HONG KONG, Dec. 12 /PRNewswire-Asia/ -- China Cord Blood Corporation ("CCBC" or "the Company") (NYSE: CO), China's leading provider of cord blood collection, laboratory testing, hematopoietic stem cell processing, and stem cell storage services, today announced its unaudited financial results for the quarter and six months ended September 30, 2009.
Highlights as of September 30, 2009
-- For the quarter ended September 30, 2009, net revenue increased 30.4%
year-over-year to RMB63.9 million (US$9.4 million) from RMB49.0 million.
Fiscal year first half net revenue reached RMB121.8 million
(US$17.8 million), up 48.7% year-over-year from RMB81.9 million.
-- For the quarter ended September 30, 2009, storage fees accounted for
17.4% of total net revenue, up 3.2 percentage points year-over-year
from 14.2%.
-- The Company had 11,371 new subscribers sign-up during the quarter ended
September 30, 2009, up 19.0% from 9,552 in the same period last year.
As of September 30, 2009, the total accumulated number of subscribers
reached 105,812.
-- The Company had an aggregate of 21,752 new subscribers signed up during
the first half of fiscal year 2010, up 47.1% year-over-year from 14,789.
-- Gross profit for the quarter and six months ended September 30, 2009
amounted to RMB46.3 million (US$6.8 million) and RMB87.9 million
(US$12.9 million) respectively, representing gross margins of 72.4% and
72.2%.
-- Non-GAAP EBITDA for the quarter and six months ended September 30, 2009
amounted to RMB28.9 million (US$4.2 million) and RMB56.7 million
(US$8.3 million) respectively.
-- RMB24.1 million (US$3.5 million) operating income was recorded for the
quarter ended September 30, 2009 despite the increase in administrative
expense. Fiscal year 2010 first half operating income rose 39.9% to
RMB47.2 million (US$6.9 million) from RMB33.7 million in the same
period last year.
-- Quarter ended September 30, 2009, net income attributable to
China Cord Blood Corporation shareholders was RMB17.6 million (US$2.6
million). Net income attributable to shareholders for the six months
ended September 30, 2009 was RMB13.0 million (US$1.9 million).
-- For the quarter ended September 30, 2009, basic EPS and fully diluted
EPS attributable to ordinary shares were RMB0.29 (US$0.04) and RMB0.27
(US$0.04), respectively. For the six months ended September 30, 2009,
basic EPS and fully diluted EPS attributable to ordinary shares were
RMB0.12 (US$0.02) and RMB0.11 (US$0.02), respectively.
-- Non-GAAP basic earnings per share attributable to shareholders for the
quarter and six months ended September 30, 2009 amounted to RMB0.29
(US$0.04) and RMB0.57 (US$0.08), respectively.
Summary - The quarter and six months ended September 30, 2009 and 2008
Three Months Ended Six Months Ended
September 30, September 30,
2009 2008 2009 2008
US$ RMB RMB US$ RMB RMB
(in thousands except percentage and operating data)
Revenue 9,361 63,897 48,988 17,847 121,826 81,935
Gross Profit 6,778 46,265 37,321 12,882 87,938 59,760
Operating Income 3,537 24,144 24,832 6,914 47,199 33,735
Non-GAAP EBITDA 4,237 28,924 26,548 8,308 56,711 37,088
Net Income/(Loss)
Attributable to
China Cord Blood
Corporation
Shareholders 2,584 17,639 5,779 1,911 13,047 (12,260)
EPS Attributable to
Ordinary Shares
- Basic 0.04 0.29 (0.01) 0.02 0.12 (0.43)
Non-GAAP EPS
Attributable to
Shareholders - Basic 0.04 0.29 0.10 0.08 0.57 (0.21)
Net Revenue
Breakdown (%)
Processing Fee 82.3% 84.9% 82.7% 83.1%
Storage Fee 17.4% 14.2% 16.7% 15.7%
Others 0.3% 0.9% 0.6% 1.2%
New Subscribers (persons) 11,371 9,552 21,752 14,789
Accumulated Total Number
of Subscribers (persons) 105,812 64,171 105,812 64,171
"We completed the second quarter with encouraging results," said Ms. Ting Zheng, China Cord Blood Corporation's chairperson and chief executive officer. "As our prior efforts in cultivating the two markets are just starting to bear fruits, it is a great joy to see strong demand in both Beijing municipality and Guangdong province. China's one child policy, rising public awareness of umbilical cord blood stem cells and our effective marketing and promotion strategies are important elements which contributed to our successful market penetration. As the exclusive operator in the Beijing municipality and Guangdong province, we continue to see growth in our local markets thanks to the large addressable market size and their severe under penetration. Following the commencement of our new Beijing storage facility and Guangdong storage facility, we are well equipped to capture the opportunities present in these existing two markets."
