BEIJING, Aug. 26, 2020 /PRNewswire/ -- Concord Medical
Services Holdings Limited ("Concord Medical" or the "Company")
(NYSE: CCM), a healthcare provider specializing in cancer care,
research and prevention by operating a network of medically
advanced comprehensive cancer hospitals and standalone radiotherapy
and diagnostic imaging centers in China, today announced its unaudited
consolidated financial results for the six months ended
June 30, 2020[1].
2020 First Half Highlights
- Total net revenues were RMB83.0
million ($11.7 million) in the
first half of 2020, representing a 16.6% decrease from total net
revenues of RMB99.5 million in the
same period last year. Total net revenues included the net revenues
from the network business of RMB37.7
million ($5.3 million) and the
net revenues from hospital business of RMB45.3 million ($6.4
million).
- Gross loss was RMB3.5 million
($0.5 million) in the first half of
2020, compared to the gross profit of RMB3.1
million in the first half of 2019. The gross loss margin was
4.2% for the first half of 2020, compared to the gross profit
margin of 3.1% for the same period last year.
- Net loss attributable to ordinary shareholders in the first
half of 2020 was RMB128.8 million
($18.2 million),
compared to RMB140.1 million in the
same period last year.
- Basic and diluted loss per share for Class A and Class B
ordinary shares[2] in the first half of 2020 were both
RMB2.23 ($0.32), compared to RMB2.03, respectively, in the same period last
year.
- Non-GAAP net loss in the first half of 2020 was RMB155.0 million ($21.9
million), compared to non-GAAP net loss of RMB149.3 million in the same period last year.
Non-GAAP basic and diluted loss per share for Class A and Class B
ordinary shares in the first half of 2020 were both RMB2.15 ($0.30),
compared to RMB1.95 in the same
period last year.
- Adjusted EBITDA[3] (non-GAAP) was negative
RMB113.1 million ($16.0 million) in the first half of 2020,
compared to negative RMB108.3 million
in the same period last year.
Dr. Jianyu Yang, Chairman and
Chief Executive Officer of Concord Medical, commented, "In the
first half of 2020, the Company's business was affected by the
coronavirus disease (COVID-19) epidemic. As the epidemic situation
is under control in China, the
Company's business has returned to normal. In particular,
compared with the same period in 2019, our Shanghai Meizhong Jiahe
Cancer Center nearly doubled its revenue."
"The Company's Shanghai Meizhong Jiahe Medical Imaging
Diagnostic Center (the "Imaging Diagnosis Center") has been
officially opened in April 2020,
which will expand the Company's business income."
"The proton equipment of Guangzhou Concord Cancer Center (the
"Cancer Center") has arrived and is expected to be hoisted in the
recent months. Besides, the construction of the Cancer Center
(exclude the proton part) is nearly competed, and the Company is
starting the preparation for the opening of the Cancer Center. With
the gradual operation of the Cancer Center to the mature stage, the
Company's revenue will also be greatly improved in the next few
years."
2020 First Half Financial Results
Network Business
Net revenues from the network business were RMB37.7 million ($5.3
million), representing a 44.6% decrease from net revenues of
RMB68.0 million in the first half of
2019, primarily attributable to the effect of the COVID-19 epidemic
and the closure of certain centers in our network of centers. With
four centers closed in the first half of 2020, the Company operated
a network of 27 centers in 20 cities in China as of June 30,
2020.
Cost of revenues of the network business was RMB14.6 million ($2.1
million), representing a 58.0% decrease from RMB34.8 million in the first half of 2019.
Gross profit from the network business was RMB23.1 million ($3.3
million), representing a 30.4% decrease from RMB33.2 million in the first half of 2019. The
gross profit margin of the network business for the first half of
2020 was 61.3%, compared to the gross profit margin of 48.8% for
the same period last year.
Selling expenses of the network business were RMB19.4 million ($2.7
million), representing a 108.6% increase from RMB9.3 million in the first half of 2019. Selling
expenses as a percentage of net revenues from the network business
was 51.5% in the first half of 2020, compared to 13.7% in the first
half of 2019. The increase in selling expenses of the network
business was mainly due to the increase in advertisement and
promotion expenses.
General and administrative expenses of the network business were
RMB56.9 million ($8.1 million), representing a 30.1% decrease from
RMB81.4 million in the first half of
2019. General and administrative expenses as a percentage of net
revenues from the network business were 150.9% in the first half of
2020, compared to 119.7% in the same period last year. The decrease
was mainly because Zhongrong Fund management fees have been fully
settled in the second half of 2019.
