For personal use only 02 Who is Compumedics?
03 Financial Summary
04 Chairman’s Address
09 Global Markets
10 Core Business
12 Clients and Core Products
13 Strategic Growth Platforms
17 A Focused Strategy in Action
19 Board of Directors
20 Senior Management
Compumedics Limited
ABN 95 006 854 897
Annual General Meeting
Thursday, 25th October 2018
at 10.30am
To be held at: Compumedics Limited
30-40 Flockhart Street Abbotsford
Victoria 3067
For personal use only Who is Compumedics?
Compumedics is a leading global, innovative developer
A leading global, innovative developer
and manufacturer of medical devices for:
and manufacturer of medical devices for:
Diagnosing
sleep disorders
Monitoring
neurological
disorders including
long-term epilepsy
monitoring (LTEM)
Highly sophisticated
brain research
Ultrasonic monitoring
of blood flow
through the brain
(Transcranial
Doppler [TCD])
1
2
Compumedics is a technological leader
A technological leader in its chosen markets:
in its chosen markets:
#1
Australian
sleep & neuro
diagnostics
device supplier
#1
Japan
sleep diagnostics
device supplier
#1
#3
China
sleep diagnostics
device supplier
to premier facilities
&
#1 TCD
device supplier
USA
sleep diagnostics
device supplier
and emerging
#3 supplier for
neurological
monitoring devices
Since 1987 Compumedics has grown into a company:
with 120 employees across four locations, Melbourne, Australia (Home Office),
Charlotte, NC, USA, Hamburg and Singen, Germany.
which listed on the ASX on Dec 21, 2000.
that has generated almost $580m in revenues since listing of which over $470m
have been export revenues
All $ = A$ unless otherwise specified
For personal use only FINANCIAL SUMMARY
ALL FIGURES IN A$M UNLESS OTHERWISE STATED
TREND
2018
2017
Revenue for continuing operations
37.0
34.4
Earnings before interest, income tax, depreciation and amortisation (EBITDA)
Earnings before interest and income tax (EBIT)
Net operating profit after tax (NPAT)
Research and development costs as a percentage of operating revenue
Total assets
Shareholders funds
Net tangible assets per share (cents)
Weighted average number of shares (million)
Earnings per share (basic) (cents)
Earnings per share based on earnings before interest, tax, depreciation and amortisation (cents)
4.2
3.7
2.8
14
2.8
1.4
1.3
17
34.7
29.2
23.2
20.1
10.8
9.5
177
177
1.6
2.4
0.7
1.6
• The FY18 net profit after tax (NPAT) was up to AUD2.8M compared to AUD1.3M for the FY17. Earnings before interest, tax, depreciation and
amortisation (EBITDA) was AUD4.2M compared to AUD2.8M for the FY17. These results reflected an ongoing focus on performance, and both quality
and efficiency improvements across all operational areas.
• Revenues shipped and invoiced increased 8% to AUD37.0M over the previous financial year, whilst sales orders taken, were up by 16% to a record
AUD40.0M, compared to AUD34.4M for the previous financial year.
For personal use only
CHAIRMAN’S ADDRESS
Dear Compumedics investors,
colleagues and business partners,
On behalf of the Board, management and the Compumedics team,
I present to you the following highlights in the results contained
within the Compumedics 2018 Annual Report. As a result of the
growth in revenues, FY18 net profit after tax (NPAT) was up 113%
to $2.8m compared to $1.3m for FY17. Earnings before interest,
tax, depreciation and amortisation (EBITDA) were up 55% to $4.2m
compared to $2.8m for FY17. These results also reflect an ongoing
focus on performance, along with both quality and efficiency
improvements across all operational areas of the business.
Revenues shipped and invoiced increased 8% to $37.0m for FY18,
compared to $34.4m for FY17, whilst sales orders taken, were up
16% to a record $40.0m for FY18, compared to $34.4m for FY17.
Once again the China market was a solid performer for the business,
growing by 28% over the prior year. This re-affirms Compumedics’
commitment to ongoing business growth in China, particularly in
sleep and neuro-diagnostics, brain research and DWL‘s Transcranial
Doppler (TCD) products. In China, Compumedics has over 2,000
systems installed at more than 333 universities and 600 hospitals,
including seven of the top ten hospitals.
Cash on hand was steady to $3.9m at 30 June 2018 compared to
$4.1m at 30 June 2017, whilst debt levels increased to $1.8m at 30
KEY PERFORMANCE ACHIEVEMENTS FY18
June 2018, compared to $0.7m at 30 June 2017, largely reflecting
costs associated with the first MEG, now being installed.
Additionally, and further underscoring the core business profitability,
over $1.7m was invested in next-generation growth platforms (medical
innovations) including the new magnetoencephalography (MEG)
neuroimaging business, eHealth (professional) sleep cloud-services
(Nexus 360), and Somfit® consumer-health platform, positioning
Compumedics for significant upcoming realisation opportunities.
A number of key milestones and positive outcomes were achieved
during the 30 June 2018 (FY18) financial year. Of particular note
was the installation of the first MEG sale to Barrow Neurological
Institute (BNI) in Phoenix, Arizona. The installation of this first system
is progressing well and should be complete in the first half of FY19.
The Company improved profitably as a result of growth across key
global markets in its core businesses, including those in China,
Europe, and the US, albeit the US had a growth rate less than
expected. The DWL ultrasound business performed well. The partial
booking of the first MEG sale to BNI contributed to overall revenue
growth for FY18. Further, the Company continued advancing and
commercially activating strategic growth platforms that will yield
ongoing positive performance for FY19, and beyond.
