Financial

EOS imaging Reports its Full Year 2020 Results and First Quarter 2021 Revenues

April 20, 2021

PARIS–(BUSINESS WIRE)–Regulatory News:

EOS imaging (Euronext, FR0011191766 – EOSI – Eligible PEA – PME) (Paris:EOSI), a leader in 2D/3D orthopedic medical imaging and software solutions for 3D anatomical modeling and surgical planning, today announces its consolidated annual results for the year to December 31, 2020 as approved by the Board of Directors on April 20, 2021. Unaudited revenues for the first quarter of 2021 also released.

  • A year marked by the successful commercialization of EOSedge and the 400th global install of EOS imaging system
    • Total revenues of €23.8 million (+19%) generated in 2020 vs. 2019 which had been impacted more strongly by the business model transition
    • Commercial performance1 penalized by the Covid-19 pandemic at €31.2 million (-12%) vs. 2019
    • Successful first full year of commercialization of EOSedge™ which accounted for 85% of 2020 orders in countries where it is cleared to market
    • Milestones reached in December 2020: 400th installation worldwide and 150th installation in North America
    • Strong reduction in operating loss to -€9.6 million, an improvement of 43% compared to 2019
    • Cash position improved at €9.7 million as of December 31 2020 vs. €8.2 million at December 31, 2019
  • Good sales momentum in Q1 2021 despite the pandemic context
    • Total revenues of €5.6 million, up +48% compared to Q1 2020
    • Commercial performance1 at €7.9 million up +31% compared to Q1 2020
    • Cash position at €8.2 million as of end of March 2021, vs. €7.2 million as of end of March 2020
  • Obtaining a State-guaranteed loan (PGE) of €4.3m in April 2021
  • Opening on April 1st, 2021 of the tender offer following the agreement between Alphatec Holdings (ATEC) and EOS imaging on December 16, 20202 to acquire EOS imaging

Mike Lobinsky, CEO of EOS imaging, comments:  While the COVID-19 pandemic impacted our business over the course of the year I was pleased to see the rebound in orders in the second half of 2020, which has carried into Q1 2021. I want to thank the EOS leadership team for wisely managing our spend to offset the pandemic impact, contributing to the reduction in our annual operating loss. This along with the favorable impact in our working capital requirements strengthened our cash position compared to prior year. Finally, we closed the year with a new agreement with Alphatec Holdings to acquire EOS imaging. I am convinced that the combination of our two complementary organizations and product portfolios promises to bring many benefits to our companies, customers and patients”.

FY 2020 FINANCIAL RESULTS

  • FY 2020 annual revenues of €23.8 million, +19% compared to FY 2019

EOS imaging posted FY 2020 revenues of €23.8 million, including:

  • €10.9 million in equipment revenues, from the billing of 23 systems, vs. €8.5 million in 2019 from the billing of 24 systems;
  • €12.9 million of recurring revenues,+11% growth over prior yearsupported by an increase in maintenance revenues due to the growth of the install base.

During the past year, EOS imaging booked 40 equipment orders, representinga total equipment order value of €18.3 million compared to 56 equipment orders in 2019. Uncertainties related to Covid-19 impacted orders in the first half of 2020, as many customer investment decisions were postponed.

2020 orders were notably driven by the successful launch of EOSedge in December 2019, which accounted for 20 of the 40 systems ordered worldwide. More specifically, the innovative new platform accounted for 85% of orders in the countries where it is marketed.

The Commercial performance1 thus came to €31.2 million compared with €35.7 million in 2019, a decrease of -12%. This is the result of the drop in orders received in 2020 (-24%) linked to the COVID-19 context, partially offset by the increase in recurring revenues (+11%).

The install base grew to 402 systems as of December 31, 2020, representing annual growth of +12% compared to December 31, 2019.

As of December 31, 2020, the order book amounted to €17.4 million3.

The Company recorded €2.2 million in Other Income. EOS imaging continued its investments in research and development, allowing it to benefit from public incentives and research tax credits for an amount of €1.0 M (vs. €1.9 M in 2019). At the same time, the Company benefited from financial support related to the Covid-19 pandemic for €1.2M.

  • Gross margin improved to €12.6 million

Gross margin amounted to €12.6m vs. €9.1m in 2019. The unaudited margin rate, excluding exceptional items4, rose to 54.3% of sales, compared with 49.8% in 2019. The margin rate benefited mainly from the reduction in the consumption of spare parts due to lower maintenance activity in the pandemic context, and a decrease in staff.

