LifeWatch AG

EQS-Adhoc: LifeWatch AG: LifeWatch AG reports above-market revenue growth of 9.1% and substantial improvement in profitability during first half 2015

EQS Group-Ad-hoc: LifeWatch AG / Key word(s): Half Year Results
LifeWatch AG: LifeWatch AG reports above-market revenue growth of 9.1%
and substantial improvement in profitability during first half 2015

20.08.2015 / 07:00
Release of an ad hoc announcement pursuant to Art. 53 KR.
The issuer is solely responsible for the content of this announcement.

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LifeWatch AG reports above-market revenue growth of 9.1% and substantial
improvement in profitability during first half 2015

Revenue growth of 9.1% to USD 52.5 million - above-market growth in core
monitoring services resulting in market share gains - substantial increase
in profitability as efficiency measures bear fruit - EBITDA margin of 13.8%
achieved - net profit of USD 1.9 million vs. net loss of USD 4.7 million in
H1 2014 - full-year guidance reiterated

Zug/Switzerland, August 20, 2015 - LifeWatch AG (SIX Swiss Exchange: LIFE),
a leading developer and provider of medical solutions and remote diagnostic
monitoring services in the digital health market, is pleased to report on
good progress during the first half of 2015. In total, revenues during the
first six months amounted to USD 52.5 million, an increase of 9.1% compared
to the prior year period. Monitoring services (99.7% of revenues) grew by
12.1%, clearly outperforming the market average and thus resulting in
market share gains. During the first half year, our US-based subsidiary
LifeWatch Services Inc. signed 40 new or amended contracts, underpinning
our brand and sales force successes. Device sales declined to USD 0.2
million due to delivery delays into the second half of 2015. The gross
profit margin amounted to 52.8% versus 52.1% a year earlier. We expect the
gross margin to continue to expand mid-term as on-going cost and efficiency
measures, product mix improvements and new project launches take effect.

Substantial improvement in operating profitability
Our operating profitability improved substantially thanks to the positive
impact of the restructuring and productivity measures that we implemented
over the past year. As such, EBITDA during the first half year reached USD
7.2 million (H1 2014 LBITDA of USD -1.5 million), equivalent to an EBITDA
margin of 13.8%, and EBIT amounted to USD 3.8 million (EBIT margin of
7.3%), marking the highest levels since the first half of 2009. Significant
progress was achieved in Sales & Marketing thanks to sales force
optimization and territory realignment, resulting in an 800 bps reduction
to 18% of revenues (H1 2014: 26%). Likewise, the reorganization of the R&D
activities during the second half of 2014 as well as the capitalization of
some development costs led to a 300 bps reduction in R&D to 3.8% of
revenues. Without capitalization, R&D expenses would represent 5.7% of
revenues (H1 2014: 8%). Thanks to these substantial cost savings, together
with slightly lower General & Administration costs, the absence of
restructuring charges and despite a higher tax charge, LifeWatch was able
to achieve a positive net income of USD 1.94 million during the first half
of 2015, compared to a net loss of USD 4.72 million during the prior
period. As a result of this good operating performance, the company
generated a cash flow from operations of USD 4.2 million during the first
six months of 2015, against a cash drain of USD 2.8 million during H1 2014.
The equity ratio stood at 54.3% as of June 30, 2015 (53.4% as of December
31, 2014).

On-going development and market activities
As previously announced, development activities are continuing on both our
cardiac and vital signs monitoring patches. The pilot trials for the vital
signs monitoring system are on-going with two new clinics being added in
September, one in the United States and one in Switzerland. The FDA's
enforcement of its new guidances on medical devices "Design Considerations
for Devices Indicated for Home Use" and "Mobile Medical Applications" has
resulted in unexpected minor delays in obtaining the requisite FDA
clearances for LifeWatch's cutting-edge technologies. Clearance for the
vital signs monitoring system is however still expected later this year,
allowing for a limited market release during the fourth quarter. The
cardiac monitoring patch is currently being tested in a hospital
environment. Here again, the new FDA guidance is somewhat delaying
regulatory clearance, although we still anticipate a full market launch
later this year.

Positive news was received in July regarding an 8% increase in the
reimbursement rate from Medicare for our Telemetry offering (ACT) as of
2016. This should lead to improved revenues and profits of around USD 3.5
million in 2016. This change will further enhance our expected revenue
growth for 2016 and beyond.

