compumedics limited. agenda meeting opens chairman's address ordinary business meeting closes

Compumedics Limited

Agenda

• Meeting opens

• Chairman's address

• Ordinary business

• Meeting closes

Chairman's address

Compumedics is a world leading supplier of medical technology for patient monitoring.

Compumedics primary healthcare markets cover sleep, brain and ultrasonic blood flow monitoring.

Our Vision is to set the innovative and technological standards for patient monitoring in our chosen markets.

We aim to deliver superior returns to our shareholders by identifying and delivering innovative and accessible medical technologies

globally in our chosen markets.

We provide our customers with products and software solutions of superior technology, ease of use and reliability.

Global reach

• Sales, marketing and support offices in

– Melbourne, Australia– Charlotte, N. Carolina, USA– Singen, Germany– Hamburg, Germany

• Corporate headquarters in Melbourne, Australia

• Network of Distributors Globally

Strategic drivers

• Expanding Compumedics’ key sleep disorder business through new products (Grael™), new diagnostic market opportunities (Home sleep testing – USA and German markets) and sleep-treatment markets with SomniLink® SPAP®

• Broadening the scope of Compumedics’ key sleep business through new market opportunities for Compumedics sleep services business (Cardio Sleep Services®) in the US and then to Germany and other key global markets

• Expansion of Compumedics’ existing diagnostic business to long term EEG Monitoring (LTM) through the release of the Neuvo® device over the next 12 months to all key global markets.

A brief chronology• 1987 Compumedics established Asia Pacific’s first fully

computerised sleep laboratory. • 1995 the Company was selected to supply equipment to the US

Sleep Heart Health Study, the world’s largest sleep study with 20,000 patient studies completed by 2008.

• 1998 awarded the overall Australian Exporter of the Year.

• 2000 listed on the Australian Stock Exchange.

• 2002, acquired US-based Neuroscan - the world's leading supplier of instruments for brain-research. In the US - the world's largest medical device market - Neuroscan holds around 90% of the market for brain-research products.

• 2003 awarded the Frost & Sullivan Award for Market Expansion Strategy.

A brief chronology

• In 2004, acquired German-based DWL Elektronishe GmbH, enabling Compumedics to expand its global operations into the neurovascular and cardio-vascular diagnostic fields.

• 2006, awarded the Frost and Sullivan Technology Leadership

award for the innovative Somté recorder product.

• 2007, Compumedics and Chairman were inducted into the Victorian Manufacturing Hall of Fame.

• 2008 DWL division received the top 100 German Innovation award.

• 2009 received an award for design excellence for its new generation Grael™ sleep diagnostic system.

Key growth opportunities

The current key growth opportunities for the core business continue to evolve from four principal areas being:

– The evolution of the home-sleep-testing (HST) market in the US as a result of recent changes to USA private and government funding of HST and the expected growth in sales of small limited channel sleep-diagnostic screener devices

– The expansion of our core sleep-diagnostic and brain (neurological) monitoring businesses in Europe.

– Specifically Germany and France are being established as direct sales bases.

– The entry of Compumedics into the global long-term EEG monitoring (LTM) market with the world-wide release of its new innovative LTM device, Neuvo®.

Compumedics today: Financials

2006 actual

2007 actual

2008 actual

2009 actual

Revenues ($m) 37.7 36.7 38.5 38.4

Margins % 52% 58% 58% 57%

Other income 1.3 0.1 0.4 0.6

Operating Expenses 22.1 19.5 20.3 19.6

EBITDA (0.5) 1.3 1.9 3.7

NPAT (1.6) 0.1 0.8 2.7

AUD/USD exchange rate 0.73 0.84 0.96 0.75


Sleep diagnsoticsBrain researchNeuro diagnosticsUltrasonic blood flowSupplies and technical support

USA Europe Asia Australia

≈$40m annual revenues % split by:

Geographic territoryBusiness Area


• Total revenues resilient at $38.2m compared to $39m in the prior year despite global financial crisis (GFC)

• FY2009 record NPAT of $2.7m a 259% increase over the prior year result of $0.8m

