RNS Number : 2678C
Inion Oy
29 August 2008
Inion Oy
("Inion or the "Company")
Results for the six months ended 30 June 2008
Tampere, Finland and Guildford, UK. 29 August 2008, Inion (LSE: IIN.L), a company focused on the development of novel biodegradable
medical implants, today announces its unaudited half-year results for the six months ended 30 June 2008.
The Company is holding a meeting for analysts at 9.30am today at the offices of Piper Jaffray Ltd, One South Place, London EC2M 2RB.
Conference call dial-in details are as follows:
Std International Dial in: +44 (0) 1452 567 588
Conference code: 6121081267�
A copy of the presentation is available at www.inion.com
Financial summary
* Sales for H1 2008 were EUR2.59 million, up 12% on sales of EUR2.31 million for the same period in 2007. Sales development is in line
with market expectation to achieve full year sales of approximately EUR7 million.
* Sales for Q2 2008 were EUR1.8 million, 115% higher than in Q1 2008, and 34% higher than in the corresponding period in 2007.
* Operating loss down 20% to EUR4.85 million (H1 2007: EUR6.08 million), with pre-tax loss down 11% to EUR5.25 million (H1 2007: EUR5.92
million)
* Cash, cash equivalents and short-term investments at EUR7.77 million as at 30 June 2008 (EUR13.82 million at 31 December 2007)
* Currently evaluating a range of options available to the Company to ensure it is well-funded in order to bridge the business to
profitability
Operational summary (including post-period highlights)
* FDA 510(k) marketing clearance received post the period end in July 2008 for Inion's biodegradable graft containment systems for
spinal fusion procedures allowing the Company to accelerate commercial activities in the spine market. Inion's spinal surgery products
received European marketing clearance in 2007.
* Inion's commercial operation continues to develop and deliver increasing sales. In the USA, 40 distributors are currently engaged,
with 22 focusing on the sales and distribution of speciality orthopaedics products and 18 focusing on spine product sales. US commercial
activity is focused on the launch of the recently approved spinal graft containment systems alongside the training and engagement of high
volume users in these areas. In the key markets within Europe and the Far East retraining the distributors' sales force continues, focusing
on the core business areas of spine and speciality orthopaedics
* David Follows has been promoted to Chief Operating Officer, from Chief Commercial Officer and Dave Hawkes has been promoted to US
National Sales Director, from Regional Sales Manager for the Central USA region.
* Out-licensing agreement signed in August with US firm Curative Biosciences Inc. covering novel bioactive technology for promoting bone
regrowth and repair when treating patients with broken bones.
Ian Paling, Inion's Chairman, said: "Inion has a great product offering and a focused commercial operation run by an experienced and
professional team. With these elements in place, the Company's future is all about successful execution of its commercial strategy. We are
pleased therefore to report today an improved sales performance during the first half of 2008 compared to the same period last year. Given
the progress the Company has made over the past 18-24 months, we are confident we will see continued growth during the second half of the
year, to achieve our sales target of approximately EUR7 million for the full year for 2008."
-ends-
For further information, please contact:
Inion Oy Tel: +44 (0)1483 685390
Ian Paling, Chairman
Chris Lee, Chief
Executive Officer
Julien Cotta, Chief
Financial Officer
Citigate Dewe Rogerson Tel: +44 (0)207 638 9571
Mark Swallow / David
Dible
About Inion (www.inion.com)
Inion Oy is a medical devices company focused on the development and successful commercialisation of innovative and unique biodegradable
surgical implants and bone graft substitutes in selected high value orthopaedic market segments.
Inion's core expertise and technology lies in the design and manufacture of innovative biodegradable plates, screws, pins and membranes,
which are used to enhance the healing of bone or soft tissue injuries to the skeleton, such as those caused by trauma or by reconstructive
surgery. Inion implants are made from its proprietary Inion[R] family of biodegradable materials, with properties tailored for specific
surgical applications, in terms of strength, flexibility and rate of degradation
Inion is also focused on developing proprietary new biodegradable biomaterials that promote bone healing and accelerate patient
rehabilitation.
Inion was incorporated in early 2000 and listed on the Official List of the UK Listing Authority in December 2004 (ticker: IIN). The
Company has offices in the UK and USA, and its head office, R&D and production facilities are in Tampere, Finland.