3
4
FIRST
MEG SALE
NOW BEING INSTALLED
ADDITIONAL OPPORTUNITIES
BEING PURSUED
TM
SOMFIT
CONSUMER SLEEP DEVICE
COMMERCIALISATION
ACTIVITIES ADVANCE
RECORD ORDERS
NET PROFIT AFTER TAX
TM
NEXUS 360
16 SITES, 123 BEDS,
15,000 STUDIES
EBITDA
55%
$40M
Up 16% from $34.4M in FY17
REVENUE
113%
$2.8M in FY18 vs $1.3M in FY17
$4.2M in FY18 vs $2.7M in FY17
CORE BUSINESS*
EBITDA
CORE BUSINESS*
NET PROFIT AFTER TAX
$37.0M
$5.6M
$4.5M
UP FROM $34.4M IN FY17
$5.6M in FY18 vs $3.9M in FY17
$4.5M in FY18 vs $3.8M in FY17
*Excludes Medical Innovation Strategic Investments
For personal use only OPERATIONS
Strong Underlying Financial and Operational Performance.
Compumedics continues to generate profits from its blue-chip-client-
based core business, whilst maintaining strong investment in R&D (14%
of revenue). The continued profits have been achieved in the face of
extraordinary ongoing investment, resources and commercial activation
of next-generation growth platforms. These growth platforms are all
demonstrating strong commercial activation potential and lucrative
break-out business opportunities.
Ongoing Performance and Profitability
Improvements.
Compumedics remains focused on operational programs designed to
drive improved efficiencies, capable of enhancing sales margins and
product quality. These programs cover the streamlining of logistics,
along with the outsourcing of non-key functions such as larger scale
production. Additional programs cover the strengthening of recurring
revenue streams including enhanced online shopping cart capabilities,
designed to help drive sales volumes.
PRODUCT DEVELOPMENT PIPELINE
Product research and development, across both core product groups
as well as breakout business divisions, was maintained across all the
Company’s divisions with a range of product updates, new product
releases, and refreshed product pipelines. This underpins strong
ongoing growth across the Compumedics® sleep, neuro-diagnostic,
Neuroscan® research, DWL® (ultrasonic Doppler blood flow) and
consumable businesses.
Compumedics Grael ® Range of Patient Diagnostic Amplifiers
The new extended Grael® amplifier range continues to help drive
diagnostic monitoring systems growth. This expanded range of products
has provided effective business and market development opportunities,
as it relates to matching market requirements of different regions
to specific models across the expanded Grael® product platform.
Compumedics is well positioned to continue driving earnings growth
and penetrate new markets. For example, the Grael® platform has been
Grael® 4K HD trolley EEG configuration
instrumental in the recent commercial developments in the Japanese
market, culminating in the recent announcement of Fukuda Denshi Co.
as Compumedics’ new Japanese Trade partner. Compumedics and its
Neuroscan division have also continued to drive new capabilities with
continued technological advancements, including the introduction of
the multi- Grael® feature, which precisely time-synchronises multiple
Grael® units to create banks of virtual amplifiers, enabling greatly
increased channel capacity. This function has been particularly
attractive to research. Additionally, this new functionality has helped to
commercially activate emergent markets such as cognitive marketing.
New applications can acquire and analyse cognitive responses, together
with other physiological responses, from multiple subjects using 16
or more synchronized Grael® amplifiers (512 or more channels of
brain signals). These solutions continue to drive new opportunities
including those addressing consumer marketing organization, teaching,
and clinical requirements. Additionally, a new Grael® DC model has
been developed to meet growing research and clinical requirements
to monitor low frequency and slow-moving base-line physiological
signal measures.
ONsight™ A.V.S. System
Compumedics ONsight™ Remote EEG/Sleep and Synchronised
Video System
The new Compumedics ONsight™ EEG/Sleep system enables a new
generation of in-home, high- performance sleep and neuro-diagnostic
monitoring, coupled with synchronised video-monitoring. This product
addresses a market sector mainly reserved, in previous times, for
more advanced clinical diagnostic monitoring environments. These
new advancements help to free-up precious and scarce hospital
resources. The unique integration with Nexus 360 allows for complete
real-time monitoring of the video and data to provide in laboratory-
level data-acquisition quality and sophistication, whilst enabling a
convenient in-home patient experience. Initial customer feedback has
been positive, providing promising product demand, moving forward.
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6
Neuroscan MEG Neuroimaging
Delivery of the first Compumedics/Neuroscan Orion LifeSpan™
MEG system to USA-based Barrow Neurological Institute (BNI) at St.
Joseph’s Hospital and Medical Center, located in Phoenix, Arizona, is
scheduled for the final quarter of the 2018 calendar year.
BNI, the world’s largest neurological disease treatment and research
institution, is the home of the Muhammad Ali Parkinson Center and is
consistently ranked as one of the best neurosurgical training centers
in the world. The institute was founded in 1962 and has since
grown into one of the premier destinations in the world for neurology
and neurosurgery. More operative neurosurgical procedures
are undertaken at BNI than at any other United States institution.
Compumedics has overcome earlier MEG system barriers with the
Compumedics/Neuroscan Orion LifeSpan™’s increased precision,
coupled with the fully-integrated “gold standard” CURRY® MEG brain
analysis software. MEG is a neuro-functional imaging technique for
mapping brain activity by recording magnetic fields produced by
electrical currents occurring naturally in the brain, using very sensitive
new generation DROS axial gradiometers or magnetometers.
In order to provide a more comprehensive MEG offering for
both clinical and research applications, two new MEG designs,
accommodating both sitting and laying (supine) positions are also
being developed. We expect to be able to vigorously compete for all
new MEG tenders as well as upgrades worldwide, with full regulatory
approval scheduled for 2019.
Additionally, the appointment of Mr. Gordon Haid as Global Neuro-
Imaging Business Director, is a major milestone for the ongoing Orion
LifeSpan™ MEG commercial activation program (ASX 19Apr18).
Gordon Haid is a well-established and respected MEG business
expert with an extraordinary track record, including sales of around
30 MEG systems world-wide.
Neuroscan CURRY ® and STIM™
CURRY® 8, Neuroscan’s latest brain analysis platform suite,
continues to drive both organic growth as well as growth across
new, lucrative break-out market sectors, such as the new Orion
MEG brain scanning division. This year, major development efforts
have taken place to fully integrate CURRY® as the host software for
the Orion LifeSpan™ MEG system. CURRY®, Neuroscan’s brain
analytics platform, will not only provide the existing tools for data
processing and source analysis, but will also control all aspects
of data acquisition and MEG hardware control. Combined with
simultaneously recorded EEG, CURRY® brain analysis software
suite will have the ability to record at least 512 channels of MEG
and EEG data simultaneously along with fully synchronized video.
