Concord Medical Announces Fourth Quarter and Fiscal Year 2010 Financial Results Full Year Revenues up 33%, Company Opens 33 New Centers in 2010

Mar 28, 2011, 08:07 ET from Concord Medical Services Holdings Limited

BEIJING, March 28, 2011 /PRNewswire-Asia-FirstCall/ -- Concord Medical Services Holdings Limited (“Concord Medical” or the “Company”) (NYSE: CCM), the operator of the largest network of radiotherapy and diagnostic imaging centers in China, today announced its unaudited consolidated financial results for the fourth quarter and fiscal year ended December 31, 2010(1), the Company’s first full year of operations since completing its IPO in December 2009, underwritten by Morgan Stanley, J.P. Morgan and CICC.

Fourth Quarter and Fiscal Year 2010 Highlights

  • Total net revenues in the fourth quarter of 2010 were RMB112.9 million ($17.1 million), a 30.1% increase from the corresponding period in 2009. Total net revenues in fiscal year 2010 were RMB389.5 million ($59.0 million), a 33.2% increase from 2009.
  • Gross profit in the fourth quarter of 2010 was RMB81.5 million ($12.4 million), a 32.0% increase from the corresponding period in 2009. Gross profit in fiscal year 2010 was RMB266.8 million ($40.4 million), a 30.2% increase from 2009.
  • Net income in the fourth quarter of 2010 was RMB43.7 million ($6.6 million), a 21.8% increase from the corresponding period in 2009. Net income in fiscal year 2010 was RMB130.9 million ($19.8 million), a 4.9% increase from 2009.
  • Non-GAAP net income(2) in the fourth quarter of 2010 was RMB45.5 million ($6.9 million), a 23.3% increase from the corresponding period in 2009. Non-GAAP net income in fiscal year 2010 was RMB140.5 million ($21.3 million), an 11.6% increase from 2009.
  • Both basic and diluted earnings per American depositary share (“ADS”)(3) in the fourth quarter of 2010 were RMB0.87 ($0.13). Both basic and diluted earnings per ADS in fiscal year 2010 were RMB2.66 ($0.40).
  • Both Non-GAAP basic and diluted earnings per American depositary share (“ADS”)(3) in the fourth quarter of 2010 were RMB0.91 ($0.14). Both basic and diluted earnings per ADS in fiscal year 2010 were RMB2.86 ($0.43).
  • Adjusted EBITDA(4) (non-GAAP) in the fourth quarter of 2010 was RMB80.6 million ($12.2 million), an 11.8% increase from the corresponding period in 2009. Adjusted EBITDA in fiscal year 2010 was RMB295.4 million ($44.8 million), a 19.8 % increase from 2009.
  • Concord Medical added 10 centers and closed 2 centers in the fourth quarter of 2010, bringing the total number of centers in operation to 119 across 44 cities in China, as of December 31, 2010. To date, the Company has entered into agreements to establish 29 new centers.
  • The number of treatment and diagnostic patient cases was 8,309 and 34,646 during the fourth quarter and fiscal year 2010, representing a 13.0% and 37.0% increase from the fourth quarter and fiscal year 2009, respectively.

“We are pleased to report a year of solid financial and operational growth in 2010, the first full year of operations since our IPO and listing on the NYSE in December 2009, underwritten by Morgan Stanley, J.P. Morgan and CICC,” said Dr. Jianyu Yang, director, president and chief executive officer of Concord Medical. “In 2010, revenues grew 33% year-over-year to RMB389.5 million while we brought the total number of centers in our network to 119 by adding 33 centers in the year. In 2011, we will continue to grow our already established center network and are committed to meeting our target of operating 200 centers by the end of 2012. In addition, Concord Medical will focus more resources on expanding our network of standalone facilities such as our Chang’An CMS International Cancer Center and our Beijing Proton Medical Center.”