Ms. Zheng continued, "Our recent listing on the New York Stock Exchange marks a new era in our corporate history. It is a recognition of our company's achievements as well as our team's dedicated effort. The listing platform offers access and tools for growth, and with our proven execution capabilities, together form a solid foundation and paves the way for the next phase of corporate development. As China's first and largest cord blood bank operator, we will continue to leverage on our industry expertise and first mover advantage to seize opportunities arising in China and the Asia Pacific region."
Financial Results for the Second Fiscal Quarter Ended September 30, 2009
Revenue
Net revenue for the quarter ended September 30, 2009 increased 30.4% year-over-year to RMB63.9 million (US$9.4 million) from RMB49.0 million. Net revenue generated from processing fees recorded a 26.5% increase year-over-year to RMB52.6 million (US$7.7 million) due in part to the 11,371 new subscribers signed up during the quarter, which increased from 9,552 new subscribers for the same period last year. Net revenue from storage fees increased 60.1% to RMB11.1 million (US$1.6 million) as our total subscriber base continued to expand. The total accumulated number of subscribers reached 105,812 as of September 30, 2009, up from 64,171 subscribers as of September 30, 2008. For the quarter ended September 30, 2009, processing fees and storage fees accounted for 82.3% and 17.4% of total net revenue, respectively, compared to 84.9% and 14.2% for the same period last year.
Gross Profit
Gross profit reached RMB46.3 million (US$6.8 million), up from RMB37.3 million for the same period last year, representing a gross margin of 72.4%. Gross margin was 3.8 percentage points lower year-over-year following the commencement of the new Beijing storage facility and the new Guangdong storage facility which came on line in April 2009 and September 2008, respectively. Direct cost for the quarter ended September 30, 2009 was RMB17.6 million (US$2.6 million) which was higher than the RMB11.7 million for the same period last year mainly due to the increase in overhead after the new facilities commenced operation.
Sales and Marketing Expense
Despite the ongoing marketing effort, management continued to tightly monitor sales and marketing expense. Sales and marketing expense as a percentage of net revenue declined from 15.1% last year to 14.8% for the quarter ended September 30, 2009. Total sales and marketing expense for the quarter ended September 30, 2009 was RMB9.5 million (US$1.4 million), an increase of 28.3% from RMB7.4 million for the same period last year.
General and Administrative Expense
To cope with the rising demand and better serve our existing markets, new storage facilities were constructed which boosted total capacity more than six fold, and as a result, in conjunction with work force expansion, total administrative expense for the quarter ended September 30, 2009 increased to RMB12.7 million (US$1.9 million) compared to RMB5.1 million for the same period last year.
Operating Income
Operating income for the quarter ended September 30, 2009 was RMB24.1 million (US$3.5 million) compared to RMB24.8 million for the same period last year because the increase in net revenue was offset by the increase in administrative expense. Operating margin for the quarter ended September 30, 2009 was 37.8%.
