MeVis Medical Solutions AG

Earnings Release • May 30, 2011

News Details

Corporate | 30 May 2011 11:00

Profitable first quarter for MeVis:

MeVis Medical Solutions AG / Key word(s): Interim Report/Quarter
Results

30.05.2011 / 11:00

MeVis Medical Solutions continues to profit from strong maintenance
business

* Consolidated sales of EUR 3.7 million stay at previous year's level
* Share of maintenance business rises to 42% (previous year 28%)
* New license business drops 20% to EUR 2.1 million (previous year EUR 2.6
million)
* Earnings before interest and taxes (EBIT) amount to EUR 0.5 million
(previous year
EUR 0.2 million)
* EBIT margin is 14% (previous year 4%)
* Financial result comes to EUR -0.2 million (previous year EUR -0.3
million)
* Earnings before taxes increase to EUR 0.2 million (previous year EUR -0.1
million)
* High volume of deferred taxes impacts consolidated earnings of EUR -0.2
million (previous year EUR -0.1 million)

Bremen, May 30, 2011 - MeVis Medical Solutions AG [ISIN: DE000A0LBFE4], a
leading software company in medical imaging, today announced its results
for the first quarter of 2011. Consolidated revenues have been rising again
for the first time in three quarters and at EUR 3,718 k reached the same
level as in the first quarter of 2010. The composition of consolidated
sales continued to change in favor of the maintenance business. While this
business carried on developing dynamically with revenues growing by 51% to
EUR 1,545 k (previous year EUR 1,021 k), revenues from license sales
dropped by 20% to EUR 2,086 k (previous year EUR 2,614 k).

New business therefore continued to stagnate at the level of the previous
three quarters. The main reasons for this development were market
saturation effects in the company's core business of digital mammography in
the US, one of its key sales markets. The competitive positions of
individual equipment and component manufacturers in the area of breast MRI
have been shifting in the wake of the latest consolidations in this market.

The Digital Mammography segment once again proved to be a solid pillar of
the company with sales growing by 6% to EUR 2,876 k (previous year EUR
2,720 k). This is primarily due to the further significant increase in
maintenance revenue, which contributed 48% (previous year 31%) to segment
revenues in the period under review. Throughout the Group, the share of
maintenance revenue went up to 42% (previous year 28%).

New products in the neurology and lung diagnostics business continued
developing disappointingly in a stagnating market environment. Revenues in
the Other Diagnostics segment therefore went down by 16% to EUR 842 k
(previous year: EUR 999 k). The company's lung product Visia(TM) CT-Lung
System once again did not generate any significant sales in the past
quarter.
'We just released the first cardiac product jointly developed with our
Dutch industry partner Medis for sale outside the USA in mid-May,' said
Thomas E. Tynes, President & CEO of MeVis Medical Solutions, Inc.,
Pewaukee, USA, and member of the Executive Board of MeVis Medical Solutions
AG. 'This is an application based on our Visia(TM) technology to support
MRI-based diagnostics of cardiovascular disease.'

The company plans to launch further applications beginning in the first
quarter of 2012.

'Apart from the established product features of our software applications,
which make them valuable for advanced clinical use, our Visia(TM)
applications particularly stand out with their improved integration
capabilities and architecture allowing for a more cost-effective
adaptation to existing medical imaging IT systems,' commented Dr. Carl J.G.
Evertsz, CEO of MeVis Medical Solutions AG. 'This, we hope, will improve
our access to further industry partners.'

Capitalized development costs within the Group rose by 56% to EUR 782 k
during the period under review (previous year EUR 502 k). The drop in staff
costs by 10% to EUR 2,510 k (previous year EUR 2,784 k) also contributed to
the 44% increase in earnings before interest, taxes, depreciation and
amortization (EBITDA) to EUR 1,413 k (previous year EUR 982 k). The number
of employees fell by 6% from 169 to 159 full-time equivalents at the end of
the quarter. Other operating expenses went up by 18% and came to EUR 727 k
during the period under review (previous year EUR 617 k). This is mainly
the result of legal and consulting costs rising to EUR 87 k (previous year
EUR 4 k).

Depreciation and amortization on previously capitalized development costs,
which went up as planned by 32% to EUR 529 k (previous year: EUR 401 k),
were offset by a slight drop of 18% in other acquired intangible assets to
EUR 259 k (previous year: EUR 314) on account of the balance sheet
adjustment at the end of 2010. Total depreciation and amortization climbed
by 9% to EUR 904 k during the period under review (previous year EUR 832
k). The rate of total capitalization, in other words the ratio between
depreciation and amortization on capitalized development costs and newly
recognized own development activities, amounted to 0.68 in the period under
review (previous year 0.70).

Earnings before interest and taxes (EBIT) therefore increased by 239% to
EUR 509 k (previous year EUR 150). The EBIT margin rose correspondingly to
14% (previous year 4%).

Earnings before taxes climbed to EUR 223 k (previous year EUR -97 k),
corresponding to a return on sales of 6% (previous year -3%). Taking into
account much higher income tax expenses, which mainly consisted of expenses
from deferred taxes that do not have an effect on liquidity, consolidated
net loss for the period came to EUR -190 k (previous year
EUR -150 k). Earnings per share therefore amounted to EUR -0.11 (previous
year EUR -0.09). Deferred taxes primarily originated from the strategic
acquisition of Siemens' shares in MeVis BreastCare Solutions GmbH & Co. KG
and the recognition of development costs.

Liquid funds came to EUR 10,429 k at the end of the first quarter (December
31, 2010: EUR 8,162 k).

'In light of business developments to date, we are confirming our forecast
contained in the 2010 consolidated annual report. We expect another slight
reduction in consolidated sales for the current financial year, based on
the decrease in the new licensing business at the group level in the 2010
financial year,' stated Dr. Robert Hannemann, member of the Executive Board
of MeVis Medical Solutions AG. 'Consolidated earnings before interest and
taxes (EBIT) should be slightly positive on account of the ongoing savings
regarding operating expenses, the reduced number of employees and the lower
risk of impairment losses resulting from the balance sheet adjustment on
December 31, 2010.'

Taking into consideration the development of US dollar exchange rates, the
currency in which around 80% of bills are invoiced within the Group, as
well as current market and business developments, the Executive Board will
define its forecast during the course of the financial year.

The financial reports are available for download on the company's website
at http://www.mevis.de/mms/en/Financial_Reports.html.

End of Corporate News

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Language: English
Company: MeVis Medical Solutions AG
Universitätsallee 29
28359 Bremen
Deutschland
Phone: +49 421 224 95 0
Fax: +49 421 224 95 11
E-mail: ir@mevis.de
Internet: http://www.mevis.de
ISIN: DE000A0LBFE4
WKN: A0LBFE
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, München, Stuttgart

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126709 30.05.2011