News Column

SHL Telemedicine Reports Second Quarter 2014 Financial Results

August 19, 2014

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Press release (German press release on page 6)






SHL Telemedicine Reports Second Quarter 2014 Financial Results



Revenue increased 39.2% to USD 10.3 million (USD 7.4 million in Q2 2013)Improvement in gross margins to 56.3% from 52.7%EBITDA of USD 1.7 million (16.5% of revenues) with EBIT of USD 0.2 millionNet profit of USD 0.1 millionInvesting in expansion into new territoriesConfirmed 2014 revenue guidance of over 30% growth year-over-year


Tel Aviv/Zurich, 20 August 2014 - SHL Telemedicine Ltd. (SIX Swiss Exchange: SHLTN, OTCPK: SMDCY), a leading provider and developer of advanced personal telemedicine solutions, today announced results for the second quarter and six months ended 30 June 2014.


Erez Alroy, Co-CEO of SHL, commented: "We have seen good momentum in our businesses leading to significantly improved financial performance for the period, even with the increased investments in our expansion initiatives. Expansion into new markets beyond Israel and Germany, based on our global smartheart™ platform, remains a key priority for SHL's growth strategy."


"In the US, we are progressing with our plans to launch our products and services, while in India we have made first steps in rolling out our telemedicine solution. In addition, since receiving approval in March to commence marketing activities in Japan, our smartheart™ platform has been accepted by over 20 leading Japanese clinics."


"We have gone through a lengthy process of receiving regulatory and marketing approvals for the smartheart™platform in several major territories. The global interest we are witnessing is very encouraging and we are excited by the opportunities it may bring"


Financial Highlights

During the second 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 results.


Revenues for the quarter grew by 39.2% (32.4% at constant exchange rates*) and amounted to USD 10.3 million compared to USD 7.4 million in Q2 2013. For the half year revenues grew by 44.1% (37.2% at constant exchange rates) and amounted to USD 20.9 million compared to USD 14.5 million in the first half of 2013.


Gross profitfor the quarter amounted to USD 5.8 million (56.3% of revenues) compared to USD 3.9 million (52.7% of revenues) in Q2 2013. Gross profit for the half year amounted to USD 11.7 million (56.0% of revenues) compared to a gross profit of USD 7.6 million (52.4% of revenues) in the first half of 2013.


EBITDA and EBIT for the half year and second quarter improved significantly over the adjusted EBITDA and EBIT of 2013, which included a one-time item lowering the general and administrative expenses.


For the quarter, EBITDA amounted to USD 1.7 million (16.5% of revenues) with EBIT at USD 0.2 million (1.9% of revenues) compared with an adjusted EBITDA and LBIT of USD 0.6 million and USD 0.7 million in the second quarter 2013


For the half year, EBITDA amounted to USD 3.7 million (17.7% of revenues) with an EBIT of USD 0.6 million (2.9% of revenues), compared with an adjusted EBITDA of USD 0.5 million (3.4% of revenues) and an LBIT of USD 1.9 million in the first half of 2013.


Unadjusted EBITDA and EBIT for the second quarter 2013 amounted to USD 1.7 million and USD 0.4 million, respectively with EBITDA and EBIT for the first half of 2013 amounting to USD 3.1 million and USD 0.6 million, respectively.


Net Income for the quarter and half year was USD 0.1 million, or USD 0.01 per share, compared to an adjusted net loss of USD 1.1 million, for the second quarter 2013 and USD 2.8 million for the first half of 2013. Unadjusted net loss for the second quarter and first half of 2013 amounted to USD 0.0 million (USD 0.00 per share) and USD 0.3 million (USD 0.03 per share), respectively.


Cash used in operations for the quarter and half year amounted to USD 0.9 million and USD 3.3 million, respectively. 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 and half year 2013 amounted to USD 0.8 million and USD 2 million. The decrease in operating cash flow 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 21.8 million at June 30, 2014.


Balance sheet included total assets at 30 June 2014 of USD 106.3 million with shareholders' equity amounting to USD 68.8 million (64.7% 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 -Q2 2014




in USD million (except per share amounts)



Q2 2014



Q2 2013



% change



Q2 2014(constant currency)



% change



Revenues



10.3



7.4



39.2%



9.8



32.4%



Gross profit



5.8



3.9



48.7%



5.5



41.0%



%



56.3%



52.7%





56.1%





EBIT/(LBIT)



0.2



0.4



(50.0%)



0.2



(50.0%)



%



1.9%



5.4%





2.0%





EBITDA



1.7



1.7



0.0%



1.6



(5.9%)



%



16.5%



23.0%





16.3%





Net income (loss)



0.1



0.0



n.a.



0.1



n.a.



