EX-99.1 2 h04392exv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
(MINDRAY LOGO)
Mindray Announces Second Quarter 2010 Financial Results
Shenzhen, China — August 9, 2010 — Mindray Medical International Limited (NYSE: MR), a leading developer, manufacturer and marketer of medical devices worldwide announced today its selected unaudited financial results for the second quarter and first half ended June 30, 2010.
     Highlights for Second Quarter and First Half 2010
  —   Net revenues were $179.2 million, an increase of 12.0% over the second quarter of 2009 and 22.9% over the first quarter of 2010.
 
  —   Record international sales of $106.8 million as compared to $84.1 million for the second quarter of 2009.
 
  —   Solid China non-tender sales growth of 9.1% year-over-year and 19.0% over the first quarter 2010.
 
  —   Fully diluted EPS was $0.36, a 22.0% increase from the second quarter of 2009, and a 14.4% increase from the first quarter of 2010.
 
  —   Launched three products during the quarter, bringing the year-to-date total to four new products across three product lines.
 
  —   Paid dividend of $22.8 million in April 2010.
“We are happy to report a 12.0% year-over-year increase in revenues, driven primarily by this quarter’s accelerated international sales growth of 27.0%,” commented Xu Hang, Mindray’s chairman and co-chief executive officer. “We are particularly encouraged by the accelerated growth we have seen in both emerging and developed markets. Both Latin America and the CIS region led growth among all regions while Western Europe and the U.S. recorded double-digit growth. In China, non-tender sales also continued to expand, growing 19.0% sequentially and 9.1% year-over-year. Government tender activities, however, unexpectedly continued to decline and as a result, our total China sales decreased 4.6% year-over-year but grew 16.5% as compared to the first quarter this year. While we cannot control the timing associated with tender sales, we are realigning our sales force and undertaking other strategic initiatives in product development and marketing, allowing us to focus more intensely on our higher end product lines for the non-tender market. We also remain committed to our investment in international channels and the localization efforts of our on-site operations. We believe this approach should position Mindray well to continue its strong performance

1

 

in emerging markets and benefit from new opportunities in both high-end product segments and developed markets.”
SUMMARY — Second Quarter and First Half 2010
                                                 
    Three Months Ended   Six Months Ended
    June 30   June 30
(in $ millions, except per-share data)   2010   2009   % chg   2010   2009   % chg
Net Revenues
     179.2       160.1       12.0 %     325.1       294.2       10.5 %
Revenues generated in China
     72.4       76.0       -4.6 %     134.6       138.3       -2.7 %
Revenues generated outside China
     106.8       84.1       27.0 %     190.5       155.9       22.2 %
Gross Profit
     104.4       91.6       14.1 %     186.7       166.3       12.3 %
Non-GAAP Gross Profit
     105.8       93.4       13.3 %     189.6       169.7       11.8 %
Operating Income
     47.5       39.0       21.9 %     79.4       68.4       16.2 %
Non-GAAP Operating Income
     51.2       43.9       16.6 %     87.1       78.6       10.9 %
EBITDA
     54.2       46.7       16.1 %     93.0       82.3       13.1 %
Net Income
     42.3       33.0       28.1 %     78.5       58.4       34.5 %
Non-GAAP Net Income
     45.9       37.8       21.3 %     86.0       68.4       25.9 %
Diluted EPS
     0.36       0.29       22.0 %     0.67       0.52       29.1 %
Non-GAAP Diluted EPS
     0.39       0.34       15.5 %     0.74       0.61       20.9 %
Revenues
Mindray reported net revenues of $179.2 million for the second quarter of 2010, a 12.0% increase from $160.1 million in the second quarter of 2009. Net revenues generated in China in the second quarter of 2010 decreased 4.6% to $72.4 million from $76.0 million in the second quarter of 2009, while net revenues generated in international markets in the second quarter of 2010 increased 27.0% to $106.8 million from $84.1 million in the second quarter of 2009.
Performance by Segment
Patient Monitoring & Life Support Products: Patient monitoring & life support products segment revenues increased 19.9% to $82.8 million this quarter from $69.1 million in the second quarter of

