omniture

China Cord Blood Corporation Reports Financial Results for the Third Quarter and First Nine Months of Fiscal 2015

3Q15 Added 17,622 New Subscribers
3Q15 Revenue Up 10.7% YOY to RMB166.7 Million ($26.9 Million)
3Q15 Operating Income Increased to RMB67.8 Million ($10.9 Million)
Conference Call to be Held February 26, 2015 at 8:00 a.m. ET
2015-02-26 05:05 2611

HONG KONG, Feb. 26, 2015 /PRNewswire/ -- China Cord Blood Corporation (NYSE: CO) ("CCBC" or the "Company"), China's leading provider of cord blood collection, laboratory testing, hematopoietic stem cell processing and stem cell storage services, today announced its preliminary unaudited financial results for the third quarter and first nine months of fiscal 2015 ended December 31, 2014.

Third Quarter of Fiscal 2015 Highlights

  • Revenues for the third quarter of fiscal 2015 increased by 10.7% to RMB166.7 million ($26.9 million) from RMB150.6 million in the prior year period.
  • New subscribers and accumulated subscriber base were 17,622 and 425,377, respectively.
  • Gross profit increased by 5.7% to RMB130.6 million ($21.1 million) from RMB123.6 million in the prior year period, despite higher raw material costs and depreciation expense.
  • Gross margin was 78.4%, compared to 82.0% in the prior year period.
  • Operating income increased to RMB67.8 million ($10.9 million) from RMB65.7 million in the prior year period, despite higher depreciation expense as a result of the completion of the new facilities and the first time recognition of share-based compensation expense related to the restricted share units ("RSUs") granted.
  • Operating income before depreciation and amortization and share-based compensation expenses was RMB83.2 million ($13.4 million), up 9.9% year-over-year.[1]
  • Interest expense was RMB25.8 million ($4.2 million), compared to RMB21.9 million in the prior year period due to the absence of interest expense capitalization.
  • Net income attributable to the Company's shareholders was RMB33.4 million ($5.4 million), compared to RMB34.6 million in the prior year period.
  • Operating cash flow for the quarter was RMB152.7 million ($24.6 million) after taking into account the interest payment made to the Company's convertible note holder.

First Nine Months of Fiscal 2015 Highlights

  • Revenues for the first nine months of fiscal 2015 increased by 12.2% to RMB472.1 million ($76.1 million) from RMB420.9 million in the prior year period.
  • New subscribers reached 48,754 and the accumulated subscriber base expanded to 425,377.
  • Gross profit increased by 9.9% to RMB376.0 million ($60.6 million) from RMB342.1 million in the prior year period.
  • Operating income increased by 10.5% to RMB185.5 million ($29.9 million) from RMB167.9 million in the prior year period.
  • Operating income before depreciation and amortization and share-based compensation expenses was RMB225.6 million ($36.4 million), up 15.6% year-over-year.[1]
  • Interest expense was RMB75.9 million ($12.2 million), compared to RMB53.1 million in the prior year period due to the absence of interest expense capitalization.
  • Net income attributable to the Company's shareholders was RMB90.4 million ($14.6 million), compared to RMB92.4 million in the prior year period.
  • Operating cash flow for the first nine months of fiscal 2015 increased by 12.5% to RMB448.4 million ($72.3 million) from RMB398.6 million in the prior year period.

"We recorded solid performance in the third quarter of fiscal 2015 with more than 17,600 new subscribers, representing strong year-on-year growth and a quarter-on-quarter improvement," stated Ms. Ting Zheng, Chief Executive Officer of China Cord Blood Corporation. "Our new subscriber growth in the December quarter reflects our recent increase in strategic marketing efforts in the second quarter of fiscal 2015. With the Company's cumulative subscriber base exceeding 425,000, we have further solidified our position as one of the largest cord blood banks on a global scale."

Ms. Zheng further commented, "In the near term, we continue to explore new promotion platforms while strengthening our existing marketing channels in order to deepen our market penetration in both Beijing and Guangdong, as well as gradually enrolling new hospitals in Zhejiang. We recently announced our new MOU with Cord Blood Registry in the US. This partnership will further our mission to deliver premium quality precautionary healthcare services to families as we continue to support patients and clients both domestically and abroad."