Earnings Before Interest, Taxes, Depreciation and Amortization ("non-GAAP EBITDA")
Non-GAAP EBITDA for the quarter ended September 30, 2009 was RMB28.9 million (US$4.2 million), a slight increase of 8.9% year-over-year, translating into a non-GAAP EBITDA margin of 45.3%.
Net Income Attributable To China Cord Blood Corporation Shareholders
Net income attributable to shareholders for the quarter ended September 30, 2009 increased to RMB17.6 million (US$2.6 million), up from RMB5.8 million for the same period of 2008. Net income attributable to shareholders margin for the quarter ended September 30, 2009 was 27.6%, up from 11.8%. Basic earnings per share and fully diluted earnings per share attributable to ordinary shares for the quarter ended September 30, 2009 were RMB0.29 (US$0.04) and RMB0.27 (US$0.04), respectively.
Non-GAAP basic earnings attributable to shareholders for the September 30, 2009 quarter amounted to RMB0.29 (US$0.04), up from RMB0.10 for the same period last year.
Other Selected Data
As of September 30, 2009, the Company had total cash and cash equivalents of RMB247.8 million (US$36.3 million) as compared to RMB161.4 million as of March 31, 2009. As of September 30, 2009, the Company had a balance on short-term loans of RMB45.0 million (US$6.6 million).
As of September 30, 2009, non-current inventories were RMB26.9 million (US$3.9 million) compared to RMB26.1 million as of March 31, 2009. Thirteen units of donated cord blood stem cells were used for treatment during the quarter ended September 30, 2009.
For the convenience of readers, certain RMB amounts have been translated into U.S. dollars at the rate of RMB6.8262 to US$1.00, the noon buying rate in New York City for cable transfers of RMB per U.S. dollar as set forth in the H.10 weekly statistical release of the Federal Reserve Board, as of Wednesday, September 30, 2009. No presentation is made that the RMB amounts could have been or could be converted into U.S. dollars at that rate or at any other certain rate on September 30, 2009 or at any other dates.
Financial Results for the Six Months Ended September 30, 2009
Revenue
Fiscal year 2010 first half net revenue amounted to RMB121.8 million (US$17.8 million), an increase of 48.7% year-over-year from RMB81.9 million. During this period, 21,752 new subscribers signed up for our services, an increase of 47.1% year-over-year from 14,789.
Gross Profit
Backed by the increase in subscriber numbers, gross profit for the six months ended September 30, 2009 amounted to RMB87.9 million (US$12.9 million), an increase of 47.2% from RMB59.8 million for the same period last year. Fiscal year 2010 first half gross margin was 72.2%, similar to 72.9% for the same period last year.
Operating Income
Fiscal year 2010 first half operating income increased 39.9% year-over-year to RMB47.2 million (US$6.9 million). Operating margin decreased by 2.5 percentage points to 38.7% which was largely attributable to the increase in overhead following the storage capacity and work force expansion.
Net Income Attributable to Shareholders
Net income attributable to China Cord Blood Corporation shareholders for the six months ended September 30, 2009 was RMB13.0 million (US$1.9 million), compared to a loss of RMB12.3 million last year. During the six months ended September 30, 2008, total write-off and impairment loss amounted to RMB37.3 million and RMB21.6 million (US$3.2 million) for the six months ended September 30, 2009.
Earnings Per Share
Fiscal year 2010 first half basic earnings per share and fully diluted earnings per share attributable to ordinary shares were RMB0.12 (US$0.02) and RMB0.11 (US$0.02), respectively.
Earnings Before Interest, Taxes, Depreciation and Amortization ("non-GAAP EBITDA")
For the six months ended September 30, 2009, the Company recorded non-GAAP EBITDA of RMB56.7 million (US$8.3 million), up from RMB37.1 million same period last year.
Non-GAAP Earnings Per Share
Non-GAAP basic earnings attributable to shareholders for the six months ended September 30, 2009 amounted to RMB0.57 (US$0.08) comparing to a loss of RMB0.21 same period last year.
