20/11/2003

MediVision presents management's report for the period ended on September 30, 2003

COMPANY ANNOUNCES CONTINUING GROWTH IN REVENUES AND NET PROFIT AMERICAN SUBSIDIARY RAISED $1.2 MILLION IN A CONVERTIBLE LOAN.

Yokneam Elit, Israel, MediVision Medical Imaging Ltd. (EURO.NM: MEDV) released today (November 20, 2003) information concerning its operations and the financial results for three and nine months periods ended September 30, 2003.

MediVision has recorded a net profit of approximately U.S. $50 thousands in the third quarter and approximately U.S. $113 thousands for nine months period.

This quarter of 2003 is the third consecutive quarter in which the Company shows a net profit. The Company and its subsidiary increased the sales in the three and nine months period of 2003 by 12% and 15%, compared to the parallel periods of 2002 and reached sales volume of approximately U.S. $2,552 thousands and U.S. $7,667 thousands accordingly. The Company maintained a high level of Gross profit: 58% gross profit for the third quarter and 59% for the nine months period of 2003.

The EBITDA for the three and nine months periods ended September 30, 2003 were approximately U.S. $156 thousands and U.S. $577 thousands accordingly, an improvement of 24% and 87%, as compared with EBITDA of approximately U.S. $126 thousands and U.S. $309 thousands for the comparable periods ended September 30, 2002.

In the second quarter of 2003 the company exercised an option to convert $1,150,000 of debt, owed by its US subsidiary, Ophthalmic Imaging Systems ('OIS', OTCBB: OISI) into stock, increasing its holdings in OIS by additional 12% to 85% of the common stock of OIS.

During September 2003 OIS has raised U.S. $1,200 thousands in a convertible loan from Laurus funds.

During the Third Quarter, OIS sold its first EMR / EPM solution resulting from the reseller agreement signed in August 2003 by OIS with NextGen Healthcare Information Systems Inc., a subsidiary of Quality Systems, Inc. (NASDAQ: QSII).

Under the terms of the agreement, OIS was appointed as a reseller in the US of two computer-based practice management and medical records products: NextGen® Enterprise Practice Management (EPM) and NextGen® Electronic Medical Records (EMR).
 

Highlights of the Period ended September 30, 2003:

Increase in sales volume - Following the continuous increase in sales volumes in previous quarters, the third quarter of 2003 demonstrates again the on going confidence of the customers and market in the Company.

This quarter is the eleventh consecutive quarter in which the company presents growth in sales volume over the parallel quarter of the previous year.

Medivision's sales for the three and nine months periods ended September 30, 2003 were approximately U.S. $ 2,552 thousands and U.S. $ 7,667 compared to approximately U.S. $ 2,270 thousands and U.S. $ 6,687 thousands sales for the parallel periods in 2002, an increase of 12% and 15% accordingly.

Net profit - This quarter is the third quarter in a row in which the Company shows net profit. This achievement is a further step, following the achievements of previous year, in which the Company has presented a positive Operating Income.

Funds raising by OIS - During September 2003 OIS signed on a convertible loan agreement with Laurus funds. The convertible loan is at the amount of U.S. $1.2 million and is convertible into OIS shares under certain conditions.

First sale of EMR / EPM solution - Following the reseller agreement signed in August 2003 by OIS with NextGen Healthcare Information Systems, Inc., a subsidiary of Quality Systems, Inc. (NASDAQ: QSII), OIS sold during the Third Quarter its first EMR / EPM product. Under the terms of the agreement, OIS was appointed as a reseller in the US of two computer-based practice management and medical records products: NextGen® Enterprise Practice Management (EPM) and NextGen® Electronic Medical Records (EMR).

FAST 50 Technology contest - The 2003 Israeli Fast 50 program ranks the Israeli technology companies upon their five year percentage growth in revenue between 1998 and 2002. The Company was awarded the fifth place out of 50 ranked companies, and climbed up from the 11th place of last year competition.

The contest is held by Deloitte&Touche accounting firm in Israel. This program is also conducted in 19 US regions, Europe, South Africa, Hong Kong-China and Japan. This year is the second year in which the Company participates and awarded. Information with regard to the Financial Situation for the period ending September 30, 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 three and nine months periods ended September 30, 2003 aggregated to approximately U.S. $2,552 thousands and U.S. $7,667 thousands as compared to Sales of approximately U.S. $2,270 thousands and U.S. $6,687 thousands for the comparable periods of 2002 reflecting an increase of 12% and 15% accordingly. During the period ended September 30, 2003 89% of the Company's Sales were in the U.S.A., 8% were in Europe and 3% were to domestic and other markets.

Gross profit

Gross profit for the nine and three months periods ended September 30, 2003 were approximately U.S. $1,492 thousands and U.S. $4,515, which are 58% and 59% of sales revenues, as compared with gross profit of approximately U.S. $1,352 thousands and U.S. $3,977 thousands, which were 60% and 59% of sales revenue for the comparable periods of 2002.

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 three and nine months periods ended September 30, 2003 amounted to approximately U.S. $256 thousands and U.S. $711 thousands or 10% and 9% of sales revenue respectively. The participation in R&D expenses related to the CGLT project by the BIRD-F during the nine ended September 30, 2003, which is included as a deduction of research and development expenses, amounted to approximately U.S. $89 thousands, therefore net R&D expenses were approximately U.S. $622 thousands for the nine months and U.S. $256 thousands for the three month periods accordingly, as compared to net R&D expenses of approximately U.S. $563 thousands and U.S. $172 thousands for the comparable periods in 2002. The R&D expenses for the three and nine months periods ended September 30, 2003 are attributed mainly to the R&D efforts made in conjunction with integration between MediVision products and AGFA products and the termination of the CGLT project.

Selling and Marketing Expenses

Total Selling and Marketing expenses for the three and nine months periods ended September 30, 2003 were approximately U.S. $780 thousands and U.S. $2,281 thousands, which are 31% and 30% of total sales revenues respectively, as compared to approximately U.S. $660 thousands and U.S. $1,981 thousands, which were 29% and 30% of total sales revenues during the parallel periods of the previous year. 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 three and nine months periods ended September 30, 2003 were approximately U.S. $378 thousands and U.S. $1,270 thousands, which are 15% and 17% of the total sales respectively, as compared to approximately U.S. $480 thousands and U.S. $1,383 thousands, which were 21% and 21% of the total sales during parallel periods of 2002. The decrease in General and Administrative expenses in money and in percentage of revenues further illustrates 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 are designed to 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 85% 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
cel. ++972-52-821728

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

ariel@medivision-ois.com

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