Basic EPS (LPS)



0.01



0.00



n.a.




0.01



n.a.





SHL Telemedicine - consolidated key figures - H1 2014




in USD million (except per share amounts)



H1 2014



H1 2013



% change



H1 2014(constant currency)



% change



Revenues



20.9



14.5



44.1%



19.9



37.2%



Gross profit



11.7



7.6



53.9%



11.2



47.4%



%



56.0%



52.4%





56.3%





EBIT/(LBIT)



0.6



0.6



0.0%



0.6



0.0%



%



2.9%



4.1%





3.0%





EBITDA



3.7



3.1



19.4%



3.5



12.9%



%



17.7%



21.4%





17.5%





Net income (loss)



0.1



(0.3)



n.a.



0.1



n.a.



Basic EPS (LPS)



0.01



(0.03)



n.a.



0.01



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 geographicdistribution -Q2 14





Israel



Germany





USD m



% of total



USD m



% of total



Q2 2014



6.1



59.2%



4.2



40.8%



Q2 2013



5.8



78.4%



1.6



21.6%



Q2 2014 (in constant currency)



5.9



60.2%



3.9



39.8%



% change in constant currency



1.7%





143.8%






Revenues by geographicdistribution -H1 14





Israel



Germany





USD m



% of total



USD m



% of total



H1 2014



12.2



58.4%



8.7



41.6%



H1 2013



11.4



78.6%



3.1



21.4%



H1 2014 (in constant currency)



11.6



58.3%



8.3



41.7%



% change in constant currency



1.8%





167.7%







Conference Call, today, August 20, 16:00CET

SHL will hold a call to discuss the Q2 results today at 16:00 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 U.S.A.



Toll free: +1 866 291 41 66



From Israel



Toll free: 1 80 921 44 27





Local: +972 3763 1173




Slides are available at

http://www.shl-telemedicine.com/about-us/investorrelations/financial-reports-pres-2014/




IR Agenda 2014:



November 20, 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.


For further information please contact:

Erez Alroy, Co-CEO, Phone: +972 3561 22 12, ereza@shl-telemedicine.comMartin Meier-Pfister, IRF Communications, Phone: +41 43 244 81 40, shl@irfcom.chGarth Russell, KCSA Strategic Communications, Phone (U.S.A.): +1 212 896 1250, grussell@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.






Medienmitteilung


SHL Telemedicine gibt Finanzergebnisse fÜr das zweite Quartal und die Halbjahresresultate 2014 bekannt


Umsatz um 39.2% erhÖht auf USD 10.3 Mio. (USD 7.4 Mio. im Q2 2013)Verbesserte Bruttomarge von 52.7% auf 56.3%EBITDA im Quartal von USD 1.7 Mio. (16.5% des Umsatzes) mit EBIT vonUSD 0.2 Mio.•Nettoumsatz im Quartal von USD 0.1 Mio.Investitionen fÜr die Expansion in neue GebieteBestÄtigte Umsatzprognose 2014 von jÄhrlich Über 30% Wachstum


Tel Aviv/ZÜrich, 20. August 2014 - SHL Telemedicine Ltd. (SIX Swiss Exchange: SHLTN, OTCPK: SMDCY), ein fÜhrender Anbieter und Entwickler innovativer Telemedizin-LÖsungen, vermeldet heute die Resultate fÜr das 2. Quartal 2013.


Erez Alroy, Co-CEO of SHL, kommentiert: "Wir verzeichneten eine gute Dynamik in unserem GeschÄft, die zu einer deutlichen Steigerung unserer Ergebnisse beigetragen hat, obwohl wir auch die Investitionen in unsere Expansionsstrategie erhÖht haben. Die Expansion in neue MÄrkte ausserhalb von Israel und Deutschland, basierend auf unserer globalen Plattform smartheart™, bleibt ein SchlÜsselkriterium in der SHL-Wachstumsstrategie."


"In den USA haben wir unsere PlÄne fÜr Produkt- und Service-Lancierungen vorangetrieben, wÄhrend wir in Indien begonnen haben, unsere Telemedizin-LÖsung einzufÜhren. Nachdem wir im MÄrz die Bewilligung fÜr Marketing-AktivitÄten in Japan erhalten hatten, wurde unsere Plattform smartheart™ inzwischen von Über zwanzig fÜhrenden Kliniken akzeptiert."


"Wir haben fÜr unsere Plattform smartheart™ in einigen Gebieten den aufwÄndigen Prozess fÜr die Zulassung wie auch die MarketingaktivitÄten durchlaufen. Das weltweite Interesse, das wir erleben, ist sehr ermutigend und wir freuen uns auf die damit verbundenen Chancen."


