BEIJING, Oct. 1 /PRNewswire-Asia-FirstCall/ -- China Medical Technologies, Inc. (the "Company") (Nasdaq: CMED), a leading China-based medical device company that develops, manufactures and markets advanced in- vitro diagnostic products, today announced the filing of its annual report on Form 20-F for the fiscal year ended March 31, 2009 with the U.S. Securities and Exchange Commission (the "SEC"). The annual report, which contains its consolidated financial statements for the fiscal year ended March 31, 2009 audited by its new independent auditors, PricewaterhouseCoopers, and comparative consolidated financial statements for the fiscal year ended March 31, 2008 audited by its former independent auditors, KPMG, can be accessed on the Company's investor relations website at http://ir.chinameditech.com. Shareholders can receive a hard copy of the annual report free of charge by sending a request to IR@chinameditech.com.
The Company has recently made the following adjustments on its previously reported unaudited quarterly and annual condensed consolidated statements of income which are setout below:
Reclassification of expenses
Reclassification of sales and marketing expenses related to the costs of free ECLIA analyzers to cost of revenues
The Company considered that it was more appropriate to record the costs of ECLIA analyzers provided free of charge to the Company's customers starting from April 2008 in the cost of revenues rather than sales and marketing expenses. The reclassification of the expenses to cost of revenues covered the respective unaudited quarterly consolidated income statement for the quarters ended June 30, 2008, September 30, 2008, December 31, 2008, March 31, 2009 and June 30, 2009 and the unaudited annual consolidated income statement for the fiscal year ended March 31, 2009.
Reclassification of foreign exchange gain (loss) from general and administrative expenses to other income (expense)
The Company reclassified the foreign exchange gain (loss) from general and administrative expenses to other income (expense). The reclassification of the gain (loss) to other income (expense) covered the respective unaudited quarterly consolidated income statement for the quarters ended June 30, 2008, September 30, 2008, December 31, 2008, March 31, 2009 and June 30, 2009 and the unaudited annual consolidated income statement for the fiscal year ended March 31, 2009.
Recognition of the full gain on the sale of the HIFU Business
The Company recently received a letter from Chengxuan International Ltd. ("Chengxuan"), a major shareholder of the Company which is controlled and owned by the Company's Chairman and Chief Executive Officer, Mr. Xiaodong Wu. The letter notified the Company that Chengxuan withdrew its claim of compensation of approximately US$15.5 million against the Company for the events subsequent to the purchase of the HIFU Business from the Company. As such, the Company considered that the previous deferral of the gain of approximately US$15.5 million on the sale of the HIFU Business has become unnecessary and has recorded the full gain on the sale in the unaudited quarterly consolidated income statement for the quarter ended December 31, 2008 and the unaudited annual consolidated income statement for the fiscal year ended March 31, 2009.
The respective unaudited quarterly and annual condensed consolidated statements of income have been adjusted and included in this press release.
About China Medical Technologies, Inc.
China Medical Technologies is a leading China-based medical device company that develops, manufactures and markets advanced in-vitro diagnostic products using Enhanced Chemiluminescence (ECLIA) technology, Fluorescent in situ Hybridization (FISH) technology and Surface Plasmon Resonance (SPR) technology to detect and monitor various diseases and disorders. For more information, please visit http://www.chinameditech.com .
Contact
Winnie Yam
Tel: +852-2511-9808
Email: IR@chinameditech.com
China Medical Technologies, Inc.
Unaudited Condensed Consolidated Statements of Income
For the Three Months Ended
June 30, 2008 Adjustments June 30, 2008
RMB'000 RMB'000 RMB'000
As previously As adjusted
reported on
September 1,
2009 (1)
Revenues 162,052 162,052
Cost of revenues (2) (51,270) (3,444) (54,714)
Gross profit 110,782 107,338
Operating expenses:
Research and development (6,138) (6,138)
Sales and marketing (2) (11,285) 3,444 (7,841)
General and administrative (3) (24,780) 2,755 (22,025)
Total operating expenses (42,203) (36,004)
Operating income 68,579 71,334
Interest income 3,997 3,997
Interest expense -
convertible notes (16,285) (16,285)
Interest expense -
amortization of convertible
notes issuance costs (1,585) (1,585)
Interest expense - other (1,145) (1,145)
Other expense (3) - (2,755) (2,755)
Income before income taxes 53,561 53,561
Income tax expense (12,561) (12,561)
Income from continuing
operations 41,000 41,000
Income from discontinued
Operation, net 32,377 32,377
Net income 73,377 - 73,377
Notes:
(1) As a result of the adoption of FSP APB14-1 effective April 2009, the
Company adjusted interest expense for convertible notes in the
unaudited condensed consolidated statement of income for the three
months ended June 30, 2008 retrospectively in accordance with U.S.
