HONG KONG, Nov. 23, 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 second quarter and first half
of fiscal year 2016 ended September 30,
2015.
Second Quarter of Fiscal 2016 Highlights
- Revenues for the second quarter of fiscal 2016 increased by
12.7% to RMB171.5 million
($27.0 million) from RMB152.1 million in the prior year period.
- New subscribers and accumulated subscriber base were 16,744 and
474,193, respectively.
- Gross profit increased by 10.2% to RMB134.2 million ($21.1
million) from RMB121.8 million
in the prior year period, despite higher raw material costs.
- Gross margin was 78.3%, compared to 80.1% in the prior year
period.
- Operating income amounted to RMB52.5
million ($8.3 million),
compared to RMB57.5 million in the
prior year period, mainly due to the recognition of share-based
compensation expense related to the restricted share units ("RSUs")
granted in the quarter ended December 31,
2014.
- Operating income before depreciation and amortization and
share-based compensation expenses was RMB79.7 million ($12.5
million), up 12.6% compared to RMB70.8 million in the prior year
period.1
- Interest expense was RMB26.3
million ($4.1 million)
compared to RMB25.2 million in the
prior year period.
- Dividend income was RMB10.0
million ($1.6 million) whereas
no such income was received in the prior year period.
- Impairment loss on available-for-sale equity securities was
RMB8.4 million ($1.3 million) whereas there was no such
impairment loss in the prior year period.
- Net income attributable to the Company's shareholders was
RMB18.7 million ($2.9 million), compared to RMB27.2 million in the prior year period.
- Net cash provided by operating activities for the second
quarter of fiscal 2016 was RMB168.5
million ($26.5 million).
First Half of Fiscal 2016 Highlights
- Revenues for the first half of fiscal 2016 increased by 10.3%
to RMB336.8 million ($53.0 million) from RMB305.5 million in the prior year period.
- New subscriber sign-up reached 32,834 and accumulated
subscriber base expanded to 474,193.
- Gross profit increased by 7.2% to RMB263.0 million ($41.4
million) compared to RMB245.3
million in the prior year period.
- Operating income recorded RMB100.9
million ($15.9 million)
compared to RMB117.6 million in the
prior year period.
- Operating income before depreciation and amortization and
share-based compensation expenses amounted to RMB154.5 million ($24.3
million), up 8.6% year-over-year from RMB142.3 million in the prior year
period.1
- Interest expense amounted to RMB52.2
million ($8.2 million),
compared to RMB50.1 million in the
prior year period.
- Dividend income was RMB11.2
million ($1.8 million)
compared to RMB1.2 million in the
prior year period.
- Impairment loss on available-for-sale equity securities of
RMB8.4 million ($1.3 million) whereas there was no such loss in
the prior year period.
- Net income attributable to the Company's shareholders amounted
to RMB32.3 million ($5.1 million), compared to RMB57.0 million in the prior year period.
- Net cash provided by operating activities for the first half of
fiscal 2016 increased to RMB298.6
million ($47.0 million) from
RMB295.7 million in the prior year
period.
1
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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").
|
"During this quarter, despite the challenge we continue to face
in the 'year of the sheep' which caused the number of new born
within our operational region to contract, the Group managed to
recruit 16,744 new subscribers, representing a year-over-year
increase of 7.4% and a quarter-over-quarter increase of 4.1%. By
end of September 2015, the Group has
recruited over 470,000 accumulative subscribers, which further
consolidates our client base and market leadership." Ms. Ting
Zheng, Chief Executive Officer of China Cord Blood Corporation
stated, "In the reporting period, subscribers from Guangdong province make up the majority of the
new subscribers. At the same time, our hospital coverage and market
presence in Zhejiang market are
gradually improving. The management team is cautiously optimistic
towards the overall market and the Group's performance in the
second half of fiscal 2016. We remain committed toward achieving
our annual new subscriber target in this fiscal year."
