Chinese medical devices major
Mindray Medical International Limited
) fourth-quarter 2012 adjusted (excluding one-time expenses other
than stock-based compensation expense) earnings per share of 49
cents narrowly beating the Zacks Consensus Estimate of 48 cents.
For 2012, adjusted earnings per share of $1.65 missed the Zacks
Consensus Estimate of $1.67. Reported net income rose 19.3% year
over year to $55.8 million (or 47 cents per share) in the
Revenues were up sharply 19.7% year over year to $316.1
million, in the fourth quarter, beating the Zacks Consensus
Estimate of $304 million. For 2012, sales were up 20.4% to
$1060.1 million higher than the Zacks Consensus Estimate of $1056
During the reported quarter, Mindray recorded ex-China sales
of $168 million, up 14.7% year over year. Revenues in China
increased 25.9% year over year to $148.1 million in the reported
quarter. The company performed well in emerging markets.
Patient Monitoring & Life Support Products (42.7% of total
sales) revenues grew 13% year over year in the reported quarter
to $135 million. In-Vitro Diagnostic Products (26.2% of total
revenue) revenues were $82.9 million, up 29.8%. Revenues from
reagents contributed 36.9% of In-Vitro Diagnostic segment sales
during the quarter.
Medical Imaging Systems (23.8% of total sales) sales rose to
$75.4 million, a growth of 15.8%. Other revenues (7.3% of total
revenue) were up 45.3% to $22.8 million.
Adjusted gross profit amounted to $184.8 million in the
quarter, higher 27.9% year over year. Adjusted gross margin was
58.5%, higher than 54.7% in the year-ago period.
Adjusted selling expenses were $51.2 million, or 16.2% of
total net sales, compared with 19% a year ago. Adjusted general
and administrative expenses were $36 million, or 11.4% of sales,
versus 6.3% a year ago. Adjusted research and development
expenses were $31.9 million, or 10.1% of sales, compared with
9.3% in the prior-year quarter.
Adjusted operating income stood at $65.8 million in the
quarter, a year-over-year growth of 24.2%. Adjusted operating
margin was 20.8%, higher than the 20.1% in the year-ago
Balance Sheet and Cash Flow
As of December 31, 2012, Mindray had $862.9 million in cash
and liquid investments, up about 42.9% from a year ago. Long-term
bank loan stood at $50 million, up 42.8% from a year ago. Net
cash generated from operating activities was $144.9 million in
the quarter (up 50.2% year over year) while capital expenditure
amounted to $18.4 million.
Mindray provides guidance on a full year basis. The company
forecasts revenue growth of 17% or more for 2013. It also expects
adjusted net income for the year to increase by a minimum of 15%
year over year. The guidance does not take into account any tax
advantage on account of software business status during 2011 and
2012, which might be received in 2013. The guidance incorporates
an income tax rate of 15% for the Shenzhen subsidiary. The
forecast for capital expenditure for 2013 is about $130
Mindray is a bellwether in the Chinese MedTech industry with a
solid international presence. A key distinction with domestic
competitors is that the majority of Mindray's products have CE
Mark and/or Food and Drug Administration (FDA) clearance.
Mindray maintains a decent product pipeline and brings out
several new products each year. New products contribute in a
major way to Mindray's revenues. In 2012, the company launched 10
new products and acquired four companies.
The company has entered the premium segment globally, where
its competitive advantage is still unclear. Also, on the negative
side, health care reforms in China and the U.S. may reduce demand
for Mindray's products. Competition is fierce and leads to price
erosion over time.
Given Imaging Ltd.
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