Strong Positive Momentum of Q2 2008 Expected to Continue .The growth momentum built up in recent quarters at SHL’s German operations has brought these activities to profitability during the quarter under review and is contributing to the improved overall performance of the Company.In addition, the performance of the Israeli operations has continued to be very satisfactory. As a result, revenues for the second quarter of 2008 increased to USD 11.0 million compared to the previous quarter of USD 10.4 million which resulted in earnings before interest, tax and depreciation (EBITDA) of USD 2.3 million, corresponding to 21.0% of revenues, compared to 1.5% in Q2 2007. Revenues for the quarter reflected an increase of some 70% over those of Q2 2007.
Revenues for the first half of the year increased by 71% to USD 21.4 million from USD 12.5 million in H1 2007 giving an EBITDA of USD 4.1 million compared to an LBITDA of USD 0.1 million in H1 2007.
SHL’s net profit for the half year amounted to USD 1.3 million compared to a net loss of USD 4.3 million in H1 2007. Due to its improved financial results and business prospects, the Company recorded in this quarter an additional tax asset of USD 3.3 million on the assumption that it is now generating sufficient taxable income to utilize this previously unrecorded tax asset. In addition, SHL recorded financial income of USD 0.4 million compared to financial expenses of USD 3.7 million in the previous quarter. As a result, SHL’s net profit for the quarter amounted to USD 4.0 million compared to a net loss of USD 2.7 million in the previous quarter.
Commenting on the results for the quarter Erez Alroy, Co-CEO of SHL Telemedicine stated: “During this period of uncertainty in the markets, coupled with the prevailing inflationary trends, it is satisfying to achieve improved results in all parameters of our operations. The opportunities offered by the SHL telemedicine platform, products and
services successfully serve the ever increasing needs that are occurring within the healthcare field, provide cost savings to health insurers and increase the well being of patients. This is especially so in the German market where health insurers respond to the
comprehensive structural changes that are being implemented and which at the same time provide the growth drivers for SHL. We are beginning to reap the rewards for the patience and investment over the years in developing our services to this market and can now look
forward to continuous growth there. “
Cash reserves at 30 June 2008 amounted to USD 45 million. During the quarter the Company continued to reduce its loans and since the beginning of the year has now repaid some USD 35 million.
Balance sheet. SHL’s assets at 30 June 2008 totalled USD 112 million with shareholders’ equity amounting to USD 66 million.
Share buyback. In March 2008, the Board of Directors approved a share buyback up to an equivalent of USD 2 million until 30 June 2008 and during the quarter, SHL repurchased ordinary shares of the Company for an amount of USD 0.6 million. The Board of Directors
has extended the period for the repurchase of shares until 30 September 30 2008.
Diabetic pilot study in Germany. During Q2 2008 SHL announced preliminary study results of the Diabetiva® program (telemedical treatment of diabetics). The pilot conducted shows very promising results both in terms of cost savings for health insurers and in terms of improved well being and patient care. SHL expects to conclude the study during the second half of 2009.
FDA approval of CardioSen’C. At the beginning of August, approval was received from the US Food and Drug Administration for the marketing of SHL’s proprietary new 12 – lead ECG transmitter, the CardioSen’C. This innovative portable device is SHL’s newest product in its cardiobeeper product range and significantly simplifies the measurement and transmission of a 12-lead ECG and rhythm strip in real-time due to its ergonomic design, compact dimensions, lightweight, vocal prompts and remote operation capabilities by the medical call center personnel.
Looking ahead. SHL expects a continuation of its positive operational results, which as set out above are mainly driven by the strong performance of its German operations.
Consequently, SHL raises its guidance for the full year 2008. Revenue is now expected to be between USD 43 and 44 million (up from USD 38 to 41 million) and EBITDA between USD 8 and 9 million (up from USD 7 to 8 million).
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