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NetDragon Announces Fourth Quarter and Fiscal Year 2014 Financial Results

admin March 26, 2015

Strong Revenue and Operational Metrics Growth

HONG KONG, March 26, 2015 /PRNewswire/ — NetDragon Websoft Inc. (“NetDragon” or “the Company”) (Hong Kong Stock Code: 0777), a leading developer and operator of online games and mobile internet platforms in China, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2014. A conference call and webcast is scheduled at 8 p.m. Hong Kong Time on March 26, 2015 to discuss the results and recent business developments.

Fiscal Year 2014 Financial Highlights

Revenue was RMB962.8 million, an increase of 8.9% from RMB 884.5 million last year.
Operating profit was RMB252.0 million, an increase of 24.3% from RMB202.8 million last year.
Profit from continuing operations attributable to owners of the Company was RMB176.7 million, an increase of 7.5% from RMB164.4 million last year.
Basic and diluted earnings per share were RMB34.77 cents and RMB34.22 cents, respectively.

Fourth quarter 2014 Financial Highlights

Revenue was RMB282.9 million, an increase of 21.6% quarter-over-quarter and 23.5% year-over-year.
Gross profit was RMB246.5 million, an increase of 17.9% quarter-over-quarter and 19.7% year-over-year.
Operating profit was RMB4.0 million, a decrease of 93.2% quarter-over-quarter and an increase from an operating loss of RMB1.7 million during the same period of 2013.
Non-GAAP operating profit[1] was RMB13.5 million, a decrease of 79.7% quarter-over-quarter and an increase of 19.4% year-over-year.
Loss attributable to owners of the Company was RMB19.4 million, compared to profit attributable to owners of the Company of RMB52.6 million during the previous quarter. Non-GAAP profit attributable to owners of the Company, which excludes several non-core operational items, was RMB6.8 million.
Basic and diluted losses per share were RMB3.78 cents and RMB3.82 cents, respectively.
The Board of Directors has proposed a final dividend of HK$0.20 per share subject to the approval by shareholders at the Annual General Meeting.

Fourth quarter 2014 Operational Highlights[2]

Peak concurrent users (“PCU”) for online games were 642,000.
Average concurrent users (“ACU”) for online games were 301,000.

“We experienced a healthy 8.9% increase in revenue to RMB962.8 million during the year as we further consolidated our market position in the gaming space and pushed forward with the development of our online education platform,” commented Mr. Dejian Liu, Chairman and Executive Director of NetDragon. “Our online games business continues to gain strong growth momentum during the quarter with peak concurrent users reaching 642,000 as revenues increased 6.7% year-over-year to RMB221.5 million. One of our newest games, Calibur of Spirit, continues to gain strong user traction following its selection for the World Cyber Arena last fall. We signed an exclusive China licensing agreement with Tencent and officially launched the game in January 2015 where it achieved record-high MAU of 7 million that month and monthly gross revenue over RMB21.0 million in February 2015. With such a strong performance at the beginning of its lifespan, we are confident that this game will develop into a substantial long-term new revenue stream as large scale marketing campaigns get underway and new updates are launched throughout the year. We launched new expansion packs for our flagship games during the period including an English version for Conquer Online which generated an 11-year high monthly revenue in December 2014. We are also excited to beta-launch Tiger Knight later this year.”

“We continued to incubate our mobile games business during the quarter and have seen encouraging progress from Eudemons Online Pocket Version which was officially launched in January 2015 and is expected to register over RMB10 million in monthly gross revenue in March 2015. The iOS and Android versions of Blade & Sword continue to make steady progress through the various stages of development while the Arabic version of The Pirate remains extremely popular across the Middle East and North Africa where it is expected to continue to grow as new updates are launched.”

“NetDragon’s new strategic business focus continues to be its online education business which completed a round of series A preference shares funding of US$52.5 million in February 2015. The participation of globally renowned investors demonstrates the confidence they have in our unique position to leverage our proven world-class mobile internet and gaming expertise, large-scale technology resources and team infrastructure to build an online and mobile education ecosystem. We are making very solid progress in the design and development of our educational products, and remain on track to gradually roll them out as each development milestone is achieved. We expect to make exciting announcements in the coming months regarding our overall product strategy and the unique value proposition we can create for students, educators and parents.”

Mr. Ben Yam, Chief Financial Officer, added, “Non-GAAP profit for the quarter was RMB4.1 million which is a blended figure combining our highly profitable gaming business and our online education business which is currently in product development stage. During the quarter, our online games business achieved revenue growth of 6.7% year-over-year and 9.8% sequentially with a stable operating cost structure. We also continue to invest heavily in the development of educational products which requires significant investments in staff costs and has reduced the blended profitability in the short-term. These investments however, are the best use of our cash and demonstrate our commitment to building an online education business that will become another cornerstone for our long-term success.”

[1] See the ‘Non-GAAP Financial Measures’ section at the bottom of this release for more details

[2] PCU and ACU include the Company’s new micro-client game Calibur of Spirit

Fourth quarter 2014 Unaudited Financial Results

Revenue

Revenue was RMB282.9 million, an increase of 21.6% from RMB232.7 million in the previous quarter and 23.5% from RMB229.0 million during the same quarter last year.

Revenue from online games and other business generated from China was RMB229.0 million, an increase of 16.9% from RMB195.9 million in the previous quarter and 11.6% from RMB205.2 million in the same quarter last year. The increase in revenue was mainly due to the strong performance of Eudemons Online and Calibur of Spirit.

Revenue from online games and other business generated from overseas markets was RMB53.9 million, an increase of 46.2% from RMB36.8 million in the previous quarter and 126.0% from RMB23.8 million in the same quarter last year due to the growth in the Company’s mobile solutions and marketing business operated by its Hong Kong-based subsidiary Cherrypicks.

Gross profit and gross margin

Gross profit was RMB246.5 million, an increase of 17.9% from RMB209.2 million in the previous quarter and 19.7% from RMB205.9 million in the same quarter last year. Gross margin was 87.2%, compared with 89.9% in the previous quarter and 89.9% in the same quarter last year. The decreases in gross margin were partly due to the inclusion of Cherrypicks which generates lower gross margins when compared with NetDragon’s online games business.

Operating expenses

Selling and marketing expenses were RMB51.2 million, representing an increase of 32.8% from RMB38.6 million in the previous quarter, and 61.6% from RMB31.7 million during the same period last year. The increase in selling and marketing expenses was mainly due to the increase in advertising and promotional expenses of Eudemons Online and Calibur of Spirit.

Administrative expenses were RMB120.9 million, representing an increase of 55.9% from RMB77.5 million during the third quarter of 2014 and a decrease of 14.2% from RMB140.9 million during the same period last year. The quarter-over-quarter increase in administrative expenses was mainly due to the increase in (i) staff costs; and (ii) depreciation and amortization. The year-over-year decrease in administrative expenses was mainly due to the (i) decrease in exchange loss on foreign currencies; and (ii) expenditure of domain name during the same period last year.

Development costs were RMB89.3 million, representing an increase of 32.6% from RMB67.3 million during the third quarter of 2014 and an increase of 100.8% from RMB44.5 million during the same period last year. The sequential and year-over-year increases in development costs was mainly due to increases in (i) staff costs; and (ii) outsourcing fees.

Other expenses were RMB12.0 million, representing an increase of 226.7% from RMB3.7 million during the third quarter of 2014 and 126.4% from RMB5.3 million during the same period last year. The sequential and year-over-year increases in other expenses was mainly due to the increase in allowances on trade receivables.

Operating profit

Operating profit from continuing operations was RMB4.0 million, a decrease of 93.2% from RMB57.7 million in the third quarter of 2014, and an increase from an operating loss of RMB1.7 million in the same quarter last year.

Taxation

Taxation was RMB9.4 million, an increase of 126.6% from RMB4.2 million during the third quarter of 2014 and a decrease of 43.7% from RMB16.8 million during the same quarter last year. The sequential increase in taxation was mainly due to an under provision for tax in 2014 while the year-over-year decrease was mainly due to the decrease in taxable profit.

(Loss) profit for the period from continuing operations

Loss from continuing operations was RMB22.2 million, compared with profit of RMB52.4 million in the previous quarter and loss of RMB2.7 million in the same quarter last year.

Non-GAAP profit from continuing operations, which excludes a net loss on held-for-trading investments (which tend to fluctuate quarter-to-quarter), an exchange loss and amortization of intangible assets resulting from the acquisition of Cherrypicks last year, was RMB4.1 million during the fourth quarter of 2014.

Liquidity

As of December 31, 2014, NetDragon had bank deposits, bank balances, cash, pledged bank deposits and held-for trading liquid investments of approximately RMB3,484.8 million, compared with RMB4,483.7 million as of December 31, 2013.

Business Review and Outlook

Games

On October 26th, 2014, NetDragon began beta testing “Goddess Era,” a new expansion pack for Eudemons Online that introduces the “Goddess Gifts” system and allows players to enhance their character’s attributes free of charge. The new expansion pack, which enhances gameplay and increases user stickiness, is expected to begin closed beta testing during the first half of 2015. Eudemons Online celebrated its anniversary in March 2015 with in-game activities. Conquer Online, the Company’s other flagship title, also launched a new expansion pack “King of Kungfu” in October 2014. By adding new classes to the game, the expansion pack provides more excitement for players. The English, French, Spanish and Arabic versions of Conquer Online’s expansion pack were also launched overseas. A class-updated version of Conquer Online — The Rhapsody of Ice and Fire: Taoist Ascending will be launched during the first half of 2015 and is expected to maintain the game’s market share overseas. Revenue generated by the English version of Conquer Online in December 2014 reached an 11-year high as a result of the enhanced competitiveness of the game in various countries and regions worldwide.

Calibur of Spirit, NetDragon’s first MOBA web micro-client game, officially began open-beta testing on January 16, 2015, achieving MAU of 7 million that month and over RMB21.0 million in monthly gross revenue in February 2015 demonstrating the Company’s world-class game-design and development capabilities. The game was previously selected for the 2014 World Cyber Arena held in Yinchuan, China in October 2014. Marketing and promotional events have rapidly increased the game’s operational metrics. The Company also signed an exclusive China licensing agreement for Calibur of Spirit with Tencent at the end of 2014. NetDragon is confident that revenue from this game will grow substantially as large scale publicity campaigns get underway. The Portuguese and Spanish versions of Calibur of Spirit have already been completed and are scheduled to begin testing in Latin America and Europe in the first half of 2015. The Company’s in-house developed 3D action war game Tiger Knight began its first round of internal beta testing during the fourth quarter of 2014 and will begin its second round during the second quarter of 2015. A new expansion pack for Way of the Five was launched during the quarter along with annual celebration activities which began on March 7, 2015.

NetDragon continued to release content updates for its mobile game including one for the Arabic version of The Pirate in the fourth quarter of 2014 in an effort to solidify its existing player base as well as to seek out new players. This resulted in new record high monthly gross revenue in October 2014. The Company is committed to its strategy of developing high-quality products and continues to develop mobile products to ensure their success in an increasingly competitive market. The iOS version of Blade & Sword, NetDragon’s self-developed mobile 2.5D martial arts role-play game, finished closed beta testing in November 2014 and is currently undergoing closed beta testing of its iOS version with the Android version expected to begin closed beta testing in the first quarter of 2015. Martial Overlord, a mobile 3D martial arts action game, began channel testing in November 2014 and its second round of beta-testing in March 2015. The iOS version of Eudemons Online Pocket Version was officially launched on Apple’s AppStore in January 2015 with open beta testing for the Android version beginning at the same time. Waku & Maou, is a real-time strategy-based collectible mobile card game which began being operated by China’s leading mobile game publisher in January 2015. The Android version began its first round of closed beta testing in January 2015 with open beta testing for the Android and iOS version expected to begin during the first half of 2015.

Online and Mobile Education

The Company made very strong progress in research and development, pedagogy integration, content partnership and acquisition, sales channel build-out and M&A discussions for its online and mobile education business during the fourth quarter and fiscal year 2014.

Research & Development — The Company’s educational product design and R&D team currently comprises of over 350 staff. With world-class leadership, the team focuses on the design and development of both software and hardware, and over the course of 2014, has achieved many milestones in the development of high-quality and differentiated software. The Company’s 101 student tablet, which has also gone through multiple design iterations, will be commercially launched during the third quarter of 2015. The Company’s product development roadmap to create a holistic, integrated total-solution for online and mobile education remains unchanged. The initial version of the commercialized product will be focused on enabling best-in-class interconnectivity in the classroom, and will create true value through a transformational yet easy-to-learn educational solution for teachers and students. The Company will update the market when more information on product launches is available. In addition, the Company expects to officially open a research lab in Beijing in the coming months to extend its talent acquisition reach. The current plan is to scale the office to hundreds of R&D staff within one to two years to accelerate educational research and development.

Pedagogy Integration — NetDragon continues to deepen its partnership with Beijing Normal University, China’s top education university, to ensure the most effective pedagogy is being developed and integrated based on collaboration with proven hands-on educators. In November 2014 NetDragon, signed an agreement with Beijing Normal University to jointly research e-classroom design in an effort to develop insight into how software and hardware can best be integrated with various teaching models in a classroom learning environment. One March 18, 2015, NetDragon’s education subsidiary and Beijing Normal University also announced the establishment of Smart Learning Institute which will provide a unique platform to integrate the most advanced e-pedagogy with NetDragon’s mobile internet expertise and technological know-how. The Company believes the accumulation and understanding of pedagogy through its partnerships with top-tier universities and institutions including Beijing Normal University will form a significant barrier to entry.

Content Partnerships — NetDragon signed a MOU in November 2014 with a subsidiary of Pearson, the globally renowned leading education company, and Beijing Normal University, to develop a smart education solution. This collaboration will leverage Pearson’s rich K12 educational content resources to build China’s leading integrated smart education solution. In addition, the Company is also in discussions with numerous major publishers and content partners to enrich the content on its platform.

Channel Build-Out — The Company is in the process of building a nationwide school distribution network for its educational products. Currently, the Company is in discussion with over 20 regional and local distributors and has secured distribution agreements with a number of them. The Company is also in active discussions with several channel partners in addition to conventional distributors.

M&A — NetDragon is in advanced discussions with multiple major acquisition targets in the online education space. If such acquisitions materialize, the Company’s competitive position in the market will further be enhanced.

Fundraising — In February 2015, NetDragon’s education subsidiary closed a Series A equity fundraising round of US$52.5 million led by IDG, Vertex (a Temasek subsidiary) and Alpha Animation, at a valuation of US$477.5 million.

Other developments —Netdragon was officially admitted to the Education Informatization Standard Committee under the Ministry of Education in November 2014. Membership will allow NetDragon to participate in the forming of technology standards, which will be conducive in developing the right products that meet or exceed regulatory standards. NetDragon is one of a very select few tier-one mobile internet companies who are members of the committee.

Non-GAAP Financial Measures

To supplement the consolidated results of the Company prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”), the use of certain non-GAAP measures is provided solely to enhance the overall understanding of the Group’s current financial performance. These non-GAAP measures are not expressly permitted measures under HKFRSs and may not be comparable to similarly titled measures for other companies. The non-GAAP financial measures of the Group exclude share-based payments expense, amortisation of intangible assets arising from acquisition of subsidiaries, interest income on pledged bank deposits, exchange gain (loss) on pledged bank deposits, secured bank borrowings and redeemable convertible preferred shares, net gain (loss) on derivative financial instruments, finance costs and gain on disposal of subsidiaries (net of related income tax).

Management Conference Call

NetDragon will host a management conference call and webcast to review its the fourth quarter and fiscal year 2014 results on Thursday, March 26, 2015, at 8pm Hong Kong time.

Details of the live conference call are as follows:

International Toll	65-6723-9381
US Toll Free	1-866-519-4004
Hong Kong Toll Free	800-906-601
China Toll Free (for fixed line users)	800-819-0121
China Toll Free (for mobile users)	400-620-8038
Passcode	NetDragon

A live and archived webcast of the conference call will be available on the Investor Relations section of NetDragon’s website at http://ir.netdragon.com/investor/ir_events.shtml. Participants in the live webcast should visit the aforementioned website 10 minutes prior to the call, then click on the icon for “4Q and Fiscal Year 2014 Results Conference Call” and follow the registration instructions.

About NetDragon

NetDragon Websoft Inc. (HKSE: 0777) is a leading innovator and creative force in China’s online games and mobile internet industries. Established in 1999, NetDragon is leading developer in the mobile internet segment with a highly successful track record which includes the development of flagship MMORPGs such as Eudemons Online and Conquer Online, China’s number one online gaming portal, 17173.com, and China’s most influential smartphone app store platform, 91 Wireless, which was sold to Baidu in what was at the time the largest internet M&A transaction in China in 2013. Being a China’s pioneer in overseas expansion, NetDragon directly operates a number of game titles in over 10 languages internationally since 2003. NetDragon continues to strive for developing mobile games and software applications for users. In recent years, NetDragon has also become a major player in China’s online and mobile education industry as it works to leverage its mobile internet technologies expertise and know-how to develop a game-changing education ecosystem product.

For investor enquiries, please contact:

NetDragon Websoft Inc.

Ms. Maggie Zhou
Senior Director of Investor Relations
Tel.: +852 2850 7266; +86 591 8754 3120
Email: maggie@nd.com.cn; ndir@nd.com.cn
Website: www.nd.com.cn/ir

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (FOR THE FOURTH QUARTER AND FISCAL YEAR ENDED 31 DECEMBER 2014)
	4Q 2014	3Q 2014	2014	2013
	(Unaudited)	(Unaudited)	(Audited)	(Audited)
	RMB ‘000	RMB ‘000	RMB ‘000	RMB ‘000
Continuing operations
Revenue	282,880	232,702	962,817	884,518
Cost of revenue	(36,342)	(23,530)	(102,844)	(81,426)

Gross profit	246,538	209,172	859,973	803,092
Other income and gains	32,464	36,034	157,101	44,980
Selling and marketing expenses	(51,206)	(38,569)	(152,495)	(106,200)
Administrative expenses	(120,876)	(77,538)	(326,934)	(366,143)
Development costs	(89,278)	(67,341)	(249,260)	(162,857)
Other expenses	(11,977)	(3,666)	(34,027)	(10,046)
Share of losses of associates	(1,715)	(406)	(2,354)	(16)
Operating profit	3,950	57,686	252,004	202,810
Interest income on pledged bank deposits	475	638	2,794	4,883
Exchange gain (loss) on pledged bank deposits and secured bank borrowings	–	1,188	(5,081)	4,593
Net (loss) gain on derivative financial instrument	–	(646)	6,817	(5,481)
Gain on disposal of available-for-sale investment	–	–	–	5,761
Net (loss) gain on held-for-trading investments	(16,905)	(1,553)	(17,304)	8,756
Finance costs	(235)	(728)	(3,212)	(4,651)
(Loss) profit before taxation	(12,715)	56,585	236,018	216,671
Taxation	(9,442)	(4,166)	(64,197)	(50,264)
(Loss) profit for the period/year from continuing operations	(22,157)	52,419	171,821	166,407
Discontinued operations
Profit for the period/year from discontinued operations	–	–	–	6,056,041
(Loss) profit for the period/year	(22,157)	52,419	171,821	6,222,448
Other comprehensive expense for the period/year, net of income tax:
Exchange differences arising on translation of foreign operations that may be reclassified subsequently to profit or loss	(461)	(161)	(40)	(1,130)
Total comprehensive (expense) income for the period/year	(22,618)	52,258	171,781	6,221,318


(Loss) profit for the period/year attributable to:
-Owners of the Company	(19,406)	52,595	176,681	6,140,776
-Non-controlling interests	(2,751)	(176)	(4,860)	81,672
	(22,157)	52,419	171,821	6,222,448
(Loss) profit for the period/year attributable to owner of the Company:
-from continuing operations	(19,406)	52,595	176,681	164,352
-from discontinued operations	–	–	–	5,976,424
(Loss) profit for the period/year attributable to owner of the Company	(19,406)	52,595	176,681	6,140,776

(Loss) profit for the period/year attributable to non-controlling interests:
-from continuing operations	(2,751)	(176)	(4,860)	2,055
-from discontinued operations	–	–	–	79,617
(Loss) profit for the period/year attributable to non-controlling interests	(2,751)	(176)	(4,860)	81,672

Total comprehensive (expense) income attributable to:
-Owners of the Company	(19,867)	52,434	176,641	6,139,646
-Non-controlling interests	(2,751)	(176)	(4,860)	81,672
	(22,618)	52,258	171,781	6,221,318

	RMB cents	RMB cents	RMB cents	RMB cents
(Loss) earnings per share
From continuing and discontinued operations
– Basic	(3.78)	10.31	34.77	1,213.44
– Diluted	(3.82)	10.27	34.22	1,181.10
From continuing operations
– Basic	(3.78)	10.31	34.77	32.48
– Diluted	(3.82)	10.27	34.22	31.75

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (AS AT 31 DECEMBER 2014)
	2014	2013
	(Audited)	(Audited)
	RMB’000	RMB’000
Non-current assets
Property, plant and equipment	822,704	532,684
Prepaid lease payments	378,673	185,819
Investment property	–	15,725
Intangible assets	141,254	–
Interests in associates	28,795	1,299
Available-for-sale investments	5,000	5,000
Loan receivables	18,327	16,041
Deposits made for acquisition of property, plant and equipment	35,967	16,769
Other receivable	–	60,969
Goodwill	40,013	12,534
Deferred tax assets	54	54
	1,470,787	846,894
Current assets
Prepaid lease payments	2,708	2,583
Loan receivables	1,578	713
Trade receivables	51,072	41,718
Amounts due from customers for contract work	7,252	–
Other receivables, prepayments and deposits	210,098	69,770
Amounts due from related companies	1,704	4,564
Amounts due from associates	367	–
Held-for-trading investments	211,584	20,735
Pledged bank deposit	236,805	107,368
Bank deposits	1,999,644	3,051,289
Bank balances and cash	1,036,788	1,304,355
	3,759,600	4,603,095