[1] See exhibit 3 of this press release for a reconciliation of operating income to exclude the non-cash items related to the depreciation and amortization and share-based compensation expenses to the comparable financial measure prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP").

 

Summary – Third Quarter and First Nine Months Ended December 31, 2013 and 2014

 
   

Three Months Ended December 31,

   

Nine Months Ended December 31,

   

2013

 

2014

   

2013

 

2014

(in thousands)

 

RMB

 

RMB

 

US$

   

RMB

 

RMB

 

US$

Revenues

 

150,586

 

166,675

 

26,863

   

420,942

 

472,128

 

76,093

Gross Profit

 

123,554

 

130,628

 

21,053

   

342,058

 

375,957

 

60,593

Operating Income

 

65,743

 

67,843

 

10,934

   

167,913

 

185,473

 

29,892

Depreciation and Amortization Expense         

 

9,949

 

12,877

 

2,075

   

27,257

 

37,585

 

6,058

Share-based Compensation Expense[2]

 

-

 

2,497

 

402

   

-

 

2,497

 

402

Interest Expense

 

 

21,866

 

25,760

 

4,152

   

53,085

 

75,864

 

12,227

Net Income Attributable to the Company's Shareholders              

 

34,554

 

33,384

 

5,380

   

92,364

 

90,369

 

14,564

Earnings per Ordinary Share  – Basic[3] and Diluted (RMB/US$)

 

0.41

 

0.41

 

0.07

   

1.14

 

1.13

 

0.18

                           

Revenue Breakdown (%)

                         

Processing Fees

 

71.3%

 

68.8%

       

70.9%

 

68.5%

   

Storage Fees

 

28.7%

 

31.2%

       

29.1%

 

31.5%

   
                           

New Subscribers (persons)

 

16,317

 

17,622

       

47,505

 

48,754

   

Total Accumulated Subscribers (persons)

 

359,487

 

425,377

       

359,487

 

425,377

   
                           

[2] Share-based compensation expense relates to the Company's restricted share unit scheme ("RSU Scheme") in which 7,300,000 RSUs were granted to certain executives, directors and key employees during the three months ended December 31, 2014. Out of 7,300,000 RSUs, 7,080,000 ordinary shares ("Shares") were then issued and deposited into a trust sponsored and funded by the Company ("Trust").

[3] The terms of the convertible notes held by KKR China Healthcare Investment Limited ("KKR"), Cordlife Group Limited ("CGL") and Magnum Opus International Holdings Limited ("Magnum") provide each party with the ability to participate in any excess cash dividend. Therefore, the calculation of basic EPS has taken into consideration the effect of such participating rights of RMB0.05 ($0.01) and RMB0.11 ($0.02) per share for the three months and nine months ended December 31, 2014, respectively.

 

         

Summary – Selected Cash Flow Statement Items

       
   

Three Months Ended December 31,

 

Nine Months Ended December 31,

   

2013

 

2014

 

2013

 

2014

(in thousands)

 

RMB

   

RMB

   

US$

   

RMB

   

RMB

   

US$

 

Net cash provided by operating activities

 

168,993

   

152,732

   

24,616

   

398,616

   

448,423

   

72,273

 

Net cash used in investing activities

 

(83,955)

   

(15,242)

   

(2,457)

   

(140,846)

   

(37,637)

   

(6,066)

 

Net cash provided by financing activities

 

-

   

-

   

-

   

2,336

   

-

   

-

 

Third Quarter of Fiscal 2015 Financial Results

REVENUES. Revenues increased by 10.7% to RMB166.7 million ($26.9 million) in the third quarter of fiscal 2015 from RMB150.6 million in the prior year period. The increases in processing revenues and recurring storage revenues were mainly driven by the solid year-over-year growth of new subscribers and the Company's enlarged total subscriber base.

The Company's accumulated subscriber base expanded to 425,377 by the end of December 2014, resulting in a 20.6% increase in storage fee revenues to RMB52.1 million ($8.4 million) in the third quarter of fiscal 2015 from RMB43.2 million in the prior year period. As a percentage of total revenues, storage fees accounted for 31.2%, compared to 28.7% in the prior year period.

