MAUNA KEA TECHNOLOGIES (EPA:MKEA) Mauna Kea Technologies announces first half 2015 financial results

Transparency directive : regulatory news

09/09/2015 18:00

PRESS RELEASE

      MAUNA KEA TECHNOLOGIES ANNOUNCES FIRST HALF 2015 FINANCIAL RESULTS

* Renewed momentum in North America with 82% growth in H1 2015 sales
      * Gross margin for H1 2015 is stable at 68%
              * Operating expenses are stable

Paris, September 9, 2015 - Mauna Kea Technologies (Euronext: MKEA, FR0010609263,
PEA-SME eligible), inventor of Cellvizio(r), the multidisciplinary confocal
laser endomicroscopy platform, today announced its results for the first half of
the current financial year, ended June 30, 2015.

Sacha Loiseau, Founder and Chief Executive Officer of Mauna Kea Technologies,
said: "The renewed growth seen in the US during the first half of 2015 has
rewarded the efforts undertaken in this market. The first half- year was also
marked by key milestones in the expansion of the Cellvizio platform into the
surgery and interventional radiology markets with several important regulatory
approvals, together with ground- breaking results in neurosurgery obtained in
collaboration with Siemens. We are more confident than ever of the increasing
importance of our unique technology for these new markets and are redoubling our
efforts to improve our commercial efficiency, while at the same time studying
opportunities for growth through partnerships."

In EURK - IFRS                 H1 2015         H1 2014
                        (June 30, 2015) (June 30, 2014)
Operating Revenue
Sales                            4,025           4,569
Other income                       713             537
Total of revenue                 4,738           5,106
Operating Expenses
Cost of sales                  (1,272)         (1,461)
Gross margin (%)                   68%             68%
Research and Development       (2,505)         (2,084)
Sales & Marketing              (6,494)         (6,113)
Administrative expenses        (1,766)         (1,919)
Share-based payments             (303)           (794)
Total operating expenses      (12,341)        (12,372)
Operating profit               (7,603)         (7,265)
Profit/(loss)                  (7,493)         (7,332)

H1 2015 sales: confirmation of renewed momentum in the United States

In H1 2015, Mauna Kea Technologies recorded a decrease of 12% in its sales to
EUR4,025K (versus EUR4,569K in H1 2014). As announced previously, sales in the
first half of the year were supported by renewed strong momentum in the Americas
with growth of 27% to EUR2,367K, and in particular by the performance of North
America, which recorded growth of 82% (accounting for 98% of sales in the
region). The upturn in the Americas was offset by a decline of 16% in sales in
the EMEA region to EUR1,024K, and a decline of 58% in the APAC region to
EUR634K, due to the time-lag in obtaining the regulatory agreement in China for
Cellvizio 100s. Throughout the half-year period, revenue in the Americas
represented 59% of total sales, compared with 25% and 16% for the EMEA and APAC
regions.

At June 30, 2015, the company had an installed base of 471 Cellvizio systems.
The net installed base of Cellvizio rose to 337 clinical systems and 134
pre-clinical systems, including 28 Cellvizio Dual Band.

H1 2015 consolidated results: maintaining a high gross margin

"Other income" amounted to EUR713K (vs. EUR537K), broken down primarily into
Research Tax Credit for EUR658K (vs. EUR490K in H1 2014).

In H1 2015, the company maintained a high gross margin at 68%, stable compared
with H1 2014, which reflected a return to a sales price for systems and
consumables in the United States that is better suited to the price strategy in
other markets.

Sales and Marketing costs, the largest overhead for the company, amounted to
EUR6,494K in the first half of the year, an increase of 6% compared with H1 2014
and down 2% compared with H2 2014. In both the United States and Europe, the
company achieved a reduction in Sales and Marketing expenses, which will
continue in the coming periods. In H1 2015, the impact of this cost reduction
was absorbed by the rise of the dollar, whose negative impact amounted to
EUR563K.

Research and Development (R&D) costs, recorded in the income statement,
increased by 20% to EUR2,505K.  No R&D expense was recognized in the balance
sheet for the first half of 2015, versus EUR207K in H1 2014, which brought
overall growth in R&D costs to 9% in the half-year period compared with H1 2014.
When Research Tax Credits are included, the net increase in R&D costs was 7% in
H1 2015.

