Carasent

Quarterly Report • Apr 28, 2020

Carasent Reports First Quarter 2020 Results

Oslo, Norway – April 28, 2020 – Carasent ASA® (OSE: CARA), announced its unaudited financial results for the three months ended March 31, 2020.

Interim Management Report

Evimeria EMR AB had a strong first quarter in line with our expectations and with no substantial Covid-19 effects.

Overview of First Quarter 2020 results for Evimeria EMR AB (in SEK and IFRS adjusted*).

*Previously we have reported Swedish GAAP numbers for Evimeria, but to increase transparency we will, starting this quarter, report IFRS adjusted numbers. A multi year overview for previous years is presented in the section Evimeria Adjusted IFRS below.

• Revenue of SEK 15.9 million, an increase of 35% as compared to Q1 2019.
• EBITDA of SEK 6.0 million as compared to SEK 3.6 million during Q1 2019.
• EBIT of SEK 3.7 million as compared to SEK 2.5 million during Q1 2019.
• Signed 23 new clinics during the First Quarter 2020, which is above previous year. Ended the Fourth Quarter with 427 active clinics.

Overview of First Quarter 2020 consolidated results for Carasent ASA (in NOK and IFRS).

• Revenues of NOK 15.6 million as compared to NOK 11.1 million during Q1-19.
• Net income of NOK 0.4 million as compared to NOK 1.0 million during Q1-19.
• Cash balances of NOK 9.4 million at March 31, 2020.

Key Highlights of First Quarter 2020

The quarter started off as expected with high market activity and strong demand. All segments showed good progress and add on sales to existing customer based continued.

With the rapid change in the pandemic situation in early March we saw higher level of uncertainty in the marketplace. However, the effects for Evimeria proved to be limited and the performance came out strong and in line with our expectations.

23 new clinics were signed during the quarter and add on sales to existing customer base continued to show good progress.

As a result, the revenue growth was 35% compared to first quarter 2019 and the scalability of the business and delivery model continues to increase earnings.

Outlook and Covid-19 effects

Evimeria has so far seen limited effects of the coronavirus situation. The overall activity in our customer base has decreased slightly in April but with large variances and effects within different segments and services.

Out-patient visits and non-emergency specialist care has decreased while customer activity within the online segment has increased. Demand for digital services, such as video, has increased rapidly and many clinics are in the process of transforming parts of their operations to a digital environment.

Sales and market activities are lower, but not significantly. More than 70% of Evimerias sales efforts are already conducted with digital interaction and so far in April we have already signed seven new clinics.

Evimeria has taken measures to protect employees and support the ongoing efforts to contain the Covid-19 pandemic in line with recommendations, and the transition to remote work has so far been seamless for our employees, customers and business partners.

At this stage, we do not believe that the overall effect for Evimeria to be dramatic and we will continue to invest in our expansion projects with regards to new segments, geographies and new services.

However, the impact near term will depend on the overall development of the pandemic itself and the public measures taken to contain the spread of the virus, which in some scenarios could impact Evimeria through lower growth rates and increasing credit risk. Two clinics has during April temporarily closed down their operations.

Long term, we reiterate our market view. The market development, seen from a fundamental perspective - that is, the need for a growing healthcare sector and need for new value-creating and effective digital solutions - is very strong. The background to this is the underlying trends, with a growing aging population and an increased outpatient healthcare in a hard-pressed public sector.

Evimeria Adjusted IFRS in SEK (Amounts in 1,000 SEK)

EVIMERIA IFRS ADJUSTED	2 016	2 017	2018	2 019	Q1 2019	Q1 2020
Webdoc license	9928	13 967	19855	26716	5 944	8 030
Integrated Services	7 312	9326	14 130	19875	4678	6689
Consulting	113	1571	3 340	4 718	1 151	1 200
Other				75	74	16
REVENUES	17352	24 864	37 325	51 385	11 847	15 935
Growth %		43%	50%	38%		35%
COGS	3 869	551	7516	9 388	2 263	3 164
GROSS MARGIN	13 484	19313	29 809	41 997	9584	12 771
GM %	78%	78%	80%	82%	81%	80%
OPEX	8 953	13 586	21 108	24 579	6018	6742
EBITDA	4531	5 727	8 700	17 417	3 566	6029
EBITDA%	26,1%	23,0%	23,3%	33,9%	30,1%	37,8%
D&A	1 585	1 608	1689	4 443	1032	2 284
EBIT	2 946	4 120	7 012	12 975	2534	3 745
EBIT%	17,0%	16,6%	18,8%	25,2%	21,4%	23,5%

Financial Results – First Quarter 2020

Revenue for the first quarter of 2020 totaled NOK 15.6 million as compared 11.1 million during the first quarter 2019. All revenues are related to Evimeria EMR AB.

