First Quarter 2007 Net Income Grows 79% Year-Over-Year
SHENZHEN, China, May 14 /Xinhua-PRNewswire-FirstCall/ -- Mindray Medical
International Limited (NYSE: MR), a leading developer, manufacturer and
marketer of medical devices in China with a rapidly growing international
presence, today announced its selected unaudited financial results for the
first quarter ended March 31, 2007.
Highlights for First Quarter 2007
-- First quarter 2007 net revenues increased 32.7% over the first
quarter 2006 to RMB422.4 million (US$54.7 million). During the first
quarter 2006, the Company recognized RMB17.8 million in sales from
a large central government tender. After factoring out the benefits
attributable to the aforementioned government tender, first
quarter 2007 net revenue growth would have been 40.6% year-over-
year.
-- Net revenues generated in international markets in the first
quarter 2007 increased by 60.4% to RMB213.9 million (US$27.7
million) from RMB133.4 million in the first quarter 2006.
-- Net revenues generated in China in the first quarter 2007 increased
by 12.7% to RMB208.5 million (US$27.0 million) from RMB185.0
million in the first quarter 2006. Adjusted for the aforementioned
government tender, first quarter 2007 domestic net revenue growth
would have been 24.7% year-over-year.
-- First quarter 2007 gross profit was RMB237.1 million (US$30.7
million), representing a 44.7% increase from RMB163.9 million in the
first quarter 2006. The consolidated gross margin for the first
quarter 2007 expanded to 56.1% from 53.8% achieved in the fourth
quarter 2006 and from 51.5% achieved in the first quarter 2006,
representing a margin expansion of 460 basis points from the first
quarter 2006.
-- First quarter 2007 non-GAAP net income, as defined below, increased
95.5% year-over-year to RMB139.6 million (US$18.1 million) from
RMB71.4 million in the first quarter 2006. First quarter 2007 GAAP
net income was RMB122.4 million (US$15.8 million) compared to RMB68.4
million in the first quarter 2006, representing an increase of 78.9%
year-over-year.
-- First quarter 2007 non-GAAP basic and diluted earnings per share, as
defined below, were RMB1.32 (US$0.17) and RMB1.25 (US$0.16),
respectively. First quarter 2007 GAAP basic and diluted earnings per
share were RMB1.16 (US$0.15) and RMB1.09 (US$0.14), respectively.
The Company has historically experienced a seasonal fluctuation in
sequential revenue between the fourth quarter, typically the strongest quarter
of the year, and the first quarter, typically the slowest quarter of the year.
''We are pleased with our revenue results for the quarter as sales of new
products continued to grow and margins expanded, '' said Mr. Xu Hang,
Mindray's Chairman and Co-Chief Executive Officer. "We believe that our
ongoing commitment to investing in R&D will continue to drive higher margins
and successful new product introductions.''
"Domestically, we are well positioned to benefit from the Chinese
government's increasing expenditure on healthcare development in rural areas.
We also believe domestic medical device spending will resume or even exceed
historical spending levels and previously anticipated growth rates during 2007
amid a healthier sector environment,'' said Mr. Li Xiting, Mindray's President
and Co-Chief Executive Officer. "As we continue to experience high growth in
international markets, we will add local distributors, sales support staff,
and offices to best support our end-users."
In the first quarter 2007, the Company more than doubled its own-brand
sales in North America, while Europe and South America continued to be key
markets for international growth.
Financial Results for First Quarter 2007
Mindray reported net revenues of RMB422.4 million (US$54.7 million) for
the first quarter 2007, representing a 32.7% increase from RMB318.3 million in
the first quarter 2006. Revenues generated from the sale of new products
introduced in 2006 contributed to more than 60% of the increase in net
revenues in the first quarter 2007.
Performance by Segment
Patient Monitoring Devices: Patient monitoring device segment revenues
increased 23.9% to RMB160.5 million (US$20.8 million) from RMB129.6 million in
the first quarter 2006. The patient monitoring device segment contributed
38.6% of total net segment revenues in the first quarter 2007.
