State of Love and health Ambassador statement: Net profit decline due to deduction of option payment

In the afternoon of August 27, Beijing time, Nasdaq:kang, the first quarter of the fiscal year 2014, had a net profit of $1.9 million, down 70% from $6.5 million in the same period last year, without the audit report.

The company then issued a statement that the first fiscal quarter reported a decline in net profit, because the quarter deduction of the cost of options caused by 7 million of dollars, the cost of option issuance is only one-time, does not reflect the company's operating conditions.

The following is the full statement:

Eastern Time August 25, 2014 5 o'clock in the afternoon, Ikang State parent company Healthcare Group, Inc. (Nasdaq:kang) (hereinafter referred to as "The State of Love") published in the first quarter of fiscal year 2014 unaudited results, including net profit deduction of the option to pay the cost of 7 million U.S. dollars, the cost of option issuance is only one-time, does not reflect the company's operating conditions, for this description is as follows:

1. The fiscal year of the ambassador is from April 1 to the March 31 of the year, so the first quarter of each fiscal year is from April 1 to June 30. In addition, one of the common shares of the ambassador is equivalent to two ads depository shares;

2, in the first quarter of the 2014 financial year of the ambassador, because the cost of option incentive issuance is 7 million U.S. dollars, this is a one-time accounting processing, not the cost of operating activities;

3. Listed companies usually give the management team some options as incentives. A number of options issued prior to the listing of the company are listed as the conditions for exercising the option, so the related costs of this option in accounting will be counted as a one-time fee for the current period. A large equity incentive fee was credited to the quarter, as the Ambassador of Hong Kong successfully listed on Nasdaq April 9. This cost is only due to the accounting process, not bad management, which does not reflect the company's operating level of the current quarter, while the company does not produce any cash flow impact. After adjusting the financial information disclosure, we can see the operation status of the company after excluding the influence of share incentive cost.

4. The net profit for the first quarter of the 2013 fiscal year was 6.5 million dollars. The net profit for the first quarter of fiscal year 2014 was $1.9 million, which reflected the impact of the 7 million dollar one-off option fee, which, after excluding the effect of the option fee, was 8.9 million in the first quarter of the fiscal year and 37.5% per cent compared with the same period last year;

5. Similarly, in the first quarter of the financial year 2014, the operating income of the state-run $5.7 million was also due to the 7 million dollar one-time option fee, which, after excluding the effect of the option fee, was 2014 U.S. dollars in the first quarter of the fiscal year, and 12.6 million in the same period last year. At the same time, after excluding the impact of option costs, the first quarter of the fiscal year 2014 earnings per share of 0.26 U.S. dollars, that is, 0.13 U.S. dollars per depository shares, the same period in 2013 earnings per share of 0.19 U.S. dollars, that is, each depository shares of 0.09 dollars;

6, this exclusion of one-time options cost impact adjustment is in the United States listed companies are usually reported and disclosed, known as the Non-US GAAP report financial data to reflect the company's exclusion of such costs after the impact of financial operations results.

In addition, Thomson Reuters has made the mistake of calculating an average annual income forecast for the year 2014, mistaking the average full-year income for 323 million dollars, Analysts have calculated the correct value of 289.1 million dollars for the annual revenue forecast for the year 2014. On August 26, 2014, about 1 o'clock in the afternoon Hong Kong time, Thomson Reuters has corrected the data. Prior to the 2014 fiscal year to make a full annual income forecast between 283 million U.S. dollars and 290 million U.S. dollars, the current ambassador of love to this income is expected to confirm again. (Lin)