Business Outlook for Fiscal Year 2010
The Company expects the total number of new subscribers for fiscal year 2010 will increase by approximately 30% year-over-year or no less than 45,000 new subscribers, which transpires into no less than 30% increase in total net revenue. Accumulated total number of subscribers will be at least 129,000 by March 31, 2010. With intention in geographic expansion, the Company continues to pursue active discussions with several existing licensees and license applicants in certain other regions for potential acquisitions.
The Company's practice is to provide guidance on a full year basis only. Such expectations reflect the Company's current and preliminary views, which is subject to change.
Conference Call
The Company will hold a conference call at 8:00 am EST on Friday, December 11, 2009 to discuss the Company's second quarter financial performance and provide a brief overview of the Company's recent development followed by a question and answer session. Listeners may access the call by dialing 1-866-519-7010 for U.S. domestic callers, +61-2-96960911 for international callers, or 800-90-1036 and 800-93-0392 for Hong Kong callers, access code: 44327945. A replay of the call will be accessible through December 18, 2009 by dialing +852-2888-1115, access code: 44327945.
About China Cord Blood Corporation
China Cord Blood Corporation is the first and the largest cord blood banking operator in China in terms of geographical coverage and is the only cord blood bank operator with more than one license (i.e., Beijing and Guangdong). Under the current PRC government regulations, only one licensed cord blood bank operator is permitted to operate in each licensed region and only six licenses have been issued 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 .
About Non-GAAP Financial Measures
On June 30, 2009, holders of 100% of China Cord Blood Services Corporation's ordinary shares and holders of 76% of China Cord Blood Services Corporation redeemable ordinary shares exchanged their shares for a total of 54,345,104 shares of the Company ordinary shares. Further in August 2009, holders of the remaining 24% of redeemable shares of China Cord Blood Services Corporation exchanged such shares for 3,506,136 shares of the Company's ordinary shares. The Non-GAAP basic income/(loss) per share attributable to China Cord Blood Corporation shareholders for the three months and six months ended September 30, 2009 give effect to the abovementioned share exchange transaction as if they had been completed at the beginning of period. Pro forma adjustments are made to add back the write-off of deferred reverse recapitalization costs and income attributable to redeemable noncontrolling interests as if the above share exchanges with ordinary shareholders of China Cord Blood Services Corporation had been completed at the beginning of period and all reverse recapitalization costs had been written off prior to the completion of the share exchanges with ordinary shareholders of China Cord Blood Services Corporation.
Non-GAAP EBITDA represents operating income excluding acquired intangible assets amortization expense and depreciation expense. We have presented EBITDA because we consider it an important supplemental measure of our performance and believe it is frequently used by analysts, investors and other interested parties in the evaluation of companies in our industry. Management uses EBITDA as a measurement tool for evaluating our actual operating performance compared to budget and prior periods. Other companies in our industry may calculate EBITDA differently than we do, basing the determination on net income before net interest expense, income tax expense (benefit), depreciation and amortization. EBITDA is not a measure of performance under generally accepted accounting principles (GAAP) and should not be considered as a substitute for net income prepared in accordance with GAAP.
The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. The non-GAAP measures described by the Company are reconciled to the corresponding GAAP measure in the exhibits below titled "Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures" and "Reconciliations of non-GAAP EPS to the nearest comparable GAAP measures".
The Company believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to its historical performance and liquidity. The Company believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to the supplemental information used by management in its financial and operational decision-making.
Safe Harbor Statement
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events, performance and results of operations, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in statements filed from time to time with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
For more information, please contact:
China Cord Blood Corporation
Ms. Joeling Law
Phone: +852-3605-8180
Email: ir@chinacordbloodcorp.com
Integrated Corporate Relations, Inc.
