CONTEXTVISION AB FIRST QUARTER 2012

Transcription

1 d CONTEXTVISION AB FINANCIAL RESULTS CONTEXTVISION AB FIRST QUARTER 2012 Q1 HIGHLIGHTS Sales increase 15 %. Large customers broadening future commitment Increase of market share in XR Government Contribution of 1.4 MSEK for mammography product development Q1 FINANCIAL DATA Sales of 15.2 MSEK (13.2) Operating result of 0.4 MSEK (0.4) and result before tax of 0.4 MSEK (0.5) Earnings per share of 0.05 (0.05) SEK

2 CONTEXTVISION AB//FIRST QUARTER 2012 FINANCIAL RESULTS//PAGE 2 OF 9 MANAGEMENT COMMENT ANITA TOLLSTADIUS, THE COMPANY S CEO COMMENTED: We are very pleased to report that the strong sales momentum that we experienced during our fourth quarter 2011 continued in the first quarter Net sales came in at 15,2 MSEK, which is an increase of 15% compared to last year s sales level. Again, strong end-user demand in Asia continues to be the main engine of growth. We experienced a full 20% increase in sales levels in this region, where governments continue to invest in their national healthcare infrastructure and many of our local customers benefit from this trend. Another pleasant development during the quarter was the strong product demand from European customers. Our sales increased 20% over prior year s quarter. One of the reasons is that most of the growth stems from our larger customers who target emerging markets with their midrange product lines. Sales activities in the United States continue to be stable, although also here we are increasingly encouraged by a positive prognosis from our customers. We have seen a major trend that would favor the development of sales from mid-end product ranges, and we believe that this is a new sales opportunity, from which we can gain advantage in the foreseeable future. Our largest customers see the majority of their growth in the mid-end price segment. Consequently, we are now witnessing an ever stronger customer interest in incorporating our image enhancement in a broader product range. ContextVision s market leading position in ultrasound image enhancement continues to be strongly supported by the new broader product portfolio, ranging from a new versatile family of products for 2D images to the 3D image enhancement (GOPiCE) for high end ultrasound equipment. The latter was originally introduced to the market several years ago and is now contributing significantly to the sales increase. Sales of our 3D enhancement increased by over 100% compared to the same period last year. Again, we are very pleased that our vision and strategy for where the market is heading proved to be correct. We are confident that the demand for 3D imaging enhancement will remain robust for the foreseeable future. Although it is true that ultrasound is our most important market, our XR products are also developing well and the market potential within this imaging segment should not be underestimated. In fact, we are gaining market share in this field, as we have signed new major customer contracts during the first quarter. In the area of interventional radiology, we are focusing our product implementation on a specific platform. This is being done in close collaboration with our customer, a large international company. Our upgraded imaging enhancement product for irv will thereby be incorporated in their equipment and start generating sales next year. In February we received an EU grant of 1,4 MSEK over 19 months to support a project based on a collaboration with a teleradiology company, Telememedicine Clinic, to develop a new innovative product for enhancement of particularly challenging mammography images. Our mammography program includes a CAD (Computer Aided Detection) functionality from our Chinese partner Neusoft. We are in an evaluation phase in which the CAD functionality is tested on images rendered by our customers systems. Our challenge for the quarter was clearly on the cost side. There are several reasons for the higher expense levels in Q1. The majority of the cost increase derives from extraordinary costs and from a much lower level of capitalized expenditure, compared to Q The reason why we have an extraordinary low level of capital expenditure is that we are now in a phase where we focus more on implementing our new products onto customer systems. Such expenditures are expected to generate sales on a near-term basis and are thus expensed. We are currently engaged in a legal process, which contributes to our higher operational expenses. In 2006, a group of former employees and consultants set up a new company, that directly started to compete with ContextVision. A legal process has been ongoing since 2007, and the main hearing was held in the District Court of Linköping, during April. Judgment is expected in the end of May. The subject of the legal process is related to whether the new company has used or infringed certain intellectual property, belonging to ContextVision. In 2008, ContextVision initiated a further legal proceeding regarding the ownership of a patent application submitted by the former employees. The main hearing is scheduled for October We are very fortunate to have a strong financial situation, which gives us the freedom to evaluate and potentially invest into new product opportunities or technologies. We have identified a growing need in healthcare to obtain clinically more valuable information from the generated medical images. Previously our core technology has been proven to offer unique possibilities within the field of image analysis and we believe there is an opportunity for us to broaden our activities in this area. Our focus is therefore to identify and examine specific therapeutic areas where we believe the medical need and potential for growth are particularly compelling. We are enthusiastic, as we believe our current exploratory work will result in our company being confronted with an even more exciting future and growth outlook.