Finanzkennzahlen

WÄhrend dem zweiten Quartal 2014 nahm der Umsatz zu, was vor allem auf das Wachstum in Deutschland, nach der Akquisition von almeda, zurÜckzufÜhren ist. Obschon verstÄrkt in die geografische Expansion investiert wurde, haben sich das Brutto- wie auch das operative Ergebnis deutlich verbessert.


Der Umsatz steigerte sich im Quartal um 39.2% (32.4% bei konstanten Wechselkursen), was einem Anstieg auf USD 10.3 Mio., verglichen mit USD 7.4 Mio. im Q2 2013, entspricht. Im ersten halben Jahr wuchs der Umsatz um 44.1% (37.2% bei konstanten Wechselkursen), was USD 20.9 Mio. verglichen mit USD 14.5 Mio. im ersten Halbjahr 2013 entspricht.


Der Bruttogewinn fÜr das Quartal betrug USD 5.8% (56.3% des Umsatzes), verglichen mit USD 3.9 Mio. (52.7% des Umsatzes) im Q2 2013. Der Bruttogewinn fÜr das Halbjahr betrug USD 11.7 Mio. (56.0% des Umsatzes), verglichen zum Bruttogewinn von USD 7.6 Mio. (52.4% des Umsatzes) in der ersten HÄlfte 2013.


Der EBITDA und EBIT fÜr das Halbjahr und das zweite Quartal verbesserten sich deutlich gegenÜber dem bereinigten EBITDA und EBIT von 2013, welche ein Einmalereignis einschlossen, das Personal- und Sachkosten senkte.


Der EBITDA fÜr das Quartal betrug USD 1.7 Mio. (16.5% des Umsatzes) mit einem EBIT fÜr das Quartal in der HÖhe von USD 0.2 Mio. (1.9% des Umsatzes), gegenÜber einem bereinigten EBITDA und LBIT von USD 0.6 Mio. und USD 0.7 Mio. im zweiten Quartal 2013.


FÜr das Halbjahr betrug der EBITDA USD 3.7 Mio. (17.7% des Umsatzes) mit einem EBIT von USD 0.6 Mio. (2.9% des Umsatzes), gegenÜber einem bereinigten EBITDA von USD 0.5 Mio. (3.4% des Umsatzes) und einem LBIT von USD 1.9 Mio. im ersten Halbjahr 2013.


Der unbereinigte EBITDA und EBIT fÜr das zweite Quartal 2013 betrug USD 1.7 Mio. und USD 0.4 Mio., der EBITDA und EBIT betrug im ersten Halbjahr 2013 USD 3.1 Mio. und USD 0.6 Mio.


Der Nettogewinn fÜr das Quartal und Halbjahr betrug USD 0.1 Mio., oder USD 0.01 pro Aktie, verglichen mit einem bereinigten Nettoverlust von 1.1 Mio. im zweiten Quartal 2013 und USD 2.8 Mio. im ersten Halbjahr 2013. Der unbereinigte Nettoverlust fÜr das zweite Quartal und das erste Halbjahr 2013 betrug USD 0.0 Mio. (USD 0.00 pro Aktie) und USD 0.3 Mio. (USD 0.03 pro Aktie).


Cashflow. Generierte liquide Mittel aus GeschÄftstÄtigkeit fÜr das Quartal und Halbjahr betrugen USD 0.9 Mio. und USD 3.3 Mio. Ausgenommen der USD 5.2 Mio. von Philips im ersten Quartal 2013, eine letzte Zahlung verbunden mit der Raytel-Transaktion, betrugen die liquiden Mittel im Halbjahr 2013 USD 0.8 Mio. und USD 2 Mio. Der RÜckgang des operativen Cashflows ist das Ergebnis eines einmalig benÖtigten


UmlaufvermÖgens bei almeda, wofÜr SHL im Voraus Ende 2013 USD 2.9 Mio. erhielt. Liquide Mittel und marktgÄngige Wertpapiere betrugen USD 21.8 Mio. am 30. Juni 2014.


Bilanz. Die Aktiva betrugen am 30. Juni 2014 USD 106.3 Mio. mit einem Eigenkapital von USD 68.8 Mio. (64.7% der Bilanzsumme) gegenÜber Aktiva von USD 108.5 Mio. und einem Eigenkapital von USD 68.9 Mio. per 31. Dezember 2013.