First quarter 2007 patient monitoring device revenues benefited from sales
of the Company's high-end Beneview modular patient monitors and WATO series
anesthesia machines, each of which were introduced in the second half of 2006.
Diagnostic Laboratory Instruments: Diagnostic laboratory instrument
segment revenues increased 62.8% to RMB133.7 million (US$17.3 million) from
RMB82.1 million in the first quarter 2006. The diagnostic laboratory
instrument segment contributed 32.1% of total net segment revenues in the
first quarter 2007.
First quarter 2007 diagnostic laboratory instrument revenues benefited
from sales of the Company's five-part hematology analyzer, introduced in
September 2006.
Ultrasound Imaging Systems: Ultrasound imaging system segment revenues
increased 16.9% to RMB117.3 million (US$15.2 million) from RMB100.3 million in
the first quarter 2006. The ultrasound imaging system segment contributed
28.2% as a percentage of total net segment revenues in the first quarter 2007.
First quarter 2007 ultrasound imaging system revenues benefited from sales
of the DC-6, the Company's first color Doppler ultrasound imaging system,
introduced in September 2006.
Performance by Geographic Region
Net revenues generated in international markets in the first quarter 2007
increased by 60.4% to RMB213.9 million (US$27.7 million) from RMB133.4 million
in the first quarter 2006.
In the first quarter 2007, the United States surpassed Germany as the
single largest country in revenues among the Company's international markets.
The Company cited its growing portfolio of FDA- and CE-approved products and
increased brand acceptance as key contributing factors to the rapid
international acceptance of its products and increased international revenues.
Net revenues generated in China in the first quarter 2007 increased by
12.7% to RMB208.5 million (US$27.0 million) from RMB185.0 million in the first
quarter 2006. After adjusting for the benefits of the RMB17.8 million central
government tender in the first quarter 2006, first quarter 2007 domestic net
revenue growth would have been 24.7% year-over-year.
Gross Margins
First quarter 2007 gross profit was RMB237.1 million (US$30.7 million), a
44.7% increase from RMB163.9 million in the first quarter 2006. The
consolidated gross margin for the first quarter 2007 expanded to 56.1% from
53.8% achieved in the fourth quarter 2006 and from 51.5% achieved in the first
quarter 2006. This increase was primarily due to the continued effort by the
Company to improve product margins as well as an increase in sales
contribution from higher margin products. Non-GAAP gross margin, as defined
below, was 57.3% in the first quarter 2007.
Operating Expenses
Selling expenses for the first quarter 2007 were RMB48.1 million (US$6.2
million), an increase of RMB3.9 million from the first quarter 2006. As a
percentage of total net revenues, selling expenses decreased to 11.4% from
13.1% in the fourth quarter 2006. The Company expects selling expenses as a
percentage of total net revenues to rise for the full year 2007 as it
continues to both grow sales headcount in both domestic and international
markets and increase investment in its overseas offices.
General and administrative expenses for the first quarter 2007 were
RMB23.2 million (US$3.0 million), an increase of RMB12.8 million from the
first quarter 2006. This increase is primarily due to an increase in share-
based compensation expenses from RMB0.7 million in the first quarter 2006 to
RMB4.0 million in the first quarter 2007 as well as increases in headcount.
General and administrative expenses decreased to 5.5% of total net revenues
from 6.9% in the fourth quarter 2006.
Research and development expenses for the first quarter 2007 were RMB41.3
million (US$5.3 million), an increase of RMB9.0 million from the first quarter
2006. This increase reflects the increase in share-based compensation expenses
from RMB0.9 million in the first quarter 2006 to RMB4.0 million in the first
quarter 2007. Research and development expenses increased to 9.8% of total net
revenues from 9.6% in the fourth quarter 2006.