Revenues generated from processing fees in the third quarter were RMB114.6 million ($18.5 million), up 6.7% from RMB107.4 million in the prior year period. This growth was driven by the 17,622 new subscribers recorded in the December quarter, which represented an 8.0% increase year-on-year and a 13.1% increase sequentially. Revenues generated from processing fees accounted for 68.8% of total revenues, compared to 71.3% in the prior year period.

GROSS PROFIT. Gross profit for the third quarter of fiscal 2015 amounted to RMB130.6 million ($21.1 million), a 5.7% increase from RMB123.6 million in the prior year period. The increase in revenue was partially offset by higher depreciation expense and raw material costs. Gross margin was 78.4%, compared to 82.0% in the prior year period.

OPERATING INCOME. Operating income for the third quarter increased at a slower pace to RMB67.8 million ($10.9 million) from RMB65.7 million in the prior year period, as a result of higher depreciation expense and the recognition of share-based compensation expense. Operating margin was 40.7%, compared to 43.7% in the prior year period. Depreciation and amortization expenses for the third quarter were RMB12.9 million ($2.1 million), compared to RMB9.9 million in the prior year period. Share-based compensation expense related to the Company's RSUs which were granted in December 2014 pursuant to the Company's RSU Scheme amounted to RMB2.5 million ($0.4 million) for the December quarter, whereas no such expense was incurred in the prior year period. Operating income before depreciation and amortization and share-based compensation expenses totaled RMB83.2 million ($13.4 million), up 9.9% compared to the prior year period.[4]

[4] See exhibit 3 of this press release for a reconciliation of operating income to exclude the non-cash items related to the depreciation and amortization and share-based compensation expenses to the comparable financial measure prepared in accordance with U.S. GAAP

Research and Development Expenses. Research and development expenses, which have been stable in recent quarters, were RMB2.4 million ($0.4 million).

Sales and Marketing Expenses. Sales and marketing expenses for the third quarter amounted to RMB30.3 million ($4.9 million), compared to RMB28.2 million in the prior year period. The increase in sales and marketing expenses reflected the Company's effort to attract new subscribers and increased advertising and promotion activities. As a percentage of revenue, sales and marketing expenses were 18.2%, as compared to 18.7% in the prior year period.

General and Administrative Expenses. General and administrative expenses for the third quarter were RMB30.1 million ($4.9 million), compared to RMB27.2 million in the prior year period. Increased depreciation expense and the recognition of share-based compensation expense contributed to the increase. As a percentage of revenue, general and administrative expenses were 18.1%, similar to the prior year period.

OTHER INCOME AND EXPENSES.

Interest Expense. Interest expense was mainly related to the Company's outstanding convertible notes. In the December quarter, the Company incurred interest expense of RMB25.8 million ($4.2 million), without any capitalization. For the prior year period, interest expense was RMB21.9 million as RMB3.6 million of interest expense was capitalized in relation to the construction of new facilities.

NET INCOME ATTRIBUTABLE TO THE COMPANY'S SHAREHOLDERS. Due to higher interest expense, which offset the increase in operating income, income before income tax for the third quarter decreased year-over-year to RMB47.1 million ($7.6 million) from RMB49.2 million. Net income attributable to the Company's shareholders for the third quarter of fiscal 2015 amounted to RMB33.4 million ($5.4 million), compared to RMB34.6 million in the prior year period. Net margin for the third quarter of fiscal 2015 was 20.0%.

EARNINGS PER SHARE. The terms of the convertible notes held by KKR, CGL and Magnum provide each party with the ability to participate in any Excess Cash Dividend[5]. Therefore, the calculation of basic and diluted EPS has taken into consideration the effect of such participating rights, which was RMB0.05 ($0.01) per share. Basic and diluted earnings per ordinary share for the third quarter of fiscal 2015 were RMB0.41 ($0.07).[6]

[5] "Excess Cash Dividend" means any cash dividend to holders of shares that, together with all other cash dividends previously paid to holders of shares in the same financial year, exceeds, on a per share basis, an amount equal to the interest that has accrued and shall accrue at 7% in such financial year divided by the number of shares into which the note is convertible at the conversion price then in effect on the relevant record date.