“The government continues to encourage private investment into the healthcare system in China,” continued Dr. Yang. “In December 2010, we saw more specific guidelines such as prioritizing private investment in new projects, extending medical insurance coverage to treatment through private providers and allowing talent transfer between private and public hospitals. Combining the increasingly favorable macroeconomic conditions with our effective marketing and execution efforts, we are confident that Concord Medical is well on its way to achieving greater success.”

Dr. Yang added, “In the fourth quarter of 2010, we had healthy top line growth despite a drop in patient volume in the first week of October caused in part by the Golden Week holiday. Our operating and net margins for year 2010 were also affected by costs and expenses associated with being a public company. We expect this impact to diminish over time as our business increases in scale. Looking forward, we will focus on continuing to enhance operational and financial efficiency while further expanding our network.”

Recent Developments

On July 12, 2010, Concord Medical announced it entered into a joint venture agreement with Chang’An Hospital and commenced preliminary operations of Chang’An CMS International Cancer Center (“CCICC”) in anticipation of obtaining a clinical license for CCICC. As of this announcement, CCICC had not received such license. On January 6, 2011, Concord Medical announced that it entered into agreements to acquire a total of 52% of the equity interest in Chang'An Hospital from certain shareholders of the Hospital for an aggregate consideration of approximately RMB200 million, subject to satisfactory due diligence and relevant government approval. The acquisition is intended to expand the development of CCICC by consolidating the full capacity of the Hospital into CCICC, a cancer specialty hospital with a focus on cancer diagnosis and treatment services.  

Concord Medical completed its share repurchase program in the fourth quarter 2010. During the fourth quarter of 2010, the Company repurchased 719,626 ADSs, representing 2,158,878 ordinary shares, for an aggregate consideration of $5.274 million, inclusive of fees. Since the inception of the share repurchase program in July 2010, the Company has repurchased a total of 1,700,656 ADSs, representing 5,101,968 ordinary shares, for an aggregate consideration of $11.552 million, inclusive of fees. As of December 31, 2010, the Company had a total of 17.4 million ADSs outstanding, representing 52.2 million ordinary shares, or 37% of its outstanding ordinary shares.

Fourth Quarter 2010 Results

Concord Medical reported total net revenues of RMB112.9 million ($17.1 million) for the fourth quarter of 2010, a 30.1% increase from the corresponding period in 2009, primarily due to an increase in patient cases from existing centers and the opening of new centers, as well as income from the preliminary operation of CCICC.  

Cost of revenues in the fourth quarter of 2010 was RMB31.3 million (US$4.7 million), a 25.2% increase from the corresponding period in 2009, primarily due to an increase in depreciation costs related to new equipment added in 2010.

Gross profit margin in the fourth quarter of 2010 was 72.2% as compared to 66.2% in the third quarter of 2010 and 71.2% in the corresponding period in 2009. The lower gross profit margin in the third quarter of 2010 was mostly due to depreciation and amortization from business expansion.

Operating expenses, consisting of selling expenses and general and administrative expenses, were RMB30.1 million ($4.6 million) in the fourth quarter of 2010 as compared to RMB17.3 million in the previous quarter and RMB13.3 million in the corresponding period in 2009. The quarter-over-quarter increase was primarily due to a government grant in the previous quarter, increases in office and travel expenses, and operating expenses related to the preliminary operation of CCICC. The year-over-year increase was primarily due to increases in professional expenses associated with being a public company, increases in headcount, office and travel expenses, share-based compensation charges, and operating expenses related to the preliminary operation of CCICC.

Operating income was RMB51.4 million ($7.8 million) in the fourth quarter of 2010, representing a 6.3% increase from the corresponding period in 2009. Operating income excluding share-based compensation expenses (non-GAAP) was RMB53.2 million ($8.1 million), a 7.7% increase from the corresponding period in 2009.

