Year- end report (2016-05-01 – 2017-04-30)
IN SHORT
- Full year net sales amounted to 4 127 (3 706) TSEK. The total value of orders received after the period amounted to 748 TSEK on the day of the report.
- Fourth quarter gross margin was 62 %, corresponding to approximately 80 % of end customer net sales. As HoloMonitor components now are purchased in larger quantities, the gross margin is expected to remain at approximately 60 %.
- Extensive quality assurance efforts have resulted in that marketing activities were first intensified in early 2017. This has now resulted in a dramatic increase in number of quotation requests. The increase in quotation requests, combined with the recent surge of published scientific articles, indicates that the sales development in 2016/17 was a direct consequence of that marketing activities were intentionally held back until product quality and delivery capacity was secured.
- Additional HoloMonitor units were deployed at University of Iowa, Taipei Veterans General Hospital, University of Tehran (2 units), InnovaBio in St. Petersburg, QIMR Berghofer Medical Research Institute in Brisbane and at Sahlgrenska University Hospital in Gothenburg.
- The Board of Directors proposes no dividend for 2016/17.
FEBRUARY 2017 – APRIL 2017
Net sales 1 221 (1 212) TSEK
Operating result before depreciation (EBITDA) -2 129 (-1 997) TSEK
Net result -3 378 (-3 443) TSEK
Earnings per share -0.29 (-0.33) SEK
MAY 2016 – APRIL 2017
Net sales 4 127 (3 706) TSEK
Operating result before depreciation (EBITDA) -6 039 (-6 108) TSEK
Net result -10 416 (-9 329) TSEK
Earnings per share -0.90 (-0.94) SEK
CEO COMMENTARY
“I went in 1932 to the Zeiss Works [Zeiss is still one of the leading microscope supplier in the world] in Jena to demonstrate [the phase contrast microscope]. It was not received with such enthusiasm as I had expected. Worst of all was one of the oldest scientific associates, who said: ‘If this had any practical value, we would ourselves have invented it long ago’.”
The founding idea
These words are from Frits Zernike’s Nobel Lecture in 1953. When finally released as a commercial product in the late 1940s, Zernike’s invention revolutionized cell biology. The phase contrast microscope was invented in a time when computerized image processing was unheard of. Unsurprisingly, the two technologies work poorly together. Holographic microscopy improves and adapts the benefits of the phase contrast microscope to computerized image processing. This was the founding idea of PHI in 2004 and the idea which still lead us today.
Becoming mainstream
Since then holographic microscopy has evolved from being received with the same lack of initial enthusiasm as the phase contrast microscope to something that is rapidly becoming mainstream among scientists. The proof of this materialized on May 19,2017 when the International Society for Advancement of Cytometry published a special issue, showcasing holographic microscopy and related technologies to a wider scientific audience. In the issue, HoloMonitor is featured in 3 out of the 10 original articles.
The importance of mainstream
I often get the question “If HoloMonitor technology is so great, why aren’t people throwing themselves at it?”. Without a doubt, Zernike received the same question when he came back from the discouraging demonstration at Zeiss. We humans like change. But, if the change is non-mainstream and too rapid, we feel that we lose control and instinctively react against it, just like the Zeiss associates did.
Scientific articles
This brings me to why scientific articles are so important. Independent experts review scientific articles anonymously. The articles thus both market and prove with high credibility to mainstream customers that HoloMonitor and holographic microscopy provides better research results than their old workhorse, the phase contrast microscope. The scientific articles make our industry unique. The articles are a fantastic tool to objectively provide knowledge of new technologies, but also to assess the interest in the technology and future sales.
Scientific articles featuring HoloMonitor.
Indicator of sales growth
Academic and industrial customers purchase HoloMonitor to create new research results. The goal of academic research is to publish these new research results. The growth of number of published scientific articles featuring HoloMonitor is therefore an early indicator of future sales increase. The number of scientific articles, posters and doctoral thesis featuring HoloMonitor have now grown to well over 80, distributed over roughly 60 scientists. See the full list here.
Product verification
Too many companies with promising products have failed when eagerly pursuing a rapid increase of sales; a much too costly sales organization is recruited before the product can be manufactured in volume with high and consistent quality for a sustainable cost. The difficulty is in the product verification. Every customer handles the product slightly differently. The only way to ensure that a product will work as expected in the field is therefore to test it in sufficient numbers in the field. All other form of product verification is associated with great uncertainty. The over 90 units in operation have made it possible to identify and verify the simple design changes necessary for HoloMonitor to among other things be able to tolerate the hot and very humid incubator environment without disruptions.
HoloMonitor in operation at QIMR Berghofer in Brisbane.
Sales
In previous reports, we have touched upon that our extensive quality assurance efforts have resulted in that our marketing activities were first intensified in early 2017. The intensified marketing activities by our distributors and our expanded marketing department have resulted in a dramatic increase in number of quotation requests, a very important step in a sales process that in many cases span over several months. The increase in quotation requests, combined with the recent surge of published scientific articles, indicates that this year’s sales development is a direct consequence of that marketing activities were intentionally held back until product quality and delivery capacity was secured.
Neither a house nor a company will persist to become valuable without a foundation. The foundation for profitable long-term volume sales has now been built with improved gross margin, validated products, secured production, increasingly established technology, confirmed customer value and with currently limited competition.
Peter Egelberg
For additional information, please contact:
Peter Egelberg, CEO
Tel: +46 703 19 42 74
E-mail: peter.egelberg@phiab.se
Web: www.phiab.se
This information is information that Phase Holographic Imaging is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at June 19, 2017.
Phase Holographic Imaging (PHI) leads the ground-breaking development of time-lapse cytometry instrumentation and software. With the first instrument introduced in 2011, the company today offers a range of products for long-term quantitative analysis of living cell dynamics that circumvent the drawbacks of traditional methods requiring toxic stains. Headquartered in Lund, Sweden, PHI trades through a network of international distributors. Committed to promoting the science and practice of time-lapse cytometry, PHI is actively expanding its customer base and scientific collaborations in cancer research, inflammatory and autoimmune diseases, stem cell biology, gene therapy, regenerative medicine and toxicological studies.