This announcement includes "forward-looking statements" which include all statements other than statements of historical facts,
including, without limitation, those regarding the Group's financial position, business strategy, plans and objectives of management for
future operations (including development plans and objectives relating to the Group's products), and any statements preceded by, followed by
or that include forward-looking terminology such as the words "targets", "believes", "estimates", "expects", "aims", "intends", "will",
"can", "may", "anticipates", "would", "should", "could" or similar expressions or the negative thereof. Such forward-looking statements
involve known and unknown risks, uncertainties and other important factors beyond the Group's control that could cause the actual results,
performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by
such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group
will operate in the future. Among the important factors that could cause the Group's actual results, performance or achievements to differ
materially from those in forward-looking statements include those relating to Inion's funding requirements, regulatory approvals, reliance
on third parties, intellectual property, key personnel and other factors. These forward-looking statements speak only as at the date of this
announcement. The Group expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking
statements contained in this announcement to reflect any change in the Group's expectations with regard thereto or any change in events,
conditions or circumstances on which any such statements are based. As a result of these factors, prospective investors are cautioned not to
rely on any forward-looking statement.
CEO statement
Inion has made solid progress during the first half of 2008 and this has been reflected in the sales growth we have seen compared to the
same period in 2007. This sales development is more clearly visible by looking at the quarterly performance, which shows that sales in the
second quarter of the year were up 115% on those in the first quarter and up 34% on the corresponding period in 2007. This growth is from a
low level given that the main focus of corporate activity in 2007 was in restructuring the company and putting in place a new commercial
operation. The positive sales development reported today can be attributed to the fact that we now have the majority of this international
commercial operation established and are focusing on increasing active training and management of current distributors, to accelerate sales
growth in our key spine and orthopaedic trauma markets.
The Company remains focused on controlling costs, and losses from operations during the first half of 2008 were reduced 20% to EUR4.85
million from EUR6.08 million in 2007. These figures are discussed in more detail in the Financial Review but it is important to note that
they reflect a 54% reduction in Research and Development spend to EUR1.2 million, which is mainly due to the closure of the Cambridge R&D
facility and the termination of long term research projects. This cost reduction more than offsets the increased sales and marketing cost
(up 24% to EUR2.30 million) and other administrative expenses invested as Inion intensifies its commercial activities.
Commercial operation
Inion's business is focused on two high-value and high-growth segments of the global orthopaedics market: Spine and Speciality
Orthopaedics (targeting foot and ankle, and upper extremities, i.e. hand, wrist and elbow). Inion's key markets are in the USA and select
territories across the rest of world, which are accessed through a focused network of specialist distributors
Inion's priority market is the USA, where significant progress has been made in building a network of specialist independent local
distributors. A total of 40 independent distributors were engaged as at 30 June 2008, with 22 focusing on the sales and distribution of
Speciality Orthopaedics products and 18 focusing on Spine product sales.
In select markets in Europe and the rest of the world, Inion continues to develop its distribution network with established
orthopaedics-focused distributors.
The Company's global commercial operations are being led by Inion's newly promoted Chief Operating Officer, David Follows. David
originally joined Inion in June 2007 as Chief Commercial Officer from ETHICON Endo-Surgery UK, where he was Managing Director. He has more
than 28 years of commercial experience in the medical devices industry, predominantly with subsidiaries of Johnson & Johnson.
David is responsible for manufacturing, supply chain, logistics, research & development and quality control, as well as sales outside
the USA and global marketing.
In the USA, Dave Hawkes has been promoted to US National Sales Director from his previous role as Regional Sales Manager for the Central
USA region.
Dave joined Inion in mid-2007 and has significant sales and marketing experience in the medical implants industry from Stryker and
latterly DePuy. In this new role, and working closely with Chris Lee (CEO) and David Follows (COO), he will take on responsibility for the
development and growth of Inion's trauma and spinal surgery businesses in the USA, including overseeing the appointment and training of new
independent distributors.
Inion is strongly focused on a programme of active training and management of current distributors to accelerate sales growth in its key
markets and since March 2008 has had a full-time trainer based in the US for this purpose.
