Medicrea International: Third Quarter Revenues and Full-Year Outlook

The MEDICREA Group (FR0004178572-ALMED) (Paris:ALMED) listed on Alternext by NYSE Euronext Paris, a medical device company specialized in the development of innovative surgical technologies for the treatment of spinal disorders, is publishing its 2011 half year results.

The first half of 2011 was a turning point in MEDICREA's development. For the first time since the company's IPO, it made an operating profit, amounting to €0.5 million, as opposed to an operating loss of €1 million in the first half of 2010. The operating profit was driven by revenue growth of almost 39%, and a further improvement in gross margin, which increased by 3 points, year-to-year to 77%.

Operating profit before depreciation, amortisation and provisions (EBITDA), equalled more than 20% of revenues, and exceeded €2 million in the first half. This is more than double the figure achieved in the year 2010.

THIRD QUARTER REVENUES AND FULL-YEAR OUTLOOK

After solid growth in the first half, third-quarter revenues came in at €4 million.

MEDICREA made significant organizational changes to its US sales operation, with the aim of expanding and strengthening the sales team in order to take the company's US development to the next level. Starting in the second quarter and continuing in the third, MEDICREA recruited an additional sales team consisting of a Vice President of Sales, and four new Regional Directors. They were then provided with intensive training. This took up a great deal of the Group’s human resources, as well as disrupted its commercial efforts, and the day-to-day technical support it provides to surgeons, at a time when the market remained highly competitive.

"Our third-quarter revenues declined slightly over 10% versus the prior year. This performance fell below our expectations," stated Denys Sournac, Chairman and CEO. "Although year to-year revenue growth in the fourth quarter is likely to be moderate, I am certain that we have made the right decisions by reorganising, and significantly strengthening our US sales force. With more qualified staff on the streets and the planned launch of six new products in the next few quarters, I am highly confident about our strategy. We should see renewed strong sales growth from early 2012," said Mr Sournac.

STRATEGIC DEVELOPMENTS

MEDICREA's commercial development has so far focused mainly on the PASS-LP® thoraco-lumbar fixation system, which is particularly effective in treating spinal deformities and is acknowledged as one of the world's best systems for complex spinal surgery.

The PASS-LP® range of implants accounts for almost 75% of Group revenues. The system will continue to expand through various innovations and new elements, including a version that can be implanted entirely through a minimally invasive transcutaneous procedure.

On October 19th in Milan, MEDICREA will unveil 6 new products at Eurospine, Europe's largest spinal surgery conference. It will then present its products at the NASS Annual Meeting in Chicago in November. These new spinal implants represent market segments in which MEDICREA currently has little or no presence.

The Group is planning to discuss strategic partnerships with US rivals. The aim is that some of MEDICREA's technologies, which are ready to be commercialized broadly, will be deployed by a company with a powerful sales and marketing operation.

The K-Jaws® cervical compressive mini-frame has taken another step forward, with MEDICREA filing a new application with the FDA in early October. "Despite the delay resulting from several requests for information and additional tests, I am optimistic that this project will have a positive outcome in the next few months," stated Denys Sournac.

Coming up

2011 sales will be published on January 12th, 2012, after market close.

ABOUT MEDICREA (www.medicrea.com)

MEDICREA specializes in the design, development, manufacture and distribution of orthopedic implants dedicated to spinal surgery. In an $9 billion market, MEDICREA is a very dynamic small to medium-sized business of 100 employees with unique innovation capabilities. MEDICREA enjoys an excellent reputation and develops unique relationships with the most visionary and creative spine surgeons in France, the U.K., and the U.S.A. Products developed and patented by MEDICREA provide neuro-surgeons and orthopedic surgeons specialized in spine with new and less-invasive surgical solutions, which are faster and easier to implement than traditional techniques. The Group operates from its headquarters based in Lyon, France with a manufacturing facility located in La Rochelle, France and three distribution subsidiaries in the U.S.A, U.K., and France.

MEDICREA is listed on ALTERNEXT by NYSE - Euronext Paris
ISIN : FR 0004178572– code : ALMED