The development of our own spike and seizure CURRY® module
continues, with early testing of the algorithms already in progress.
Update of STIM2 for compatibility with Windows 10 has also
been completed.
Multi-Dop® T Digital
DWL Ezi-Dop™ and Multi-Dop ® T Digital
DWL is launching the unique, new EZ-Dop™, the smallest fully-
functional and complete transcranial Doppler (TCD) system in the
world. This system combines state of the art components and
technologies with the newest digital Doppler-Technology, enabling
enhanced signal quality. These new technology advancements
support applications
in new and emergent markets, such
the next generation of emboli detection systems, as well as
Compumedics/DWL’s next generation of servo-controlled robotic
ultrasound systems.
The EZ-Dop will not only optimize functionality and usability, but also
bring high-end Doppler technology into a small, portable design
format. This will further secure our competitive market position of
DWL Doppler systems, with this new platform of advanced, compact
and high-performance design.
The EZ-Dop will also achieve wider deployment such as anaesthesia,
neurosurgery, ICU and brain-death diagnostic monitoring applications.
Another focus in 2019 will be our active technology partner
leadership role in the “Network of European Reference Centers in
Neurosonology (ERN Sono)”. This network is designed as a reference
network, which works in close cooperation with the European Society
of Neurosonology and Cerebral Hemodynamics (ESNCH). There is a
definite need for a well-structured clinical network to seek further
technical progress. This initiative offers a profound education and
training program, to investigate and evaluate the usefulness of
ultrasound in new fields. This program will implement clinical trials
and programs to help further foster the application of sonography
in daily practice. Part of this program is Transcranial Doppler (TCD)
monitoring, including emboli detection, vasomotor reactivity, PFO,
other new or emergent TCD applications.
DWL is a major supplier for the TCD system deployed at the core of
these highly prestigious ERN Sono scientific studies. The scientific
activities will include publications as well as teaching activities.
For personal use only NEXT GENERATION GROWTH
PLATFORM COMMERCIALISATION
The Company remains focused on a number of substantial
opportunities based on key next-generation growth platforms,
applicable to imminent or ongoing commercial activation.
These new generation growth platforms include online health
initiatives, comprising of professional and consumer-based Nexus
360 eHealth services, Somfit® consumer health platform, ongoing
sales and developments within the new Orion LifeSpan™ MEG brain
scanner division, patented sleep-treatment, new-horizon driver-
vigilance monitoring systems and the newly patented CMP/DWL
servo-controlled robotic ultrasound systems.
Compumedics/Neuroscan Fast-Emerging Orion Lifespan™
MEG Brain Scanner Division
It is significantly more sensitive than the existing market-leader’s
technology. It also features a unique vacuum liquid-helium
recycling coolant system. This allows the system to be operated
continuously without reliance upon coolant recycling downtime,
whilst preserving virtually 100% of this increasingly expensive
natural resource. Just two years after the agreement with KRISS,
the first Orion LifeSpan™ MEG system is being readied for
installation at the prestigious Barrow Neurological Institute in
Phoenix, Arizona, USA, where it will be used to diagnose epilepsy
and other disorders in both children and adults. The team at
BNI will also have an active research program to expand the
indications of MEG to other brain disorders. FDA, CE Mark and
other regulatory approvals are in process.
• The market for the Orion LifeSpan™ MEG technology,
along with related products, is expected to grow rapidly as
the advantages over incumbent technology are demonstrated.
CURRY® acquisition and analytics software platform advantage
Orion LifeSpan™ MEG system
• Magnetoencephalography (MEG) is the most sensitive and
precise functional brain imaging technique currently available.
It measures and localizes signals using helmet-shaped arrays of
sensors in real-time at a millisecond rate with millimetre accuracy.
It is completely non-invasive, safe and silent. It has applications in
both neuroscience and clinical diagnostics.
• Compumedics transitioned from providing their market
leading CURRY® MEG brain analytics solutions to providing their
full turnkey Orion LifeSpan™ MEG systems of today, by signing
a world-wide exclusive technology licence agreement in 2016
with the Korea Research Institute of Standards and Science
(KRISS), a government-funded research institute with a
history of magnetic field measurement instrumentation dating
back to the early 1990’s. The group has built numerous
advanced systems capable of detecting the tiny magnetic
signals from the human brain and heart. This expertise,
combined with the established amplifier and software capability
of Compumedics, has resulted in the world’s most advanced MEG
device, known as the Orion LifeSpan™. At the core of the
new Orion LifeSpan™ MEG is the latest generation of MEG
brain sensors, comprising of the patented DROS systems–
Dual Relaxation Oscillator Squid (Super Conductive Quantum
Interference Device).
• The unique Orion LifeSpan™ MEG system comprises of a patent-
pending, rotating dual-helmet Dewar for adult and pediatric
patients (adult/adult, pediatric/pediatric options are available).
Furthermore, the overall MEG market is expected to increase as
new applications, both for basic research and as this clinical
practise gains greater acceptance.
• Compumedics is putting in place close working relationships
between the company and individuals using the Orion LifeSpan™
MEG. This includes validation studies supporting new applications
for MEG; cognitive function and dysfunction research; protocol
development, especially those that will directly lead to clinical
biomarkers; validation and verification studies; improved/
expanded funding for MEG, including research grants and
especially clinical reimbursements (both public and private); etc.
The company has a strong interest in expanding the role of MEG
in detecting and diagnosing epilepsy, autism, dementia,
Parkinson’s and other brain/nervous system disorders.
Compumedics WEB-based sleep diagnostic platforms
These eHealth developments present significant efficiency gains
for Compumedics’ existent and new customers, along with a highly
scalable and effective business model for Compumedics and
clients, alike. Customers appreciate the industry-leading quality and
sophistication of Compumedics’ internet “plug and play” amplifiers
coupled with the unique Compumedics single vendor solutions. The
Nexus 360 enables a fully-integrated sleep cloud-services platform,
incorporating the first of its kind “end-to-end” clinical enterprise
solution for unsurpassed simplicity and efficiency, providing an
effective user clinical-work-flow and user-experience.
