ContextVision AB First quarter result 2008

Transcription

1 ContextVision AB First quarter result 2008 Period January March Sales of 16.6 (10.8) MSEK 54% sales growth Operating profit was 5.0 (-0.1*) MSEK and profit before tax was 6.1 (0.8*) MSEK Earnings per share was 0,54 (0.07*) SEK Significant events during the quarter 88% of the sales increase boosted operating profit Intensive preparation of two major product launches for 3D and fluoroscopy image enhancement * Q data excluding SharpView related cost of 1,7 MSEK and reversal of bonus provision of 5,9 MSEK ContextVision is the software imaging partner to the most recognized medical imaging manufacturers worldwide, enabling them to rapidly deliver leading products to market and provide next-generation upgrades while focusing on their customers. Context Vision s world leading imaging software offers the greatest image clarity and quality available, enabling unprecedented diagnostic confidence. The company has worldwide offices with corporate sales & marketing in Stockholm, Sweden and listed on the Oslo Stock Exchange, Norway (ticker: COV) ContextVision AB, First quarter 2008 financial results Page 1 of 7

2 Management Comment Jan-Erik Hedborg, the company s CEO commented: Sales for the first quarter are in line with our expectations, being well aware of the seasonality that our business is beset with, where the beginning of a year typically is rather slow. Compared to 2007 sales increased with 54% to 16,6 MSEK generating an operating profit of 5 MSEK, a 30% margin. An entire 88% of the sales increase boosted our profit (comparing with underlying zero operating profit Q1 2007), again showing the evident scalability of our business model. Our Q1 result is also a reflection of the fact that our business now resides on a broader customer base, generating revenues that even in a season wise weaker quarter are quite enough to deliver a stable profit and respectable margins. That being said, as for all exporting companies the recent US dollar depreciation has had a notable negative impact on our financial result. Wherefore it is justified to say that the underlying performance of the business actually is even better than our financial statements indicate. Currently I think it is safe to say that the entire company is with passion and devotion engaged in the process of developing our new products for 3-D and fluoroscopy image enhancement, which will play a significant role delivering our future growth. 3-D image enhancement is applicable on all our current product lines but initial focus will be on ultrasound, where we have an extensive customer base. Customer contacts are so far very positive which reassures me that the market is ready for this next generation of image enhancement. The launch of 3D GOPView US is planned to take place in August in Chicago. With fluoroscopy we are entering an entirely new segment within X-ray with strong potential. Individual competence of our co-workers is a key asset for the company, not only for research & development but also for sales and marketing. Therefore it is very comforting that we have engaged a very experienced person from the American med-tech industry to head and secure a successful launch of our fluoroscopy image enhancement product, called GOPView ira, scheduled for release in November in Chicago. During the quarter we again participated in the biggest trade show in Europe, ECR in Vienna. We have for quite many years frequently visited all the big trade shows around the world. At those events it is quite evident that we now are a truly recognized member of the medical imaging community, considered as a potential partner even by the world s largest OEM s. To simplify the history of ContextVision it basically consists of two success stories, first image enhancement for Magnetic Resonance in 1987 and secondly for Ultrasound in In light of that I am very pleased that we are now in the midst of releasing two new products almost simultaneously, where each on its own has the potential of acquiring the label success story. * * * With a very broad customer base and a strong existing product portfolio combined with two new major product launches later this year, I feel comfortable repeating our long term goal of going for doubling the year 2007 revenue by ContextVision AB, First quarter 2008 financial results Page 2 of 7

3 Net sales and operating profit January March Net sales Total sales for ContextVision were 16.6 (10.8) MSEK. This represents a sales growth of 54% compared with the corresponding quarter In fact this is the best quarter one sales in the history of the Company. Sales are in line with our expectations however with a somewhat weaker performance in Europe and stronger in Asia. The business is generally beset with seasonality where the beginning of a year is slower than the end. 100% of the Company s sales are denominated either in USD (approx. 40%) or Euro (approx. 60%). Hence, currency movement s impacts reported sales. During 2007 the depreciation in USD was more or less compensated by a stronger Euro, however in this quarter we have a clear negative currency effect due to the weak USD. Had currency rates been the same as quarter one 2007 current quarter sales would be approximately 0.6 MSEK higher. Other income 2007 contained a government contribution of 0.4 MSEK with no equivalent income Operating profit and margin The operating profit was 5.0 (4.1) MSEK producing an operating margin of 30%. The same quarter previous year contains SharpView related cost of 1.7 MSEK and reversal of a bonus provision of 5.9 MSEK, hence comparable operating profit and margin was -0.1 MSEK. The USD currency depreciation also had a significant negative impact on the result, where accounts receivables denominated in USD has been written down generating a loss of some 0.8 MSEK. The operating profit again constitutes an excellent example of the strong leverage in the business model, where a sales increase of 5.8 MSEK increased the underlying operating profit with 5.1 MSEK. This means that as much as 88% of the actual sales increase directly impacted the operating result. Without the negative impact of the USD depreciation, profit would actually have increased more than sales. The reason for this strong leverage is that the image enhancement software sold is virtually not associated with any variable cost, wherefore a change in sales to a very large extent affects the profit. ContextVision AB, First quarter 2008 financial results Page 3 of 7

