CORRECTION - Mauna Kea Technologies: Mauna Kea Technologies Announces its FY 2015 Results

24 Mar, 2016, 05:35 ET from Mauna Kea Technologies

3-point gross margin improvement to 70%
Steep reduction in operating expenses
€10.6 million in available cash

Mauna Kea Technologies (Euronext: MKEA, FR0010609263; OTCQX: MKEAY), inventor of Cellvizio®, the multidisciplinary confocal laser endomicroscopy platform, today announced its full-year results for the financial year ended December 31, 2015, as approved by the Board of Directors at its meeting on March 23, 2016.

Benoît Jacheet, Chief Financial Officer of Mauna Kea Technologies, stated: "2015 was a critical year in the implementation of our updated strategic plan and this affected our sales performance. Even so, we successfully delivered a significant improvement in our gross margin and operating performance by streamlining our cost structure to reduce fixed operating costs. Increased financial flexibility is expected to support the continued growth of our global user base."


    In EURK - IFRS (Audited figures)                      2015               2014
                                             (Year to Dec. 31,  (Year to Dec. 31,
                                                         2015)              2014)
    Operating revenue
    Sales                                                8,547             11,016
    Other income                                         1,434              1,267
    Total revenue                                        9,981             12,282
    Operating expenses
    o/w Cost of sales                                  (2,534)            (3,675)
    Gross margin (%)                                       70%                67%
    o/w Research and development                       (4,648)            (4,583)
    o/w Sales & marketing                             (11,665)           (12,753)
    o/w General & administrative                       (3,642)            (3,819)
    o/w Share-based payments                             (450)            (1,257)
    Total operating expenses                          (22,939)           (26,088)
    Other operating income and expenses                    232                  -
    Operating profit/(loss)                           (12,726)           (13,805)
    Net profit/(loss)                                 (12,643)           (13,973)

             

Rebound confirmed in the United States over the full year, despite broadly disappointing sales

As previously reported, Mauna Kea Technologies recorded a 22% decline in its full-year 2015 sales to €8,547 thousand. The small increase (2%) in Pre-clinical sales was not sufficient to make up for the larger decline (-29%) in worldwide Clinical sales, which accounts for the majority of the Company's sales. Probe reorders (orders from existing Cellvizio customers) rose by 17%, reflecting strong clinical adoption by physicians and growing third-party reimbursement support. Against the backdrop of an overall sales decline of 10% in the Americas, sales in North America rose by 14%, with the United States leading the way; results that emphasize the importance of our concerted marketing efforts in this key market. Sales in APAC declined by 35%, largely reflecting the delay in obtaining regulatory approval for the Cellvizio 100s in China (approval that was granted in December 2015). EMEA sales dropped 23% amid persistently tough conditions in the region.

At December 31, 2015, the Company had an installed base of 495 Cellvizio systems. Cellvizio's net installed base grew to 353 clinical and 142 pre-clinical systems, including 31 Cellvizio Dual Band systems.

Other income, which came to €1,434 thousand (vs. €1,267 thousand), chiefly consisted of a €1,201 thousand research tax credit (vs. €1,178 thousand in 2014).

Gross margin improvement and steep reduction in operating expenses

Over the full year, Mauna Kea Technologies improved its gross margin to 70%, up 3 percentage points over 2014. This improvement reflected an initiative undertaken by the Company to optimize its procurement channel as well as a higher average selling price (ASP). Increased ASP reflects greater contribution from US sales in the global total as well as a greater contribution from Pre-clinical sales, which carry a higher selling price than the Clinical version of Cellvizio.

2015 sales and marketing costs, including spending on clinical affairs, totaled €11,665 thousand, down 9% on the 2014 level. Implementation of our strategic pivot toward a partnership strategy as well as staffing adjustments made in anticipation of difficult market conditions in China and Brazil led to a targeted reduction in direct sales and marketing costs.

Research and development (R&D) costs recorded on the income statement remained stable at €4,648 thousand, compared with €4,583 thousand in 2014. Including the research tax credit, net R&D spending rose by 1.2% in 2015.

General and administrative costs fell to €3,642 thousand, down 5% compared with 2014.

Operating expenses declined by 12% in 2015 to €22,939 thousand (vs. €26,088 thousand at year-end 2014). The Company's full-year operating loss came to €12,726 thousand (vs. €13,805 thousand in 2014).

After €84 thousand in financial income, Mauna Kea Technologies' net loss stood at €12,643 thousand in the financial year ended December 31, 2015 (vs. €13,973 thousand in the year to December 31, 2014).

In the second half of 2015, Mauna Kea Technologies used €1.6 million in net cash (vs. €2.8 million in H1 2015 and €5.0 million in H2 2014) including the impact of the capital increase linked to the May 2015 private placement and drawdowns under its PACEO step-up equity financing program. Its actual cash burn stood at around €3.8 million in H2 2015 (vs. €5.0 million in H2 2014). At December 31, 2015, it had €10.6 million in available cash.

Mauna Kea Technologies had 91 employees at December 31, 2015, compared with 120 at December 31, 2014. This decline reflects several measures implemented in support of the new partnership strategy including the shutdown of direct sales and marketing operations in Germany, a reduction in staff in corporate marketing/clinical affairs, and departures in US sales and operations; positions that were not replaced.

Sacha Loiseau, Founder and Chief Executive Officer of Mauna Kea Technologies, concluded: "Implementation of our Vision 2020 strategic plan, which is set to make Mauna Kea Technologies a leading player in the digital transformation of medicine and surgery, is now well underway. After successfully bringing microscopes into the patient's body, we are now on the verge of bringing in vivo the connected laboratory of the future, harnessing the full power of the latest artificial intelligence techniques now available in the Cloud and the advent of next-generation molecular markers. Our partnerships with Cook Medical, Siemens and Fujifilm are concrete illustrations that our vision for Mauna Kea is becoming a reality, and the recent launch of Cellvizio by Cook Medical at the European Association of Urology Congress demonstrates the commercial leverage inherent to our new strategy. We remain confident in the potential of our key markets and in the power of our existing and future partners."

A conference call will be held at 7:30 PM CET (Paris time) today on the following number: +1.855.40.277.62 (USA) or +44-2033679454 (UK). You will be able to play back the conference call for three months by calling: +1.877.64.230.18 (USA) or +44.2033679460 (UK) and using the access code: 299716#.

About Mauna Kea Technologies 
Mauna Kea Technologies is a global medical device company focused on eliminating uncertainties related to the diagnosis and treatment of cancer thanks to real time in vivo microscopic visualization. The Company's flagship product, Cellvizio, has received clearance to sell a wide range of applications in more than 40 countries, including the United States, Europe, Japan, China, Canada, Brazil and Mexico.

For more information on Mauna Kea Technologies, visit www.maunakeatech.com

Mauna Kea Technologies
Investors relations US
Sebastien Cadet
Global Marketing Director and OEM Leader
investors@maunakeatech.com

France and Europe
NewCap - Investor Relations | Strategic Communication
Florent Alba/Pierre Laurent
Tel: +33 (0)1 44 71 94 94
maunakea@newcap.fr

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SOURCE Mauna Kea Technologies