EANS-Adhoc: LifeWatch AG to report on promising Fourth Quarter 2011 and Full Fiscal Year 2011 Financial Results (with document)
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Analysts' Comments/LifeWatch AG
29.02.2012
+ Revenues increased by 18% to USD 22.24 million in the fourth quarter
2011;
+ EBIT of USD 0.09 m and EBITDA of USD 1.08 million in the fourth quarter
2011;
+ Positive operating cash flow of USD 7.07 million in the fourth quarter
2011;
+ Completed cost reductions of over USD 15 million annually;
+ Another 25 million covered lives and 111 contracts in FFY 2011
Analyst and media conference, international live conference call and audio web
cast on LifeWatch Q4 2011 and FFY 2011 financial results:
+ Wednesday, February 29, 2012 at 10.00 a.m. CET at Zunfthaus zur Saffran,
Zurich/Switzerland;
+ Dial-in number: + 41 (0)91 610 56 00 (Europe), + 44 (0)203 059 58 62
(UK), +1 (1)866 291 41 66 (USA - Toll-free);
+ Audio web cast https://services.choruscall.eu/links/lifewatch120229.html;
Neuhausen am Rheinfall/Switzerland - LifeWatch AG (SIX Swiss Exchange: LIFE),
the leading provider of wireless telemedicine, today announces the results for
the fourth quarter 2011 and full fiscal year 2011. LifeWatch marked up the end
of a difficult year with a return to growth and positive EBIT and EBITDA in the
fourth quarter 2011. The Company continues to make improvements in all areas of
its business and is rolling out its promising strategy for an enforced product
and geographical diversification.
Fourth Quarter 2011 Financial Highlights:
Revenues of USD 22.24 million, an increase of approximately 18% from Q3
2011
EBIT of USD 0.09 million, compared with LBIT of 19.84 in Q3 2011
EBITDA of USD 1.08 million, versus an LBITDA of USD 18.37 million in Q3
2011
Net loss of USD 0.55 million versus net loss of USD 20.4 million in Q3
2011
Positive operating cash flow of USD 7.07 million, versus negative
operating cash flow in Q3 2011
Cash, cash equivalents, marketable securities and structures of USD 13.93
million, compared with USD 7.20 million recorded in Q3 2011
Full Fiscal Year 2011 Financial Highlights:
Revenues of USD 82.24 million, compared with USD 87.09 million in FFY 2010
Successfully completed cost reductions of over USD 15 million annually
LBIT and LBITDA of USD 28.22 million and USD 22.92 million respectively,
compared with LBIT of USD 4.85 million and EBITDA of USD 0.39 million,
respectively, in FFY 2010
Excluding restructuring and other costs, LBIT and EBITDA in FFY 2011 were
USD 4.55 million and USD 0.76 million, respectively
Net loss of USD 31.97 million, compared with net income of USD 0.83
million in FFY 2010
Negative operating cash flow of USD 8.45 million
Cash, cash equivalents, marketable securities and structures of USD 13.93
million on December 31, 2011
Business Update:
The civil OIG investigation had a big impact on our FFY 2011 results. As
published in our Q3 2011 letter to shareholders, LifeWatch cooperated fully
with the OIG and the DOJ throughout the investigation. We are finalizing the
settlement to be paid over five years, and in Q3 2011, the Company booked a
provision in a cumulative amount of USD 18.50 million which is related to this
issue. LifeWatch will disclose further details once the settlement is completed
with the OIG and DOJ.
Technology Update:
LifeWatch has entered into a joint development agreement with the U.S. American
medical technology developer Ansar Group on a break-through testing technology
which will be deployed on a wide range of LifeWatch wireless cardiac monitors
in the coming months. For the first time in the wireless cardiac monitoring
industry, the treating physician will be able to measure individual
parasympathetic and sympathetic responses of their patient. This information
will be significant in providing additional clinical data for patients with
Atrial Fibrillation, Syncope (fainting), Congestive Heart Failure, Cardiac
Autonomic Neuropathy (associated with increased risk of mortality and
morbidity), and Hypertension. These conditions together affect an estimated 99
million Americans. An additional subset of patients who could benefit from this
test includes millions of Americans who are currently prescribed Beta blockers.