Income tax expense in the fourth quarter of 2010 was RMB10.1 million ($1.5 million), compared to an income tax expense of RMB10.7 million in the corresponding period in 2009. The effective tax rate for the fourth quarter of 2010 was 18.8% as compared to 27.0% in the third quarter of 2010 and 22.9% for the corresponding period in 2009. The decrease in effective tax rate was mainly due to the resolution of a previously accrued uncertain tax position amounting to RMB6.2 million.

Net income in the fourth quarter of 2010 was RMB43.7 million ($6.6 million), representing an 21.8% increase from the corresponding period in 2009. Both basic and diluted earnings per ADS for the fourth quarter of 2010 amounted to RMB0.87 ($0.13).

Non-GAAP net income in the fourth quarter of 2010 was RMB45.5 million ($6.9 million), a 23.3% increase from the corresponding period in 2009. Both non-GAAP basic and diluted earnings per ADS in the fourth quarter of 2010 amounted to RMB0.91 ($0.14).

Adjusted EBITDA (non-GAAP), was RMB80.6 million ($12.2 million) for the fourth quarter of 2010, representing an 11.8% increase from the corresponding period in 2009.

As of December 31, 2010, the Company had total fixed assets valued at RMB925.3 million ($140.2 million), cash and cash equivalents of RMB535.8 million ($81.2 million), and restricted cash of RMB 117.7 million ($17.8 million).

As of December 31, 2010, the Company had bank credit lines totaling RMB2.2 billion (US$335 million), of which RMB241.1 million ($36.5) were utilized.

Accounts receivable was RMB169.4 million ($25.7 million) as of December 31, 2010, compared to RMB149.5 million as of September 30, 2010 and RMB111.3 million as of December 31, 2009. Days sales outstanding was approximately 127 days in the fourth quarter of 2010, unchanged from 127 days in the third quarter of 2010.

Fiscal Year 2010 Results

Total net revenues in 2010 were RMB389.5 million ($59.0 million), representing a 33.2% increase from RMB292.4 million in 2009, primarily due to an increase in patient cases from existing centers and the opening of new centers, as well as income from the preliminary operation of CCICC.

Cost of revenues in 2010 was RMB122.7 million (US$18.6 million), representing a 40.1% increase from RMB87.6 million in 2009, primarily due to the increased depreciation cost related to the opening of new centers and the resulting increase in salaries and benefits to additional personnel employed and assigned to the new centers.

Gross profit margin in 2010 was 68.5%, compared to 70.1% in 2009. This decrease was primarily due to higher operating costs associated with having a larger number of new centers in their ramp-up periods.

Selling expenses in 2010 were RMB17.2 million ($2.6 million), representing a 123.5% increase from RMB7.7 million in 2009. Selling expenses as a percentage of total net revenues increased to 4.4% in 2010 from 2.6% in 2009. The increase was primarily due to increases in headcount and marketing and other expenses to support increased business development efforts.

General and administrative expenses in 2010 were RMB70.0 million ($10.6 million), representing a 134.8% increase from RMB29.8 million in 2009. General and administrative expenses as a percentage of total net revenues increased to 18.0% in 2010 from 10.2% in 2009.  The increase was primarily due to increases in professional expenses associated with being a public company, share-based compensation charges, headcount, office and travel expenses, and operating expenses related to the preliminary operation of CCICC.

Share-based compensation expenses, which were allocated to related operating expense items, were RMB9.6 million ($1.5 million) in 2010, compared to RMB1.0 million in 2009.

Operating income in 2010 was RMB179.7 million ($27.2 million), a 7.3% increase from RMB167.4 million in 2009. Operating income excluding share-based compensation expenses (non-GAAP) in 2010 was RMB189.3 million ($28.7 million), representing a 12% increase from 2009.

Income tax expense in 2010 was RMB43.9 million ($6.6 million), compared to an income tax expense of RMB36.4 million in 2009. The effective tax rate for 2010 was 25.1% as compared to 22.6% in 2009.

