Corporate News: MeVis Medical Solutions confirms preliminary figures for fiscal 2007

MeVis Medical Solutions confirms preliminary figures for fiscal 2007: Demand for software solutions for image-based medicine remains high

  • Sales EUR 7.9 million, EBIT EUR 0.5 million (EBIT pre IPO costs: EUR 1.5 million)
  • Strong license sales in 2007
  • Sharp increase in revenues and earnings planned for 2008

Bremen, April 14, 2008 – MeVis Medical Solutions AG [ISIN: DE000A0LBFE4; WKN: A0LBFE] has presented the final figures for the fiscal year 2007. License sales in the digital mammography segment, which are generated through the company’s OEM partners, Siemens AG and Hologic Inc., were boosted by approx. 60 percent. In 2007, the specialist in software products for image-based medicine and market leader in software for the early detection of breast cancer generated total sales of approx. EUR 7.9 million and EBIT of EUR 0.5 million (approx. EUR 1.5 million before IPO expenses). The Management Board projects an increase in sales to at least EUR 9.0 - 10.0 million and EBIT of at least EUR 2.5 million for 2008. These projections are based on the growing demand for existing products and the introduction of new software products in fields such as neurosurgical planning, diagnosis and biopsy of prostate cancer and automatic detection and therapy monitoring of lung cancer. On the other hand, the company will incur development expenses for many new products that will be launched in the market in the coming years.

As announced on 19 February 2008, the decline in sales (previous year: EUR 8.3 million) and EBIT (previous year: EUR 4.7 million) is primarily attributable to non-recurrent effects. These include payments in conjunction with the IPO in an amount of approx. EUR 1 million as well as modified billing procedures applied by OEM partner Invivo Corp. Due to the latter’s takeover by Philips NV., sales planned for the fourth quarter of 2007 will be postponed by three to six months. Sales were also impacted by the USD exchange rate, even though the extent of these effects have been mitigated through currency hedges. Price discounts, which were granted to the OEM partners for the first time in five years, also had an impact on sales revenues. On the other hand, they clearly supported the sale of larger volumes; in the digital mammography segment, a much higher number of licenses was sold than in 2006.

The expansion of the workforce is key to the successful development of new products and the resulting increase in sales and earnings. Despite the general shortage of qualified labour, MeVis Medical Solutions clearly increased the number of employees, especially those with an interdisciplinary background from IT, engineering, physics and mathematics from 73 to 113 in 2007, thus laying the foundation for faster growth. These scheduled additional expenses were not capitalised in 2007. 'While this led to a sharp increase in personnel expenses in the third and fourth quarter,' said Dr. Carl J.G. Evertsz, CEO of MeVis Medical Solutions AG, 'it will quickly pay off based on an average development phase of one to three years for our high-margin products.' The above effects explain the decline in the operating. Net profit for the year after taxes amounted to EUR 0.1 million.

'Our medical expertise and selective investments in research and development give us a clear competitive edge,' said Dr. Carl J.G. Evertsz. The planned product launches will now enable the company to reap the fruits of its development efforts. For instance, the successful DynaCAD software, for which only a customised application for magnetic resonance imaging of the female breast has existed so far, will be complemented by two other customised solutions, i.e. DynaCAD Neuro MRT for the nervous system and DynaCAD Prostate for prostate diagnosis and biopsy. The new tomosynthesis software which will take mammography to a new level is already in the clinical trial phase in the USA and Europe. MeVis projects the commercial market launch for early 2009 at the latest.

The signs are good for the company’s continued growth and the expansion of its product portfolio. Another step in this direction was taken by MeVis in April 2008, when the company acquired the Pulmonary Computed Tomography (CT) Business from Hologic R2, Inc. Based on the acquired software, intellectual property and patents, the company aims to expand its portfolio in the epidemiologically important field of pulmonary diseases, especially lung cancer. 'We are already an important strategic partner to global market leaders in medical engineering such as Siemens, Hologic and Invivo/Philips. The acquisition makes us even more attractive and expands our customer base even further,' said Carl J.G. Evertsz. 'To continue to live up to this position, we must stay at the very forefront of innovation. This also includes expanding our product portfolio through acquisitions wherever this makes sense.' Liquid funds in an amount of EUR 28.5 million at year-end this is equivalent to approx. EUR 16 per share mean that the company has the financial capability to achieve its strategic objectives.

The company`s financial reports are available for downloading at our website.