MAUNA KEA TECHNOLOGIES (EPA:MKEA) Mauna Kea Technologies: 2014 Full Year Results and Q1 2015 Sales

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14/04/2015 17:50

Press release

                              MAUNA KEA TECHNOLOGIES
                     2014 FULL-YEAR RESU LTS AND Q1 2015 SALES

* 2014 Revenue growth 13% to EUR12.3M
* 2014 gross margin of 67%
* Q1 U.S. sales growth 36% (12% in USD)
* Q1 U.S. probe sales volume growth 83%
* Q1 global sales (-14%) negatively impacted by regulatory delay in China

PARIS, April 14, 2015 - Mauna Kea Technologies (Euronext: MKEA, FR0010609263,
PEA-PME eligible), inventor of Cellvizio(r), the multidisciplinary confocal
laser endomicroscopy platform, today announced its annual results for the
financial year ended on December 31, 2014 and closed by the Board of Directors'
meeting held on April 13, 2015, as well as its sales for the 1st quarter of the
financial year, ended on March 31, 2015.

Sacha Loiseau, Founder and CEO of Mauna Kea Technologies, stated "In the first
quarter, we have passed severa l important mi lestones toward achieving
wide-scale adoption of our proprietary technology. We are encouraged by better
Q1 performance in the United States, in particular strong probe volume growth.
However, our overall commercial performance is not consistent globally,
including China where regulatory delays have deferred sales. We continue to
focus on sales channel effectiveness to optimize the platform value of
Cellvizio."

EUR thousands - IFRS standards         2014           2013
                                (12/31/2014)   (12/31/2013)
Operating income

Sales                                11,016          9,977
Other revenue                         1,267            939
Total revenue                        12,282         10,915
Operating expenses

Of which Cost of goods sold          (3,675)        (3,042)
Rate of gross margin (%)                 67%           70%
Of which Research & Development      (4,583)       (3,611)
Of which Sales & Marketing          (12,753)      (11,174)
Of which General & Administrative    (3,837)       (3,759)
Of which Share-based payments        (1,257)         (851)
Total operating expenses            (26,106)      (22,437)
Operating result                    (13,823)      (11,521)
Net profit / (loss)                 (13,991)      (11,516)

2014 Full-Year Sales: Strong momentum in Asia-Pacific

In 2014, Mauna Kea Technologies posted sales growth of 10% over the financial
year to EUR11,016 thousand compared with EUR9,977 thousand in FY 2013. Clinical
and Pre-clinical sales saw growth of 7% (to EUR8,591 thousand) and 25% (to
EUR2,425 thousand) respectively, compared with EUR8,036 thousand and EUR1,941
thousand, in the prior year. Sales to hospitals and clinics represented 78% of
activity over the financial year (compared with 81% in 2013).

A breakdown of sales by product and type reveals an increase in sales of
Systems by 5% to EUR7,175 thousand over the financial year, compared with
EUR6,835 thousand in the previous year and a rise in sales of Consumables by
14% to EUR2,958 thousand, compared with EUR2,603 thousand in 2013. Sales of
Associated Services also rose by 64%, to EUR882 thousand, compared with EUR538
thousand in 2013, as a result of the efforts undertaken to increase this
important recurring revenue.

By volume over FY 2014, the company sold 88 Systems and 896 Probes (compared
with 73 and 688 in 2013), demonstrating sales growth by volume of +21% for
Equipment and +30% for Consumables.

At December 31, 2014, Mauna Kea Technologies had an installed base of 444
Cellvizio systems globally: 144 in the Americas (134 in the United States), 191
in the EMEA region, 94 in the APAC region and 15 in Latin America, divided
between 315 clinical and 129 pre-clinical systems (23 of which are Cellvizio
Dual Band).