Net income in 2010 was RMB130.9 million ($19.8 million), representing a 4.9% increase from RMB124.8 million in 2009. Both basic and diluted earnings per ADS for 2010 amounted to RMB2.66 ($0.40).

Net income excluding share-based compensation expenses (non-GAAP) in 2010 was RMB140.5 million ($21.3 million), reflecting a 11.7% increase from RMB125.8 million in 2009. Both basic and diluted earnings per ADS excluding share-based compensation expenses (non-GAAP) in 2010 were RMB2.86 ($0.43).

Capital expenditures were RMB345.2 million ($52.3 million) in 2010, compared to RMB228.7 million in 2009. The increase was primarily due to the opening of new centers.

Adjusted EBITDA (non-GAAP) was RMB295.4 million ($44.8 million) in 2010, representing a 19.8% increase from RMB246.6 million in 2009.

Outlook for Fiscal Year 2011

Based on current market and operating conditions, estimated business expansion and forecasted patient volume, Concord Medical expects to generate total net revenues in an estimated range of RMB480 million to RMB520 million in 2011, which would represent a 23% to 33% increase from 2010. This estimated range excludes any potential future revenue as a result of the currently pending acquisition of Chang’An Hospital but includes income from CCICC’s preliminary operations. The Company notes that unanticipated delays in the closing of Chang’An Hospital’s acquisition, any failure to obtain CCICC’s clinical license and other uncertainties may result in CCICC not achieving its anticipated benefits to the Company, which in turn could have a material adverse effect on the Company’s business, financial condition and results of operations in 2011 and future periods.  

The Company intends to open 25 to 30 new radiotherapy and diagnostic imaging centers, excluding any potential major acquisitions, in 2011. The Company expects total capital expenditures related to these new centers to be in the range of RMB300 million to RMB360 million.

The foregoing reflects Concord Medical’s current and preliminary views, which are subject to change.

Conference Call Information

Concord Medical’s management will hold an earnings conference call at 8:00 a.m. Eastern Daylight Time on March 28, 2011 (8:00 p.m. Beijing/Hong Kong time on March 28, 2010).

Dial-in details for the earnings conference call are as follows:

US:

+1.866.202.3048

China:

+10-800-852-1490 China Netcom (South China)

+10-800-152-1490 China Telecom (North China)

+10-800-130-0399 China Telecom (South China)

Hong Kong:

+800 96 3844

UK:

+44 2073658425

International:

+1.617.213.8843

Passcode:

97544973

A replay of the conference call may be accessed by phone at the following number until April 4, 2011:

US:

+1-888-286-8010

International:

+1-617-801-6888

Passcode:

93821317

Additionally, a live and archived webcast of this conference call will be available at http://ir.cmsholdings.com/.

About Concord Medical

Concord Medical operates the largest network of radiotherapy and diagnostic imaging centers in China in terms of revenues and the total number of centers in operation per available statistics. As of December 31, 2010, the Company operated a network of 119 centers with 66 hospital partners, spanning 44 cities and 24 provinces and administrative regions in China. Under long-term arrangements with top-tier hospitals in China, the Company provides radiotherapy and diagnostic imaging equipments and manages the daily operations of these centers located on its hospital partners’ premises. The Company also provides ongoing training to doctors and other medical personnel in its network of centers to ensure a high level of clinical care for patients.

Safe Harbor Statement

This press release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” and similar expressions. In particular, many of the statements from management in this press release and the section under “Outlook for Fiscal Year 2011” are forward-looking in nature.  These forward looking statements are based upon management’s current views and expectations with respect to future events and are not a guarantee of future performance.  Furthermore, these statements are, by their nature, subject to a number of risks and uncertainties that could cause actual performance and results to differ materially from those discussed in the forward-looking statements as a result of a number of factors. Such factors include: the number of new radiotherapy and diagnostic imaging centers opened; the increase in the number of patients in existing centers; the establishment of specialty cancer hospitals; changes in the healthcare industry in China, including changes in the healthcare policies and regulations of the PRC government; and technological or therapeutic changes affecting the field of cancer treatment and diagnostic imaging.  Further information regarding these and other risks is included in the Company’s filings with the U.S. Securities and Exchange Commission at www.sec.gov. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Statement Regarding Unaudited Financial Information

The Company's independent auditors are in the process of completing an audit of the Company’s U.S. GAAP financial statements for 2010. These unaudited 2010 numbers disclosed in this announcement are, therefore, subject to change.

About Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles (GAAP), Concord Medical uses certain non-GAAP measures.  The Company presents certain of its financial information that is adjusted from results based on GAAP to exclude the impact of share-based compensation expense. The Company believes excluding share-based compensation expense from its non-GAAP financial measures is useful for its management and investors to assess and analyze the Company’s core operating results as such expense is not directly attributable to the underlying performance of the Company’s business operations and do not impact its cash earnings. Concord Medical also believes these non-GAAP measures excluding share-based compensation expense are important in helping investors to understand the Company’s current financial performance and future prospects and to compare business trends among different reporting periods on a consistent basis. In addition, Concord Medical also presents the non-GAAP measure of Adjusted EBITDA, which is defined in this announcement as net (loss) income plus interest, taxes, depreciation and amortization, share-based compensation expenses and other adjustments. Other adjustments include change in fair value of convertible notes, foreign exchange loss and other income. Furthermore, Adjusted EBITDA eliminates the impact of items that the Company does not consider indicative of the performance of its network of centers. The Company believes investors will similarly use Adjusted EBITDA as one of the key metrics to evaluate its financial performance and to compare its current operating results with corresponding historical periods and with other companies in the healthcare services industry. The presentation of these additional measures should not be considered a substitute for or superior to GAAP results or as being comparable to results reported or forecasted by other companies. The non-GAAP measures have been reconciled to GAAP measures in the attached financial statements.

(1) This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.600 to US$1.00, the effective noon buying rate as of December 31, 2010 in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York.

(2) Non-GAAP net income is defined in this announcement as net income excluding share-based compensation expenses. Share-based compensation was RMB 1.8 million ($0.27 million) in the fourth quarter of 2010 and RMB9.57 million ($1.45 million in fiscal year 2010.

(3) Each ADS represents three ordinary shares of the Company.

(4) Adjusted EBITDA is defined in this announcement as net (loss) income plus interest, taxes, depreciation and amortization, share-based compensation expenses and other adjustments. Other adjustments include foreign exchange loss and other income.

For investor and media inquiries please contact:

China

Tony Tian

Concord Medical Services

+86-10-5957-5287

tony.tian@cmsholdings.com

Lilian Wong

Brunswick Group, LLC

+86-10-5960-8600

lwong@brunswickgroup.com

U.S.

Nicki Kahner

Brunswick Group, LLC

+1-212-333-3810

nkahner@brunswickgroup.com

Concord Medical Services Holdings Limited

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

December 31, 2009*

September 30, 2010

December 31, 2010

RMB

RMB

RMB

US$

ASSETS

Current assets

Cash

1,037,239

515,190

537,783

81,179

Restricted cash, current portion

293

101,657

102,873

15,587

Notes receivable

900

136

Accounts receivable

111,328

149,520

167,389

25,665

Prepayments and other current assets

100,484

69,724

74,469

11,283

Due from a related party

-

4,000

-

-

Deferred tax assets, current portion

3,168

2,027

1,504

228

Total current assets

1,252,512

842,118

884,918

134,078

 

Non-current assets

Property, plant and equipment, net

573,042

863,854

925,336

140,202

Goodwill

300,163

300,163

300,163

45,479

Acquired intangible assets, net

155,345

185,939

146,113

22,138

Deposits for non-current assets

127,150

236,575

208,019

31,518

Net investments in financing leases

-

84,444

85,854

13,008

Deferred tax assets, non-current portion

19,700

21,271

21,869

3,313

Other non-current assets

11,532

51,210

51,867

7,859

Restricted cash, non-current portion

4,421

6,134

14,792

2,241

Prepaid land use right

-

-

28,113

4,260

Total non-current assets

1,191,353

1,749,590

1,782,126

270,018

 

