SHL Telemedicine reports first quarter 2014 financial results -- Revenues up by 49.3% to USD 10.6 million (USD 7.1 million in Q1 2013)

-- EBITDA reached USD 2.0 million (USD 1.4 million in Q1 2013)

-- Germany revenue tripled year over year, contributing 43.4% of total revenues

-- Received marketing approvals for the smartheart™ in Japan and China

-- Accelerated revenue growth. Increasing revenue outlook to over 30% growth in 2014

TEL AVIV, Israel and ZURICH, May 21, 2014 /PRNewswire/ -- SHL Telemedicine Ltd. (SIX Swiss Exchange: SHLTN, OTCPK: SMDCY), a leading provider and developer of advanced personal telemedicine solutions, today announced results for the first quarter ended 31 March 2014.

Erez Alroy, Co-CEO of SHL, commented: "We have started the year on solid footing and have successfully accelerated our revenue growth. As a result, we are increasing our revenue outlook to over 30% growth for the year. We are confident this momentum in our business will continue for the remainder of 2014."

Business Review
SHL strengthened its position as a leading provider of telehealth services in Germany through the broadening of its institutional services portfolio and customer base. The Company recently appointed Mr. Martin Lehner as Managing Director of SHL Germany. Prior to joining SHL, he served as CEO and President of Amoena, a leading medical products company and as Executive Vice President at Elan Group.

In Israel, SHL's business showed another strong quarter with improved margins.

SHL is progressing in the commercial rollout of its telehealth services in India. And in the U.S., the Company has started developing channels for the smartheart platform.

In May, SHL received the China Food and Drug Administration ("CFDA") approval for the marketing of the smartheart in China, which closely follows the receipt of the Japanese PMDA Pre-Market Certification for marketing the smartheart. The smartheart has already received marketing approvals in Europe and the U.S.

During the quarter, SHL launched a Level 1 American Depository Receipt (ADR) program in the United States. The ADRs are traded over-the-counter under the ticker symbol SMDCY. Each ADR represents one ordinary share in SHL Telemedicine. The Company's ordinary shares continue to trade on the SIX Swiss Exchange under the symbol "SHLTN."

Financial Highlights
During the first quarter 2014, revenues increased considerably primarily due to the growth in the Company's German business, following the acquisition of almeda. Even with the increased investments in geographical expansion, SHL's financial performance has improved significantly with improved gross and operating margins.

Revenues for the first quarter amounted to USD 10.6 million compared with USD 7.1 million in the first quarter of 2013. This represents an increase of 49.3% and 42.3% at constant exchange rates*.

Gross profit for the quarter amounted to USD 6.0 million (56.6% of revenues) compared with USD 3.7 million (52.1% of revenues) in the first quarter of 2013.

EBITDA for the quarter amounted to USD 2.0 million (18.9% of revenues) with EBIT for the quarter amounting to USD 0.4 million (3.8% of revenues) compared with EBITDA of USD 1.4 million (19.7% of revenues) and EBIT of USD 0.2 million (2.8% of revenues) in the first quarter of 2013.

Net income for the quarter amounted to USD 0.0 million (USD 0.00 per share) compared with a net loss of USD 0.3 million (USD 0.03 per share) in Q1 2013.  

Cash flow for the quarter includes cash used in operations of USD 2.4 million. Excluding USD 5.2 million received from Philips in the first quarter of 2013, which was the last payment related to the Raytel transaction, cash used in operations during the quarter amounted to USD 1.3 million. The decrease in operating cash flow this quarter is the result of one–time working capital requirements at almeda, for which SHL received USD 2.9 million upfront at the end of 2013. Cash, cash equivalents and marketable securities amounted to USD 25.1 million at March 31, 2014.

Balance sheet included total assets at 31 March 2014 of USD 108.2 million with shareholders' equity amounting to USD 68.9 million (63.7% of balance sheet) compared to total assets of USD 108.5 million with shareholders' equity amounting to USD 68.9 million at 31 December 2013.