Furthermore, we are on track to launch our cardiac monitoring business in
the Turkish market in the first half of 2016 and are currently in the
process of establishing the necessary organization and infrastructure to
meet this goal. This is a first step in the global expansion of our remote
cardiac monitoring services. Although these development activities, as well
as other opportunities currently under review, involve significant costs in
the short-term, we believe they are necessary to enhance our future growth
and thereby remain a leader in this rapidly growing digital health market.

Outlook
LifeWatch stands by its full-year 2015 guidance. The company is continuing
its efforts to update and grow its core business while at the same time
launching new products and entering new markets. Dr. Stephan Rietiker
commented: "Our market growth and efficiency programs are progressing well
and I am particularly excited about the prospects for our new products and
of our new markets. We firmly believe that we are setting the stage for
continued above average growth and increased profitability in the years to
come."

Key figures (unaudited, USD millions):




                                           H1 2015                 H1 2014




Revenues                                     52.51                   48.12


Gross profit                                 27.75                   25.09


As % of revenues                             52.8%                   52.1%


EBITDA / (LBITDA)                             7.23                  (1.52)


As % of revenues                             13.8%                      NA


EBIT / (LBIT)                                 3.81                  (4.13)


As % of revenues                              7.3%                      NA


Net income (loss)                             1.94                  (4.72)


As % of revenues                              3.7%                      NA


Earnings (loss) per share                     0.14                  (0.36)


Total fixed assets, net                      16.22                   13.02


Total assets                                 71.94                   68.54


Total equity                                 39.04                   34.82


As % of total assets                         54.3%                     51%


Net cash flow                                 0.02                  (3.92)


Employees                                      612                     561





Detailed reporting
The report on the first half 2015 can be found on our website using the
following link:
http://irlifewatch.com/websites/lifewatch_ir/English/4020/interim-reports.
html
The presentation on the first half 2015 is available under this link:
http://irlifewatch.com/websites/lifewatch_ir/English/5010/financial-presen
tations.html

Today's conference call
A conference call on LifeWatch's half-year results will be held today at
14.00 CET.
Dial-in numbers for the conference call:
CH: +41 22 580 59 70
GER: +49 69 2222 29 043
UK: +44 203 00 92 452
US: +1 855 402 77 66
Participant Pin Code: 60170589#

The live audio webcast and presentation slides will be available under
following link:
http://lifewatch200815-live.audio-webcast.com/

For further questions:
LifeWatch AG
c/o Dynamics Group, Philippe Blangey / Doris Rudischhauser
Phone: +41 43 268 32 35 / +41 79 410 81 88
E-mail: investor-relations@lifewatch.com



About LifeWatch AG:

LifeWatch AG, headquartered in Zug and listed on SIX Swiss Exchange (LIFE),

Switzerland, is a leading healthcare technology and solution company,
specializing in advanced digital health systems and wireless remote
diagnostic patient monitoring services. LifeWatch's services provide
physicians with critical information to determine appropriate treatment and
thereby improve patient outcomes. LifeWatch AG has operative subsidiaries
in the United States, in Switzerland and in Israel, and is the parent
company of LifeWatch Services Inc., and LifeWatch Technologies, Ltd.
LifeWatch Services, Inc. is a leading U.S.-based provider of cardiac
monitoring services and home sleep testing of Obstructive Sleep Apnea
(OSA). LifeWatch Technologies Ltd., based in Israel, is a leading developer
and manufacturer of telemedicine products. For additional information,
please visit www.lifewatch.com.

Sign up for customized e-mail alerts and documentation requests at
http://www.irlifewatch.com/alert-service.aspx

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, the 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 FROM 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.


End of ad hoc announcement

+++++
Additional features:

Document: http://n.equitystory.com/c/fncls.ssp?u=JUHJWGNGJA
Document title: LifeWatch AG reports above-market revenue growth of
9.1% and substantial improvement in profitability during first half
2015

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20.08.2015 News transmitted by EQS Schweiz AG. www.eqs.com - news
archive: http://switzerland.eqs.com/de/News

The issuer is responsible for the contents of the release.

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Language:    English
Company:     LifeWatch AG
             Baarerstrasse 139
             6300 Zug
             Switzerland
Phone:       +41 41 728 67 78
Internet: www.lifewatch.com
ISIN:        CH0012815459
Valor:       811189
Listed:      Regulated Unofficial Market in Berlin, Stuttgart; Open
             Market in Frankfurt ; SIX


End of News    EQS Group News-Service
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388131 20.08.2015
 



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