Comparing to RMB24.8 million in
the same period last year, capital expenditures decreased to
RMB3.9 million ($0.6 million) in the first half of 2020,
primarily for procuring equipment for network centers.
Accounts receivable were RMB61.1
million ($8.6 million) as of
June 30, 2020, compared to
RMB67.1 million as of December 31, 2019. The average period of sales
outstanding for accounts receivable (also known as "Days Sales
Outstanding") was 298 days in the first half of 2020.
During the first half of 2020, the Company handled 3,837 patient
treatment cases and 40,444 patient diagnostic cases, representing a
28.1% decrease and a 45.9% decrease from the same period last year,
respectively. The decreases in patient treatment and diagnostic
cases were mainly due to the influence of the COVID-19
epidemic.
Hospital Business
Net revenues from the hospital business were RMB45.3 million ($6.4
million) in the first half of 2020, representing a 43.8%
increase from net revenues of RMB31.5
million in the first half of 2019, mainly because the
operation of Shanghai Meizhong Jiahe Cancer Center Co., Ltd. has
gradually matured and the Imaging Diagnostic Center opened in this
April.
Cost of revenues of the hospital business in the first half of
2020 was RMB71.8 million
($10.2 million), representing a 16.6%
increase from cost of revenues of RMB61.6
million in the first half of 2019, mainly because of the
preparation and operation of the Imaging Diagnostic Center.
Gross loss from the hospital business was RMB26.5 million ($3.8
million) in the first half of 2020, compared to RMB30.1 million in same period last year. The
gross loss margin of the hospital business for the first half of
2020 was 58.5%, compared to the gross loss margin of 95.8% for the
same period last year.
Selling expenses of the hospital business were RMB2.7 million ($0.4
million) in the first half of 2020, representing an 80.0%
increase from selling expenses of RMB1.5
million in the first half of 2019. Selling expenses as a
percentage of net revenues from the hospital business was 6.0% in
the first half of 2020, compared to 4.8% in the first half of 2019.
The increase was mainly because the market research cost increase
for the Imaging Diagnosis Center and the Cancer Center.
General and administrative expenses of the hospital business
were RMB77.5 million ($11.0 million) in the first half of 2020, of
which employee benefit expenses were RMB31.7
million ($4.5 million). In the
same period of last year, general and administrative expenses of
the hospital business were RMB58.1
million. The increase was mainly due to the increase in
salary and rental fees for hospitals. General and administrative
expenses as a percentage of net revenues from the hospital business
was 171.1% in the first half of 2020, compared to 184.4% in the
first half of 2019.
Comparing to RMB410.5 million in
the first half of 2019, capital expenditures of the hospital were
RMB364.9 million ($51.6 million) in the first half of 2020. The
decrease was mainly related to the decrease in construction fees
and medical equipment payment for Beijing Proton Medical Center,
Shanghai Concord Cancer Center and the Cancer Center.
As of June 30, 2020, accounts
receivable from hospital business were RMB11.2 million ($1.6
million), representing an 18.2% decrease from accounts
receivable of RMB13.7 million as of
December 31, 2019. The number of Days
Sales Outstanding was 50 days in the first half of 2020.
As of June 30, 2020, the Company
had bank loans and other borrowings totaling RMB2.0 billion ($288.6
million).
Recent Developments
The Imaging Diagnosis Center commenced operation in April 2020. The Imaging Diagnosis Center is
located on the second floor of the Medical Technology Center of
Shanghai Xinhongqiao International Medical Park (the "Park"), which
is the center of the Park. The Imaging Diagnosis Center provides
high-quality diagnostic imaging services, such as radiology,
ultrasound and nuclear medicine, diagnosis and remote consultation,
education and training, to all the medical institutions, premium
clinics and medical institutions around the Park. Advanced imaging
diagnostic equipment, such as CT, magnetic resonance, PET-CT and
PET-MRI, have been installed in the Imaging Diagnosis Center.