SHL Telemedicine – consolidated key figures – Q1 2014

in USD million

(except per share

amounts)

Q1 2014

Q1 2013

%

change

Q1 2014

(constant

currency)

%

change

Revenues

10.6

7.1

49.3%

10.1

42.3%

Gross profit

6.0

3.7

62.2%

5.7

54.1%

%

56.6%

52.1%


56.4%


EBIT

0.4

0.2

100.0%

0.4

100.0%

%

3.8%

2.8%


4.0%


EBITDA

2.0

1.4

42.9%

1.9

35.7%

%

18.9%

19.7%


18.8%


Net income/(loss)

0.0

(0.3)

n.a.

0.1

n.a.

Basic EPS/ LPS)

0.00

(0.03)

n.a.

0.00

n.a.

* Constant currency - In order to enable meaningful comparison between the results, they are also presented at constant currency exchange rates. These are calculated by translating the 2014 results using the average 2013 exchange rates instead of the current period exchange rates. Management believes that this presentation enables a more meaningful comparison between the periods due to the significant fluctuations in NIS/USD/EUR exchange rates.

Revenues by geographic distribution – Q1 2014


Israel

Germany

 

USD m

% of total

USD m

% of total

Q1 2014

6.0

56.6%

4.6

43.4%

Q1 2013

5.6

78.9%

1.5

21.1%

Q1 2014 (constant

currency exchange

rates)

5.7

56.4%

4.4

43.6%

% change in constant

currency

1.8%


193.3%


Conference Call, today, 21 May, 4.00 pm CET
SHL will hold a conference call to discuss the Q1 results today at 4.00 pm CET. Erez Alroy, Co-CEO, and Eran Antebi, CFO, will host the call. Dial-in numbers are as follows:

From Europe                +41 (0)58 310 50 00
From UK                      +44 (0)203 059 58 62
From US                      +1 (1)631 570 5613
From Israel                   Toll free: 1 80 921 44 27/Local: +972 3763 1173

Slides are available at
http://www.shl-telemedicine.com/investors-relations/financial-reports/

IR Agenda 2014
August 20, 2014          Q2 Results
November 19, 2014      Q3 Results

About SHL Telemedicine
SHL Telemedicine is engaged in developing and marketing personal telemedicine systems and the provision of medical call center services, with a focus on cardiovascular and related diseases, to end users and to the healthcare community. SHL Telemedicine offers its services and personal telemedicine devices to subscribers utilizing telephonic and Internet communication technology. The Company operates in Israel, Germany, India and the United States in one business segment, Telemedicine services. SHL is listed on the SIX Swiss Exchange (SHLTN, ISIN: IL0010855885, Security No.: 1128957) and has an ADR program listed over-the counter; Symbol: SMDCY. For more information please visit our web site at www.shl-telemedicine.com.

Contacts:

Erez Alroy

Co-CEO

P:+972 3 5612212,

ereza@shl-telemedicine.com

Martin Meier-Pfister

IRF Communications

P: +41 43 244 81 40

shl@irfcom.ch

Garth Russell / Elizabeth Barker

KCSA Strategic Communications

P: 212-896-1250 / 212-896-1203

grussell@kcsa.com / ebarker@kcsa.com

Some of the information contained in this press release contains forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those in the forward-looking statements as a result of various factors. SHL Telemedicine undertakes no obligation to publicly update or revise any forward-looking statements.