[6] During the quarter ended December 31, 2014, the Company granted a total of 7,300,000 RSUs to certain executives, directors and key employees under the Company's RSU Scheme, subject to certain performance conditions. Out of 7,300,000 RSUs, 7,080,000 Shares were then issued and deposited into a Trust, and will be transferred to respective executives, directors and key employees (or their designated nominees) under the Company's RSU Scheme when the performance conditions are met. The Trust facilitates the granting (and subsequent vesting) of incentive RSUs and holds such Shares for the benefit of such executives, directors and key employees. Under the non-GAAP measure to take into account of such Shares, in addition to 73,003,248 outstanding shares, basic and diluted earnings per ordinary share were RMB0.40 ($0.06) and RMB1.12 ($0.18) for the three months and nine months ended December 31, 2014.

LIQUIDITY. As of December 31, 2014, the Company had cash and cash equivalents of RMB2,295.6 million ($370.0 million), compared to RMB1,882.9 million as of March 31, 2014. The Company had total debt of RMB868.0 million ($139.9 million) as of December 31, 2014. Operating cash flow for the third quarter of fiscal 2015 amounted to RMB152.7 million ($24.6 million) after taking into account the interest payment made to the Company's convertible note holder.

First Nine Months of Fiscal 2015 Financial Results

For the first nine months of fiscal year 2015, total revenues increased by 12.2% to RMB472.1 million ($76.1 million) from RMB420.9 million in the prior year period. The increase was largely attributable to the steady growth of new subscribers and the Company's expanded subscriber base, which reached 425,377 at the end of December 2014. Revenues from processing fees and storage fees grew by 8.4% and 21.4% year-over-year, respectively. Gross profit increased by 9.9% to RMB376.0 million ($60.6 million) from RMB342.1 million in the prior year period. Operating income increased by 10.5% to RMB185.5 million ($29.9 million) from RMB167.9 million in the prior year period. Operating income before depreciation and amortization and share-based compensation expenses totaled RMB225.6 million ($36.4 million), an increase of 15.6% over the prior year period.7 Net income attributable to the Company's shareholders amounted to RMB90.4 million ($14.6 million). Basic and diluted earnings per share attributable to ordinary shares were RMB1.13 ($0.18). Net cash provided by operating activities in the first nine months of fiscal 2015 was RMB448.4 million ($72.3 million).

[7] See exhibit 3 of this press release for a reconciliation of operating income to exclude the non-cash items related to the depreciation and amortization and share-based compensation expenses to the comparable financial measure prepared in accordance with U.S. GAAP.

Conference Call

The Company will host a conference call at 8:00 a.m. ET on Thursday, February 26, 2015 to discuss its financial performance and give a brief overview of the Company's recent developments, followed by a question and answer session. Interested parties can access the audio webcast through the Company's IR website at http://ir.chinacordbloodcorp.com. A replay of the webcast will be accessible two hours after the conference call and available for three weeks at the same URL above. Listeners can also access the call by dialing 1-631-514-2526 or 1-855-298-3404 for US callers, or +852-5808-3202 for Hong Kong callers, access code: 3388198.

Use of Non-GAAP Financial Measures

GAAP results for the three months and nine months ended December 31, 2014 include non-cash items related to the depreciation and amortization and share-based compensation expenses. To supplement the Company's unaudited condensed consolidated financial statements presented on a U.S. GAAP basis, the Company has provided adjusted financial information excluding the impact of these items in this press release. The non-GAAP financial measure represents non-GAAP operating income. Such adjustment is a departure of U.S. GAAP; however, the Company's management believes that these adjusted measures provide investors with a better understanding of how the results relate to the Company's historical performance. Also, management uses non-GAAP operating income as a measurement tool for evaluating actual operating performance compared to budget and prior periods. These adjusted measures should not be considered an alternative to operating income, or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP. These measures are not necessarily comparable to a similarly titled measure of another company. A reconciliation of the adjustments to U.S. GAAP results appears in exhibit 3 accompanying this press release. This additional adjusted information is not meant to be considered in isolation or as a substitute for U.S. GAAP financials. The adjusted financial information that the Company provides also may differ from the adjusted information provided by other companies.