Strengthened product offering
Inion remains committed to introducing innovative products to market, strengthening its respective portfolios targeting the Spine and
Speciality Orthopaedics segments.
An important milestone achieved in July, just after the period end, was receipt of a 510(k) marketing clearance from the US Food and
Drug Administration (FDA) for biodegradable graft containment systems for spinal fusion procedures: the Inion S-1[TM] Anterior Cervical
Fusion System, the Inion S-1[TM] double-level plate and the Inion S-2[TM] Anterior Thoraco-Lumbar Fusion System. These biodegradable implant
systems are used in conjunction with traditional rigid fixation in procedures to treat a range of spinal conditions along its entire length,
including ruptures and displacement of inter-vertebral discs.
More than 183,000 cervical plating procedures, and more than 10,000 anterior thoraco-lumbar plating procedures, were performed in 2006
in the USA, according to a market research report in 2007 by Spinemarket. The US market for these procedures was worth approximately EUR318
million and EUR32 million, respectively. The number of spinal plating procedures has since grown at an annual rate of approximately 30%.
The Inion S-1[TM] system was initially authorised for sale in the US and Europe in 2005, however these new spine systems, which also
received CE Mark marketing authorisation in Europe in the second half of 2007, utilise a significant technology advance whereby a
radiographic marker has been incorporated along the edges of the plates, and to the tips of screws. These markers enable surgeons to view
the position of the implants in post-operative x-ray without interfering with their assessment of the site of surgery and its healing
progress.
This product enhancement, in addition to the fact that Inion's biodegradable implants degrade slowly and completely over time into
carbon dioxide and water, which are absorbed into the body, offers surgeons and patients significant clinical benefits over traditional
metal materials. These differentiated features of Inion's spine systems will be key selling points for what is a major product offering for
Inion, targeting a significant and growing market opportunity. As such, the commercial operation is prepared for an aggressive sales and
marketing delivery in all its important markets.
Ian Paling elected Chairman
In August, Inion elected Ian Paling as the Chairman of Inion, replacing Gn Ando, who stepped down from the Board. Ian is a highly
regarded businessman with more than 25 years' senior management and Board-level experience, most recently as CEO of Corin Group PLC (LSE:
CRG), a world leader in the development, manufacture and distribution of a wide range of reconstructive orthopaedic devices. Ian was
instrumental in Corin's growth from a small private business into an internationally recognised and successful player in the global
orthopaedics sector, with a strong presence in most of the world's important markets.
We believe Ian has the necessary skills, experience, contacts and qualities to guide and support the business through the next phase of
its commercial development, and to help build on the solid foundation the Company has laid during the past 18-24 months.
Inion would like to take this opportunity to thank Gn for his important contribution to the restructuring and refocusing process, which
has put the Company in a good position to leverage its unique biomaterial technologies, to realise its long-term value potential.
Non-core businesses
As a result of Inion's realigned product focus, the Company is seeking to divest its cranio-maxillofacial (CMF) and dental businesses as
well as certain other assets. During 2007 and through the first half of 2008, these businesses and distribution networks have been
maintained with minimal investment and, particularly in the case of the CMF business, continue to provide an important revenue stream. As
mentioned in Inion's results announcement in March 2008, the sales performance in CMF, combined with discussions undertaken with potential
acquirers, has led Inion to re-evaluate the previous timelines for the disposal of this business. The view then was that with a limited
amount of additional investment to strengthen the CMF product portfolio, Inion may be able to achieve a greater valuation for this business,
while retaining the income this business generates in the interim. During the first half of 2008, Inion has made strategic investments in
the CMF business and continues to evaluate opportunities for its divestment at an acceptable valuation.
Additionally, Inion has made progress in out-licensing some non-core intellectual property and technologies from an early stage research
programme that was ceased as a result of the Company refocusing. In August, after the period end, Inion signed an out-licensing agreement
with US Company, Curative Biosciences Inc. covering certain novel bioactive technologies for the promotion of bone regrowth and repair when
treating patients undergoing orthopaedic surgical procedures. The licensed technology was developed through research work undertaken at the
Cambridge facility prior to its closing last year, and is based on the use of N,N-dimethylacetamide (DMA) either alone or incorporated in
resorbable polymer structures (such as plates, membranes and screws).. Inion has received a small upfront fee, and could receive development
and sales milestones of up to $2 million and royalties on revenues generated from any products developed using the technology.
