Corporate News: MeVis’ profitability increased in 2011

MeVis Medical Solutions sees slight fall in sales and substantial reduction in costs

  • Consolidated sales declined slightly by 4 % to € 13.7 m (previous year: € 14.3 m)
  • Maintenance business grew by 20 % to € 5.5 m (previous year: € 4.6 m); new licensing business fell by 16 % to € 7.6 m (previous year: € 9.0 m)
  • One-time effects with no impact on liquidity led to a negative EBIT (earn-ings before interest and tax) of € -1.6 m (previous year: € -5.4 m)
  • EBIT before extraordinary items stood at € 1.2 m (EBIT margin: 9 %), sig-nificantly above the previous year’s performance (€ 0.7 m, 5 %)
  • Net financial results stood at € -1.3 m due to impairments on investment in Dutch company Medis
  • Consolidated net profit stood at € -4.1 m (previous year: € -8.4 m)
  • Stable cash flow from operating activities of € 5.1 m (previous year: € 5.0 m)
  • Liquidity fell just € 0.7 m to € 7.5 m despite purchase price payment of € 3.0 m

Bremen, April 24, 2012 – MeVis Medical Solutions AG [ISIN: DE000A0LBFE4], a leading software provider for the medical imaging market, has released the final results for its 2011 fiscal year. According to the company’s figures, consolidated sales fell slightly, by 4 % to € 13.7 m. Contributing 3 percentage points, a weak dollar was a significant factor in this decline in sales.

Sales of new licenses fell by 16 % to € 7.6 m during the fiscal year, due primarily to market saturation in digital mammography and breast examinations using magnetic resonance imaging. Revenues from maintenance contracts continued to do well and grew throughout the Group by 20 %. Coming to € 5.5 m, this figure represented 41 % of total net sales (previous year: 32 %).

Reporting a 2 % decline in segment sales to € 10.5 m, Digital Mammography was once again the top performer at the company in the last fiscal year. This strength is due above all to another significant increase in maintenance revenues, which accounted for 45 % of the segment’s sales during the reporting period (previous year: 38 %). The segment’s net profit came to € 5.6 m (previous year: € 5.4 m).

License sales for newer products in the Other Diagnostics segment continued to disappoint. The segment’s revenue fell by 10 % to € 3.2 m, and this fall is largely due to a decline in MRT products’ sales for breast examinations. Maintenance revenues have substantially increased in this segment as well: Standing at € 0.8 m, they now account for 24 % of the segment’s total sales (previous year: 15 %).

We cut expenses substantially in 2011, reducing personnel costs by € 1.2 m to € 9.2 m. This figure contains a provision for remuneration to be paid to the former Chairman of the Executive Board – minus this sum, personnel cost reduction would come to € 1.5 m.

Depreciation and amortization came to € 3.6 m, remaining at last year’s level. Reacting to the revaluation of Visia applications developed since 2008, we recognized a one-off impairment loss of € 2.5 m.

Adjusted for both of these exceptional items, earnings before interest and taxes came to € 1.2 m, which represented an improvement of € 0.5 m despite the fall in net sales.

The company’s financial result was impacted by an impairment of our 41 % stake in the Dutch company Medis, worth € 0.9 m. The impairment was based on a revised estimate of what future developments would bring, and the value of the financial result was reduced to € -1.3 m. As a result, pre-tax earnings in the fiscal year just ended came to € -2.9 m (adjusted for exceptional items: € 0.8 m) and a consolidated net result for the period of € -4.1 m (previous year: € -8.4 m), which corresponds to earnings per share of € -2.38.

The structure of the consolidated balance sheet has changed little. The equity ratio stood at 64 %, the same figure as last year.

Dr. Robert Hannemann, CFO at MeVis Medical Solutions AG, said, “We believe that the current fiscal year will see stable sales progress and a slight increase in EBIT before exceptional items. We want to achieve this slight growth in EBIT with sustainable cuts to our present operating expenses and lower personnel expenses. In addition, the closure of our US subsidiary will show its impact on our finances in the second half of the year.”

Marcus Kirchhoff, Chairman of the Executive Board and CEO of MeVis Medical Solutions AG, added: “We expect fiscal year 2013 to see an improvement in our sales and earnings structure. Our aim is to achieve this sales growth by broadening the business relationships we have with our existing industrial customers and by establishing new sales channels.” The company intends to unveil its new strategic focus at the annual general meeting on June 12, 2012.

On the balance sheet date, cash and cash equivalents had fallen to € 7.5 m (previous year: € 8.2 m). Taking into account the operative cash flow and outstanding balance for the acquisition of 49 % of the shares of MBS KG totaling up to € 4.0 m, which is due as partial payments until 2015, we continue to believe that adequate liquidity is available in the current fiscal year.

Due to the current developments and market conditions, the Executive Board will provide further details about its business forecast during the course of the current fiscal year.

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

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