Analysis of the geographical breakdown of 2014 sales confirms the strong
momentum in Asia-Pacific, with 2014 sales growth in this region of 52% to
EUR3,806 thousand, compared with EUR2,501 thousand in 2013. EMEA posted growth
of 8% to EUR3,197 thousand, compared with EUR2,973 thousand last year,
reflecting slower penetration than forecasted, particularly in Germany, Russia
and Turkey. The Americas were the only region to post a decline over the prior
year, at (11%) to EUR4,012 thousand, compared with EUR4,502 thousand in 2013.

Sales in the Americas represented 36% of total sales in FY 2014, compared with
29% and 35% for EMEA and APAC respectively.

2014 Consolidated Results: Impact of direct sales model reflected in operating
expenses

"Other revenue" was EUR1,267K (compared with EUR939K), primarily due to a
Research Tax Credit of EUR1,178K (compared with EUR732K in 2013).

Gross margin declined 3 percentage points to 67% (compared with 70% in 2013),
primarily due to management's decision in Q1 2014 to reduce pricing for systems
and consumables in the United-States to be more consistent with other regions.

In 2014, the charges pertaining to the Sales and Marketing costs, the Company's
largest expense item, came to EUR12,753K, an increase of 14%; in part,
reflecting the run-rate cost of a larger sales team in the US.

Expenditures pertaining to Research and Development increased to EUR4,583K
(+27% compared with 2013). However, Research and Development expenses and
activated development costs together grew by 11% as activated development costs
were reduced in 2014 by 71%.

Total IFRS Operating Expenses rose to EUR26,106K over the period (compared with
EUR22,437K in 2013). Mauna Kea Technologies' operating profit was -EUR13,823K
(compared with -EUR11,521K in 2013).

Net profit/(loss) came to -EUR13,991K in 2014 compared with -EUR11,516K in
2013.

During 2014, Mauna Kea Technologies' cash usage was EUR12.8M (compared with
EUR9.8M in 2013), and available cash at December 31, 2014 was EUR15.0 M

Mauna Kea Technologies' workforce totaled 120 employees at of December 31, 2014
(compared with 112 as of December 31, 2013).

Eric Cohen, Chief Financial Officer of Mauna Kea Technologies, declared: "In
2014, we adjusted our selling price in the US to be more in line with other
territories, thus reducing our gross margin by 3%. The presence of a full sales
team in 2014 brought our sales & marketing expenses back to their 2012 level.
In 2014, we continued to invest in research and development and increased our
expenses in this field by 11 %. At the end of 2014, we had a cash position of
EUR15 million and are confident in our capacity to reduce our operating loss in
the future".

Q1 2015 Sales: Improvements in the United States, regulatory delay in China,
stable growth in EMEA

EUR thousands                 Q1 2015           Q12014      Change (%)
IFRS                   March 31, 2015    March 31,2014
Q1 Sales at March 31            1,855            2,164           -14%

2015 first-quarter sales came to EUR1,855K, a decline of 14% compared to
EUR2,164K in 2014. Strong growth in the pre-clinical business to EUR581K
(+160%) did not offset a downturn in the clinical business to EUR1,274K
(- 34%). Revenue generated by sales to hospitals and clinics accounted for 69%
of activity during the quarter (compared with 90% in Q1 2014).

An analysis of sales per product and per type highlights a decline in Systems
sales to EUR1,222K and Consumables to EUR479K (-12% and -19% respectively).
Services also declined to EUR154K (-20%).

By volume, the company recorded the sale of 12 systems and 134 probes (compared
with 16 and 157 respectively) in Q1 2014, representing a decrease of 25% for
systems and 15% for probes. The net installed Cellvizio clinical base increased
by 12 systems during the 1st quarter of 2015 and the total installed base,
including pre-clinical systems, has reached 456 systems at March 31, 2015.

Sales in the United States grew by 36% (12% in USD) in the first quarter this
year. Overall, the Americas region showed a slight decline to EUR934K (-6%)
compared to the same period in 2014 as the growth in the US was offset by a
decline in South America.