  • Lower operating expenses and reduction in operating loss 2020

Operating expenses totaled €24.4 million in 2020, down 13% compared to 2019. This cut results mainly from the sharp decrease in Sales & Marketing expenses (-34%), following in particular the cancellation of trade shows and the reduction in travel expenses due to the pandemic context and its restrictions. The main expenses related to the ATEC Offer are not taken into account as of December 31, 2020 (fees, specific bonuses, etc.).

The increase in revenues combined with lower operating expenses resulted in a reduced 2020 operating loss of -€9.6 million (-43%), compared with -€16.7 million in 2019.

The financial results were -€1.6 million as of December 31, 2020, compared with -€1.7 million in 2019.

All in all, the net loss was -€11.2 million in 2020, versus -€18.4 million in 2019 (-39%).

  • Cash position as of December 31, 2020: €9.7 million

EOS imaging continued to reduce its working capital requirements in line with the transition of its commercial cycle. The reduction amounted to €13.2 million in 2020. In particular, trade receivables, which amounted to €17.7 million at the end of 2019, was reduced to €9.8 million at the end of 2020.

In addition, the Company was able to control its expenses and investments over the past year while managing through the pandemic.

As a result, EOS imaging’s cash position amounted to €9.7 million as of December 31, 2020, compared to €8.2 million as of December 31, 2019, i.e., a cash increase of €1.5 million YOY.

Q1 2020 Trends

  • In the first quarter of 2021, EOS imaging booked 11 orders for a total of €4.7 million, compared to 6 orders in Q1 2020, for an amount of €3.0 million.
  • Q1 2021 revenues amounted to €5.6 million including currency effects5(+48%), of which:
    • €2.3 million in equipment sales following the delivery of 4 systems vs. 2 systems in Q1 2020 for revenues of €0.7M. Covid-19 restrictions are still causing some delivery delays.
    • €3.3 million in recurring revenues, up +7%, thanks to the growth in maintenance revenues (+13%), which benefit from the constant increase in the install base.
  • Commercial performance amounted to €7.9 million, up 31% compared to Q1 2020.
  • The order book grew by €2.3 million during the first quarter to reach €19.7 million as of March 31, 2021, compared to €17.4 million as of December 31, 2020.
  • As of March 31, 2021, EOS imaging’s cash position amounted to €8.2 million vs. €7.2 million as of March 31, 2020
  • Q1 2021 orders and revenues by product line
Equipment orders Unaudited / including forex impact5,6 / € million As of March 31Q1 2021Q1 2020
Equipment orders received (over the period)4.663.00
Equipment order book (end of period)19.7116.73
Revenues Unaudited / including forex impact5,6 / € million As of March 31Q1 2021Q1 2020
Equipment2.340.72
Maintenance3.082.72
Consumables and associated services0.180.33
Total quarterly revenues5.593.77
  • Q1 2020 revenues by region
Revenues Unaudited / including forex impact5,6 / € millionAs of March 31Q1 2021Q1 2020
EMEA2.371.72
APAC0.310.63
NAM2.891.40
LATAM0.020.01
Total quaterly revenues5.593.77

***

Shareholders’ Meeting: June, 30 2021 – The Company will publish details at a later date

Next financial press release: revenues for the first-half of 2021, on July, 21 2021