Over the course of its existence, Inion has been active in protecting its intellectual property and by out-licensing such IP, Inion
seeks to realise the value resulting from research through companies more focused in these areas.
Outlook
Inion has made significant and positive changes to its strategy and organisation, which have put it on track to become a successful
business based on commercialising innovative biodegradable products in the fields of spine and speciality orthopaedics. Based on the recent
progress the Company has made in terms of strengthening its product offering and containing costs, and with sales increasing month on month,
the commercial operation is gaining real momentum.
While the new growth trajectory being established is expected to enable Inion to become a profitable business, it is clear that further
funding will be needed to achieve this goal. The Directors of the Company are now looking at a range of options that could provide the
funding needed to bridge the period until Inion becomes profitable.
Chris Lee
Chief Executive Officer
29 August 2008
Financial review
The financial results for H1 2008 are reviewed below and compared with H1 2007 unless otherwise stated.
Revenue
The revenue of EUR2.59 million was 12% higher than last year (H1 2007: EUR2.31 million). Revenue from each of the product segments is
set out in the table below.
2008 2007 Change Change
EUR' EUR' EUR' %
000 000 000
Spine 164 126 38 30%
Speciality orthopaedics 1,287 1,179 108 9%
Cranio-maxillofacial (CMF) 1,105 933 172 18%
Dental 37 73 (36) (49%)
Total 2,593 2,311 282 12%
Spine revenues have increased mainly because of sales in the US.
Revenues from Speciality Orthopaedics have increased for three main reasons. First, sales of Inion Hexalon[TM] biodegradable screws have
benefited from both the withdrawal of a competitor in the market and the increasing use of the double-bundle technique for anterior cruciate
ligament reconstruction where twice as many screws are used per procedure.
Secondly, a large and final order for Inion Anchron[TM] (for use in fixing soft tissue to bone) was received from a distributor in South
America in advance of our decision to cease supply of this product.
Finally, two new distributors for Speciality Orthopaedic products in Europe have recently been appointed to replace an existing
distributor whose exclusive contract is not being renewed. Sales to the existing distributor when compared to last year were lower. This has
been partially offset by new sales in the US.
Revenues from CMF have improved in particular in the Far East as an increasing number of users are converting from metal to
biodegradable implants.
Gross profit
Gross profit has increased by 148% to EUR0.96 million (H1 2007: EUR0.39 million). Gross margin was 37% (H1 2007: 17%). Except for
reorganisation costs of EUR0.14 million which were included in cost of sales last year, the main reasons for the increase in gross profit
are the increase in sales and savings in production costs. Savings in production costs amounted to EUR0.10 million.
Operating loss
The operating loss for H1 decreased by 20% to EUR4.85 million (H1 2007: EUR6.08 million). Operating loss last year included one-off
costs of EUR0.76 million in respect of re-organisation. The remaining decrease in operating loss is mainly due to the increase in sales
together with savings in operating costs.
R&D expenditure decreased by 54% to EUR1.20 million (H1 2007: EUR2.58 million). This decrease is mainly due to the closure of the
Cambridge research facility as well as the termination of research based projects.
Sales and marketing costs were up 24% at EUR2.30 million (H1 2007: EUR1.85 million). Re-organisation costs of EUR0.30 million are
included in the figure for last year. Excluding these costs, the increase is driven mainly by the new operating subsidiary in the US.
Administrative expenses increased by 12% to EUR2.44 million (H1 2007: EUR2.18 million). Reorganisation costs of EUR0.30 million are
included in costs for H1 2007. Administrative expenses have increased following the creation of a tax provision of EUR0.65 million in
respect of a potential tax liability arising from earlier years.
Other operating income for the year was EUR0.14 million (H1 2007: EUR0.15 million). This represents grant income that subsidises R&D
expenditure on the Inion OptimaPLUS[TM] biodegradable and bioactive range of biomaterials. The grant was awarded by Tekes (Finnish National
Technology Agency) for the reimbursement of EUR1.9 million of a total EUR3.8 million of qualifying expenditure.
Finance income and expense
Net finance expense for the year was EUR0.40 million (H1 2007: net finance income EUR0.16 million). This is due to lower interest income
arising on lower average cash balances and a weakening dollar.
