AI assistant
ContextVision AB Interim / Quarterly Report 2010
9979_rns_2010-08-19_5afbf8a3-d1d2-4d36-8b86-7025124dc71a.pdf
Interim / Quarterly Report
Open in viewerOpens in your device viewer
CONTEXTVISION
IMAGE IS EVERYTHING
ContextVision AB
Second quarter 2010
COV reports Q2
Q2 HIGHLIGHTS:
- Major OEM order for MSEK 6.0 (650 k€) received
- Anita Tollstadius appointed as chairman of the board and executive chairman
- Q2 sales grow over Q1 and the company returns to operational profitability.
FINANCIAL DATA
Second quarter 2010
- Sales of 13.4 MSEK (15.7)
- Operating result of -3,6 MSEK (0.8) and result before tax of -3.8 MSEK (0.6)
-
Earnings per share of -0.50 (0.03) SEK
-
Underlying Q2 operating profit of 1.6 MSEK
- Associated company SharpView goes into bankruptcy. Non cash loss from associated company 5.2 MSEK recorded during the period.
ContextVision is the software imaging partner to the most recognized medical equipment manufacturers worldwide, enabling them to rapidly deliver leading products to market and provide next-generation upgrades while focusing on their customers. Context Vision's world leading imaging software offers the greatest image clarity and quality available, enabling unprecedented diagnostic confidence. The company has offices worldwide with management in Stockholm, Sweden and listed on the Oslo Stock Exchange, Norway (ticker: COV)
ContextVision AB, Second quarter 2010 financial results Page 1 of 9
CONTEXTVISION
IMAGE IS EVERYTHING
Management Comment
Anita Tollstadius, the company's executive chairman commented:
During the second quarter management focused on sales increase, return the company to profitability and to continue the strategic process for future growth.
As previously announced, last year, the company initiated a strategic process with an aim to maximize the company's assets and growth potential including evaluating a merger or other strategic opportunities. A significant step in this direction was achieved in early July with the signing of a memorandum of understanding with a large, diversified and one of the fastest-growing medical equipment manufacturers in the world. What is particularly intriguing about our potential partner is that the company is already present, well entrenched and ideally positioned to continue to take advantage of the inherently strong demand for western-standard medical equipment in the Asian / Pacific regions. While no final agreement has yet been reached, we are working diligently to secure an agreement that would change the profile of our company as we know it today.
Sales during the second quarter were in-line with our expectations and we are very pleased to achieve positive growth over the first quarter. We are also pleased to observe that several of our ultrasound and x-ray customers appear to be experiencing a recovery in their sales to end-users. We signed 5 new OEM contracts (4 new customers) during the quarter, 2 x-ray- and 3 ultrasound manufacturers in Europe and Asia. In June, we also signed a major agreement with an ultrasound manufacturer valued at MSEK 6.0 that we expect to be delivered within the next twelve months. The agreement is yet another testimony to the GOP technology's superior competitive position within the ultrasound segment.
On a less favourable note, SharpView AB (publ) filed for bankruptcy in the end of June.
SharpView was a spin-off from ContextVision in 2007 and listed as an independent company on NGM in Stockholm 2008. SharpView had the exclusive rights to sell the ContextVision GOP-based solutions to the end-user market, but the sales did not develop as expected. Following down-sizing earlier this year, the company continued to suffer from the hospital budget constraints and in June, the board of SharpView decided to file for bankruptcy.
As a consequence, ContextVision booked a full write-down of the remaining receivables on SharpView as well as the carrying value of its investment in SharpView. A total of MSEK 5,2 MSEK has negatively affected the result of ContextVision for the period. Following the complete write-down there are no more risks involved for ContextVision related to SharpView.
Another consequence of the bankruptcy is that the license agreement between the companies was immediately terminated, which means that the exclusive right of selling GOP-based solutions to the end-user market now returns to ContextVision.
Excluding the write-down of SharpView debts and shares, the operating result was positive, which again was an improvement from Q1.