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GROWTH OUTLOOK
Compumedics remains focused on a number of new initiatives designed
to underpin both current and future organic and breakout growth,
including:
New product platform roll-out to continue in FY19
• The Company expects to release a new range of ambulatory
products for both its sleep and neurological diagnostic and
monitoring businesses, mid FY19 through to mid FY20.
• Additionally, a new range of Home Sleep Testing (HST) devices are
expected to be released.
Compumedics/Neuroscan expansion into much larger MEG brain
analysis imaging market
• The Company continues to successfully pursue further
opportunities in this field during FY19 and is actively working
known opportunities.
Growth in international markets with active sales expansion
plans for China, Japan, Germany and USA
• The Company will continue to expand its USA sales team, to
grow market share in both sleep and neurological diagnostic and
monitoring markets.
• The Company will continue to build on its long-term relationships
in China to grow the Company’s businesses, along with the
establishment of joint ventures and partnerships to help transform
sleep and brain healthcare within this important and growing region.
• This year Compumedics signed a multi-million-dollar distribution
Agreement for the Japanese market, with Fukuda Denshi Co., one
of Japan’s most respected and well established neuro-diagnostic
and monitoring organisations.
• This financial year’s winning of the German Bethel Epilepsy Centre
Contract, further complementing Compumedics expanding base
of German sleep and neuro-diagnostic reference centres, paves
the way for the ongoing recruitment and strengthening of
Compumedics German clinical sales and marketing force.
eHealth business expansion with continued commercial
activation of its cloud-based sleep diagnostics platform, Nexus
360, for both professional and consumer applications
• Compumedics now has 16 sites and over 123 beds in the US
generating a minimum of $285k per annum. It expects to grow this
to $1m over the course of FY19.
• Compumedics also continues to pursue Somfit® opportunities
consumer applications.
• Final negotiations for the previously announced Health 100
opportunity are well underway and the market will be appropriately
updated, accordingly.
DWL business expansion opportunities following the granting of
a servo-controlled robotic ultrasound patent, along with its new
generation of EZ-Dop technology, along with colour ultrasonic
and TCD advancements
• Compumedics/DWL patent, enabling a servo-controlled
robotic ultrasound system. This development is being designed
to incorporate traumatic brain injury (TBI) diagnostic capabilities
for deployment across a range of remote applications including
sports-fields, battle-fields, ambulance vehicles and other
emergency or routine deployment opportunities.
• The Company continues to develop its technologies around the 3D
Transcranial Colour Doppler (3D TCCD)/Duplex imaging, whilst
refining the best way to fully exploit this commercial opportunity.
SUMMARY AND FINANCIAL OUTLOOK
is well positioned,
Compumedics
following sound performance
and progressive developments in FY18, to continue to drive forward
with its commercial activation programs, coupled with enhanced
productivity initiatives across all areas of the business. Importantly, the
Company has achieved strong financial and operational outcomes in
FY2018, whilst establishing a strong basis for growth in 2019 and the
years ahead.
As it relates to the financial outlook, ongoing growth and profitability
are expected. FY19 revenues in the range of $40m to $42m, with a
corresponding EBITDA of about $5.5m to $6.5m, and NPAT of about
$4.0m to $5.0m, is expected to be realised. Earnings forecasts include
ongoing investments in the next-generation growth platforms, via
medical innovations, as noted in this report. Moreover, this guidance
includes continued high levels of R&D investment (estimated at 12% of
revenues) but at this stage excludes growth-platform revenues or profit
contribution to the FY19 results.
7
8
This guidance is based on the general economic environment in
Australia and the Company’s other key offshore markets including the
US, China, France and Germany remaining broadly as they are at the
timing of the release of these results.
Market expansion initiatives including the continued strengthening of
the China business, coupled with the new Fukuda Denshi Co. long-term
Japanese partnership, have contributed to further strengthening of the
core business.
Additionally, the continued commercial activation of next-generation
including Nexus 360 and Somfit® eHealth
growth platforms,
developments, together with ongoing Orion LifeSpan™ MEG advances,
position the Company well for upcoming breakthrough business
opportunities.
Compumedics continue to sharpen its focus on fundamental financial
performance, whilst maintaining commercial activation momentum with
its MEG and Somfit® breakout businesses, to provide a strong overall
growth outlook.
We would like to thank you all for your continued support and we look
forward to on-going advancements over the year ahead.
Yours sincerely,
Dr. David Burton, Ph.D.
Executive Chairman and Chief Executive Officer
Compumedics Limited
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GLOBAL MARKETS
Global
Neurodiagnostics
market
AUS
Current Market position:
1
3
1
Current Market Share:
1%
less than
Description of the market:
Global Neurodiagnostics is the study of electrical
activity in the brain, spinal cord, nerves and
muscles for the diagnosis and monitoring of
neurological based diseases. Tests may be
performed in hospital outpatient departments,
neurophysiology labs, operating theatres, intensive
care units and private practice.
Global Sleep
Diagnostics market
Description of the market:
The global Sleep Diagnostics industry is
comprised of diagnostic and therapeutic
technologies and medicines. Compumedics’
core business lies in the design and manufacture
of technologies for the diagnosis of sleep
disorders – a market estimated to be worth
AUD$250 million worldwide and growing.
Global Brain
Research market
Competitive Advantages:
1 Complete range from clinical to research
technologies
2 Uncompromised system design
3 Highest industry quality standards
4 Best in class brain analytics
Key drivers:
The key drivers for achieving growth in this
market are to have technologically superior
products that differentiate Compumedics from the
existing competition. With the current products
being complemented by a completely new
long-term monitoring device in 2010, this will be
achieved.
Current Market position:
Current Market Share:
AUS
1
3
1
Competitive Advantages:
1 Innovative strength
2 Active involvement in sleep science
globally
3 Market placement and momentum
4 Best in class sleep analytics
6%
Key drivers:
To logically continue to expand our US and
European sales and support infrastructure and
to evolve the business to provide complete
sleep medical solutions.