About China Cord Blood Corporation

China Cord Blood Corporation is the first and largest umbilical cord blood banking operator in China in terms of geographical coverage and the only cord blood banking operator with multiple licenses. Under current PRC government regulations, only one licensed cord blood banking operator is permitted to operate in each licensed region and only seven licenses have been authorized as of today. China Cord Blood Corporation provides cord blood collection, laboratory testing, hematopoietic stem cell processing and stem cell storage services. For more information, please visit our website at http://www.chinacordbloodcorp.com.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or the Company's future financial performance. The Company has attempted to identify forward-looking statements by terminology including "anticipates", "believes", "expects", "can", "continue", "could", "estimates", "intends", "may", "plans", "potential", "predict", "should" or "will" or the negative of these terms or other comparable terminology. These statements are only predictions, uncertainties and other factors may cause the Company's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. The information in this press release is not intended to project future performance of the Company. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company does not guarantee future results, levels of activity, performance or achievements. The Company expectations are as of the date this press release is issued, and the Company does not intend to update any of the forward-looking statements after the date this press release is issued to conform these statements to actual results, unless required by law.

The forward-looking statements included in this press release are subject to risks, uncertainties and assumptions about the Company's businesses and business environments. These statements reflect the Company's current views with respect to future events and are not a guarantee of future performance. Actual results of the Company's operations may differ materially from information contained in the forward-looking statements as a result of risk factors some of which include, among other things: continued compliance with government regulations regarding cord blood banking in the People's Republic of China, or PRC and any other jurisdiction in which the Company conducts its operations; changing legislation or regulatory environments (including revisions to China's One Child Policy) in the PRC and any other jurisdiction in which the Company conducts its operations; the acceptance by subscribers of the Company's different pricing and payment options and reaction to the introduction of the Company's premium-quality pricing strategy; demographic trends in the regions of the PRC in which the Company is the exclusive licensed cord blood banking operator; labor and personnel relations; the existence of a significant shareholder able to influence and direct the corporate policies of the Company; credit risks affecting the Company's revenue and profitability; changes in the healthcare industry, including those which may result in the use of stem cell therapies becoming redundant or obsolete; the Company's ability to effectively manage its growth, including implementing effective controls and procedures and attracting and retaining key management and personnel; changing interpretations of generally accepted accounting principles; the availability of capital resources, including in the form of capital markets financing opportunities, in light of industry developments affecting issuers that have pursued a "reverse merger" with an operating company based in China, as well as general economic conditions; compliance with restrictive debt covenants under our senior convertible notes; and other relevant risks detailed in the Company's filings with the Securities and Exchange Commission in the United States.

This announcement contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars as of and for the periods ending December 31, 2014 were made at the noon buying rate of RMB6.2046 to $1.00 on December 31, 2014 in the City of New York for cable transfers in Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York. China Cord Blood Corporation makes no representation that the Renminbi or U.S. dollar amounts referred to in this press release could have been or could be converted into U.S. dollars or Renminbi, at any particular rate or at all.

For more information, please contact:

China Cord Blood Corporation
Investor Relations Department
Tel: (+852) 3605-8180
Email: ir@chinacordbloodcorp.com

ICR, Inc.
William Zima
Tel: (+86) 10-6583-7511
U.S. Tel: (646) 405-5185
Email: William.zima@icrinc.com

 

EXHIBIT 1

CHINA CORD BLOOD CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of March 31 and December 31, 2014

 
   

March 31,

   

December 31,

   

2014

   

2014

   

RMB

   

RMB

   

US$

   

(in thousands except share data)

                 

ASSETS

                     

Current assets

                     

Cash and cash equivalents

   

1,882,901

     

2,295,598

     

369,984

Trading securities

   

-

     

7,571

     

1,220

Accounts receivable, less allowance for doubtful accounts
 (March 31, 2014: RMB20,322; December 31, 2014: RMB25,309(US$4,079))

   

95,273

     

117,276

     

18,902

Inventories

   

31,583

     