Total share-based compensation expenses, which were allocated to cost of
goods sold and related operating expenses, were RMB13.3 million (US$1.7
million) in the first quarter 2007 compared to RMB3.0 million in the first
quarter 2006.
Non-GAAP operating profit, as defined below, in the first quarter 2007 was
RMB142.6 million (US$18.5 million), representing a 77.8% increase from RMB80.2
million in the first quarter 2006. GAAP operating profit in the first quarter
2007 was RMB124.6 million (US$16.1 million), representing a 61.5% increase
from RMB77.2 million in the first quarter 2006. Non-GAAP operating margins
were 33.8% in the first quarter 2007 compared to 26.1% in the fourth quarter
2006 and 25.2% in the first quarter 2006. GAAP operating margins were 29.5%
in the first quarter 2007 compared to 17.6% in the fourth quarter 2006 and
24.2% in the first quarter 2006.
Net Income
First quarter 2007 non-GAAP net income increased 95.5% year-over-year to
RMB139.6 million (US$18.1 million) from RMB71.4 million in the first quarter
2006. First quarter 2007 GAAP net income was RMB122.4 million (US$15.8
million) compared with RMB68.4 million in the first quarter 2006. Non-GAAP net
margins were 33.1% in the first quarter 2007 compared to 29.6% in the fourth
quarter 2006 and 22.4% in the first quarter 2006. GAAP net margins were 29.0%
in the first quarter 2007 compared to 22.2% in the fourth quarter 2006 and
21.5% in the first quarter 2006. First quarter 2007 income tax expense was
RMB22.9 million (US$3.0 million), representing an effective tax rate of 15.7%
compared to 7.1% effective tax rate in the first quarter 2006, or an increase
of RMB17.2 million from the same period one year ago.
First quarter 2007 basic and diluted non-GAAP earnings per share were
RMB1.32 (US$0.17) and RMB1.25 (US$0.16), respectively. First quarter 2007 GAAP
basic and diluted earnings per share for the quarter were RMB1.16 (US$0.15)
and RMB1.09 (US$0.14), respectively. Shares used in the computation of
diluted earnings per share increased from 85.4 million in the first quarter
2006 to 111.9 million in the first quarter 2007 due to issuances of new shares
and grants of share options that occurred in the past twelve months.
On March 16, 2007, the 10th People's Congress of China passed the China
Unified Corporate Income Tax Law (the ''New Law''), which will become
effective on January 1, 2008. The New Law establishes a single unified 25%
income tax rate for most companies with some preferential income tax rates to
be applicable to qualified hi-tech enterprises. The related detailed
implementation rules and regulations (the ''IRRs'') on the definition of
various terms and the interpretation and application of the provisions of the
New Law are expected to be promulgated by the State Council within 2007. The
Company currently believes that the new laws do not impact its qualification
as a hi-tech enterprise, and as such, believe the current tax rate of 15% will
continue to apply. In the event the promulgation of the new IRRs result in a
change such that the Company will no longer qualify as a hi-tech enterprise,
it will be required to adjust certain long term deferred tax liabilities which
will result in a loss in the period the change takes effect. If the Company
were to have applied a 25% tax rate in the first quarter 2007 an additional
provision for income taxes of approximately RMB13.1 million (or RMB0.12 per
diluted share) would have been recorded, based on the balance of the deferred
tax liabilities as of March 31, 2007.
Other Select data
Average account receivable days outstanding was 22 days in the first
quarter 2007 compared to 23 days in the first quarter 2006. Inventory turnover
was 72 days in the first quarter 2007 compared to 72 days in the first quarter
2006.
As of March 31, 2007, the Company has RMB1,492.8 million (US$193.3
million) in cash and cash equivalents and short-term investments.