2

 

2009. The patient monitoring & life support products segment contributed 46.2% to the total net revenues in the second quarter of 2010.
In-Vitro Diagnostic Products: In-vitro diagnostic products segment revenues increased 8.0% to $43.2 million this quarter from $40.0 million in the second quarter of 2009. The in-vitro diagnostic products segment contributed 24.1% to the total net revenues in the second quarter of 2010.
Medical Imaging Systems: Medical imaging systems segment revenues increased 1.9% to $42.7 million this quarter from $41.9 million in the second quarter of 2009. The medical imaging systems segment contributed 23.8% to the total net revenues in the second quarter of 2010.
Other revenues, which are primarily comprised of service fees charged for post warranty period repair services, increased 15.7% to $10.5 million this quarter from $9.1 million in the second quarter of 2009. Other revenues contributed 5.9% to the total net revenues in the second quarter of 2010.
Gross Margins
Second quarter 2010 gross profit was $104.4 million, a 14.1% increase from $91.6 million in the second quarter of 2009. Second quarter 2010 non-GAAP gross profit, as defined below, was $105.8 million, a 13.3% increase from $93.4 million in the second quarter of 2009. Second quarter 2010 gross margin was 58.3% compared to 57.2% in the second quarter of 2009 and 56.4% in the first quarter of 2010. Non-GAAP gross margin was 59.0% in the second quarter of 2010 compared to 58.3% in the second quarter of 2009 and 57.5% in the first quarter of 2010.
Operating Expenses
Selling expenses for the second quarter of 2010 were $27.2 million, or 15.2% of the total net revenues, compared to 16.5% in the second quarter of 2009 and 16.2% in the first quarter of 2010. Non-GAAP selling expenses for the second quarter of 2010 were $25.9 million, or 14.5% of the total net revenues, compared to 15.5% in the second quarter of 2009 and 15.3% in the first quarter of 2010.
General and administrative expenses for the second quarter of 2010 were $15.4 million, or 8.6% of the total net revenues, compared to 7.1% in the second quarter of 2009 and 8.4% in the first quarter of 2010. Non-GAAP general and administrative expenses for the second quarter of 2010 were $15.1 million, or 8.4% of the total net revenues, compared to 6.7% in the second quarter of 2009 and 8.1% in the first quarter of 2010.

3

 

Research and development expenses for the second quarter of 2010 were $14.3 million, or 8.0% of the total net revenues, compared to 9.2% in the second quarter of 2009 and 9.9% in the first quarter of 2010. Non-GAAP research and development expenses for the second quarter of 2010 were $13.5 million, or 7.6% of the total net revenues, compared to 8.7% in the second quarter of 2009 and 9.4% in the first quarter of 2010.
Total share-based compensation expenses, which were allocated to cost of revenues and related operating expenses, were $1.8 million in the second quarter of 2010 compared to $1.9 million in the first quarter of 2010 and $2.6 million in the second quarter of 2009.
Operating income was $47.5 million in the second quarter of 2010, a 21.9% increase from $39.0 million in the second quarter of 2009 and 49.0% increase from $31.9 million in the first quarter of 2010. Non-GAAP operating income in the second quarter of 2010 was $51.2 million, a 16.6% increase from $43.9 million in the second quarter of 2009 and 42.4% increase from $35.9 million in the first quarter of 2010. Operating margin was 26.5% in the second quarter of 2010 compared to 24.4% in the second quarter of 2009 and 21.9% in the first quarter of 2010. Non-GAAP operating margin was 28.6% in the second quarter of 2010 compared to 27.4% in the second quarter of 2009 and 24.6% in the first quarter of 2010.
Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”)
Second quarter 2010 EBITDA increased 16.1% year-over-year to $54.2 million from $46.7 million in the second quarter of 2009, and increased 39.6% from $38.8 million in the first quarter of 2010.
Net Income
Net income increased 28.1% year-over-year to $42.3 million from $33.0 million in the second quarter of 2009. Non-GAAP net income increased 21.3% year-over-year to $45.9 million from $37.8 million in the second quarter of 2009. Net margin was 23.6% in the second quarter of 2010 compared to 20.6% in the second quarter of 2009 and 24.8% in the first quarter of 2010. Non-GAAP net margin was 25.6% in the second quarter of 2010 compared to 23.6% in the second quarter of 2009 and 27.5% in the first quarter of 2010. Second quarter 2010 income tax expense was $7.2 million representing an effective tax rate of 14.5%.
Second quarter 2010 basic and diluted earnings per share were $0.37 and $0.36, respectively, compared to $0.30 and $0.29 in the second quarter of 2009. Basic and diluted non-GAAP earnings per share were $0.40 and $0.39, respectively, compared to $0.35 and $0.34 in the second quarter of