A change in the management of the company was announced in June. After seven years as CEO, Jan Erik Hedborg left the executive position to pursue other opportunities. He will, however, consult with the company during the transition period. Under Jan Erik's leadership, ContextVision's customer base has been significantly expanded throughout the world and the company's reputation as the leading provider of image enhancement software has expanded and solidified. The Board thanks Jan Erik for his significant contributions to the company during his tenure and wishes him all the best for the future.
The present chairman, Anita Tollstadius, was appointed as executive chairman until a permanent CEO has been recruited. The recruitment process is ongoing.
The near-term focus of the management is on sales and on developing the strategic direction of the company. We are looking forward to provide more information about the progress during the quarters to come.
ContextVision AB, Second quarter 2010 financial results Page 2 of 9
CONTEXTVISION
IMAGE IS EVERYTHING
Net sales and operating profit
Second quarter 2010
Net sales
- Quarter two sales for ContextVision were 13.4 MSEK, compared to 15.7 MSEK prior year.
Operating profit and margin
- The operating result was -3.6 MSEK (0.8) with an operating margin of -26.9 % (0.3 %).
- A loss of 5.2 MSEK was recorded during the period, as a result from associated company. The underlying operating profit was 1.6 MSEK during the period.
- By the end of June, associated company Sharpview AB publ went into bankruptcy. As a consequence Contextvision has as of June 30, 2010 written down all assets related to Sharpview to zero based on the assumption that it is not likely that any assets will be recoverable following the liquidation. The total of the write-down is 5.2 MSEK, recorded as part of operational costs. There are no remaining assets to be written off in the future.
Cash-flow and financing
- Cash flow from operations represented a decrease of 1.5 MSEK (0.9).
- Cash amounted to 13.8 MSEK (17.1) at period end. After period end, the cash situation improved as a result of a customer payment of 3.7 MSEK.
- Equity at period end amounted to 35.9 (40.6) MSEK giving an equity ratio of 81% (78%).
- An additional tax cost of 0.3 MSEK was recorded during the period, due to a voluntary correction of tax assessments from previous years.
Annual General Meeting
- The AGM was held on June 3. The AGM approved the 2009 annual report and the board of directors was discharged from liability.
- Magne Jordanger, Martin Hedlund, Erik Danielsen and Anita Tollstadius were re-elected as board members.
- Former chairman of the board, Knut Brundtland, has been appointed as a partner and CEO for ABG Sundal & Collier, a leading Nordic investment bank. Due to regulatory obligations related to his new position, Mr. Brundtland has to disengage from all board assignments, and has therefore left the board of ContextVision.
- At a board meeting following election, Mrs. Anita Tollstadius was appointed to be the new chairman of the board.
ContextVision AB, Second quarter 2010 financial results Page 3 of 9
CONTEXTVISION
IMAGE IS EVERYTHING
Employees and management
- The company announced a change in management on the 21st of June. The company is entering a new phase and the board of directors has decided to appoint Anita Tollstadius as executive chairman until a new CEO has been recruited. Present CEO, Jan Erik Hedborg, will remain in the company during the transition period.
- At period end the company had 36 (37) employees of which 15 are dedicated to research and development. Three employees are located in the United States of America and one in China.
- During the period, two new employees joined the company to strengthen the customer and product support group.
ContextVision group
- The group consists of ContextVision AB (publ), company registration number 556377-8900 as the parent company, and ContextVision Inc Corp registration number 36-4333625 State of Illinois, USA, as the wholly owned subsidiary.
Business operations
- Sales by region for the quarter are as follows (MSEK): Asia 5.6, Europe 5.2 and USA 2.6.
- Sales by product for the quarter are as follows (MSEK): Ultrasound 8.0, X-Ray 2.2 Magnetic Resonance 1.9 and Other 1.2 (other consists of GOPView iRV, GOPView CT and GOPView MAMMO).