Current liabilities
Trade and other payables	209,214	152,837
Amounts due to customers for contract work	424	–
Deferred income	25,595	26,553
Amount due to a related company	1,891	–
Amount due to an associate	8	–
Secured bank borrowing	236,805	104,672
Other financial liability	–	3,122
Income tax payable	137,648	539,927
	611,585	827,111

Net current assets	3,148,015	3,775,984
Total assets less current liabilities	4,618,802	4,622,878

Non-current liabilities
Other payables	1,283	–
Deferred tax liabilities	116	–
	1,399	–

Net assets	4,617,403	4,622,878

Capital and reserves
Share capital	36,943	37,664
Share premium and reserves	4,529,971	4,577,478

Equity attributable to owners of the Company	4,566,914	4,615,142
Non-controlling interests	50,489	7,736
	4,617,403	4,622,878

ERN Fashion

Samsonite International S.A. Announces 2014 Final Results

admin March 17, 2015

Net sales reach a record US$2.35 billion

Double-digit Revenue and EBITDA Growth for the Fifth Consecutive Year

HONG KONG, March 17, 2015 /PRNewswire/ —

Highlights

Samsonite posted double-digit growth in both net sales and Adjusted EBITDA for the fifth year running.
Samsonite’s net sales for the year ended December 31, 2014 increased by 17.3%[1] to a record US$2,350.7 million with strong growth across all regions. US Dollar reported net sales increased by 15.4%.
- Asia — 18.0%[1] year-on-year net sales growth.
- North America — 22.9%[1] year-on-year net sales growth.
- Europe — 10.4%[1] year-on-year net sales growth.
- Latin America — 15.7%[1] year-on-year net sales growth.
Profit attributable to shareholders increased to US$186.3 million, representing year-on-year growth of 5.8%, or 16.3% excluding acquisition costs and foreign exchange translation losses.
Adjusted Net Income[2] increased to US$206.3 million, representing year-on-year growth of 9.0%, or 12.3% excluding foreign exchange translation losses.
Adjusted EBITDA[2] increased to US$384.3 million, representing 13.8% year-on-year growth.
Net sales of the American Tourister and High Sierra brands continued to deliver strong growth with an increase of 19.0%[1] and 24.9%[1] year-on-year, respectively, while the Samsonite and Hartmann brands saw solid net sales growth of 10.2%[1] and 10.3%[1], respectively.
Good progress was made across all four product categories.
- Travel — net sales increased by 10.9%[1] to US$1,654.4 million.
- Casual — net sales increased by 25.1%[1] to US$252.1 million.
- Business — net sales increased by 34.6%[1] to US$256.2 million.
- Accessories — net sales increased by 76.3%[1] to US$147.2 million.
Three acquisitions were completed during the year, which together significantly expand the Group’s brand and product offering:
- Lipault, a French luggage brand known for its functional and fashionable designs and appeal to female travellers, in April 2014.
- Speck Products, a leading designer and distributor of slim protective cases for personal electronic devices that are marketed under the Speck® brand, in May 2014.
- Gregory, a premium technical outdoor backpack brand, in July 2014.
Subsequent to 2014, the Group acquired Rolling Luggage in February 2015, providing the Group with a significant retail footprint in some of the world’s leading airports and further expanding the Group’s portfolio of retail store locations.
The Group generated US$229.9 million of cash from operating activities during 2014 compared to US$193.0 million during 2013, resulting in a net cash position of US$72.9 million at year-end, providing a solid platform to execute future growth plans.
Adjusted basic earnings per share[2] increased to US$0.147 in 2014 from US$0.134 for the previous year. Basic earnings per share as reported increased to US$0.132 from US$0.125.
The Board recommended a cash distribution to shareholders of US$88.0 million, or approximately US$0.0625 per share, up 10% from the US$80.0 million distribution paid in the previous year.

[1]	Excluding foreign currency effects.
[2]	This non-IFRS measure eliminates the effect of a number of non-recurring costs and charges and certain other non-cash items that impact the Group’s reported profit for the year. The Group believes the adjusted figures are useful in gaining a more complete understanding of its operational performance and of the underlying trends of its business.

Samsonite International S.A. (“Samsonite” or “the Group”; stock code 1910), the world’s largest travel luggage company, today announced its results for the year ended December 31, 2014.

The Group’s net sales increased by 15.4% to a record US$2,350.7 million for the year ended December 31, 2014. Excluding foreign currency effects, net sales increased by 17.3%. Excluding amounts attributable to acquisitions made in 2014, net sales increased by US$203.2 million, or 10.0%, and by 11.9% on a constant currency basis. Samsonite continued to benefit from the worldwide growth in travel and tourism as international tourist arrivals grew by 4.7% in 2014 to 1.13 billion travellers, according to the World Tourism Organization (UNWTO).

Reported profit for the year attributable to shareholders increased by 5.8% to US$186.3 million. Excluding acquisition costs and foreign exchange translation losses, profit attributable to shareholders increased by 16.3%. The Group’s Adjusted Net Income increased by 9.0%, to US$206.3 million and by 12.3% excluding foreign exchange translation losses. Adjusted EBITDA increased by 13.8% to US$384.3 million for the year ended December 31, 2014.

Adjusted basic earnings per share increased to US$0.147 in 2014 from US$0.134 in 2013. Basic earnings per share as reported increased to US$0.132 for the year ended December 31, 2014 compared to US$0.125 for the previous year. The Board has recommended that a cash distribution in the amount of US$88.0 million, or approximately US$0.0625 per share, be made to the Company’s shareholders. This represents a 10% increase from the distribution paid in the previous year.

Mr. Tim Parker, Chairman, said, “Since the Group’s listing in 2011, we have achieved considerable growth, and today Samsonite is the leader in travel goods in almost every significant world market. The Group continued its strong momentum in 2014, achieving another year of excellent progress. The next stage of our growth will see the Group develop on a much more ambitious scale as we intend to not only extend our leading position in travel goods with the Samsonite and American Tourister brands, but we will also continue to diversify our brands, product offering and distribution channels. We firmly believe that our business has the capacity to double in size over the next few years, and the progress we have made during 2014 is consistent with our long-term ambition.”

Mr. Ramesh Tainwala, Chief Executive Officer, added, “We are pleased to report another outstanding set of results for the fifth year running, reflecting the consistent and successful execution of Samsonite’s growth strategy. Our business grew nicely across all geographies, brands and product categories in 2014, which is a testament to our ability to deliver best in class products catering to the needs of consumers in individual markets. The Group’s strong performance also demonstrates the resilience of the multi-brand, multi-category and multi-channel model we have established over the last few years as part of our aim to strategically diversify the business. In line with this strategy, last year we acquired three very different, yet complementary brands, Lipault, Speck and Gregory, which together significantly extend our product offering and which we expect will contribute considerably to our topline as we leverage our global distribution and marketing platform to expand them into new markets. Our most recent buy, Rolling Luggage, coming at the start of 2015, establishes a strong retail presence for us in key international airport locations as we push to expand our retail points of sales globally. Looking ahead, we will stay the course of our clear and defined strategy to achieve our goals for sustained growth.”

Table 1: Key Financial Highlights

	Year ended December 31, 2014 US$ (Million)	Year ended December 31, 2013 US$ (Million)	Percentage change 2014 vs. 2013	Percentage change 2014 vs. 2013 Excl. Foreign Currency Effects
Net Sales	2,350.7	2,037.8	15.4%	17.3%
Profit attributable to shareholders	186.3	176.1	5.8%	–
Adjusted Net Income	206.3	189.2	9.0%	–
Adjusted EBITDA	384.3	337.7	13.8%	–
Basic and diluted earnings per share (US$)	0.132	0.125	5.6%	–
Adjusted basic earnings per share (US$)	0.147	0.134	9.7%	–
Recommended cash distribution	88.0	80.0	10%	–

Net Sales by Brand

Net sales of the Group’s flagship brand, Samsonite, increased by 8.6% year-on-year to US$1,535.7 million, accounting for 65.3% of the Group’s net sales, down from 69.4% for 2013, reflecting continuing efforts to diversify the Group’s brand portfolio. Excluding foreign currency effects, net sales of the Samsonite brand increased by 10.2%.

The Group’s mid-priced brand, American Tourister, recorded net sales of US$504.2 million, an increase of 17.4%, or 19.0% on a constant currency basis, from 2013. This growth was largely driven by Asia, which saw net sales for the brand increase by 17.5% in constant currency terms in 2014, accounting for 71.5% of the increase in overall American Tourister brand sales for the year. While accounting for a smaller contribution to the Group’s overall net sales than Asia, net sales of the American Tourister brand also saw considerable growth in Europe, increasing by 54.8% on a constant currency basis.

The net sales growth of both the Samsonite and American Tourister brands was largely the result of expanded product offerings and further penetration of existing markets, which were supported by the Group’s targeted advertising activities.

The High Sierra and Hartmann brands, both acquired by the Group in 2012, posted constant currency net sales growth of 24.9% and 10.3%, respectively, as the Group pursued further geographical expansion of the two brands. Hartmann was launched globally in the fourth quarter of 2014 with the opening of the New York Madison Avenue flagship store in October, followed by the Tokyo Ginza flagship in December, with a total of over 350 points of sales around the world as at December 31, 2014, including key cities such as London, Paris, Moscow, Beijing, Shanghai, Seoul, Hong Kong and Singapore. Meanwhile, the High Sierra brand continued its successful expansion in Asia, Europe and Latin America in 2014.

The Group made three acquisitions in 2014: Lipault, acquired in April; Speck Products, acquired in May, and; Gregory Mountain Products, acquired in July. For the year ended December 31, 2014, net sales of the Speck, Gregory and Lipault brands amounted to US$91.6 million, US$12.6 million and US$5.5 million, respectively. The integration of all three of these businesses is substantially complete and plans are well advanced to expand product ranges and distribution.

Mr. Tainwala said, “Lipault, Speck and Gregory are wonderful new additions to our brand portfolio. Samsonite remains our flagship, but as we diversify and increase our product offering, it will come to account for a smaller proportion of our overall sales. American Tourister continued to drive growth, most notably in Asia, but also in other regions such as Europe. As we continue the broader geographical rollout of High Sierra and Hartmann, we’re seeing very encouraging signs from consumers, and expect both of these brands will be drivers of considerable growth for our business going forward. Our portfolio now comprises a diverse set of well-respected brands in both the travel and non-travel categories and spanning a wide range of price points. In line with our strategic objectives, we will continue to further diversify our offering by monitoring the market for attractive acquisition opportunities.”

Table 2: Net Sales by Brand

Brand	Year ended December 31, 2014 US$’000	Year ended December 31, 2013 US$’000	Percentage change 2014 vs. 2013	Percentage change 2014 vs. 2013 Excl. Foreign Currency Effects
*Samsonite*	1,535,708	1,413,703	8.6%	10.2%
*American Tourister*	504,222	429,309	17.4%	19.0%
*High Sierra*	89,239	72,007	23.9%	24.9%
*Hartmann*	16,947	15,481	9.5%	10.3%
*Speck^[3]*	91,565	–	–	nm[6]
*Gregory^[4]*	12,613	–	–	nm[6]
*Other^[5]*	100,413	107,312	(6.4)%	2.4%

[3] The Speck brand was acquired on May 28, 2014 [4] The Gregory brand was acquired on July 23, 2014 [5] Other includes Lipault, Saxoline, Xtrem and others [6] nm Not meaningful due to acquisition during 2014

Net Sales by Region

The Group continued to achieve strong double-digit constant currency sales growth in all regions in 2014, led by Asia and North America.

The Group’s net sales in Asia increased by 16.1% to US$892.3 million for the year ended December 31, 2014 compared to the previous year. Excluding foreign currency effects, net sales increased by 18.0%. Along with additional product offerings and points of sale expansion, the success of the Group’s business in Asia has been bolstered by a continued focus on country-specific product and marketing strategies to drive increased awareness of and demand for the Group’s products. The sales growth in the region was largely driven by the American Tourister brand, net sales of which accounted for 43.2% of the increase in net sales for the region. The Samsonite Red sub-brand in the Group’s casual category, which was first launched in South Korea in 2010 and is aimed at young fashion-conscious consumers, continued to be popular, with net sales increasing by 91.9% on a constant currency basis to US$57.9 million in 2014 on the back of successful new product introductions and marketing programs. On the back of the success of American Tourister, Samsonite and Samsonite Red, China continued to lead in terms of sales and performance, contributing 25.5% of the region’s net sales and recording 18.4% year-on-year net sales growth, or 18.7% on a constant currency basis, despite a slowing economy which affected consumer spending. Japan posted strong constant currency net sales gains of 32.3%, driven by the success of the Samsonite brand and the Gregory acquisition. South Korea, with constant currency net sales up 12.8% year-on-year, continued to experience robust sales growth driven by American Tourister and Samsonite Red, while India and Hong Kong posted healthy constant currency net sales gains of 19.9% and 12.2%, respectively.

The Group’s net sales in North America, which includes the United States and Canada, increased by 22.4% to US$761.3 million for the year ended December 31, 2014 compared to the previous year. Excluding foreign currency effects, net sales increased by 22.9%. The Group’s continued focus on marketing and selling products designed to appeal to North American consumers, as well as the addition of the Speck and Gregory brands, contributed to the net sales growth in the region. Excluding net sales attributable to Speck and Gregory, net sales increased by 6.9%, or 7.3% on a constant currency basis. Net sales across both the Samsonite and American Tourister brands, as well as across the travel and casual categories, all recorded solid year-on-year constant currency growth, while the business and accessories categories performed particularly well on the back of the Speck acquisition.

The Group’s net sales in Europe increased by 8.3% to US$557.9 million for the year ended December 31, 2014 compared to the previous year. Excluding foreign currency effects, net sales for the European region increased by 10.4%. Strong local currency sales growth was achieved in several markets due to the positive sell-through of new product introductions, including new product lines manufactured using the Curv material and other lines of polypropylene suitcases, as demand for hardside luggage continued to grow in the region. Germany, the Group’s leading market in Europe representing 14.7% of total regional net sales, achieved 10.6% constant currency sales growth during the year. The United Kingdom also posted strong growth, with constant currency net sales increasing by 12.2% year-on-year. The Group’s business in Italy and Spain continued to show signs of improvement with constant currency net sales growth of 12.3% and 11.3%, respectively. Excluding foreign currency effects, net sales in France increased by 13.2% year-on-year assisted by the Lipault acquisition. The Group continued to penetrate the emerging markets of Turkey and South Africa with year-on-year constant currency net sales growth of 34.9% and 25.5%, respectively. The Group’s business in Russia was negatively impacted by the economic uncertainty and devaluation of the Russian Ruble, but still generated constant currency net sales growth of 5.7% year-on-year.

In Latin America, net sales increased by 5.7% to US$130.6 million for the year ended December 31, 2014 compared to the previous year. Excluding foreign currency effects, net sales increased by 15.7%. Chile and Mexico accounted for 45.1% and 30.5% of the region’s net sales, respectively. Chile recorded year-on-year net sales growth of 8.1%, excluding foreign currency effects, due in large part to the recently launched women’s handbag brand Secret. US Dollar reported net sales for Chile decreased by 5.9% due to the negative impact of foreign exchange rates. Excluding foreign currency effects, Mexico recorded a net sales increase of 16.3%, while Brazil posted year-on-year constant currency net sales growth of 105.0% mainly due to the direct import and sales model implemented during 2013. Excluding net sales attributable to Argentina, which continued to be negatively impacted by import restrictions imposed by the local government, net sales for the Latin American region increased by 20.0% on a constant currency basis.

Mr. Tainwala said, “2014 saw considerable growth once again coming from North America and Asia, and we continued to see positive progress in Europe, particularly Italy and Spain, which have both suffered considerably in the past few years due to the Eurozone crisis. As recent events have demonstrated, global economies continue to be turbulent; however the broad geographical spread of our operations as well as our multi-brand, multi-category and multi-channel model have enabled us to weather the many external forces that can buffet individual markets.”

Table 3: Net Sales by Region

Region	Year ended December 31, 2014 US$’000	Year ended December 31, 2013 US$’000	Percentage change 2014 vs. 2013	Percentage change 2014 vs. 2013 Excl. Foreign Currency Effects
Asia	892,258	768,363	16.1%	18.0%
North America	761,310	621,741	22.4%	22.9%
Europe	557,934	515,177	8.3%	10.4%
Latin America	130,606	123,580	5.7%	15.7%

Net Sales by Product Category

Net sales in the travel category, the Group’s traditional area of strength, grew by 10.9% to US$1,654.4 million, excluding foreign currency effects, delivering 44.3% of the Group’s total increase in net sales in 2014. Country-specific product designs, locally relevant marketing strategies and expanded points of sale, including e-commerce, continue to be the key factors contributing to the Group’s success in the travel category.

As a result of the Group’s strategic focus on expanding its product offering, the accessories category recorded constant currency net sales growth of 76.3% year on year, largely due to the acquisition of Speck Products. The acquisition of Speck also had a positive impact on the business product category, where net sales increased by 34.6% excluding foreign currency effects. Meanwhile, net sales in the casual product category increased by 25.1% on a constant currency basis, due primarily to the success of High Sierra and Samsonite Red as well as the acquisition of Gregory.

Mr. Tainwala added, “Our share of travel has reduced from 74.4% of total net sales in 2013 to 70.4% in 2014, while that of non-travel has grown from 25.6% to 29.6% during the same period. This demonstrates the progress we have made in a short time to diversify our brand and product portfolio. Over the next five years, we aim to increase the contribution of our non-travel brands to around 50% of total net sales.”

Table 4: Net Sales by Product Category

Product Category	Year ended December 31, 2014 US$’000	Year ended December 31, 2013 US$’000	Percentage change 2014 vs. 2013	Percentage change 2014 vs. 2013 Excl. Foreign Currency Effects
Travel	1,654,402	1,515,852	9.1%	10.9%
Casual	252,069	205,871	22.4%	25.1%
Business	256,228	193,474	32.4%	34.6%
Accessories	147,222	85,745	71.7%	76.3%

Distribution

As at December 31, 2014, the wholesale and retail channels represented 79.4% and 20.2%, respectively, of the Group’s net sales. Excluding foreign currency effects, net sales in the wholesale channel increased year-on-year by 17.2%, while net sales in the retail channel increased by 18.3%. On a same store, constant currency basis, net sales in the retail channel increased by 7.9%. For the year ended December 31, 2014, approximately 6.6% of the Group’s net sales were derived from its direct-to-consumer e-commerce business and net sales to e-tailers, versus 5.6% for the previous year.

The Group expanded its points of sale by approximately 3,600 during the year to a total of over 49,000 points of sale in over 100 countries worldwide as of December 31, 2014. Over 300 points of sale were added in Asia during 2014, including 41 net new company-operated retail locations, bringing the total to more than 7,200 points of sale in the region as at December 31, 2014.

Mr. Tainwala noted, “2014 saw Samsonite pushing for a more balanced channel mix. We are integrating both online and offline distribution to create an omni-channel presence that will strengthen our engagement with consumers, increase visibility for our products and drive sales. Given the explosive growth in online retail, we believe e-commerce will be a new driver of profitable growth for our business, and will be the way in which many of our newer and younger customers experience our brands. As for brick-and-mortar, we are aggressively expanding our own retail footprint around the world, including in airports under the Rolling Luggage name as well as through opening multi-brand bag and luggage specialty stores under the J.S. Trunk & Co. name. We believe an omni-channel model has the potential to grow the proportion of retail sales from around 20% of our net sales in 2014 to perhaps as much as 50% over the medium term.”

Marketing

The Group spent US$144.7 million, or 6.2% of net sales, on marketing in 2014, an increase of 12.0% compared to 2013, reflecting its ongoing commitment to advertise and promote its brands and products to support sales growth worldwide. The Group continued to employ targeted and focused advertising and promotional campaigns and the Group believes the success of these campaigns is evident in its net sales growth outpacing the industry in all regions.

Outlook

Looking ahead to 2015, the Group’s existing growth strategy will continue to maintain its course with the objective of increasing shareholder value through sustainable revenue and earnings growth.

In particular, Samsonite will:

Continue to gain market share by leveraging the strength of the Group’s diverse portfolio of brands, which include Samsonite, American Tourister, Hartmann, High Sierra, Gregory, Speck and Lipault, across all of its markets;
Allocate more resources to increase the Group’s direct-to-consumer sales, including e-commerce, retail and omni-channel, in proportion to net sales;
Allocate more resources to the markets in Latin America where the Group is less represented and has the potential to gain market share;
Allocate more resources to the Hartmann brand to increase sales and gain market share worldwide;
Focus on further integrating Speck Products, Lipault and Gregory into the Group’s existing business and continue to realize anticipated synergies in sourcing, systems and back-office support functions;
Continually improve the efficiency and effectiveness of the Group’s supply chain and global distribution network; and
Continually evaluate acquisition opportunities that have a compelling strategic fit, leveraging the Group’s strong management team and balance sheet capacity.

About Samsonite

Samsonite International S.A. (together with its consolidated subsidiaries, the “Group”) is the world’s largest travel luggage company, with a heritage dating back more than 100 years. The Group is principally engaged in the design, manufacture, sourcing and distribution of luggage, business and computer bags, outdoor and casual bags, travel accessories and slim protective cases for personal electronic devices throughout the world, primarily under the Samsonite®, American Tourister®, Hartmann®, High Sierra®, Gregory®, Speck® and Lipault® brand names and other owned and licensed brand names. The Group’s core brand, Samsonite, is one of the most well-known travel luggage brands in the world.

For more information, please contact:

Samsonite International S.A.