4

 

2009. Shares used in the computation of diluted earnings per share for the second quarter 2010 were 118.1 million.
Other Select Data
Average accounts receivable days outstanding were 58 days in the second quarter of 2010 compared to 69 days in the first quarter of 2010. Average inventory days were 93 days in the second quarter of 2010 compared to 96 days in the first quarter of 2010. Average accounts payable days outstanding were 59 days in the second quarter of 2010 compared to 60 days in the first quarter of 2010. Mindray calculates the above working capital days using the average of beginning and ending balances of the quarter.
As of June 30, 2010, the company had total $370.2 million in cash and cash equivalents, restricted cash and restricted investments and short-term investments, compared to $430.6 million as of March 31, 2010. Net cash generated from operating activities and net cash outflow from capital expenditures during the quarter were $19.8 million and $11.3 million, respectively.
First Half 2010 Results
Mindray reported net revenues of $325.1 million in the first half of 2010, representing a 10.5% increase from $294.2 million in the first half of 2009.
  —   Net revenues generated in China in the first half of 2010 decreased 2.7% to $134.6 million from $138.3 million in the first half of 2009.
 
  —   Net revenues generated in international markets in the first half of 2010 increased 22.2% to $190.5 million from $155.9 million in the first half of 2009.
First half 2010 EBITDA increased 13.1% year-over-year to $93.0 million from $82.3 million in the first half of 2009.
First half 2010 net income increased 34.5% year-over-year to $78.5 million from $58.4 million in the first half of 2009. The first half 2010 net income included the recognition of $8.6 million corporate income tax reduction which relates to the nationwide key software enterprise status for the calendar year 2009, awarded to our Shenzhen subsidiary in January 2010. First half 2010 non-GAAP net income increased 25.9% year-over-year to $86.0 million from $68.4 million in the first half of 2009.

5

 

First half 2010 diluted earnings per share increased 29.1% year-over-year to $0.67 from $0.52 in the first half of 2009. First half 2010 non-GAAP diluted earnings per share increased 20.9% to $0.74 from $0.61 in the first half of 2009.
Business Outlook for Full Year 2010
The company has updated its full year guidance and now expects its full year 2010 net revenues to be $700 million.
The company also expects its full year 2010 non-GAAP net income to grow 10% over its non-GAAP net income for full year 2009, excluding the $8.6 million corporate income tax reduction recognized in the first quarter of 2010. This guidance assumes a corporate income tax rate of 15% applicable to the Shenzhen subsidiary.
The company expects its capital expenditure for 2010 to remain in the range of $60 million to $70 million.
The company’s practice is to provide guidance on a full year basis only. This forecast reflects Mindray’s current and preliminary views, which are subject to change.
“While we achieved better than expected international sales, lower-than-expected government spending in our domestic market for the first half of the year has limited our planned growth rate and therefore our planned profit for the year,” said Li Xiting, Mindray’s president and co-chief executive officer. “We have thus decided to lower our yearly guidance. This adjustment, however, does not impact our confidence in our long-term outlook for China. We remain confident about the growth of the private sector in China and the resultant non-tender sales, as well as the government’s commitment to its healthcare reform plan and we are proactively addressing the areas of the business and factors that are within our control. Equally, if not more important, we will implement strategic initiatives more aggressively across product development, sales force organization, branding and marketing in the coming quarters to expand in the fast growing hospital self-funded segment. We expect that these initiatives, together with realignment of our international sales network, will ensure China and international sales remain parallel growth drivers for the company.”
Conference Call Information
Mindray’s management will hold an earnings conference call at 8:00 AM on August 10, 2010 U.S. Eastern Time (8:00 PM on August 10, 2010 Beijing/Hong Kong Time).