23,255

     

3,748

Prepaid expenses and other receivables

   

37,010

     

17,879

     

2,882

Debt issuance costs

   

3,616

     

3,606

     

581

Deferred tax assets

   

7,664

     

9,165

     

1,477

Total current assets

   

2,058,047

     

2,474,350

     

398,794

Property, plant and equipment, net

   

626,632

     

610,453

     

98,387

Non-current prepayments

   

208,894

     

208,049

     

33,531

Non-current accounts receivable, less allowance for doubtful accounts
 (March 31, 2014: RMB42,703; December 31, 2014: RMB50,480 (US$8,136))

   

225,496

     

205,010

     

33,042

Inventories

   

48,385

     

56,832

     

9,160

Intangible assets, net

   

120,549

     

117,084

     

18,871

Available-for-sale equity securities

   

144,247

     

109,965

     

17,723

Other investment

   

189,129

     

189,129

     

30,482

Debt issuance costs

   

7,854

     

5,115

     

824

Deferred tax assets

   

1,789

     

2,551

     

411

Total assets

   

3,631,022

     

3,978,538

     

641,225

                       

LIABILITIES

                     

Current liabilities

                     

Bank loan

   

60,000

     

60,000

     

9,670

Accounts payable

   

10,422

     

16,022

     

2,582

Accrued expenses and other payables

   

102,559

     

82,932

     

13,366

Deferred revenue

   

196,432

     

223,876

     

36,082

Amounts due to related parties

   

21,453

     

6,054

     

976

Income tax payable

   

2,571

     

10,939

     

1,763

Deferred tax liabilities

   

3,900

     

7,800

     

1,257

Total current liabilities

   

397,337

     

407,623

     

65,696

Convertible notes

   

777,753

     

807,952

     

130,218

Non-current deferred revenue

   

823,921

     

1,035,379

     

166,873

Other non-current liabilities

   

164,077

     

203,394

     

32,782

Deferred tax liabilities

   

27,938

     

26,584

     

4,285

Total liabilities

   

2,191,026

     

2,480,932

     

399,854

                       

EQUITY

                     

Shareholders' equity of China Cord Blood

  Corporation

                     

Ordinary shares

                     

- US$0.0001 par value, 250,000,000 shares

  authorized, 73,140,147 shares issued and 73,003,248 

  shares outstanding as of March 31 and December 31, 

  2014, respectively

   

50

     

50

     

8

Additional paid-in capital

   

798,221

     

800,713

     

129,052

Treasury stock, at cost

  (March 31 and December 31, 2014: 136,899 shares, 

  respectively)

   

(2,815)

     

(2,815)

     

(453)

Accumulated other comprehensive income

   

84,263

     

48,936

     

7,887

Retained earnings

   

555,323

     

645,692

     

104,066

Total equity attributable to China Cord Blood

 Corporation

   

1,435,042

     

1,492,576

     

240,560

Non-controlling interests

   

4,954

     

5,030

     

811

Total equity

   

1,439,996

     

1,497,606

     

241,371

Total liabilities and equity

   

3,631,022

     

3,978,538

     

641,225

                       

 

 

EXHIBIT 2

CHINA CORD BLOOD CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three Months and Nine Months ended December 31, 2013 and 2014

 
   

Three months ended

December 31,

   

Nine months ended

December 31,

   

2013

   

2014

   

2013

   

2014

   

RMB

   

RMB

   

US$

   

RMB

   

RMB

   

US$

   

(in thousands except per share data)

                                   

Revenues

   

150,586

     

166,675

     

26,863

     

420,942

     

472,128

     

76,093

Direct costs

   

(27,032)

     

(36,047)

     

(5,810)

     

(78,884)

     

(96,171)

     

(15,500)

Gross profit

   

123,554

     

130,628

     

21,053

     

342,058

     

375,957

     

60,593

Operating expenses

                                             

Research and development

   

(2,401)

     

(2,418)

     

(390)

     

(7,234)

     

(7,247)

     

(1,168)

Sales and marketing

   

(28,217)

     

(30,271)

     

(4,879)

     

(84,274)

     

(92,967)

     

(14,984)

General and administrative

   