Summary – Second Quarter and First Half Ended September 30, 2014 and 2015
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Three Months Ended
September 30,
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Six Months Ended
September 30,
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2014
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2015
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2014
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2015
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(in
thousands)
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RMB
|
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RMB
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US$
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RMB
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RMB
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US$
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Revenues
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152,122
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171,484
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26,982
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|
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305,453
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336,847
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53,000
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Gross
Profit
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121,774
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134,244
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21,123
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|
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245,329
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|
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263,034
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|
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41,386
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Operating
Income2
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57,463
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52,478
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8,258
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117,630
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100,905
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15,876
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Interest
Expense
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25,209
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|
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26,301
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4,138
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50,104
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52,184
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8,211
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Net Income
Attributable to
the Company's
Shareholders
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27,249
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18,723
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2,946
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56,985
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32,274
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5,077
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Earnings per Ordinary
Share
– Basic3 and Diluted
(RMB/US$)
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0.35
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0.25
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0.04
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0.72
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0.44
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0.07
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Revenue Breakdown
(%)
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Processing
Fees
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67.4%
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65.0%
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68.3%
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64.9%
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Storage
Fees
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32.6%
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35.0%
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31.7%
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35.1%
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New Subscribers
(persons)
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15,584
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16,744
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31,132
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32,834
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Total Accumulated
Subscribers (persons)
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407,755
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474,193
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407,755
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474,193
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2
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The reported
operating income for the three months and six months ended
September 30, 2015 included the followings:
(i) Depreciation and amortization expenses of RMB12.6 million ($2.0
million) and RMB24.9 million ($3.9 million) for the three months
and six months ended September 30, 2015; and
(ii) Share-based compensation expense of RMB14.6 million ($2.3
million) and RMB28.7 million ($4.5 million) for the three months
and six months ended September 30, 2015 relates to the Company's
restricted share unit scheme ("RSU Scheme") in which 7,300,000 RSUs
were granted to certain executives, directors and key employees
during the three months ended December 31, 2014. Out of 7,300,000
RSUs granted, 7,080,000 ordinary shares ("Shares") were then issued
and deposited into a trust sponsored and funded by the Company
("Trust").
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3
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The terms of the
outstanding convertible notes provide each holder with the ability
to participate in any excess cash dividend. As there is no excess
cash dividend for the three months and six months ended September
30, 2015, such participating right effect is nil.
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Summary – Selected Cash Flow Statement Items
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Three Months Ended
September 30,
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Six Months Ended
September 30,
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2014
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2015
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2014
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2015
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(in
thousands)
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RMB
|
|
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RMB
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US$
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RMB
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RMB
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US$
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Net cash provided
by
operating
activities
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171,048
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168,506
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26,512
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295,691
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298,632
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46,987
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Net cash used
in
investing
activities
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(3,998)
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(3,951)
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(622)
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(22,395)
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(9,530)
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(1,499)
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Net cash used
in
financing
activities
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-
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(60,000)
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(9,440)
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-
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(60,000)
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(9,440)
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Second Quarter of Fiscal 2016 Financial Results
REVENUES. Revenues increased by 12.7% to
RMB171.5 million ($27.0 million) in the second quarter of fiscal
2016 from RMB152.1 million in the
prior year period, mainly due to the increase of processing fees
from new subscribers and storage revenues from the Company's
growing subscriber base.
Revenues generated from processing fees in the second quarter
were RMB111.4 million ($17.5 million), up 8.7% from RMB102.5 million in the prior year period as a
result of the increase in new subscriber sign-ups. 16,744 new
subscriber sign-ups were recorded during the second quarter of
fiscal 2016, representing a 7.4% increase from 15,584 in the prior
year period. Revenues generated from processing fees accounted for
65.0% of total revenues, compared to 67.4% in the prior year
period.
As the Company's accumulated subscriber base expanded to 474,193
by the end of September 2015,
revenues generated from storage fees increased to RMB60.1 million ($9.5
million), up 21.2% from RMB49.6
million in the prior year period. As a percentage of total
revenues, storage fees accounted for 35.0%, compared to 32.6% in
the prior year period.
GROSS PROFIT. Gross profit for the second quarter
of fiscal 2016 increased by 10.2% to RMB134.2 million ($21.1
million) from RMB121.8 million
in the prior year period, thanks to the increased revenues and the
relatively modest increase in direct cost. The Company continued to
report a solid gross margin of 78.3%.
