EQS Group-Ad-hoc: LifeWatch AG / Key word(s): Final Results
31.03.2015 / 07:00
Release of an ad hoc announcement pursuant to Art. 53 KR.
The issuer is solely responsible for the content of this announcement.
LifeWatch publishes Annual Report 2014 - well poised for future growth
- Market share gains - volume growth of above 13%
- Adjusted EBITDA in 2014 of USD 11 million equivalent to a margin of
- Outlook: revenue growth of 10% to 15% in 2015 with improved EBIT and
Neuhausen am Rheinfall, Switzerland, March 31, 2015 - LifeWatch AG (SIX
Swiss Exchange: LIFE), a market leader in the development and sale of
digital health solutions, primarily for remote cardiac monitoring and sleep
apnea diagnostics, today published its audited 2014 Annual Report. As
already announced LifeWatch realized a turnover of USD 98.47 million for
the business year 2014, 8.1% more than in the previous year (2013: USD
91.06 million). Monitoring services contributed USD 96.13 million, up 7.4%
on the previous year.
The second half year saw a significant reduction in costs, which offsets
the operative losses from the first half year. The positive business
development in the second half resulted in an EBITDA of USD 7.47 million
for this period, which more than offset the negative numbers for the first
half of the year. Total EBITDA for 2014 amounted to USD 5.95 million with a
margin of 6.0% in comparison to an EBITDA of USD 1.56 million or a margin
of 1.7% in 2013. After taking into account one-off adjustments of USD 5.05
million for legal cases (USD 1.93 million), LifeWatch V inventory write-off
(USD 1.19 million), and Others (USD 1.93 million) in 2014, LifeWatch
achieved an adjusted EBITDA of USD 11 million equivalent to a margin of
11.2%. EBIT for the second half amounted to USD 4.43 million following the
negative result in the first six months of USD 4.13 million. In total EBIT
for the business year 2014 amounted to USD 0.30 million (2013: -2.089
The net loss of USD 2.73 million (2013: net profit USD 2.92 million)
resulted primarily from a tax charge of USD 2.54 million, in comparison to
a tax credit of over USD 5 million which was recorded in the previous year.
The fully-diluted loss per share in 2014 amounted to USD 0.20 in 2014,
compared with earnings per share of USD 0.22 in 2013.
Volume growth of more than 13%
LifeWatch made significant progress during the reporting period. U.S.-based
LifeWatch Services, Inc. was able to achieve volume growth of above 13%,
which is significantly above the growth of the market as a whole. Volume
growth did not fully flow through to the revenue line as a result of the 8%
Medicare price cut implemented at the beginning of 2014. As a consequence,
gross profit reached USD 53.18 million with a margin of 54.0% in comparison
to a gross profit of USD 53.61 million and a margin of 58.9% in the
Cost savings and improvements in operational efficiency
The restructuring of the Research and Development (R&D) activities in
Israel and the realignment of the sales force in the US implemented in
early summer started to bear fruit in the second half of the year. Sales
and marketing costs as a percentage of revenues came down from 26.0% in the
first half year to 20.2% in the second half, whilst at the same time sales
in the second half of the year increased by more than USD 2 million in
comparison to the first half year. In total, Sales and Marketing (S&M)
expenses stood at USD 22.68 million or 23.0% of revenues, compared with S&M
expenses of USD 19.55 million or 21.5% of revenues in 2013.
Similarly, R&D costs as a percentage of revenues reduced from 6.8% in the
first half year to 4.5% in the second half year, whilst at the same time
R&D operations remained on track with our on-going development projects.
The main reason for the lower R&D costs compared to 2013 is the partial
capitalization of software development costs, mainly related to investment
in the Vital Signs Patch and a lightweight cardiac monitoring patch.
General Administration (G&A) expenses were USD 25.14 million or 25.5% of
revenues, compared with G&A expenses of USD 26.39 million or 29.0% of
revenues in the previous year.
Positive Operating Cash Flow
LifeWatch' operations provided cash in the amount of USD 4.09 million,
compared with USD 8.26 million provided from operations in business year
2013. The balance of cash, cash equivalents and marketable securities
amounted to USD 7.14 million at the end of the reporting year, compared
with USD 10.18 million at the end of 2013.