Managed Care:
For fiscal 2011, LifeWatch signed 111 agreements, of which 51 were for
NiteWatch Home Sleep Test services, and 60 for Ambulatory Cardiac Telemetry
(ACT) services. Since 2010, LifeWatch has negotiated 367 contracts for these
two services alone. Among the biggest private insurance companies that
LifeWatch contracted recently for its services were the East Coast Carrier
Magnacare in New York (850,000 covered lives) and the West Coast based carriers
Blue Shield of California (3.5 million covered lives) and Heritage Provider
Network (550,000 covered lives) from Southern California.
Home Sleep Testing:
In January of 2012, Kaiser Health News (a nonprofit news organization providing
in-depth coverage of health care policy and politics), cited the rising costs
of diagnosing Obstructive Sleep Apnea (OSA) in the U.S. due to the overuse of
sleep labs. Currently about 80% of the sleep tests are performed at sleep labs,
with 20% performed in the home. As insurance companies are becoming more aware
of the cost benefits of diagnosing OSA with Home Sleep Tests, we believe the
U.S. market will experience a paradigm shift from Sleep Labs to the less
expensive non-attended home sleep testing. The national rates for OSA are also
rising, as a result of the increase of obesity in the general population, which
is expected to drive growth.
Joint Venture and Expansion into New Geographies:
In November 2011, LifeWatch and Tracker AG entered into a joint venture to
develop and distribute innovative products and solutions in the field of
telemedicine and monitoring services in Switzerland and neighboring European
healthcare markets. Their first jointly developed product, the LifeTracker
Mobile, is an innovative mobile phone targeted to health and wellness conscious
consumers over 55 years of age. LifeTracker products use M2M technology
(machine to machine) that enables an automated information exchange between
different devices such as mobile phones and blood pressure monitors. Further
product specific options are on track to be launched in the first half of 2012.
Revenues:
Revenues for Q4 of 2011 reached USD 22.24 million, an improvement of
approximately 18% from Q3 of 2011. Revenues for FFY 2011 reached USD 82.24
million, a decrease of about 6% from FFY 2010 of USD 87.08 million. The
decrease in FFY revenues is mainly due to the reduction in reimbursement rates,
a decrease in ACT enrollments due to tighter reimbursement requirements, and
the impact of the civil investigation led by the Office of the Inspector
General (OIG) on our sales force.
Gross Profit:
Gross profit during this reporting quarter improved to USD 13.48 million with a
margin of 60.6%, compared with a gross profit of USD 8.81 million (46.9%
margin) in Q3 2011. Gross margins improved due to the increased revenues in Q4
2011, cost savings associated with the termination of the Medical Policy Appeal
Program (MPAP), and a reduction in headcount. Gross profit in FFY 2011 reached
USD 43.44 million with a margin of 52.8% compared to gross profit of USD 43.71
million with a margin of 50.2% in FFY 2010. The cost cutting measures
introduced in Q2 of 2011 had a positive impact on FFY gross profit margin.
Net Income/Loss:
Net loss for the fourth quarter was USD 0.55 million compared to a net loss of
USD 20.40 million recorded in Q3 2011. Fully-diluted loss per share was USD
0.04 in the fourth quarter of 2011 compared with fully-diluted loss per share
of USD 1.64 reported for the Q3 of 2011. Net loss for FFY 2011 was USD 31.97
million compared to a net income of USD 0.83 million recorded in FFY 2010.
Fully-diluted loss per share was USD 2.56 in FFY 2011 compared with fully-
diluted earnings per share of USD 0.06 reported for FFY 2010.
Outlook 2012:
We remain cautiously optimistic for FFY 2012. The healthcare cuts proposed in
the U.S. have been postponed until 2015; however we still face competition from
new entry level companies in our cardiac monitoring services business. And our
long-term growth strategy of product and geographical diversification look
promising.