3 CONTEXTVISION AB//FIRST QUARTER 2012 FINANCIAL RESULTS//PAGE 3 OF 9 NET SALES AND OPERATING PROFIT FIRST QUARTER 2012 NET SALES Quarter one sales for ContextVision were 15.2 MSEK, compared to 13.2 MSEK last year. Strong sales in all our three regions. OPERATING PROFIT AND MARGIN The operating result was 0.4 MSEK (0.4) with an operating margin of 3.3 % (3.3 %). The result of the quarter suffers from several cost increases, which are commented below. Personnel costs have increased by 2.1 MSEK due to two main reasons. One reason is new recruitments, together with general salary increase. Part of the cost increase is a temporary cost for restructuring. The other reason is that most of our R&D resources have been allocated to current customer projects. Costs for customer projects are directly recorded in the current accounts, whereas new product development is capitalized. Capitalized expenditure of personnel costs is 1.0 MSEK less this period compared to last year, which directly affects the personnel cost level with the same amount. Costs for preparing a legal case (see details below) have been recorded in other external costs. CASH-FLOW AND FINANCING CASH AND EQUITY Cash flow for the period represented an increase of 4.2 MSEK (5.3), due to customer payments originated by the strong sales Q Cash amounted to 23.9 MSEK (19.0) at period end. Equity at period end amounted to 40.8 (36,9) MSEK giving an equity ratio of 82% (82%). GOVERNMENT CONTRIBUTION Last year a government contribution of 0.7 MSEK was granted for a specific project. The first half of the project has been successfully reported, and 0.4 MSEK of income has been recorded during Q1. Another government contribution of 1.4 MSEK has been granted in connection with our largest current development project in mammography. The project spreads for a period of 2 years. 0.2 MSEK has been recorded during Q EMPLOYEES AND MANAGEMENT At period end the company had 37 (35) employees of which 15 are dedicated to research and development. Three employees are located in the United States of America and one in China. CONTEXTVISION GROUP The group consists of ContextVision AB (publ), company registration number as the parent company, and ContextVision Inc Corp registration number State of Illinois, USA, as the wholly owned subsidiary. BUSINESS OPERATIONS Please find market and product sales details on page 6. SAPHENEIA LITIGATION In 2006 five employees left ContextVision. Together with two Americans who had been engaged as consultants to ContextVision, they set up a new company, Sapheneia Commercial Products AB (SCP). Immediately after having left ContextVision, SCP started its business that directly competes with ContextVision. In 2007 SCP and its American parent company as well as the American consultants and one company belonging to one of the consultants initiated legal proceedings before Linköping District Court requesting a declaratory judgment to the effect that they have not infringed ContextVision s copyrights and that they are not liable in damages to ContextVision as a consequence of any use or disclosure of trade secrets. In return, ContextVision has requested a declaratory judgment to the effect that SCP is liable in damages due to its use and disclosure of trade secrets. The main hearing in these cases was recently held and the judgment is expected to be rendered by the District Court in late May In 2008 ContextVision initiated legal proceedings against SCP at the Stockholm City Court requesting a declaratory judgment to the effect that ContextVision is the owner of a patent application submitted by SCP and which states two of ContextVision s former employees as inventors. The main hearing in this case is scheduled for October 2012.

4 CONTEXTVISION AB//FIRST QUARTER 2012 FINANCIAL RESULTS//PAGE 4 OF 9 RISKS & UNCERTAINTIES ContextVision s major risk factors include business risks connected to the general financial situation, to the level of healthcare investment on different markets, currency exchange risks, the company s ability to recruit and keep qualified employees and the effect of political decisions. The company s risk factors are described in the annual report No significant new risks have originated since then. The quarterly 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 ContextVision 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.

5 CONTEXTVISION AB//FIRST QUARTER 2012 FINANCIAL RESULTS//PAGE 5 OF 9 PRESENTATION AND REPORTING DATES This quarterly report will be published on the company s website on the 26:th of April. There will be a video presentation released on the 27:th of April, at CET. Please follow the link: Please visit for further information, or use shareholderinfo@contextvision.se to send a question directly to management. CONTEXTVISION FAST FACTS ContextVision is a spin-off from the Image Processing Laboratory at Linköping University, Sweden. The corporate identity was established in 1983 with the first OEM agreement in radiology in ContextVision is traded on the Oslo Stock Exchange since ContextVision enhances significant information in digital images using proprietary GOP technology. THE COMPANY OFFERS: The invitation for the Annual General Meeting will be mailed to shareholders on April 27. The AGM is scheduled for June 13, 5pm at the company s office in Stockholm. Shareholders, who want to participate, should register according to the instructions given in the invitation. The annual report 2011 will be available on May 4. Shareholders who want a full printed copy, should contact the company by sending an to: shareholderinfo@contextvision.se REPORTING DATES Q1 result 2012 April 26, Annual report available May 04, 2012 AGM 2012 June 13, 2012 Q2 result 2012 August 23, 2012 More than 25 years successful experience in OEM business Unprecedented image enhancement for X-Ray, MRI, CT, and ultrasound images Long standing corporate commitment to R&D that ensures timely and rewarding upgrade paths Strong customer relationships to ensure their success Expert training in image processing for our customers Compatibility across any image format and all major computer platforms ContextVision s technology enables the company s customers to provide superior digital imaging solutions for hospitals and clinicians. Such solutions promise more rapid and accurate diagnoses, reduced operator eye fatigue, and ultimately, a greater return-on-investment for medical imaging users. Q3 result 2012 October 25, 2012 Q4 and annual result 2012 February 21, 2013 FOR MORE INFORMATION PLEASE CONTACT: Anita Tollstadius, CEO Phone +46 (0)