OPERATING INCOME. Operating income for the second
quarter recorded RMB52.5 million
($8.3 million) compared to
RMB57.5 million in the prior year
period, mainly because of the recognition of share-based
compensation expense. Operating margin in the current quarter was
30.6%, compared to 37.8% in the prior year period. Depreciation and
amortization expenses for the second quarter were RMB12.6 million ($2.0
million), compared to RMB13.3
million in the prior year period. Operating income before
depreciation and amortization and share-based compensation expenses
totaled RMB79.7 million ($12.5 million), up 12.6% from RMB70.8 million in 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.
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Research and Development
Expenses. Research and development expenses were
RMB2.2 million ($0.3 million) compared to RMB2.3 million in the prior year period.
Sales and Marketing
Expenses. Sales and marketing expenses for the second
quarter amounted to RMB37.0 million
($5.8 million), compared to
RMB31.0 million in the prior year
period, which reflects the share-based compensation expense and our
extra efforts made to compensate for negative market conditions. As
a percentage of revenues, sales and marketing expenses were 21.6%,
up from 20.3% in the prior year.
General and Administrative
Expenses. General and administrative expenses for the
second quarter were RMB42.6 million
($6.7 million), compared to
RMB31.0 million in the prior year
period. The recognition of share-based compensation expense mainly
contributed to such increase. As a percentage of revenue, general
and administrative expenses were 24.9%, compared to 20.4% in the
prior year period.
OTHER INCOME AND EXPENSES.
Interest Expense.
Interest expense is mainly related to the Company's outstanding
convertible notes. In the current quarter, the Company incurred
interest expense of RMB26.3 million
($4.1 million) compared to
RMB25.2 million in the prior year
period.
Dividend Income.
During the reporting quarter, we recorded RMB10.0 million ($1.6
million) dividend income received from the Company's equity
investment in the Shandong Cord Blood Bank whereas no such dividend
was recorded in the prior year period.
Impairment Loss. In
this quarter, we incurred an impairment loss of RMB8.4 million ($1.3
million) on available-for-sale equity securities of ordinary
shares held in Life Corporation Limited ("LFC"). Having considered
the significance of the accumulated decline in the fair market
value of the ordinary shares of LFC, the period of time during
which market value of the shares had been below cost and the
current market conditions, the management considers that the
impairment loss on the investment up to September 30, 2015 was other-than-temporary.
Therefore, an impairment loss was recognized in earnings for the
second quarter of fiscal 2016.
NET INCOME ATTRIBUTABLE TO THE COMPANY'S
SHAREHOLDERS. Income before income tax for the second
quarter decreased to RMB31.7 million
($5.0 million) from RMB37.5 million in the prior year period. Net
income attributable to the Company's shareholders for the second
quarter of fiscal 2016 amounted to RMB18.7
million ($2.9 million),
compared to RMB27.2 million in the
prior year period. Net margin for the second quarter of fiscal 2016
was 10.9%.
EARNINGS PER SHARE. The terms of the outstanding
convertible notes provide each holder with the ability to
participate in any Excess Cash Dividend5. Therefore, the
calculation of basic and diluted EPS has taken into consideration
the effect of such participating rights. As there is no Excess Cash
Dividend for the current period, such participating right effect is
nil. Basic and diluted earnings per ordinary share for the second
quarter of fiscal 2016 were RMB0.25
($0.04).6
5
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"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.
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6
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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 granted, 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 as a class.
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 RMB0.23 ($0.04) and RMB0.40
($0.06) for the three months and six months ended September 30,
2015.
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LIQUIDITY. As of September
30, 2015, the Company had cash and cash equivalents of
RMB2,671.8 million ($420.4 million), compared to RMB2,436.7 million as of March 31, 2015. The Company had total debt of
RMB873.2 million ($137.4 million) as of September 30, 2015. Net cash provided by
operating activities for the first quarter of fiscal 2016 amounted
to RMB168.5 million ($26.5 million).
