Corporate News: MeVis Medical Solutions ramps up sales despite difficult market conditions in 1st quarter 2009

Interim report 1st quarter 2009

  • Group sales up by 42 percent, to approx. € 3.5 million
  • Consolidated EBIT increases by 18 percent, to reach € 0.44 million
  • Consolidated profit decreases by 66 percent, to € 0.13 million
  • Decline in demand in U.S. for digital mammography partially offset by successful DynaCAD® software platform
  • Positive impetus expected to be made by product launches in the second half of the year

Bremen, May 26, 2009 – In spite of ongoing buyer reluctance of clinical end-users, in the first three months of fiscal 2009 MeVis Medical Solutions AG [ISIN: DE000A0LBFE4] boosted its consolidated sales revenues by 42 percent year-on-year, to approx. € 3.5 million.

This growth is essentially attributable to two effects: the October 21, 2008 carve-out of business with industry partner Hologic from MeVis BreastCare GmbH & Co. KG, a joint venture with Siemens, and the subsequent pro-rata acquisition of this business division by MeVis Medical Solutions AG was fully consolidated for the first time in the 1st quarter of 2009 and had a positive impact on corporate figures. In addition, the internationally successful software platform DynaCAD® from industry partner Invivo contributed to corporate growth. The DynaCAD® system is used for contrast-agent-based magnetic resonance imaging of the breast (including biopsies) and can be used with all magnetic resonance imaging equipment of the world's leading OEMs.

Revenues are spread across the segments of Digital Mammography, amounting to T€ 2,312 (previous-year quarter: T€ 1,774), and Other Diagnostics of T€ 1,147 (previous-year quarter: T€ 655).

The global financial and economic crisis also affected the market environment for MeVis products. This was evident particularly in postponed and/or reduced investment activities of hospitals as well as an extension in sales cycles. "We were nevertheless able to stabilize our sales revenues realized with our U.S. industry partner Invivo Corp. at the previous year's level and partly even extending them", says Dr. Carl J. G. Evertsz, CEO of MeVis Medical Solutions AG.

The enlarged product portfolio in the 1st quarter compared with the same period a year earlier led to an increase in capitalized staff costs to T€ 736 (previous-year quarter: T€ 492). At the end of the 1st quarter the MeVis Group had a workforce of 240 (previous-year quarter: 139 employees). This is equivalent to an increase by approx. 73 percent. Compared with the end of 2008, however, the size of the workforce only grew very slightly.

"As some of our industry partners referred to significantly lower demand in their latest interim reports, we have initiated various cost-effective measures to stabilize business trends in this particularly difficult fiscal year", says Christian H. Seefeldt, CFO of MeVis Medical Solutions AG. Accordingly, it was possible to lower other operating expenses by roughly 8 percent, to T€ 812 (previous-year quarter: T€ 879).

Nevertheless, on EBIT of approx. € 0.44 million (previous-year quarter: € 0.37 million), an EBIT margin of only 12.6% was achieved (previous-year quarter: 15.2%). This is primarily due to increased staff costs year-on-year, to substantially higher depreciation arising from the takeovers made in 2008 as well as to increasing depreciation of capitalized development costs.

The Group's net financial result, amounting to € 0.39 million (previous-year quarter: € 0.03 million), suffered considerably on account of the lower level of interest rates year-on-year, from the negative market influences in the 1st quarter due to currency hedges as well as calculatory interest on payment installments related to the acquisitions carried out in 2008. Accordingly, MeVis reports consolidated earnings for the period of only € 0.13 million (previous-year quarter: € 0.39 million), which corresponds to earnings per share of € 0.08 (previous-year quarter: € 0.37).

Nevertheless, the MeVis Group has ample financial resources to achieve its planned growth in the forthcoming months and years. As at March 31, 2009, cash and cash equivalents amounted to T€ 15,584 (December 31, 2008: T€ 15,257).

The Executive Board affirms its opportunity outlook given within the scope of the consolidated annual financial statements for fiscal 2008 and its forecast for the financial year 2009. Accordingly, until the global financial and economic crisis subsides, the Company only perceives little growth potential for the products already launched. On the other hand, the consolidation effect will have a positive influence on our sales revenues and earnings trends in the current financial year. "Moreover, the introduction of new products planned, starting in the 2nd quarter, should generate positive step-by-step earnings contributions in the second half of the year. Yet in the current market situation, we consider a concrete sales revenues and earnings forecast for fiscal 2009 to be sensible only when the half-year report is released", said Dr. Evertsz.

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