6

 

     Dial-in details for the earnings conference call are as follows:
         
 
  Hong Kong:   +852-3002-1672
 
        
 
  U.S. Toll Free:   +1-866-383-8108
 
        
 
  International:   +1-617-597-5343
 
        
    Pass code for all regions: Mindray
A replay of the conference call may be accessed by phone at the following numbers until August 24, 2010.
         
 
  U.S. Toll Free:   +1-888-286-8010
 
        
 
  International:   +1-617-801-6888
 
        
 
  Pass code:   3017 2538
Additionally, a live and archived webcast of this conference call will be available on the Investor Relations section of Mindray’s website at http://ir.mindray.com.
Use of Non-GAAP Financial Measures
Mindray provides gross profit, research and development expenses, selling expenses, general and administrative expenses, operating income, net income and earnings per share on a Non-GAAP basis that excludes share-based compensation expense, acquired intangible assets amortization expense, realignment costs - post acquisition, all net of related tax impact, as well as EBITDA to enable investors to better assess the company’s operating performance. The Non-GAAP measures described by the company are reconciled to the corresponding GAAP measure in the exhibit below titled “Reconciliations of Non-GAAP results of operations measures to the nearest comparable GAAP measures.”
The company has reported for the second quarter of 2010 and provided guidance for full year 2010 earnings per share on a Non-GAAP basis. Each of the terms as used by the company is defined as follows:
  —   Non-GAAP gross profit represents gross profit reported in accordance with GAAP, adjusted for the effects of share-based compensation and amortization of acquired intangible assets.
 
  —   Non-GAAP operating income represents operating income reported in accordance with GAAP, adjusted for the effects of share-based compensation, realignment cost - post acquisition, and amortization of acquired intangible assets.

7

 

  —   Non-GAAP net income represents net income reported in accordance with GAAP, adjusted for the effects of share-based compensation, realignment cost - post acquisition, and amortization of acquired intangible assets, all net of related tax impact.
 
  —   Non-GAAP earnings per share represents Non-GAAP net income divided by the number of shares used in computing basic and diluted earnings per share in accordance with GAAP, and excludes the impact of the declared dividends for the basic calculation.
 
  —   EBITDA represents net income reported in accordance with GAAP, adjusted for the effects of interest income and expenses, provision for income taxes, depreciation and amortization.
The company computes its Non-GAAP financial measures using the same consistent method from quarter to quarter. The company notes that these measures may not be calculated on the same basis of similar measures used by other companies. Readers are cautioned not to view Non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies, and should refer to the reconciliation of GAAP results with Non-GAAP results for the for the three months and six months period ended June 30, 2010 and 2009, respectively, in the attached financial information.
Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements,” including those related to the company’s selected unaudited 2010 financial results, the company’s business outlook for the fiscal year 2010, including with respect to net revenues, non-GAAP net income, capital expenditure, anticipated growth or recovery in particular geographic or product markets including emerging markets and high-end product and developed markets, the impact of anticipated healthcare reform or government expenditures, the level of investment in healthcare from government and private sources, the company’s ability to benefit from planned company investments and new strategic initiatives in product development, sales force organization, realignment of our international sales networks, branding and marketing, or to derive anticipated operation synergies, to improve cost structures and operational efficiencies to benefit from government tender sales in China, the growth of non-tender sales in China, and hospital self-funded sales, and our expectation that China and international sales will remain parallel growth drivers for the company. These statements are not historical facts but instead represent only our belief regarding future events or circumstances, many of which, by their nature, are inherently uncertain and outside of our control. It is possible that our actual results and financial condition and other circumstances may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including but not limited to: the expected growth of the medical device market in China and internationally; relevant government policies and regulations