R&D expenses in the income statement remained unchanged from H2 2014 (EUR2,505K
in H1 2015 vs. EUR2,499K in H2 2014) and no R&D expenses were capitalized in the
balance sheet in either of these two periods.

Administrative expenses came to EUR1,766K, down 8% compared with H1 2014.

Due to a significant reduction in the "share-based payment transaction" expense,
operating expenses under IFRS were stable in H1 2015 at EUR12,341K (vs.
EUR12,372K in H1 2014) and down 10% compared with H2 2014. The company's
operating loss amounted to EUR7,603K in H1 2015 (vs. a loss of EUR7,265K in H1
2014 and a loss of EUR6,558K in H2 2014).

The Group's net loss came to EUR7,493K at June 30, 2015 (vs. a loss of EUR7,332K
at June 30, 2014 and a loss of EUR6,659K in H2 2014).

During the first half-year of 2015, the company utilized EUR2.8 million of cash
versus EUR7.8 million in H1 2014  and of EUR5.0 million in H2 2014. At the end
of the half-year period, available cash was EUR12.2 million.

At June 30, 2015, Mauna Kea Technologies had 109 employees vs. 120 employees at
end-December 2014.

Eric Cohen, Vice-President Finance of Mauna Kea Technologies, said: "In this
first half of the year, we maintained operating expenses at a stable level
compared with H1 2014, despite the negative impact of euro-dollar exchange rates
(+EUR574K) and initiated a reduction in Sales and Marketing expenses, down by 2%
compared with H2 2014, as well as in General overheads. This reduction will
continue in the coming periods. The net Research & development effort rose by 7%
compared with H1 2014 and was slightly higher (+2%) compared with H2 2014. The
slowdown in activity in EMEA and APAC in the first half-year was not fully
offset by the upturn in momentum in the Americas, which is reflected in the
slight decrease of 5% in our operating profit."

Regulatory approvals and reimbursement coverage

* March 2015: assignment by the American Medical Association (AMA) of a new CPT
  code for use in endoscopic retrograde cholangio-pancreatography (ERCP),
  allowing practitioners to diagnose biliary tract pathologies, notably
  strictures and cancers. More than 500,000 ECRPs are completed annually in the
  United States;
* April 2015: approval from COFEPRIS (Comisión Federal Para la Protección
  contra Riesgos Sanitarios), the Mexican health authority, to market Cellvizio;
* April 2015: CE Marking to use Cellvizio in minimally invasive laparoscopic
  surgery;
* June 2015: CE Marking for the use of Cellvizio in interventional radiology;
* July 2015: approval from the Japanese Ministry of Health, Labor and Welfare
  for the AQ-Flex 19(tm) confocal endomicroscopy miniprobe;
* July 2015: CE Marking for the Cellvizio 800 intra-operative platform, which
  provides infrared endomicroscopic imaging during minimally invasive surgical
  operations.

Clinical results and conferences: the medical value of optical biopsy

* April 2015: record attendance of the ICCU 2015 and of the related continuous
  training course on endomicroscopy;
* May 2015: presentation of confocal laser endomicroscopy applications at the
  conference of the Japan society for endoscopic surgery, the most significant
  conference dedicated to endoscopy worldwide;
* August 2015: publication of the results of a new study on the use of
  endomicroscopy with Cellvizio in the peer-reviewed journal Neurosurgery and
  partly financed by Siemens Corporate Technology. The data produced indicate
  that Cellvizio enables a histomorphologic diagnosis to be made in real time
  with similar results to those of traditional surgical biopsy.

Next press release: Q3 2015 sales on October 15, 2015 (after close of trading)

About Mauna Kea Technologies
Mauna Kea Technologies is a global medical device company focused on protecting
patients' lives while enabling physicians and surgeons to make better decisions
thanks to direct visualization at the cellular level. The Company's flagship
product, Cellvizio, has received clearance to sell a wide range of applications
in more than 40 countries, including the United States, Europe, Japan, China,
Canada, Brazil and Mexico. For more information on Mauna Kea Technologies, visit
www.maunakeatech.com

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

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