INVISIO (IVSO) Q3 2008 earnings summary

Executive summary

• Refocused operations on professional products while reducing overhead; management reported stronger demand and a trend toward improved profitability.

• 9M net sales rose to SEK 34.7m from SEK 13.5m; the period still recorded a SEK 34.3m net loss.

Financial highlights

• Q3 net sales were SEK 6.2m vs SEK 5.1m; gross profit was SEK 4.0m vs SEK 2.0m.

• Q3 operating loss was SEK 7.6m vs SEK 9.6m; net loss was SEK 7.8m vs SEK 10.6m, and EPS was SEK -0.39 vs SEK -0.63.

• 9M operating loss was SEK 33.2m vs SEK 39.8m; net loss was SEK 34.3m vs SEK 41.6m, and EPS was SEK -1.73 vs SEK -2.63.

• 9M operating expenses fell to SEK 44.0m from SEK 47.7m; operating cash flow improved to SEK -29.3m from SEK -39.1m.

Outlook and guidance

• Q4 outlook was favorable overall, with professional-product sales expected to be good; operating expenses were expected to remain at Q3 levels.

• First full-scale customer tests of the new professional product series were planned for Q4; additional distributor and cooperation agreements were expected.

• Motorola’s consumer product launch was expected in early 2009; substantial professional sales growth was expected for FY2009, with quarter-to-quarter variability.

• Royalty revenue was expected after the Motorola launch; timing and results depend on market success of the products.