LifeWatch well positioned to exploit market opportunities
Many factors are serving to increase the interest in digital health. The
aging population and pressure on costs are causing health systems to look
for more efficiency through embracing technical innovation. The desire of
patients to become more involved in their health monitoring and treatment
can only be met with the aid of new technology. The company, via its
innovative patch technology platform, is addressing these needs.
Furthermore, the use of such technology is dependent upon a robust,
reliable and proven service platform for the interpretation and delivery of
the results and this is already a core competence of the company.
The company is well positioned to deliver growth in its core business and,
with the introduction of new and updated products, is ready to tackle both
related markets in the US as well as expand internationally. We expect that
the turnaround seen in the second half of 2014, fueled by the results of
the restructuring measures, will continue in 2015. We therefore expect that
sales will continue to grow at above market growth rates and that EBIT,
EBITDA and Net Income continue to improve. In particular, we expect revenue
growth of 10% to 15% in 2015 (assuming a stable reimbursement environment).
Although significant continuing investment in new and existing products
will have an impact on profitability, we are targeting EBIT and EBITDA
margins at the levels seen in the second half of 2014, with non-adjusted
net income being positive.
Key Figures for Fiscal Year 2014 (audited, in USD millions)
FFY 2014 FFY 2013
Revenues 98.47 91.06
Gross profit 53.18 53.61
As % of revenues 54.0% 58.9%
EBITDA / (LBITDA) 5.95 1.56
As % of revenues 6.0% 1.7%
EBIT / (LBIT) 0.3 -2.09
As % of revenues 0.3% -2.3%
Net income / (loss) -2.73 2.92
As % of revenues -2.8% 3.2%
Total fixed assets, net 14.92 12.05
Total equity 36.88 38.45
Employees at the end of period 580 544
The 2014 Annual Report can be obtained from the LifeWatch website via the
nnual-report-2014.pdf.. Printed copies of the Annual Report can be ordered
April 29, 2015 Ordinary General Meeting in Zurich
August 20, 2015 Analyst Conference Results HY 2015
c/o Dynamics Group, Philippe Blangey / Doris Rudischhauser
Telephone: +41 43 268 32 35
About LifeWatch AG:
LifeWatch AG, headquartered in Neuhausen am Rheinfall and listed on SIX
Swiss Exchange (LIFE) in Switzerland, is a leading provider of digital
health systems and wireless telemetry monitoring services. The LifeWatch
services deliver important information to doctors for appropriate treatment
of their patients and better treatment results. LifeWatch has operative
subsidiaries in the USA, Switzerland, Macedonia and Israel and is the
parent concern for LifeWatch Services, Inc. and LifeWatch Technologies,
Ltd. LifeWatch Services, Inc. is a leading US provider of cardiac
monitoring services as well as sleep analysis for the diagnosis of
obstructive sleep apnoea syndromes (OSAS). LifeWatch Technologies, Ltd. in
Israel is a leading developer and producer of digital health products. For
further information, see www.lifewatch.com.
E-Mail Alert: In order to receive regular information and updates on
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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
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SUBSIDIARIES FOR SALE IN THE UNITED STATES, OR AN INVITATION TO SUBSCRIBE
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SUBSIDIARIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
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STATES OR TO U.S. PERSONS ABSENT FROM REGISTRATION UNDER OR AN APPLICABLE
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INFORMATION ABOUT THE ISSUER AND ITS MANAGEMENT AS WELL AS FINANCIAL
STATEMENTS OF THE ISSUER.
In case of doubt, the English Press Release is the original.
End of ad hoc announcement
31.03.2015 News transmitted by EQS Schweiz AG. www.eqs.com - news
The issuer is responsible for the contents of the release.
Company: LifeWatch AG
8212 Neuhausen am Rheinfall
Phone: +41 52 632 00 50
Fax: +41 52 632 00 51
Listed: Regulated Unofficial Market in Berlin, Stuttgart; Open
Market in Frankfurt ; SIX
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