8

 

relating to the medical device industry; market acceptance of our products; our expectations regarding demand for our products; our ability to expand our production, our sales and distribution network and other aspects of our operations; our ability to stay abreast of market trends and technological advances; our ability to effectively protect our intellectual property rights and not infringe on the intellectual property rights of others; competition in the medical device industry in China and internationally; and general economic and business conditions in the countries in which we operate. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in our public filings with the Securities and Exchange Commission. For a discussion of other important factors that could adversely affect our business, financial condition, results of operations and prospects, see “Risk Factors” beginning on page 7 of our annual report on Form 20-F, filed on May 25, 2010. Our results of operations for the second quarter of 2010 are not necessarily indicative of our operating results for any future periods. Any projections in this release are based on limited information currently available to us, which is subject to change. Although such projections and the factors influencing them will likely change, we will not necessarily update the information. Such information speaks only as of the date of this release.
All references to “shares” are to our ordinary shares, which are divided into two classes, Class A and Class B. Each of our American Depositary Shares, which trade on the New York Stock Exchange, represents one Class A ordinary share.
About Mindray
We are a leading developer, manufacturer and marketer of medical devices worldwide. We maintain our global operational headquarters in Shenzhen, China, and multiple sales offices in major domestic and international markets. From our main manufacturing and engineering base in China and through our worldwide distribution network, we supply internationally a broad range of products across three primary business segments, comprised of patient monitoring and life support products, in-vitro diagnostic products and medical imaging systems. For more information, please visit http://ir.mindray.com.
For investor and media inquiries please contact:
In the U.S:
Bryan Armstrong
FD
Tel: +1-312-553-6707
Email: bryan.armstrong@fd.com

9

 

John Capodanno
FD
Tel: +1-212-850-5705
Email: john.capodanno@fd.com
In China:
May Li
Tel: + 86 755 2658 2518
Email: may.li@mindray.com

10

 

Exhibit 1
MINDRAY MEDICAL INTERNATIONAL LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
                 
    As of December     As of June  
    31, 2009     30, 2010  
    US$     US$  
    (Note 2)     (unaudited)  
ASSETS
                
 
                
Current assets:
                
Cash and cash equivalents
     204,228       211,275  
Restricted cash and restricted investments (Note 1)
     102,257       —  
Short-term investments
     —       158,890  
Accounts receivable, net
     113,340       123,394  
Inventories
     64,518       83,244  
Value added tax receivables
     8,519       13,628  
Other receivables
     8,999       7,777  
Prepayments and deposits
     7,466       5,531  
Deferred tax assets
     2,338       3,510  
 
            
Total current assets
     511,665       607,249  
 
            
 
                
Restricted investment (Note 1)
     66,000       —  
Other assets
     1,585       1,539  
Advances for purchase of plant and equipment
     28,395       13,392  
Property, plant and equipment, net
     153,726       167,902  
Land use rights, net
     25,776       44,401  
Intangible assets, net
     64,065       62,608  
Goodwill
     115,053       115,150  
 
            
Total assets
     966,265       1,012,241  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Current liabilities:
                