William Yue

Tel: +852-2422-2611

Fax: +852-2480-1808

Email: william.yue@samsonite.com

Artemis Associates

Vanita Sehgal	Jonathan Yang
Tel: +852-2861-3227	Tel: +852-2861-3234
Mob: +852-9103-4626	Mob: +852-6373-6676
Email: vanita.sehgal@artemisassociates.com	Email: jonathan.yang @artemisassociates.com

Europe: Newgate Communications

Jonathan Clare	Clotilde Gros	Georgia Lewis
Tel: +44-2076-806-500	Tel: +44-207-680-6522	Tel: +44-207-680-6528
	Mob: +44-7899-790-749	Mob: +44-7718-619-905

Email: samsonite@newgatecomms.com

This announcement contains forward-looking statements. All statements other than statements of historical fact contained in this announcement, including, without limitation, the discussions of the Group’s business strategies and expectations concerning future operations, margins, profitability, liquidity and capital resources, the future development of the Group’s industry and the future development of the general economy of the Group’s key markets and any statements preceded by, followed by or that include words and expressions such as “expect”, “seek”, “believe”, “plan”, “intend”, “estimate”, “project”, “anticipate”, “may”, “will”, “would” and “could” or similar words or statements, as they relate to the Group or its management, are intended to identify forward-looking statements.

These statements are subject to certain known and unknown risks, uncertainties and assumptions, which may cause the Group’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Accordingly, you should not place undue reliance on any forward-looking information.

Subject to the requirements of applicable laws, rules and regulations, the Group does not have any and undertakes no obligation to update or otherwise revise the forward-looking statements in this announcement, whether as a result of new information, future events or developments or otherwise. In this announcement, statements of or references to the Group’s intentions are made as of the date of this announcement. Any such intentions may change in light of future developments. All forward-looking statements contained in this announcement are qualified by reference to the cautionary statements set out above.

Photo – http://photos.prnasia.com/prnh/20150317/8521501672LOGO

ERN Fashion

Shanghai La Chapelle Fashion Co., Ltd. Announces 2014 Annual Results

admin March 11, 2015

Actively Expanded Online and Offline Sales Networks To Achieve Sustainable Growth

HONG KONG, March 11, 2015 /PRNewswire/ — Shanghai La Chapelle Fashion Co., Ltd. (“La Chapelle” or the “Company”, together with its subsidiaries, the “Group”, stock code: 6116.HK), one of the largest fashion apparel companies in the PRC, is pleased to announce the audited consolidated results for the year ended 31 December 2014 (the “Year”).

Financial Highlights	For the Year Ended 31 December (RMB’Mn)
Financial Highlights	2014	2013	Changes (%)
Revenue	7,814.2	6,225.1	+25.5%
Gross profit	5,364.5	4,283.4	+25.2%
Gross profit margin	68.7%	68.8%	-0.1pts
Profit attributable to equity owners of the Company	503.5	407.3	+23.6%
Basic earnings per share	RMB1.27	RMB1.14	+11.4%
Proposed final dividend per share	RMB0.60	—	—

During the Year, the Group recorded outstanding results and achieved growths in both revenue and net profit. Benefited from the expansion of retail network and growth in same store sales, the Group’s revenue recorded a substantial growth of 25.5% to approximately RMB7,814.2 million in 2014 (2013: approximately RMB6,225.1 million), while the gross profit up by 25.2% to approximately RMB5,364.5 million (2013: approximately RMB4,283.4 million). As at 31 December 2014, the number of retail points of the Group increased to 6,887 (2013: 5,384), situating at approximately 2,200 physical locations.

The gross profit of the Group in the Year was relatively stable, with a slight 0.1 percentage point decrease to 68.7% (2013: 68.8%), mainly attributable to a higher proportion of the sales of past season products in 2014 than that of 2013 and an increase in provisions for inventories. With the substantial increase in revenue and relatively stable gross profit margin, the profit attributable to equity owners of the Company increased by 23.6% to approximately RMB503.5 million in 2014 (2013: approximately RMB407.3 million). During the Year, the Group’s basic and diluted earnings per share increased by 11.4% to RMB1.27 cents (2013: 1.14 cents).

The Board proposed a final dividend of RMB0.60 per ordinary share.

Mr. Wang Yong, Executive Vice President of La Chapelle, said, “The PRC’s retail environment was adversely affected by the slowdown of GDP growth, persisting contraction in the spending momentum and structural change in the market. 2014 was a difficult year for many apparel enterprises in the industry. Nevertheless, through expanding our retail networks substantially, we achieved growths in both revenue and net profit.”

Business review

During the Year, the Group’s active expansion of retail network brought significant results growth, further consolidating La Chapelle’s leading position leading position in the mass-market ladies’ casualwear segment in the PRC. Meanwhile, the Group has adopted a series of strategies to further seize market opportunities and increase market share. For example, we continued to execute our multi-brand strategy, to optimize the retail channel management system, implemented a retail-oriented strategy, rolled out a number of new management information systems to further increase our operation efficiency, dedicated to the launch of O2O business and a partnership system. All above has paved a solid foundation for the Group’s long-term strategic development.

During the Year, our retail network expanded considerably. Among the 6,887 retail points, 47.1% were located in first-tier cities and second-tier cities and the remaining 52.9% were located in third-tier cities and fourth-tier cities; with 72.0% of the total were located in concessionaire counters whereas 28.0% were standalone retail outlet. During the Year, the Group launched a partnership system for some of the stores in December 2014, under which the staff salary would be directly linked to their sales performance. This successfully incentivized the staff and boosted same stores sales. Besides, the Group launched an online flagship store on Tmall and Suning Yigou, the well-known business-to-customer online shopping platforms in the PRC, and established a corporate mobile application platform on WeChat, a well-known messenger and social network mobile application, in the Year. Benefited from the direct marketing and interaction with customers, the Group achieved approximately RMB37.6 million of sales through its O2O channel in 2014. As a further step to implement the O2O strategy, the Group made a strategic investment in February 2015 by acquiring a controlling interest of 54.04% in Hangzhou Anshe E-Commerce Co., Ltd (well known for its brand name “QiGeGe”) to establish an operating platform, which focuses on brands and apparel products and covers both online and offline channels.

During the Year, the Group continued to execute the multi-brand strategy. The eight brands under the Group, namely La Chapelle, La Chapelle Sport, 7.Modifier, Candies, La Chapelle Homme, La Babité, La Chapelle Kids and Pote, cover ladies wear, menswear and children’s wear, which have enabled the Group to access a wider customer base and diversify the sources of revenue. In 2014, 66.5% of the Group’s revenue was generated from the sales of La Chapelle and La Chapelle Sport, mainly attributable to the longest brand history and the highest level of customer loyalty and recognition of these two brands. On the other hand, the other brands displayed a faster growth in comparison, in which their contribution of the Group’s revenue increased from approximately 26.3% in 2013 to 33.5% in 2014. In addition, in collaboration with the Group’s strategic partner Roland Berger Strategy Consultants, a new independent brand was launched based on the SPA (Specialty retailer of Private label Apparel) model. The new brand is expected to officially launch and open its first retail outlet in the first half of 2015, offering customers a wide range of apparel products including ladies wear, menswear and children’s wear at reasonable prices.

The Group also dedicated to optimize the management information system and supply chain management system so as to further enhance the operation efficiency and management capabilities. During the Year, the Group rolled out a number of new systems to enhance the management of different stages of operation. For example, the Group introduced an Order Management System (OMS) to coordinate and allocate orders from online retail channels and retail points, and upgraded the existing SAP ERP system and installed a warehouse management system (WMS) in the newly-built warehouse and logistic center in Taicang, Jiangsu Province. Moreover, the Group is also constructing two additional warehouse and logistic centres in Tianjin and Chengdu. Upon completion of the construction, the Group will possess a nationwide distribution network, which enables the Group to be more effective and efficient in distribution, providing efficient services to retail points.

Prospects

As the PRC’s economy is marching into the stage of steady and healthy development, individual consumption will continue its growing pace. Looking into the future, the Group will adopt the following strategies to enhance its overall competitiveness and to increase its market share, including: 1) Continue to strategically expand its retail network and increase its penetration into the existing markets. The Group plans to expand into tier 2 and 3 cities in the PRC with rising disposable income and substantial market potential, and open more retail outlets in shopping centres and multistory flagship stores to response to the changing shopping patterns and habit of the consumers in the PRC; 2) Focus on brand building by raising the Group’s brand image and brand awareness and increasing customer’s loyalty and recognition toward La Chapelle’s brands; 3) Selectively search for acquisition and strategic alliance opportunities to complement the Group’s existing business and further solidify its market position; 4) Further improve the information system, including an upgrade on the POS system and launch of a customer relationship management (“CRM”) system for collecting and analyzing customer information in 2015; 5) Enhance O2O strategy by accelerating the establishment of online platform under its own brands, increasing its proportion of sales in order to achieve sustainable growth for the Group.

Mr. Wang Yong, Executive Vice President of La Chapelle, said, “In the future, we will focus on our products by strengthening product design and development capabilities. Moreover, we will further expand our retail network, improve supply chain management, enhance our warehousing and logistics infrastructure and optimize our information systems. After the strategic investment in QiGeGe, we will focus on building proprietary online and offline brand sales platform and strive to offer comprehensive shopping experience to customers so as to use the online platform to drive the same store sales growth in physical stores. Leveraging on our leading market position, strong product design capability, successful multi-brand strategy and independent direct sales model, La Chapelle will further expand its sales network in the PRC and increase its market share, maximizing returns for our shareholders.”

About Shanghai La Chapelle Fashion Co. Ltd.

Founded in 2001, Shanghai La Chapelle Fashion Co. Ltd. is a fast-growing multi-brand fashion group in the PRC, which designs, markets and sells apparel products with a focus on mass-market ladies’ casualwear. The Group strives to offer customers the latest fashions at competitive prices through a wide range of apparel products under 8 brands, namely La Chapelle, La Chapelle Sport, 7.Modifier, Candie’s, La Babité, La Chapelle Homme, Pote and La Chapelle Kids. The Group directly controls and operates 100% of its nationwide sales network. As at 31 December 2014, the Group’s extensive nationwide retail network comprised 6,887 retail points located in approximately 2,200 physical locations across all 31 provinces, autonomous regions and municipalities in the PRC. In August 2014, the Group launched its O2O strategy to integrate traditional physical stores with online channels.

Website: www.lachapelle.cn

ERN Health Care

AMRI Announces Fourth Quarter and Full Year 2014 Results

admin February 12, 2015

— Fourth quarter contract revenue of $80.7 million, up 35% from 2013

— Full year 2014 contract revenue of $250.7 million, up 19% from 2013

— Fourth quarter adjusted diluted EPS of $0.28 up 33% from $0.21 in 2013, including a $0.03 decrease in EPS from royalties in the current quarter

— Full year adjusted diluted EPS of $0.63 compared to $0.68 in 2013, including a $0.21 decrease in EPS from royalties in the current year

— Full year 2015 contract revenue expected to be between $335 and $370 million, up 40% at the midpoint.

ALBANY, N.Y., Feb. 12, 2015 /PRNewswire/ — AMRI (NASDAQ: AMRI) today reported financial and operating results for the fourth quarter and full year ended December 31, 2014.

“While our OsoBio facility resumed full operations later than anticipated, after we learned in the fall of 2014 that a remediation would be necessary, strong execution led us to finish 2014 with record performances in each of our businesses, as reflected by a greater than 30% increase in quarterly revenue and adjusted earnings,” said William S. Marth, AMRI’s president and chief executive officer.

“During 2014, we reorganized our discovery business, optimizing our resource mix and laying the ground work for a differentiated discovery platform. We advanced our growth in generics, initiating multiple development programs across all segments of our business, and we completed and integrated two acquisitions and announced a third, expanding our capabilities into very attractive, high demand areas such as controlled substances, sterile manufacturing and product development. Lastly, we created sustainable shareholder value, replacing declining royalties with an expanding, profitable contract business.

“We have much to be proud of in 2014 and are poised for a strong 2015. Despite a significant headwind from the loss of Allegra royalties in 2015, we believe continued strong growth in our base business, the contribution of our acquisitions, together with enhanced operational discipline, will lead to continued, significant growth in revenue and earnings in 2015.”

Fourth Quarter 2014 Results

Total revenue for the fourth quarter of 2014 was $86.6 million, an increase of 29% compared to total revenue of $67.1 million reported in the fourth quarter of 2013.

Total contract revenue for the fourth quarter of 2014 was $80.7 million, an increase of 35% compared to contract revenue of $59.7 million reported in the fourth quarter of 2013. Adjusted contract margins were 23% for the fourth quarter of 2014, compared with 21% for the fourth quarter of 2013, driven by the growth of the Drug Product business, increased capacity utilization, and the benefit of cost reduction initiatives and facility optimization. Adjusted contract margins exclude the following items that are included under U.S. GAAP: business interruption costs, purchase accounting depreciation and amortization and business acquisition costs. For a reconciliation of U.S. GAAP contract margins as reported to adjusted contract margins for the 2014 and 2013 reporting periods, please see Table 1 at the end of press release.

Royalty revenue in the fourth quarter of 2014 was $5.9 million, a decrease of 21% from $7.4 million in the fourth quarter of 2013. Royalty revenue for the fourth quarter of 2014 includes $3.4 million in royalties from the Allegra^® products as well as $2.5 million from the net sales of certain amphetamine salts sold by Actavis.

Net loss under U.S. GAAP was $(1.9) million, or $(0.06) per diluted share, in the fourth quarter of 2014, compared to U.S. GAAP net income of $4.3 million, or $0.13 per diluted share for the fourth quarter of 2013. Net income on an adjusted basis in the fourth quarter of 2014 was $9.2 million, or $0.28 per diluted share, compared to adjusted net income of $6.8 million or $0.21 per diluted share in 2013. Net income on an adjusted basis excludes the following items that are included under U.S. GAAP: business interruption charges, restructuring and impairment charges, convertible debt interest and amortization charges, business acquisition costs, executive transition costs, postretirement benefit plan settlement gains, write-offs of deferred financing costs, non-recurring income tax adjustments, litigation settlements, insurance demutualization gains, losses on disposals of fixed assets related to restructuring activities, ERP implementation costs, and depreciation and amortization of purchase accounting adjustments. For a reconciliation of U.S. GAAP net income (loss) and earnings (loss) per diluted share as reported to adjusted net income and earnings per diluted share for the 2014 and 2013 reporting periods, please see Table 2 at the end of this press release.

Full Year 2014 Results

Total revenue for the year ended December 31, 2014 was a record $276.6 million, an increase of 12% compared to total revenue of $246.6 million for the same period in 2013.

Total contract revenue for the full year 2014 was a record $250.7 million, an increase of 19% compared to contract revenue of $210.0 million for 2013. Adjusted contract margins were 19% for the full year 2014, compared to 18% in 2013.

Royalty revenue for the full year 2014 was $25.9 million, a decrease of 29% from $36.6 million in 2013, in line with expectations. Royalty revenue for the full year 2014 includes $16.3 million in royalties from the Allegra^® products, as well as $9.6 million from the net sales of certain amphetamine salts sold by Actavis.

Net loss under U.S. GAAP for the full year 2014 was $(3.3) million, or $(0.10) per diluted share, compared to U.S. GAAP net income of $11.8 million, or $0.37 per diluted share for the full year 2013. Net income on an adjusted basis in the full year 2014 was $20.7 million or $0.63 per diluted share, compared to adjusted net income of $21.5 million or $0.68 per diluted share in 2013. Adjusted net income in 2014 includes a $6.4 million decline in royalty income and $0.7 million of income from operations acquired during 2014.

For a reconciliation of U.S. GAAP net income (loss) and earnings (loss) per diluted share as reported to adjusted net income and earnings per diluted share for the 2014 and 2013 reporting periods, please see Table 2 at the end of this press release. Financial results for the three months and year ended December 31, 2013 have been updated from previously reported amounts to reflect prior period income tax adjustments identified during the second quarter of 2014. The Company considers the adjustments to be immaterial to the impacted periods.

Segment Results

Drug Discovery Services (DDS)

	Three Months Ended		Year Ended
	December 31,		December 31,
(Unaudited; $ in thousands)	2014	2013	2014	2013

DDS Contract Revenue	$ 19,741	$ 18,404	$ 76,737	$ 77,418
Cost of Contract Revenue	15,482	16,028	62,401	66,604
Contract Gross Profit	4,259	2,376	14,336	10,814
Contract Gross Margin	22%	13%	19%	14%

Discovery and Development Services (DDS) contract revenue for the fourth quarter of 2014 increased 7% to $19.7 million, compared to $18.4 million the fourth quarter of 2013, primarily due to an increase in development services revenue. DDS gross margins increased to 22% from 13% in the fourth quarter of 2013, driven by the benefit of cost reduction initiatives and facility optimization.

For the full year 2014, DDS contract revenue decreased to $76.7 million from $77.4 million in 2013. A decline in discovery service revenue was offset by an increase in development service revenue. DDS gross margins increased to 19% in 2014 from 14% in 2013, driven by the benefit of cost reduction initiatives and facility optimization.

Active Pharmaceutical Ingredients (API)

	Three Months Ended		Year Ended
	December 31,		December 31,
(Unaudited; $ in thousands)	2014	2013	2014	2013

API Contract Revenue	$ 46,204	$ 38,301	$ 144,349	$ 125,871
Cost of Contract Revenue	34,200	27,975	111,873	95,144
Contract Gross Profit	12,004	10,326	32,476	30,727
Contract Gross Margin	26%	27%	22%	24%

Adjusted Contract Gross Profit (1)	12,220	10,326	32,882	30,727
Adjusted Contract Gross Margin (1)	26%	27%	23%	24%

(1) Refer to Table 1 included in this release for the reconciliation of U.S. GAAP contract gross profit and contract gross margin to adjusted contract gross profit and adjusted contract gross margin as a percentage of contract revenue.

API contract revenue for the fourth quarter of 2014 increased 21% compared to the same period of 2013 due primarily an increase in API shipments to customers, and the addition of Cedarburg Pharmaceuticals. Excluding the Cedarburg acquisition, contract revenue increased 14% compared to the fourth quarter 2013. API adjusted contract margins for the fourth quarter of 2014 decreased to 26% from 27% in the fourth quarter of 2013, due to the mix of business within the segment.

For the full year 2014, API contract revenue increased 15% to $144.3 million from $125.9 million in 2013, due primarily to the addition of Cedarburg Pharmaceuticals. Excluding the acquisition of Cedarburg, API contract revenue increased 7% compared to the full year 2013. API adjusted gross margins decreased to 23% in 2014 from 24% in 2013, due to the mix of business within the segment.

Drug Product Manufacturing (DPM)

	Three Months Ended		Year Ended
	December 31,		December 31,
(Unaudited; $ in thousands)	2014	2013	2014	2013

DPM Contract Revenue	$ 14,767	$ 3,010	$ 29,619	$ 6,712
Cost of Contract Revenue	16,449	3,100	34,919	10,175
Contract Gross Loss	(1,682)	(90)	(5,300)	(3,463)
Contract Gross Margin	-11%	-3%	-18%	-52%

Adjusted Contract Gross Profit (Loss) (1)	1,761	(90)	1,467	(3,463)
Adjusted Contract Gross Margin (1)	12%	-3%	5%	-52%

(1) Refer to Table 1 included in this release for the reconciliation of U.S. GAAP contract gross loss and contract gross margin to adjusted contract gross profit (loss) and adjusted contract gross margin as a percentage of contract revenue.

Drug Product Manufacturing contract revenue for the fourth quarter of 2014 increased $11.8 million over the same period of 2013 and includes $10.3 million of revenue from Oso Biopharmaceuticals Manufacturing (OsoBio) that was acquired in July 2014. Drug Product adjusted contract margins for the fourth quarter of 2014 increased to 12% compared to -3% the same period of 2013, driven by volume increases, improved mix and the addition of the OsoBio business, however contract margins were significantly impacted at the Company’s Albuquerque facility as a result of the previously disclosed business interruption event.

For the full year 2014, Drug Product contract revenue increased $22.9 million to $29.6 million from $6.7 million in 2013, due primarily to the addition of $16.7 million in revenue from OsoBio and a 92% increase in revenue from the company’s Burlington operations. Drug Product adjusted gross margins improved to 5% in 2014 from -52% in 2013, due to the addition of OsoBio and increased capacity utilization at our Burlington facility.

Liquidity and Capital Resources

In the fourth quarter 2014, AMRI expanded its existing revolving line of credit from $50 million to $75 million with the addition of another bank to the facility.

At December 31, 2014, AMRI had cash, cash equivalents and restricted cash of $51.0 million, compared to $23.9 million at September 30, 2014. The increase in cash and cash equivalents for the quarter ended December 31, 2014 was primarily due to $35 million in proceeds from the Company’s line of credit, partially offset by cash used in operations of $2.0 million and $5.2 million of capital expenditures. Total common shares outstanding, net of treasury shares, were 32,627,940 at December 31, 2014.

In January 2015, AMRI acquired a Glasgow, UK-based drug product formulation business for $24 million and expects to complete the previously announced acquisition of SSCI/ West Lafayette, Ind. in February 2015.

Financial Outlook

AMRI estimates the following for full year 2015:

Full year contract revenue is expected to be between $335 and $370 million, an increase of 40% at the midpoint, including
- DDS revenue of approximately $98 million
- API revenue of approximately $162 million
- Drug Product revenue of approximately $92 million
Royalty revenue of between $13 and $14 million, including approximately $4 million of Allegra royalties, which expire fully in the third quarter 2015
Adjusted selling, general and administrative expenses at approximately 17% of contract revenue
Adjusted EBITDA between $59 and $65 million, up 34% at the midpoint
Adjusted diluted EPS is expected to be between $0.80 and $0.90, compared to $0.63 in 2014, based on an average fully diluted share count of approximately 33 million shares
Capital expenditures of between $24 and $26 million
Effective tax rate of approximately 33%

AMRI’s estimates for 2015 reflect the acquisition of the SSCI West Lafayette, Ind. operations, closing in February 2015, to be included in the DDS segment, as well as the Glasgow UK injectable drug product formulation operations, closed in January 2015, to be included in the Drug Product segment.

