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China Cord Blood Corporation Reports Financial Results For The First Quarter Of Fiscal 2016

Published: Aug 20, 2015

HONG KONG, Aug. 19, 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 first quarter of fiscal 2016 ended June 30, 2015.

First Quarter of Fiscal 2016 Highlights

  • Revenues for the first quarter of fiscal 2016 increased by 7.8% to RMB165.4 million ($26.7 million) from RMB153.3 million in the prior year period.
  • New subscribers and accumulated subscriber base were 16,090 and 457,449, respectively.
  • Gross profit increased by 4.2% to RMB128.8 million ($20.8 million) from RMB123.6 million in the prior year period, despite higher raw material costs.
  • Gross margin was 77.9%, compared to 80.6% in the prior year period.
  • Operating income amounted to RMB48.4 million ($7.8 million), compared to RMB60.2 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 RMB74.8 million ($12.1 million), up 4.6% compared to RMB71.6 million in the prior year period.1
  • Interest expense was RMB25.9 million ($4.2 million) compared to RMB24.9 million in the prior year period.
  • Net income attributable to the Company's shareholders was RMB13.6 million ($2.2 million), compared to RMB29.7 million in the prior year period.
  • Net cash provided by operating activities for the first quarter of fiscal 2016 was RMB130.1 million ($21.0 million).

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

"During the reporting quarter, the market continued to contract and remained challenging. The decline in births, however, did not prevent us from recruiting more than sixteen thousand new subscribers, representing a year-over-year increase of 3.5%, which is in line with management's expectations." said Ms. Ting Zheng, Chief Executive Officer of China Cord Blood Corporation, "We will continue to deepen our existing channels and launch value-added products, utilize O2O channels to increase our conversion ratio, and foster greater customer loyalty by creating parents-children communities. Meanwhile, we continue to build up our team and marketing network for the Zhejiang market. In face of the market contraction in the Chinese lunar "Year of the Sheep", we are determined to achieve our subscriber target for fiscal 2016 by capitalizing on deepening of our existing sales channels and exploring new promotion platforms."

Summary First Quarter Ended June 30, 2014 and 2015


Three Months Ended June 30


2014


2015

(in thousands)

RMB


RMB


US$

Revenues

153,331


165,363


26,672

Gross Profit

123,555


128,790


20,773

Operating Income

60,167


48,427


7,812

Depreciation and
   Amortization Expenses

11,407


12,328


1,988

Share-based 

  Compensation Expense2

-


14,093


2,273

Interest Expense

24,895


25,883


4,175

Net Income Attributable to the
  Company's Shareholders

29,736


13,551


2,185

Earnings per Ordinary Share

   Basic3 and Diluted 

      (RMB/US$)

0.37


0.19


0.03







Revenue Breakdown (%)






Processing Fees

69.2%


64.8%



Storage Fees

30.8%


35.2%









New Subscribers (persons)

15,548


16,090



Total Accumulated
  Subscribers (persons)

392,171


457,449









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


3 The terms of the convertible notes held by KKR China Healthcare Investment Limited ("KKR"), Cordlife Group Limited ("CGL") and Magnum Opus International Holdings Limited ("Magnum") provide each party with the ability to participate in any excess cash dividend. As there is no excess cash dividend for the three months ended June 30, 2015, such participating right effect is nil.

Summary Selected Cash Flow Statement Items



Three Months Ended June 30



2014


2015

(in thousands)


RMB


RMB


US$

Net cash provided by
  operating activities


124,643


130,126


20,988

Net cash used in
  investing activities


(18,397)


(5,579)


(900)

Net cash provided by
  financing activities


-


-


-

First Quarter of Fiscal 2016 Financial Results

REVENUES. Revenues increased by 7.8% to RMB165.4 million ($26.7 million) in the first quarter of fiscal 2016 from RMB153.3 million in the prior year period.

To read full press release, please click here.

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