- The health crisis has impacted all regions of activity,
half-year revenue down 27%
- Operating expenses under control, down 12% to €9.6
million
- 50% improvement in the operating result to -€6.3
million
- 42% improvement in the net loss to -€8.0 million
- Cash position of €3.8 million at June 30, 2020, improvement
in cash burn
Regulatory News:
SuperSonic Imagine (Paris:SSI) (Euronext: SSI, FR0010526814,
PEA-PME eligible), a Company specializing in ultrasound medical
imaging, today announces its financial results for the first half
of the year to June 30, 2020.
Antoine Bara, General Manager of SuperSonic
Imagine, comments: “The first half of 2020 was marked by the
public health crisis associated with COVID-19 that led to a
reduction in our sales activity on our three key markets: China,
France and the United States. Within this unprecedented context,
the Company is implementing every possible action at its disposal
to protect itself in the face of this new environment. Moreover,
SuperSonic Imagine’s cash position should enable it to cope with
the uncertainties associated with the ongoing pandemic. Once the
health and economic situation has been normalized, I firmly believe
that the Company will return to a growth momentum that is in line
with the added value of our Product and Service offer”.
Audited accounts in thousands of euros
H1 2020
H1 2019
Change
Sales
8,038
11,792
-32%
Other revenue
680
82
x7.3
Total revenue
8,718
11,874
-27%
Cost of sales
-4,837
-6,206
-22%
Gross margin
3,881
5,668
-32%
Gross margin on sales1
3,201
5,586
-43%
Gross margin on sales (%)2
39.8%
47.4%
-7.6 pp
Operating expenses
-9,564
-10,857
-12%
Core operating result
-5,682
-5,188
+10%
EBITDA3
-4,020
-3,243
+24%
Operating result
-6,322
-12,740
-50%
Financial result
-1,674
-1,145
+46%
Net profit/loss
-7,996
-13,891
-42%
These accounts have been subject to a limited review.
Revenue for the first half of 2020
Over the first six months of the year, SuperSonic Imagine
recorded revenue of €8,038 thousand, down 32% compared with the
first half of 2019. Product sales totaled €6,724 thousand, down
32%, whilst Service sales totaled €1,314 thousand, down 30%.
China, the United States and France recorded falls in H1 revenue
up to 48%, 25% and 28%, respectively.
Globally, sales in the Americas were down by 27% while the EMEA
and Asia zones recorded falls of 31% and 33%, respectively.
Other revenue, which totaled €680 thousand, essentially includes
€654 thousand in management fees billed to Hologic Inc. and €26
thousand in revenue resulting from an industrial partnership
contract signed in 2018.
Gross margin on sales of 39.8%
In the first half of 2020, the gross margin on sales fell to
39.8%, from 47.4% in the first half of 2019. The gross margin on
equipment sales fell sharply (-9.2 percentage points) which can be
explained:
- for -3.0 pp by the write-back of a provision booked only in
2019;
- for -6.7 pp by the unfavorable geographical mix, notably with a
reduction in China’s weight, and by the significant decrease in the
margin in the United States because of the divestment of US
subsidiary SuperSonic Imagine Inc. to Hologic Inc. in December 2019
(the sale of systems to Hologic Inc. in 2020 generates a lower
margin than sales of systems to US end clients in 2019);
- for +0.5 pp by a substantial inventory provision booked in
2019.
On the other hand, the gross margin on Service sales increased
by 1.7 pp. This improvement was primarily a result of the
divestment of US subsidiary SuperSonic Imagine Inc. to Hologic Inc.
in December 2019 presenting a low Service margin in 2019.
Operating expenses under control, decline in EBITDA
In the first half of 2020, operating expenses were down €1.3
million chiefly because of the €0.7 million reduction in Research
& Development expenses and the €0.8 million reduction in
Marketing expenses.
The Company benefited from subsidies and tax credits that were
up by €0.7 million compared with the first half of 2019, thus
reducing Research & Development expenses. This increase
explains the change in R&D expenses, equivalent to net spending
after durable goods.
Sales & Marketing costs were down by 13.8% compared with the
first half of 2019. This decrease was mainly due to lower travel
and event-related expenses as a result of the epidemic crisis of
COVID-19 crisis and to the decrease in personnel costs in the
United States following the divestment of the SuperSonic Imagine
Inc. subsidiary end of December 2019.
General & Administrative expenses increased by 8.4% to €2.3
million. Operating expenses held steady at €0.9 million, a slight
increase of 2.4%.
At June 30, 2020, the core operating result was down 9.5% at
-€5.7 million (vs. -€5.2 million in H1 2019).
All in all, EBITDA4 deteriorated by 24%, with a loss of €4.0
million at June 30, 2020 compared with a loss of €3.2 million at
June 30, 2019.
Improvement in the operating result and net result, impacted
by 2 exceptional expenses in 2019
At June 30, 2020, the operating loss was €6.3 million, versus a
loss of €12.7 million in H1 2019.
Other non-core operating expenses at June 30, 2020 primarily
include the severance costs paid to former CEO Michèle Lesieur,
which were approved by the Shareholders’ Meeting of June 16,
2020.
At June 30, 2019, the operating result included the two
following exceptional expenses:
- €5.2 million associated with the transaction and external costs
incurred within the framework of the settlement of the legal
dispute with the company Verasonics.
- €2.3 million relating to expenses incurred in connection with
the proposed acquisition of Supersonic Imagine by Hologic Inc.
The financial result was -€1.7 million, and mainly consisted of
interest on the financial debt to majority shareholder Hologic, as
well as interest and fees due in respect to the early repayment of
all non-group financial debt.
