EOS imaging Reports H1 2019 Results

Regulatory News:

EOS imaging (Paris:EOSI) (Euronext, FR0011191766 – EOSI), a leader in 2D/3D orthopedic medical imaging and software solutions for 3D anatomical modeling and surgical planning today announces its consolidated results for the six months ended June 30, 2019, as stated by the Board of Directors on September 23, 2019.

FIRST SEMESTER 2019 HIGHLIGHTS

• €6.0 millions total H1 2019 revenues, of which €5.2 millions of Maintenance and Services,
  up to +33% vs H1 2018
• €12.8 million EOS systems orders¹, i.e. -6% vs. H1 2018, driven by +18% growth in North America and +17% in EMEA, partially offset by the decrease in APAC
• Solidified gross margin at 50.5% of sales as of June 30, 2019
• Operating expenses under control
• Company’s financials impacted by the temporary gap in equipment revenues caused by the transition into EOS imaging’s new commercial cycle implemented in January 2019

Mike Lobinsky, CEO of EOS imaging, commented: “This semester marks an important milestone for EOS imaging in the strengthening of the fundamentals of the Company, whether it be supply chain management, business performance or product innovation. The evolution of our commercial model has been an important strategic step towards improved delivery process and better cash management. We are confident in having put in place the most efficient organization, allowing to deliver, past the current transition phase, strong performance over the next quarters and beyond. Meanwhile, we continue to develop our portfolio of innovative orthopedic solutions, recently reinforced by the launch of EOSlink, enabling the seamless integration of the EOSapps pre-operative surgical planning software with intra-operative surgical solutions. With the fundamentals of our business set, we look forward to resuming strong invoicing in future semesters.”

In order to better meet customer expectations, EOS imaging made a change in its commercial cycle at the beginning of 2019, by organizing the delivery of EOS systems to the start of the installation phase, and no longer at receipt of the equipment order.

This evolution has created a transition period during which (i) new received orders gradually build an order book², and (ii) sales are gradually recorded according to the pace of delivery of the EOS systems. As installations usually take place 3 to 12 months after the order, a similar lag is expected on deliveries.

While 2019 revenues are temporarily impacted by the transition phase, this evolution leads to improvements in production and logistics management and contribute to the necessary reduction of working capital.