Tous Actualités
Suivre
Abonner LifeWatch AG

LifeWatch AG

DGAP-Adhoc: LifeWatch AG reports solid revenue growth in first quarter 2014 and is poised for further organic growth

LifeWatch AG  / Key word(s): Strategic Company Decision/Quarter Results

27.05.2014 07:03

Release of an ad hoc announcement pursuant to Art. 53 KR
---------------------------------------------------------------------------

Press Release

LifeWatch AG reports solid revenue growth in first quarter 2014 and is
poised for further organic growth

  - Key strategic findings are being addressed immediately: broadening the
    product and service offering, expanding the current technology
    globally, assessing an mHealth accessory device and moving towards
    becoming a fully-integrated biomedical informatics provider

  - Necessary investments for a sound future total over USD 7 million in
    2014

  - Dr. Stephan Rietiker appointed CEO, effective June 1, 2014

  - New management team aligned along global business functions

  - Q1 2014 sales up 12.2%, operating results impacted by sales force
    investments

Neuhausen am Rheinfall/Switzerland, May 27, 2014 - LifeWatch AG (SIX Swiss
Exchange: LIFE), a leading provider of medical solutions in remote cardiac
monitoring, announces key findings of its in-depth strategic and
operational review. The objectives being addressed include the broadening
of the product and service offering, the expansion of the current
technology globally, the assessment of developing a mHealth accessory
device as well as the move towards a fully-integrated biomedical
informatics provider.  In order to implement these actions Dr. Stephan
Rietiker, hitherto Delegate of the Board of Directors, has been appointed
as Chief Executive Officer (CEO) as of June 1, 2014. Under his leadership,
a new management team is being put in place and the organization is being
adjusted to reflect a primary focus on the markets. Results in the first
quarter 2014 were strong at the topline with revenues of USD 23.6 million,
an increase of 12.2%. Operating results were, however, impacted by higher
sales and marketing expenses and lower reimbursement rates, leading to an
LBIT of USD 0.96 million and a net loss of USD 1.33 million in the period
under review. We expect, however, marketing and sales expenses over the
year as a percentage of sales to revert to a level similar to previous
years.

Strategic and operational update
LifeWatch possesses a comprehensive suite of heart and sleep diagnostic
devices and corresponding services that have received impressive
credentials in the USA. However, recent analysis revealed that next
generation products Need to be launched within the next 6-12 months, and
that the offering needs to be broadened. In the past monitoring services
were narrowly focused on cardiac monitoring. The future objectives include
expanding monitoring to other disease areas, as well as chronic disease
management, and leverage the technology and know-how globally. In research
and development the in-depth examination revealed that product development
was poorly aligned with market needs and suffered from a lack of global
project management. An interdisciplinary project review committee is being
set up. Initial priorities include the upgrading of current product
technologies, the review of the medical phone situation and its envisioned
transitioning to a mHealth accessory device as well as improving the
product design of the Vital Signs Patch (VSP). An additional area with
promising potential is biomedical informatics. Given the long-term
experience and rich base of patient data collected over the past 20 years,
LifeWatch aims to capitalize on its know-how by combining sensing
technologies with service and information to become a fully integrated
biomedical informatics provider. In summary, LifeWatch is convinced that by
utilizing the rich know-how and resources within the organization and
investing more than USD 7 Million this year in updating existing products
and developing new products, a sound foundation can be established, which
will allow the organization to fully unlock its potential for future
profitable growth.

New management team
In order to implement the strategic priorities, the leadership of the
company needs to be strengthened. As such, Dr. Stephan Rietiker, hitherto
Delegate of the Board of Directors, will take over as CEO as of June 1,
2014, and, thus, will not stand for election to the Board of Directors at
the AGM 2013 to be held on May 28, 2014 in Zurich. At the same time, a new
organizational structure is being set up along global business units to
better focus on market needs. Within the new structure Roger Richardson is
appointed as President Global Patient Services, Yair Tal as President
mHealth, Dr. Dominik Aronsky as Chief Information & Informatics Officer and
Stephanie Kravetz as Chief Legal Officer. Mike Turchi will succeed Kobi Ben
Efraim as Chief Financial Officer. Kobi Ben Efraim has been LifeWatch's CFO
since 2005 and will continue to serve the company in the function of
Corporate Controller. Except for Dr. Aronsky who joins the Company from the
department of Biomedical Informatics of Vanderbilt University, the members
of the new management team come from within the organization and have
substantial expertise with LifeWatch's operations. The new market-focused
organization will result in faster communication and decision making
processes as well as more interdisciplinary product development, thus
enabling LifeWatch to serve physicians, patients and payors even better.

