MeVis Medical Solutions AG

Earnings Release • Aug 27, 2008

News Details

Corporate | 27 August 2008 08:19

MeVis Medical Solutions reporting a successful first half of 2008

MeVis Medical Solutions AG / Interim Report/Half Year Results

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31 percent increase in revenues to EUR 5.5 million

• Further extensions to product range in line with plans
• High growth-induced expenditure reflected in 18 percent EBIT margin
• New products to be launched in the market in the second half of 2008

Bremen, August 27, 2008 - The first half of 2008 was a period of growth for
MeVis Medical Solutions AG [ISIN: DE000A0LBFE4]. At least a further two new
products are to be launched before the end of this year, with more to
follow in 2009 and 2010.

A specialist in software for image-based medical technology, MeVis has been
recruiting heavily to broaden its product range. As of June 30, 2008, MeVis
Medical Solutions consolidated group had 169 employees (year-ago period:
83). Revenues in the period under review rose by 31 percent to EUR 5.5
million (year-ago period: EUR 4.2 million).

'We were able to continue the successful performance which we had achieved
in the first quarter of 2008,' says Dr. Carl J.G. Evertsz, CEO of MeVis
Medical Solutions. 'We achieved a 67 percent increase in license sales in
the digital mammography segment, thus demonstrating once more our strong
market position as an internationally leading independent vendor of
software for the image-based early detection and diagnosis of breast
cancer. The joint venture with Siemens, MeVis BreastCare GmbH & Co. KG,
contributed EUR 3.4 million to consolidated segment revenues (year-ago
period: EUR 2.9 million). Accordingly, digital mammography remains the
MeVis Group’s business mainstay (62 percent of revenues).

The Company also achieved strong growth in the Other Diagnostics segment,
with revenues rising by 59 percent to EUR 2.1 million (year-ago period: EUR
1.3 million). This development is supported by a new invoicing agreement
with our OEM-partner Invivo Corp. effectively reversing the unexpected
negative one-off effects experienced during the fourth quarter of 2007. At
the same time, the segment earnings of EUR 0.1 million (year-ago period:
EUR 0.4 million) came under pressure from heavy spending on extensions to
the product range.

Over 80 percent of the Company’s total revenues were generated in the US
market due to the close partnership with OEMs Hologic and Invivo.

Consolidated EBIT came to EUR 1 million in the first half of 2008 (year-ago
period: EUR 1.8 million), translating into an EBIT margin of 18 percent
(year-ago period: 42 percent), while the cash flow from operating
activities stood at EUR 0.7 million (year-ago period: EUR 0.9 million). 'We
are pleased that we have been able to extend our development activities as
planned and continue growing profitably despite the heavy expenditure,'
says Dr. Olaf Sieker, CFO at MeVis Medical Solutions. 'Spending on new
products is still having a significant impact on our consolidated EBIT
margin at the moment. However, moving forward, we expect these products to
also generate EBIT margins of 40 to 50 percent in the medium term in line
with our current products.'

With the planned additions to the product range and related recruiting,
non-capitalized staff costs in the period under review rose by EUR 0.7
million to EUR 2.3 million (year-ago period: EUR 1.6 million). A
capitalization of development expenses in accordance with IAS 38 has been
in effect since the beginning of the 2008 financial year. Over the first
half of 2008 capitalized personnel expense amounted to EUR 1 million
(year-ago period: EUR 0).

In addition, this growth process was accompanied by an increase in other
operating expenses by EUR 1.4 million over the first half of 2008 to EUR
2.0 million (year-ago period: EUR 0.6 million) primarily due to increased
legal and consulting costs in connection with post-flotation matters and
increased rental expenditure as a result of the growth in business.

Net financial result in the first half of 2008 climbed substantially to a
positive EUR 0.5 million (year-ago period: negative EUR 0.03 million)
chiefly as a result of the inflow of funds from the stock market flotation.
Consequently, consolidated net profit after tax held steady as compared to
the year-ago period at EUR 0.9 million, translating into earnings per share
of EUR 0.67 (year-ago period: EUR 1.65). As of June 30, 2008, the Company
had cash and cash equivalents totaling EUR 22.6 million.

At the end of the first half of 2008, MeVis Medical Solutions returned its
25.1 percent share in MeVis Research GmbH to the City of Bremen in
preparation for the planned conversion of this non-profit research facility
into a Fraunhofer Institute at the end of the year. This will result in a
substantial increase in research capacities in Bremen and will also broaden
the research basis considerably. Says Evertsz: 'This development is of
crucial importance for the extensions to our product range. Looking
forward, we want to strengthen our commitment to innovation in
disease-oriented software solutions.'

Acquired in April of this year from Hologic, the lung CT software for
diagnosing lung cancer and automatically detecting nodules is to be
launched under MeVis’ own brand name in the immediate future and will be
successively built upon with the addition of further functions. Explains
Sieker: 'We expect the lung CT software to start generating revenues in the
third quarter of 2008.' MeVis Medical Solutions also plans to launch a new
software solution for neurology (brain surgery) in the fourth quarter of
this year.

The full interim report for the first half of 2008 is available at the
Company’s website at http://www.mevis.de/mms/en/Financial_Reports.html.
27.08.2008 Financial News transmitted by DGAP

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Language: English
Issuer: MeVis Medical Solutions AG
Universitätsallee 29
28359 Bremen
Deutschland
Phone: +49 421 330 74-0
Fax: +49 421 330 74-50
E-mail: ir@mevis.de
Internet: http://www.mevis.de
ISIN: DE000A0LBFE4
WKN: A0LBFE
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, München, Düsseldorf, Stuttgart

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