All in all, the net loss was €8.0 million in the first half of
2020, versus a loss of €13.9 million in H1 2019.
Improvement in cash burn: cash position of €3.8 million at
June 30, 2020
SuperSonic Imagine had a cash position of €3.8 million at June
30, 2020 (compared with €6.5 million at December 31, 2019), giving
net cash burn of €2.7 million, a very significant improvement
compared with the first half of 2019 that showed a net cash burn of
€5.5 million.
Cash burn (consumption of operating and investment cash flow)
also improved, with €0.7 million a month over the first half of
2020 compared with €1.1 million in the first half of 2019.
Net cash burn broke down as follows:
- -€3.0 million associated with operating activity in H1 2020,
primarily as a result of the net operating loss over the half. The
€1.7 million increase in Working Capital Requirements was mainly
due to a €1.4 million increase in inventories offset by a €2.4
million decrease in trade receivables.
- Cash burn associated with R&D investments, notably
capitalized R&D spending, was down by €0.7m over the half. The
2019 Research Tax Credit was banked in the first half of 2020 and
explains the decrease in cash burn associated with investment
activities.
- +€1.6 million cash associated with financing operations in the
first half of 2020 (compared with €0.8 million in the first half of
2019) mainly due to the repayment of all non-Group debts for €8.3m,
offset by the increase in the revolving credit facility for €11.5
million with the Hologic group.
2020 outlook
At the current time, it is difficult to accurately quantify the
impact the COVID-19 pandemic will have on the Group’s 2020 annual
activity.
The Group has seen a decrease in activity on its 3 key markets
of France, China and the United States.
Regarding the supply chain, supplier delivery delays were
observed at the height of the lockdown period in March and April.
The trend is towards a reduction in these delivery delays, although
we cannot rule out another deterioration in the COVID-19 situation
that could lead to lockdown measures being applied again in some
regions of the world. Should this happen, this could result in
further supply delivery delays over the coming weeks.
Regarding the ability to deliver, to date logistics flows remain
active, although transit times may be increased by a few days and
prices pushed up on certain routes (some lines have seen their
tariffs double or triple as a result of the decrease in air freight
cargo capacity). This is a rapidly evolving situation that is being
monitored on a daily basis by SuperSonic Imagine’s Supplies and
Logistics teams, in liaison with the suppliers concerned.
The SuperSonic Imagine group’s cash position (strengthened by
the revolving loan concluded between Hologic Hub Ltd and the
Company for a maximum cumulative amount of €67 million) should
enable the Group to be in a position to deal with the uncertainties
related to the ongoing pandemic.
The Group’s Management is closely monitoring the evolution of
this pandemic in each of the geographical regions concerned, and is
implementing all required measures to protect its employees,
clients and partners (thus participating in the global effort to
limit the spread of the virus). Most activities, including R&D
activities, are now being carried out via telecommuting. At the
same time, the Group has implemented all necessary health
protection measures to continue its essential logistical activities
enabling orders to be distributed and shipped. In order to cope
with the lockdown period imposed by the government, the Group
implemented partial unemployment measures.
Within a global economic context that remains extremely
uncertain, the Group is implementing every measure at its disposal
to protect itself within this unprecedented environment. However,
with the pandemic having affected every geographical region in
which the Group operates, SuperSonic Imagine is not in a position
to guarantee that it will not be more seriously impacted, notably
in view of the economic consequences of the extended lockdown
measures in France and every other country in which it is present
(particularly the United States, particularly hard hit by the
Covid-19 crisis). In these conditions, the SuperSonic Imagine
group’s companies could see their sales, profitability and cash
flow affected, although to what extent exactly is currently still
difficult to assess.
The half-year financial report is available on the
Company's website in the Investors section.
Next financial press release: Q3 2020 sales, on October
14, 2020.
About SuperSonic Imagine SuperSonic Imagine is a medical
technology company (Medtech) specialized in ultrasound imaging. The
company designs, develops and markets an ultrasound platform whose
exclusive ultrafast technology (UltraFast™) has given rise to new
imaging methods, which have now become standards in the
non-invasive care path for the characterization of breast, liver or
prostate diseases. The first innovative mode UltraFast™ is
ShearWave® elastography (SWE™), which allows doctors to instantly
visualize and analyze tissue hardness, which is critical
information for the diagnosis of many pathologies. To date, more
than 800 publications have validated the benefits of its
technologies. The latest addition to the Aixplorer® range,
Aixplorer MACH® 30 introduces a new generation of imaging
UltraFast™ allowing the optimization of all innovative imaging
modes: ShearWave PLUS, UltraFast Doppler, Angio PL.U.S, TriVu. With
almost 2,800 ultrasound platforms installed worldwide, SuperSonic
Imagine is present in more than 80 countries and its main markets
are China, the United States and France. The group's revenues for
the 2019 financial year amounted to €26.4 million. SuperSonic
Imagine is a company listed on Euronext (symbol: SSI). For more
information, visit www.supersonicimagine.fr.
1 Gross margin on sales = Sales – Cost of sales. 2 Gross margin
on sales (%) = (Gross margin on sales / Sales) x 100. 3 EBITDA:
Earnings Before Interest, Tax, Depreciation and Amortization. 4
EBITDA at June 30, 2020 corresponds to current operating income,
i.e. - €5.7 million, restated for €1.4 million in depreciation,
amortization and provisions and €0.3 million in taxes and
duties.
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version on businesswire.com: https://www.businesswire.com/news/home/20200723005417/en/
Investor Relations NewCap Thomas Grojean
supersonicimagine@newcap.eu +33 44 71 94 94