Notes:
|
[1] This
announcement contains translations of certain RMB amounts into U.S.
dollars at specified rates solely for the convenience of the
reader. Unless otherwise noted, all translations of RMB into U.S.
dollars are made at a rate of RMB7.0651 to $1.00, the noon buying
rate in New York City for cable transfers payable in RMB, as
certified for customs purposes by the Federal Reserve Bank of New
York on June 30, 2020.
|
[2] The
Company adjusts for the accretion of mezzanine equity in the
calculation of loss attributable to ordinary shareholders of the
Company used in the loss per share for Class A and Class B ordinary
shares calculation.
|
[3]
Adjusted EBITDA is defined as net income plus interest, taxes,
depreciation and amortization, share-based compensation expenses
and other adjustments. Other adjustments include foreign exchange
gain (loss), net, loss on disposal of long-lived equipment, income
from disposal of associate companies and other income.
|
About Concord Medical
Concord Medical Services Holdings Limited is a healthcare
provider specializing in cancer care, research and prevention. The
Company operates a network of medically advanced comprehensive
cancer hospitals and standalone radiotherapy and diagnostic imaging
centres in China. The Company
focuses on providing multidisciplinary cancer care approach in all
areas of oncology services in its cancer hospitals. The Company
also equips its hospitals with technologically advanced equipment
such as the state-of-the-art proton therapy system in its
Beijing, Shanghai and Guangzhou cancer hospitals. As of June 30, 2020, the Company operated a network of
27 centers based in 20 hospitals, spanning over 20 cities across 13
provinces and administrative regions in China. To ensure the commitment to the highest
level of clinical care for patients, the Company offers ongoing
education and training for doctors and other medical professionals
in its network hospitals and centres in both local and overseas
medical institutions. For more information, please see
http://ir.ccm.cn.
Safe Harbor Statement
This announcement contains forward-looking statements. These
forward-looking statements can be identified by words or phrases
such as "will," "expects," "anticipates," "future," "intends,"
"plans," "believes," "estimates" and similar expressions.
Forward-looking statements are inherently subject to uncertainties
and contingencies beyond the Company's control and based upon
premises with respect to future business decisions, which are
subject to change. A number of important factors could cause actual
results to differ materially from those contained in any
forward-looking statement. The Company does not undertake any
obligation to update any forward-looking statement, except as
required under applicable law.
About Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in
accordance with United States Generally Accepted Accounting
Principles ("GAAP"), Concord Medical uses certain non-GAAP
measures. The Company presents certain of its financial information
that is adjusted from results based on GAAP to exclude the impact
of share-based compensation expense. The Company believes excluding
share-based compensation expense from its GAAP financial measures
is useful for its management and investors to assess and analyze
the Company's core operating results, as such expense is not
directly attributable to the underlying performance of the
Company's business operations and do not impact its current cash
earnings. Concord Medical also believes these non-GAAP measures
excluding share-based compensation expense are important in helping
investors to understand the Company's current financial performance
and future prospects and to compare business trends among different
reporting periods on a consistent basis. In addition, Concord
Medical also presents the non-GAAP measure of Adjusted EBITDA,
which is defined in this announcement as net income plus interest,
taxes, depreciation and amortization, and share-based compensation
expenses and other adjustments. Other adjustments include foreign
exchange gain (loss), net, loss on disposal of long-lived
equipment, income from disposal of associate companies and other
income. Furthermore, Adjusted EBITDA eliminates the impact of items
that the Company does not consider to be indicative of the
performance of the network business and hospital business. The
Company believes investors will similarly use Adjusted EBITDA as
one of the key metrics to evaluate its financial performance and to
compare its current operating results with corresponding historical
periods and with other companies in the healthcare services
industry. The presentation of these additional measures should not
be considered a substitute for or superior to GAAP results or as
being comparable to results reported or forecasted by other
companies. The non-GAAP measures have been reconciled to GAAP
measures in the attached financial information.
Concord Medical
Services Holdings Co., Ltd.