6 CONTEXTVISION AB//FIRST QUARTER 2012 FINANCIAL RESULTS//PAGE 6 OF 9 INCOME STATEMENT (SEK 1000) Net sales Other income 526 Total revenues Goods for resale Other external costs Personnel costs Depreciation assets Write-down of intangible assets -904 Operating results Interest income Interest costs and similar profit/loss items -1 Results after financial items Tax Net results Earnings per share after tax, before/ after dilution (SEK) 0,05 0,05 0,46 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (SEK 1000) Effect of currency hedging Translation difference Total other comprehensive income Net result for the period Total comprehensive income for the period FINANCIAL HIGHLIGHTS Earnings per share after tax (SEK) before/after dilution 0,05 0,05 0,46 Average number of shares Operating margin (per cent) 2,9 3,3 8,0 Solidity (per cent) 82,0 82,1 83,0

7 CONTEXTVISION AB//FIRST QUARTER 2012 FINANCIAL RESULTS//PAGE 7 OF 9 SALES BY REGION (MSEK) Asia 7,5 6,2 27,9 Europe 4,6 3,8 18,9 USA 3,1 3,2 11,6 Total 15,2 13,2 58,4 SALES BY PRODUCT (MSEK) XR 1,9 2,5 9,0 US 10,6 8,8 36,5 MR 1,9 1,4 9,8 Others (irv, CT, Mammo) 0,8 0,5 3,1 Total 15,2 13,2 58,4 CONSOLIDATED BALANCE SHEET (SEK 1000) Q Q Intangible fixed assets Tangible assets Other financial assets Inventories Current receivables Cash and bank Total assets Equity Provisions Current liabilities Total equity and liabilities CHANGE IN EQUITY (SEK 1000) Opening balance Total comprehensive income for the period Closing balance

8 CONTEXTVISION AB//FIRST QUARTER 2012 FINANCIAL RESULTS//PAGE 8 OF 9 CONSOLIDATED STATEMENT OF CASH FLOWS (SEK 1000) Q Q FULL YEAR 2011 Result after financial items Depreciation and write-down of assets Result from participation in associated company Unrealized gain/loss on current investments -85 Changes in provisions -96 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 intangible assets Investments in tangible assets Investment in financial assets -163 Cash flow from investing activities Financing activities 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 1:st quarter ended March 31, 2012 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 2011

9 CONTEXTVISION AB//FIRST QUARTER 2012 FINANCIAL RESULTS//PAGE 9 OF 9 GLOSSARY CT (COMPUTED TOMOGRAPHY) A diagnostic device through which a two-dimensional cross-sectional image of the studied tissue is obtained using X-rays. DR (DIRECT RADIOGRAPHY) A detector that converts X-ray photons into digital signals, replacing the need for X-ray films. FLUOROSCOPY An X-ray imaging technique that produces real-time images of a patient s internal structures on a TV monitor. Fluoroscopy allows the study of dynamic processes within the body and can be used for guidance in interventional procedures. GOP (GENERAL OPERATOR PROCESSOR) A term for ContextVision s methodology in detecting structures in an image and relating them to their wider context in order to increase visualization accuracy. GOPICE (IMAGE CUBICLE ENHANCMENENT) GOPiCE is the family name for ContextVisions realtime 3D volumetric image enhancement product, for OEM embedded software. GOPVIEW The family name for ContextVision s product lines of OEM-embedded software. HCU (HAND CARRIED ULTRASOUND) A portable, battery-powered ultrasound machine no larger than a briefcase. IMAGE ANALYSIS Processing a digital image in order to describe/classify its contents or to extract quantitative measurements. IMAGE ENHANCEMENT To improve the visual quality of a digital image by increasing the visibility of relevant structures, as in edge/contrast enhancement and the suppression of noise or artifacts. MAMMOGRAPHY An X-ray method used to examine the human breast. MODALITY A device that generates internal images of the body, such as X-ray, ultrasound, magnetic resonance imaging, and computed tomography. MRI (MAGNETIC RESONANCE IMAGING) A non-invasive procedure, generated by variations in strong magnetic fields, that produces a two-dimensional view of an internal organ or structure, especially the brain and spinal cord. OEM The acronym for Original Equipment Manufacturer. US (ULTRASOUND) A procedure in which high-energy sound waves are bounced off internal tissues or organs to create echoes. The echo patterns are displayed on the screen of an ultrasound machine, forming a picture of body tissues called a sonogram. X-RAY A diagnostic device in which radiation is used to create images for examination of soft and hard tissue, such as muscle and bone. IMAGE PROCESSING A generic term used to describe the computation of digital images, typically to enhance or analyze them.