Current Market position:
Current Market Share:
Description of the market:
Global Brain Research is the study of the
brain’s functionality, using Quantitative EEG
(QEEG) methods to supplement traditional EEG
findings. With the advent of high speed digital
information processing and statistical analysis,
QEEGs extract and quantify brain electrical
activity to address aspects of EEGs that cannot
be appreciated visually.
1
1
1
Competitive Advantages:
1 Superior patented technology
2 Uncompromised system design
3 Unmatched innovation
4 Best in class brain analytics
30%
Key drivers:
The key driver for growth in brain research will be to maintain
Neuroscan’s preeminent technological lead and to back this
by expanding the sales and support infrastructure to harness
this expanding market opportunity. Expansion into markets
including animal (nonhuman) EEG and pharmaceutical
product development will be actively pursued worldwide.
Global Doppler
Ultrasound market
Description of the market:
The Doppler Sonography technique utilises sound
frequencies to measure the blood flow conditions in
vessels and evaluate haemodynamics by using high-
quality diagnostic and monitoring systems.
DWL Doppler systems are used in a wide range of
specialist branches of medicine including neurology,
neurosurgery, cardio- and vascular surgery,
anesthesia, intensive treatment, internal medicine,
angiology and radiology.
The products are purchased by private practices and
clinics, hospitals (both public and private), and by
major universities, national research institutes and
corporate research laboratories around the world.
Current Market position:
Current Market Share:
less than
35%
Key drivers:
• Digital Doppler Technology
• New application areas for the use of TCD
• Expanding market opportunities by new Health
Care Regulations for the use of TCD
• Expanding Sales and Support Infrastructure
1
2
1
1
Competitive Advantages:
1 Full Digital Doppler Technology
2 Bilateral Doppler
3 Multi-Range Doppler Technology
4 Physiological Tests
5 Emboli Differentiation & Multi-Frequency probes
6 Highest Doppler sensitivity
7 Best signal to noise ratio
8 Reference gates
9 High and low temperature endurance systems
10 Space endurance systems
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CORE BUSINESS - GROWTH DRIVERS
Compumedics will continue to grow its core sleep, neuro, brain research and blood flow monitoring businesses by:
Compumedics / Neuroscan LTEM innovative brain analysis software and high performance
amplifiers are unrivalled world class technology. With the release of new innovative electrode
array designs, a larger growth is anticipated in direct sales, with a resulting increase in the sales
of high-density EEG systems.
We have >20,000 systems installed worldwide. Strong reputation and brand name.
Customers like buying from Compumedics.
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10
Earnings initiatives to continue to flow through in FY19 – FY21. Lower cost base enables addition of
mid-tier plus further manufacturing and operational efficiency gains.
Opportunity to significantly grow the USA business based on the sales and marketing management
and operational changes now implemented.
Expansion into untapped German market.
Push into the Chinese neurology market.
Ideally positioned to accelerate organic growth and value realisation.
For personal use only CORE BUSINESS
Premium Focus now expanding to whole market.
Compumedics has traditionally sold its products into the premium end of each of the markets it sells into. The company has recently launched, and
commenced shipping, a new range of devices that have been specifically designed to be priced competitively for the majority of customers in the
markets Compumedics sells into. Compumedics will use its branding and reputation in the premium end of the market to drive market expansion
in the whole market, increasing the addressable market available to Compumedics by two to three times.
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CLIENTS AND CORE PRODUCTS
Key Clients
Compumedics has over almost 30 years of operations and in that time has worked with and established a client list of key opinion
leaders, world wide which include:
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12
Core Products
Sleep Diagnostics
Compumedics Grael® - 4K HD
Compumedics Grael® PSG
Compumedics Siesta®
Compumedics Somté® PSG
Compumedics ProfusionTM
Sleep Software
Compumedics ProfusionTM
NeXus Software
Neuro Diagnostics (including Brain Research)
Ultrasonic Blood Flow
Monitoring
Compumedics
Grael LT®- HD EEG
Compumedics CURRY®
Neuroimaging Suite
Multi-Dop® T digital
Compumedics Neuvo®
512 Channel
Compumedics Grael EEG®
Neuroimaging Suite - 4K HD
ONsightTM A.V.S.
Ambulatory Video Solutions
Compumedics
Orion LifeSpanTM MEG
Doppler-BoxTM X
For personal use only FINANCIAL SUMMARY
STRATEGIC GROWTH PLATFORMS
The Company is focused on a number of substantial opportunities based on next-generation growth
platforms applicable to DWL, Neuroscan brain imaging, and medical innovation projects such as eHealth,
sleep treatment, and driver vigilance.
The MEG opportunity is highlighted here.
THE NEW ORION LIFESPAN™ MEG
- AN EXCITING INNOVATION FROM COMPUMEDICS
What is MEG? How Does it Work?
Developed by David Cohen at Massachusetts Institute of Technology in
the 1970s, MEG technology can record the magnetic fields associated
with electric currents generated by synchronously active populations of
neurons in the brain.
MEG is based on the use of highly sensitive detectors called a SQUIDs,
or super-conducting quantum interference devices.
These superconducting magnetic field detectors can accurately measure
the occurrence of spontaneous brain activity called spikes, which can be
signatures of the existence and location of onset for epilepsy activity in the
brain such as dementia, autism and epilepsy can be detected.
The development and integration of a zero-loss helium recycling system
(used to cool the SQUIDs into the operational superconducting state,
reduces system operating costs by as much as $100,000
USD annually.
• CURRY® fully integrated / STIM2 / Video Integration
- Real Time Dipole Averaging and Clustering
- Real Time Event Averaging
- 3 CURRY® WorkStations: 1 Acquisition, 2 Analysis
- multiple system configurations are under development
including sitting only and combine sitting/supine options
to satisfy clinicials and researcher alike.