Business Outlook for Full Year 2007
The Company's updated total net revenue guidance range for the full year
2007 is between RMB2,120 million and RMB2,170 million, from the previous range
of RMB2,120 million to RMB2,150 million. The updated full year 2007 non-GAAP
net income guidance is between RMB585 million and RMB600 million, from the
previous range of RMB570 million to RMB585 million. Non-GAAP net income per
share is expected to be between RMB5.08 and RMB5.36 on a fully diluted basis,
assuming an estimated diluted share count of 112 million shares.
The Company estimates total share-based compensation expenses in 2007 will
be approximately RMB55 million based on the share options that have been
granted as of May 14, 2007. Total expense and/or amortization of intangible
assets related to the April 2006 acquisition of minority interest will be
approximately RMB18.8 million in 2007.
The Company expects its capital expenditure for 2007 to be in the range of
RMB400 million to RMB435 million.
The Company's practice is to provide guidance on a full year basis only.
This forecast reflects Mindray's current and preliminary views, which are
subject to change.
Conference Call Information
Mindray's management will hold its first quarter 2007 earnings conference
call after the U.S. market closes at 8:00 PM on May 14, 2007 U.S. Eastern Time
(8:00 AM on May 15, 2007 Beijing/Hong Kong Time).
Dial-in details for the earnings conference call are as follows:
Hong Kong: +852-3002-1672
US Toll Free: +1-866-271-6130
International: +1-617-213-8894
Passcode for all regions: Mindray
A replay of the conference call may be accessed by phone at the following
numbers until May 25, 2007.
US Toll Free: +1-888-286-8010
International: +1-617-801-6888
Passcode: 88472043
Additionally, a live and archived webcast of this conference call will be
available on the Investor Relations section of Mindray's website at
http://www.mindray.com .
About Mindray
Mindray Medical International Limited is a leading developer, manufacturer
and marketer of medical devices in China with a significant and growing
presence outside of China. Established in 1991, Mindray offers a broad range
of products across three primary business segments: patient monitoring
devices, diagnostic laboratory instruments, and ultrasound imaging systems.
Mindray is headquartered in Shenzhen, China, and has 29 local sales and
services offices in China, as well as sales and services offices in Boston,
Istanbul, London, Mumbai, Seattle and Vancouver. For more information, please
visit http://www.mindray.com.
Use of Non-GAAP Financial Measures
The Company has reported for the first quarter 2007 and provided estimates
for full year 2007 net income, operating income, or earning per share on a
non-GAAP basis. Each of the terms as used by the Company is defined as
follows:
-- Non-GAAP gross profit represents gross profit reported in
accordance with GAAP, adjusted for the effects of share-based
compensation, and expense and/or amortization of acquired
intangible assets.
-- Non-GAAP operating profit represents operating profit reported in
accordance with GAAP, adjusted for the effects of share-based
compensation, and expense and/or amortization of acquired intangible
assets including, but not limited to, in-progress research and
development (IPR&D).
-- Non-GAAP net income represents net income reported in accordance
with GAAP, adjusted for the effects of share-based compensation, and
expense and/or amortization of acquired intangible assets including,
but not limited to, IPR&D, all net of related tax impact.
-- Non-GAAP earnings per share represents non-GAAP net income divided by
the number of shares used in computing basic and diluted earnings per
share in accordance with GAAP, and excludes the impact of the deemed
dividends for the basic calculation.
In addition to Mindray's consolidated financial results under GAAP, the
Company also provides non-GAAP financial measures, including non-GAAP
operating profit, non-GAAP net income and non-GAAP earnings per share on a
basic and fully diluted basis. The Company believes that both management and
investors benefit from referring to these non-GAAP financial measures in
assessing Mindray's financial performance and liquidity and when planning and
forecasting future periods. These non-GAAP operating measures are useful for
understanding and assessing Mindray's underlying business performance and
operating trends and the Company expects to report operating profit and net
income on a non-GAAP basis using a consistent method on a quarterly basis
going forward.