Short-term bank loans (Note 1)
     103,128       —  
Notes payable
     5,647       6,362  
Accounts payable
     35,752       48,499  
Advances from customers
     10,081       5,822  
Salaries payables
     19,877       16,917  
Other payables
     56,592       53,438  
Income taxes payable
     16,199       10,704  
Deferred tax liabilities
     1,499       —  
Other taxes payable
     5,863       604  
 
            
Total current liabilities
     254,638       142,346  
 
            
 
                
Bank loans- long term (Note 1)
     66,000       —  
Other long-term payables
     1,342       1,454  
Deferred tax liabilities, net
     3,734       5,935  
 
            
 
     71,076       7,389  
 
                
Shareholders’ equity:
                
Ordinary shares
     14       15  
Additional paid-in capital
     298,408       460,439  
Retained earnings
     301,476       357,156  
Accumulated other comprehensive income
     40,651       44,894  
 
            
Total shareholders’ equity
     640,549       862,504  
 
                
Non- controlling interest
     2       2  
 
            
Total equity
     640,551       862,506  
Total liabilities and shareholders’ equity
     966,265       1,012,241  
 
            
 
(1)   Restricted as the security package required for the bank loans as of December 31, 2009. Use of such funds are permitted provided that the proportionate amount of debt must be retired concurrently. As of June 30, 2010, the bank loans were fully repaid.
 
(2)   Financial information is extracted from the audited financial statements included in the Company’s fiscal 2009 Form 20-F

 

 

Exhibit 2
MINDRAY MEDICAL INTERNATIONAL LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except for share and per share data)
                                 
    Three months ended June 30,     Six months ended June 30,  
    2009     2010     2009     2010  
    US$     US$     US$     US$  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)  
Net revenues
                                
-PRC
     75,944       72,415       138,314       134,569  
- International
     84,116       106,800       155,911       190,491  
 
                        
Net revenues
     160,060       179,215       294,225       325,060  
Cost of revenues (note 2)
     (68,505 )     (74,778 )     (127,929 )     (138,373 )
 
                        
Gross profit
     91,555       104,437       166,296       186,687  
 
                                
Selling expenses (note 2)
     (26,410 )     (27,187 )     (48,199 )     (50,851 )
General and administrative expenses (note 2)
     (11,436 )     (15,397 )     (20,233 )     (27,643 )
Research and development expenses (note 2)
     (14,723 )     (14,316 )     (29,468 )     (28,751 )
 
                        
Operating income
     38,986       47,537       68,396       79,442  
 
                                
Other income/(expenses), net
     784       (40 )     352       77  
Interest income
     1,321       2,379       2,941       4,513  
Interest expense
     (1,765 )     (437 )     (2,790 )     (1,843 )
 
                        
Income before income taxes and non-controlling interests
     39,326       49,439       68,899       82,189  
Provision for income taxes
     (6,312 )     (7,157 )     (10,544 )     (3,710 )
 
                        
Net Income
     33,014       42,282       58,355       78,479  
Less: Net income attributable to non-controlling interests
     —       —       —       —  
 
                        
Net Income attributable to the Company
     33,014       42,282       58,355       78,479  
 
                        
 
                                
Basic earnings per share
     0.30       0.37       0.54       0.70  
 
                        
 
                                
Diluted earnings per share
     0.29       0.36       0.52       0.67  
 
                        
 
                                
Shares used in the computation of:
                                
Basic earnings per share
     108,283,992       114,299,570       108,079,235       112,779,472  
 
                        
 
                                
Diluted earnings per share
     112,553,875       118,139,545       112,374,573       117,028,955  
 
                        
 
(2)     Share-based compensation charges incurred during the period related to:
                                 
Cost of revenues
     118       86       249       185  
Selling expenses
     929       625       1,980       1,290  
General and administrative expenses
     789       292       1,742       770  
Research and development expenses
     796       785       1,642       1,449  
 
                        
 
                                
Total
     2,632       1,788       5,613       3,694  
 
                        

 

 