Risks & uncertainties
- Consolidation of the medical business occurs on a regular basis with the general purpose of enhancing technical competence and gaining market shares, at the same time as competition decreases. Besides consolidations, new players enter the market and challenge the established actors. The trends above represent both threats and opportunities for ContextVision.
The quarter report provides a fair and true overview of the company's and the Group's activities, position and results, and describes the risks and uncertainties of significance faced by ContextVision and by the companies in the Group.
The Board of Directors of ContextVision AB
Stockholm 2010-08-19
This report has not been reviewed by the company's auditors.
ContextVision AB, Second quarter 2010 financial results Page 4 of 9
CONTEXTVISION
IMAGE IS EVERYTHING
Presentation and reporting dates
This quarterly report will be published on the company’s website on the 19th of August. There will be a webcast presentation released on the 20th of august, at 09.00 CET. Please follow the link: http://www.cik.no/contextvision/100820/100820_contextvision.php
Please visit our website for further information, www.contextvision.com, or use [email protected] to send a question directly to management.
Reporting dates
Q2 result 2010 August 19, 2010
Q3 result 2010 October 21, 2010
Q4 2010 and annual result 2010 February 17, 2011
For more information please contact:
Anita Tollstadius, executive chairman Phone +46 (0)8 750 35 59
ContextVision fast facts
- ContextVision is a spin-off from the Image Processing Laboratory at Linköping University, Sweden. The corporate identity was established in 1983 with the first OEM agreement in radiology in 1987. ContextVision is traded on the Oslo Stock Exchange since 1997.
- ContextVision enhances significant information in digital images using proprietary GOP technology. The company offers:
- More than 25 years successful experience in OEM business
- Unprecedented image enhancement for x-ray, MRI, CT, and ultrasound images
- Long standing corporate commitment to R&D that ensures timely and rewarding upgrade paths
- Strong customer relationships to ensure their success
- Expert training in image processing for our customers
- Compatibility across any image format and all major computer platforms
- ContextVision’s technology enables the company’s customers to provide superior digital imaging solutions for hospitals and clinicians. Such solutions promise more rapid and accurate diagnoses, reduced operator eye fatigue, and ultimately, a greater return-on-investment for medical imaging users.
ContextVision AB, Second quarter 2010 financial results Page 5 of 9
CONTEXTVISION
IMAGE IS EVERYTHING
Income Statement (SEK 1000)
| Q2 2010 | Q2 2009 | Six months 2010 | Six months 2009 | 2009 | |
|---|---|---|---|---|---|
| Net sales | 13 383 | 15 735 | 24 783 | 28 014 | 54 731 |
| Total revenues | 13 383 | 15 735 | 24 783 | 28 014 | 54 731 |
| Goods for resale | -429 | -349 | -689 | -447 | -1 489 |
| Other external costs | -3 759 | -5 197 | -7 795 | -9 052 | -17 950 |
| Personnel costs | -6 949 | -8 724 | -13 515 | -16 375 | -29 882 |
| Depreciation assets | -679 | -654 | -1 370 | -1 300 | -2 805 |
| Result from associated company 1/ | -5 161 | - | -5 426 | - | - |