First Half of Fiscal 2016 Financial Results
For the first half of fiscal year 2016, total revenues increased
by 10.3% to RMB336.8 million
($53.0 million) from RMB305.5 million in the prior year period. The
increase was largely attributable to the increase of the Company's
storage revenues from the expanded subscriber base, which reached
474,193 units by the end of September
2015. Revenues from processing fees and storage fees grew by
4.7% and 22.2%, respectively. Gross profit increased by 7.2% to
RMB263.0 million ($41.4 million) from RMB245.3 million in the prior year period.
Operating income amounted RMB100.9
million ($15.9 million)
compared to RMB117.6 million in the
prior year period. The decrease was a result of the recognition of
share-based compensation expense. Operating income before
depreciation and amortization and share-based compensation expenses
totaled RMB154.5 million
($24.3 million), up 8.6% from
RMB142.3 million in the prior year
period.7 Net income attributable to the Company's
shareholders amounted to RMB32.3
million ($5.1 million). Basic
and diluted earnings per share attributable to ordinary shares were
RMB0.44 ($0.07). Net cash provided by operating
activities in the first half of fiscal 2016 was RMB298.6 million ($47.0
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.
|
Recent Developments
- On April 27, 2015, the Company
announced that its board of directors (the "Board") had received a
non-binding proposal letter from Golden Meditech Holdings Limited
("Golden Meditech"), pursuant to which Golden Meditech proposed to
acquire all of the outstanding ordinary shares of the Company not
already directly or indirectly owned by Golden Meditech for
$6.40 per ordinary share in cash and
that the Board had formed a special committee of independent
directors (the "Special Committee") who are not affiliated with
Golden Meditech to evaluate such proposal.
- In May 2015, Golden Meditech
announced a series of agreements and proposed transactions that
would result in the acquisition, directly or indirectly, of
$115 million in aggregate principal
amount of the Company's outstanding 7% senior convertible notes due
2017 ("Convertible Notes") and 7,314,015 ordinary shares of the
Company (the "CGL Sale Shares"), subject to certain conditions
(including receipt of shareholder approvals) and potential
adjustments to the relevant purchase prices.
- On August 6, 2015, the Company
announced that the Board had received a non-binding acquisition
proposal letter from Nanjing Xinjiekou Department Store Co., Ltd.
("Nanjing Xinjiekou"), pursuant to which Nanjing Xinjiekou offered
to acquire all of the Company's China business, including all of the Company's
equity interests in its China
subsidiaries and its assets and resources relating to its business
in China. The purchase price
offered is not lower than RMB6.0
billion. Nanjing Xinjiekou's proposal was evaluated by the
Special Committee.
- In August 2015, the Company was
informed that Magnum Opus 2 International Holdings Limited, an
entity wholly owned by Mr. Yuen Kam, chairman of the Board, had
acquired the outstanding shares of Excellent China Healthcare
Investment Limited and thereby had indirectly acquired $65 million of the Convertible Notes.
- On October 26, 2015, Golden
Meditech completed an open offer of 985,695,846 offer shares
("Offer Shares") of Golden Meditech (the "Open Offer"). Pursuant to
the underwriting agreement dated July 27,
2015 between Golden Meditech and Bio Garden Inc.
("Bio Garden"), an entity controlled
by Mr. Yuen Kam, Bio Garden acted as
the sole underwriter for Golden Meditech in the Open Offer.
Bio Garden acquired a total of
743,704,302 Offer Shares of Golden Meditech in the Open Offer,
including 308,379,302 Offer Shares which had not been taken up by
the shareholders of Golden Meditech who were eligible to
participate in the Open Offer. The total proceeds from the Open
Offer amounted to approximately HK$986
million (before expenses in relation to the Open Offer). The
Company was informed in November 2015
that Golden Meditech applied a portion of the net proceeds from the
Open Offer to the purchase of $25
million in principal amount of Convertible Notes and the CGL
Sale Shares and that it currently intends to apply the remaining
net proceeds to acquire the other $25
million in aggregate principal amount of Convertible
Notes.