Exhibit 3
MINDRAY MEDICAL INTERNATIONAL LIMITED
RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS MEASURES TO THE NEAREST
COMPARABLE GAAP MEASURES
(Dollars in thousands, except for share and per share data)
                                 
    Three months ended June 30,     Six months ended June 30,  
    2009     2010     2009     2010  
    US$     US$     US$     US$  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)  
Net revenues
     160,060       179,215       294,225       325,060  
 
                                
Non-GAAP net income
     37,840       45,887       68,350       86,032  
Non-GAAP net margin
     23.6 %     25.6 %     23.2 %     26.5 %
Amortization of acquired intangible assets
     (2,141 )     (1,868 )     (4,349 )     (4,000 )
Deferred tax impact related to acquired intangible assets
     94       51       198       141  
Realignment costs — post acquisition
     (147 )     —       (231 )     —  
Share-based compensation
     (2,632 )     (1,788 )     (5,613 )     (3,694 )
 
                        
GAAP net income
     33,014       42,282       58,355       78,479  
GAAP net margin
     20.6 %     23.6 %     19.8 %     24.1 %
 
                                
Non-GAAP income per share — basic
     0.35       0.40       0.63       0.76  
Non-GAAP income per share — diluted
     0.34       0.39       0.61       0.74  
 
                                
GAAP income per share — basic
     0.30       0.37       0.54       0.70  
GAAP income per share — diluted
     0.29       0.36       0.52       0.67  
 
                                
Shares used in computation of:
                                
 
                                
Basic earnings per share
     108,283,992       114,299,570       108,079,235       112,779,472  
 
                        
Diluted earnings per share
     112,553,875       118,139,545       112,374,573       117,028,955  
 
                        
 
                                
Non-GAAP operating income
     43,906       51,193       78,589       87,136  
Non-GAAP operating margin
     27.4 %     28.6 %     26.7 %     26.8 %
Amortization of acquired intangible assets
     (2,141 )     (1,868 )     (4,349 )     (4,000 )
Realignment costs — post acquisition
     (147 )     —       (231 )     —  
Share-based compensation
     (2,632 )     (1,788 )     (5,613 )     (3,694 )
 
                        
GAAP operating income
     38,986       47,537       68,396       79,442  
GAAP operating margin
     24.4 %     26.5 %     23.2 %     24.4 %
 
                                
Non-GAAP gross profit
     93,376       105,772       169,653       189,631  
Non-GAAP gross margin
     58.3 %     59.0 %     57.7 %     58.3 %
Amortization of acquired intangible assets
     (1,703 )     (1,249 )     (3,108 )     (2,759 )
Share-based compensation
     (118 )     (86 )     (249 )     (185 )
 
                        
GAAP gross profit
     91,555       104,437       166,296       186,687  
GAAP gross margin
     57.2 %     58.3 %     56.5 %     57.4 %

 

 

Exhibit 4
MINDRAY MEDICAL INTERNATIONAL LIMITED
RECONCILIATION OF GAAP NET INCOME TO EARNINGS BEFORE INTEREST, TAXES,
DEPRECIATION AND AMORTIZATION
(Dollars in thousands)
                                 
    Three months ended June 30,     Six months ended June 30,  
    2009     2010     2009     2010  
    US$     US$     US$     US$  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)  
GAAP net income
     33,014       42,282       58,355       78,479  
Interest income
     (1,321 )     (2,379 )     (2,941 )     (4,513 )
Interest expense
     1,765       437       2,790       1,843  
Provision for income taxes
     6,312       7,157       10,544       3,710  
 
                        
 
                                
Earnings before interest and taxes (“EBIT”)
     39,770       47,497       68,748       79,519  
Depreciation
     4,687       4,683       9,050       9,216  
Amortization
     2,201       2,011       4,452       4,261  
 
                        
 
                                
Earnings before interest, taxes, depreciation and amortization (“EBITDA”)
     46,658       54,191       82,250       92,996