EOS imaging Reports Full Year 2018 Results and First Quarter 2019 Revenue

PARIS–(BUSINESS WIRE)–Regulatory News:

EOS imaging (Paris:EOSI) (Euronext, FR0011191766 – EOSI), the
pioneer of orthopedic medical imaging 2D/3D, today announces
consolidated results for the full year ended December 31, 2018, and its
first quarter 2019 consolidated revenues as adopted by the Board of
Directors on April 16, 2019.


  • +6% Gross Margin growth at €17.8 million vs. €16.8 million as
    of December 31, 2017

    • 490bp Gross Margin progression up to 50.2% of sales (vs. 45.3%
      over FY 2017), driven by positive trend in average selling price
  • Total net cash position of €19.7 million as of December 31,
    2018, following convertible notes issuance and Fosun Pharmaceutical AG
    equity financing
  • Growing adoption of EOS® in the US up to 100% of Top 10 rated1
    Neurosurgical Hospitals, 100% of the Top 10 rated Pediatric Orthopedic
    hospitals and 90% of the Top 10 rated Orthopedic Hospitals
  • Global install base exceeded 300 EOS® systems by the end of
    year fueling maintenance revenues
  • Global maturing opportunity pipeline

Mike Lobinsky, CEO of EOS imaging, commented: “2018 has been a
year of many accomplishments for EOS imaging. Despite the year end
commercial slowdown, we are proud to reach the 300th-installed-EOS®
mark and see this as an important milestone for the Company. By year-end
2018, we opened three new markets (Mexico, Spain and Portugal) and are
excited to see the continued global adoption of our systems in leading
hospitals and imaging centers as well as new adoption in private spine
and orthopedic clinics in the U.S.; Our growing installed base had also
a very positive impact on recurring revenues which increased by +26%
over prior year. We are also pleased to see the increasing interest in
our Advanced Orthopedic Solutions offering which is continuing to
differentiate EOS imaging beyond our core diagnostic imaging system.”


  • Consolidated revenues over FY 2018: €35.4 millions

EOS imaging recorded annual revenues of €35.4 million, compared to €37.1
million in full year 2017.

The Company sold 64 EOS® systems in 2018. The worldwide installed base
grew to over 300 EOS® systems by the end of 2018.

Recurring revenues grew +26% to €8.9 million notably driven by a strong
+33% increase of maintenance contract revenues from the rapidly growing
global installed base. Recurring revenues in 2018 represented 25% of
total sales, compared to 19% in 2017.

EOS imaging continued R&D investments led to revenues from public grants
and tax credit amounting to €1.4 million.

  • Gross Margin: €17.8 million

Gross Margin increased by +6% to €17.8 million, representing 50.2% of
sales, compared to 45.3% in 2017. This improvement was driven up by the
combination of an increase in average selling prices and an improvement
in production and maintenance costs.

  • Financial Results

Operating expenses including cost of share-based payments for the full
year 2018 totaled €27.4 million, up 13% compared to the prior year.

The increase in Sales, Marketing and Clinical costs was driven by the US
sales team reorganization initiated in H2 2017 and taking a full year
impact in 2018.

Administrative costs have increased by €2.2 million, of which €1 million
one-time costs mostly relating to consulting in support to the
refinancing and personnel transitions.

Operating loss for the full year 2018 was €8.2 million compared with an
operating loss of €5.8 million in 2017.

Net financial expenses for the full year 2018 totaled €(4.8) million,
compared to €(2.0) million in 2017, mainly reflecting in the one-time
expense for the early reimbursement of the company venture debt in May

Net loss for the full year 2018 was €13.0 million compared with a net
loss of €7.8 million in the previous year.

  • Summarized Consolidated Income Statement

Income Statement / Unaudited2 / €

As of December 31

      FY 2018       FY 2017
Revenues 35.39 37.09
Other income       1.43       1.72
Total Revenues       36.82       38.81
Direct cost of sales (17.62) (20.29)
Gross margin 17.77 16.80
as a % of revenue       50.2%       45.3%
Indirect cost of production and services (3.87) (4.12)
Research & Development (4.43) (4.10)
Sales , Marketing and Clinical (10.87) (9.81)
Regulatory expenses (0.76) (0.74)
Administrative costs       (6.76)       (4.61)
Total operating expenses
excluding cost of goods and
share-based payments
      (26.68)       (23.38)
Share-based payments       (0.77)       (0.91)
Total operating expenses       (27.45)       (24.29)
Operating income/(loss)       (8.24)       (5.77)
Net financial income/(expense)       (4.79)       (2.02)
Net income/(loss)       (13.04)       (7.79)

As of December 31,


As of December 31,

Net cash position       19.72       6.93
  • Net cash position at December 31, 2018: €19.7 million

As of December 31, 2018, EOS imaging’s net cash totaled €19.7 million,
compared with €6.9 million at December 31, 2017. This variation results
from €(8.7) million net cash flow from operations, €(4.1) million net
cash flow from investments, and €25.5 million net cash flow from

Over 2018, EOS imaging undertook two significant financing operations:
the issuance of convertible notes allowing the full repayment of the
Company’s venture debt and a €15.1 million equity financing from Fosun
Pharmaceuticals AG.


