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Chindex International (CHDX)
Q1 2013 Earnings Call
May 09, 2013 8:00 am ET
Roberta Lipson - Co-Founder, Chief Executive Officer, President and Director
Lawrence Pemble - Chief Operating Officer, Executive Vice President, Director and Chief Financial Officer of Chindex Medical Limited
R. Gregg Hillman
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I would now like to introduce your host for today's conference, Roberta Lipson, President and CEO of Chindex International. You may begin.
Thank you, and welcome to Chindex International's first quarter 2013 conference call. Joining me on the call today is Larry Pemble, our Chief Operating Officer.
Before we proceed with the summary of operating results for the period and an update on recent events, I'll ask Larry to read the Safe Harbor statement. I'll make some brief comments, and Larry will review the financial results, then we'll turn to Q&A.
Larry, will you please proceed with the Safe Harbor statement.
Yes. Thank you, Roberta, and good morning, everyone. Please note that this call will contain certain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today.
A number of potential risks and uncertainties are outlined in our public filings with the SEC, including in our Form 10-Q for the year -- for the period ended March 31, 2013, which will be filed tomorrow, May 10. Chindex does not undertake any obligations to update any forward-looking statements except as required under applicable law.
Thanks, Larry. As Larry noted in our Safe Harbor statement, we announced our quarterly financial results on Wednesday after the market closed. An earnings release is now available on our website.
I would like to begin with highlights of our financial performance in the first quarter of 2013. The first quarter is generally our slowest quarter of the year due to the 2 New Year holidays, as well as February being a short month.
For the first quarter, revenue grew 28% year-over-year to $41.6 million, representing our strongest first quarter revenue performance. Adjusted EBITDA grew 36% year-over-year to $7.4 million, representing 18% adjusted EBITDA margin, which was higher than the prior-year period.
We experienced 3 encouraging trends in our patient data. First, our total patient days continued to grow in all markets in which we operate. Second, we are -- experienced a balanced rise of Chinese nationals and expatriates among our base of patients. And third, our overall base of patients have increased levels of insurance coverage. These observations reinforce our confidence in the potential to expand our hospital network to the rising underserved health care needs of China's increasingly affluent population.
During the first quarter of 2013, we continued focusing on ramping up new facilities and service lines. Beijing remains the largest source of revenue growth and thus, is the major focus of our expansion effort.
At the Beijing U main campus, at the end of March 2013, we have 70 available beds in service out of a total of 120 licensed beds. Admission rates have been increasing at our cardio and neurosurgery units, which have benefited from facility improvements and are contributing to our operating margin and adjusted EBITDA margin at higher than historical levels.
Patient traffic at our Beijing United Central Business District Clinic has doubled since its opening at the beginning of the year, which is an encouraging trend, driven by growing awareness about this sizable downtown facility by its growth of multinational employee that finds it a convenient location to seek health care during the day.
Beijing United Family Rehabilitation Hospital has secured the required regulatory approval to install the necessary equipment and hired and trained a number of medical staff. This facility is expected to open and start admitting a limited number of patients in June 2013, with additional patient flows expected in phases over the course of the 2013, 2014 period.
At the New Hope Oncology Center, we have seen an increase in daily patient flows, as our full menu of oncology treatment modalities gains momentum.
Since we began our pilot program in Beijing, our United Family Home Healthcare service, or UFHH, has received positive feedback from patients, their families and our own medical professionals. We believe the Home Healthcare model has great potential to generate material financial results to our operations over the long term and augment awareness of United Family Healthcare as the most fully integrated health care service provider.
In addition to Beijing, we began offering this service in Tianjin at the end of the first quarter and expect to launch in Shanghai later this year.
In Shanghai, we are working on a new facility in Puxi, next to the main hospital, called the United Family Changco [ph] Clinic, which, when completed, will more than triple the size of the original facility which houses our dental clinic and allow us to add a number of clinics that will move out of the main hospital, such as dermatology, ENT, ophthalmology and physical therapy. We expect the renovation, which should be completed in the near future, to become a major component of our facility expansion in the Puxi area. As we migrate more outpatient services out of the main hospital campus, we'll expand our inpatient room capacity by 10%.