Orion LifeSpan™ key advantages
Patented dual helmet rotating
adult/pediatric dewar
Patented Sensing System
Integrated zero-loss
Helium recycling
Vibration-free continuous operation
Helium reliquification system integrated
into the Orion LifeSpan™ MEG
system for reduced running costs
Key Features
• 186/138 adult/pediatric radial gradiometers
( > Spatial Density than Elekta)
• Simultaneous hyperscanning of two patients/subjects
• SQUID: Double relaxation oscillation SQUID (DROS)
• Average sensitivity: Better than 3.0 fTrms/ Hz (@ 10 Hz)
• Integrated Zero-Loss Closed-Loop Helium Recycling
• Sample Freq 10 kHz Max Option, Resolution: 16/24 bits
• 32/64/128 Channel Integrated EEG
• Active MSR Shielding (medium strength)
Adult Dewar view
Pediatric Dewar view
For personal use only
Neuroscan MEG Neuroimaging
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• The CURRY® Neuroimaging platform and MEG have a history
stretching back over 25 years. CURRY was first conceived as a
product in the early 1990’s when Philips Electronics investigated
the feasibility of developing its own MEG hardware platform.
Ultimately, the hardware platform did not survive, but the software,
along with its core engineering architects, Dr. Manfred Fuchs and
Dr. Michael Wagner, continued on.
• The benefits associated with CURRY’s ability to integrate MEG
with EEG and co-register both kinds of high-temporal resolution
functional imaging data with the structural neuroimaging data
including MRI, CT, DTI, as well as PET, SPECT and fMRI accelerated
the adoption of the software by both the research and clinical
communities. Early clinical adopters, such as Dr. John Ebersole,
supported and championed the benefits of source localization tools
such as CURRY, contributing to the development of specific source
analysis billing codes for EEG and MEG. For a long time, CURRY has
been the de-facto software platform for clinical MEG community,
particularly those assessing epilepsy. This has culminated in
the adoption of CURRY as the standard analysis platform by the
European Epilepsy Consortium.
Market & Competition
• The MEG market is currently estimated at about 20 systems a year
at an average selling price of USD4.0m each = US$80m/pa
• This is expected to grow about 10% a year, excluding China
• It is estimated that China could double the existing market size to
about 70 units a year
• The dominant existing player is Elekta, based out of Sweden,
followed by Yokogawa (Japanese market) and CTF MEG (a much
smaller player)
Plan
• H1 FY19 – Deliver first sale to Barrow Neurological Institute
in Phoenix, AZ, USA
• H1 FY19 – Secure second sale
• H1 FY20 – Obtain FDA clearance for 1st system in USA
For personal use only STRATEGIC GROWTH PLATFORMS
Compumedics’ cloud based sleep diagnostic platform includes a professional application, NeXus 360, and
a consumer application, Somfit.® NeXus 360 has been sold into ten sites in the USA in FY17 as a critical
first step for this new business.
Laboratory Management System
TM
A Revolution in Laboratory Management
Introducing Compumedics Profusion neXus 360, the next generation
of Profusion neXus. Built on the proven Profusion neXus platform
with more than 15 years of customer use and thousands of users,
Profusion neXus 360 offers the full functionality of Profusion neXus
and more, in a fully web-based interface.
Profusion NeXus 360 Features:
Platform and Browser Independent
• Simple, browser/internet-based access via HTML5
• Two-factor Authentication Access
• Digitally secure study “sign-off”
• User-defined, group-based access privileges
• Template/Document Integration
• Non-editable audit-log
• Multi-language Support (English, French, Chinese, Spanish)
• Fully managed Cloud Service, simple installation, reliable
system backups and easy system updating
• In-lab acquisition and real-time uploading to the web
PC / Computer
Tablet
Phone
For personal use only Quality Sleep is Essential
“Every aspect of who you are as a human, every capability is degraded, impaired, when
you lose sleep. What does that mean? Your decision-making, reaction time, situational
awareness, memory, communication, and those things go down by 20 to 50 percent.”
(Mark Rosekind, member of the National Transportation Safety Board in Sleepless in America – National Geographic
Channel Documentary December 2014)
30-40%
of the population
1 in 5 people
Why use Gold Standard Sleep Technology?
The technology in Somfit® is medically validated and the data collected
is Gold standard – meaning that it is the accepted methodology to
accurately measure and detect REM, and the data can be used for
medical consultations with your GP if and when the need arises.
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16
What is Sleep Fitness?
Coaching
Sleep fitness is getting the right type or stages of sleep and the right
amount of sleep.
There are five stages of sleep, each characterized by different brain activity.
The most important sleep stages are REM (dream sleep) that enables
brain restoration for learning and memory and deep sleep for body
recovery.
The body also needs alignment of our internal circadian clock with
the sleep/wake cycle - otherwise sleep quantity suffers (ie the “jet lag
effect”) and sleep fitness is degraded.
Are you getting quality sleep (how do you know)?
Movement detection is not clinically accepted as a true measure of
sleep-wake.
The American Academy of Sleep Medicine (AASM) recommends that
to clinically and scientifically distinguish between various sleep stages to
determine sleep quality or fitness - sleep scientists measure brain waves
(electroencephalography or EEG), eye movements and muscle tone.
This is the Gold Standard for a sleep test.
The Somfit®
For the first time, a fitness tracker with gold standard sleep technology.
At night, the Somfit® will track your sleep collecting medical grade
data to provide true sleep insights - understand your night’s sleep
architecture - accurately measure the quality of your sleep through
accurate measurements of durations you spend in REM, deep sleep
or light sleep.
Empower yourself with accurate sleep data and with Compumedics’
strong ties with the sleep professional community and extensive
experience in sleep monitoring, you can take intelligent action to
improve your wellbeing and performance.
Who is it for ?
• Athletes - managing and
enhancing performance
• Parents - to monitor
their children’s sleep patterns
• Medical professionals
- to assist treatments of
insomnia or depression
• Anyone who wants to truly
understand their sleep habits
for well being.
The power inside
Somfit® coaching APP
Powered with technologies from Compumedics, the company with over
25 years experience in professional sleep diagnostics and equipping
leading sleep laboratories around the world with advanced sleep
monitoring systems.