The Company computes its non-GAAP financial measures using the same
consistent method from quarter to quarter. The Company notes that these
measures may not be calculated on the same basis of similar measures used by
other companies. Readers are cautioned not to view non-GAAP results on a
stand-alone basis or as a substitute for results under GAAP, or as being
comparable to results reported or forecasted by other companies, and should
refer to the reconciliation of GAAP results with non-GAAP results for the
three-month periods ended March 31, 2006 and 2007, respectively, in the
attached financial statements.
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements," including those
related to the Company's anticipated operating results for 2007, increased
medical device spending in China, customer acceptance of Company products,
continued benefits of R&D spending levels, increased headcounts, and
international expansion. These statements are not historical facts but instead
represent only our belief regarding future events, many of which, by their
nature, are inherently uncertain and outside of our control. It is possible
that our actual results and financial condition and other circumstances may
differ, possibly materially, from the anticipated results and financial
condition indicated in these forward-looking statements. Readers are cautioned
that these forward- looking statements are only predictions and may differ
materially from actual future events or results due to a variety of factors,
including but not limited to: the expected growth of the medical device market
in China and internationally; relevant government policies and regulations
relating to the medical device industry; market acceptance of our products;
our expectations regarding demand for our products; our ability to expand our
production, our sales and distribution network and other aspects of our
operations; our ability to stay abreast of market trends and technological
advances; our ability to effectively protect our intellectual property rights
and not infringe on the intellectual property rights of others; competition in
the medical device industry in China and internationally; and general economic
and business conditions in the countries in which we operate. The financial
information contained in this release should be read in conjunction with the
consolidated financial statements and notes thereto included in our prospectus
filed with the Securities and Exchange Commission on February 1, 2007. For a
discussion of other important factors that could adversely affect our
business, financial condition, results of operations and prospects, see "Risk
Factors" beginning on page 10 of our prospectus. Our results of operations for
the first quarter of 2007 and for fiscal year 2007 are not necessarily
indicative of our operating results for any future periods. Any projections in
this release are based on limited information currently available to us, which
is subject to change. Although such projections and the factors influencing
them will likely change, we will not necessarily update the information. Such
information speaks only as of the date of this release.
This announcement contains translations of certain Renminbi amounts into
US dollars at specified rates solely for the convenience of readers. Unless
otherwise noted, all translations from Renminbi to US dollars as of and for
the quarter ended March 31, 2007 were made at the noon buying rate in the City
of New York for cable transfers in Renminbi per US dollar as certified for
customs purposes by the Federal Reserve Bank of New York, or the noon buying
rate, as of March 30, 2007, which was RMB 7.7232 to US$1.00. Mindray makes no
representation that the Renminbi or US dollar amounts referred to in this
release could have been or could be converted into US dollars or Renminbi, as
the case maybe, at any particular rate or at all.
All references to "shares" are to our ordinary shares, which are divided
into two classes, Class A and Class B. Each of our American Depositary Shares,
which trade on the New York Stock Exchange, represents one Class A ordinary
share.
The accounting policies underlying the financial information for the
segmental reporting are based primarily on statutory accounting requirements
in the PRC.