Balance-Sheets (USD thousands)



30.6.2014



30.6.2013



31.12.2013





Unaudited



Unaudited



Audited



Cash and cash equivalents



8,154



9,457



8,732



Restricted cash



1,365



-



-



Short term investments



12,301



18,091



19,661



Trade receivables



14,764



12,495



10,479



Inventory



1,628



475



869



Other current assets



8,193



6,596



8,014



Current Assets



46,405



47,114



47,755











Non-Current Assets



11,403



12,322



11,632











Property and equipment, net



15,700



15,125



15,982











Intangible assets, net



32,793



23,292



33,146











Total Assets



106,301



97,853



108,515











Credit from banks and current maturities



10,643



9,117



10,477



Deferred revenues



521



110



330



Trade payables



1,969



1,016



1,433



Other accounts payable



4,236



3,768



4,568



Other liabilities



1,526



-



2,504



Current liabilities



18,895



14,011



19,312











Long-term loans



16,496



18,965



18,205



Deffered revenues



1,218



1,272



1,283



Employee benefit liabilities



875



985



805



Non-current liabilities



18,589



21,222



20,293











Total liabilities



37,484



35,233



39,605



Equity:









Issued capital



31



31



31



Additional paid-in capital



95,037



94,692



95,014



Treasury shares



(2,579)



(2,956)



(2,774)



Foreign currency translation reserve



6,213



3,622



6,148



Capital reserve for available-for-sale investments and actuarial gains



1,175



892



1,633



Accumulated deficit



(31,060)



(33,661)



(31,142)



Total equity



68,817



62,620



68,910



Total liabilities and equity



106,301



97,853



108,515






Statements of Income

(USD thousands, except per share data)



Q2 14




Q2 13



H1 14




H1 13



2013





Unaudited



Unaudited



Unaudited



Unaudited



Audited



Revenues



10,274



7,408



20,917



14,548



29,674















Depreciation and amortization



562



551



1,166



1,122



2,127



Cost of revenues



3,947



2,963



8,007



5,859



11,607



Gross Profit



5,765



3,894



11,744



7,567



15,940















Research and development costs, net



645



577



1,242



1,013



2,206



Selling and marketing expenses



2,987



2,328



5,719



4,679



8,787



General and administrative expenses



2,063



583



4,347



1,291



10,341



Gain from almeda acquisition and other income



(137)



-



(137)



-



(8,492)



Operating income



207



406



573



584



3,098















Financial income



511



141



704



474



1,072



Financial expenses



(370)



(407)



(614)



(1,052)



(2,631)



Income before taxes on income



348



140



663



6



1,539



Taxes on income (Tax benefit)



269



82



581



293



(693)















Net income (loss)



79



58



82



(287)



2,232















Basic and diluted income (loss) per share



0.01



0.00



0.01



(0.03)



0.22




Other Comprehensive income not to be reclassified to profit or loss in subsequent periods:














Foreign currency translation reserve



301



620



65



1,562



4,088



Actuarial gain



-



-



-



-



233





301



620



65



1,562



4,321



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



(489)




13



(545)




(19)



146



Gain (loss) on available-for-sale investments



(87)



19



87



63



406





(576)



32



(458)



44



552



























Total comprehensive income(loss)



(196)



710



(311)



1,319



7,105


















Statements of Cash Flows (USD thousands)



Q2 2014




Q2 2013




H1 2014




H1 2013



2013





Unaudited



Unaudited



Unaudited



Unaudited



Audited



Net income (loss)



79



58



82



(287)



2,232



Adjustment required to reconcile net income (loss) to net cash provided by (used in) operating activities



(964)





(822)



(3,340)





3,459



400



Net Cash provided by (used in) Operating Activities



(885)




(764)



(3,258)




3,172



2,632















Purchase of property and equipment



(480)



(315)



(863)



(918)



(2,200)



Investment in intangible assets



(380)



(501)



(778)



(986)



(1,878)



Restricted cash



(1,367)



-



(1,367)







Acquisition of almeda



-



-



-



-



2,920



Proceeds from sale of property and equipment



-




14



-




14



29



Purchase of short-term investments



(3,130)



(2,665)



(5,056)



(3,113)



(8,511)



Proceeds from sale of short-term investments



10,085




905



12,529




1,654



6,402



Net Cash provided by (used in) Investing Activities



4,728




(2,562)



4,465




(3,349)



(3,238)















Proceeds from exercise of options



60



101



65



141



486



Short-term bank credit, net



(714)



461



-



218



1,053



Payment of long-term loans



(998)



(804)



(1,867)



(1,580)



(3,267)



Treasury shares purchased



-



-



-



(36)



(36)



Net Cash used in Financing Activities



(1,652)



(242)



(1,802)



(1,257)



(1,764)



Effect of exchange rate changes on cash and cash equivalents



24




56



17




278



489



Increase (decrease) in cash and cash equivalents



2,215




(3,512)



(578)




(1,156)



(1,881)



Cash and cash equivalents at the beginning of the period



5,939




12,969



8,732




10,613



10,613



Cash and Cash equivalents at the end of the period



8,154




9,457



8,154




9,457



8,732








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