• Bank debt reduced year-on-year by a further 21% from $2.8m to $2.2m, highest cash levels in 3

years at $2.6m up from $0.6m last year

• Many new products released or about to be released, Grael™, Neuvo®, Xegis™

• SomniLink® SPAP® shipping to Italy


• Gross margins stable at approximately 57%

• Operating expenses less investing activities stable with last year’s spending - $19.7m compared to

$19.1m in the prior year

• EBITDA up to $3.4m profit compared to prior year profit of $1.9m, a 79% increase over the prior year

• Operating cash was $3.7m for the year ended 30 June 2009, a 106% increase over the prior year

result of $1.8m


• Borrowings were reduced by a further 21% from $2.8m in the prior year to $2.2m at end of FY2009

• Borrowing costs at $0.6m were 14% lower than the prior year’s $0.7m, a 32% reduction over 2 years

• Sales in Asia(21%), Australia(+2%), DWL(+26%) and CSS-USA(135%) were up. Sales in USA(-

26%), Europe(-44%) and Japan(-38%) declined, primarily as a result of the GFC in those territories

• Net Foreign exchange was a $0.8m gain for FY2009 being $1.5m turn around than the $0.7m loss in FY2008


Compumedics revenue

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009

AUDm

Acquisi tion of

Neur oscan - USA

Acquisi tion of DWL -

Germany


(3.0)

(2.0)

(1.0)

-

1.0

2.0

3.0

4.0

5.0

EBITDA - w/o MI 4.2 (0.6) 1.3 2.8 3.2 4.0

EBITDA 3.0 (2.3) (0.1) 1.4 1.9 3.6

FY2004 FY2005 FY2006 FY2007 FY2008 FY2009

AU

D m

illio

n

Compumedics - Earnings before interest, tax, depreciation and amortisation (EBITDA) as reported and without Medical Innovation Division R&D spending


Debt continues to decline – a further 21% reduction year-on-year

0123456789

AUDm

2002 2003 2004 2005 2006 2007 2008 2009


Foreign exchange impacts favourably in current financial year

-1-0.8-0.6-0.4-0.2

00.20.40.60.8

AUDm

2003 2004 2005 2006 2007 2008 2009

… so how has it turned out so far?• Private company (1999) turnover $9m pa with 45 staff (1 US

based)

• Listed on ASX (December 2000) – raised $11m (post fees/debt)

• April 2002 purchased US based Neuroscan – worlds leading source localisation software – Compumedics turnover $34m, with 120 staff (50 US based and 4 German based)

• September 2004 purchased German based DWL – ultrasonic blood flow business – one of the global founders of this technology – Compumedics turnover now $38m, generating profits, with 160 staff (55 US based, 30 German based)

• June 2005 having amassed a world class intellectual property portfolio around sleep, brain and ultrasonic blood flow monitoring Compumedics losses close to $5m – grown too quickly, stretched the financial, management and human resource capability of the Company too far

• June 2006 Compumedics reduced loss for the year to $1.6m and maintains sales and product development of IP portfolio

• June 2008 Compumedics - 2 years into its performance transition program - returned to profits ($0.8m), has grown revenues to $38m despite a rising exchange rate and has 160 staff (60 US based and 40 European based)

• June 2009 Compumedics sets record profit of $2.7m on revenues of about $38m despite GFC.

• Offices established in key markets in USA (Charlotte, NC), Germany (Hamburg and Singen) and the home office in Australia (Melbourne)

• Compumedics is poised, with the existing management team, to resume historical growth from key growth opportunities including new product releases Grael™ PSG/EEG, Neuvo® LTM EEG and Somnilink® SPAP and HST market in the USA

… so how has it turned out so far?

Past, present and future

$9m

The past, present and future revenue percentage profiles of the business by market/product offering

$38m

$150m+

By 2014Today1999

SLEEP treatment

SLEEP diagnostics Brain

research

Neuro diagnostics

Brain blood flow

Supplies & service

Sleep diagnostics

Supplies & service

SLEEP diagnostic services

SLEEP diagnostics

Neuro diagnostics

Brain research

Brain blood flow

Supplies & service

SLEEP diagnostic services

Past, present and future

• The underlying trading performance for the first quarter is similar to last year in terms of sales activities with much stronger sales performances in Germany and the Middle East, Australia continuing to perform solidly and a little change to a very tough American market

• The almost 30% currency movement is a significant short term impediment to earnings growth for the Company

• Looking through this, the substantial opportunity of a strong currency, and a financially stronger Compumedics, is for the Company to acquire additional assets in its key US market at potentially very affordable prices. Compumedics will pursue these opportunities where incremental sales and earnings can be achieved.

