Regulatory News:

Mauna Kea Technologies (Paris:MKEA) (OTCQX:MKEAY) inventor of Cellvizio®, the multidisciplinary probe and needle-based confocal laser endomicroscopy (p/nCLE) platform, today announced its sales for the fourth quarter 2018 ended December 31, 2018.

“We are encouraged by Q4 performance and the momentum created leading into 2019. Our fourth quarter sales growth reflects the continued progress we are making in transitioning our business model and focusing our commercial efforts in high-growth procedure categories in the US market,” stated Robert L. Gershon, Chief Executive Officer of Mauna Kea Technologies. “Fourth quarter system shipments increased 211% year-over-year, driven by strong adoption of our Cellvizio systems by customers that see the value in our pay-per-use program. On a full year basis, this program has driven increasing adoption throughout 2018, and system placements in this program represented 323% increase over 2017. Most importantly, these placements are driving solid growth in sales of consumables – the key indicator of recurring revenue – which increased 17% year-over-year in total year 2018”.

Fourth Quarter and Full Year 2018 Sales by Category

(in € thousands) – IFRS  

Q4
2018

  

Q4
2017

  

% Chg.
Y/Y

  

FY 2018

  

FY
2017

 

 

% Chg.
Y/Y

Systems   874   653   34%   2,683   3,101   (13%)
Consumables   795   624   27%   2,812   2,397   17%
o/w pay-per-use program   327   154   112%   890   650   37%
Services   450   273   65%   1,265   1,188   6%
Total Sales   2,120   1,550   37%   6,760   6,687   1%

Total sales for the fourth quarter of 2018 were €2.1 million, up 37% year-over-year. Fourth quarter sales growth was driven by a 34% increase in system sales, a 65% increase in services revenue and a 27% increase in sales of consumables. The year-over-year increase in total consumables sales in the fourth quarter of 2018 was driven by sales to customers in our pay-per-use program, which represented approximately 41% of total consumables sales in the fourth quarter of 2018, compared to 25% in the prior year period.

Total sales for the full year 2018 were €6.8 million, up 1% year-over-year. Full year 2018 sales growth was driven primarily by a 17% increase in consumables sales and a 6% increase in services revenue, which offset a 13% decrease in systems sales in the period. The year-over-year decrease in system sales was driven by the Company’s strategic shift to a consignment model where units are placed, compared to the prior selling model based on outright sales of systems in the prior year period. The Company placed 55 new Cellvizio systems under its PPU program in 2018, up 323% year-over-year. New system placements in 2018 drove a 37% increase in pay-per-use consumables sales.

Fourth Quarter and Full Year 2018 Units Sales by Type

Units (#)

  

Q4
2018

  

Q4
2017

  

% Chg.
Y/Y

 

 

FY
2018

  

FY
2017

 

 

% Chg.
Y/Y

 

New Systems Sold   9   8   13%   26   30   (13%)
New System Placements 19 1 1,800% 55 13 323%
Consumable Probe Shipments 170 177 (4%) 663 606 9%
o/w reorders or pay-per-use 132 161 (18%) 594 491 21%

Total Cellvizio System shipments increased 211% year-over-year to 28 in the fourth quarter of 2018, compared to 9 total shipments in the prior year period. New system placements under the Company’s pay-per-use program represented 68% of total shipments in the fourth quarter of 2018, compared to 11% in the prior year period.

Total Cellvizio System shipments increased 88% year-over-year to 81 in the full year 2018 period, compared to 43 total shipments in the prior year period. New system placements under the Company’s pay-per-use program represented 68% of total shipments in the full year 2018 period, compared to 30% in the prior year period.

Total consumable probe shipments decreased 4% year-over-year to 170 in the fourth quarter of 2018, compared to 177 in the prior year period. Consumable probe reorders and pay-per-use orders represented 78% of total consumable probe shipments in the fourth quarter of 2018, compared to 91% in the prior year period.

Total consumable probe shipments increased 9% year-over-year to 663 in the full year 2018 period, compared to 606 in the prior year period. Consumable probe reorders and pay-per-use orders represented 90% of total consumable probe shipments in the full year 2018 period, compared to 81% in the prior year period.