About LifeWatch AG:
LifeWatch AG, headquartered in Neuhausen am Rheinfall and listed on SIX Swiss
Exchange (LIFE), Switzerland, is the leading healthcare technology and solution
company, specializing in advanced telehealth systems and wireless remote
patient monitoring services. LifeWatch services cater to individuals, ranging
from high-risk and chronically ill patients, to consumers of health and
wellness products. LifeWatch has subsidiaries in the United States, the
Netherlands, Japan, the United Kingdom, Switzerland and Israel. LifeWatch AG is
the parent company of LifeWatch Services Inc., a leading US-based cardiac
monitoring service provider, and manufacturer of telecardiology products.
LifeWatch is also introducing a new program for Home Sleep Testing of
Obstructive Sleep Apnea (OSA) patients under the brand name NiteWatch. For
additional information, please visit www.lifewatch.com.
Sign-up for customized E-mail alerts and documentation requests is available at
http://production.investis.com/lifewatch/alert-service/
This press release includes forward-looking statements. All statements other
than statements of historical facts contained in this press release, including
statements regarding future results of operations and financial position,
business strategy and plans and objectives for future operations, are forward-
looking statements. The words "believe," "may," "will," "estimate," "continue,"
"anticipate," "intend," "expect" and similar expressions are intended to
identify forward-looking statements. LifeWatch AG has based these forward-
looking statements largely on current expectations and projections about future
events and financial trends that it believes may affect the financial
condition, results of operations, business strategy, short term and long term
business operations and objectives, and financial needs. These forward-looking
statements are subject to a number of risks, uncertainties and assumptions. In
light of these risks, uncertainties and assumptions, the forward-looking events
and circumstances described may not occur and actual results could differ
materially and adversely from those anticipated or implied in the forward-
looking statements. All forward-looking statements are based only on data
available to LifeWatch AG at the time of the issue of this press release.
LifeWatch AG does not undertake any obligation to update any forward-looking
statements contained in this press release as a result of new information,
future events or otherwise.
THIS PRESS RELEASE IS NOT BEING ISSUED IN THE UNITED STATES OF AMERICA AND
SHOULD NOT BE DISTRIBUTED TO UNITED STATES PERSONS OR PUBLICATIONS WITH A
GENERAL CIRCULATION IN THE UNITED STATES. THIS PRESS RELEASE DOES NOT
CONSTITUTE AN OFFER OF SECURITIES OF LIFEWATCH AG OR ANY OF ITS SUBSIDIARIES
FOR SALE IN THE UNITED STATES OR AN INVITATION TO SUBSCRIBE FOR OR PURCHASE ANY
SECURITIES OF LIFEWATCH AG OR ITS SUBSIDIARIES IN THE UNITED STATES. IN
ADDITION, THE SECURITIES OF LIFEWATCH AG AND ITS SUBSIDIARIES HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD
OR DELIVERED WITHIN THE UNITED STATES OR TO U.S. PERSONS ABSENT REGISTRATION
UNDER OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
UNITED STATES SECURITIES LAWS. ANY PUBLIC OFFERING OF SECURITIES TO BE MADE IN
THE UNITED STATES WILL BE MADE BY MEANS OF A PROSPECTUS THAT MAY BE OBTAINED
FROM LIFEWATCH AG OR ITS SUBSIDIARIES, AS APPLICABLE, AND WILL CONTAIN DETAILED
INFORMATION ABOUT THE ISSUER AND ITS MANAGEMENT AS WELL AS FINANCIAL STATEMENTS
OF THE ISSUER.
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Further inquiry note:
Sensus Investor and Public Relations, Zürich:
Tel +41 43 366 55 11 | Fax +41 43 366 55 12 | Email lifewatch@sensus.ch
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issuer: LifeWatch AG
Rundbuckstrasse 6
CH-8212 Neuhausen am Rheinfall
phone: +41 52 632 00 50
FAX: +41 52 632 00 51
mail: users@lifewatch.com
WWW: www.lifewatch.com
sector: Healthcare Providers
ISIN: CH0012815459
indexes: SPI, SPIEX
stockmarkets: free trade: Berlin, Open Market / XETRA: Frankfurt, Main Standard:
SIX Swiss Exchange
language: English