MeVis Medical Solutions AG

Earnings Release • Aug 30, 2010

News Details

Corporate | 30 August 2010 07:30

MeVis: sustained revenue growth with reduced profitability

MeVis Medical Solutions AG / Half Year Results

30.08.2010 07:30

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MeVis Medical Solutions benefits in first half of 2010 from increased
maintenance revenues against challenging market environment

* Group revenues rise by 15% to 7.3 million euros (previous year: 6.4
million euros) despite weaker license sales
* Group-EBIT burdened by scheduled depreciation to reach 0.2 million euros
(previous year: 0.5 million euros)
* Group net financial result decreases from -0.1 million euros to -0.4
million euros due to non-cash foreign currency effects
* Consolidated net result for the period decreases to -0.7 million euros
(previous year: 0.2 million euros) on account of increased income taxes
* Cash flow from operating activities doubles to 3.2 million euros
(previous year: 1.6 million euros)

Bremen, August 30, 2010 - MeVis Medical Solutions AG [ISIN: DE000A0LBFE4],
a leading medical imaging software company, today published its results for
the 1st half of the year 2010. According to the figures, Group sales in the
2nd quarter continued at the level of the preceding quarter while still
impacted by largely unfavourable economic influences. However, Group sales
significantly increased by 15% to EUR 7,321,000 year-on-year (previous
year: 6,364,000).

With growth of 19%, revenues in the Digital Mammography segment amounting
to EUR 5,356,000 (previous year: EUR 4,494,000) have once again proceeded
well compared with 1st half of 2009. This is especially due to the tripling
of maintenance and service revenues in this segment compared with the
previous year, which make up 35% of segment revenues in the 1st half of the
year. Maintenance and service revenues have risen group-wide by 90%
compared with the 1st half of 2009, and contribute 30% to total revenues.

The business development and the expansion of the market position with new
products in the fields of neurology, prostate and lung diagnostics
proceeded unevenly and were overall disappointing in the stagnating market
during this period. As a result, Group revenues in the Other Diagnostics
segment compared with the 1st half of 2009 rose by only 5% to EUR 1,965,000
(previous year: EUR 1,870,000). In this segment, capitalization of
development costs affecting net income sank in the 1st half of 2010 by 19%
to EUR 639,000 (previous year: EUR 791,000). This is especially due to the
fact that the expenditure for the development of the Visia(TM) Enterprise
platform, the centerpiece of our future Visia(TM) products, is not
capitalized. Future revenue contributions will therefore not be burdened by
depreciation and amortization.

Personnel capacity, at 181 employees (full-time equivalents) remained
almost unchanged at Group level (previous year: 183). Due to the extensive
cost-cutting measures initiated in early 2009, it was possible to reduce
other operating expenses once again by 11% year-on-year, to EUR 1,455,000
(previous year: EUR 1,627,000).

However, Group profitability declined on account of increased scheduled
depreciation and amortization of capitalized development costs. Thus, total
depreciation increased by 50% to EUR 1,774,000 (previous year
EUR1,185,000). Hence, despite an increased EBITDA figure of 16% in the
year-on-year comparison (earnings before interest, taxes, depreciation and
amortization) of EUR 1,924,000 (previous year EUR 1,656,000), it was only
possible to generate an EBIT result (earnings before interest and taxes) of
EUR 150,000 (previous year EUR 471,000).

In the period under review the net financial income decreased to EUR
-363,000 (previous year EUR -76,000). Apart from a reduced net interest
income, this was mainly due to the non-cash impact of the change in value
of derivative financial instruments (forwards), acquired to hedge our
exchange rate risks. Therefore pre-tax earnings in the 1st half of the year
were also lower at EUR -213,000 (previous year EUR 395,000). Taking into
account the markedly higher income tax expenditure, we therefore closed the
1st half of the year with a loss of EUR -652,000 (previous year EUR
160,000), which corresponds to earnings per share of EUR -0.38 (previous
year EUR 0.09).

Cash flow from operations doubled in the first half to EUR 3,220,000
(previous year: EUR 1,586,000). What was of decisive importance in this
context was the reduced amount of taxes actually paid in the period under
review as well as the changes in trade receivables and trade payables, next
to the increase in depreciation and amortization.

With EUR 14,166,000 in liquid funds (31.12.2009: EUR 15,093,000), the MeVis
Group continues to have sound financial resources. Moreover, as at the
balance sheet date the Company held treasury shares worth EUR 2,082,000.
Other financial liabilities totaling EUR 14,654,000 (31.12.2009: EUR
14,076,000) are with an amount of EUR 12,900,000 (31.12.2009: EUR
13,456,000) essentially related to the remaining payment obligations
arising from the acquisition of business shares and units.

'The ongoing investor reluctance on the part of clinical end customers in
the U.S. market and the slowdown in momentum in the digitization of
mammography equipment in the U.S. could be only partially offset by sales
of our software outside the U.S. by our industry partners in the past
quarter', says Dr. Carl J.G. Evertsz, CEO of MeVis Medical Solutions AG,
'should this market momentum in license sales continue, we expect only a
modest increase in revenues at the Group level compared with 2009. In this
case, Group-EBIT would only be slightly positive for fiscal 2010, simply
because the increased need for amortization of capitalized development
expenses directly encumbers profitability.'

The complete consolidated interim financial statements for H1/2010 are
available for download on the company's website at
http://www.mevis.de/mms/en/Financial_Reports.html.

30.08.2010 Ad hoc announcement, Financial News and Press Release distributed by DGAP.
Media archive at www.dgap-medientreff.de and www.dgap.de

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Language: English
Company: 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 München, Düsseldorf, Berlin, Stuttgart

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