Fourth Quarter Results Conference Call

AMRI will host a conference call and webcast today at 8:30 a.m. ET to discuss fourth quarter 2014 results. The conference call can be accessed by dialing (866) 208-5728 (domestic calls) or (224) 633-1279 (international calls) at 8:20 a.m. ET and entering passcode 75749093. The webcast and supplementing slides can be accessed on the company’s website at www.amriglobal.com.

A replay of the conference call can be accessed for 24 hours at (855) 859-2056 (domestic calls) or (404) 537-3406 (international calls) and entering passcode 75749093. Replays of the webcast can also be accessed for up to 90 days after the call via the investor area of the company’s website at http://ir.amriglobal.com.

About AMRI
Albany Molecular Research Inc. (AMRI) is a global contract research and manufacturing organization that has been working with the Life Sciences industry to improve patient outcomes and the quality of life for more than two decades. With locations in North America, Europe and Asia, our key business segments include Discovery and Development Solutions (DDS), Active Pharmaceutical Ingredients (API), and Drug Product Manufacturing. Our DDS segment provides comprehensive services from hit identification to IND, including expertise with diverse chemistry, library design and synthesis, in vitro biology and pharmacology, drug metabolism and pharmacokinetics, as well as natural products. API Manufacturing supports the chemical development and cGMP manufacture of complex API, including potent, controlled substances, biologics, peptides, steroids, and cytotoxic compounds. Drug Product Manufacturing supports development through commercial scale production of complex liquid-filled and lyophilized parenteral formulations. For more information about AMRI, please visit our website at www.amriglobal.com or follow us on Twitter (@amriglobal).

Forward-looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements include, but are not limited to, statements regarding the company’s estimates of revenue, contract revenue, adjusted EBITDA, adjusted diluted earnings per share, and all information and other statements regarding the estimates of results and financial outlook for 2015, statements made by the company’s Chief Executive Officer, and statements under the caption “Financial Outlook,” statements regarding the business interruption event at the OsoBio facility and the time and resources involved with the remediation thereof and the impact of such event on the Company’s results of operations, statements regarding the strength of the company’s business and prospects, statements regarding the impact of recent acquisition activity, and statements concerning the company’s momentum and long-term growth, including expected results for 2015. Readers should not place undue reliance on our forward-looking statements. The company’s actual results may differ materially from such forward-looking statements as a result of numerous factors, some of which the company may not be able to predict and may not be within the company’s control. Factors that could cause such differences include, but are not limited to, trends in pharmaceutical and biotechnology companies’ outsourcing of manufacturing services and chemical research and development, including softness in these markets; sales of Allegra® and the impact of the “at-risk” launch of generic Allegra®, the rapid reduction in royalties on the Allegra products expected in 2015 and the patent expirations on such products, the OTC conversion of Allegra® and the generic and OTC sales of Allegra in Japan on the company’s receipt of significant royalties under the Allegra® license agreement; the success of the sales of other products for which the company receives royalties; the risk that the company will not be able to replicate either in the short or long term the revenue stream that has been derived from the royalties payable under the Allegra® license agreements; the risk that clients may terminate or reduce demand under any strategic or multi-year deal; the company’s ability to enforce its intellectual property and technology rights; the company’s ability to obtain financing sufficient to meet its business needs; the company’s ability to successfully comply with heightened FDA scrutiny on aseptic fill/finish operations; the results of further FDA inspections; the company’s ability to effectively maintain compliance with applicable FDA and DEA regulations; the company’s ability to integrate past or future acquisitions, including the Aptuit West Lafayette and Glasgow operations, Cedarburg Pharmaceuticals and Oso Biopharmaceuticals Manufacturing, and make such acquisitions accretive to the company’s business model, the company’s ability to take advantage of proprietary technology and expand the scientific tools available to it, the ability of the company’s strategic investments and acquisitions to perform as expected, as well as those risks discussed in the company’s Annual Report on Form 10-K for the year ended December 31, 2013 as filed with the Securities and Exchange Commission on March 17, 2014, and the company’s other SEC filings. Revenue, contract revenue, adjusted diluted EPS, adjusted contract margin, adjusted EBITDA and other financial guidance offered by senior management today with respect to 2015 represent a point-in-time estimate and are based on information as of the date of this press release. Senior management has made numerous assumptions in providing this guidance which, while believed to be reasonable, may not prove to be accurate. Numerous factors, including those noted above, may cause actual results to differ materially from the guidance provided. The company expressly disclaims any current intention or obligation to update the guidance provided or any other forward-looking statement in this press release to reflect future events or changes in facts assumed for purposes of providing this guidance or otherwise affecting the forward-looking statements contained in this press release.

Non-GAAP Adjustment Items

To supplement our financial results prepared in accordance with U.S. GAAP, we have presented non-GAAP measures of contract gross profit (loss), contract gross margin, income (loss) from operations, and net income (loss) and income (loss) per diluted share as adjusted to exclude certain restructuring charges, executive transition costs, convertible debt interest and amortization charges, business interruption charges, business acquisition costs, litigation settlement charges, write-offs of deferred financing costs, non-cash long-lived asset impairment charges, losses on disposals of assets related to restructuring activities, insurance demutualization gains, depreciation and amortization of purchase accounting adjustments, non-recurring income tax adjustments, and postretirement benefit plan settlement gains in the 2014 and 2013 periods. We have also presented non-GAAP measures of adjusted EBITDA, which in addition to the items excluded above, further excluded the impact of interest income and expense, depreciation and amortization expense, and income tax expense or benefit. Exclusion of these non-recurring items allows comparisons of operating results that are consistent over time. We believe presentation of these non-GAAP measures enhances an overall understanding of our historical financial performance because we believe they are an indication of the performance of our base business. Management uses these non-GAAP measures as a basis for evaluating our financial performance as well as for budgeting and forecasting of future periods. For these reasons, we believe they can be useful to investors. The presentation of this additional information should not be considered in isolation or as a substitute for income (loss) from operations, net income (loss) or income (loss) per diluted share, prepared in accordance with U.S. GAAP. Reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are set forth in Tables 1-3. Our projected 2015 adjusted EPS and adjusted EBITDA, however, are only provided on an adjusted basis. It is not feasible to provide GAAP EPS and EBITDA guidance because the items excluded are difficult to predict and estimate and are primarily dependent on future events.

Albany Molecular Research, Inc.
Condensed Consolidated Statements of Operations (unaudited)

	Three Months Ended		Year Ended
(Dollars in thousands, except for per share data)	December 31,	December 31,	December 31,	December 31,
	2014	2013	2014	2013

Contract revenue	$ 80,712	$ 59,715	$ 250,705	$ 210,001
Recurring royalties	5,888	7,407	25,866	36,574
Total revenue	86,600	67,122	276,571	246,575

Cost of contract revenue	66,131	47,103	209,193	171,923
Technology incentive award	344	513	1,621	2,767
Research and development	229	44	1,004	414
Selling, general and administrative	13,954	11,004	48,898	42,256
Postretirement benefit plan settlement gain	–		(1,285)
Restructuring charges	146	1,075	3,582	7,183
Impairment charges	2,885	417	7,835	1,857
Total operating expenses	83,689	60,156	270,848	226,400

Income from operations	2,911	6,966	5,723	20,175

Interest expense, net	(2,700)	(1,000)	(10,956)	(1,244)
Other (expense) income, net	(238)	(99)	(235)	772

(Loss) income before income taxes	(27)	5,867	(5,468)	19,703

Income tax expense (benefit)	1,834	1,603	(2,190)	7,935

Net (loss)income	$ (1,861)	$ 4,264	$ (3,278)	$ 11,768

Basic (loss) income per share	$ (0.06)	$ 0.14	$ (0.10)	$ 0.38

Diluted (loss) income per share	$ (0.06)	$ 0.13	$ (0.10)	$ 0.37

Albany Molecular Research, Inc.
Selected Consolidated Balance Sheet Data (unaudited)

(Dollars in thousands)	December 31,	December 31,
	2014	2013

Cash and cash equivalents………………………………………………..	$ 46,995	$ 175,928
Restricted cash………………………………………………………………..	4,052	714
Accounts receivable, net…………………………………………………..	71,644	52,216
Royalty income receivable…………………………………………………	5,061	7,523
Inventory…………………………………………………………………………	49,880	31,991
Total current assets………………………………………………………….	191,012	279,019
Restricted cash………………………………………………………………..	−	3,810
Property and equipment, net………………………………………………	165,475	127,775
Total assets…………………………………………………………………….	519,953	445,268

Total current liabilities……………………………………………………….	48,690	48,849
Longâ€’term debt, excluding current installments, net of unamortized discount……………………………………………………………………..	159,980	123,135
Total liabilities…………………………………………………………………..	278,131	204,511
Total stockholders’ equity………………………………………………….	241,822	240,757
Total liabilities and stockholders’ equity……………………………….	519,953	445,268

Table 1: Reconciliation of three months and year ended December 31, 2014 and 2013 reported contract gross profit (loss) and contract gross margin to adjusted contract gross profit (loss) and adjusted contract gross margin

Non-GAAP Measures	Three Months Ended		Year Ended
(Dollars in thousands)	December 31,		December 31,
	2014	2013	2014	2013

Consolidated Contract Revenue, as reported	$ 80,712	$ 59,715	$ 250,705	$ 210,001
Consolidated Cost of Contract Revenue, as reported	66,131	47,103	209,193	171,923
Consolidated Contract Gross Profit, as reported	14,581	12,612	41,512	38,078
add: Business interruption charges	3,328	–	6,445	–
add: Purchase accounting depreciation	331	–	694	–
add: Business acquisition costs	–	–	34	–
Consolidated Contract Gross Profit, as adjusted	$ 18,240	$ 12,612	$ 48,685	$ 38,078
Consolidated Contract Gross Margin, as reported	18%	21%	17%	18%
Consolidated Contract Gross Margin, as adjusted	23%	21%	19%	18%

API Segment Contract Revenue, as reported	$ 46,204	$ 38,301	$ 144,349	$ 125,871
API Segment Cost of Contract Revenue, as reported	34,200	27,975	111,873	95,144
API Segment Contract Gross Profit, as reported	12,004	10,326	32,476	30,727
add: Purchase accounting depreciation	216	–	406	–
API Segment Contract Gross Profit, as adjusted	$ 12,220	$ 10,326	$ 32,882	$ 30,727
API Segment Contract Gross Margin, as reported	26%	27%	22%	24%
API Segment Contract Gross Margin, as adjusted	26%	27%	23%	24%

Drug Product Segment Contract Revenue, as reported	$ 14,767	$ 3,010	$ 29,619	$ 6,712
Drug Product Segment Cost of Contract Revenue, as reported	16,449	3,100	34,919	10,175
Drug Product Segment Contract Gross Loss, as reported	(1,682)	(90)	(5,300)	(3,463)
add: Business interruption charges	3,328	–	6,445	–
add: Purchase accounting depreciation	115	–	288	–
add: Business acquisition costs	–	–	34	–
Drug Product Segment Contract Gross Profit (Loss), as adjusted	$ 1,761	$ (90)	$ 1,467	$ (3,463)
Drug Product Segment Contract Margin, as reported	-11%	-3%	-18%	-52%
Drug Product Segment Contract Margin, as adjusted	12%	-3%	5%	-52%

Table 2: Reconciliation of three months and year ended December 31, 2014 and 2013 reported income from operations, net income (loss) and earnings (loss) per diluted share to adjusted income from operations, adjusted net income and adjusted earnings per share:

ENT ERN Fashion GAM MEN

NetDragon Announces Third Quarter 2014 Financial Results

admin December 2, 2014

– Solid YOY Top Line Growth with Strong New Game Pipeline Growth Momentum

– Education Ecosystem Product Development on Track

HONG KONG, Dec. 2, 2014 /PRNewswire/ — NetDragon Websoft Inc. (“NetDragon” or “the Company”) (Hong Kong Stock Code: 777), a leading developer and operator of online games and mobile internet platforms in China, today announced its financial results for the third quarter ended September 30, 2014 (“the Period”). A conference call and webcast is scheduled at 8 p.m. Hong Kong Time on Tuesday, December 2, 2014 to discuss the results and recent business developments.

Third quarter 2014 Financial Highlights

Revenue was RMB232.7 million, an increase of 1.1% quarter-over-quarter and 6.1% year-over-year.
Gross profit was RMB209.2 million, an increase of 0.4% quarter-over-quarter and 4.8% year-over-year.
Operating profit was RMB57.7 million, a decrease of 24.1% quarter-over-quarter and an increase of 15.8% year-over-year.
Non-GAAP[1] profit for the Period attributable to owners of the Company was RMB62.9 million
Profit for the Period from continuing operations was RMB52.4 million, a decrease of 17.8% quarter-over-quarter and an increase of 41.8% year-over-year.
Basic and diluted earnings per share were RMB10.31 cents and RMB10.27 cents, respectively.

Third quarter 2014 Operational Highlights[2]

Peak concurrent users (“PCU”) for online games were 382,000, a decrease of 18.9% quarter-over-quarter and 25.1% year-over-year.
Average concurrent users (“ACU”) for online games were 225,000, a decrease of 5.9% quarter-over-quarter and 16.7% year-over-year.
Average revenue per user (“ARPU”) for online games was RMB299, an increase of 1.4% from the previous quarter and 14.6% year-over-year.
Daily active users (“DAU”) for new micro-client game Calibur of Spirit were 1 million.

(Dollars in thousands, except for per share data)
Non-GAAP Measures

	QTD	QTD	YTD	YTD
	December 31, 2014	December 31, 2013	December 31, 2014	December 31, 2013
Income from operations, as reported	$ 2,911	$ 6,966	$ 5,723	$ 20,175
Impairment charges	2,885	417	7,835	1,857
Restructuring charges	146	1,075	3,582	7,183
Business interruption charges	3,511	–	6,628	–
Executive transition costs	–	1,115	626	1,630
Business acquisition costs	1,083	–	3,721	–
Purchase accounting depreciation and amortization	913

[1] See “Non-GAAP Financial Measures” section for more details on the reasons for presenting these measures

[2] the PCU and ACU data below did not include the new micro-client game Calibur of Spirit

“We achieved another quarter of solid growth as we gain strong growth momentum in our MMORPG, mobile games and online education businesses.” commented Mr. Dejian Liu, Chairman and Executive Director of NetDragon. “We are pleased that two of our newly launched games, Calibur of Spirit and Eudemons Online Pocket Version, gain strong user traction as hype surrounding Calibur of Spirit continuues to grow following its selection for the World Cyber Arena (“WCA”) held in Yinchuan in October 2014. This was not only the sole China-developed competitive game selected, but also marked NetDragon’s first game entered into the WCA – a fact that we are very proud of. Calibur of Spirit has already been able to achieve PCU of 170,000, MAU of 4 million and DAU of 1 million during the quarter, and over RMB10 million in monthly gross revenue in October 2014. With marketing and promotional activities ramping up in preparation for its official launch early next year, we are confident that revenue for this game will grow substantially in 2015. At the same time, we are excited to have concluded an agreement with Valve during the quarter to make the English version of our new 3D strategy MMO game, Tiger Knight, available on Steam in the near future once open beta-testing is completed early next year.”

“We continued to push our mobile games business forward with revenue increasing 43.8% sequentially as we take advantage of the rapid shift towards mobile globally. The Android version of Eudemons Online Pocket Version was launched in September 2014 to great reviews and has already generated solid operating metrics. We also have high hopes for the iOS version which will begin open-beta testing next quarter. We signed an exclusive licensing agreement for Blade & Sword with one of China’s leading mobile game publishers during the quarter. In overseas markets, the Arabic version of The Pirate generated record high monthly revenue.”

“We just concluded a summit on smart education which we jointly organized with East China Normal University to focus on developing educational tools for the digital age. We are developing relationships with multiple educational institutions such as Beijing Normal University and Central China Normal University as part of our broader strategy to participate in the formulation of educational standards. As part of this effort, we have been developing intelligent classroom and other educational products that will seamlessly be integrated into our overall ecosystem. We began to generate revenue from our K12 educational tablet during the quarter and look forward to further developing our total-solution educational ecosystem. We are confident our education products will provide a unique value proposition to the massive addressable market of students in China.”

Third quarter 2014 Unaudited Financial Results

Revenue

Revenue was RMB232.7 million, an increase of 1.1% from RMB230.1 million in the previous quarter and an increase of 6.1% from RMB219.4 million during the same quarter last year.

Revenue from online games and other business generated from China was RMB195.9 million, a decrease of 3.8% from RMB203.5 million in the previous quarter and an increase of 0.4% from RMB195.1 million in the same quarter last year.

Revenue from online games and other business generated from overseas markets was RMB36.8 million, an increase of 38.3% from RMB26.6 million in the previous quarter and an increase of 51.4% from RMB24.3 million in the same quarter last year. The sequential and year-over-year increases were mainly due to revenue contribution from Cherrypick’s mobile solutions business which was acquired by the Company during the third quarter of 2014.

Gross profit and gross profit margin

Gross profit was RMB209.2 million, an increase of 0.4% from RMB208.2 million in the previous quarter and an increase of 4.8% from RMB199.5 million in the same quarter last year. Gross profit margin was 89.9%, compared with 90.5% in the previous quarter and 91.0% in the same quarter last year.

Operating expenses

Selling and marketing expenses were RMB38.6 million, an increase of 14.8% from RMB33.6 million in the previous quarter and an increase of 38.1% from RMB27.9 million in the same quarter last year. The sequential and year-over-year increases in selling and marketing expenses were mainly due to increases in staff costs in relation to the rapid build-up of our education business as well as advertising and promotional expenses.

Administrative expenses were RMB77.5 million, an increase of 8.2% from RMB71.6 million in the previous quarter and a decrease of 11.5% from RMB 87.6 million in the same quarter last year. The sequential increase in administrative expenses was mainly due to increases in staff costs and depreciation of the new Changle base and amortisation of intangible assets arising from acquisition of Cherrypicks which were offset by a decrease in legal and professional fees. The year-over-year decrease was mainly due to decreases in share-based compensation and legal and professional fees which were partially offset by increases in low value consumables, depreciation and amortisation and rental expenses.

Development costs were RMB67.3 million, an increase of 30.3% from RMB51.7 million in the previous quarter and an increase of 48.5% from RMB45.3 million in the same quarter last year. The sequential increase in development costs was mainly due to an increase in R&D staff. The year-over-year increase was mainly due to increases in staff and outsourcing costs.

Other expenses were RMB3.7 million, a decrease of 77.8% from RMB16.5 million in the previous quarter. The sequential decrease in other expenses was mainly due to a one-time donation during the second quarter of 2014 to Beijing Normal University.

Operating profit

Operating profit from continuing operations was RMB57.7 million, a decrease of 24.1% from RMB76.0 million in the previous quarter and an increase of 15.8% from RMB49.8 million in the same quarter last year.

Profit for the Period from continuing operations

Profit for the Period from continuing operations was RMB52.4 million, a decrease of 17.8% from RMB63.8 million in the previous quarter and an increase of 41.8% from RMB37.0 million in the same quarter last year.

Basic and diluted earnings per share were RMB0.1031 and RMB0.1027, respectively, compared with RMB0.1254 and RMB0.1250, respectively, in the previous quarter, and RMB0.0727 and RMB0.0722, respectively, in the same quarter last year.

Liquidity

As ofSeptember 30, 2014, NetDragon had bank deposits, bank balances, cash and pledged bank deposit and liquid investments (classified as held-for-trading investments) of approximately RMB3,398.7 million, compared with RMB3,709.3 million as of June 30, 2014. Liquid investments are comprised of pre-dominantly highly liquid fixed-income investments which are used to enhance the Company’s overall strong cash position.

Share Repurchase Program

During the nine months ended September 30, 2014, the Company repurchased a total of 2,585,000 shares for an aggregate consideration of approximately HKD37.0 million before expenses.

During the month ended October 31, 2014, the Company repurchased and subsequently cancelled 2,824,500 shares for an aggregate consideration of approximately HKD37.0 million.

Third quarter 2014 Business Developments

Games

Growth momentum in the Company’s online and micro-client games business picked up during the quarter following the launch of Calibur of Spirit and Eudemons Online Pocket Version. Calibur of Spirit generated PCU of 170,000, MAU of 4 million, and DAU of 1 million during the third quarter and over RMB10 million in monthly gross revenue in October 2014. The Company expects to the see the game generate increasing returns following its official launch early next year. In September 2014, the android version of Eudemons Online Pocket Version was launched and recorded a pay rate of 6.74% and a one-day retention rate of approximately 45%.

In September 2014, the Company began closed-beta testing for Goddess Era, the Chinese expansion pack for its flagship game Eudemons Online. Slated to begin open-beta testing next quarter, the expansion pack allows players to enhance their characters’ attributes for free through the newly added ‘Goddess Gifts’ system. The Company also released Second Ninja War, a new updated version of Conquer Online that adds new skills and weapons to the game. Mecho Wars, an expansion pack for the Company’s flagship title Zero Online was launched in September 2014 and provides players with inter-server game modes and new gameplay. Talisman World, an expansion pack for Way of the Five began open-beta testing in July 2014. The expansion pack generated record monthly revenue by providing players with a refreshing new combat experience and battle mode.

Online and Mobile Education

The Company continued to make steady progress in the development of its Open Cloud-based Education Platform during the quarter. In partnership with universities, the Company drove the research progress on artificial intelligence, big data analysis and cloud computing and allowed the seamless connectivity of the educational tablet to education resources. Having established a robust back-end platform, the Company is able to provide content support to various online education applications.