Operating expenses for the first quarter of 2020 totaled NOK 10.9 million as compared NOK 8.0 million during the first quarter of 2019. Operating expenses excludes cost of sales and amortizations. The operating expenses relates to two different areas.

NOK 9.8 million of the operating expenses for the first quarter of 2020 relates to Evimeria EMR AB. NOK 1.1 million consists of professional fees (legal, accounting and consulting) along with public Company costs such as stock exchange registration, insurance and board remuneration fees.

Operating income for the first quarter of 2020 totaled NOK 1.7 million as compared to NOK 0.9 million during the first quarter of 2019.

Other financial expenses of NOK 0.9 million relates to a fair value assessment of the existing stock option program.

Net income for the first quarter of 2020 totaled NOK 0.4 million as compared to NOK 1.0 million during the first quarter of 2019.

The Company ended the first quarter of 2020 with NOK 9.4 million of available cash balances and outstanding interest-bearing debt of NOK 1.9 million (not including lease liability).

Financial Statements – Basis for Preparation

The enclosed consolidated condensed financial statements have been prepared in accordance with IAS 34 - Interim Financial Reporting Standards (IFRS).

Statements of income

		Three Months Ended
		March 31, 2020	March 31, 2019
(Amounts in NOK 1,000)	Note	IFRS	IFRS
Operating Revenues
Revenues	2	15 633	11 077
Total Operating Revenues		15 633	11 077
Cost of Sales
Direct Costs of Revenues		3 099	2 116
Total Cost of Sales		3 099	2 116
Gross Profit		12 534	8 960
Operating Expenses
Employee Compensation and Benefits		4 801	4 529
Other Operational and Administrative Costs	3	2 908	1 724
Depreciation and Amortization	3	3 146	1 776
Total Operating Expenses		10 856	8 029
Operating Income		1 678	931
Other Expense
Interest Expense		180	50
Other Financial Expense		901
Other Income and Expense			24
Total Other Expense		1 081	73
Income Before Income Taxes		597	858
Income Tax Expense		(209)	186
Net Income for the Period		387	1 044
Attributable to Equity Holders of Parent		387	1 044
Earnings Per Share:	Basic	0,01	0,03
	Diluted	0,01	0,03
Attributable to Equity Holders of Parent		0,01	0.03

Statement of comprehensive income

		3 Months Ended
		March 31, 2020	March 31, 2019
(Amounts in NOK 1,000)	Note	TERS	IFRS
Net Income for the Period		387	1 044
Changes in translation differences		9 910	(2 560)
Change in Valuation of Investments for Sale
Items that may be Reclassified Subsequently to Income Statement		9 910	(2 560)
Items that will not be to Income Statement
Total Other Comprehensive Income/(Loss) for the Period		9 910	(2 560)
Total Comprehensive Income/(Loss) for the Period		10 297	(1 516)
Attributed to Equity Holders of Parent		10 297	(1 516)

Statement of financial position

		March-20	March-19	December-19
		2020	2019	2019
(Amounts in NOK 1,000)	Note	IFRS	IFRS	IFRS
ASSETS
Non-Current Assets
Customer Relationships		21 176	22 897	19 429
Goodwill		64 821	57 882	58 813
Webdoc (IP)		26 020	16 103	21 147
Total Intangible Assets, net		112 046	96 882	99 389
Tools and Equipment		1 360	774	1 090
Right of use Asset	ﻟﺮﺍ	17319	3 280	16 561
Total Tangible assets		18 679	4 055	17651
Total Non-Current Assets		130 725	100 937	117 040
Current Assets
Customer Receivables		8 578	7 638	7 667
Other Receivables		485	469	464
Prepaid Expenses		1 881	716	562
Cash and Cash Equivalents		9 386	7 175	10 928
Total Current Assets		20 329	15 998	19 620
TOTAL ASSETS		151 055	116 935	136 660
LIABILITIES AND SHAREHOLDERS EQUITY
Equity Attributed to Equity Holders of the Parent
Share Capital		54 124	54 124	54 124
Other Paid-in Capital		35 819	35 818	35 819
Retained Earnings		10 929	(27)	634
Total Shareholders Equity		100 873	89 915	90 577
Other Liabilities to credit institutions		1 134	1 954	1 134
Lease liability		14 773	2 815	14 152
Liability Stock Option Program		3 680		2 780
Deferred tax liability		7 646	6 660	7 008
Total non-current liabilities		27 233	11 429	25 074
Current Liabilities
Trade Accounts Payable		2 254	2 234	1917
Accrued Expenses and Prepaid Income		7 629	6 388	7 396
Contract liability		6 147	3 978	5 270
Tax Payable		418	212	1 146
Current Liabilities to credit institutions		742	930	851
Current lease liability		3 176	514	2 607
Other Current Liabilities		2 583	1 335	1 823
Total Current Liabilities		22 949	15 591	21 010
TOTAL LIABILITIES AND EQUITY		151 055	116 935	136 660