-- Financial Tables to Follow --
Exhibit 1
MINDRAY MEDICAL INTERNATIONAL LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
As at
December 31,
2006 As at March 31, 2007
RMB RMB US$
(derived from
audited
financials) (unaudited)(unaudited)
ASSETS (In thousands)
Current assets:
Cash and cash equivalents 1,709,596 1,479,530 191,570
Restricted cash -- -- --
Short-term investments 13,312 13,228 1,713
Accounts receivable, net 104,679 99,166 12,840
Inventories, net 122,071 171,563 22,214
Value added tax receivables -- -- --
Other receivables 11,774 17,028 2,205
Prepayments and other 7,560 16,422 2,126
Deferred tax assets - current
portion 2,747 1,884 244
Total current assets 1,971,739 1,798,821 232,911
Loans to employees 4,851 4,813 623
Long-term investments 105,573 357,059 46,232
Other assets 13,827 11,417 1,478
Property, plant and equipment, net 186,980 267,864 34,683
Land use right 2,505 2,472 320
Deferred tax assets - non-
current portion -- 597 77
Intangible assets 149,479 144,772 18,745
Goodwill 122,169 122,169 15,818
Total assets 2,557,123 2,709,984 350,889
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable 50,625 52,586 6,809
Accounts payable 79,352 121,882 15,781
Customers' deposits 47,007 53,572 6,937
Salaries payables 55,676 29,465 3,815
Other taxes payable 7,937 6,015 779
Other payables 13,965 22,290 2,886
Dividends payables -- 125,110 16,199
Proceeds payables 34,854 -- --
Accrued professional expenses -- -- --
Accrued other expenses 33,363 32,396 4,195
Advance subsidies 17,900 17,900 2,318
Income taxes payable 11,703 28,106 3,639
Total current liabilities 352,382 489,321 63,357
Commitment and contingencies
Minority interests 10 10 1
Deferred tax liabilities, net 21,815 21,726 2,813
21,825 21,736 2,814
Mezzanine equity:
Convertible redeemable
preferred shares -- -- --
Shareholders' equity:
Ordinary shares 110 110 14
Additional paid-in capital 1,934,937 1,948,200 252,253
Retained earnings 266,834 263,820 34,159
Accumulated other comprehensive
loss (18,965) (13,203) (1,710)
Total shareholders' equity 2,182,916 2,198,927 284,717
Total liabilities and shareholders'
equity 2,557,123 2,709,984 350,889
(1) all translations from Renminbi to US dollars as of and for the quarter
and full year ended March 31, 2007 were made at the noon buying rate
as of March 30, 2007, which was RMB7.7232 to US$1.00
Exhibit 2
MINDRAY MEDICAL INTERNATIONAL LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended March 31,
2006 2007 2007
RMB RMB US$
(unaudited) (unaudited) (unaudited)
(In thousands, except share and per share data)
Net revenues
- PRC 184,983 208,543 27,002
- International 133,362 213,866 27,691
Net revenues 318,345 422,409 54,694
Cost of revenues (note 2) (154,459) (185,282) (23,990)
Gross profit 163,886 237,127 30,703
Selling expenses (note 2) (44,110) (48,050) (6,221)
General and
administrative expenses
(note 2) (10,353) (23,168) (3,000)
Research and development
expenses (note 2) (32,250) (41,265) (5,343)
Other general expenses -- (37) (5)
Operating income 77,173 124,607 16,134
Other income, net 241 3,164 410
Interest income 3,269 17,560 2,274
Interest expense (123) (96) (12)
Income before income
taxes and minority
interests 80,560 145,235 18,805
Provision for income
taxes (5,701) (22,866) (2,961)
Minority interests (6,456) (0) (0)
Income attributable to
ordinary shareholders 68,403 122,369 15,844
Basic earnings per share 0.91 1.16 0.15
Diluted earnings per share 0.80 1.09 0.14
Shares used in the
computation of:
Basic earnings per share 75,350,054 105,743,984 105,743,984
Diluted earnings per
share 85,425,031 111,869,215 111,869,215
(2) Share-based compensation charges incurred during the period
related to:
