BEIJING, April 10, 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 announced selected preliminary, unaudited results for the fiscal year ended December 31, 2014.
All figures in this release are subject to the completion of normal year-end accounting procedures and adjustments, which could result in changes to these preliminary results.
The Company expects to announce its audited fiscal year financial results and host an earnings conference call before April 30, 2015.
For the year ended December 31, 2014, Dehaier expects to report revenues of approximately $12 million, representing a year-over-year decrease of approximately 29%. This decrease was mainly due to lower sales from our medical device distribution business.
Dehaier expects gross profit to decrease by 42% year-over-year to approximately $3.7 million and gross margin to decrease by 7 percentage points to approximately 31% for the year ended December 31, 2014. This decline in gross margin was attributable to a higher than expected percentage of revenues derived from the sales of lower margin third party medical devices.
We expect to report operating loss of approximately $1.8 million for the year ended December 31, 2014, compared to operating income of $3.5 million for the year ended December 31, 2013 as a result of decrease in gross margin and increase in SG&A expenses which were primarily attributable to amortization of employees and consultants share-based compensation expenses. On a non-GAAP basis after adjusting for $2.6 million, adjusted operating income is expected to be approximately $0.8 million for the year ended December 31, 2014, compared to $4.9 million for the year ended December 31, 2013.
The Company anticipates net income attributable to Dehaier of approximately $1.3 million, or $0.23 per diluted share, for the year ended December 31, 2014, compared to $2.0 million, or $0.43 per diluted share, for the year ended December 31, 2013.
Mr. Ping Chen, Dehaier's Chief Executive Officer, commented, "2014 proved to be challenging year for our medical device distribution business as competition intensified due to the entry of new players. This, combined with our strategic shift of more resources toward our new sleep respiratory business, led to an approximately 31% decrease in our medical device business in 2014."
"However, our sleep respiratory business, which we launched in October 2014, continued to progress well and contributed approximately 10% of total revenues for the year of 2014. As of today, our wearable sleep respiratory solution systems for OSAS have been adopted by over 100 hospitals and examination centers across 18 provinces and municipalities in China. Additionally, our efforts in actively participating in government procurement projects and developing new services platform such as telemedicine and mobile medical solutions started to show promises and contributed approximately 3% of total revenues for the year of 2014. Looking ahead, we will continue our efforts in building a more sustainable platform to prepare us for the challenge of increasingly competitive market condition and quickly evolving technology trends," concluded Mr. Chen.
About Non-GAAP Financial Measures
This press release contains non-GAAP financial measures for earnings that exclude non-cash charges. The Company believes that these non-GAAP financial measures are useful to investors because they exclude non-cash charges that management excludes when it internally evaluates the performance of the Company's business and makes operating decisions, including internal budgeting, and performance measurement, as these measures provide a consistent method of comparison to historical periods. Moreover, management believes these non-GAAP measures reflect the essential operating activities of the Company. Accordingly, management excludes the expense arising from certain non-cash charges when making operational decisions. The Company also believes that providing the non-GAAP measures that management uses to its investors is useful to investors for a number of reasons. The non-GAAP measures provide a consistent basis for investors to understand the Company's financial performance in comparison to historical periods. In addition, it allows investors to evaluate the Company's performance using the same methodology and information as that used by the Company's management. Non-GAAP measures are subject to inherent limitations because they do not include all of the expenses included under GAAP and because they involve the exercise of judgment of which charges are excluded from the non-GAAP financial measure. However, the Company's management compensates for these limitations by providing the relevant disclosure of the items excluded.
About Dehaier Medical Systems Ltd.
Dehaier is an emerging leader in the development, marketing and sale of medical products, including medical devices and wearable sleep respiratory products. The company develops and assembles its self-branded medical devices and sleep respiratory products from third-party components. The company also distributes products designed and manufactured by other companies, including medical devices from IMD (Italy), HEYER (Germany) and Timesco (UK). Dehaier's technology is based on six patents and eleven software copyrights. More information may be found at http://www.dehaier.com.cn.
Forward-looking Statements
This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, fulfillment of bids and contracts, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.