• In addition the Company will continue to consider all strategic initiatives available to it to fully enhance shareholder value over coming months.

Core products: Sleep

NEW !!! Grael™

World’s first high definition PSG amplifier built on over 20 years of experience – delivering unparalleled signal quality, innovative features and efficiency-enhancing technologies.

Somte PSG

The simplest and most convenient way to meet requirements for full PSG … absolutely anywhere.

Full PSG ambulatory recorder for attended sleep studies using Blue-tooth wireless technology, or in an unattended ambulatory setting or both.


Somté

Combined Sleep and CHF monitor for both hospital and private physician application.

Siesta802

World leading portable diagnostic device with wireless capability for both sleep and general patient monitoring.


E-Series

Laboratory based diagnostic product for both full polysomnography (PSG) “sleep” studies and or separate EEG studies. First to be “Network-Ready”


ProFusion PSG 3

A high-powered comprehensive software companion to our family of leading-edge sleep recorders/ amplifiers.

Designed to give sleep medicine professionals everything they need :

clarity, power, quality assurance and great reports.


Neuvo LTMThe state of the art technology platform from Compumedics for Long term EEG monitoring.

Bedside display Up to 256 channels Single connection Touch-screen monitor Wall or Mobile configuration

Core products: Brain monitoring

Safiro

Neurodiagnostic excellence in Ambulatory EEG offering convenience, advanced capabilities and confidence in recordings

Lightweight and ergonomic

32 Channels

Infrared capabilities


Digital Video

Advanced software and hardware compression technology

Synchronised digital video capabilities

Accurate image reproduction

MPEG4 software compression

32 Bit network performance


ProFusion EEG4

Next generation clinical LTM software package that offers unprecedented ease of use in the EEG lab, and in post-recording analysis and review


Curry 6

Offers extensive possibilities for scientific research investigations in the field of multimodal neuro-imaging. Dipole solutions are obtained using various models and reconstruction methods.


Source

Offers impressive source localisation capabilities, including several dipole models and three spheres, BEM and FEM reconstructions.


Stim

Presents audio and video stimuli and sends stimuli and response to Scan where they are incorporated into the data file.

SynAmps RT

Revolutionary 24-bit acquisition system that offers up to 512 EEG channels with 10G Ohm input impedance and sampling rates capable of up to 20,000 Hertz per channel. The system provides the coordination up of to four headbox units.


Doppler Box Unique fully digital Doppler M-Mode “Depth of Flow” Display Size and weight of a “pencil box” Modular - Attachable to any PC - “Soft” upgrade to any/all Special

Function Tests

Core products: Ultrasonic blood flow

Embo-Dop

Quantum leap in Emboli detection

Card based unique clinically proven Doppler device to discriminate between gaseous and solid emboli, using special patented multi-frequency probes

Multi-Dop

Portable Doppler device for complete routine applications, upgradeable for 1- and 2- channel monitoring diagnostics

Core products: Ultrasonic blood flow

EZ-Dop

Compact, portable and modular Doppler for routine diagnostics.

Summary• World class patient monitoring Company

• Uniquely placed in key global markets with strong growth opportunities

• Performance transition program continues with solid outcomes

delivered, profits and cash growing - balance sheet strong – net cash position

• Established routes to market in key international markets combined with increased sales resources and new products should allow our proven formula for long term growth and value creation to continue

• Substantial core and new breakout (sleep treatment) growth opportunities to drive the business forward

Ordinary business

• Item 1 Financial Statements and Reports (non binding resolution)

• Item 2 Election of a Director

• Item 3 Adoption of Remuneration Report (non binding resolution)

• Item 4 Approval of RCNs

compumedics limited. agenda meeting opens chairman's address ordinary business meeting closes

Documents

core sleepdiagnostic

sleeptreatment markets

computerised sleep laboratory

worlds largest sleep

us sleep heart health

german markets

new market opportunities

chosen markets