Dehaier Medical Systems Ltd. Reports Full Year 2014 Financial Results

BEIJING, April 30, 2015 (GLOBE NEWSWIRE) -- Dehaier Medical Systems Ltd. (Nasdaq:DHRM) ("Dehaier" or the "Company"), which develops, markets and sells medical devices and wearable sleep respiratory products in China, today reported its financial results for the fiscal year ended December 31, 2014.

Mr. Ping Chen, Dehaier's Chief Executive Officer, stated: "During 2014, we furthered the strategic restructuring of our business focus from medical equipment distribution to mobile internet-based medical devices and services, including wearable sleep respiratory solution systems for Obstructive Sleep Apnea Syndrome ("OSAS"), telemedicine services, hospital management and wireless network solutions. Though our earnings declined in 2014 as we continued to transform our business platform and increased our spending on the development of our sleep respiratory business, we are encouraged by the progress of our sleep respiratory business. With our wearable sleep respiratory solution systems for OSAS gradually selling to more hospitals and medical examination centers across China, we are increasingly confident in the long-term outlook of our sleep respiratory business and expect it to evolve into one of the key growth drivers of our business in coming years."

Mr. Chen continued, "The healthcare industry is transforming as both consumers and physicians are beginning to tap into new technologies such as mobile healthcare, telemedicine, and smart wearable medical devices. We believe our wearable sleep respiratory solution systems for OSAS position us well to capitalize on these new trends.

"Looking ahead, we will continue to pursue sustainable growth by enhancing our capability to deliver our systems to more medical institutions and by promoting the application of sleep respiratory solution systems we delivered. We will not only promote the application of our systems in sleep centers, respiration departments and ENTs but also promote application of our systems to a large number of hospitalized patients for pre- and post-operative sleep diagnosis. We will continue focusing on the penetration of private physical examination chains which we believe have significant potential users for our sleep respiratory solution systems. With substantial sleep diagnostic market demand from existing chronic disease patients in China, we plan to sell our systems to community clinics and expect meaningful contribution from the community clinic market in coming quarters. We will also actively explore opportunities to collaborate in niche market segments or verticals as well as with universities and research institutes. That said, we believe 2015 will bring further transformation of our business platform and significant progress in our new business initiatives," Mr. Chen concluded.

Financial Highlights for Fiscal Year 2014

• Revenue of $11.99 million, compared to $16.86 million for 2013;
• Gross profit decreased by 50.21% year-over-year to $3.19 million;
• Gross margin of 26.62%, compared to 38.03% for 2013;
• Operating loss of $2.11 million, compared to operating income of $3.51 million a year ago;
• Adjusted operating income (non-US GAAP) of $0.98 million, compared to $4.88 million a year ago;
• Net income attributable to the Company was $1.00 million, or $0.18 per diluted share, compared to $2.00 million, or $0.43 per diluted share, for 2013.

Operation Highlights for Fiscal Year 2014

• In January 2014, the Company received approval from the China Food and Drug Administration ("CFDA") for its second generation DHR998 Sleep Diagnostic Device.
   
• In February 2014, the Company sold 734,700 shares of its common stock and warrants to purchase an aggregate of 220,410 shares of common stock to institutional investors in a registered offering. Net proceeds for the Company from the registered offering were approximately $6.1 million.
   
• In April 2014, the Company began serving as the exclusive product-appointed distribution agent for some of the world's leading medical companies in bidding for multiple government procurement projects in China, and the Company became an authorized agent of Olympus (Beijing) Sales & Service Co., Ltd. to supply its electronic gastroscope and electronic bronchoscope products for several medical device procurement projects funded by the Chinese government.
   
• In June 2014, the Company received approval from the CFDA for its Morpheus Ox software, and the Company obtained a software copyright certificate for its Tele-Consultation Management System V1.0 from China's State Copyright Bureau and a software product register and test report from the Software Testing Center of China's State Information Center.
   
• In September 2014, the Company announced that it had cooperated with several large medical enterprises in multiple medical equipment procurement projects for top-tier hospitals in China and successfully secured purchase orders of medical equipment including anesthesia machines, defibrillators, color doppler ultrasound machines, magnetic resonance imaging machines, computed tomography machines and video bronchoscopes.
   
• In October 2014, the Company announced that 22 hospitals and 6 medical examination centers in Beijing, Shanghai, Tianjin, Henan, Shandong, Shanxi, and Gansu provinces had introduced its wearable sleep respiratory technology systems that provide OSAS diagnosis, CPAP treatment, curative effect evaluation and other related services.
   
• In November 2014, the Company announced that its sleep respiratory solution systems were adopted by an additional 26 major hospitals and 4 medical examination centers in Beijing, Tianjin, Shanxi, Hebei, Anhui, Hubei, Shandong, Inner Mongolia, and Gansu provinces and the Company signed a new software license and strategic cooperation agreement with Israel-based WideMed Technologies Ltd.