EMEA demonstrated sustained performance with a sales increasing of 16% to
EUR699K. The APAC region declined to EUR222K (-61%), in part due to a delay in
obtaining the regulatory agreement in China for the Cellvizio 100s and to a
high volume of sales in Q4 2014 in Japan.

At March 31, 2015, the Americas, EMEA and APAC regions respectively represent
50%, 38% and 12% of sales.

2014 and Q1 2015: Significant commercialization breakthroughs and highlights

Authorizations and reimbursement:

* October 2014, a favorable opinion from the French Health Authorities for the
  reimbursement of endomicroscopy on patients suffering from Barrett's
  Esophagus;

* March 2015, a new CPT(r) reimbursement code (the 4th one secured by the
  company) obtained in the United States for the use of endomicroscopy in the
  biliary tract.

Clinical results and conferences - the medical value of optical biopsy:

* October 2014, CONTACT 1 trial published in Endoscopy, demonstrating the very
  high specificity of needlebased confocal laser endomicroscopy (nCLE) for the
  characterization of benign pancreatic cysts.

* March 2015, DETECT trial published in Gastrointestinal Endoscopy confirming
  the value of nCLE for the differentiation between mucinous cysts and
  non-mucinous cysts, safely and with a high degree of accu racy.

* January 2015, FOCUS pivotal trial published in Gastrointestinal Endoscopy
  confirms the very high accuracy of pCLE for the characterization of biliary
  cancer during endoscopic retrograde cholangiopancreatography (ERCP).

* January 2015, first clinical consensus report on the use of endomicroscopy in
  gastroenterology, developed by 26 international experts published in the
  United European Gastroenterology Journal;

* February 2015, positive results of two large Chinese clinical trials on the
  benefits of Cellvizio for diagnosing stomach and esophageal cancers and
  carried out on 356 and 240 patients respectively, published in
  Gastrointestinal Endoscopy and Journal of Clinical Gastroenterology;

* March 2015, the clinical value of Cellvizio was profiled during a live
  procedure for the first time in Japan during the 14th International Endoscopy
  Conference in Yokohama, Japan.

Commercial expansion and partnership:

* November 2014, signed a collaboration agreement with Siemens to evaluate the
  use of Cellvizio during interventional radiology procedures.

Next press release: sales during the first half of 2015 on July 15, 2015
(post-market closing)

About Mauna Kea Technologies
Mauna Kea Technologies is a global medical device company focused on leading
innovation in endomicroscopy and optical biopsy. The company designs, develops
and markets innovative tools to visualize and detect cell abnormalities in real
time during standard endoscopy procedures. The company's flagship product,
Cellvizio(r), a probe needle based Confocal Laser Endomicroscopy (pCLE/nCLE)
system, provides physicians and researchers with high-resolution cellular
imaging of internal tissues. Large-scale, international, multicenter clinical
trials have demonstrated Cellvizio's ability to help physicians to more
accurately detect early forms of diseases and make immediate treatment
decisions. Designed to help physicians in their diagnoses, provide patients
with better treatment and reduce hospital costs, the Cellvizio system can be
used with virtually any endoscope. Cellvizio has 510(k) clearance from the
United States Food and Drug Administration and CE Marking in the European Union
for use in the gastrointestinal tract and the urinary and respiratory systems,
for endoscopic exploration of the biliary and pancreatic ducts and for
fine-needle aspiration procedures. Cellvizio has also obtained SFDA regulatory
approval in China and MHLW approval in Japan.

For further information on Mauna Kea Technologies, visit www.maunakeatech.com

Mauna Kea Technologies             France & Europe
Eric Cohen                         NewCap - Investor Relations & Financial
                                   Communication
Vice-President Finance             Florent Alba / Pierre Laurent
Tel. : +33 (0)1 70 08 09 70        Tel. : +33 (0)1 44 71 94 94
investor-vpf@maunakeatech.com      maunakea@newcap.fr

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