| Write-down of intangible assets | - | - | - | - | -1 933 |
| Operating results | -3 594 | 811 | -4 012 | 840 | 673 |
| Interest income | - | 13 | 59 | 343 | 341 |
| Interest costs and similar profit / loss items | - | - | -7 | -1 | -20 |
| Write-down of assets held for sale | - | - | - | - | -8 973 |
| Results after financial items | -3 594 | 824 | -3 960 | 1 182 | -7 979 |
| Tax | -244 | -219 | -321 | -377 | -273 |
| Net results | -3 839 | 605 | -4 280 | 805 | -8 252 |
| Earnings per share after tax, SEK | -0,50 | 0,08 | -0,55 | 0,10 | -1,05 |
Consolidated Statement of comprehensive income (SEK 1000)
| Q2 2010 | Q2 2009 | Six months 2010 | Six months 2009 | 2009 | |
|---|---|---|---|---|---|
| Effect of currency hedging | -365 | 1 261 | -598 | 1 136 | 2 116 |
| Fair value adjustment of assets available for sale | - | -832 | - | -3 655 | -4 368 |
| Fair value adjustment for assets available for sale transferred to the income statement during the period | - | - | - | - | 8 973 |
| Translation difference | 167 | -108 | 98 | -27 | -87 |
| Total other comprehensive income | -198 | 321 | -500 | -2 546 | 6 634 |
| Net result for the period | -3 839 | 605 | -4 280 | 805 | -8 252 |
| Total comprehensive income for the period | -4 037 | 926 | -4 780 | -1 741 | -1 618 |
Financial Highlights
| Q2 2010 | Q2 2009 | Six months 2010 | Six months 2009 | 2009 | |
|---|---|---|---|---|---|
| Earnings per share after tax, SEK | -0,50 | 0,08 | -0,55 | 0,10 | -1,05 |
| Operating margin (per cent) | -26,9 | 5,2 | -16,2 | 3,0 | 1,2 |
| Solidity (per cent) | 81,0 | 78,0 | 81,0 | 78,0 | 81,7 |
ContextVision AB, Second quarter 2010 financial results Page 6 of 9
CONTEXTVISION
IMAGE IS EVERYTHING
Consolidated Balance Sheet (SEK 1000)
| Q2 2010 | Q2 2009 | 2009 | |
|---|---|---|---|
| Intangible fixed assets | 11 882 | 12 826 | 11 247 |
| Tangible assets | 1 394 | 1 744 | 1 438 |
| Participation in associated companies | - | - | 1 426 |
| Long-term receivables from associated companies | - | - | 2 000 |
| Other financial assets | 50 | 2 189 | 50 |
| Inventories | 329 | 802 | 404 |
| Current receivables | 16 855 | 18 352 | 23 185 |
| Cash and bank | 13 829 | 16 105 | 10 067 |
| Total assets | 44 339 | 52 018 | 49 817 |
| Equity | 35 897 | 40 555 | 40 678 |
| Provisions | 874 | 737 | 1 088 |
| Current liabilities | 7 568 | 10 726 | 8 051 |
| Total equity and liabilities | 44 339 | 52 018 | 49 817 |
Change in equity (SEK 1000)
| Q2 2010 | Q2 2009 | Six months 2010 | Six months 2009 | 2009 | |
|---|---|---|---|---|---|
| Opening balance | 39 934 | 39 629 | 40 678 | 49 535 | 49 535 |
| Total comprehensive income for the period | -4 037 | 926 | -4 780 | -1 741 | -1 618 |
| Repurchase of own shares | - | - | - | -7 239 | -7 239 |
| Closing balance | 35 897 | 40 555 | 35 897 | 40 555 | 40 678 |
1/ The Sharpview investment
During the 2nd quarter associated company Sharpview AB publ went into bankruptcy. As a consequence Contextvision has as of June 30, 2010 written down all assets related to Sharpview to zero based on the assumption that it is not likely that any assets will be recoverable following the bankruptcy. This implies that the equity investment in Sharpview has been written off by 1.161 TSEK and outstanding receivables on Sharpview by 4.000 TSEK, totaling 5.161 TSEK, during the 2nd quarter 2010.
