Announces Half Year Financial Report for 31 December 2013
Sydney, Feb 26, 2014 AEST (ABN Newswire) - SomnoMed Limited (
ASX:SOM) (SOMNF:OTCMKTS) announced today its results for the first half year to December 2013. The company posted strong unit and revenue growth, generated profits and cash whilst continuing to invest in its future through its medical initiative and further acquisitions in both Europe and the APAC regions.
Group revenues for the half year were $12.55 million, an increase of 39% over the comparable six months of 2012. Sales of 20,455 apnea devices were recorded, an increase 19% over last year's 17,251 units, after unit sales accelerated in the second quarter to a growth of 23.8% above the previous year.
The operating profit before corporate, business development and non-cash items was $2.235 million for the six months to December 2013, approximating the 2012 half year's result, despite medical initiative expenditure of $915,000 being incurred in the current period.
The gross margin generated increased by 36% to $8.1 million, due to the increased sales across the group, maintaining the group gross margin percentage of 65% (2012 - 66%). The MAS gross margin for the half year was 67% (2012 - 68%).
Gross Margins are likely to remain around these levels, with further improvements linked to the planned introduction of digital processes and economies of scale expected in FY 14/15 and beyond.
The Company generated an EBITDA of $680,000 for the six months to December 2013, after expenditure of more than $900,000 on the US medical initiative, compared to an EBITDA of $723,000 in the same period in the previous year, when $300,000 was invested in the early stages of the medical initiative in the US. Taking this into consideration the underlying profits of the company continue to grow, with the underlying EBITDA in the reporting period being 13.2% of revenues, compared with the stated EBITDA of 5% of revenues.
The European region generated exceptional unit sales and revenue growth during the half year, with unit growth of 47% and a revenue increase of 60% (exchange rate constant). The strong performance of the region came as a result of the restructuring and expansion of various operations in the region and the acquisitions made in this and previous periods in Holland, Germany, Scandinavia and France. Europe is expected to continue on its growth path driven by increased demand, primarily due to rising insurer and physician support for SomnoDent(R) devices. SomnoMed also expects to open a number of new markets in Europe during the course of this calendar year.
In the United States, the company's largest market, the half year finished strongly, with solid sales in November and December and a record number of units sold in December 2013. This market continues to offer SomnoMed further growth opportunities and strategic alliances that should be reflected in more positive results in the second half. Initial indications of the results of the Company's medical initiative in the USA are positive and the Company continues to monitor and evaluate these results to determine extent and timing of its future build up.
Growing acceptance by medical practitioners in the US can also be observed in all our core markets in Europe and Asia- Pacific. Parallel to that we see growing interest from insurers, care providers and even corporations looking for a more patient friendly but medically effective treatment for obstructive sleep apnea. Oral appliance treatment offers this pathway and SomnoDent(R) is prominently positioned and seen as the globally leading product.
During the half year the USA SomnoMed Preferred Dental Network ("PDN") continued to grow and programs were implemented to improve our customer service, so as to further consolidate SomnoMed's position as the leader in COAT(TM) - Continuous Open Airway Therapy. SomnoDent(R) Herbst a high quality and differentiated Medicare product, was successfully launched at the beginning of the new financial year and recorded significant volume gains every month. Further product launches are planned over the course of 2014 and a clinical trial of the SomnoMed Compliance Recording System ("DentiTrac") is expected to commence in the current quarter.
The Board is very happy with the results achieved in the first half. Actions taken over the last twelve months are showing good results; unit and revenue growth accelerated and reached new highs in the last quarter of the year gone by. The Board is confident that these levels of growth should be maintained in the second half of the financial year. The guidance given to the market for the full year of 43,000 units is confirmed and the expectation of annual revenues to $25 million from $23 million is increased. SomnoMed's management is looking forward to the second half, where they will continue to focus on strengthening the SomnoMed brand as the leader in COAT(TM)-Continuous Open Airway Therapy and the global expansion of SomnoMed's business.
SomnoMed's balance sheet remains strong with cash of $3.9 million (2012 $3.5million), with no debt.
To view the full Half Year report to December 31 2013, please visit:
http://media.abnnewswire.net/media/en/docs/76683-ASX-SOM-784725.pdf
Contact
Somnomed Limited
WWW: www.somnomed.com
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