|
Consolidated
Balance Sheets
|
(in
thousands)
|
|
December 31,
2019
|
June 30,
2020
|
|
RMB
|
RMB
|
US
|
|
(audited)
|
(Unaudited)
|
(Unaudited)
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
74,307
|
566,516
|
80,185
|
Accounts
receivable
|
73,731
|
61,528
|
8,709
|
Prepayments and other
current assets
|
94,868
|
288,727
|
40,867
|
Inventories
|
4,341
|
5,573
|
789
|
Net investments in
direct financing leases, current portion
|
35,240
|
40,285
|
5,702
|
Total current
assets
|
282,487
|
962,629
|
136,252
|
|
|
|
|
Non-current
assets
|
|
|
|
Property, plant and
equipment, net
|
1,898,861
|
2,092,567
|
296,184
|
Right of use assets,
net
|
647,080
|
629,989
|
89,169
|
Net investments in
direct financing leases, non-current portion
|
27,084
|
20,249
|
2,866
|
Goodwill
|
210,443
|
213,920
|
30,279
|
Intangible assets,
net
|
532,489
|
524,882
|
74,292
|
Deposits for
non-current assets
|
624,132
|
671,817
|
95,090
|
Long-term
investments
|
64,948
|
321,496
|
45,505
|
Other non-current
assets
|
9,921
|
13,684
|
1,937
|
Total non-current
assets
|
4,014,958
|
4,488,604
|
635,322
|
|
|
|
|
Total
assets
|
4,297,445
|
5,451,233
|
771,574
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
8,275
|
5,992
|
848
|
Accrued expenses and
other liabilities
|
277,101
|
256,106
|
36,249
|
Income tax
payable
|
752
|
2,165
|
306
|
Operating lease
liabilities, current
|
12,884
|
9,867
|
1,397
|
Short-term bank and
other borrowings
|
285,500
|
440,177
|
62,303
|
Long-term bank and
other borrowings, current portion
|
42,939
|
106,768
|
15,112
|
Total current
liabilities
|
627,451
|
821,075
|
116,215
|
|
|
|
|
Non-current
liabilities
|
|
|
|
Long-term bank and
other borrowings, non-current portion
|
1,291,763
|
1,491,961
|
211,173
|
Deferred tax
liabilities
|
165,438
|
166,624
|
23,584
|
Long-term secured
borrowings
|
-
|
116,800
|
16,532
|
Operating lease
liabilities, non-current
|
218,817
|
211,716
|
29,966
|
Other long-term
liabilities
|
104,738
|
104,529
|
14,799
|
Total non-current
liabilities
|
1,780,756
|
2,091,630
|
296,054
|
|
|
|
|
Total
liabilities
|
2,408,207
|
2,912,705
|
412,269
|
|
|
|
|
Contigently
redeemable noncotrolling interests
|
1,909,606
|
2,737,552
|
387,475
|
EQUITY
|
|
|
|
Class A ordinary
shares
|
68
|
68
|
10
|
Class B ordinary
shares
|
37
|
37
|
5
|
Treasury
stock
|
(8)
|
(8)
|
(1)
|
Additional paid-in
capital
|
1,759,941
|
1,823,366
|
258,081
|
Accumulated other
comprehensive loss
|
(97,285)
|
(104,152)
|
(14,742)
|
Accumulated
deficit
|
(1,785,517)
|
(2,078,181)
|
(294,148)
|
Total Concord
Medical Services Holdings Limited shareholders'
deficit
|
(122,764)
|
(358,870)
|
(50,795)
|
Noncontrolling
interests
|
102,396
|
159,846
|
22,625
|
|
|
|
|
Total
deficit
|
(20,368)
|
(199,024)
|
(28,170)
|
|
|
|
|
Total liabilities,
mezzanine equity and deficit
|
4,297,445
|
5,451,233
|
771,574
|
Concord Medical
Services Holdings Co., Ltd.
|
Consolidated
Profit & Loss
|
(in thousands,
except for number of shares and per share
data)
|
|
June 30,
2019
|
June 30,
2020
|
|
RMB
|
RMB
|
US$
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
Revenues net of
value-added tax
|
|
|
|
Network
|
68,046
|
37,674
|
5,332
|
Hospital
|
31,466
|
45,337
|
6,417
|
Total net
revenues
|
99,512
|
83,011
|
11,749
|
|
|
|
|
Cost of
revenues:
|
|
|
|
Network
|
(34,799)
|
(14,644)
|
(2,073)
|
Hospital
|
(61,596)
|
(71,839)
|
(10,168)
|
Total cost of
revenues
|
(96,395)
|
(86,483)
|
(12,241)
|
|
|
|
|
Gross profit/
(loss)
|
3,117
|
(3,472)
|
(492)
|
|
|
|
|
Operating
expenses:
|
|
|
|
Selling
expenses
|
(10,827)
|
(22,095)
|
(3,127)
|
General and
administrative expenses
