- Significant Improvement in Gross
Margin Up 7 Points at 78%
- Positive Ebitda (1)
- Tight Control Over Operating
Expense
- Reduction of Operating Loss
The Medicrea Group (Euronext Growth Paris: FR0004178572-ALMED ;
OTCQX Best Market –MRNTF), pioneering the transformation of spinal
surgery through artificial Intelligence, predictive modeling and
patient specific implants with its UNiD™ ASI (Adaptive Spine
Intelligence) proprietary software platform, services and
technologies, reports its unaudited results for the first quarter
of 2019.
€’million Q1 2019
Q1 2018 (2)Restated
Q1 2018
Published
Sales
Gross margin - % of sales
EBITDA (1)
Operating income
Other operating income and expense
Share-based payments
Cost of net financial debt
Income before taxes
Net Income
7.7
78%
0.3
(1.6)
(0.2)
(0.5)
(1.4)
(3.6)
(3.6)
8.2
71%
0.3
(1.9)
(0.1)
(0.2)
(0.7)
(2.8)
(2.8)
8.2
71%
(0.2)
(1.9)
(0.1)
(0.2)
(0.6)
(2.8)
(2.7)
(1) : Operating income before
interest depreciation and amortization(2) : after IFRS
16 "Leases" adjustments applicable since January 1, 2019
Sales for the first quarter of 2019 amounted to 7.7 million
euros, up 10% (+6% at constant exchange rates) compared to 2018 on
a pro-forma basis, thanks to growth in the USA, the Group's
priority market.
The discontinuation of two non-strategic distribution activities
of third-party products (mainly biologics) and services (surgical
motors maintenance and repairs) accounts for the 6% overall and
temporary decline in sales compared to prior year. Starting from
the second half of the year, these changes will no longer impact
sales growth.
The strategic activity of predictive modeling and personalized
implants (UNiD ASI™) is expanding strongly, mainly in the USA, with
the number of patient-specific UNiD® surgeries up 68% in Q1 2019.
As of March 31, 2019, UNiD ASI™ sales represent 42% of total sales
(33% in Q1 2018). For the US market alone, these figures stand at
67% and 55% respectively. To date, 3,750 patient-specific surgeries
have been performed.
As previously announced, gross margin for the first quarter
improved significantly compared to the same period last year,
amounting to 78% (+7 points) thanks to 1 / a favorable mix of sales
and improved manufacturing efficiency (+5 points), 2 / the
discontinuation of non-strategic distribution activities (+1 point)
and 3 / some positive currency impact (+1 point). The improvement
is also visible sequentially, gross margins for the 3rd and 4th
quarter amounting respectively to 73% and 77%. The ratio should
gradually move closer to the 80% normative level, which is the
Group’s target.
Operating expenses including research and development, marketing
and administration expenses amounted to € 7.6 million in the first
quarter, down € 0.4 million compared to the first quarter of 2018,
after neutralization of currency effects. Operating income before
interest depreciation and amortization (EBITDA), after taking into
account IFRS 16 changes, is positive at € 0.3 million.
Operating loss thus improved by € 0.3 million to € -1.6 million
thanks to the increase in gross margin and the control of operating
expenses, despite the temporary adverse effects of the
discontinuation of the distribution and service activities
described above.
Expenses of 0.5 million euro relating to share-based payments
arise from free shares and stock options granted in the last
quarter of 2018. Accounting rules in force for these instruments,
in particular IFRS 2, will result in recording a charge of
approximately 2 million euros for the full year.
The cost of net financial debt increased by € 0.8 million
compared to the first quarter of 2018, as a result of:
- interest expense on the $30 million bond issued in December
2018- some unrealized foreign exchange losses of 0.4 million euros
on this same loan due to the strengthening of the dollar since the
beginning of the 2019 financial year- interest expense of € 0.1
million due to IFRS 16 accounting changes
It is likely that the cost of net financial debt will fluctuate
quite significantly over the coming quarters depending on the euro
/ dollar parity, should the Company not be successful in hedging
both the exchange rate and the interest rate attached to the $30
million bond.
Cash on hand amounted to € 6.9 million at March 31, 2019, not
including a € 1 million research tax credit receivable expected to
be cashed in the 2nd quarter of 2019.
Outlook
"The increase in our gross margin and the control of our costs
are very positive signs for the start of this year. Our sales
growth should accelerate in coming quarters thanks to the expansion
of our portfolio products. We have just obtained the FDA's approval
to market our new Tulip pedicle screw in the United States. These
implants available from June onwards and widely used by American
surgeons should, in parallel to the continued deployment of our
UNiD ASI ™ offer, strengthen the Group's presence on its priority
market,” comments Denys Sournac, President and CEO of Medicrea.
Next publication: 2019 Half-Year sales: July 8th 2019,
after market.
About Medicrea (www.medicrea.com)
Through the lens of predictive medicine, Medicrea leverages its
proprietary software analysis tools with big data and machine
learning technologies supported by an expansive collection of
clinical and scientific data. The Company is well-placed to
streamline the efficiency of spinal care, reduce procedural
complications and limit time spent in the operating room.
Operating in a $10 billion marketplace, Medicrea is a Small and
Medium sized Enterprise (SME) with 200 employees worldwide, which
includes 50 who are based in the U.S. The Company has an
ultra-modern manufacturing facility in Lyon, France housing the
development and production of 3D- printed titanium patient-specific
implants.
For further information, please visit: Medicrea.com.
Connect with MedicreaFACEBOOK |
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Medicrea is listed onEURONEXT
Growth ParisISIN: FR 0004178572Ticker:
ALMEDLEI: 969500BR1CPTYMTJBA37
Medicrea is traded onOTCQX Best
MarketTicker: MRNTF
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version on businesswire.com: https://www.businesswire.com/news/home/20190517005514/en/
MedicreaDenys SOURNACFounder, Chairman and
CEOdsournac@medicrea.comFabrice KILFIGERChief Financial
Officerfkilfiger@medicrea.comTel: +33 (0)4 72 01 87 87