GAAP.
(2) The Company reclassified the costs of free ECLIA analyzers from sales
and marketing expenses to cost of revenues.
(3) The Company reclassified the foreign exchange loss from general and
administrative expenses to other expense.
China Medical Technologies, Inc.
Unaudited Condensed Consolidated Statements of Income
For the Three Months Ended
September 30, September 30,
2008 Adjustments 2008
RMB'000 RMB'000 RMB'000
As previously As adjusted
reported
Revenues 193,967 193,967
Cost of revenues (1) (52,043) (5,265) (57,308)
Gross profit 141,924 136,659
Operating expenses:
Research and development (6,338) (6,338)
Sales and marketing (1) (16,515) 5,265 (11,250)
General and administrative (2) (26,859) 1,387 (25,472)
Total operating expenses (49,712) (43,060)
Operating income 92,212 93,599
Interest income 10,301 10,301
Interest expense -
convertible notes (18,410) (18,410)
Interest expense -
amortization of convertible
notes issuance costs (3,235) (3,235)
Interest expense - other (1,145) (1,145)
Other expense (2) - (1,387) (1,387)
Income before income taxes 79,723 79,723
Income tax expense (14,423) (14,423)
Income from continuing
operations 65,300 65,300
Income from discontinued
Operation, net 52,432 52,432
Net income 117,732 - 117,732
Notes:
(1) The Company reclassified the costs of free ECLIA analyzers from sales
and marketing expenses to cost of revenues.
(2) The Company reclassified the foreign exchange loss from general and
administrative expenses to other expense.
China Medical Technologies, Inc.
Unaudited Condensed Consolidated Statements of Income
For the Three Months Ended
December 31, December 31,
2008 Adjustments 2008
RMB'000 RMB'000 RMB'000
As previously As adjusted
reported
Revenues 225,296 225,296
Cost of revenues (1) (55,818) (2,897) (58,715)
Gross profit 169,478 166,581
Operating expenses:
Research and development (8,304) (8,304)
Acquired in-process research
and development (244,872) (244,872)
Sales and marketing (1) (14,565) 2,897 (11,668)
General and administrative
(2) (3) (38,115) 8,554 (29,561)
Amortization of SPR intangible
assets (2) - (9,132) (9,132)
Total operating expenses (305,856) (303,537)
Operating loss (136,378) (136,956)
Interest income 12,448 12,448
Interest expense -
convertible notes (27,856) (27,856)
Interest expense -
amortization of convertible
notes issuance costs (4,652) (4,652)
Interest expense - other (1,165) (1,165)
Other income (3) - 578 578
Loss before income taxes (157,603) (157,603)
Income tax expense (13,915) (13,915)
Loss from continuing
operations (171,518) (171,518)
Income from and gain on sale
of discontinued
Operation, net (4) 173,422 106,178 279,600
Net income 1,904 106,178 108,082
Notes:
(1) The Company reclassified the costs of free ECLIA analyzers from sales
and marketing expenses to cost of revenues.
(2) The Company disclosed the amortization of SPR intangible assets
separately from general and administrative expenses.
(3) The Company reclassified the foreign exchange gain from general and
administrative expenses to other income.
(4) The Company recorded the full gain on the sale of the HIFU Business.
China Medical Technologies, Inc.
