22/05/2003

MediVision presents management's report for the period ended on March 31st, 2003

Yokneam Elit, Israel, MediVision Medical Imaging Ltd. (EURO.NM: MEDV) released today (May 22, 2003) information concerning its operations and the financial results for the period ended March 31st, 2003.

Medivision have recorded a net profit of approximately U.S. $ 30 thousands for the first time since it was established. The company and its subsidiary increased the sales in first quarter of 2003 by 18%, compared to the parallel period of 2002 and reached sales volume of approximately U.S. $2,546 thousands.

The Company maintained a high level of Gross profit: 59%.
The EBITDA for the period ended March 31, 2003 was approximately U.S. $174 thousands, as compared with EBITDA of approximately U.S. $83 thousands for the comparable period ended March 31, 2002.

Highlights of the Period ended March 31, 2003:

Increase in sales volume – Medivision’s sales for the period ended March 31, 2003 were approximately U.S. $2,546 thousands, compared to approximately U.S. $2,153 thousands sales for the parallel period in 2002, an increase of 18%.
This quarter is the ninth consecutively quarter in which the company presents growth in sales volume over the parallel quarter of the previous year. This continuous increase in sales demonstrates the growing confidence of the customers in the Company’s products, technology and leadership.

Net profit – Based on the ongoing increase in sales volume, the company has achieved, for the first time since it was founded, a net profit for a quarterly period. This significant achievement is a further step, following the achievements of previous year, where the Company have presented a positive Operating Income.

Information with regard to the Financial Situation For the period ending March 31, 2003

CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. Dollars (in thousands - except per share amounts)

Management's Discussion and Analysis of the Financial Condition and Results of Operations of the Company

Sales

The consolidated Sales for the period ended March 31, 2003 aggregated to approximately U.S. $2,546 thousands as compared to Sales of approximately U.S. $2,153 thousands for the comparable period of 2002. During the period ended March 31, 2003 92% of the Company’s Sales were in the U.S.A., 6% were in Europe and 2% were to domestic and other markets. The company and its subsidiary have achieved an increase of approximately 18% over the previous year period sales volume.

Gross profit

Gross profit for the period ended March 31, 2003 was approximately U.S. $1,499 thousands which are 59% of sales revenues, as compared with gross profit of approximately U.S. $1,290 thousands, which were 60% of sales revenue for the comparable period of 2002. The slim difference stems from slight differences in products mix which vary from quarter to quarter.

Research and Development Expenses

In accordance with International Accounting Standards (IAS), the Company does not capitalize its research and development expenses. Accordingly, statements of operations include research and development expenses. The Company's total R&D expenses for the period ended March 31, 2003 amounted in the first quarter of 2003 to approximately U.S. $230 thousands or 9% of sales revenue. The participation in R&D expenses related to the CGLT project by the BIRD-F during the period ended March 31, 2003, which is included as a deduction of research and development expenses, amounted to approximately U.S. $80 thousands, therefore net R&D expenses .were approximately U.S. $150, as compared to net R&D expenses of approximately U.S. $153 thousands for the comparable period in 2002. The R&D expenses for the period ended March 31, 2003 are attributed mainly to the R&D efforts made in conjunction with integration between MediVision products and AGFA products and the CGLT project.

Selling and Marketing Expenses

Total Selling and Marketing expenses for the period ended March 31, 2003 were approximately U.S. $716 thousands, which are 28% of total sales revenues, as compared to approximately U.S. $628 thousands, which were 29% of total sales revenues during the parallel period of the previous year. The decrease in the relative portion of Selling and Marketing expenses from the Sales volume is attributed to the increase in sales and ongoing efforts made by the Company in order to reduce expenses and to further increase the efficiency of its sales activity. Marketing expenses include expenses stemming from marketing campaigns, trade shows, advertising in professional publications, travels, salaries and commissions.

General and Administrative Expenses

General and Administration expenses include mainly management salaries, professional services, rental, maintenance and various provisions. Total General and Administrative expenses for the period ended March 31, 2003 were approximately U.S. $535 thousands, which are 21% of the total sales, as compared to approximately U.S. $512 thousands, which were 24% of the total sales during parallel period. The decrease in General and Administrative expenses percentage further illustrate the success of the company in the implementation of a company wide streamlining plan.

About MediVision

MediVision specializes in digital imaging devices for ophthalmic applications with an emphasis on diagnostics related to the eye retina. MediVision's products provide digital upgrades for a range of ophthalmic imaging systems, thus significantly enhancing imaging capability and providing its users with advanced diagnostic tools. The company's goals are to achieve significant market share and be a market leader in the ophthalmic digital imaging field.

The company owns a 73% interest in Ophthalmic Imaging Systems Inc. based in Sacramento, California, USA.

This Release contains certain forward-looking statements and information relating to the Company that are based on the beliefs of the Management of the Company as well as assumptions made by and information currently available to the Management of the Company. Such statements reflect the current views of the Company with respect to future events, the outcome of which is subject to certain risks and other factors, which may be outside of the Company's control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results of outcomes may vary materially from those described herein as projected, anticipated, believed, estimated, expected or intended.

For more information, please contact :
Ariel Shenhar
MediVision Medical Imaging Ltd.
Vice President, Chief Financial Officer
Tel. ++972-4-9894884
Fax ++972-4-9894883
Cell. ++972-52-821728

P.O. Box 45, Yokneam Elit Industrial Park 20692, Israel

ariel@medivision-ois.com

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