In the United States:
Ashley M. Ammon or Christine Duan
Phone: +1-646-277-1200
In China:
Wei-Jung Yang:
Phone: +86-10-6599-7968
Exhibit 1
CHINA CORD BLOOD CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30 and March 31, 2009
September 30, March 31,
2009 2009
US$ RMB RMB
(in thousands except redemption value
and number of shares)
ASSETS
Current assets
Cash and cash equivalents 36,303 247,813 161,406
Accounts receivable, less allowance
for doubtful accounts (September 30,
2009: RMB6,764; March 31, 2009:
RMB 6,170) 9,416 64,274 49,763
Inventories 763 5,211 6,501
Prepaid expenses and other receivables 1,171 7,990 7,978
Deferred tax assets 279 1,908 1,846
Total current assets 47,932 327,196 227,494
Property, plant and equipment, net 36,855 251,574 236,740
Non-current prepayments and deposits 3,013 20,569 27,184
Non-current accounts receivable, less
allowance for doubtful accounts
(September 30, 2009: RMB3,793;
March 31, 2009: RMB2,223) 20,823 142,144 91,761
Inventories 3,940 26,894 26,069
Intangible asset, net 3,923 26,783 27,268
Available-for-sale equity securities 6,130 41,843 26,242
Deferred reverse recapitalization costs -- -- 33,633
Deferred offering costs 129 878 --
Deferred tax assets 64 436 --
Total assets 122,809 838,317 696,391
LIABILITIES
Current liabilities
Bank loan 6,592 45,000 --
Accounts payable 979 6,681 5,128
Accrued expenses and other payables 2,982 20,353 19,269
Deferred revenue 4,238 28,927 18,351
Promissory note 514 3,510 --
Amounts due to related parties 516 3,523 --
Income tax payable 579 3,953 4,321
Total current liabilities 16,400 111,947 47,069
Deferred revenue 11,525 78,676 74,231
Other non-current liabilities 2,212 15,100 13,551
Deferred tax liabilities 476 3,249 4,017
Total liabilities 30,613 208,972 138,868
Commitments and contingencies
Redeemable ordinary shares of China
Cord Blood Services Corporation
US$0.0001 par value, 14,614,140
shares issued and outstanding as of
March 31, 2009 (redemption value of
US$51,088,745 as of March 31, 2009) -- -- 386,577
EQUITY
China Cord Blood Corporation
shareholders' equity Ordinary
shares US$0.0001 par value,
250,000,000 shares authorized,
43,237,100 shares and 62,792,642
shares issued and outstanding as
of March 31, 2009 and September
30, 2009, respectively 6 43 34
Additional paid-in capital 84,038 573,660 140,745
Accumulated other comprehensive loss (517) (3,531) (19,319)
Retained earnings 7,495 51,160 44,082
Total China Cord Blood Corporation
shareholders' equity 91,022 621,332 165,542
Noncontrolling interests 1,174 8,013 5,404
Total equity 92,196 629,345 170,946
Total liabilities, redeemable
ordinary shares and equity 122,809 838,317 696,391
Exhibit 2
CHINA CORD BLOOD CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months and Six Months Ended September 30, 2009 and 2008
Three months ended Six months ended
September 30, September 30,
2009 2008 2009 2008
US$ RMB RMB US$ RMB RMB
(in thousands except per share)
Revenues 9,361 63,897 48,988 17,847 121,826 81,935
Direct costs (2,583) (17,632) (11,667) (4,965) (33,888) (22,175)
Gross profit 6,778 46,265 37,321 12,882 87,938 59,760
Operating expenses
Sales and marketing (1,387) (9,470) (7,382) (2,419) (16,512) (15,047)
General and
administrative (1,854) (12,651) (5,107) (3,549) (24,227) (10,978)
Total operating
Expenses (3,241) (22,121) (12,489) (5,968) (40,739) (26,025)