Discussions to develop new content and strategic partnership for the Company’s online and mobile education business continued during the quarter. Development of the Company’s K-12 educational tablet continued as it moved through the various stages of development including the design and function of its features and content. Through the implementation of a “total solution ecosystem” product strategy, the Company is working diligently to achieve targets in the design and development of software, hardware, content and social networking components. By leveraging technology, ‘gamification’ of educational content and user behavioral analysis in the delivery of educational content, the Company is confident that the final product will be a game-changer in the way students learn.

NetDragon entered into a strategic cooperation agreement with Beijing Normal University to jointly-focus on developing new educational content and technologies. The Company plans to establish a NetDragon research center in Beijing that will focus on jointly-developing educational opportunities with Beijing Normal University. Opportunities include cooperation in the development and production of content, joint employment of senior staff, collaborative research on classroom interaction and e-textbooks. NetDragon donated US$250,000 to the Internet Learning Institute of the National Central University in Taiwan in an effort to develop smart educational tools for Chinese students in Mainland China, Taiwan, and Hong Kong during the quarter. The Company believes that its partnership with universities will broaden the supply of high-quality educational content as well as access to world class pedagogical research and practices.

The Company also signed strategic agreements with domestic and international education book publishers, working together in an effort to generate quality content for the educational tablet. In additional, it formed a strategic partnership with East China Normal University, Beijing Normal University and Huazhong Normal University to develop a unique innovative mobile education platform and worked with People’s Education Press on to support the National Science and Technology program – Research on key technology in developing education resources digital publishing and application.The Company was responsible for presenting the program’s display terminal (electronic bag), and its education tablet will serve as an pilot end device for the entire education industry.

Cooperation and Communication in the Mobile Internet Industry and Communication Technology between Fujian Province and Hong Kong

On September 5, 2014, NetDragon signed a Letter of Intent (“LOI”) with Hong Kong Cyberport Management Company Limited and Hong Kong Wireless Technology Industry Association for a term of one year. The three parties agreed to establish a strategic partnership to further grow the local information and communication technology industry. The LOI covers the following four aspects: professional training, the introduction of local mobile applications to the mainland market, internship programs, and digital classrooms. All three parties will jointly support and help Hong Kong-based IT companies and talent to promote their business in Mainland China and will provide talent training programs for them.

Strategic Merger with Cherrypicks

On June 3, 2014, NetDragon entered into a sale and purchase agreement to acquire Cherrypick’s mobile solution business. Cherrypicks is a leading enterprise in mobile technology and mobile marketing in the Asia Pacific region. The acquisition was completed on July 21, 2014. The strategic merger will provide the Company with a team of world-class, innovative mobile solutions developers with strong capabilities to build cutting edge mobile products for global markets in areas including enterprise software, mobile marketing, mobile commerce and mobile education.

Business Outlook

MMORPGs

The Company’s first micro-client in-house developed multiplayer online battle arena game, Calibur of Spirit was selected for the World Cyber Arena (“WCA”) held in at Yinchuan China in October 2014. This marks the Company’s first game selected for the WCA, and represents a solid footstep in exploring the game industry chain. Calibur of Spirit is the only China-developed competitive game selected for the WCA. The game is currently undergoing beta-testing and will begin open-beta testing in early 2015. Given the huge popularity of this game, the Company expects Calibur of Spirit to generate increased revenue for its gaming revenue in the following quarters. The Company’s new 3D action strategy MMO, Tiger Knight, was identified by the Steam Community as a game of interest during the first half of 2014. Steam is a global fully integrated digital gaming and social platform developed by Valve. In September 2014, the Company signed an agreement with Valve to make the English version of the game available on Steam in the near future. Tiger Knight is in currently undergoing testing, with open beta-testing expected to begin in early 2015.

For existing online games, the Company will continue to provide gameplay updates and new versions to increase user stickiness. NetDragon plans to release brand new expansion packs for its flagship titles, Eudemons Online and Conquer Online, in the fourth quarter of 2014 including content enhancements.

Mobile Games

ŸThe android version of Eudemons Online Pocket Version was officially launched in September 2014.
Blade & Sword, a self-developed 2.5D role playing mobile game based on martial arts, is expected to begin testing of its iOS and Android versions during the fourth quarter of 2014.
Waku & Maou, a real-time strategy-based collectible card mobile game featuring scenic landscapes, is currently undergoing closed-beta testing and is expected to launch during the fourth quarter of 2014.
Fatal Fighter, a 2D scrolling mobile combat game, began a new beta testing in October 2014 with a simplified Chinese and Arabic version expected to launch in the fourth quarter of 2014 or early 2015.
Martial Overlord, a 3D in-house developed martial arts mobile action game, is currently undergoing beta-testing and is expected to launch during the first quarter of 2015.

Online and Mobile Education

In cooperation with East China Normal University, the Company jointly organized the “2014 Strait Wisdom Education Forum and Education Informatization Technology Conference” held at the end of November 2014 which focused on education in the digital age. On November 27, NetDragon officially became a member of CELTSC’s Branch Council for Education Technology following approval by all members present at the Council’s general meeting. In the future, the Company will continue to participate in the formulation of standards for electronic books, bags and study rooms by cooperating with various institutions as it works to develop its educational ecosystem.

The Company expects to continue its strong progress in the development of its mobile education ecosystem product. On the hardware side, the Company is working to refine and enhance the functionality and uniqueness of its educational tablet based on user feedback gathered during the pilot launch. On the software side, NetDragon is implementing a program that will be rolled out in tandem with China’s ‘Three Access Points, Two Platforms’ program which seeks to upgrade overall information technology for educational uses. According to the program, NetDragon will build a communication platform on online study room space based on the instant messaging technology.

In November 2014, NetDragon, Beijing Normal University and a global educational content company signed a memorandum of understanding to leverage each party’s strengths to develop a leading smart education solution to support the national educational technology platform.

Non-GAAP Financial Measures

To supplement the consolidated results of the Company prepared in accordance with HKFRSs, the use of certain non-GAAP measures is provided solely to enhance the overall understanding of the Company’s current financial performance. These non-GAAP measures are not expressly permitted measures under HKFRSs and may not be comparable to similarly titled measures for other companies. The non-GAAP financial measures of the Company exclude share-based payments expense, amortization of intangible assets arising from acquisition of subsidiaries, interest income on pledged bank deposit, exchange gain (loss) on pledged bank deposit, secured bank borrowing and redeemable convertible preferred shares, net gain (loss) on derivative financial instruments and finance costs.

Management Conference Call

NetDragon will host a management conference call and webcast to review its third quarter 2014 financial results ended September 30, 2014 on Tuesday, December 2, 2014, at 8pm Hong Kong time.

Details of the live conference call are as follows:

International Toll	65-6723-9381
US Toll Free	1-866-519-4004
Hong Kong Toll Free	800-906-601
China Toll Free (for fixed line users)	800-8190-121
China Toll Free (for mobile users)	400-6208-038
Passcode	NetDragon

A live and archived webcast of the conference call will be available on the Investor Relations section of NetDragon’s website at http://ir.netdragon.com/investor/ir_events.shtml. Participants in the live webcast should visit the aforementioned website 10 minutes prior to the call, then click on the icon for “3Q 2014 Results Conference Call” and follow the registration instructions.

About NetDragon

NetDragon Websoft Inc. (HKSE: 0777) is a leading innovator and creative force in China’s mobile internet industry. Established in 1999, NetDragon is a vertically integrated, cutting-edge R&D powerhouse with a highly successful track record which includes the development of flagship MMORPGs such as Eudemons Online and Conquer Online, China’s number one online gaming portal, 17173.com, and China’s most influential smartphone app store platform, 91 Wireless, which was sold to Baidu in what was at the time the largest internet M&A transaction in China in 2013. Being a China’s pioneer in overseas expansion, NetDragon directly operates a number of game titles in over 10 languages internationally since 2003. NetDragon continues to strive for developing mobile games and software applications for users. In recent years, NetDragon has also becoming a major player in China’s online and mobile education industry as it works to leverage its mobile internet technologies and operational know-how to make fun and effective learning tools.

For investor enquiries, please contact:

NetDragon Websoft Inc.

Ms. Maggie Zhou
Senior Director of Investor Relations
Tel.: +86 591 8754 3120; +852 2850 7266
Email: maggie@nd.com.cn; ndir@nd.com.cn
Website: www.nd.com.cn/ir

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014

	Three Months Ended
		September 30, 2014		June 30, 2014		September 30, 2014
		RMB ‘000		RMB ‘000		RMB ‘000
		(Unaudited)		(Unaudited)		(Unaudited)
Continuing operations
Revenue			232,702		230,144		219,364
Cost of revenue			(23,530)		(21,888)		(19,837)

Gross profit			209,172		208,256		199,527
Other income and gains			36,034		41,255		12,476
Selling and marketing expenses			(38,569)		(33,590)		(27,935)
Administrative expenses			(77,538)		(71,645)		(87,611)
Development costs			(67,341)		(51,687)		(45,349)
Other expenses			(3,666)		(16,491)		(1,259)
Share of losses of associates			(406)		(145)		(41)
Operating profit			57,686		75,953		49,808
Interest income on pledged bank deposit			638		840		222
Exchange gain (loss) on pledged bank deposit and secured bank borrowing			1,188		(2,106)		(1,769)
Net (loss) gain on derivative financial instrument			(646)		2,737		–
Net (loss) gain on held-for-trading investment			(1,553)		61		–
Finance costs			(728)		(1,132)		(326)
Profit before taxation			56,585		76,353		47,935
Taxation			(4,166)		(12,547)		(10,974)
Profit for the period from continuing operations			52,419		63,806		36,961

Discontinued operations
Profit for the period from discontinued operations			–		–		105,586
Profit for the period			52,419		63,806		142,547
Other comprehensive (expense) income for the period, net of income tax:
Exchange differences arising on translation of foreign operations that may be reclassified subsequently to profit or loss			(161)		29		(167)

Total comprehensive income for the period			52,258		63,835		142,380

Profit (loss) for the period attributable to:
-Owners of the Company			52,595		63,830		97,230
-Non-controlling interests			(176)		(24)		45,317
			52,419		63,806		142,547
Profit for the period attributable to owners of the Company:
-from continuing operations			52,595		63,830		36,926
-from discontinued operations			–		–		60,304
Profit for the period attributable to owners of the Company			52,595		63,830		97,230
(Loss) profit for the period attributable to non-controlling interests:
-from continuing operations			(176)		(24)		35
-from discontinued operations			–		–		45,282
(Loss) profit for the period attributable to non-controlling interests			(176)		(24)		45,317

Total comprehensive income (expense) attributable to:
-Owners of the Company			52,434		63,859		97,063
-Non-controlling interests			(176)		(24)		45,317
			52,258		63,835		142,380

Earnings per share			RMB cents		RMB cents		RMB cents
From continuing and discontinued operations
-Basic			10.31		12.54		19.14
-Diluted			10.27		12.50		19.02
From continuing operations
-Basic			10.31		12.54		7.27
-Diluted			10.27		12.50		7.22

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2014

	September 30, 2014	December 31, 2013
	(Unaudited)	(Audited)
	RMB ‘000	RMB ‘000
Non-current assets
Property, plant and equipment	771,887	532,684
Prepaid lease payments	379,263	185,819
Investment property	–	15,725
Intangible assets	143,380	–
Interests in associates	30,510	1,299
Available-for-sale investments	5,000	5,000
Loan receivables	15,897	16,041
Deposits made for acquisition of property, plant and equipment	19,444	16,769
Other receivable	–	60,969
Goodwill	18,780	12,534
Deferred tax assets	54	54
	1,384,215	846,894
Current assets
Prepaid lease payments	2,708	2,583
Loan receivables	898	713
Trade receivables	52,252	41,718
Other receivables, prepayments and deposits	167,914	69,770
Amounts due from related companies	1,704	4,564
Amounts due from associates	72	–
Held-for-trading investments	185,884	20,735
Pledged bank deposit	–	107,368
Bank deposits	2,540,917	3,051,289
Bank balances and cash	671,934	1,304,355
	3,624,283	4,603,095

Current liabilities
Trade and other payables	168,999	152,837
Deferred income	27,008	26,553
Amount due to a related company	340	–
Secured bank borrowing	–	104,672
Other financial liability	–	3,122
Income tax payable	136,505	539,927
	332,852	827,111

Net current assets	3,291,431	3,775,984
Total assets less current liabilities	4,675,646	4,622,878

Non-current liabilities
Other payables	2,248	–
Deferred tax liabilities	51	–
	2,299	–
Net assets	4,673,347	4,622,878

Capital and reserves
Share capital	37,849	37,664
Share premium and reserves	4,633,727	4,577,478
Equity attributable to owners of the Company	4,671,576	4,615,142
Non-controlling interests	1,771	7,736
	4,673,347	4,622,878

ERN Health Care

Golden Meditech Announces 2014 / 2015 Interim Results

admin November 28, 2014

Expect Healthcare Reforms to Drive Long-term Development of Core Businesses for Achieving Remarkable Operational Performance

HONG KONG, Nov. 28, 2014 /PRNewswire/ —

HK$’000	Six months ended		Change %
HK$’000	30 September 2014	30 September 2013	Change %
Turnover	546,011	534,641	2.1
Cord Blood Storage Service Income	384,242	339,113	13.3
Hospital Management Service Income	61,878	41,377	49.5
Medical Insurance Administration Service Income	2,394	2,249	6.4
Medical Devices and Accessories Sales	94,580	142,683	(33.7)
Chinese Herbal Medicines Sales	2,917	9,219	(68.4)

Impairment Loss on Fixed Assets	(6,358)	–	N/A
Changes in Fair Value of Financial Assets and Liabilities	(159,307)	(260,061)	38.7

Loss After Tax	(105,285)	(178,227)	40.9
Adjusted Profit After Tax*	60,380	81,834	(26.2)

Profit / (Loss) Attributable to Equity Shareholders	1,433	(14,095)	110.2
Adjusted Profit Attributable to Equity Shareholders*	3,107	26,226	(88.2)

Earnings / (Loss) Per Share (Basic)	HK0.08 cents	HK(1.24) cents	106.5
Adjusted Earnings Per Share (Basic) ^#	HK0.18 cents	HK2.31 cents	(92.2)

*	Excluding loss due to fair value changes of financial assets and liabilities, and impairment loss on fixed assets
^#	Based on Adjusted Profit Attributable to Equity Shareholders of the Company

Golden Meditech Holdings Limited (the “Company” or “Golden Meditech,” together with its subsidiaries collectively as the “Group”, 801.HK; 910801.TW), a leading integrated healthcare enterprise in China, is pleased to announce the Group’s interim results for the six months ended 30 September 2014.

During the reporting period, the performance of Golden Meditech’s core businesses was in line with management’s expectations. The Group’s total revenue increased by 2.1% to HK$546,011,000 as compared to HK$534,641,000 for the previous reporting period. Profit attributable to equity shareholders of the Company and basic earnings per share were HK$1,433,000 and HK0.08 cents respectively as compared to a loss of HK$14,095,000 and a basic loss per share of HK1.24 cents for the previous reporting period. Excluding non-cash fair value loss of financial assets and financial liabilities, and impairment loss on certain fixed assets, the adjusted profit attributable to equity shareholders of the Company was HK$3,107,000 and HK$26,226,000 for the current and previous reporting periods, respectively. The decrease in adjusted profit attributable to equity shareholders of the Company was attributable to the start-up costs of the trial running Beijing Qinghe Hospital (“Qinghe Hospital”) and lesser contributions from the medical devices segment.

Mr. Kam Yuen, Chairman and Chief Executive Officer of the Group, said, “With a view to reaping economic gains to build a better healthcare system, the mainland China’s government has significantly increased its spending on healthcare and stepped up pace of its healthcare reforms. The favourable initiatives such as encouraging private capital to enter into hospital sector, extending national medical insurance coverage to the whole nation and so forth are set to boost healthy competition and deliver growth momentum to the healthcare industry. Being a visionary with comprehensive market intelligence and seasoned operating experience, Golden Meditech has long ago recognised the growth opportunities in healthcare services sector and explored all options to proactively seize opportunities arise from the healthcare reforms. Through strategically optimising its business transformation, the Company devoted ample resources to foster the development of cord blood storage business and hospital management business. With China Cord Blood Corporation’s (“CCBC”) new cord blood storage facilities in Guangdong and Zhejiang opening at a steady pace, CCBC’s penetration in both markets is expected to increase, further expanding its overall leadership position in China’s cord blood storage industry.”

HEALTHCARE SERVICES SEGMENT

During the reporting period, revenue from the healthcare services segment increased by 17.2% to HK$448,514,000. Revenue generated from cord blood storage business, hospital management service business and medical insurance administration business were HK$384,242,000, HK$61,878,000 and HK$2,394,000 respectively.

CCBC has successfully deepened its penetration in the mid-to-high end market and recruited 407,755 accumulated subscribers with 31,132 new subscribers signed up during the reporting period. It continued to achieve steady growth in terms of revenue and profit and generated robust cash-flow as majority of new subscribers selected the one-time upfront payment option. However, as a result of the fair value changes of the convertible notes issued, CCBC reported net loss under Hong Kong Financial Reporting Standards for the reporting period.

Given the combined scale of Guangdong and Zhejiang markets is significantly larger than the Beijing market, CCBC is committed to gradually scaling up its operation through the new facilities in Guangdong and Zhejiang. The new facilities are largely completed and opening at a steady pace, serving as a catalyst for future growth while enabling CCBC to timely seize the opportunities ahead.

Being a pioneer in the mainland China’s hospital management industry, Golden Meditech has expanded its reach in hospital management sector through the Qinghe Hospital. Located at Haidian District in Beijing with a total floor area of approximately 75,000m², offering 600 beds of which 48 beds are haematology wards, Qinghe Hospital specialised not only in haematology but also provides a broad range of medical disciplines. Although Qinghe Hospital is at the early stage of development and reported a loss as the depreciation costs of the facilities were included during the reporting period , the management believes the economic interests of Qinghe Hospital will be improved when it is fully operational. The Company further increased its shareholdings in Qinghe Hospital to 82.73% and announced in November 2014 that it has fully consolidated its shareholding in GM Hospital Group Limited. With the demand for high-end healthcare services set to grow with the deepening of mainland China’s healthcare reforms, the Company is dedicated to further boosting its competitiveness and striving to grasp hold of the industry that is ripe with opportunities, reinforcing its leading position in the sector.

Serving as a missing link by providing claim process and bill settlement services to medical insurance companies, hospitals and policy holders, the medical insurance administration business is devoted to enhancing its claim administration system, explore any market opportunities and let the end-users to gain better understanding of its business models. With relentless efforts, the medical insurance administration business has been acknowledged and accredited by the market, and is now seeking collaborations with insurance companies and local governments. Nevertheless, the medical insurance administration business remains at the early stage of development, the management believes the extension of national medical insurance coverage and deepening of healthcare reforms will unveil vast opportunities for this business to grow substantially.

MEDICAL DEVICES SEGMENT

During the reporting period, revenue from the medical devices segment amounted to HK$94,580,000, representing a decrease of 33.7% as compared to the previous corresponding period, accounting for 17.3% of the Group’s total revenue.

Driven by the mainland China’s healthcare reforms, the standard of healthcare industry has been continuously improved, creating higher demand for prime quality medical devices. Meanwhile, sales of the consumables of Autologous Blood Recovery System (“ABRS”) has grown steadily with the mainland China’s government promoting healthcare policies related to the clinical use of blood. However, due to rising competitions, the management proactively adopted new marketing strategy and adjusted ABRS’ selling price to maintain market share and fortify competitive advantages, which resulted in lower revenue from the sales of ABRS whereas revenue from the sales of medical devices consumables continued to record growth during the recording period. Golden Meditech endeavours to sustain its competitive advantage in terms of product quality as well as pricing strategy by developing and manufacturing its blood related medical devices in mainland China. The Company is also capitalising on its existing business network to introduce prime quality foreign medical devices to mainland China, enabling it to timely seize any opportunities arise from the healthcare reforms.

STRATEGIC INVESTMENTS

During the reporting period, the Company successfully disposed its entire shareholdings in Fortress Group Limited. Furthermore, the Company is exploring all favourable development options to unlock the commercial value of the Shanghai production facility of the Chinese herbal medicine business.

OUTLOOK AND STRATEGIES

Looking ahead, Mr. Kam commented, “Golden Meditech is confident in the prospects of its core businesses and will unremittingly strive to strengthen its leading position amid the deepening of mainland China’s healthcare reforms. Being strategically positioned in the unique and lucrative sector in the mainland China’s healthcare market, the Company will spare no effort in cultivating its healthcare services and medical devices businesses, and sustain its capabilities by excelling in quality, research and development, operational efficiency and management capacities. At the same time, it will continue to develop synergies among the core businesses and create a competitive edge at its advantage, with a view to allowing the market to fully acknowledge and appreciate the intrinsic value of Golden Meditech.”

About Golden Meditech Holdings Limited

Golden Meditech Holdings Limited (www.goldenmeditech.com) is China’s leading integrated-healthcare enterprise. Golden Meditech is a first-mover in China, having established dominant positions in medical devices, and cord blood storage and hospital management businesses of the healthcare services markets, thanks to its strengths in innovation and market expertise and the ability to capture emerging market opportunities. Going forward, the Group will continue to pursue a leading position in China’s healthcare industry both through organic growth and strategic expansion.