- On November 5, 2015, Golden
Meditech and Nanjing Xinjiekou entered into a non-binding framework
purchase agreement (the "MOU"). Pursuant to the MOU, Nanjing
Xinjiekou proposed to (i) acquire from Golden Meditech an aggregate
of 40,521,494 ordinary shares of the Company to be issued upon
conversion of all outstanding Convertible Notes, the CGL Sale
Shares and 30,681,266 ordinary shares of the Company currently held
by Golden Meditech, which in the aggregate would represent
approximately 65.1% of the enlarged issued share capital of the
Company (the "Minimum Company Shares") and (ii) provide assistance,
including possible financing, to Golden Meditech in its proposed
"going private" transaction involving the Company. The total
consideration for the possible disposal of the Minimum Company
Shares to Nanjing Xinjiekou by Golden Meditech (the "Total
Consideration") is subject to further negotiation between Golden
Meditech and Nanjing Xinjiekou with reference to the valuation of
the Minimum Company Shares, which is preliminarily expected to be
not less than RMB7.255 billion (the
"Expected Valuation").
The Total Consideration is
proposed to be settled by Nanjing Xinjiekou issuing its new shares
(the "Settlement Shares") representing an amount of not less than
RMB4.0 billion and the remaining
RMB3.255 billion of the Total
Consideration being settled in cash, resulting in cash
consideration of approximately RMB41.4 per Minimum Company Share (or
approximately $6.5 per Minimum
Company Share translated at the noon buying rate on September 30, 2015).
The proposed disposal of the
Minimum Company Shares to Nanjing Xinjiekou and the agreement on
the Expected Valuation by Nanjing Xinjiekou are conditional
upon (i) Nanjing Xinjiekou acquiring the Minimum Sale Shares
upon completion of the proposed "going private" transaction of the
Company by Golden Meditech; (ii) Golden Meditech undertaking
not to transfer the Settlement Shares for a period of 36 months;
(iii) Golden Meditech taking effective steps to ensure that
the Company's management does not resign in a 36 months' period;
and (iv) Golden Meditech providing a conditional undertaking
to Nanjing Xinjiekou with respect to the Company achieving certain
profit targets in calendar years 2015, 2016 and 2017, including
providing compensation to Nanjing Xinjiekou with respect to any
profit shortfall.
The proposed disposal of the
Minimum Company Shares to Nanjing Xinjiekou by Golden Meditech and
the agreement on the Expected Valuation by Golden Meditech are
conditional upon (i) Nanjing Xinjiekou providing financing to
Golden Meditech in respect of Golden Meditech's proposed "going
private" transaction of the Company, if requested by Golden
Meditech and subject to agreement between the parties; (ii) neither
the appraised value of the Minimum Company Shares nor the Total
Consideration would be less than RMB7.255
billion; (iii) the market value of the Settlement Shares at
the relevant price determination date will not be less than
RMB4.0 billion and RMB3.255 billion of the Total Consideration will
be settled in cash; (iv) Nanjing Xinjiekou maintains its listing
status on the Shanghai Stock Exchange; and (v) Nanjing Xinjiekou
will not change the strategy or business model of the Company for a
period of 36 months from the date of completion of the proposed
disposal.
In addition to the Minimum Company
Shares, Nanjing Xinjiekou has indicated that it also intends to
acquire the remaining 34.9% of the Company's ordinary shares owned
by other shareholders of the Company. Nanjing Xinjiekou proposed a
preliminary valuation of RMB1.745
billion for such shares, representing a valuation of
approximately RMB41.4 per ordinary
share (or approximately $6.5 per
ordinary share translated at the noon buying rate on September 30, 2015).
The MOU is effective until
May 2016 and Golden Meditech has
agreed not to enter into any discussions, negotiations or
transactions with any party other than Nanjing Xinjiekou in
relation to the sale or disposition of the Minimum Company Shares
during the term of the MOU.
- The Company cautions its shareholders and others considering
trading its securities that no decisions have been made with
respect to the Company's response to Golden Meditech's proposal and
Nanjing Xinjiekou's proposal, and there cannot be any assurance as
to when, if ever, or on what terms any potential transaction will
be consummated.
Conference Call
The Company will host a conference call at 8:00 a.m. ET on Tuesday,
November 24, 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 link 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: 2981323.