Cost of revenues 95 349 45
Selling expenses 1,369 4,892 633
General and administrative
expenses 690 4,022 521
Research and development
expenses 860 4,000 518
Exhibit 3
MINDRAY MEDICAL INTERNATIONAL LIMITED
RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS MEASURES TO THE
NEAREST COMPARABLE GAAP MEASURES
For the three months ended,
09/30/2005 12/31/2005 03/31/2006 06/30/2006
RMB RMB RMB RMB
(unaudited) (unaudited) (unaudited) (unaudited)
(In thousands, except share and per share data)
Net revenue 296,864 344,933 318,345 358,420
Non-GAAP net income
(note 3) 84,001 85,453 71,417 103,541
Non-GAAP net margin 28.3% 24.8% 22.4% 28.9%
Expense/Amortization of
acquired intangible
assets -- -- -- --
Deferred tax impact
related to acquired
intangible assets -- -- -- --
Share-based compensation (44,594) -- (3,014) (7,172)
GAAP net income 39,407 85,453 68,403 96,369
Non-GAAP income per
share - basic 1.00 1.13 0.95 1.27
Non-GAAP income per
share - diluted 1.00 1.13 0.84 1.13
GAAP income per share -
basic 0.47 1.13 0.91 1.18
GAAP income per share -
diluted 0.47 1.13 0.80 1.05
Shares used in
computation of:
Basic earnings per
share 83,916,315 75,350,054 75,350,054 81,595,905
Diluted earnings per
share 83,916,315 75,350,054 85,425,031 91,477,498
Non-GAAP operating
income 89,637 88,915 80,187 107,915
Non-GAAP operating
margin 30.2% 25.8% 25.2% 30.1%
Expense/Amortization of
acquired intangible
assets -- -- -- --
Share-based compensation (44,594) -- (3,014) (7,172)
GAAP operating income 45,043 88,915 77,173 100,743
Non-GAAP gross profit 160,124 183,239 163,981 205,689
Non-GAAP gross margin 53.9% 53.1% 51.5% 57.4%
Expense/Amortization of
acquired intangible
assets -- -- -- --
Share-based compensation -- -- (95) (141)
GAAP gross profit 160,124 183,239 163,886 205,548
(3) the figures do not include minority interests of RMB8.4
million and RMB6.5 million reported in fourth quarter 2005 and
first quarter 2006
Exhibit 3
MINDRAY MEDICAL INTERNATIONAL LIMITED
RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS MEASURES TO THE
NEAREST COMPARABLE GAAP MEASURES
For the three months ended,
09/30/2006 12/31/2006 03/31/2007 03/31/2007
RMB RMB RMB US$
(unaudited) (unaudited) (unaudited) (unaudited)
Net revenue 360,859 477,357 422,409 54,694
Non-GAAP net income
(note 3) 100,372 141,512 139,633 18,080
Non-GAAP net margin 27.8% 29.6% 33.1% 33.1%
Expense/Amortization
of acquired
intangible assets -- (34,121) (4,707) (610)
Deferred tax impact
related to acquired
intangible assets -- 5,118 706 91
Share-based
compensation (9,327) (6,541) (13,263) (1,717)
GAAP net income 91,045 105,968 122,369 15,844
Non-GAAP income per
share - basic 1.18 1.34 1.32 0.17
Non-GAAP income per
share - diluted 1.04 1.27 1.25 0.16
GAAP income per share
- basic 1.07 1.00 1.16 0.15
GAAP income per share
- diluted 0.94 0.95 1.09 0.14
Shares used in
computation of:
Basic earnings per
share 85,276,860 105,727,677 105,743,984 105,743,984
Diluted earnings per
share 96,913,296 111,445,681 111,869,215 111,869,215
Non-GAAP operating
income 106,250 124,677 142,578 18,461
Non-GAAP operating
margin 29.4% 26.1% 33.8% 33.8%
Expense/Amortization
of acquired
intangible assets -- (34,121) (4,707) (610)
Share-based
compensation (9,327) (6,541) (13,263) (1,717)
GAAP operating income 96,923 84,015 124,607 16,134
Non-GAAP gross profit 201,291 257,149 242,184 31,358
Non-GAAP gross margin 55.8% 53.9% 57.3% 57.3%
Expense/Amortization
of acquired
intangible assets -- -- (4,707) (610)
Share-based
compensation (190) (188) (349) (45)
GAAP gross profit 201,101 256,961 237,127 30,703
(3) the figures do not include minority interests of RMB8.4
million and RMB6.5 million reported in fourth quarter 2005 and
first quarter 2006