Compumedics offers expertise in medical product design, but
significantly provides the advanced diagnostic-grade signal processing
power for more accurate sleep staging and analysis in the Somfit.®
For personal use only
A FOCUSED STRATEGY IN ACTION
For over 30 years, Compumedics’ focus in Sleep
and associated medical disorders has established
a solid platform for growth.
Used by NASA
and SHHS.
S-Series –
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digital sleep
system in
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P-Series and
S-Series released
Compumedics announced
the release of the P-Series
Portable Sleep Monitoring
System with features
including intelligent CPAP
control.
Compumedics
established
Dr. David Burton
founded Compumedics
to design and
manufacture medical
electronics. Prior
to Compumedics,
analysis and diagnosis
depended, in large
part, upon manual
recording methods,
which were very time
consuming and costly
to implement.
NASA contracts won for
International Space Station
and Space Shuttle flight
preparation
NASA chose Compumedics’
P-Series Portable Sleep
Monitoring System for the
1998 Neuro-mission Space
Shuttle flight preparations.
Compumedics won the
contract to supply medical
hardware for the International
Space Station’s Human
Research Facility (HRF) under
contract to NASA.
Compumedics recognised
Compumedics was
named Australian Exporter
of the Year.
Compumedics was awarded
the 1998 Governor of Victoria
Award for Victorian Exporter
of the Year.
Compumedics was awarded
the 1998 AusIndustry
Innovation Award.
Compumedics was awarded
the 1998 Telstra
Innovation Award.
Compumedics awarded
the 2006 Frost & Sullivan
Technology Leadership
Award.
Compumedics and
chairman inducted
into the Victorian
Manufacturing Hall
of Fame.
Somté® PSG is released -
the simplest and most
convenient way to meet
requirements for recording
full PSG, in both attended
and unattended settings.
Siesta 802™ World
Siesta 802™ – World
leading wireless system
for sleep and EEG
- receives FDA clearance.
Somté® PSG - Full PSG
absolutely anywhere.
1988
1993
1994
2001
2006 -
2007
2008
1987
1991
1995
1998-
1999
2000
2002-
2005
Epworth installs first
Sleep Disorders Unit
Compumedics’ first sleep
system was installed
at the Epworth Hospital
Sleep Disorders Unit
(Melbourne, Victoria).
TIME magazine and the
television series ‘Beyond
2000’ both featured the
Epworth sleep center.
Sales revenue
$1.7M
Sales split
Domestic $1.5m
Export $0.2m
Chosen for world’s
largest sleep study
Compumedics won the
competitive US Government-
funded contract to supply the
equipment for the world’s largest
sleep study (6000 patients).
The five year Sleep Heart Health
Study (SHHS) was won against a
field of 22 competitors, including
multinationals. Compumedics
supplied 40 P-Series Sleep
Monitoring Systems along
with 9 replay and 6 analysis
systems. The equipment selection
committee was made up of sleep
experts from 11 leading University
Hospitals across the USA.
Compumedics was granted IEC
601-1 patient safety certification
for its S-Series and P-Series
products.
Compumedics’ ASX listing
Compumedics listed on the
Australian Stock Exchange.
Compumedics’ completes
first acquisition
– Neuroscan.
Compumedics DWL
awarded membership
to Germany’s top 100
innovative companies.
E-Series
EEG/PSG system
DWL division established
for blood-flow Doppler
technology.
technology.
CURRY® 6 -
Multi-modal Neuroimaging
software is released.
Globally read TIME
magazine cover and
article brings the
“Trouble with Sleep”
to the world.
Sales revenue
$20.2M
For personal use only
Grael® is released -
Compumedics released the
world’s first High Definition
and premier PSG/EEG, Grael.®
Grael® wins Powerhouse
Museum Award & finalist
at the Australian International
Design Award.
Beijing Bestmed,
Compumedics’ China-
based distributor invests
$0.5, becoming a top 10
shareholder - this injection
of funds contributes to
Compumedics further
growth in the China region.
Compumedics wins major multi-million
dollar MEG brain imaging contract.
New Patent Grant Underpins
Growth Opportunities for
Compumedics’ DWL.
- New product development
based on patent for system of
detecting and treating blood
vessel stenosis or occlusions.
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18
Growth in China -
Compumedics confirms strength
in China with over $5M in sales
in 2017.
Successful completion of $6.5M
capital raising
New product released -
Profusion NeXus 360 -
A Revolution in Laboratory Management
Grael® PSG/EEG
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Compumedics introduces
direct selling in Germany.
CURRY® SCAN 7 Neuroimaging
Suite is released -
Compumedics Neuroscan
releases it’s combined
acquisition and signal
processing software.
Compumedics introduces
direct selling in France.
®
Neuvo® LTM
512 Channel EEG
$7.5 Million Sleep Diagnostic
Systems Contract with
Beijing Bestmed Accelerates
Compumedics Strength
in China.
2009
2011
2013
2015
2017
2010
2012
2014
2016
2018
Compumedics recognised
as one of Australia’s top 100
Health Innovators through its
world leading devices for sleep
diagnostics.
®
Somnilink SPAP®
Somnilink SPAP receives CE and
TGA clearance.
ehealth Business
focus in Asia.
New contract signed with
Bestmed (China) with potential
revenue of US$5 million over
the next three years growing to
US$13.2 million within five years.
Company has now secured total
contracts for its eHealth platform
with potential incremental revenue
of US$9.1 million over the
next three years.
New products released -
Profusion EEG5 -
World class EEG
diagnostic software.
Profusion Sleep4 -
World class PSG
diagnostic software.
25 YEARS
OF DIAGNOSTICS
EXCELLENCE
Compumedics celebrates its 25
Year Silver Jubilee Anniversary.
Neuvo® LTM, world’s first 512
channel wall system is released
to market - the Ultimate
Long-term Monitoring System.
Grael®-HD EEG -
High-Definition EEG
is released to market.
Grael®-HD EEG
Compumedics Signs
$3.6 Million Distribution
Agreement with
Fukuda Denshi Co., Japan
Fukuda Denshi Co. becomes
Compumedics’ new neuro
diagnostic distributor in Japan.
