SHANGHAI, China, June 19 /Xinhua-PRNewswire-FirstCall/ -- Aamaxan Transport Group, Inc. (the “Company” or “ATG”) , through its subsidiaries, including Shanghai Medical Technology Co., Ltd. (“Shanghai Medical”), a PRC company and a leading provider of Hemodialysis equipment (“HDE”) and other related supplies and services, including disposable and diagnostic products, throughout Eastern China, reported its un- audited financial results for the first quarter of 2008 which ended March 31, 2008.
First Quarter of 2008 Results (Unaudited):
Net revenues for the first quarter of 2008 increased 28.3% to $10.2 million compared to $7.9 million for the same period last year. Revenues during the first quarter of 2008 were derived from an increase in sales volume throughout the Shanghai area, as the company added new customers including hospitals and clinics, and patients covered by government reimbursement plans. Hemodialysis equipment and related disposables generated 99.5% of net sales for the first quarter of 2008, while disposables comprised approximately 45% of net sales.
“We continue to experience positive momentum in sales of our HD products and supplies,” stated Mr. Chen Zhong, CEO and Chairman of Shanghai Medical. “We expect to drive incremental revenue growth by utilizing our distribution and sales network to further expand both our geographic and vertical reach, which will be complemented by growing our portfolio of products and services.”
Gross profit for the first quarter of 2008 was up 21.6% to $3.7 million, compared to $3.0 million for the same period last year, yielding gross margins of 36.6% and 38.6%, respectively. The slight decrease in gross margins was due to increasing competition, which caused pricing pressure especially at the larger “Level 3" hospitals. Operating expenses for the first quarter were $0.98 million compared to $0.48 million for the same period last year. The increase was due primarily to sales and marketing expenditures in entering new markets (such as Beijing and its surrounding districts, and Southeastern China) and management’s decision to expand the organization to accommodate future growth while targeting larger volume sales. Operating margins were 26.9% compared to 32.5% for the first quarter of 2008 and 2007, respectively.
Net income for the first quarter of 2008 increased 13.7% to $1.9 million or $0.13 per diluted share, compared to $1.7 million or $0.12 per diluted share, in the first quarter of 2007.
For the first quarter of 2008, the company used weighted average shares outstanding of 15.2 million. However, subsequent to the quarter end, the company completed a capital raise on April 15, 2008. Assuming a conversion of the convertible preferred shares, the company has 20.0 million shares outstanding post the merger and 2.0 million warrants.
Liquidity and Capital Resources:
Cash and cash equivalents totaled $3.5 million as of March 31, 2007 compared to $2.3 million on December 31, 2007, which does not reflect the $12.5 million financing completed on April 15, 2008. The company had $7.0 million in working capital and a current ratio of 2.57 to 1. Accounts receivable rose to $3.5 million from $2.4 million at the year ended December 31, 2007. On March 31, 2008 Shareholders’ Equity was $16.7 million compared to $14.1 million on December 31, 2007.
Mr. Chen concluded, “We will continue to pursue our vision and growth strategy of becoming a dominant integrated service provider of Hemodialysis (HD) and Renal Care products in China. To this end, we will continue to improve both our operating efficiencies and profitability by gaining incremental market share and exploiting the inherent leverage in our business model.”
Growth Strategy
Shanghai Medical’s goal is to become the dominant provider of Hemodialysis and renal care equipment, supplies, and related support services in Eastern China.
About Shanghai Medical Technology Co., Ltd.
Shanghai Medical is a leading provider of Hemodialysis and renal care equipment, supplies, and related support services in Eastern China. Specifically, Shanghai Medical distributes and sells Hemodialysis equipment (“HDE”) which is mainly used by hospitals and medical facilities and includes machines, dialyzers, disposables and diagnostic products used in Hemodialysis, throughout the People’s Republic of China.
Cautionary Statement Regarding Forward Looking Information
This press release may contain forward-looking information about the Company, Asian Group Management Group Ltd and Shanghai Medical. Forward- looking statements are statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as “believe,” “expect,” “may,” “will,” “should,” “project,” “plan,” “seek,” “intend,” or “anticipate” or the negative thereof or comparable terminology, and statements which may include discussions of strategy, and statements about industry trends future performance, operations and products of each of the entities referred to above. Actual performance results may vary significantly from expectations and projections as a result of various factors, including without limitation and the risks set forth “Risk Factors” contained in the Company’s Current Report on Form 8-K filed on April 21, 2008.
The shares of common stock issued in connection with the transactions have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration under the Securities Act and applicable state securities laws or an applicable exemption from those registration requirements. The Company has agreed to file a registration statement covering the resale of the shares of common stock issued in the private placement and certain other shares, within 45 days of closing.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the securities referenced herein in any jurisdiction to any person.
CONTACT: For the Company: Mr. Chen Zhong, CEO and Chairman,
sphiccz@163.net; Or Investor Relations: HC International, Inc. of Ted
Haberfield, Executive VP, +1-760-755-2716, or
thaberfield@hcinternational.net