Loss per share
The loss per share was EUR0.07 (H1 2007: EUR0.08).
Balance sheet and cash flow
Cash, cash equivalents and short-term investments at the end of June were EUR7.77 million (H1 2007: EUR19.22 million).
The total debt, including finance leases on the balance sheet was EUR4.80 million (H1 2007: EUR6.17 million). This was made up of
capital loans EUR2.34 million (H1 2007: EUR2.34 million), bank borrowings EUR0.35 million (H1 2007: EUR1.05 million) and finance lease
liabilities EUR2.11 million (H1 2007: EUR2.78 million).
Repayment of capital loans is subject to distributable retained earnings being at least equal to restricted equity as defined by Finnish
GAAP. Bank borrowings will be fully paid up by March 2009. The main finance lease liability is in respect of the Group's facility in
Finland. The lease period for this ends in June 2011 at which time ownership of the building transfers to the Group once the remaining
finance lease commitments have been fully paid.
Total cash spent in H1 2008 was EUR6.05 million (H1 2007: EUR6.41 million). Cash spent in H1 2007 excludes repayment of a non-amortising
US $6.0 million (EUR4.65 million) loan.
Risks and uncertainties
The Annual Report for 2007 summarises the key strategy for the business together with the risks associated in carrying out our business.
The following in respect of going concern provides an update for H2 2008.
Going concern
The condensed set of financial statements have been prepared on a going concern basis and, as described in Note 1, is dependent on
measures to be taken to conserve cash resources together with obtaining future alternative funding.
The condensed set of financial statements does not include any adjustments that would result from a failure to obtain additional funds.
Details of the circumstances relating to this material uncertainty are described in Note 1.
Julien Cotta
Chief Financial Officer
29 August 2008
Statement of Directors' responsibilities
The Directors confirm that this condensed set of financial statements has been prepared in accordance with IAS 34 as adopted by the
European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8 being:
* An indication of important events that have occurred during the first six months and their impact on the condensed set of
financial statements and a description of the principal risks and uncertainties for the remaining six months of the financial year
* Material related-party transactions in the first six months and any material changes in the related-party transactions described
in the last Annual Report that have materially affected the financial position or performance of the business
The Directors of Inion Oy are listed in the 2007 Annual Report with the exception of the following changes in the period:
* Peter Allen retired on 24 April 2008
* Goran Ando retired on 13 August 2008
* Ian Paling was elected as a Non-Executive Director and Chairman on 13 August 2008
Consolidated income statement Notes Unaudited Unaudited Audited
Half year ended 30 June 2008 Half year Half year Full
2008 2007 year
EUR'000 EUR'000 2007
EUR'000
Revenue 2 2,593 2,311 5,232
Cost of sales (1,635) (1,925) (3,618)
Gross profit 958 386 1,614
Other operating income 137 148 420
Research and development costs (1,198) (2,584) (5,422)
Sales and marketing (2,302) (1,853) (3,942)
Administrative expenses (2,440) (2,176) (4,697)
Operating loss (4,845) (6,079) (12,027)
Finance (expense)/income (402) 162 (244)
Loss before income tax (5,247) (5,917) (12,271)
Income tax 3 5 (47) (137)
Loss for the period (5,242) (5,964) (12,408)
Loss per share (expressed in EUR per
share)
Basic and diluted 4 (0.07) (0.08) (0.17)
Statements of recognised income and expense Unaudited Unaudited Audited
For the half year ended 30 June 2008 Half year Half year Full
2008 2007 year
EUR'000 EUR'000 2007
EUR'000
Loss for the period (5,242) (5,964) (12,408)
Net exchange gain/(loss) not recognised in 40 (25) 230
income statement
Total recognised expense for the period (5,202) (5,989) (12,178)
Consolidated balance sheet Notes Unaudited Unaudited Audited
As at 30 June 2008 Half year Half year Full
2008 2007 year
EUR'000 EUR'000 2007
EUR'000
Assets
Non-current assets
Intangible assets 856 1,083 1,143
Property, plant & equipment 4,760 5,199 4,760
Deferred tax assets 255 233 252
5,871 6,515 6,155
Current assets