Unaudited Condensed Consolidated Statements of Income
For the Three Months Ended
March 31, March 31,
2009 Adjustments 2009
RMB'000 RMB'000 RMB'000
As previously As adjusted
reported
Revenues 248,635 248,635
Cost of revenues (1) (60,206) (1,628) (61,834)
Gross profit 188,429 186,801
Operating expenses:
Research and development (10,670) (10,670)
Sales and marketing (1) (13,591) 1,628 (11,963)
General and administrative
(2) (3) (48,085) 27,547 (20,538)
Amortization of SPR
intangible assets (2) - (27,379) (27,379)
Total operating expenses (72,346) (70,550)
Operating income 116,083 116,251
Interest income 5,608 5,608
Interest expense -
convertible notes (27,840) (27,840)
Interest expense -
amortization of convertible
notes issuance costs (4,649) (4,649)
Interest expense - other (785) (785)
Other expense (3) - (168) (168)
Income before income taxes 88,417 88,417
Income tax expense (32,143) (32,143)
Income from continuing
operations 56,274 56,274
Income from discontinued
Operation, net - -
Net income 56,274 - 56,274
Notes:
(1) The Company reclassified the costs of free ECLIA analyzers from sales
and marketing expenses to cost of revenues.
(2) The Company disclosed the amortization of SPR intangible assets
separately from general and administrative expenses.
(3) The Company reclassified the foreign exchange loss from general and
administrative expenses to other expense.
China Medical Technologies, Inc.
Unaudited Condensed Consolidated Statements of Income
For the Three Months Ended
June 30, 2009 Adjustments June 30, 2009
RMB'000 RMB'000 RMB'000
As previously As adjusted
reported
Revenues 208,957 208,957
Cost of revenues (1) (52,872) (2,541) (55,413)
Gross profit 156,085 153,544
Operating expenses:
Research and development (11,703) (11,703)
Sales and marketing (1) (13,411) 2,541 (10,870)
General and administrative
(2) (3) (74,366) 27,412 (46,954)
Amortization of SPR
intangible assets (2) - (27,352) (27,352)
Total operating expenses (99,480) (96,879)
Operating income 56,605 56,665
Interest income 2,773 2,773
Interest expense -
convertible notes (35,432) (35,432)
Interest expense -
amortization of convertible
notes issuance costs (4,380) (4,380)
Other income, net (3) 300 (60) 240
Income before income taxes 19,866 19,866
Income tax expense (16,919) (16,919)
Income from continuing
operations 2,947 2,947
Income from discontinued
Operation, net - -
Net income 2,947 - 2,947
Notes:
(1) The Company reclassified the costs of free ECLIA analyzers from sales
and marketing expenses to cost of revenues.
(2) The Company disclosed the amortization of SPR intangible assets
separately from general and administrative expenses.
(3) The Company reclassified the foreign exchange loss from general and
administrative expenses to other income, net.
China Medical Technologies, Inc.
Unaudited Condensed Consolidated Statements of Income
For the Year Ended
March 31, March 31,
2009 Adjustments 2009
RMB'000 RMB'000 RMB'000
As previously As adjusted
reported
Revenues 829,950 829,950
Cost of revenues (1) (219,337) (13,234) (232,571)
Gross profit 610,613 597,379
Operating expenses:
Research and development (31,450) (31,450)
Acquired in-process research
and development (244,872) (244,872)
Sales and marketing (1) (55,956) 13,234 (42,722)
General and administrative
(2)(3) (137,839) 40,243 (97,596)
Amortization of SPR
intangible assets (2) - (36,511) (36,511)
Total operating expenses (470,117) (453,151)
Operating income 140,496 144,228
Interest income 32,354 32,354
Interest expense -
convertible notes (83,238) (83,238)
Interest expense -
amortization of convertible
notes issuance costs (14,387) (14,387)
Interest expense - other (4,240) (4,240)
Other expense, net (3) - (3,732) (3,732)
Income before income taxes 70,985 70,985
Income tax expense (73,042) (73,042)
Loss from continuing
operations (2,057) (2,057)
Income from and gain on sale
of discontinued
Operation, net (4) 258,231 106,178 364,409
Net income 256,174 106,178 362,352
Notes:
(1) The Company reclassified the costs of free ECLIA analyzers from sales
and marketing expenses to cost of revenues.
(2) The Company disclosed the amortization of SPR intangible assets
separately from general and administrative expenses.
(3) The Company reclassified the foreign exchange loss, net from general
and administrative expenses to other expense, net.
(4) The Company recorded the full gain on the sale of the HIFU Business.