Use of Non-GAAP Financial Measures
GAAP results for the three months and six months ended
September 30, 2015 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 the October 2015 revision
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; the non-binding
proposal letters from Golden Meditech and Nanjing Xinjiekou; 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
September 30, 2015 were made at the
noon buying rate of RMB6.3556 to
$1.00 on September 30, 2015 in the City of New York for cable transfers in
Renminbi per U.S. dollar as certified for customs purposes by the
Federal Reserve Bank of New York.
China Cord Blood Corporation makes no representation that the
Renminbi or U.S. dollar amounts referred to in this press release
could have been or could be converted into U.S. dollars or
Renminbi, at any particular rate or at all.
For more information, please contact:
China Cord Blood Corporation
Investor Relations Department
Tel: (+852) 3605-8180
Email: ir@chinacordbloodcorp.com
ICR, Inc.
Mr. William Zima
Tel: (+86) 10-6583-7511
U.S. Tel: (646) 405-5185
Email: William.zima@icrinc.com
EXHIBIT 1
CHINA CORD BLOOD
CORPORATION
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
As of March 31 and
September 30, 2015
|
|
|
|
March
31,
|
|
|
September
30,
|
|
|
2015
|
|
|
2015
|
|
|
RMB
|
|
|
RMB
|
|
|
US$
|
|
|
(in thousands
except share
data)
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
2,436,655
|
|
|
2,671,772
|
|
|
420,382
|
Trading
securities
|
|
7,708
|
|
|
7,861
|
|
|
1,237
|
Accounts receivable,
less allowance for doubtful accounts
(March 31,
2015: RMB28,624; September 30, 2015:
|
|
|
|
|
|
|
|
|
RMB33,073
(US$5,204))
|
|
120,762
|
|
|
124,978
|
|
|
19,664
|
Inventories
|
|
23,803
|
|
|
29,126
|
|
|
4,583
|
Prepaid expenses and
other receivables
|
|
19,508
|
|
|
17,773
|
|
|
2,797
|
Debt issuance
costs
|
|
3,592
|
|
|
3,737
|
|
|
588
|
Deferred tax
assets
|
|
10,270
|
|
|
11,874
|
|
|
1,868
|
Total current
assets
|
|
2,622,298
|
|
|
2,867,121
|
|
|
451,119
|
Property, plant and
equipment, net
|
|
603,167
|
|
|
590,061
|
|
|
92,841
|
Non-current
deposits
|
|
207,258
|
|
|
215,601
|
|
|
33,923
|
Non-current accounts
receivable, less allowance for doubtful accounts
(March 31, 2015: RMB55,211; September 30,
|
|
|
|
|
|
|
|
|
2015:
RMB56,422 (US$8,878))
|
|
194,238
|
|
|
182,265
|
|
|
28,677
|
Inventories
|
|
58,224
|
|
|
61,375
|
|
|
9,657
|
Intangible assets,
net
|
|
115,928
|
|
|
113,618
|
|
|
17,877
|
Available-for-sale
equity securities
|
|
122,416
|
|
|
146,016
|
|
|
22,974
|
Other
investment
|
|
189,129
|
|
|
189,129
|
|
|
29,758
|
Debt issuance
costs
|
|
4,210
|
|
|
2,507
|
|
|
394
|
Deferred tax
assets
|
|
2,618
|
|
|
2,212
|
|
|
348
|
Total
assets
|
|
4,119,486
|
|
|
4,369,905
|
|
|
687,568
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Bank loan
|
|
60,000
|
|
|
-
|
|
|
-
|
Accounts
payable
|
|
12,673
|
|
|
15,987
|
|
|
2,515
|
Accrued expenses and
other payables
|
|
87,381
|
|
|
62,447
|
|
|
9,826
|
Deferred
revenue
|
|
220,140
|
|
|
247,837
|
|
|
38,995
|
Amounts due to
related parties
|
|
20,802
|
|
|
45,428
|
|
|
7,148
|
Income tax
payable
|
|
10,081
|
|
|
11,765
|
|
|
1,851
|
Deferred tax
liabilities
|
|
9,100
|
|
|
11,700
|
|