Inventories 2,537 1,946 2,018
Trade receivables 1,852 1,341 1,709
Other receivables and prepaid expenses 1,181 1,350 1,593
Other financial assets at fair value - 18,175 13,302
through profit or loss
Cash and cash equivalents 7,768 1,045 516
13,338 23,857 19,138
Total assets 19,209 30,372 25,293
Shareholders' equity and liabilities
Shareholders' equity
Share capital 5 2,265 2,252 2,262
Share issue 5 - 3 -
Share premium 5 80,598 80,598 80,598
Fair value and other reserves 5 3,265 2,407 2,953
Translation differences 5 1,099 804 1,059
Retained earnings 5 (76,025) (64,288) (70,732)
Total equity 5 11,202 21,776 16,140
Non-current liabilities
Capital loans 2,342 2,342 2,342
Borrowings - 350 92
Finance lease liabilities 1,417 2,077 1,742
Other long-term liabilities 471 392 427
4,230 5,161 4,603
Current liabilities
Trade payables 1,150 622 1,143
Borrowings 350 700 609
Finance lease liabilities 691 701 690
Other short term liabilities 941 1,313 2,108
Provisions 645 99 -
3,777 3,435 4,550
Total liabilities 8,007 8,596 9,153
Total shareholders' equity and 19,209 30,372 25,293
liabilities
Consolidated cash flow statements Notes Unaudited Unaudited Audited
For the half year ended 30 June 2008 Half year Half year Full
2008 2007 year
EUR'000 EUR'000 2007
EUR'000
Cash flows from operating activities
Cash used in operations 6 (4,907) (5,416) (9,374)
Interest received 10 525 39
Interest paid (26) (114) (526)
Net cash flow used in operating (4,923) (5,005) (9,861)
activities
Cash flows from investing activities
Purchase of property, plant & equipment (225) (142) (332)
Purchase of intangible fixed assets (80) (147) (237)
Disposal of other financial assets at 13,302 8,046 13,488
fair value through profit or loss
Net cash flow from investing activities 12,997 7,757 12,919
Cash flows from financing activities
Proceeds from issue of ordinary shares 3 11 11
Repayment of borrowings (351) (5,304) (5,729)
Finance lease principal payments (474) (474) (942)
Net cash flow from financing activities (822) (5,767) (6,660)
Increase/(decrease) in cash and cash 7,252 (3,015) (3,602)
equivalents
Cash and cash equivalents at 1 January 516 4,118 4,118
Change in cash and cash equivalents due - (58) -
to exchange rate movements
Cash and cash equivalents at period end 7,768 1,045 516
Notes to the accounts
1. Basis of preparation
The interim financial statements have been prepared in accordance with the accounting policies set out in the Annual Report for the year
ended 31 December 2007.
The results for the half year ended 30 June 2008 and 30 June 2007 have not been audited and do not constitute statutory accounts.
The results for the year ended 31 December 2007 are extracted from the audited annual financial statements on which the auditors
reported without qualification.
Going concern
Inion has had a history of operating losses since inception. It expects to incur further losses as current planned expenditure exceeds
its revenues from product sales. Inion's existing cash balances are unlikely to be sufficient to fund its future planned net losses and the
Company is likely to require additional finance within the next 12 months.
The interim financial information has been prepared on a going concern basis which assumes that the Company will continue in operational
existence for the foreseeable future. The Directors have reviewed the working capital requirements of the Group over the next 12 months. The
Group's working capital requirements are sensitive to future revenues which by their nature are uncertain and depend upon the success of the
realisation of Spine and Speciality Orthopaedic revenues particularly in the US.
As at 30 June 2008, Inion had cash resources of EUR7.8 million. The Directors have identified a number of steps that could be taken to
manage its cash resources and thereby ensure that it can continue in operation for the foreseeable future. These include:
* Further equity financing
* Further non-equity based financing
* Divestment of the Cranio-maxillofacial and Dental businesses
* Reductions in the cost base and in particular continued rigorous management of the discretionary spend
2. Segmental analysis
Primary reporting format - business segments
The Company is organised into four operating segments. The operating segments are Spine, Speciality Orthopaedics, Cranio-maxillofacial
(CMF) and Dental.