4 Cash-flow and financing Disregarding tax payments related to prior year, cash-flow from operations for the quarter is solid of some 4 MSEK. ContextVision has provided the former subsidiary SharpView with a bridge finance of 5 MSEK that will be converted into shares in SharpView. Liquid funds in ContextVision including current investments amounted to 37.9 (43.6) MSEK. Equity at period end amounted to 58.7 (55.2) MSEK giving a solidity of 76% (84%). Employees At period end the Company had 29 (32) employees whereof 12 are dedicated to research and development. Two are located in the United States of America and one in China. Out of the 32 employees in 2007, four belonged to the SharpView business still incorporated in ContextVision. Business operations For the first three months of 2008 the company s sales are distributed by region and product as follows. Sales by region: Europe 24% (41%), USA 43% (35%) and Asia 34% (23%). Sales by product group: Ultrasound 83% (63%), X-ray 11% (22%) Magnetic Resonance Imaging 6% (13%) and Other 1% (2%). The data above is very much a consequence of the great strength and market response of the ultrasound product that is generating very significant revenue for the Company. Market development and outlook Onwards the Company holds great expectations for the two new products in 3D and Fluoroscopy image enhancement, both products are scheduled for release the second half of the year. GOPView US still remains the growth engine where sales rely on a large number of customers. Transactions with related parties Disbursement of a convertible loan occurred with 5 MSEK in January 2008 to the former subsidiary SharpView. This is reflected as a financial asset in the financial statement. ContextVision AB, First quarter 2008 financial results Page 4 of 7

5 Risks & uncertainties Consolidation of the medical business occur on a regular basis with the general purpose of enhancing technical competence and gaining market shares, at the same time as competition decreases. Besides consolidations, new players enter the market and challenge the established actors. The trends above represent both threats and opportunities for ContextVision. The quarter report provides a fair and true overview of the company s and the Group s activities, position and results, and describes the risks and uncertainties of significance faced by ContexVision and by the companies in the Group. The Board of Directors of ContextVision AB Stockholm This report has not been reviewed by the company s auditors. Analyst presentation and reporting dates At April 24 th there will be a presentation of the last quarter by the CEO and Chairman of the board. Presentation is held at Felix Konferansesenter (Bryggetorget 3, Oslo) at hrs. If you cannot physically attend the presentation it will also be available as webcast, please follow link at hrs: Please visit our website for further information, or use shareholderinfo@contextvision.se to send a direct question to management. Reporting dates Q2 result 2008 August 20, 2008 Q3 result 2008 October 23, 2008 Q and Annual result 2008 February 19, 2009 For more information please contact: Jan Erik Hedborg, CEO Phone +46 (0) Henrik Bergentoft, CFO Phone +46 (0) ContextVision AB, First quarter 2008 financial results Page 5 of 7

6 Income Statement (SEK 1000) Q Q Rolling 12- months 2007 Net sales Other income Operating income Goods for resale Other external costs Personnel costs Depreciation assets Operating results Interest income Interest costs and similar profit / loss items Results after financial items Tax Net results Of which attributable to: Equity holders of the Parent Company Minority Earnings per share after tax, SEK 0,54 0,42 2,54 2,42 Balance Sheet (SEK 1000) Q Q Intangible fixed assets Tangible assets Financial assets Inventories Current receivables Current investments Cash and bank Total assets Equity Minority interest in subsidiary Provisions Current liabilities Total equity and liabilities Change in equity (SEK 1000) Opening balance Repurchase of own shares Dividend of SharpView shares Translation difference Net result Closing balance Financial Highlights Q Q Rolling 12- months 2007 Earnings per share after tax, SEK 0,54 0,42 2,54 2,42 Operating margin (per cent) 30,3 37,7 36,2 37,9 Solidity (per cent) 76,0 83,5 76,0 77,1 ContextVision AB, First quarter 2008 financial results Page 6 of 7

7 Consolidated Statement of Cash Flows (SEK 1000) Q Q Operating activities Result after financial items Depreciation of assets Unrealised gain/loss on current investments Changes in provisions Income tax paid Cash flow from operating activities before change in working capital Change in working capital Increase(-)/decrease(+) inventories Increase(-)/decrease(+) current receivables Increase(+)/decrease(-) liabilities Cash flow from operating activities Investing activities Investments in group companies Investments in intangible assets Investments in tangible assets Cash flow from investing activities Financing activities Convertible loan to SharpView Cash flow from financing activities Cash flow for the period Change of liquid assets Liquid assets at beginning of period Liquid assets at period end Basis of preparation The interim condensed consolidated financial statements for the three months ended March 31 st 2008 have been prepared in accordance with IAS 34 Interim Financial Reporting. The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group s annual financial statements as of 31 December ContextVision AB, First quarter 2008 financial results Page 7 of 7