Corporate News: MeVis Medical Solutions reporting a substantial increase in revenues and consolidated profit in the first nine months of 2008

Dynamic growth in the Other Diagnostics segment

  • 28 percent increase in revenues to EUR 7.9 million
  • Stable growth in the Digital Mammography segment
  • 55 percent growth in revenues in the Other Diagnostics segment
  • 35 percent increase in consolidated profit to EUR 1.4 million

Bremen, November 20, 2008 - In the first nine months of 2008, MeVis Medical Solutions AG [ISIN: DE000A0LBFE4] recorded a substantial increase in revenues of around 28 percent. At roughly EUR 7.9 million, the revenues achieved by the image-based medicine specialist in the first nine months equaled the amount posted for the entire year in 2007. These results have been achieved in spite of an unfavorable US dollar exchange rate during the first three quarters of 2008 compared to the previous year.

With year-on-year top-line growth of around 15 percent, the Digital Mammography segment was very stable. This profitable segment is the Group’s business mainstay, generating revenues of around EUR 4.9 million, equivalent to 62 percent of total revenues.

Revenues in the Other Diagnostics segment grew sharply by around 55 percent. “This particularly reflects the success of our partnership with Invivo, which has resulted in the market-leading DynaCAD® software solution for breast diagnostics and biopsies in MRI examinations“, says Dr. Carl J.G. Evertsz, CEO of MeVis Medical Solutions.

86 percent of the Group’s revenues were derived from business denominated in US dollars, including industrial partners based in the United States in connection with the indirect sale of software licenses as well as the US dollar invoicing of liver surgery intervention plans for final clinic customers. “We have made use of the favorable trends in the exchange rate of the US dollar over the past few weeks to hedge our foreign currency exposure for 2009 and partly also beyond on the basis of current exchange rates,” explains Dr. Olaf Sieker, CFO at MeVis Medical Solutions AG.

The extensions to the product range have resulted in a sharp increase of around 91 percent in personnel numbers this year. As of September 30, 2008, the consolidated head count amounted to 185 (previous year: 97). This is reflected in a year-on-year increase of around 100 percent in staff costs to EUR 5.2 million (previous year: EUR 2.6 million). Of this, an amount of around EUR 1.5 million (previous year: nil) comprises capitalized development costs, leaving net staff costs of around EUR 3.7 million as of September 30, 2008. Although other operating expenses climbed by some 52 percent over the year-ago period to around EUR 2.7 million in the first nine months of 2008, they were down on the previous quarters of the current year.

As a result, the MeVis Medical Solutions Group achieved earnings before interest, taxes, depreciation and amortization (EBITDA) of around EUR 2.2 million in the first three quarters of 2008 (year-ago period: around EUR 2.0 million), equivalent to an EBITDA margin of some 28 percent (year-ago period: around 33 percent). Consolidated EBIT in the first nine months of the year came to around EUR 1.6 million (year-ago period: EUR 1.8 million), with the EBIT margin shrinking to around 20 percent (year-ago period: 29 percent) due to the continued high development expense for new products.

Net financial result in the first three quarters of 2008 climbed substantially to EUR 0.7 million (year-ago period: EUR 0.1 million). This is primarily due to the proceeds from the stock-market flotation, which were placed in short-term investments. Net financial result also includes changes in the fair value of financial instruments used to hedge foreign currency exposure as well as expenses and income from exchange rate differences relating to assets used to finance the Company.

Consequently, consolidated net profit after tax increased to around EUR 1.4 million, up from roughly EUR 1 million in the year-ago period, translating into earnings of EUR 0.80 per share (year-ago period: EUR 1.89). As of September 30, 2008, the Company had cash and cash equivalents and current financial assets totaling roughly EUR 22.4 million.

The Lung CT software acquired in April of this year from Hologic subsidiary R2 Technology for the automatic diagnosis of solitary pulmonary nodules, which are an early indicator of lung cancer, has been launched under the name “MeVis Visia™ CT-Lung System”. Explains Sieker: “Whereas preliminary proceeds from sales of MeVis Visia™ already arose in the third quarter of 2008, we do not expect to see a substantial increase in sales figures until next year.”

Announced on October 21, 2008, the extraction of the business with Hologic from MeVis BreastCare GmbH & Co. KG, a joint venture with Siemens, and the ensuing proportionate acquisition of this business by MeVis Medical Solutions AG did not have any impact on the period under review and will not show up in the Company’s financials until the final quarter of 2008.

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