First quarter 2014 results
LifeWatch experienced strong growth of 12.2% during the first quarter with
total revenues reaching USD 23.58 million, compared with USD 21.02 million
during Q1 2013. During the quarter, 10 new or amended contracts were
signed. However, due to Medicare reimbursement reductions this encouraging
performance did not feed through to operational results with the gross
profit margin falling from 59.1% to 55.4%. Gross profit, however, increased
by 5.1% from USD 12.42 million in Q1 2013 to USD 13.06 million in Q1 2014.
Operating expenses increased over-proportionally, as substantially higher
sales and marketing expenses of USD 6.39 million, compared to USD 4.44
million during Q1 2013, were incurred mainly due to the holding of a
national sales conference and the hiring of additional sales people.
LifeWatch expects, however, that marketing and sales expenses over the year
as a percentage of sales will revert to a level similar to previous years.
Research and development expenses amounted to USD 1.87 million, vs USD 1.55
million Q1 2013. However, compared to the prior period, during Q1 2014, USD
0.28 million of software development has been capitalized as allowed under
US GAAP accounting rules (Q1 2013: USD 0 million). The company will adopt
this accounting practice for the first time in financial year 2014. At the
EBIT level the result was negative with USD 0.96 million vs. a profit of
USD 1.17 million in the prior period. Net loss during the first quarter
2014 was USD 1.33 million, compared to a net profit of USD 0.136 million
during Q1 2013. With a negative cash flow from operations of USD 2.2
million during the first quarter, cash and cash equivalents as of March 31,
2014, amounted to USD 6.35 million and the equity ratio was at 52.3%.

Outlook
Barring unforeseen events, we expect 2014 revenues to exceed USD 100
million with an improvement in EBIT and EBITDA despite the necessary
investments in product development of more than USD 7 million during 2014.
Since LifeWatch's operations are generally not subject to seasonal effects,
the Board of Directors has decided to implement a half-yearly reporting.

Further details of the strategy and operational analysis will be presented
at a media and analyst conference to be held at 10.00 am in Zurich today.
The presentation can be downloaded on the company's website under the
following link:
http://irlifewatch.com/websites/lifewatch_ir/English/5010/financial-presen
tations.html

Key Figures for Q1 2014 (unaudited, in USD millions)

                                      Q1 2014        Q1 2013        +/-

Revenues                              23.58          21.02          +12.2%
Gross profit                          13.06          12.42          +5.1%
As % of revenues                      55.4%          59.1%
EBIT / (LBIT)                         (0.96)         1.17
As % of revenues                      N/A            5.6%
Net income / (loss)                   (1.33)         0.14
Balance sheet total                   71.79          60.99          +10.8
Total equity                          37.53          35.18          +2.34
Equity ratio                          52.3%          57.7%
Employees at the end of period        550            496


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

About LifeWatch AG:
LifeWatch AG, headquartered in Neuhausen am Rheinfall and listed on SIX
Swiss Exchange (LIFE), Switzerland, is a leading healthcare technology and
solution company, specializing in advanced telehealth systems and wireless
remote 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.


27.05.2014 News transmitted by EQS Schweiz AG.
The issuer is responsible for the contents of the release.

EQS publishes regulatory releases, media releases on the capital
market and press releases.
The EquityStory Group distributes authentic and real-time financial news
for over 1'300 listed companies.
The Swiss news archive can be found at www.equitystory.ch/news

---------------------------------------------------------------------------

Language:               English
Company:                LifeWatch AG
                        Rundbuckstrasse 6
                        8212 Neuhausen am Rheinfall
                        Switzerland
Phone:                  +41 52 632 00 50
Fax:                    +41 52 632 00 51
E-mail:
Internet:            www.lifewatch.com
ISIN:                   CH0012815459
Valor:                  811189
Listed:                 Freiverkehr in Berlin, Stuttgart; Frankfurt in Open
                        Market ; SIX

End of Announcement                             EQS Group News-Service

---------------------------------------------------------------------------

Plus de actualités: LifeWatch AG
Plus de actualités: LifeWatch AG