Corporate News: MeVis reports stable group revenues and low profitability

MeVis Medical Solutions profits from high maintenance revenues in the 3rd quarter

  • Group revenues rose by 6% to 10.9 million Euros in the first three quarters (previous year: 10.3 million Euros) due to higher maintenance revenues
  • Group EBIT of 0.8 million Euros (previous year: 0.7 million Euros) influenced by the capitalization of 2.2 million Euros and the amortization of 2.6 million Euros
  • Group financial result of -0.2 million Euros burdened by lower interest income and proportionate loss from 41% investment in Medis
  • Group net result for the period of -0.3 million Euros (previous year: 0.3 million Euros) encumbered by tax expenses of 1 million Euros

Bremen, November 22, 2010 – MeVis Medical Solutions AG [ISIN: DE000A0LBFE4], a leading company in medical imaging software, today released its results for the first three quarters of 2010. Group revenues in the 3rd quarter of 2010 have remained almost at level with the previous quarter, due to the low sales dynamic in the licensing business. Compared to the previous year, group revenues decreased by 9% to € 3,582,000 (previous year: € 3,905,000) in the 3rd quarter.

Revenues in the Digital Mammography segment amounted to € 8,230,000 (previous year: € 7,374,000) and have once again experienced a disproportionate growth of 12% in the first three quarters of 2009. This is especially due to the increase in maintenance revenues in this segment compared to the previous year. In addition, positive one-time effects on the revenues from license sales with Siemens in the field of breast MRI diagnostics, as well as on the maintenance revenues with Hologic in the field of multi-modal breast diagnostics, were recorded in the 3rd quarter.

Group maintenance revenues have risen by 69% in the first three quarters, and at € 3,558,000 they represent a third of total group revenues (previous year: € 2,111,000 or 21%).

Revenue growth associated with new products in the fields of neurology, prostate and lung diagnostics remains depressed in the stagnating U.S. market. Correspondingly, group revenues in the Other Diagnostics segment decreased by 8% to € 2,677,000 (previous year: € 2,895,000) in the first three quarters of 2010. “Tightened capital budgets and longer purchasing cycles of U.S. hospitals have had an adverse impact on several of our CT and MRI products, which are distributed primarily in the U.S. market”, says Thomas E. Tynes, Executive Board Member responsible for Marketing & Sales of the MeVis Medical Solutions AG.

Capitalization of group development expenses affecting net income increased by 24% to € 2,163,000 (previous year: € 1,748,000) in the reporting period, and thus contributed substantially to an increase of the EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) by 33% to € 3,470,000 (previous year: € 2,606,000). Taking into account the meager increase in revenues, the group’s earning position was affected by the scheduled increase in amortization of development expenses, which previously had been capitalized. Amortizations increased by a total of 39% to € 2,636,000 (previous year: € 1,893,000) in the first three quarters. The capitalization balance, namely the relationship of amortizations on capitalized development expenses to newly capitalized development expenses, increased significantly to 0.62 (previous year: 0.35) in the reporting period.

Despite considerably higher EBITDA, an increase in EBIT (earnings before interest and taxes) of only 17% to € 834,000 was achieved (previous year: € 713,000). Correspondingly, the EBIT margin increased only slightly to 8% (previous year: 7%).
The financial result in the first three quarters of € -160,000 (previous year: € -143,000) has slightly declined compared to the same period last year. The financial result is affected by positive non-cash changes in the value of derivative financial instruments used for exchange rate hedging as well as lower imputed interest expenses. However, the financial result was encumbered by lower interest received as well as by the proportionate loss from the 41% Medis capital share, compared to the previous year.

Correspondingly, earnings before tax have improved to € 674,000 (previous year: € 570,000) in the reporting period. Taking into account significantly higher tax expenditures, we closed the first three quarters of 2010 with a loss of € -346,000 (previous year: € 272,000). Earnings per share amount to € -0.20 (previous year: € 0.16).

“With the gradual market introduction of our new Advanced Applications based on the Visia™ platform, we expect a revitalization in the licensing business in the future, which will bring respective positive effects on group sales and profitability. The planned entry into the cardiovascular imaging market forms an important part of this”, says Dr. Carl J.G. Evertsz, CEO of the MeVis Medical Solutions AG.

"We have sufficient liquidity for financing our future growth. Group assets totaled € 13.7 million on 30 September 2010. Group payment obligations of € 542,000 still exist from previous acquisitions, such as the last purchasing price installment of the “R2 Image Checker CT” for the lung business, as well as up to € 12.5 million for the acquisition of 49% of shares in MBS KG, which is payable in installments until 2015”, says Dr. Robert Hannemann, Chief Financial Officer of the MeVis Medical Solutions AG since 1 October 2010.

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

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