Statement of cashflows

		3 Months Ended March 31
		2020	2019
(Amounts in NOK 1,000)	Note	IFRS	IFRS
Cash Flows from Operating Activities
Profit Before Taxes		596	858
Depreciation and Amortization		3 146	1 776
Change in Accounts Receivable		(911)	992
Change in Accounts Payable		337	(1 109)
Change in Current Assets & Liabilities		(369)	(1 774)
Income Tax Paid and accounting dispositions			(217)
Net Cash Flows Provided by Operating Activities		2 799	526
Cash Flows from Investing Activities
Investments in intangible and tangible assets		(4 239)	(1 804)
Cash Flows Used in Investing Activities		(4 239)	(1 804)
Cash Flows from Financing Activities
Payment Lease Liability		(653)	(160)
Repayment of Debt		(109)	(192)
Stock Option Program
Cash Flows Used in Financing Activities		(762)	(352)
Effect of Exchange Rates on Cash and Cash Equivalents		659	32
Net Change in Cash and Cash Equivalents		(1 543)	(1 598)
Cash and Cash Equivalents at Beginning of Period		10 928	8 773
Cash and Cash Equivalents at End of Period		9 386	7 175

Statement of changes in equity

	Share capital	Share Premium Other Paid in		Retained Earning	Total Equity
(Amounts in NOK 1000)		Reserve	Capital
Equity December 31, 2018	54 124	35 819		1 491	91 432
Net Income for the Period				1 044	1 044
Changes in translation differences				(2 560)	(2 560)
Other Comprehensive Income				(1 516)	(1 516)
Equity March 31, 2019	54 124	35 819		(27)	89 915

Share capital	Share Premium	Other Paid in	Retained Earning	Total Equity
	Reserve	Capital
54 124	35 819		636	90 577
			387	387
			9 910	9 910
			10 297	10 297
54 124	35 819		10 933	100 873

Note 1 – General information

Carasent ASA ("Carasent", the "Company" or the "Group") is a public Company registered in Norway and traded on the Oslo Stock Exchange with a registered business address at c/o Advokatsenteret Kristian Augusts gate 14, Oslo, Norway.

The condensed consolidated financial statements for the first quarter of 2020 were approved by the Board of Directors for publication on April 28, 2020.

The condensed consolidated financial statements comprise Carasent ASA and it subsidiary Evimeria EMR AB. The interim financial statements are prepared in accordance with the International Accounting Standard (IAS) 34. The condensed consolidated financial information does not include all information and disclosure required in the annual financial statements and should be read in conjunction with the consolidated financial statements for the year ended 31 December 2019, which have been prepared in accordance with International Financial Reporting Standards as adopted by the EU (IFRS).

The accounting policies applied by Carasent in these interim financial statements are consistent with those of the financial year 2019. The interim financial statements are unaudited. The presentation currency is NOK (Norwegian Krone). All financial information is presented in NOK thousands, unless otherwise stated.

The entire operations of the Group is related to Evimeria EMR AB.

Note 2 – Revenue and Segment Information

The Company has assessed its internal organizational structure, internal reporting system and geographical business units, and concluded that it does not have any reportable segments that should be reported separately.

All revenues are related to Evimeria EMR AB, Webdoc related services to customers in Sweden. The following table summarizes the components of the Company's revenue to customers.

	3 Months Ended	Year Ended
	March 31,	December 31,
(Amounts in NOK 1000)	2020	2019
Webdoc License	7 878	24 919
Addon services	7 755	23 008
Other revenues
Total Revenues	15633	47 927

Note 3 – Right of use assets and lease liabilities

Carasent implemented IFRS 16 on 1 January 2019. Reference is made to 2019 financial statements. Changes right of use assets and Lease liabilities in the period relates to:

(Amounts in NOK 1000)	Right of use Assets	Lease liability
Balance December 31, 2019	16 561	16 758
Termination
Additions
Depreciation/Amortization	(903)	(653)
Fx effects	1662	1 843
Balance March 31,2020	17319	17 949

About Carasent

Founded in 1997, Carasent ASA was previously the parent company of Apptix, Inc. Carasent withdrew from the US market in 2017. In May 2018 Carasent acquired the Swedish Company Evimeria EMR AB, a company providing cloud-based medical record services to the health care industry. The Company's strategy is to continue to develop and expand digitalization that helps customers to meet challenges in providing efficient and qualitative health care services. For more information, visit carasent.com

For further information:

Johan Lindqvist (Chairman) johan.lindqvist@windchange.se +46 733 55 09 35