***

APPENDIX

  • Consolidated income statement
Consolidated income statement / Unaudited[1] / € millionsFYFY
As of December 3120202019
Net sales23.8320.09
Other income2.192.13
Total Revenues26.0222.22
Direct cost of sales-11.22-10.96
Gross margin12.69.1
As a % of revenues52.90%45.40%
Excluding exceptional items as % of revenues454.30%49.80%
Indirect cost of production and services-4.59-4.4
Research & Development costs -5.6-4.8
Sales & Marketing expenses-7.39-11.17
Regulatory expenses-0.8-0.91
Administrative costs-5.97-5.92
Total operating expenses  -24.35-27.2
excluding share-based payments 
Share-based payments-0.04-0.74
Total operating expenses excl. Direct cost of sales-24.39-27.94
Operating profit/loss-9.6-16.69
Financial income/loss-1.58-1.74
Tax0.01
Net profit/loss-11.18-18.43
  • Consolidated balance sheet
Consolidated balance Sheet / Unaudited6 / € million20202019
 As of December 31 
            Goodwill5.135.13
            Intangible assets8.498.49
            Rights of use 3.674.39
            Tangible assets1.542.07
            Financial assets0.150.2
    Total non-current assets18.9820.27
            Inventories and work in progress13.3813.51
            Trade receivables9.8217.7
            Other current assets3.195.22
            Cash and cash equivalents9.728.19
    Total current assets36.1144.61
Total Assets55.0964.88
             Share capital0.270.27
             Treasury shares-0.44-0.45
             Share premiums0.176.92
             Reserves11.222.78
             Translation reserves0.410.99
             Consolidated income attributable to the parent-11.18-18.43
    Total equity0.4212.08
             Provisions0.681.14
             Financial liabilities24.4724.65
             Lease liabilities3.253.91
    Total non-current liabilities28.4129.7
             Financial liabilities1.551.74
             Lease liabilities0.530.53
             Trade payables 3.433.97
             Other current liabilities20.7516.87
    Total current liabilities26.2723.1
Total Liabilities55.0964.88
  • Consolidated cash flow
Consolidated cash Flow / Unaudited6 / € million20202019
As of December 31
Net income-11.18-18.43
Restatement of non-cash items2.762.92
Restatement of cash items-0.18-0.04
         Change in inventories and work in progress0.14-4.73
         Change in trade receivables7.1115.38
         Change in other current assets2.01-0.95
         Change in trade payables-0.43-3.13
         Change in other current liabilities4.481.43
       Change in operating WCR13.318
Net cash flow from operating activities4.7-7.55
Net cash flow from investment activities-2.24-2.75
       Net free cash flow2.46-10.3
Net cash flow from financing activities-0.78-1.26
Impact of exchange rate fluctuations-0.150.03
Cash and cash equivalent at end of period 9.728.19

ABOUT EOS imaging

EOS imaging is a global medical device company that designs, develops and markets innovative, low dose 2D/3D full body and weight-bearing imaging, rapid 3D modeling of EOS patient X-ray images, web-based patient-specific surgical planning, and integration of surgical plan into the operating room that collectively bridge the entire spectrum of care from imaging to post-operative assessment capabilities for orthopedic surgery. With a primary focus on hips, knees, and spine, EOS imaging is targeting a $2 billion annual market opportunity. EOS imaging has over 400 system installations in more than 40 countries generating more than 1 million patient exams annually. EOS imaging has corporate locations in U.S., France, Canada, Germany, and Singapore, and has more than 160 employees. For additional information, please visit www.eos-imaging.com.

EOS imaging is listed on Compartment C of Euronext Paris
ISIN: FR0011191766 – Ticker: EOSI

1 Commercial performance: An indicator comparable to the commercial model of past years and corresponding to the sum of recurring revenues and equipment orders generated over a period

2 See the press release published on December 17, 2020 and the information on the public offering available on www.eos-imaging-finance.com

3 The order backlog provides visibility on the sales that will be realized over the next quarters. The order backlog as of 12/31/2020 comes from: the order backlog as of 12/31/2019 (€14.4m) + orders booked in 2020 (€18.3m) – sales realized on 2020 deliveries (€15.2m).

4 Provision on sales, provision for installation costs on equipment sold in previous years, and provision for inventory depreciation.

5 Forex impact of +€0.26m in Q1 2021

6 The audit procedures on the consolidated and annual accounts have been performed, but the audit reports have not yet been issued

Contacts

EOS imaging
Valérie Worrall
CFO
investors@eos-imaging.com
(+33) 1 55 25 60 60

NewCap
Investor Relations
Thomas Grojean
eos-imaging@newcap.eu
+33 1 44 71 94 94

FP2COM
Press Relations
Florence Portejoie
fportejoie@fp2com.fr
(+33) 6 07 76 82 83

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Chris J. Stewart

Chris currently serves as President and CEO of Surgio Health. Chris has close to 20 years of healthcare management experience, with an infinity to improve healthcare delivery through the development and implementation of innovative solutions that result in improved efficiencies, reduction of unnecessary financial & clinical variation, and help achieve better patient outcomes. Previously, Chris was assistant vice president and business unit leader for HPG/HCA. He has presented at numerous healthcare forums on topics that include disruptive innovation, physician engagement, shifting reimbursement models, cost per clinical episode and the future of supply chain delivery.

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