As each of these segments has similar characteristics, they can be aggregated into one reportable business segment being the manufacture
and sale of biodegradable implants.
Secondary reporting format - geographical segments
Half year ended 30 June Unaudited Unaudited Audited
Half year Half year Full
2008 2007 year
EUR'000 EUR'000 2007
EUR'000
Europe 800 891 1,785
Americas 791 580 1,238
RoW 1,002 840 2,209
Total 2,593 2,311 5,232
3. Taxation
Half year ended 30 June Unaudited Unaudited Audited
Half year Half year Full
2008 2007 year
EUR'000 EUR'000 2007
EUR'000
Income tax -current year - - 106
Deferred tax (credit)/charge (5) 47 31
(5) 47 137
4. Loss per share
Unaudited Unaudited Audited
Half year Half year Full year
2008 2007 2007
EUR'000 EUR'000 EUR'000
Loss for the period (5,242) (5,964) (12,408)
Number Number Number
Basic and diluted: Weighted average 75,703,074 74,791,673 74,988,739
number of shares
Effect of anti-dilutive securities:
Stock options 912,751 3,555,990 2,514,489
Anti-dilutive: Adjusted weighted average 76,615,825 78,347,663 77,503,228
number of shares and assumed
conversations
5. Statement of changes in shareholders' equity
Share capital Share issue Share premium Other reserves Translation Retained earnings
Total
EUR'000 EUR'000 EUR'000 EUR'000 differences EUR'000
EUR'000
EUR'000
At 31 December 2006 2,239 5 80,598 2,313 829 (58,324)
27,660
Translation differences - - - - (25) -
(25)
Loss for the period - - - - - (5,964)
(5,964)
Employee services - share - - - 94 - -
94
option scheme
Proceeds from shares issued - 13 (2) - - - -
11
share option scheme
At 30 June 2007 2,252 3 80,598 2,407 804 (64,288)
21,776
Translation differences - - - - 255 -
255
Loss for the period - - - - - (6,444)
(6,444)
Employee services - share - - - 546 - -
546
option scheme
Proceeds from shares issued - 10 (3) - - - -
7
share option scheme
At 31 December 2007 2,262 - 80,598 2,953 1,059 (70,732)
16,140
Translation differences - - - - 40 -
40
Other net decreases - - - - - (51)
(51)
Loss for the period - - - - - (5,242)
(5,242)
Employee services - share - - - 312 - -
312
option scheme
Proceeds from shares issued - 3 - - - - -
3
share option scheme
At 30 June 2008 2,265 - 80,598 3,265 1,099 (76,025)
11,202
6. Reconciliation of loss for the period to cash used in operations
Unaudited Unaudited Audited
Half year Half year Full
2008 2007 year
EUR'000 EUR'000 2007
EUR'000
Loss for the period (5,242) (5,964) (12,408)
Deferred taxes (5) 47 31
Depreciation and amortisation 779 412 796
Share based compensations 312 94 600
Loss on disposal of property, plant and - - 199
equipment
Other adjustments (353) 163 209
Fair value loss/(gains) on other financial 117 88 (482)
assets
Net interest expense/(income) 162 (420) 411
Exchange loss 125 - 293
Net loss before changes in working capital (4,105) (5,580) (10,351)
(Increase)/decrease in inventory (519) 463 392
Decrease in debtors 267 992 366
(Decrease)/increase in non-interest bearing (550) (1,291) 219
liabilities
Cash used in operations (4,907) (5,416) (9,374)
7. Provisions
Unaudited Unaudited Audited
Half year Half year Full
2008 2007 year
EUR'000 EUR'000 2007
EUR'000
B/f on 1 January - 133 133
Provided 645 - -
Utilised - (34) (133)
C/f at end of period 645 99 -
Following a tax audit for the years 2004 - 2006 carried out by an inspection unit of the Central Finland Regional Tax Office, the
Company has been provided with a preliminary tax audit report. Based on the estimation, the proposals included in the preliminary tax audit
report may result in a potential tax liability of approximately EUR645,000 to the Company. The preliminary tax audit report is not a final
or non-appealable decision, and the Company has been allowed to respond to the matters included in the report.
The restructuring provision of EUR133,000 which was provided in 2006 was fully utilised during the course of 2007.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SEEFAASASESA
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