|
(139,518)
|
(134,397)
|
(19,023)
|
|
|
|
|
Operating
loss
|
(147,228)
|
(159,964)
|
(22,642)
|
Interest
expense
|
(9,329)
|
(20,835)
|
(2,949)
|
Foreign exchange
gain(loss), net
|
2,606
|
(1,736)
|
(246)
|
Loss on disposal of
long-lived equipment
|
(2,781)
|
(5)
|
(1)
|
Interest
income
|
6,124
|
4,050
|
573
|
(Loss) income from
equity method investments
|
(4,536)
|
1,252
|
177
|
Other income,
net
|
2,671
|
4,958
|
702
|
Gain on disposal of
an equity method investment
|
-
|
8,151
|
1,154
|
|
|
|
|
Loss before income
tax
|
(152,473)
|
(164,129)
|
(23,232)
|
Income tax
expenses
|
(7,912)
|
(1,833)
|
(259)
|
Net
loss
|
(160,385)
|
(165,962)
|
(23,491)
|
|
|
|
|
Net loss attributable
to noncontrolling interests
|
(20,268)
|
(37,167)
|
(5,261)
|
Net loss
attributable to Concord Medical Services Holdings
Limited
|
(140,117)
|
(128,795)
|
(18,230)
|
|
|
|
|
Loss per share for
Class A and Class B ordinary shares
|
|
|
|
Basic
|
(2.03)
|
(2.23)
|
(0.32)
|
Diluted
|
(2.03)
|
(2.23)
|
(0.32)
|
|
|
|
|
Weighted average
number of class A and class B ordinary
shares outstanding:
|
|
|
|
Basic
|
130,161,668
|
130,241,995
|
130,241,995
|
Diluted
|
130,161,668
|
130,241,995
|
130,241,995
|
|
|
|
|
Other
comprehensive loss, net of tax of nil
|
|
|
|
Foreign currency
translation, net tax of nil
|
(419)
|
(6,867)
|
(972)
|
Total other
comprehensive loss, net of tax
|
(419)
|
(6,867)
|
(972)
|
Comprehensive
loss
|
(160,804)
|
(172,829)
|
(24,463)
|
Comprehensive loss
attributable to noncontrolling interests
|
(19,123)
|
(37,167)
|
(5,261)
|
Comprehensive loss
attributable to Concord Medical
Services Holdings Limited's shareholders
|
(141,681)
|
(135,662)
|
(19,202)
|
Reconciliations of
non-GAAP results of operations measures to the nearest comparable
GAAP measures(*)
(in RMB thousands, except per share data unaudited)
|
|
|
|
|
|
|
|
|
|
For the six months
ended June 30, 2019
|
|
For the six months
ended June 30, 2020
|
|
GAAP
Measure
|
Adjustment
|
Non-GAAP
Measure
|
|
GAAP
Measure
|
Adjustment
|
Non-GAAP
Measure
|
Operating
loss
|
(147,228)
|
11,130
|
(136,098)
|
|
(159,964)
|
10,916
|
(149,048)
|
Net
loss
|
(160,385)
|
11,130
|
(149,255)
|
|
(165,962)
|
10,916
|
(155,046)
|
Basic loss per
share for Class A and Class B ordinary shares
|
(2.03)
|
0.09
|
(1.95)
|
|
(2.23)
|
0.08
|
(2.15)
|
Diluted loss per
share for Class A and Class B ordinary shares
|
(2.03)
|
0.09
|
(1.95)
|
|
(2.23)
|
0.08
|
(2.15)
|
|
|
|
|
|
|
|
|
(*) The only
adjustment is share-based compensation.
|
|
|
|
|
|
|
|
Reconciliation
from net income to adjusted EBITDA(*)
|
(in RMB thousands,
unaudited)
|
|
|
|
|
For the six
months ended
|
For the six
months ended
|
|
June 30,
2019
|
June 30,
2020
|
Net
loss
|
(160,385)
|
(165,962)
|
Interest
expenses, net
|
3,205
|
16,785
|
Income
tax expenses
|
7,912
|
1,833
|
Depreciation and amortization
|
32,366
|
34,715
|
Share-based compensation
|
11,130
|
10,916
|
Other
adjustments
|
(2,496)
|
(11,368)
|
Adjusted
EBITDA
|
(108,268)
|
(113,081)
|
EBITDA
margin
|
-109%
|
-136%
|
(*) Definition of
adjusted EBITDA: Adjusted EBITDA is defined as net income plus
interest,
taxes, depreciation and amortization, share-based compensation
expenses and other
adjustments. Other adjustments include foreign exchange gain(loss),
net, loss on disposal
of long-lived equipment, income from disposal of associate
companies and other income
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content:http://www.prnewswire.com/news-releases/concord-medical-reports-financial-results-for-the-first-half-of-2020-301118761.html
SOURCE Concord Medical Services Holdings Limited