SEGMENT RESULTS

Information regarding the Group’s reportable segments for the periods ended 30 September 2014 and 2013 is set out below:

$’000

Medical Devices

Cord Blood Storage

Hospital Management

Medical Insurance

Administration

Chinese

Herbal Medicine

Total

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

2014

2013

Revenue from External Customers

94,580

142,683

384,242

339,113

61,878

41,377

2,394

2,249

2,917

9,219

546,011

534,641

Inter-segment Revenue

244

–

244

–

Reportable Segment Revenue

94,824

142,683

384,242

339,113

61,878

41,377

2,394

2,249

2,917

9,219

546,255

534,641

Segment Profit / (Loss)

31,963

78,374

164,113

150,342

(43,644)

(18,849)

(17,806)

(16,460)

(14,512)

(23,042)

120,114

170,365

Click here for a PDF of the complete release: http://photos.prnasia.com/prnk/20141128/8521407161-a

ERN Health Care

China Cord Blood Corporation Reports Financial Results for the Second Quarter and First Half of Fiscal 2015

admin November 25, 2014

2Q15 Added 15,584 New Subscribers

2Q15 Revenue Up 7.4% YOY to RMB152.1 Million ($24.8 Million)

2Q15 Operating Income Increased to RMB57.5 Million ($9.4 Million)

Conference Call to be Held November 26, 2014 at 8:00 a.m. ET

HONG KONG, Nov. 26, 2014 /PRNewswire/ — China Cord Blood Corporation (NYSE: CO) (“CCBC” or the “Company”), China’s leading provider of cord blood collection, laboratory testing, hematopoietic stem cell processing, and stem cell storage services, today announced its preliminary unaudited financial results for the second quarter and first half of fiscal year 2015 ended September 30, 2014.

Second Quarter of Fiscal 2015 Highlights

Revenues for the second quarter of fiscal 2015 increased by 7.4% to RMB152.1 million ($24.8 million) from RMB141.6 million in the prior year period.
New subscriber sign-ups and accumulated subscriber base were 15,584 and 407,755, respectively.
Gross profit increased by 6.6% to RMB121.8 million ($19.8 million) from RMB114.3 million in the prior year period.
Gross margin was 80.1%, compared to 80.7% in the prior year period.
Operating income increased to RMB57.5 million ($9.4 million) from RMB56.3 million in the prior year period, despite higher depreciation expenses as a result of the completion of the new Guangdong and Zhejiang facilities.
Operating income before depreciation and amortization expenses of RMB13.3 million ($2.2 million) amounted to RMB70.8 million ($11.5 million), up 8.9% year-over-year.[1]
Interest expense amounted to RMB25.2 million ($4.1 million), compared to RMB16.5 million in the prior year period due to the absence of interest expense capitalization.
As higher interest expense was offset by lower income tax expense, net income attributable to the Company’s shareholders increased to RMB27.2 million ($4.4 million) from RMB24.9 million in the prior year period.
Operating cash flow for the quarter increased by 41.4% to RMB171.0 million ($27.9 million) from RMB121.0 million in the prior year period.

First Half of Fiscal 2015 Highlights

Revenues for the first half of fiscal 2015 increased by 13.0% to RMB305.5 million ($49.8 million) from RMB270.4 million in the prior year period.
New subscriber sign-up reached 31,132 and accumulated subscriber base expanded to 407,755.
Gross profit increased by 12.3% to RMB245.3 million ($40.0 million) from RMB218.5 million in the prior year period.
Operating income increased by 15.1% to RMB117.6 million ($19.2 million) from RMB102.2 million in the prior year period.
Operating income before depreciation and amortization expenses of RMB24.7 million ($4.0 million) amounted to RMB142.3 million ($23.2 million), up 19.1% year-over-year.[1]
Interest expense amounted to RMB50.1 million ($8.2 million), compared to RMB31.2 million in the prior year period due to the absence of interest expense capitalization.
Net income attributable to the Company’s shareholders amounted to RMB57.0 million ($9.3 million), compared to RMB57.8 million in the prior year period.
Operating cash flow for the first half of fiscal 2015 increased by 28.8% to RMB295.7 million ($48.2 million) from RMB229.6 million in the prior year period.

“In the second quarter, we continued to execute our sales strategy that emphasizes the one-time upfront payment option, resulting in strong operating cash flow,” stated Ms. Ting Zheng, Chief Executive Officer of China Cord Blood Corporation. “As of the end of the second quarter, our accumulated subscriber base increased 4% since last quarter and now has over four hundred thousand units, further solidifying our position as one of the largest cord blood banks on a global scale.”

Ms. Zheng further commented, “During the second quarter, we began a series of internal reorganization and marketing activities designed to strengthen the company’s industry leadership position and long-term competitive advantage. For instance, we are increasing our recruitment efforts and adjusting our remuneration policies, redeploying our sales staff for improved coverage and initiating new advertising campaigns, all of which are aimed at enhancing our overall sales operations. For the second half of fiscal 2015, our primary focus will be reinforcing these new measures that drive customer enrollment.”

Summary – Second Quarter and First Half Ended September 30, 2013 and 2014

	Three Months Ended September 30,			Six Months Ended September 30,
	2013	2014		2013	2014
(in thousands)	RMB	RMB	US$	RMB	RMB	US$
Revenues	141,635	152,122	24,784	270,356	305,453	49,764
Gross Profit	114,275	121,774	19,840	218,504	245,329	39,969
Operating Income	56,290	57,463	9,362	102,170	117,630	19,164
Depreciation and Amortization Expenses	8,715	13,301	2,167	17,308	24,708	4,025
Interest Expense	16,461	25,209	4,107	31,219	50,104	8,163
Net Income Attributable to the Company’s Shareholders	24,904	27,249	4,439	57,810	56,985	9,283
Earnings per Ordinary Share	0.33	0.35	0.06	0.73	0.72	0.12
– Basic[2] and Diluted (RMB/US$)	0.33	0.35	0.06	0.73	0.72	0.12

Revenue Breakdown (%)
Processing Fees	71.6%	67.4%		70.6%	68.3%
Storage Fees	28.4%	32.6%		29.4%	31.7%

New Subscribers (persons)	15,928	15,584		31,188	31,132
Total Accumulated Subscribers (persons)	343,170	407,755		343,170	407,755

Summary – Selected Cash Flow Statement Items

	Three Months Ended September 30,			Six Months Ended September 30,
	2013	2014		2013	2014
(in thousands)	RMB	RMB	US$	RMB	RMB	US$
Net cash provided by operating activities	120,969	171,048	27,867	229,623	295,691	48,174
Net cash used in investing activities	(17,531)	(3,998)	(651)	(56,891)	(22,395)	(3,649)
Net cash provided by financing activities	5,578	–	–	2,336	–	–

Second Quarter of Fiscal 2015 Financial Results

REVENUES. Revenues increased by 7.4% to RMB152.1 million ($24.8 million) in the second quarter of fiscal 2015 from RMB141.6 million in the prior year period, driven mainly by the increase of recurring storage revenues derived from the Company’s enlarged total subscriber base.

As the Company’s accumulated subscriber base expanded to 407,755 by the end of September 2014, revenues generated from storage fees increased to RMB49.6 million ($8.1 million), up 23.4% from RMB40.2 million in the prior year period. As a percentage of total revenues, storage fees accounted for 32.6%, compared to 28.4% in the prior year period.

Revenues generated from processing fees in the second quarter were RMB102.5 million ($16.7 million), up modestly from RMB101.4 million in the prior year period due mainly to the year-over-year difference in processing fees for the contracts signed between the two quarters. 15,584 new subscriber sign-ups were recorded during the second quarter of fiscal 2015, representing a slight decrease from 15,928 in the prior year period but slight improvement from the first quarter of fiscal 2015. Revenues generated from processing fees accounted for 67.4% of total revenues, compared to 71.6% in the prior year period.

GROSS PROFIT. Gross profit for the second quarter of fiscal 2015 increased by 6.6% to RMB121.8 million ($19.8 million) from RMB114.3 million in the prior year period, mainly due to increased revenues and well-controlled direct costs. Despite the increase in depreciation expenses, the Company continued to report a solid gross margin of 80.1%, compared to 80.7% in the prior year period.

OPERATING INCOME. Operating income for the second quarter increased at a slower pace to RMB57.5 million ($9.4 million) from RMB56.3 million in the prior year period, as a result of higher depreciation expenses. Operating margin in this quarter was 37.8%, compared to 39.7% in the prior year period. Depreciation and amortization expenses for the second quarter were RMB13.3 million ($2.2 million), compared to RMB8.7 million in the prior year period. Operating income before depreciation and amortization expenses totaled RMB70.8 million ($11.5 million), up 8.9% compared to the prior year period.[3]

Research and Development Expenses. Research and development expenses, which have been stable in the last few quarters, were RMB2.3 million ($0.4 million).

Sales and Marketing Expenses. Sales and marketing expenses for the second quarter amounted to RMB31.0 million ($5.0 million), compared to RMB27.6 million in the prior year period. As a percentage of revenue, sales and marketing expenses were 20.3%, up from 19.5% in the prior year period but down from 20.7% in the first quarter of the current fiscal year. Sales and marketing expenses continued to be correlated with the Company’s revenue performance. Looking ahead, the CCBC management team intends to further expand its sales force and marketing and promotion activities to continue to increase public awareness of cord blood banking.

General and Administrative Expenses. General and administrative expenses for the second quarter were RMB31.0 million ($5.1 million), compared to RMB28.0 million in the prior year period. Increased depreciation expenses and repair and maintenance fees contributed to the increase in general and administrative expenses. As a percentage of revenue, general and administrative expenses were 20.4%, compared to 19.8% in the prior year period.

OTHER INCOME AND EXPENSES.

Interest Expense. Interest expense is mainly related to the Company’s outstanding convertible notes. In the current quarter, the Company incurred interest expense of RMB25.2 million ($4.1 million), without any capitalization. For the prior year period, interest expense was RMB16.5 million as RMB6.8 million of interest expense was capitalized for the construction of the Company’s new facilities in Zhejiang and Guangdong.

NET INCOME ATTRIBUTABLE TO THE COMPANY’S SHAREHOLDERS. Due to higher interest expense, income before tax for the second quarter decreased year-over-year to RMB37.5 million ($6.1 million) from RMB44.7 million. However, net income attributable to the Company’s shareholders for the second quarter of fiscal 2015 increased to RMB27.2 million ($4.4 million) from RMB24.9 million in the prior year period mainly due to lower income tax expense. Net margin for the second quarter of fiscal 2015 was 17.9%.

EARNINGS PER SHARE. The terms of the convertible notes issued to KKR and Golden Meditech provide each party with the ability to participate in any Excess Cash Dividend[4]. Therefore, the calculation of basic and diluted EPS has taken into consideration the effect of such participating rights, which was RMB0.02 ($0.003) per share. Basic and diluted earnings per ordinary share for the second quarter of fiscal 2015 were RMB0.35 ($0.06).

LIQUIDITY. As of September 30, 2014, the Company had cash and cash equivalents of RMB2,156.5 million ($351.3 million) compared to RMB1,882.9 million as of March 31, 2014. The Company had total debt of RMB857.2 million ($139.7 million) as of September 30, 2014. Operating cash flow for the second quarter of fiscal 2015 increased by 41.4% to RMB171.0 million ($27.9 million) from RMB121.0 million in the prior year period.

First Half of Fiscal 2015 Financial Results

For the first half of fiscal 2015, total revenues increased by 13.0% to RMB305.5 million ($49.8 million) from RMB270.4 million in the prior year period. The increase was largely attributable to the increase of the Company’s storage revenue from the Company’s expanded subscriber base, which reached 407,755 units by the end of September 2014. Revenues from processing fees and storage fees grew by 9.3% and 21.8%, respectively. Gross profit increased by 12.3% to RMB245.3 million ($40.0 million) from RMB218.5 million in the prior year period. Operating income increased by 15.1% to RMB117.6 million ($19.2 million) from RMB102.2 million in the prior year period. Operating income before depreciation and amortization expenses totaled RMB142.3 million ($23.2 million), up 19.1% compared to the prior year period.[5] Net income attributable to the Company’s shareholders amounted to RMB57.0 million ($9.3 million). Basic and diluted earnings per share attributable to ordinary shares were RMB0.72 ($0.12). Net cash provided by operating activities in the first half of fiscal 2015 was RMB295.7 million ($48.2 million).

Conference Call

The Company will host a conference call at 8:00 a.m. ET on Wednesday, November 26, 2014 to discuss its financial performance and give a brief overview of the Company’s recent developments, followed by a question and answer session. Interested parties can access the audio webcast through the Company’s IR website at http://ir.chinacordbloodcorp.com. A replay of the webcast will be accessible two hours after the conference call and available for three weeks at the same URL link above. Listeners can also access the call by dialing 1-631-514-2526 or 1-855-298-3404 for US callers, or +852-5808-3202 for Hong Kong callers, access code: 7331700.

Use of Non-GAAP Financial Measures

GAAP results for the three months and six months ended September 30, 2014 include non-cash item related to depreciation and amortization expenses. To supplement the Company’s unaudited condensed consolidated financial statements presented on a U.S. GAAP basis, the Company has provided adjusted financial information excluding the impact of these items in this press release. The non-GAAP financial measure represents non-GAAP operating income. Such adjustment is a departure from U.S. GAAP; however, the Company’s management believes that these adjusted measures provide investors with a better understanding of how the results relate to the Company’s historical performance. Also, management uses non-GAAP operating income as a measurement tool for evaluating our actual operating performance compared to budget and prior periods. These adjusted measures should not be considered an alternative to operating income, or any other measure of financial performance or liquidity, presented in accordance with U.S. GAAP. These measures are not necessarily comparable to a similarly titled measure of another company. A reconciliation of the adjustments to U.S. GAAP results appears in exhibit 3 of this press release. This additional adjusted information is not meant to be considered in isolation or as a substitute for U.S. GAAP financials.

About China Cord Blood Corporation

China Cord Blood Corporation is the first and largest umbilical cord blood banking operator in China in terms of geographical coverage and the only cord blood banking operator with multiple licenses. Under current PRC government regulations, only one licensed cord blood banking operator is permitted to operate in each licensed region and only seven licenses have been authorized as of today. China Cord Blood Corporation provides cord blood collection, laboratory testing, hematopoietic stem cell processing and stem cell storage services. For more information, please visit our website at http://www.chinacordbloodcorp.com.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or the Company’s future financial performance. The Company has attempted to identify forward-looking statements by terminology including “anticipates”, “believes”, “expects”, “can”, “continue”, “could”, “estimates”, “intends”, “may”, “plans”, “potential”, “predict”, “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions, uncertainties and other factors may cause the Company’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. The information in this press release is not intended to project future performance of the Company. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company does not guarantee future results, levels of activity, performance or achievements. The Company expectations are as of the date this press release is issued, and the Company does not intend to update any of the forward-looking statements after the date this press release is issued to conform these statements to actual results, unless required by law.

The forward-looking statements included in this press release are subject to risks, uncertainties and assumptions about the Company’s businesses and business environments. These statements reflect the Company’s current views with respect to future events and are not a guarantee of future performance. Actual results of the Company’s operations may differ materially from information contained in the forward-looking statements as a result of risk factors some of which include, among other things: continued compliance with government regulations regarding cord blood banking in the People’s Republic of China, or PRC and any other jurisdiction in which the Company conducts its operations; changing legislation or regulatory environments (including revisions to China’s One Child Policy) in the PRC and any other jurisdiction in which the Company conducts its operations; the acceptance by subscribers of the Company’s different pricing and payment options and reaction to the introduction of the Company’s premium-quality pricing strategy; demographic trends in the regions of the PRC in which the Company is the exclusive licensed cord blood banking operator; labor and personnel relations; the existence of a significant shareholder able to influence and direct the corporate policies of the Company; credit risks affecting the Company’s revenue and profitability; changes in the healthcare industry, including those which may result in the use of stem cell therapies becoming redundant or obsolete; the Company’s ability to effectively manage its growth, including implementing effective controls and procedures and attracting and retaining key management and personnel; changing interpretations of generally accepted accounting principles; the availability of capital resources, including in the form of capital markets financing opportunities, in light of industry developments affecting issuers that have pursued a “reverse merger” with an operating company based in China, as well as general economic conditions; compliance with restrictive debt covenants under our senior convertible notes; and other relevant risks detailed in the Company’s filings with the Securities and Exchange Commission in the United States.

This announcement contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars as of and for the periods ending September 30, 2014 were made at the noon buying rate of RMB6.1380 to $1.00 on September 30, 2014 in the City of New York for cable transfers in Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York. China Cord Blood Corporation makes no representation that the Renminbi or U.S. dollar amounts referred to in this press release could have been or could be converted into U.S. dollars or Renminbi, at any particular rate or at all.

For more information, please contact:

China Cord Blood Corporation
Investor Relations Department
Tel: (+852) 3605-8180
Email: ir@chinacordbloodcorp.com

ICR, Inc.
Mr. William Zima
Tel: (+86) 10-6583-7511
U.S. Tel: (646) 405-5185
Email: William.zima@icrinc.com

EXHIBIT 1

CHINA CORD BLOOD CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of March 31 and September 30, 2014

	March 31,	September 30,
	2014	2014
	RMB	RMB	US$
	(in thousands except share data)

ASSETS
Current assets
Cash and cash equivalents	1,882,901	2,156,527	351,340
Accounts receivable, less allowance for doubtful accounts
(March 31, 2014: RMB20,322; September 30, 2014: RMB23,691)	95,273	110,412	17,988
Inventories	31,583	25,611	4,172
Prepaid expenses and other receivables	37,010	16,712	2,723
Debt issuance costs	3,616	3,608	588
Deferred tax assets	7,664	8,578	1,398
Total current assets	2,058,047	2,321,448	378,209
Property, plant and equipment, net	626,632	616,545	100,446
Non-current prepayments	208,894	208,429	33,957
Non-current accounts receivable, less allowance for doubtful
accounts (March 31, 2014: RMB42,703; September 30, 2014:
RMB48,300)	225,496	211,805	34,507
Inventories	48,385	54,062	8,808
Intangible assets, net	120,549	118,239	19,263
Available-for-sale equity securities	144,247	139,637	22,750
Other investment	189,129	189,129	30,813
Debt issuance costs	7,854	6,028	982
Deferred tax assets	1,789	2,648	431
Total assets	3,631,022	3,867,970	630,166

LIABILITIES
Current liabilities
Bank loan	60,000	60,000	9,775
Accounts payable	10,422	15,624	2,545
Accrued expenses and other payables	102,559	77,625	12,647
Deferred revenue	196,432	208,151	33,912
Amounts due to related parties	21,453	22,245	3,624
Income tax payable	2,571	7,202	1,173
Deferred tax liabilities	3,900	6,500	1,059
Total current liabilities	397,337	397,347	64,735
Convertible notes	777,753	797,227	129,884
Non-current deferred revenue	823,921	962,574	156,822
Other non-current liabilities	164,077	189,529	30,878
Deferred tax liabilities	27,938	27,331	4,453
Total liabilities	2,191,026	2,374,008	386,772

EQUITY
Shareholders’ equity of China Cord Blood Corporation
Ordinary shares
– US$0.0001 par value, 250,000,000 shares authorized,	50	50	8
73,140,147 shares issued, and 73,003,248 shares outstanding
as of March 31 and September 30, 2014, respectively
Additional paid-in capital	798,221	798,221	130,046
Treasury stock, at cost	(2,815)	(2,815)	(459)
(March 31 and September 30, 2014: 136,899 shares,
respectively)
Accumulated other comprehensive income	84,263	81,393	13,260
Retained earnings	555,323	612,308	99,756
Total equity attributable to China Cord Blood Corporation	1,435,042	1,489,157	242,611
Non-controlling interests	4,954	4,805	783
Total equity	1,439,996	1,493,962	243,394
Total liabilities and equity	3,631,022	3,867,970	630,166

EXHIBIT 2

CHINA CORD BLOOD CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three Months and Six Months ended September 30, 2013 and 2014

	Three months ended			Six months ended
	September 30,			September 30,
	2013	2014		2013	2014
	RMB	RMB	US$	RMB	RMB	US$
	(in thousands except per share data)

Revenues	141,635	152,122	24,784	270,356	305,453	49,764
Direct costs	(27,360)	(30,348)	(4,944)	(51,852)	(60,124)	(9,795)
Gross profit	114,275	121,774	19,840	218,504	245,329	39,969
Operating expenses
Research and development	(2,310)	(2,330)	(380)	(4,833)	(4,829)	(787)
Sales and marketing	(27,633)	(30,953)	(5,043)	(56,057)	(62,696)	(10,214)
General and administrative	(28,042)	(31,028)	(5,055)	(55,444)	(60,174)	(9,804)
Total operating expenses	(57,985)	(64,311)	(10,478)	(116,334)	(127,699)	(20,805)
Operating income	56,290	57,463	9,362	102,170	117,630	19,164
Other expense, net
Interest income	4,312	4,704	766	8,494	8,970	1,461
Interest expense	(16,461)	(25,209)	(4,107)	(31,219)	(50,104)	(8,163)
Exchange gain/(loss)	69	(182)	(30)	(55)	(2)	–
Dividend income	–	–	–	8,722	1,196	195
Others	514	680	111	1,044	1,297	211
Total other expense, net	(11,566)	(20,007)	(3,260)	(13,014)	(38,643)	(6,296)
Income before income tax	44,724	37,456	6,102	89,156	78,987	12,868
Income tax expense	(19,706)	(10,214)	(1,664)	(31,079)	(22,151)	(3,609)
Net income	25,018	27,242	4,438	58,077	56,836	9,259
Net Income attributable to non-controlling interests	(114)	7	1	(267)	149	24
Net income attributable to China Cord Blood Corporation’s shareholders	24,904	27,249	4,439	57,810	56,985	9,283
Net income per share:
Attributable to ordinary shares
– Basic	0.33	0.35	0.06	0.73	0.72	0.12
– Diluted	0.33	0.35	0.06	0.73	0.72	0.12
Other comprehensive income
– Net effect of foreign currency translation, net of nil tax	2,789	913	149	9,594	1,442	235
– Net unrealized gain/(loss) in available-for-sale equity securities, net of nil tax	59,220	(8,818)	(1,437)	83,558	(4,312)	(703)
Comprehensive income	87,027	19,337	3,150	151,229	53,966	8,791
Comprehensive income attributable to non-controlling interests	(114)	7	1	(267)	149	24
Comprehensive income attributable to China Cord Blood Corporation’s shareholders	86,913	19,344	3,151	150,962	54,115	8,815

EXHIBIT 3

CHINA CORD BLOOD CORPORATION

RECONCILIATION OF NON-GAAP OPERATING INCOME

For the Three Months and Six Months ended September 30, 2013 and 2014

Three months ended

Six months ended

September 30,

2013

2014

2013

2014

RMB

US$

RMB

US$

(in thousands)

GAAP amount

ENT ERN Fashion

Galaxy Entertainment Group Reports Selected Unaudited Q3 2014 Financial Data

admin November 11, 2014

Group Adjusted EBITDA of $3.3 Billion, up 1% Year-On-Year Despite Challenging Environment

Galaxy MacauTM Phase 2 On Schedule and On Budget to Complete As The Next Major Project in Macau by Mid-2015

Family Friendly Grand Waldo Complex On Schedule To Reopen In Early 2015

$3 Billion Special Dividend Paid in July 2014

HONG KONG, Nov. 11, 2014 /PRNewswire/ — Galaxy Entertainment Group Limited (“GEG” or “the Group”) (HKEx stock code: 27) today reported selected unaudited 2014 third quarter financial data for the three month period ended 30 September 2014.