Total assets

2,443,865

2,591,708

2,667,044

404,096

 

 

LIABILITIES

Current liabilities

Short-term bank borrowings

11,500

8,000

83,000

12,576

Long-term bank borrowings, current portion

57,487

65,826

60,906

9,228

Accounts payable

9,759

14,407

10,332

1,565

Accrual for acquisitions of property, plant and equipment

12,043

7,377

14,404

2,182

Obligations under capital leases, current portion

3,582

3,582

3,582

543

Accrued expenses and other liabilities

48,663

44,040

49,935

7,566

Income tax payable

14,642

24,396

25,401

3,849

Deferred revenue, current portion

10,401

12,020

11,520

1,745

Contingent business acquisition consideration

-

13,495

14,072

2,132

Amounts due to related parties

1,546

-

-

-

Total current liabilities

169,623

193,143

273,152

41,386

 

Non-current liabilities

Long-term bank borrowings, non-current portion

80,915

55,395

45,089

6,832

Deferred revenue, non-current portion

5,188

10,342

9,081

1,376

Obligations under capitalized leases, non-current portion

8,074

6,038

5,325

807

Lease deposits

1,000

3,814

5,110

774

Deferred tax liabilities, non-current portion

25,317

28,888

27,452

4,159

Total non-current liabilities

120,494

104,477

92,057

13,948

 

Total liabilities

290,117

297,620

365,209

55,334

 

Commitments and contingencies

 

Equity

Ordinary shares

108

106

105

16

Additional paid-in capital

2,671,910

2,679,673

2,604,704

394,652

Accumulated other comprehensive loss

(3,987)

(12,286)

(14,835)

(2,248)

Accumulated deficit

(514,283)

(468,628)

(384,883)

(58,316)

Total parent shareholders' equity

2,153,748

2,198,865

2,205,091

334,104

Noncontrolling interests

-

95,223

96,744

14,658

 

Total equity

2,153,748

2,294,088

2,301,835

348,762

 

Total liabilities and equity

2,443,865

2,591,708

2,667,044

404,096

 

*Amounts for the year ended December 31, 2009 were derived from the December 31, 2009 audited consolidated financial statements.

Concord Medical Services Holdings Limited

Unaudited Condensed Consolidated Statements of Income

(in thousands, except  for number of ADS and per  ADS data)

 

 

For The Three Months Ended

For The Twelve Months Ended

 

December 31, 2009

September 30, 2010

December 31, 2010

December 31, 2009

December 31, 2010

 

RMB

RMB

RMB

US$

RMB

RMB

US$

Revenue, net

Lease and management services

75,225

92,046

92,815

14,063

260,162

349,248

52,916

Management services

8,643

5,737

9,992

1,514

28,739

22,805

3,455

Others

2,911

3,255

10,056

1,524

3,535

17,471

2,647

Total net revenues

86,779

101,038

112,863

17,101

292,436

389,524

59,018

 

Cost of revenues

Lease and management services

(18,793)

(25,415)

(24,636)

(3,733)

(60,937)

(93,771)

(14,208)

Amortisation of acquired intangibles

(6,105)

(7,870)

(5,210)

(789)

(26,493)

(26,488)

(4,013)

Management services

(122)

(860)

(1,489)

(226)

(131)

(2,441)

(370)

Total cost of revenues

(25,020)

(34,145)

(31,335)

(4,748)

(87,561)

(122,700)

(18,591)

 

Gross profit

61,759

66,893

81,528

12,353

204,875

266,824

40,427

 

Operating expenses

 

Selling expenses

(3,212)

(3,517)

(8,555)

(1,296)

(7,675)

(17,150)

(2,598)

General and administrative expenses

(10,134)