(27,193)

     

(30,096)

     

(4,850)

     

(82,637)

     

(90,270)

     

(14,549)

Total operating expenses

   

(57,811)

     

(62,785)

     

(10,119)

     

(174,145)

     

(190,484)

     

(30,701)

Operating income

   

65,743

     

67,843

     

10,934

     

167,913

     

185,473

     

29,892

Other expense, net

                                             

Interest income

   

3,761

     

4,574

     

737

     

12,255

     

13,544

     

2,183

Interest expense

   

(21,866)

     

(25,760)

     

(4,152)

     

(53,085)

     

(75,864)

     

(12,227)

Exchange loss

   

(194)

     

(147)

     

(24)

     

(249)

     

(149)

     

(24)

Dividend income

   

1,189

     

1,148

     

186

     

9,911

     

2,344

     

378

Others

   

603

     

(537)

     

(87)

     

1,647

     

760

     

122

Total other expense, net

   

(16,507)

     

(20,722)

     

(3,340)

     

(29,521)

     

(59,365)

     

(9,568)

Income before income tax

   

49,236

     

47,121

     

7,594

     

138,392

     

126,108

     

20,324

Income tax expense

   

(14,489)

     

(13,512)

     

(2,178)

     

(45,568)

     

(35,663)

     

(5,748)

Net income

   

34,747

     

33,609

     

5,416

     

92,824

     

90,445

     

14,576

Net income attributable to non-controlling interests

   

(193)

     

(225)

     

(36)

     

(460)

     

(76)

     

(12)

Net income attributable to China Cord Blood Corporation's shareholders

   

 

34,554

     

 

33,384

     

5,380

     

 

92,364

     

 

90,369

     

 

14,564

Net income per share:

                                             

Attributable to ordinary shares

                                             

- Basic

   

0.41

     

0.41

     

0.07

     

1.14

     

1.13

     

0.18

- Diluted

   

0.41

     

0.41

     

0.07

     

1.14

     

1.13

     

0.18

 Other comprehensive income

                                             

 

- Net effect of foreign currency translation, net of nil tax

   

2,391

     

1,840

     

297

     

11,985

     

3,282

     

529

- Net unrealized (loss)/gain in available-for-sale equity securities, net of nil tax

   

(19,504)

     

(34,297)

     

(5,528)

     

64,054

     

(38,609)

     

(6,223)

Comprehensive income

   

17,634

     

1,152

     

185

     

168,863

     

55,118

     

8,882

                                               

Comprehensive income attributable to non-controlling interests

   

(193)

     

(225)

     

(36)

     

(460)

     

(76)

     

(12)

Comprehensive income attributable to China Cord Blood Corporation's shareholders

   

17,441

     

 

927

     

 

149

     

 

168,403

     

 

55,042

     

 

8,870

 

EXHIBIT 3

CHINA CORD BLOOD CORPORATION
RECONCILIATION OF NON-GAAP OPERATING INCOME
For the Three Months and Nine Months ended December 31, 2013 and 2014

 
   

Three months ended
December 31,

   

Nine months ended

December 31,

   

2013

   

2014

   

2013

   

2014

   

RMB

   

RMB

   

US$

   

RMB

   

RMB

   

US$

   

(in thousands)

                                   

 

GAAP amount of operating income

   

65,743

     

67,843

     

10,934

     

167,913

     

185,473

     

29,892

 

Depreciation and amortization expense[8]

   

9,949

     

12,877

     

2,075

     

27,257

     

37,585

     

6,058

Share-based compensation expense[9]

   

-

     

2,497

     

402

     

-

     

2,497

     

402

 

Non-GAAP operating income

   

75,692

     

83,217

     

13,411

     

195,170

     

225,555

     

36,352

                                               

[8] Depreciation and amortization expenses relate to property, plant and equipment and intangible assets respectively.

[9] Share-based compensation expense relates to the Company's RSU Scheme in which 7,300,000 RSUs were granted to certain executives, directors and key employees during the three months ended December 31, 2014. Out of 7,300,000 RSUs, 7,080,000 Shares were then issued and deposited into a Trust.

 




Source: China Cord Blood Corporation
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