 

Balance-Sheets (USD thousands)

31.3.2014

31.3.2013

31.12.2013


Unaudited

Unaudited

Audited

Cash and cash equivalents

5,939

12,969

8,732

Available-for-sale investments

19,116

16,160

19,661

Trade receivables

14,134

11,965

10,479

Inventory

1,213

457

869

Other current assets

8,081

6,466

8,014

Current Assets

48,483

48,017

47,755





Non-Current Assets

11,372

12,437

11,632





Property and equipment, net

15,600

15,239

15,982





Intangible assets, net

32,739

23,092

33,146





Total Assets

108,194

98,785

108,515





Credit from banks and current maturities

11,156

8,522

10,477

Deferred revenues

590

110

330

Trade payables

1,925

1,214

1,433

Provisions

-

1,067

-

Other accounts payable

4,472

4,240

4,568

Other liabilities

2,007

-

2,504

Current liabilities

20,150

15,153

19,312





Long-term loans

17,095

19,506

18,205

Deferred revenues

1,244

1,488

1,283

Employee benefit liabilities

834

932

805

Non-current liabilities

19,173

21,926

20,293





Total liabilities

39,323

37,079

39,605

Equity:




Issued capital

31

31

31

Additional paid-in capital

95,069

94,488

95,014

Treasury shares

(2,753)

(2,956)

(2,774)

Foreign currency translation reserve

6,130

3,002

6,366

Capital reserve for available-for-sale

     investments and actuarial gains

1,533

860

1,415

Accumulated deficit

(31,139)

(33,719)

(31,142)

Total equity

68,871

61,706

68,910





Total liabilities and equity

108,194

98,785

108,515

 

 

Statements of Income 
     (USD thousands, except per share data)

Q1 14

Q1 13

2013


Unaudited

Unaudited

Audited

Revenues

10,643

7,140

29,674





Depreciation and amortization

604

571

2,127

Cost of revenues

4,060

2,896

11,607

Gross Profit

5,979

3,673

15,940





Research and development costs, net

597

436

2,206

Selling and marketing expenses

2,732

2,059

8,787

General and administrative expenses

2,284

1,000

10,341

Gain from almeda acquisition

-

-

(8,492)

Operating income

366

178

3,098





Financial income

193

333

1,072

Financial expenses

(244)

(645)

(2,631)

Income (loss) before taxes on income

315

(134)

1,539

Taxes on income (tax benefit)

312

211

(693)





Net income (loss)

3

(345)

2,232





Basic and diluted income (loss) per share

-

(0.03)

0.22

 

Other Comprehensive income not to be

     reclassified to profit or loss in subsequent

     periods:




Foreign currency translation reserve

(236)

942

4,306

Actuarial gain

-

-

233


(236)

942

4,539

Other Comprehensive income to be reclassified

     to profit or loss in subsequent periods




Transfer to the statement of income in respect of

     available-for-sale investments

(56)

(32)

146

Gain on available-for-sale investments

174

44

188


118

12

334









Total comprehensive income (loss)

(115)

609

7,105

 

 

Statements of Cash Flows (USD thousands)

Q1 2014

 

Q1 2013

2013


Unaudited

Unaudited

Audited

Net income (loss)

3

(345)

2,232

Adjustment required to reconcile net income

     (loss) to net cash provided by (used in)

     operating activities

(2,376)

4,281

400

Net Cash provided by (used in) Operating

     Activities

(2,373)

3,936

2,632





Purchase of property and equipment

(383)

(603)

(2,200)

Investment in intangible assets

(398)

(485)

(1,878)

Acquisition of almeda

-

-

2,920

Proceeds from sale of property and

     equipment

-

-

29

Purchase of available-for-sale investments

(1,926)

(448)

(8,511)

Proceeds from sale of  available-for-sale

     investments

2,444

749

6,402

Net Cash used in Investing Activities

(263)

(787)

(3,238)





Proceeds from exercise of options

5

40

486

Short-term bank credit, net

714

(243)

1,053

Payment of long-term loans

(869)

(776)

(3,267)

Treasury shares purchased

-

(36)

(36)

Net Cash used in Financing Activities

(150)

(1,015)

(1,764)

Effect of exchange rate changes on cash and

     cash equivalents

(7)

222

489

Increase (decrease) in cash and cash

     equivalents

(2,793)

2,356

(1,881)

Cash and cash equivalents at the beginning of

     the period

8,732

10,613

10,613

Cash and Cash equivalents at the end of the

     period

5,939

12,969

8,732

 

SOURCE SHL Telemedicine Ltd.



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