|
1,841
|
Total current
liabilities
|
|
420,177
|
|
|
395,164
|
|
|
62,176
|
Convertible
notes
|
|
815,851
|
|
|
873,181
|
|
|
137,388
|
Non-current deferred
revenue
|
|
1,099,399
|
|
|
1,223,559
|
|
|
192,517
|
Other non-current
liabilities
|
|
215,585
|
|
|
237,905
|
|
|
37,432
|
Deferred tax
liabilities
|
|
25,261
|
|
|
24,356
|
|
|
3,832
|
Total
liabilities
|
|
2,576,273
|
|
|
2,754,165
|
|
|
433,345
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
Shareholders'
equity of China Cord Blood Corporation
|
|
|
|
|
|
|
|
Ordinary
shares
|
|
|
|
|
|
|
|
|
-
US$0.0001 par value, 250,000,000 shares authorized,
73,140,147
shares issued and 73,003,248 shares
outstanding
|
|
|
|
|
|
|
|
|
as
of March 31 and September 30, 2015, respectively
|
|
50
|
|
|
50
|
|
|
8
|
Additional paid-in
capital
|
|
814,678
|
|
|
843,626
|
|
|
132,737
|
Treasury stock, at
cost
|
|
|
|
|
|
|
|
|
(March 31 and September
30, 2015: 136,899 shares, respectively)
|
|
(2,815)
|
|
|
(2,815)
|
|
|
(443)
|
Accumulated other
comprehensive income
|
|
63,230
|
|
|
74,358
|
|
|
11,700
|
Retained
earnings
|
|
662,615
|
|
|
694,889
|
|
|
109,335
|
Total equity
attributable to China Cord Blood Corporation
|
|
1,537,758
|
|
|
1,610,108
|
|
|
253,337
|
Non-controlling
interests
|
|
5,455
|
|
|
5,632
|
|
|
886
|
Total
equity
|
|
1,543,213
|
|
|
1,615,740
|
|
|
254,223
|
Total liabilities
and equity
|
|
4,119,486
|
|
|
4,369,905
|
|
|
687,568
|
EXHIBIT 2
CHINA CORD BLOOD
CORPORATION
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
|
|
For the Three Months
and Six Months ended September 30, 2014 and 2015
|
|
|
|
|
|
|
|
|
|
Three months
ended
September 30,
|
|
Six months
ended
September 30,
|
|
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
(in thousands
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
152,122
|
|
171,484
|
|
26,982
|
|
305,453
|
|
336,847
|
|
53,000
|
|
Direct costs
|
|
(30,348)
|
|
(37,240)
|
|
(5,859)
|
|
(60,124)
|
|
(73,813)
|
|
(11,614)
|
|
Gross
profit
|
|
121,774
|
|
134,244
|
|
21,123
|
|
245,329
|
|
263,034
|
|
41,386
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
(2,330)
|
|
(2,153)
|
|
(339)
|
|
(4,829)
|
|
(4,087)
|
|
(643)
|
|
Sales and
marketing
|
|
(30,953)
|
|
(36,966)
|
|
(5,816)
|
|
(62,696)
|
|
(74,175)
|
|
(11,671)
|
|
General and
administrative
|
|
(31,028)
|
|
(42,647)
|
|
(6,710)
|
|
(60,174)
|
|
(83,867)
|
|
(13,196)
|
|
Total operating
expenses
|
|
(64,311)
|
|
(81,766)
|
|
(12,865)
|
|
(127,699)
|
|
(162,129)
|
|
(25,510)
|
|
Operating
income
|
|
57,463
|
|
52,478
|
|
8,258
|
|
117,630
|
|
100,905
|
|
15,876
|
|
Other expense,
net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
4,704
|
|
4,387
|
|
690
|
|
8,970
|
|
9,097
|
|
1,431
|
|
Interest
expense
|
|
(25,209)
|
|
(26,301)
|
|
(4,138)
|
|
(50,104)
|
|
(52,184)
|
|
(8,211)
|
|
Exchange
loss
|
|
(182)
|
|
(152)
|
|
(24)
|
|
(2)
|
|
(193)
|
|
(30)
|
|
Dividend
income
|
|
—
|
|
10,020
|
|
1,577
|
|
1,196
|
|
11,200
|
|
1,762
|
|
Impairment loss
on
|
|
|
|
|
|
|
|
|
|
|
|
|
|
available-for-sale
equity securities
|
|
—
|
|
(8,361)
|
|
(1,316)
|
|
—
|
|
(8,361)
|
|
(1,316)
|
|
Others
|
|
680
|
|
(328)
|
|
(52)
|
|
1,297
|
|
(239)
|
|
(38)
|
|
Total other expense,
net
|
|
(20,007)
|
|
