BUSINESS UPDATE JUNE 2018

Strength in Asia Focus Continues to Drive Growth

SIGNIFICANT MILESTONES ACHIEVED IN FY18

• Somfit China-based Joint Venture with Health 100 now in the detailed implementation phase with main agreements still anticipated to be signed no later than 16 August 2018
• First major MEG contract currently being installed at Barrow Neurological Institute (BNI) in Phoenix, Arizona, USA
• Recent growth trend in Asian sales continue – up by a further 15% approximately over the prior year
• Strengthening of the Company’s leadership continues with appointment of Tucson Dunn as Independent Director

JUNE 2018 BUSINESS UPDATE

• Core business
  • Full year (FY18) results impacted by sales performance in US, despite about 10% growth in that market over the previous period
  • Several orders in US expected for FY18 have delayed to full year 2019 (FY19)
  • Potential for US sales performance remains high for FY19
  • MEG and Somfit strategies now being implemented, further focus will be directed at harnessing opportunity in the US market for the Company’s core products
• MEG
  • 60% of the MEG sale has been booked to revenues in FY18 based on interpretation of new accounting rules for revenue recognition, which take effect 1 July 2018
  • Guidance of $40m to $42m was based on 100% of MEG revenues being recognised in FY18
  • Total new sales orders taken for FY19 will be a record $40m
  • Short-term shipped and invoiced revenues for FY18 will be approximately $36m compared to $34m for FY17
  • Installation of the new MEG system at BNI is underway
  • 3 near-term MEG sales opportunities are actively being pursued
  • Currently 60 potential MEG sales opportunities
• Unaudited group FY18 EBITDA is expected to be between $2.5m and $3.5m
• Appendix 4E anticipated release on 27 August 2018

Compumedics Limited (ASX: CMP) (“Compumedics” or “Company”) wishes to advise shareholders that expected sales for the twelve months to 30 June 2018 are approximately $36 million with sales in Asia up by a further 15% approximately over the same period last year. This is compared to sales of $34 million for the same period last year. Sales for the twelve months to 30 June 2018 are lower than previous guidance due to delays in receiving several significant new sales orders in the Company’s US business.

Compumedic’s Germany-based business, DWL, has performed to expectation, as did the Australian and European businesses. Sales in Asia, including China, have continued to perform strongly in FY18 and contributed strongly to the record sales orders taken in FY18 of approximately $40 million. Sales in Asia are up by a further 15% approximately over the same period for 2017.

The transition phase of the Company’s US business has taken longer than expected, given the competitive nature of the US market, which has resulted in lower than forecasted sales for the US business in FY18, which has impacted on the second half FY18 (H2FY18). This is despite the US clinical business growing by 10%.  The Company continues to believe the changes made in the US business will generate further growth in FY19.

The Company has commenced installation of its new MEG device at Barrow Neurological Institute (BNI) in Phoenix, Arizona. Due to interpretation of new accounting rules for revenue recognition, which take effect 1 July 2018, Compumedics has booked only 60% of the revenue associated with this sale in FY18.

The Company is actively pursuing the next three, near-term, MEG sales opportunities; from a list of approximately 60 MEG sales opportunities identified to-date.

Compumedics is currently in the detailed implementation phase, of its previously announced proposed China-based Joint Venture with Health 100.  Signing of final agreements is still expected to be on, or prior to, 16 August 2018.

With MEG and Somfit strategies now being implemented, further focus will be directed at harnessing the opportunity in the US market for the Company’s core products. The Company expects an underlying unaudited EBITDA of between $2.5m and $3.5m, based on the revised revenue number.

A detailed analysis and final numbers will be released with the Appendix 4E, which the Company is currently anticipating for 27 August 2018.

Dr David Burton, Executive Chairman of Compumedics, said:

“Whilst the 2018 financial year result for the core business is not entirely as we anticipated, the Company remains focused on driving much greater performance out of its US business.  The strategy remains intact and the Company will re-double its efforts to execute in a timely manner the growth outcomes for the core capital equipment business.

“Concurrent with this, the Company remains focused on completing the installation of its first MEG sale at BNI, whilst securing additional new MEG sales.

”Compumedics is also intensely working on closing out detailed documentation for its new Joint Venture with Health 100 in China to commercialise its Somfit consumer sleep technology.”

About Compumedics Limited

Compumedics Limited [ASX: CMP] is a medical device company involved in the development, manufacture and commercialisation of diagnostics technology for the sleep, brain and ultrasonic blood-flow monitoring applications. The Company owns US based Neuroscan and Germany based DWL Elektronishe GmbH. In conjunction with these two subsidiaries, Compumedics has a broad international reach, including the Americas, Australia and Asia Pacific, Europe and the Middle East.

Executive Chairman Dr. David Burton founded Compumedics in 1987. In the same year the Company successfully designed and installed the first Australian, fully computerised sleep clinic at Epworth Hospital in Melbourne. Following this early success, Compumedics focused on the development of products that sold into the growing international sleep clinic and home monitoring markets.

Compumedics listed on the Australian Securities Exchange in 2000. Over the years, Compumedics has received numerous awards, including Australia’s Exporter of the Year, and has been recognised as a Top 100 Innovator by both German and Australian governments.

For further information please contact:

Dr David Burton
Executive Chairman, CEO Executive Director
Ph: + 61 3 8420 7300
Fax: +61 3 8420 7399

 David Lawson
Chief Financial Officer
Ph: + 61 3 8420 7300
Fax: +61 3 8420 7399

Investor Relations, Media & PR enquires:

Rod North
Managing Director
Bourse Communications Pty Ltd
Ph: +61 3 9510 8309
Mob: 0408 670 706

Richard Allen
Oxygen Financial PR
Ph: + 61 3 9915 6341
Mob: 0403 493 049