Operating income 3,537 24,144 24,832 6,914 47,199 33,735
Other income/
(expense), net
Interest income 252 1,723 938 404 2,755 1,911
Interest expense (96) (657) -- (164) (1,117) --
Exchange gain/(loss) 66 451 (88) 83 563 (81)
Write-off of deferred
offering costs -- -- (9,688) -- -- (9,688)
Write-off of
deferred reverse
capitalization costs -- -- -- (3,159) (21,566) --
Impairment loss on
available-for-sale
equity securities -- -- (4,944) -- -- (27,598)
Others 13 83 1,738 55 377 (1,146)
Total other income/
(expense), net 235 1,600 (12,044) (2,781) (18,988) (36,602)
Income/(loss) before
income tax 3,772 25,744 12,788 4,133 28,211 (2,867)
Income tax expense (933) (6,367) (5,840) (1,779) (12,141) (7,798)
Net income/(loss) 2,839 19,377 6,948 2,354 16,070 (10,665)
Income attributable
to noncontrolling
interests (204) (1,391) (1,169) (392) (2,676) (1,595)
Income attributable
to redeemable
noncontrolling
interests (51) (347) -- (51) (347) --
Net income/(loss)
attributable to
China Cord Blood
Corporation
shareholders 2,584 17,639 5,779 1,911 13,047 (12,260)
Net income/(loss)
per share:
Attributable to
ordinary shares
-Basic 0.04 0.29 (0.01) 0.02 0.12 (0.43)
-Diluted 0.04 0.27 (0.01) 0.02 0.11 (0.43)
Attributable to redeemable
ordinary shares
-Basic N/A N/A 0.42 0.13 0.92 0.44
-Diluted N/A N/A 0.42 0.13 0.92 0.44
Exhibit 3
CHINA CORD BLOOD CORPORATION
Reconciliations of non-GAAP results of operations measures to the nearest
comparable GAAP measures
Three Three Three Six Six Six
months months months months months months
Ended Ended Ended Ended Ended Ended
Sep 30, Sep 30, Sep 30, Sep 30, Sep 30, Sep 30,
2009 2009 2008 2009 2009 2008
US$ RMB RMB US$ RMB RMB
('000) ('000) ('000) ('000) ('000) ('000)
GAAP Operating
Income 3,537 24,144 24,832 6,914 47,199 33,735
Depreciation 664 4,537 1,473 1,323 9,027 2,868
Amortization 36 243 243 71 485 485
Earnings before
interest, tax,
depreciation
and amortization
("Non -GAAP
EBITDA") 4,237 28,924 26,548 8,308 56,711 37,088
Exhibit 4
CHINA CORD BLOOD CORPORATION
Reconciliations of non-GAAP EPS to the nearest comparable GAAP measures
3 Months 3 Months 6 Months 6 Months
Ended Sep 09 Ended Sep 08 Ended Sep 09 Ended Sep 08
NUMERATOR ('RMB '000)
GAAP net income/
(loss) attributable
to China Cord Blood
Corporation
Shareholders 17,639 5,779 13,047 (12,260)
Pro forma adjustments:
Income attributable
to redeemable non-
controlling interests 347 -- 347 --
Write-off of deferred
reverse recapital-
ization costs -- -- 21,566 --
Non-GAAP net income
attributable to China
Cord Blood Corporation
shareholders 17,986 5,779 34,960 (12,260)
DENOMINATOR ('000 shares)
Weighted average ordinary
shares issued and
outstanding 61,143 43,237 52,190 43,237
Pro forma adjustments:
Issue of ordinary
shares upon share
exchange with
ordinary shareholders
of China Cord Blood
Services Corporation
in June 2009 -- 12,476 6,238 12,476
Issue of ordinary
shares upon share
exchange with
redeemable ordinary
shareholders of
China Cord Blood
Services Corporation
in August 2009 1,650 3,506 2,578 3,506
Pro forma weighted
average ordinary shares
issued and outstanding 62,793 59,219 61,006 59,219
Non-GAAP basic income/
(loss) per share
attributable to China
Cord Blood Corporation
shareholders (RMB) 0.29 0.10 0.57 (0.21)
Non-GAAP basic income
attributable to
shareholders (US$) 0.04 0.08