(20,735)
|
|
(3,263)
|
|
(38,643)
|
|
(40,680)
|
|
(6,402)
|
|
Income before income
tax
|
|
37,456
|
|
31,743
|
|
4,995
|
|
78,987
|
|
60,225
|
|
9,474
|
|
Income tax
expense
|
|
(10,214)
|
|
(12,785)
|
|
(2,012)
|
|
(22,151)
|
|
(27,774)
|
|
(4,369)
|
|
Net
income
|
|
27,242
|
|
18,958
|
|
2,983
|
|
56,836
|
|
32,451
|
|
5,105
|
|
Net income attributable
to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
non-controlling
interests
|
|
7
|
|
(235)
|
|
(37)
|
|
149
|
|
(177)
|
|
(28)
|
|
Net income
attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China Cord Blood
Corporation's
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shareholders
|
|
27,249
|
|
18,723
|
|
2,946
|
|
56,985
|
|
32,274
|
|
5,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to
ordinary shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Basic
|
|
0.35
|
|
0.25
|
|
0.04
|
|
0.72
|
|
0.44
|
|
0.07
|
|
-
Diluted
|
|
0.35
|
|
0.25
|
|
0.04
|
|
0.72
|
|
0.44
|
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Net effect of
foreign currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
translation, net
of nil tax
|
|
913
|
|
(15,797)
|
|
(2,486)
|
|
1,442
|
|
(15,238)
|
|
(2,398)
|
|
- Net
unrealized (loss)/gain in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
available-for-sale equity securities,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net of nil
tax
|
|
(8,818)
|
|
15,506
|
|
2,440
|
|
(4,312)
|
|
26,366
|
|
4,148
|
|
Comprehensive
income
|
|
19,337
|
|
18,667
|
|
2,937
|
|
53,966
|
|
43,579
|
|
6,855
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
attributable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to non-controlling
interests
|
|
7
|
|
(235)
|
|
(37)
|
|
149
|
|
(177)
|
|
(28)
|
|
Comprehensive
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
attributable to
China Cord Blood Corporation's
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shareholders
|
|
19,344
|
|
18,432
|
|
2,900
|
|
54,115
|
|
43,402
|
|
6,827
|
|
EXHIBIT 3
CHINA CORD BLOOD
CORPORATION
|
|
RECONCILIATION OF
NON-GAAP OPERATING INCOME
|
|
For the Three Months
and Six Months ended September 30, 2014 and 2015
|
|
|
|
|
|
Three months
ended
September
30,
|
|
|
Six months
ended
September
30,
|
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
|
RMB
|
|
|
RMB
|
|
|
US$
|
|
|
RMB
|
|
|
RMB
|
|
|
US$
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP amount of
operating
income
|
|
57,463
|
|
|
52,478
|
|
|
8,258
|
|
|
117,630
|
|
|
100,905
|
|
|
15,876
|
|
Depreciation and
amortization
Expenses8
|
|
13,301
|
|
|
12,575
|
|
|
1,979
|
|
|
24,708
|
|
|
24,903
|
|
|
3,917
|
|
Share-based
compensation
Expense9
|
|
-
|
|
|
14,627
|
|
|
2,301
|
|
|
-
|
|
|
28,720
|
|
|
4,519
|
|
Non-GAAP operating
income
|
|
70,764
|
|
|
79,680
|
|
|
12,538
|
|
|
142,338
|
|
|
154,528
|
|
|
24,312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 quarter ended December 31,
2014. Out of 7,300,000 RSUs granted, 7,080,000 Shares were then
issued and deposited into a Trust.
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/china-cord-blood-corporation-reports-financial-results-for-the-second-quarter-and-first-half-of-fiscal-2016-300183116.html
SOURCE China Cord Blood Corporation