(13,777)

(21,534)

(3,263)

(29,821)

(70,008)

(10,607)

 

Operating income

48,413

49,599

51,439

7,794

167,379

179,666

27,222

Interest expense

(2,011)

(2,188)

(1,226)

(186)

(6,891)

(7,448)

(1,128)

Foreign exchange income(loss)

5

(3,018)

(671)

(102)

(213)

(5,436)

(824)

Interest income

125

1,283

4,672

708

948

7,865

1,192

Other income (expense)

-

118

(399)

(60)

-

144

22

 

Income before income taxes

46,532

45,794

53,815

8,154

161,223

174,791

26,484

Income tax expense

(10,662)

(12,376)

(10,137)

(1,536)

(36,396)

(43,873)

(6,647)

Net income

35,870

33,418

43,678

6,618

124,827

130,918

19,837

 

Net income attributable to noncontrolling interests

-

3

(1,521)

(230)

-

(1,518)

(230)

 

Accretion of  Series A contingently redeemable convertible preferred shares

(6,199)

-

-

(30,050)

-

-

Accretion of Series B contingently redeemable convertible preferred shares

(9,976)

-

-

(48,359)

-

-

 

Net income attributable to ordinary shareholders

19,695

33,421

42,157

6,388

46,418

129,400

19,607

 

Earnings per ADS

Basic /Diluted

0.69

0.69

0.87

0.13

1.86

2.66

0.40

 

 

Weighted average number of ADS outstanding:

Basic /Diluted

29,057,729

48,700,469

48,628,990

48,628,990

24,882,926

48,680,198

48,680,198

Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures (*) (in RMB thousands, except for per ADS data, unaudited)

Three months ended December 312009

Three months ended September 302010

Three months ended December 312010

Twelve months ended December 312009

Twelve months ended December 312010

GAAP Result

Adjustment

 Non-GAAP  Results

GAAP Result

Adjustment

 Non-GAAP  Results

GAAP Result

Adjustment

 Non-GAAP  Results

GAAP Result

Adjustment

 Non-GAAP  Results

GAAP Result

Adjustment

 Non-GAAP  Results

Operating profit

48,413

1,007

49,420

49,599

2,577

52,176

51,439

1,807

53,246

167,379

1,007

168,386

179,666

9,570

189,236

Net income

35,870

1,007

36,877

33,418

2,577

35,995

43,678

1,807

45,485

124,827

1,007

125,834

130,918

9,570

140,488

Basic earning per ADS

0.69

0.03

0.72

0.69

0.05

0.74

0.87

0.04

0.91

1.86

0.06

1.92

2.66

0.20

2.86

Diluted earning per ADS

0.69

0.03

0.72

0.69

0.05

0.74

0.87

0.04

0.91

1.86

0.06

1.92

2.66

0.20

2.86

(*) The only adjustment is share-based compensation expense.

Reconciliation from net income to adjusted EBITDA(*) (in RMB thousands, unaudited)

Three months ended

Three months ended

Three months ended

Twelve months ended

Twelve months ended

December 31, 2009

September 30, 2010

December 31, 2010

December 31, 2009

December 31, 2010

Net income

35,870

33,418

43,678

124,827

130,918

  Interest expense, net

1,886

905

(3,446)

5,943

(417)

  Income taxes expense

10,662

12,376

10,137

36,396

43,873

  Depreciation and amortization

22,685

29,121

27,400

78,174

106,138

  Share-based compensation

1,007

2,577

1,807

1,007

9,570

  Other adjustments

(5)

2,900

1,070

213

5,292

Adjusted EBITDA

72,105

81,297

80,646

246,560

295,374

(*) Definition of adjusted EBITDA: Adjusted EBITDA is defined as net income plus interest, taxes, depreciation and amortization, share-based compensation expenses and other adjustments. Other adjustments include foreign exchange loss and other income.

SOURCE Concord Medical Services Holdings Limited