2018 Sales by Geography with split by activity (Clinical / Pre-clinical)

(in € thousands) – IFRS       Q4 2018   Q4 2017   % Chg. Y/Y   FY 2018   FY 2017   % Chg. Y/Y

U.S. & Canada1

       1,317   631   109%   3,582   3,142   14%
Clinical       1,199   605   98%   3,181   3,117   2%
Pre-clinical       118   26   363%   400   25   1,516%
Asia-Pacific       289   666   (57%)   1,599   1,952   (18%)
Clinical       279   311   (10%)   1,407   1,229   14%
Pre-clinical       10   354   (97%)   191   722   (74%)
EMEA       505   164   207%   1,544   1,283   20%
Clinical       475   122   289%   1,001   816   23%
Pre-clinical       30   42   (30%)   543   467   16%
LATAM       10   89   (89%)   36   310   (88%)
Clinical       10   89   (89%)   36   310   (88%)
Pre-clinical       0   0   n/m   0   0   n/m
Total Clinical Sales       1,962   1,128   74%   5,626   5,473   3%
Total Pre-clinical Sales       158   422   (63%)   1,135   1,214   (6%)
Total Sales       2,120   1,550   37%   6,760   6,687   1%

Clinical sales
Total clinical sales for the fourth quarter of 2018 were €2.0 million, up 74% year-over-year, driven by a 98% increase in sales in the U.S. & Canada regions and a 289% increase in sales in the EMEA region which offset a 10% decrease in sales in the Asia-Pacific region and an 89% decrease in sales in the LATAM region.

Total clinical sales for the full year 2018 period were €5.6 million, up 3% year-over-year, driven by a 14% increase in sales in the Asia-Pacific region and a 23% increase in sales in the EMEA region which offset an 88% decrease in sales in the LATAM region.

Pre-clinical sales
The year-over-year decrease in pre-clinical sales was driven by the Company’s strategic focus on clinical sales opportunities and, as stated in prior quarters, these sales are less recurring than clinical sales which presents difficult comparisons from one period to another.

Total pre-clinical sales were €158k and €1.1 million in the fourth quarter and full year 2018 periods, respectively, representing 7% of total sales and 17% of total sales, compared to 27% of total sales and 18% of total sales, respectively, in the prior period.

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Financial calendar
Please note that the 2019 financial calendar is available on Mauna Kea Technologies’ website: https://www.maunakeatech.com/en/investors/financial-calendar

About Mauna Kea Technologies
Mauna Kea Technologies is a global medical device company focused on eliminating uncertainties related to the diagnosis and treatment of cancer and other diseases thanks to real time in vivo microscopic visualization. The Company’s flagship product, Cellvizio®, has received clearance/approval in 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

Disclaimer
This press release contains forward-looking statements concerning Mauna Kea Technologies and its activities. Such forward looking statements are based on assumptions that Mauna Kea Technologies considers to be reasonable. However, there can be no assurance that the anticipated events contained in such forward-looking statements will occur. Forward- looking statements are subject to numerous risks and uncertainties including the risks set forth in the registration document of Mauna Kea Technologies registered by the French Financial Markets Authority (Autorité des marchés financiers (AMF)) on April 27, 2018 under number D.18-0429 and available on the Company's website (www.maunakeatech.com), and to the development of economic situation, financial markets, and the markets in which Mauna Kea Technologies operates. The forward-looking statements contained in this release are also subject to risks unknown to Mauna Kea Technologies or that Mauna Kea Technologies does not consider material at this time. The realization of all or part of these risks could lead to actual results, financial conditions, performances or achievements by Mauna Kea Technologies that differ significantly from the results, financial conditions, performances or achievements expressed in such forward-looking statements. This press release and the information it contains do not constitute an offer to sell or to subscribe for, or a solicitation of an order to purchase or subscribe for, Mauna Kea Technologies shares in any country.

1 US & Canada sales previously reported with LATAM sales as Americas.