THIRD QUARTER HIGHLIGHTS

GEG: Delivering Growth Despite Challenging Conditions

Revenue of $17.3 billion, an increase of 6% year-on-year
Adjusted EBITDA of $3.3 billion, an increase of 1% year-on-year

GEG: Returning Surplus Capital To Shareholders During The Quarter

Paid special dividend of $0.70 per share to shareholders on 31 July 2014
Announced the establishment of the $1.3 billion GEG Foundation on 4 July 2014

Galaxy Macau™: Delivers Robust Performance

Year-on-year revenue increase of 11% to $11.1 billion
Adjusted EBITDA of $2.4 billion, up 4% year-on-year

StarWorld Macau: Earnings Directionally In Line Year-on-Year

Year-on-year revenue increase of 0.5% to $5.7 billion
Adjusted EBITDA at $904 million, down 0.7% year-on-year

Development Update: Advancing Galaxy Macau™ Phase 2; Game Changer For GEG’s Hotel, Retail And Leisure Offer

Galaxy Macau™ Phase 2 — Remains on budget and on schedule to complete by mid-2015
Cotai Phases 3 & 4 — Site investigation works for the $50-$60 billion resort due to commence shortly
Grand Waldo Complex — Target to unveil conceptual plans in January 2015 and re-launch in early 2015
Hengqin Island — Continued development of resort conceptual plans for the 2.7 sq km land parcel
International — Continuously exploring opportunities in overseas markets, primarily in Asia

Balance Sheet: Remains Well Capitalised and Liquid

Cash on hand at 30 September 2014 of $11.5 billion
Virtually debt free with a net cash position of $11.2 billion

Subsequent Event:

Paid another special dividend of $0.45 per share or approximately $1.9 billion to shareholders on 31 October 2014

Dr. Lui Che Woo, Chairman of GEG said:

“Our results represent a strong performance in the face of strong macro headwinds, underlining the enduring appeal of our properties and management’s rigorous focus on growing revenues and driving efficiencies across the business.

During the quarter we completed our 10^th year of operation in Macau and to celebrate we announced the establishment of the GEG Foundation. The Foundation primarily aims to educate and empower young people in Macau and on the Mainland.

We are pleased that both of our flagship properties performed well in the period. Galaxy Macau™ delivered solid financial results, and StarWorld Macau’s EBITDA performance was in line with the same quarter last year and ahead of the previous quarter.

We remain very optimistic about Macau’s medium to longer term prospects and excited that Galaxy Macau™ Phase 2 is on schedule to complete on time and on budget by mid-2015. It will significantly increase the property’s inventory of five star luxury hotel rooms and its high-end retail and leisure space, strengthening Galaxy Macau™‘s status as a first choice destination for discerning, higher value customers.

The redevelopment on the Grand Waldo Complex is on schedule and we plan to unveil our exciting conceptual plans in January 2015. The emphasis will be Family Friendly leisure and entertainment for the middle-class supported by many local Macau businesses.

Underscoring our continued confidence in the outlook for the Group and for Macau, we paid a special dividend of $0.70 per share to shareholders on 31 July 2014, and paid another special dividend of $0.45 per share to shareholders on the 31 October 2014.

As always, I would like to thank our team of 16,000 staff for their commitment to provide customers with a truly memorable experience, by offering the highest quality resort facilities and delivering ‘World Class, Asian Heart’ service. We believe that this truly differentiates GEG.”

Group Financial Results

The Group posted quarterly revenue of $17.3 billion, an increase of 6% year-on-year. Adjusted EBITDA increased by 1% in the same period to $3.3 billion. As of 30 September 2014, the latest twelve months Adjusted EBITDA climbed 22% to $14.1 billion. The Group’s flagship properties achieved solid quarterly performances, with Galaxy Macau™ registering Adjusted EBITDA growth of 4% year-on-year and StarWorld Macau bouncing back quarter-on-quarter with Adjusted EBITDA improving by 10%.

The Group’s total gaming revenue for Q3 2014 on a management basis[1] grew a market leading 6.5% year-on-year to $17.1 billion driven by solid increases in VIP and Mass. Total Mass revenue increased 12% year-on-year to $4.8 billion while VIP climbed 5% year-on-year to $11.8 billion. Electronic games also grew 6% year-on-year to $0.5 billion.

GEG’s balance sheet at 30 September 2014 remains well capitalised and liquid, with cash on hand of $11.5 billion and net cash of $11.2 billion. GEG had debt of just $240 million at 30 September 2014.

Group Adjusted EBITDA (HK$’m)

Galaxy Macau™

Galaxy Macau™’s revenue in the third quarter increased by 11% year-on-year to $11.1 billion and Adjusted EBITDA grew 4% to $2.4 billion. These good results were driven by robust performances in both the VIP and mass gaming segments, where revenue increased by 12% to $7.2 billion and by 12% to $3.1 billion, respectively. Non-gaming revenue increased 3% to $386 million. Hotel occupancy rates at the property’s three five star hotels averaged 99% for the quarter.

Adjusted EBITDA margins under HKFRS and US GAAP for the period ended 30 September 2014 were 22% (Q3 2013: 23%) and 29% (Q3 2013: 31%), respectively. The property generated an impressive latest twelve months Return on Investment (ROI)[2] of 60%.

VIP Gaming
HK$’m	Q3 2013	Q2 2014	Q3 2014	QoQ%	YoY%
Turnover	191,140	264,340	224,435	-15%	17%
Net Win	6,473	8,364	7,239	-13%	12%
Win %	3.4%	3.2%	3.2%

Mass Gaming
HK$’m	Q3 2013	Q2 2014	Q3 2014	QoQ%	YoY%
Table Drop	7,012	6,943	6,842	-1%	-2%
Net Win	2,730	3,020	3,070	2%	12%
Hold %	38.9%	43.5%	44.9%

Electronic Gaming
HK$’m	Q3 2013	Q2 2014	Q3 2014	QoQ%	YoY%
Slots Handle	8,375	8,823	9,325	6%	11%
Net Win	402	384	419	9%	4%
Hold %	4.8%	4.4%	4.5%

StarWorld Macau

StarWorld Macau delivered Adjusted EBITDA of $904 million, broadly flat on the same period last year and up 10% sequentially. Revenue increased by 0.5% year-on-year to $5.7 billion. These results were achieved off the back of continuing good growth in the mass gaming segment, where revenue increased by 10% year-on-year to $1.1 billion, and a solid performance in the VIP segment, which saw a modest 2% reduction in revenue to $4.4 billion. Hotel occupancy was 99% for the quarter.

Adjusted EBITDA margins under HKFRS and US GAAP for the period ended 30 September 2014 were 16% (Q3 2013: 16%) and 24% (Q3 2013: 26%), respectively. StarWorld Macau reported latest twelve months Return on Investment (ROI) [3] of 108%.

VIP Gaming
HK$’m	Q3 2013	Q2 2014	Q3 2014	QoQ%	YoY%
Turnover	169,121	168,460	150,452	-11%	-11%
Net Win	4,500	4,260	4,412	4%	-2%
Win %	2.7%	2.5%	2.9%

Mass Gaming
HK$’m	Q3 2013	Q2 2014	Q3 2014	QoQ%	YoY%
Table Drop	2,829	2,874	2,661	-7%	-6%
Net Win	1,012	1,094	1,116	2%	10%
Hold %	35.4%	37.6%	41.4%

Electronic Gaming
HK$’m	Q3 2013	Q2 2014	Q3 2014	QoQ%	YoY%
Slots Handle	744	727	682	-6%	-8%
Net Win	44	48	45	-6%	2%
Hold %	5.9%	6.6%	6.6%

City Clubs and Construction Materials Division

City Clubs achieved $41 million of Adjusted EBITDA in the quarter.

The Construction Materials Division reported Adjusted EBITDA of $114 million, down 17% year-on-year but flat sequentially.

Developing Macau’s Largest Development Pipeline

GEG currently offers approximately a total of 2,700 five-star hotel rooms and has been operating at near maximum occupancy. To meet the expected growth in demand and to provide visitors with a more complete entertainment, retail and food & beverage offer, GEG has ambitious plans to build out the largest development pipeline in the Macau gaming market and the global gaming industry.

Phase 2 of Galaxy Macau™ will add approximately a further 1,350 five-star hotel rooms targeting higher value customers and will dramatically extend the property’s retail offer. We are confident that it will complete by mid-2015 as Macau’s next major resort. We are expanding our retail offering to approximately 100,000 square metres and are pleased to report that the space is virtually fully leased and that it has secured world renowned brands where we will be introducing a number of new brands to Macau. GEG expects that the expanded Galaxy Macau™ will capture a new wave of higher value visitors and believes that it has a distinct advantage in being the first operator to open new capacity in 2015.

The redevelopment on the Grand Waldo Complex is on schedule and we plan to unveil our exciting conceptual plans in January 2015 with the aim to re-launch the Complex in early 2015. The emphasis will be Family Friendly leisure and entertainment for the middle-class. We are particularly pleased that a number of Macau’s SMEs will be joining GEG and participating in the success of the Grand Waldo Complex.

For the long term, GEG is set to begin initial works for Cotai Phases 3 & 4 and is advancing conceptual plans for its 2.7 square kilometre land parcel on Hengqin Island.

$1.3 Billion GEG Foundation

To celebrate the Group’s 10^th year in operation, GEG announced the establishment of the GEG Foundation on 4 July 2014. Initially funded with $300 million and a further commitment of another $1 billion due later on, the Foundation aims to educate and empower young people in Macau and on the Mainland.

Selected Major Awards (January to October 2014)

	Award	Presenter
GEG	Best Hotel Group Award	Robb Report China’s 2014 Best of the Best Awards
	Forbes Asia’s Fabulous 50 Companies	Forbes Magazine
	Gaming and Lodging — Best Company	Institutional Investor Magazine — All Asia Executive Team Survey
	Best Managed Companies in Asia — Gaming	Euromoney Magazine
	Casino Operator of the Year Australia / Asia	International Gaming Awards
Galaxy Macau™	My Favourite Hotel and Resort	U Magazine
	Best Resort of the Year (HK/Macau)	Travel Weekly Magazine and Events Magazine jointly organized — China Travel & Meetings Industry Awards
	Best Service Resort Asia	Golden Horse Award of China Hotel
	Top 10 Resort Hotels of China	China Hotel Starlight Awards
	Hurun Report Best of the Best Awards — Luxury Hotel in Macau Star Performer	Hurun Report
StarWorld Macau	Ranked as “Top Class Comfort”	Michelin Guide Hong Kong Macau 2014
	2014 Certificate of Excellence	TripAdvisor Travelers’ Choice Awards
	Best Service Hotel of the Year	Travel Weekly Magazine and Events Magazine jointly organized — China Travel & Meetings Industry Awards
	Best Service Hotel of Asia	Golden Horse Award of China Hotel
	Top 10 Glamorous Hotels of China	China Hotel Starlight Awards

Special Dividends

Reflecting GEG’s confidence in its future prospects and its ability to generate surplus cash, even while developing Macau’s largest development pipeline, a special dividend of $0.70 per share was paid to shareholders on 31 July 2014.

Post period end, GEG paid another special dividend to shareholders of $0.45 per share on 31 October 2014. Together these special dividends totaled approximately $5 billion and demonstrate GEG’s commitment to returning surplus capital to shareholders.

Outlook

GEG continues to be optimistic about its future prospects and those of Macau as a whole. While 2014 has been a more challenging year for the industry, primarily as a result of economic headwinds, the appeal of Macau as a recreational and holiday destination for Mainland Chinese visitors is undiminished. This is illustrated by visitation in the first nine months of the year growing a healthy 7% year-on-year to 23.5 million. Furthermore, the fundamental long term drivers for growth remain unaltered, with major infrastructure works and increasing domestic consumption in Mainland China set to drive substantial visitation growth for many years to come.

With a high quality property portfolio, powerful brand and extensive development pipeline, GEG has a unique platform to attract new higher value customers, drive profitability and selectively returns surplus capital to its shareholders. Phase 2 of Galaxy Macau™ is on schedule to be the next major resort to complete in Macau by mid-2015. We plan to unveil our exciting conceptual plans for the Grand Waldo Complex in January 2015 with the aim to re-launch the Complex in early 2015. Management is deeply excited by the breadth and scale of the expanded property’s offer and is confident it will further fulfil GEG’s promise of providing customers with the very best facilities and service of any integrated resort in Macau.

Notes:

[1] The primary difference between statutory revenue and management basis revenue is the treatment of City Clubs revenue where fee income is reported on a statutory basis and gaming revenue is reported on a management basis.

[2]ROI calculated based on the total Adjusted EBITDA for the latest twelve months divided by gross book value through 30 September 2014 including allocated land cost.

[3]ROI calculated based on the total Adjusted EBITDA for the latest twelve months divided by gross book value through 30 September 2014 including allocated land cost.

About Galaxy Entertainment Group (HKEx stock code: 27)

Galaxy Entertainment Group Limited (“GEG”) is one of Asia’s leading gaming and entertainment corporations, and is a member of the Hang Seng Index.

GEG primarily develops and operates hotels, gaming and integrated resort facilities in Macau, the only legal gaming location in China and the largest gaming entertainment market in the world.

The two flagship properties of GEG include Galaxy Macau™, a world class integrated destination resort opened in May 2011 at Cotai, and StarWorld Macau, an award-winning property opened in 2006 on the Macau peninsula.

In April 2012, GEG announced the development of Galaxy Macau™ Phase 2 that will nearly double the size of the existing resort to one million square metres. Upon its targeted completion by mid-2015, Galaxy Macau™ Phase 2 will bring to Macau some of the most exciting entertainment, leisure, retail and MICE facilities. In December 2012, GEG outlined its concept plans for Phases 3 & 4 of its Cotai landbank and expects to commence site investigation works as early as late 2014.

GEG has entered into a framework agreement with the Hengqin Island authority to develop a 2.7 square kilometre land parcel for a world class destination resort in Hengqin Island. This project will complement GEG’s business in Macau and differentiate us from our peers, as well as play a key role in supporting Macau to become a world centre of tourism and leisure.

Additionally, GEG operates a Construction Materials Division.

For more information, please visit www.galaxyentertainment.com.

To see the full version of this release, including financial tables, click here: http://photos.prnasia.com/prnk/20141111/8521406684-b

For Media Enquiries:

Galaxy Entertainment Group

Mr. Peter J. Caveny

Vice President, Investor Relations

Tel: +852 3150 1111

Email: ir@galaxyentertainment.com

Ms. Yoko Ku

Senior Manager, Investor Relations

Tel: +852 3150 1111

Email: ir@galaxyentertainment.com

Photo – http://photos.prnasia.com/prnh/20141111/8521406684-a

ERN Health Care

AMRI Announces Third Quarter 2014 Results

admin November 5, 2014

– Third quarter contract revenue of $57.5 million, up 8% from 2013

– Lower Discovery and API revenue is offset by addition of OsoBio

– OsoBio business interruption contributes to third quarter adjusted loss per share of $(0.02)

– Full year 2014 contract revenue expected to be between $253 and $261 million, an increase of 22% at the midpoint

– Full year adjusted diluted EPS range between $0.67 and $0.73, compared to $0.70 in 2013

– Company provides initial 2015 outlook

– Company creates new Drug Product reporting segment to reflect addition of OsoBio

ALBANY, N.Y., Nov. 5, 2014 /PRNewswire/ — AMRI (NASDAQ: AMRI) today reported financial and operating results for the third quarter ended September 30, 2014.

Total revenue for the third quarter of 2014 was $62.5 million, an increase of 3% compared to total revenue of $60.8 million reported in the third quarter of 2013.

Total contract revenue for the third quarter of 2014 was $57.5 million, an increase of 8% compared to contract revenue of $53.0 million reported in the third quarter of 2013. Adjusted contract margins were 8% for the third quarter of 2014, compared with 16% for the third quarter of 2013, driven by lower capacity utilization, including the impact of a business interruption event at the company’s Albuquerque manufacturing facility. For a reconciliation of U.S. GAAP contract margins as reported to adjusted contract margins for the 2014 and 2013 reporting periods, please see Table 1 at the end of press release.

Royalty revenue in the third quarter of 2014 was $5.0 million, a decrease of 35% from $7.7 million in the third quarter of 2013. Royalty revenue for the third quarter of 2014 includes royalties from the Allegra® products as well as $2.4 million from the net sales of certain amphetamine salts sold by Actavis.

Net loss under U.S. GAAP was $(8.6) million, or $(0.27) per share, in the third quarter of 2014, compared to U.S. GAAP net income of $3.7 million, or $0.12 per diluted share for the third quarter of 2013. Net loss on an adjusted basis in the third quarter of 2014 was $(0.7) million or $(0.02) per share, compared to adjusted net income of $4.1 million or $0.13 per diluted share. Net loss on an adjusted basis excludes the following items that are included under U.S. GAAP: business interruption charges, restructuring and impairment charges, convertible debt interest and amortization charges, business acquisition costs, executive transition costs, postretirement benefit plan settlement gains, write-offs of deferred financing costs, non-recurring income tax adjustments, litigation settlements, insurance demutualization gains, losses on disposals of fixed assets related to restructuring activities, and depreciation and amortization of purchase accounting adjustments. For a reconciliation of U.S. GAAP net income (loss) and earnings (loss) per diluted share as reported to adjusted net income (loss) and earnings (loss) per diluted share for the 2014 and 2013 reporting periods, please see Table 2 at the end of this press release.

“The confluence of a business interruption event at our OsoBio facility, together with lower Discovery and API revenue has resulted in a weak third quarter,” said William S. Marth, AMRI’s President and Chief Executive Officer. “In our Discovery business, we saw lower fee-for-service work, while in our API business, timing of shipments impacted our results this quarter. Additionally, a weather-related power interruption at our OsoBio facility in Albuquerque took the facility offline for a period of time, contributing to the loss of finished product and the need to remediate one of the suites at the facility. Costs associated with this activity – together with facility downtime – increased our operating costs and contributed to the quarterly earnings loss. We have been working closely with our customers to not only provide a continued supply of product during this disruption, but have also taken steps to upgrade the facility to ensure we can supply our customers’ growing needs longer term. We anticipate the affected suite at our Albuquerque facility to be back online in mid-November.

“While we did not produce the results we expected this quarter, we remain confident in our outlook for the fourth quarter and 2015,” continued Mr. Marth. “We have taken significant actions this year to enhance our operations and align our resources with our customers’ needs. Our DDS insourcing programs continue to generate significant interest and we continue to see high demand for our development services. In addition, demand for complex API and Drug Product manufacturing continues to significantly expand.”

Year-to-Date Results

Total revenue for the nine-month period ended September 30, 2014 was $190.0 million, an increase of 6% compared to total revenue of $179.5 million for the same period in 2013.

Total contract revenue for the first nine months of 2014 was $170.0 million, an increase of 13% compared to contract revenue of $150.3 million for the same period in 2013. Adjusted contract margins were 18% for the nine months of 2014, consistent with the same period in 2013.

Royalty revenue for the first nine months of 2014 was $20.0 million, a decrease of 32% from $29.2 million in 2013, in line with expectations. Royalty revenue for the nine-month period ended September 30, 2014 includes royalties from the Allegra^® products as well as $7.2 million from the net sales of certain amphetamine salts sold by Actavis.

Net loss under U.S. GAAP for the first nine months of 2014 was $(1.4) million, or $(0.05) per diluted share, compared to U.S. GAAP net income of $7.5 million, or $0.24 per diluted share for the first nine months of 2013. Net income on an adjusted basis in the first nine months of 2014 was $11.5 million or $0.35 per diluted share, compared to adjusted net income of $14.7 million or $0.46 per share in 2013.

For a reconciliation of U.S. GAAP net income and earnings per diluted share as reported to adjusted net income and earnings per diluted share for the 2014 and 2013 reporting periods, please see Table 2 at the end of this press release. Financial results for the three and nine months ended September 30, 2013 have been updated from previously reported amounts to reflect prior period income tax adjustments identified during the second quarter of 2014. The company considers the adjustments to be immaterial to the impacted periods.

Segment Results

In conjunction with the acquisition of OsoBio and resulting growth of its Drug Product business, AMRI is presenting its operating results in three segments: Discovery and Development Services (DDS), Active Pharmaceutical Ingredients (API) and Drug Product. Results for the three and nine months ended September 30, 2013 reflect these changes to the reporting segments.