The deal further underpins
Compumedics’ on-going growth
in Asia and opens a new market
for Compumedics existing product
range – neuro-diagnostic and
monitoring products – in Japan.
New product released -
ONsight™ A.V.S
Ambulatory
Video Solutions
Monitor your
patient’s home
ambulatory studies
with CONFIDENCE!
EEG with Video
recording in
“Real Time”!
Grael® PSG
Grael® LT EEG
New Grael® Range released for
market - Grael® PSG, Grael® LT and
updates to Grael® and Grael® EEG
New e-Health Somfit® consumer
product is developed -
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Compumedics and KRISS (Korea
Research Institute of Standards
and Science) officiates technology
transfer agreement and MOU
for new advanced MEG.
For personal use only
BOARD OF DIRECTORS
Compumedics is committed to developing a world class working environment that rewards individuals for the
contributions they, and their teams, make to the business each year. Compumedics is proud of the diversity
of its people, and continues to develop its people infrastructure under the guidance of the
Senior Management Team and the Board.
Dr. David Burton, Ph.D.
Executive Chairman, CEO
Dr. David Burton, Ph.D., is the founder, Chairman and CEO of Compumedics. After establishment of Compumedics
the company was listed on the ASX in 2000, and has been awarded 24 awards for design, innovation, business
and exports including the Australian Exporter of the Year in 1998 and Small Business of the Year in 1999.
Dr. Burton started his career at the Bureau of Meteorology, where he studied radar techniques and electronic equipment.
He founded Linear Transfer Pty Ltd, which designed, manufactured and marketed high fidelity recording and sound equipment.
He was awarded an Associate Diploma in Engineering (Electronics) by the Royal Melbourne Institute of Technology and a
Ph.D. (Eng. Sc.) by Monash University, Melbourne (Australia). Dr. Burton’s engineering background includes the design and
project management of Compumedics’ first sleep laboratory and portable sleep systems. Dr. Burton has authored 150
patents or patent applications across more than 20 families of patents that form part of Compumedics’ intellectual property.
Dr. Burton has served as an advisor for the Victorian Government as a member of the Council for Knowledge, Innovation, Science and Engineering (KISE), being the Victorian
Government’s key advisory body on issues and policies focusing on science and innovation.
Dr. Burton was presented the Clunies Ross National Science and Technology Award in 2002 for his development of innovative sleep monitoring technology. He was awarded
the 2003 Centenary Medal by the Prime Minister and Governor General of Australia for outstanding contribution to science and technology, particularly public science policy.
In 2003 Dr. Burton was awarded the Ernst & Young Victorian Entrepreneur of the year award for technology, communications, E-commerce and life sciences. In 2007
Dr. Burton was inducted into the Victorian Manufacturing Hall of Fame in recognition of manufacturing achievements and world-wide medical device exports.
Dr. Burton served as a Victorian Government adviser as a Board member of the Design Victoria (2008-2011), was appointed to the Academy of Technological Science
and Engineering (ATSE) committee in 2012 and in recognition of his outstanding contribution to the profession of Biomedical Engineering and was awarded the 2012
David Dewhurst Award by Engineers Australia, College of Biomedical Engineers.
Mr. David Lawson
Executive Director
Dr. Alan Anderson
Non-Executive Director
Mr. Tucson Dunn
Non-Executive Director
Mr Lawson has been Chief Financial Office and
the Company Secretary of the Company for over
nineteen years. In that time, Mr Lawson has
been extensively involved in the development of
the Company including the Initial Public Offering
of shares in the Company, the subsequent
offshore acquisitions in the US and Germany,
private equity placements and the recent
refinancing of the Company. Mr Lawson also has
been involved in the operational turn around of
the Company and brings a significant amount of
experience and knowledge to the Board.
Dr. Anderson, is a leading American attorney
in the areas of commercial litigation,
intellectual property and computer law.
He has represented Compumedics for all
legal matters in the USA since late 1998.
Dr Anderson completed his Bachelor of
Arts with Honours (Political Science) at Coe
College. He also holds a Master of Business
Administration with Distinction, a Doctor in
Law with Honours from Cornell University,
and a Certificate in International Business and
Commercial Law from the McGeorge School
of Law (University of the Pacific).
Currently working with JLM Investment, (USA) as
CEO of Healthcare where he is responsible for
healthcare ventures.
Prior to joining JLM, Mr. Dunn served as Managing
Director of Fosun Healthcare Holdings in Shanghai
China. Mr. Dunn has over 25 years of international
healthcare leadership experience developing and
managing hospitals, clinics and related business
throughout Asia, Middle East, Europe and USA.
For personal use only SENIOR MANAGEMENT
Dr. David Burton, Ph.D.
Executive Chairman, CEO
David Lawson
Executive Director,
Chief Financial Officer
& Company Secretary
Warwick Freeman
Chief Technology Officer
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20
Kerry Hubick
Trademark, Patent
& General Legal Attorney
Christoph Witte
General Managing Director
DWL Compumedics Germany GmbH
Medical Advisory Board
Dr David Burton
Prof Ian Colrain, Ph.D.
Heads up Compumedics Medical
Innovations Division.
Authored > 100 patents or
applications across >20 families
Exec. Director - Brain Sciences &
Senior Director, Center for Health
Sciences, Stanford Research
Institute (SRI) Biosciences.
Professorial fellow - Uni of
Melbourne . Core faculty member -
Palo Alto School of Sleep Medicine.
Member - editorial board of SLEEP
Prof Patrice Bourgin, M.D.,
Ph.D.Professor of Neurology
Strasbourg University
Director, Sleep Disorders
Center - Head of Research Team
“Light, Circadian Rhythms, Sleep
Homeostasis and Neuropsychiatry
Prof John Ebersole,
MD Chicago University
Department of Neurology
Director, Adult Epilepsy
ServiceDirector, Clinical
Neurophysiology ProgramMedical
Director, Illinois MEG CenterEditor-
in-Chief, Journal of Clinical
Neurophysiology
For personal use only For personal use only AG917_01
For personal use only