  • Sales Terms and Conditions for EOS® systems modified to match common
    U.S. practice, impacting revenue recognition timing
  • Solid business performance including:

    • 15 EOS® equipment orders received in Q1 2019 to be compared to a
      particularly high Q1 2018 with 19 orders received
    • Continuous positive trend in EOS® equipments average selling price
    • +27% growth in recurring revenues compared to Q1 2018, driven by
      maintenance contracts revenue fuelled by the growing installed base

Mike Lobinsky, CEO of EOS imaging, commented: “With 15 EOS®
orders received over the 1st quarter of 2019 and +27% growth
in recurring revenues, we are in line with our expectations. Notably, we
experimented a positive trend in our two main markets, EMEA and North
America, offset by an anticipated decrease in Asia Pacific following the
Q4 distributor change in China. We have decided to implement new sales
agreements to better meet customer expectations and evolving industry
practices, particularly in the US. This strong decision will have
short-term impacts on equipment sales revenue recognition, but creates
better conditions for commercial development and cash management. We are
highly confident in our ability to develop EOS imaging across our three
major markets in 2019 and beyond.”

  • EOS® systems general sales term evolution impacting timing of
    revenue recognition

From 2019, EOS® systems direct sales agreements include a transfer of
property at the time of acceptance, ie. the signature of the Statement
of Working Order commonly referred to as “installation”, time at which
sale would be effective and revenue recorded.

Two additional advanced KPIs, equipment orders3 and order book4,
will be used to provide the necessary visibility on business performance
as well as a the ability to compare prior year performance.

This business driven decision was taken in order to make EOS® equipments
commercial model more consistent with both customer expectations and
evolving industry practices, particularly in the US. Nonetheless, given
the 3 to 12 month average delay between the shipment and the
installation of EOS® systems, 2019 revenues will be significantly
impacted by this one-time change.

This change should be accompanied by enhancements to the management of
supply chain due to shorter shipment to installation times, extension of
our working capital and improvements to our receivables.

  • Q1 2019 equipment orders and total revenue by product lines

Equipment Orders and Order Book

Non-audited / Including forex impact5 /
€ million

As of March 31

      Q1 2019       Q1 2018
Equipment Orders (over the period)       6.25      
Equipment Order Book (end of period)       6.20      

Non-audited / Including forex impact / € million

As of March 31

      Q1 2019       Q1 2018
Equiments       0.05       7.56
Maintenance contracts       2.21       1.73
Consumables and services       0.32       0.26


      2.58       9.54

Total revenue for the first three month of 2019, according to the new
general sales terms implemented, was €2.6 million.

Total equipment orders were €6.25 million, following a continuous
positive trend in average selling price.

Total Q1 2019 recurring revenue was €2.5 million, including €2.2 million
in maintenance revenue to be compared to €1.7 million in Q1 2018 (ie.
+28% growth).

Total Q1 2019 revenue with the addition of the change in equipment order
book value reached €8.8 million to be compared to €9.5 million in Q1
2018, ie. -8.0% decrease from a particularly high quarter.

  • Q1 2019 equipment orders and total revenue by geography

Non-audited / Including forex impact / € million

As of March 31

      Q1 2019       Q1 2018
EMEA       1.26       3.53
APAC       0.17       2.21
NAM       1.15       3.81

Total Quarterly Revenues

      2.58       9.54

ABOUT EOS imaging

EOS imaging designs, develops and markets EOS®, a major innovative
medical imaging solution dedicated to osteoarticular pathologies and
orthopaedics combining equipment and services targeting a $2B per year
market opportunity. EOS imaging is currently present in 34 countries,
including the United States under FDA agreement, Japan, China and the
European Union under CE labelling, through approximately over 300 EOS®
installed representing around one million patient exams every year.
Revenues were €35.4M in 2018.

For more information, please visit www.eos-imaging.com.

EOS imaging has been chosen to be included in the new EnterNext©
PEA-PME 150 index, composed of 150 French companies and listed on
Euronext and Alternext markets in Paris.

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

Next press release: Release of Q2 2018 sales in July 16, 2019

1 Source: US News – 2018/2019 Best Hospitals National
Rankings (August 2018)
2 Audit procedures have been
performed, but audit reports have not being issued yet
Equipment Orders: Sum of EOS® system orders recorded in order book over
the period
4 Order Book: Accumulation of EOS® system
ordered but not installed for which revenue has not been recognized
Forex impact over Q1 2019: +€0.08 million



EOS imaging
Valérie Worrall
Ph: (+33) 1 55 25
60 60

Relations (US)

Tram Bui / Emma Poalillo
The Ruth Group
(+1) 646-536-7008 / 7024

Relations (US)

Kirsten Thomas
The Ruth Group
Ph: (+1)