Interim report January - March 2017

First quarter

• Net sales increased by 105% to MSEK 21.1 (10.3)
• Operating profit declined to MSEK -4.9 (-3.3). Adjusted operating profit*
  increased to MSEK 1.6 (-3.3)
• Operating margin improved to -23.4% (-31.8). Adjusted operating margin*
  increased to 7.4% (-31.8)
• Cash flow from operating activities increased to MSEK 3.9 (3.1)
• Diluted earnings per share amounted to SEK -0.19 (-0.14)
• MIPS was listed on Nasdaq Stockholm on March 23 and in conjunction with
  this, a new issue of shares raised MSEK 150.0

The group in brief  

*Adjusted for items affecting comparability, IPO related costs

CEO’S COMMENTS

At the end of the quarter, the company’s share was listed on Nasdaq Stockholm. MIPS increased its shareholder base with 2,500 new shareholders and an issue of new shares raised MSEK 150.0 The new share issue ensures a strong financial position and increased flexibility. The listing provides a positive increase in our exposure and serves as a seal of quality, which I am convinced will benefit our business.

Net sales and earnings
Net sales during the quarter increased 105% to MSEK 21.1 (10.3) and sales in the Bike and Snow categories continued to be our largest categories. The operating loss amounted to MSEK -4.9 (-3.3), which included items affecting comparability of MSEK 6.5 (-), attributable in their entirety to costs in conjunction with the listing on Nasdaq Stockholm. The adjusted operating profit totalled MSEK 1.6 (-3.3). This is the first time we achieved a positive operating profit in the historically least profitable first quarter. On a last 12 months rolling basis, our net sales were MSEK 97 and our adjusted operating margin 30%. This performance is in line with our plan, according to which the ambition is to achieve net sales of more than MSEK 400 and an operating margin of more than 40% by 2020.

Significant events during the quarter
During the quarter, we participated at ISPO in Munich, one of the world’s largest trade fairs for our important Snow category. Key helmet brands like Anon, Bern, Dynafit, Giro, Oakley, Pret, Scott and Smith, launched 28 new models integrating MIPS Brain Protection System (BPS). These model introductions have been positively received and will contribute to increase penetration in the Snow category.

During the quarter, our customer Troy Lee Design, a leading brand among off-road motorbike and bike helmets, announced that as of February all new helmets from the brand will be equipped with MIPS BPS.

Strengthened organization for further growth
A strengthened organization with added resources in sales as well as research and development will enable MIPS to continue to develop our partnerships with existing and new customers. Major focus areas will include the development of new applications and, together with customers, continue to inform and educate end-users of the damaging effects rotational motion can have on the brain and how MIPS BPS could help reduce these impacts.

Our subsidiary in China, MIPS Dongguan Trading Co. Ltd., has now been established. In the past, personnel were hired through a local staffing agency. These resources will now transition to employment with MIPS Dongguan Trading Co. Ltd., which will have a total of six employees. Our company in China will manage logistics, projects and quality assurance.

Having spent a great deal of time preparing for the listing, the organization is now fully focused on to develop our business and products. Combined with the fact that the start of the year has been promising, I look forward to the remaining of 2017 with anticipation.

Johan Thiel

MIPS AB (publ)
President and CEO

For further information, please contact:

Johan Thiel, President and CEO
johan.thiel@mipsprotection.com
tel +46 73 399 65 88

Max Strandwitz, CFO
max.strandwitz@mipsprotection.com
tel +46 70 961 17 54

Boel Sundvall, IR
boel.sundvall@mipsprotection.com
tel + 46 70 560 60 18

This information is such that MIPS AB (publ) is obliged to disclose in accordance with the EU’s Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, on May 11, 2017 at 7.30 a.m. CET.

MIPS will present the interim report for January-March 2017 at a teleconference on May 11, 2017 at 10.00 a.m. CET. To participate, please register at:

http://emea.directeventreg.com/registration/19012028

Financial calendar
Interim report January – June 2017                 August 17, 2017
Interim Report January – September 2017     November 9, 2017
Year-end report 2017                                      February 15, 2018

About MIPS
MIPS is specialized in helmed-based security and protection of the brain and is the world leader in this field. Based on an ingredient brand model, MIPS Brain Protection System (BPS) is sold to the global helmet industry. The solution, which is patented in all relevant markets, is based on some 20 years of research and development together with the Royal Institute of Technology and Karolinska Institutet in Stockholm, Sweden.

The company’s headquarter with 23 employees in research and development, sales and administration is located in Stockholm, where its test facility is also located. Production takes place at sub-contractor facilities. In 2016, net sales amounted to MSEK 87 and an adjusted EBIT-margin to 28%. The MIPS share is since March 2017 listed on Nasdaq Stockholm. For more information, visit www.mipscorp.com

Financial targets
MIPS’ long-term financial targets should not be viewed as a forecast but rather as an ambition which the Board of Directors and senior executives believe is a reasonable long-term expectation for the company.

Growth: The goal is to grow organically to achieve net sales in excess of MSEK 400 by 2020.

Profitability: The goal is to achieve an EBIT-margin in excess of 40% by 2020.