Drug Discovery and Development Services (DDS)

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
(Unaudited; $ in thousands)	2014	2013	2014	2013

DDS Contract Revenue	$ 17,982	$ 19,402	$ 56,995	$ 59,011
Cost of Contract Revenue	14,829	16,858	46,905	50,581
Contract Gross Profit	3,153	2,544	10,090	8,430
Contract Gross Margin	17.5%	13.1%	17.7%	14.3%

Discovery and Development Services (DDS) contract revenue for the third quarter of 2014 decreased 7.3% compared to the third quarter of 2013, primarily due to a decline in U.S. Discovery Services. DDS gross margins increased 4.4% as compared to the third quarter of 2013, driven by the benefit of cost-reduction initiatives and facility optimization.

Active Pharmaceutical Ingredients (API)

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
(Unaudited; $ in thousands)	2014	2013	2014	2013

API Contract Revenue	$ 29,674	$ 31,793	$ 98,146	$ 87,573
Cost of Contract Revenue	29,000	24,990	77,685	67,164
Contract Gross Profit	674	6,803	$ 20,461	20,409
Contract Gross Margin	2.3%	21.4%	20.8%	23.3%

Adjusted Contract Gross Profit¹	769	6,803	20,651	20,409
Adjusted Contract Gross Margin¹	2.6%	21.4%	21.0%	23.3%

(1) Refer to Table 1 included in this release for the reconciliation of U.S. GAAP contract gross profit and contract gross margin to adjusted gross profit and adjusted gross margin as a percentage of net revenue.

API contract revenue for the third quarter of 2014 decreased 6.7% compared to the same period of 2013 due primarily to timing of API shipments to customers, offset partly by the addition of Cedarburg Pharmaceuticals. API adjusted contract margins for the third quarter of 2014 decreased 18.8% compared to the same period of 2013, primarily due to lower capacity utilization and a weaker mix of business.

Drug Product Manufacturing

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
(Unaudited; $ in thousands)	2014	2013	2014	2013

Drug Product Contract Revenue	$ 9,825	$ 1,834	$ 14,852	$ 3,702
Cost of Contract Revenue	12,585	2,700	18,472	7,075
Contract Gross Loss	(2,760)	(866)	(3,620)	(3,373)
Contract Gross Margin	-28.1%	-47.2%	-24.4%	-91.1%

Adjusted Contract Gross Profit (Loss)¹	564	(866)	(296)	(3,373)
Adjusted Contract Gross Margin¹	5.7%	-47.2%	-2.0%	-91.1%

(1) Refer to Table 1 included in this release for the reconciliation of U.S. GAAP contract gross loss and contract gross margin to adjusted contract gross profit (loss) and adjusted contract gross margin as a percentage of net revenue.

Drug Product Manufacturing contract revenue for the third quarter of 2014 increased $8.0 million over the same period of 2013 and includes $6.5 million of revenue from Oso Biopharmaceuticals Manufacturing (OsoBio) that was acquired in July 2014. Drug Product adjusted contract margins for the third quarter of 2014 increased 52.9% compared to the same period of 2013, driven by volume increases, improved mix and the addition of the OsoBio business, however, contract margins were materially impacted by lower capacity utilization at the Company’s Albuquerque facility as a result of the business interruption.

Liquidity and Capital Resources

At September 30, 2014, AMRI had cash, cash equivalents and restricted cash of $23.9 million, compared to $136.9 million at June 30, 2014. The decrease in cash and cash equivalents for the quarter ended September 30, 2014 was primarily due to the use of $107.0 million to acquire the OsoBio business, and $5.6 million of capital expenditures. Total common shares outstanding, net of treasury shares, were 32,540,156 at September 30, 2014.

Financial Outlook

AMRI’s estimates for the full year 2014 and 2015 are based on actual results for the first nine months of 2014 and management’s expectations for the balance of 2014 and its outlook for 2015.

AMRI estimates the following for full year 2014:

Full year contract revenue is expected to be between $253 and $261 million, an increase of 22.4% at the midpoint
Royalty revenue of $25 million remains unchanged
Adjusted EBITDA between $50 and $52 million, up 7% at the midpoint
Adjusted diluted EPS is expected to be between $0.67 and $0.73, compared to $0.70 in 2013, based on an average fully diluted share count of approximately 32.6 million shares
Operating cash between $12 and $16 million and capital expenditures of approximately $16 million

AMRI estimates the following for full year 2015:

Full year contract revenue is expected to be between $310 and $345 million, an increase of 27% at the midpoint.
Royalty revenue of approximately $15 million

AMRI will provide additional guidance for 2015 as part of its fourth quarter and full year 2014 earnings presentation in February 2015.

Third Quarter Results Conference Call

The conference call can be accessed by dialing 800-723-6575 (domestic calls) or +1-785-830-1997 (international calls) at 8:30 a.m. ET and entering passcode 8919999. The audio webcast will be available live via the Internet and can be accessed on the Company’s website at http://www.amriglobal.com.

Replay of the conference call can be accessed by dialing 888-203-1112 (domestic calls) or +1-719-457-0820 (international calls) and entering passcode 8919999 from Wednesday, November 5, 2014 at 12:30 p.m. ET to Thursday, November 6, 2014 at 12:30 p.m. ET. Replay of the audio webcast can also be accessed for up to 90 days after the call via the investor area of the Company’s website at http://ir.amriglobal.com.

About AMRI
Albany Molecular Research Inc. (AMRI) is a global contract research and manufacturing organization that has been working with the Life Sciences industry to improve patient outcomes and the quality of life for more than two decades. With locations in North America, Europe and Asia, our key business segments include Discovery and Development Services (DDS), Active Pharmaceutical Ingredients (API), and Drug Product Manufacturing. Our DDS segment provides comprehensive services from hit identification to IND, including expertise with diverse chemistry, library design and synthesis, in vitro biology and pharmacology, drug metabolism and pharmacokinetics, as well as natural products. API Manufacturing supports the chemical development and cGMP manufacture of complex API, including potent, controlled substances, biologics, peptides, steroids, and cytotoxic compounds. Drug Product Manufacturing supports pre-clinical through commercial scale production of complex liquid-filled and lyophilized parenteral formulations. For more information about AMRI, please visit our website at http://www.amriglobal.com or follow us on Twitter (@amriglobal).

Forward-looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements include, but are not limited to, statements regarding the Company’s estimates of revenue, contract revenue, adjusted EBITDA, adjusted diluted earnings per share and segment results for the full year 2014, estimates of results for 2015, statements made by the Company’s Chief Executive Officer, and statements under the caption “Financial Outlook,” statements regarding the business interruption event at the OsoBio facility and the time and resources involved with the remediation thereof and the impact of such event on the Company’s results of operations, statements regarding the strength of the Company’s business and prospects, statements regarding the impact of recent acquisition activity, and statements concerning the Company’s momentum and long-term growth, including expected results for 2014. Readers should not place undue reliance on our forward-looking statements. The Company’s actual results may differ materially from such forward-looking statements as a result of numerous factors, some of which the Company may not be able to predict and may not be within the Company’s control. Factors that could cause such differences include, but are not limited to, the actual efforts, including spending and facility downtime, associated with remediation of the business interruption event at OsoBio, adverse impacts on customer relationships due to the business interruption event at OsoBio, trends in pharmaceutical and biotechnology companies’ outsourcing of chemical research and development, including softness in these markets; sales of Allegra® and the impact of the “at-risk” launch of generic Allegra®, the OTC conversion of Allegra® and the generic and OTC sales of Allegra in Japan on the Company’s receipt of significant royalties under the Allegra® license agreement; the success of the sales of other products for which the Company receives royalties; the risk that the Company will not be able to replicate either in the short or long term the revenue stream that has been derived from the royalties payable under the Allegra® license agreements; the risk that clients may terminate or reduce demand under any strategic or multi-year deal; the Company’s ability to enforce its intellectual property and technology rights; the Company’s ability to obtain financing sufficient to meet its business needs; the Company’s ability to successfully comply with heightened FDA scrutiny on aseptic fill/finish operations; the results of further FDA inspections; the Company’s ability to effectively maintain compliance with applicable FDA and DEA regulations; the Company’s ability to integrate past or future acquisitions, including Cedarburg Pharmaceuticals and Oso Biopharmaceuticals Manufacturing, and make such acquisitions accretive to the company’s business model, the company’s ability to take advantage of proprietary technology and expand the scientific tools available to it, the ability of the company’s strategic investments and acquisitions to perform as expected, as well as those risks discussed in the company’s Annual Report on Form 10-K for the year ended December 31, 2013 as filed with the Securities and Exchange Commission on March 17, 2014, and the company’s other SEC filings. Revenue, contract revenue, adjusted diluted EPS, adjusted EBITDA and other financial guidance offered by senior management today with respect to 2014 and 2015 represent a point-in-time estimate and are based on information as of the date of this press release. Senior management has made numerous assumptions in providing this guidance which, while believed to be reasonable, may not prove to be accurate. Numerous factors, including those noted above, may cause actual results to differ materially from the guidance provided. The company expressly disclaims any current intention or obligation to update the guidance provided or any other forward-looking statement in this press release to reflect future events or changes in facts assumed for purposes of providing this guidance or otherwise affecting the forward-looking statements contained in this press release.

Non-GAAP Adjustment Items

To supplement our financial results prepared in accordance with U.S. GAAP, we have presented non-GAAP measures of contract gross profit (loss), contract gross margin, income (loss) from operations, and net income (loss) and income (loss) per diluted share as adjusted to exclude certain restructuring charges, executive transition costs, convertible debt interest and amortization charges, business interruption charges, business acquisition costs, litigation settlement charges, write-offs of deferred financing costs, non-cash long-lived asset impairment charges, losses on disposals of assets related to restructuring activities, insurance demutualization gains, depreciation and amortization of purchase accounting adjustments, non-recurring income tax adjustments, and postretirement benefit plan settlement gains in the 2014 and 2013 periods. We have also presented non-GAAP measures of adjusted EBITDA, which in addition to the items excluded above, further excluded the impact of interest income and expense, depreciation and amortization expense, and income tax expense or benefit. Exclusion of these non-recurring items allows comparisons of operating results that are consistent over time. We believe presentation of these non-GAAP measures enhances an overall understanding of our historical financial performance because we believe they are an indication of the performance of our base business. Management uses these non-GAAP measures as a basis for evaluating our financial performance as well as for budgeting and forecasting of future periods. For these reasons, we believe they can be useful to investors. The presentation of this additional information should not be considered in isolation or as a substitute for income (loss) from operations, net income (loss) or income (loss) per diluted share, prepared in accordance with U.S. GAAP. Reconciliations of these non-GAAP measures to the most directly comparable GAAP financial measures are set forth in Tables 1-3. Our projected 2014 adjusted EPS and 2014 and 2015 adjusted EBITDA, however, are only provided on an adjusted basis. It is not feasible to provide GAAP EPS and EBITDA guidance because the items excluded are difficult to predict and estimate and are primarily dependent on future events.

Albany Molecular Research, Inc.
Condensed Consolidated Statements of Operations (unaudited)

	Three Months Ended		Nine Months Ended
(Dollars in thousands, except for per share data)	September 30, 2014	September 30, 2013	September 30, 2014	September 30, 2013

Contract revenue	$ 57,481	$ 53,029	$ 169,993	$ 150,286
Recurring royalties	4,990	7,726	19,978	29,167
Total revenue	62,471	60,755	189,971	179,453

Cost of contract revenue	56,414	44,548	143,062	124,820
Technology incentive award	260	571	1,277	2,254
Research and development	568	94	775	370
Selling, general and administrative	11,568	9,249	34,944	31,252
Postretirement benefit plan settlement gain	−	−	(1,285)	−
Restructuring charges	2,164	276	3,436	6,108
Property and equipment impairment charges	1,232	−	4,950	1,440
Total operating expenses	72,206	54,738	187,159	166,244

(Loss) income from operations	(9,735)	6,017	2,812	13,209

Interest expense, net	(2,575)	(138)	(8,256)	(411)
Other income, net	235	155	3	1,038

(Loss) income before income taxes	(12,075)	6,034	(5,441)	13,836

Income tax (benefit) expense	(3,434)	2,332	(4,024)	6,332

Net (loss) income	$ (8,641)	$ 3,702	$ (1,417)	$ 7,504

Basic (loss) income per share	$ (0.27)	$ 0.12	$ (0.05)	$ 0.24
Diluted (loss) income per share	$ (0.27)	$ 0.12	$ (0.05)	$ 0.24

Albany Molecular Research, Inc
Selected Consolidated Balance Sheet Data(unaudited)

(Dollars in thousands)	September 30, 2014	December 31, 2013

Cash and cash equivalents	$ 18,416	$ 175,928
Restricted cash	5,483	714
Accounts receivable, net	56,205	52,216
Royalty income receivable	4,987	7,523
Inventory	56,020	31,991
Total current assets	158,976	279,019
Restricted cash	−	3,810
Property and equipment, net	165,926	127,775
Total assets	533,036	445,268

Total current liabilities	54,634	48,849
Long‑term debt, excluding current installments, net of unamortized discount	123,571	123,135
Total liabilities	287,837	204,511
Total stockholders’ equity	245,199	240,757
Total liabilities and stockholders’ equity	533,036	445,268

Table 1: Reconciliation of three and nine months ended September 30, 2014 and 2013 reported contract gross profit (loss) and contract gross margin to adjusted contract gross profit (loss) and adjusted contract gross margin

Non-GAAP Measures	Three Months Ended		Nine Months Ended
(Dollars in thousands)	September 30,		September 30,
	2014	2013	2014	2013

Consolidated Contract Revenue, as reported	$ 57,481	$ 53,029	$ 169,993	$ 150,286
Consolidated Cost of Contract Revenue, as reported	56,414	44,548	143,062	124,820
Consolidated Contract Gross Profit, as reported	1,067	8,481	26,931	25,466
add: Business interruption charges	3,117	–	3,117	–
add: Purchase accounting depreciation	268	–	363	–
add: Business acquistion costs	34	–	34	–
Consolidated Contract Gross Profit, as adjusted	$ 4,486	$ 8,481	$ 30,445	$ 25,466
Consolidated Contract Gross Margin, as reported	1.9%	16.0%	15.8%	16.9%
Consolidated Contract Gross Margin, as adjusted	7.8%	16.0%	17.9%	16.9%


API Segment Contract Revenue, as reported	$ 29,674	$ 31,793	$ 98,146	$ 87,573
API Segment Cost of Contract Revenue, as reported	29,000	24,990	77,685	67,164
API Segment Contract Gross Profit, as reported	674	6,803	20,461	20,409
add: Purchase accounting depreciation	95	–	190	–
API Segment Contract Gross Profit, as adjusted	$ 769	$ 6,803	$ 20,651	$ 20,409
API Segment Contract Gross Margin, as reported	2.3%	21.4%	20.8%	23.3%
API Segment Contract Gross Margin, as adjusted	2.6%	21.4%	21.0%	23.3%

Drug Product Segment Contract Revenue, as reported	$ 9,825	$ 1,834	$ 14,852	$ 3,702
Drug Product Segment Cost of Contract Revenue, as reported	12,585	2,700	18,472	7,075
Drug Product Segment Contract Gross Loss, as reported	(2,760)	(866)	(3,620)	(3,373)
add: Business interruption charges	3,117	–	3,117	–
add: Purchase accounting depreciation	173	–	173	–
add: Business acquisition costs	34	–	34	–
Drug Product Segment Contract Gross Profit (Loss), as adjusted	$ 564	$ (866)	$ (296)	$ (3,373)
Drug Product Segment Contract Margin, as reported	-28.1%	-47.2%	-24.4%	-91.1%
Drug Product Segment Contract Margin, as adjusted	5.7%	-47.2%	-2.0%	-91.1%

Table 2: Reconciliation of three and nine months ended September 30, 2014 and 2013 reported income (loss) from operations, net income (loss) and earnings (loss) per diluted share to adjusted income from operations, adjusted net income and adjusted earnings per share:

(Dollars in thousands, except for per share data)

Non-GAAP Measures

QTD

YTD

September 30,
2014

September 30,
2013

September 30,
2014

September 30,
2013

(Loss) income from operations, as reported

$ (9,735)

$ 6,017

$ 2,812

$ 13,209

Impairment charges

1,232

–

4,950

1,440

Restructuring charges

2,164

276

3,436

6,108

Business interruption charges

3,117

–

3,117

–

Executive transition costs

–

129

626

515

Business acquisition costs

970

–

2,638

–

Purchase accounting depreciation and amortization

753

–

1,028

–

Postretirement benefit plan settlement gain

–

(1,285)

–

Litigation settlement

–

1,946

(Loss) income from operations, as adjusted

$ (1,499)

$ 6,448

$ 17,322

$ 23,218

Net (loss) income, as reported

$ (8,641)

ERN Fashion

China Fordoo Holdings Limited (Stock Code: 2399) Announces 2014 Interim Results

admin August 27, 2014

— Turnover Reached RMB766.2 Million

— Gross Profit Increased by 13.0% to RMB269.1 Million

HONG KONG, Aug. 28, 2014 /PRNewswire/ — China Fordoo Holdings Limited (“Fordoo” or the “Company” and, together with its subsidiaries, the “Group”, Stock Code: 2399), a reputable menswear brand in the PRC, is pleased to announce its interim results for the period ended 30 June 2014 (the “period”).

During the period, benefited from the growing recognition of the Group’s “FORDOO” brand and an increase in the average wholesale price of products, the Group’s turnover increased to RMB766.2 million, representing an increase of 6.8% over the corresponding period last year (1H2013: RMB717.4 million). The expansion of distribution network further strengthened the profitability of the Group. Net profit increased by 8.5% to RMB128.7 million over the corresponding period in 2013. Basic and diluted earnings per share were RMB36 cents, representing an increase of 8.5% as compared to the corresponding period last year (1H2013: RMB33 cents).

Mr. Kwok Kin Sun, Executive Director, Chief Executive Officer and Chairman of the Board said, “In the first half of 2014, China’s economic growth continued to slowdown and the retail market remained weak. For the apparel retail industry, the total retail sales of garments, hats, footwear and knitwear recorded a 10.0% year-on-year increase, which was 1.9 percentage points lower than that of the corresponding period in 2013. Therefore, the Group adopted a prudent operation strategy and focused on improving the distribution channel management and enhancing product quality and design. We are very satisfied that the purchase orders from the sales fair held in March 2014 increased by 24% from the ones held in September 2013.”

Business Review

As a reputable menswear brand in the PRC, by product type, Fordoo continued to lead the market in the men’s trousers segment. In the first half of 2014, turnover from men’s trousers increased by 16.9% to RMB458.1 million as compared to the corresponding period last year (1H2013: RMB392.0 million). In addition, sales of trousers remained the major contributor to the total turnover with a proportion of 59.8%. In terms of product style, the Group maintained a healthy growth in the business formal and business casual series. The business casual series continued to be the largest turnover contributor to the Group with a proportion of 63.4% (1H2013: 61.1%).

The Group has been striving to optimize its retail and sales network for the sustainable business growth. As of 30 June 2014, the retail and distribution network of the Group further expanded to 52 distributors and 180 sub-distributors. During the period, the Group had a total 1,353 retail outlets (including 2 self-operated retail stores), representing a net increase of 53 retail outlets as at 31 December 2013, spanning over 240 cities and 31 provinces, autonomous regions and central government-administered municipalities in the PRC. The increase in retail outlets was a strategy to further penetrate into the markets in the second and third-tier cities.

In the first half of 2014, as part of the Group’s marketing and promotion plan to enhance and reinforce its brand image, the renovation of 41 existing stores had completed, and the plan for renovating another 59 stores by the end of the year remained on track. In addition, the Group continued to actively carry out regular advertising and promotion campaign through various channels, such as advertisements in fashion magazines, promotion activities in the internet and other media, as well as advertisements on large outdoor billboards in airports, highways and well-known department stores.

Prospects

Looking ahead to the second half of 2014, the Group sustains its cautiously optimistic view with respect to the growth of consumer demand in menswear market in China. It is confident that the ongoing urbanization and expanding middle class in China will generate a strong demand on apparels in the long run. Therefore, the Group maintains its target for distributors of adding approximately 200 retail outlets within the year. In the coming 2014 spring/summer sales fair to be held in September 2014, the Group will launch a new casual fashion line targeting young customers aged 18 to 30.

Mr. Kwok concluded, “Fordoo will strive to seize the opportunities arising from the continuous growth of the men’s casual wear and trousers market in PRC, as well as strengthen its cooperation with the distributors and sub-distributors. The Group will equip itself for the future development through enhancing its product design and development capability and kicking off the implementation of the ERP system. Driven by the success of men’s trousers, business formal and business casual series, it is believed that the Group could continue its sustainable growth and maximize shareholders’ returns.”

– End –

About China Fordoo Holdings Limited

Fordoo is a reputable menswear brand in the PRC. Positioned in the middle-upper menswear segment, Fordoo primarily targets men aged 30 to 60. According to Frost & Sullivan, Fordoo brand was ranked sixth in the middle-upper menswear market with a market share of 2.9%, fifth in both the middle-upper business casual menswear segment and the middle-upper business formal menswear segment with respective market share of 4.0% and 2.9%, and second in the men’s trousers category with a market share of 3.0%, all of which were in terms of retail sales in 2013. Fordoo manages and operates the business through a strategically integrated model, comprising brand management and marketing, design and product development, ordering process, procurement of raw materials, self-production and outsourced production and sales and distribution. As of 30 June 2014, Fordoo’s distribution network comprised of 52 distributors, 180 sub-distributors and 1,353 retail outlets (excluding the two self-operated stores).

Issued by Porda Havas International Finance Communications Group for and on behalf of China Fordoo Holdings Limited.

ERP FAS FIN REA TEX

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