ContextVision AB, Second quarter 2010 financial results Page 7 of 9
CONTEXTVISION
IMAGE IS EVERYTHING
Consolidated Statement of Cash Flows (SEK 1000)
| Q2 2010 | Q2 2009 | 6 months 2010 | 6 months 2009 | |
|---|---|---|---|---|
| Result after financial items | -3 594 | 824 | -3 960 | 1 182 |
| Depreciation and write-down of assets | 679 | 654 | 1 372 | 1 302 |
| Result from participation in associated company | 5 160 | 5 426 | ||
| Unrealized gain/loss on current investments | -365 | -158 | -598 | 859 |
| Changes in provisions | -130 | 450 | -214 | 450 |
| Income tax paid | -642 | -1 034 | -1070 | -7 385 |
| Cash flow from operating activities before change in working capital | 1 108 | 736 | 956 | -3 592 |
| Change in working capital | ||||
| Increase(-)/decrease(+) inventories | -164 | -131 | 75 | -373 |
| Increase(-)/decrease(+) current receivables | -878 | -1 944 | 7129 | -310 |
| Increase(+)/decrease(-) liabilities | -480 | 1 582 | -435 | -797 |
| Cash flow from operating activities | -414 | 243 | 7 725 | -5 072 |
| Investing activities | ||||
| Investments in intangible assets | -986 | -1 058 | -1 732 | -2 715 |
| Investments in tangible assets | -108 | -206 | -231 | -273 |
| Investments in financial assets | - | - | -2 000 | - |
| Short-term investments | - | - | - | 15 202 |
| Cash flow from investing activities | -1 094 | -1 264 | -3 963 | 12 214 |
| Financing activities | ||||
| Repurchase of own stock | - | - | - | -7 239 |
| Cash flow from financing activities | 0 | 0 | 0 | -7 239 |
| Cash flow for the period | -1 508 | -1 021 | 3 762 | -97 |
| Change of liquid assets | ||||
| Liquid assets at beginning of period | 15 337 | 17 126 | 10 067 | 16 201 |
| Liquid assets at period end | 13 829 | 16 105 | 13 829 | 16 105 |
Basis of preparation
The interim condensed consolidated financial statements for the 2:nd quarter ended June 30, 2010 have been prepared in accordance with IAS 34 Interim Financial Reporting. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as of 31 December 2009.
ContextVision AB, Second quarter 2010 financial results Page 8 of 9
CONTEXTVISION
IMAGE IS EVERYTHING
GLOSSARY
CT (COMPUTED TOMOGRAPHY)
A diagnostic device through which a two-dimensional cross-sectional image of the studied tissue is obtained using X-rays.
DR (DIRECT RADIOGRAPHY)
A detector that converts X-ray photons into digital signals, replacing the need for X-ray films.
FLUOROSCOPY
An X-ray imaging technique that produces real-time images of a patient's internal structures on a TV monitor. Fluoroscopy allows the study of dynamic processes within the body and can be used for guidance in interventional procedures.
GOP® (GENERAL OPERATOR PROCESSOR)
A term for ContextVision's methodology in detecting structures in an image and relating them to their wider context in order to increase visualization accuracy.
GOPVIEW®
The family name for ContextVision's product lines of OEM-embedded software.
HCU (HAND CARRIED ULTRASOUND)
A portable, battery-powered ultrasound machine no larger than a briefcase.
IMAGE ANALYSIS
Processing a digital image in order to describe/classify its contents or to extract quantitative measurements.
IMAGE PROCESSING
A generic term used to describe the computation of digital images, typically to enhance or analyze them.
IMAGE ENHANCEMENT
To improve the visual quality of a digital image by increasing the visibility of relevant structures, as in edge/contrast enhancement and the suppression of noise or artifacts.
MAMMOGRAPHY
An X-ray method used to examine the human breast.
MODALITY
A device that generates internal images of the body, such as X-ray, ultrasound, magnetic resonance imaging, and computed tomography.
MRI (MAGNETIC RESONANCE IMAGING)
A non-invasive procedure, generated by variations in strong magnetic fields, that produces a two-dimensional view of an internal organ or structure, especially the brain and spinal cord.
OEM
The acronym for Original Equipment Manufacturer.
US (ULTRASOUND)
A procedure in which high-energy sound waves are bounced off internal tissues or organs to create echoes. The echo patterns are displayed on the screen of an ultrasound machine, forming a picture of body tissues called a sonogram.
X-RAY
A diagnostic device in which radiation is used to create images for examination of soft and hard tissue, such as muscle and bone.
ContextVision AB, Second quarter 2010 financial results Page 9 of 9