EDAP TMS S.A. Reports 2004 First Quarter Financial Results - Both
Operating Divisions Post Operating Profits for the First Time -
VAULX-EN-VELIN, France, May 12 /PRNewswire-FirstCall/ -- EDAP TMS
S.A. , a global leader in the development, marketing and
distribution of a portfolio of minimally-invasive medical devices
for the treatment of urological diseases, today reported financial
results for the first quarter ended March 31, 2004. The Company's
revenues for the first quarter of 2004 were EUR 5.8 million
compared to EUR 4.4 million in the same quarter of 2003, a 30%
increase from the prior year same period. This double-digit
increase in revenues tracked to the Company's budgeted expectations
for the quarter. Revenues included a higher total number of
machines sold in the first quarter of 2004 versus the first quarter
of 2003 in both of the Company's operating divisions. The Company's
gross margins were 37% for the first quarter of 2004 versus 36% for
the first quarter of 2003 and 17% for the fourth quarter of 2003.
The strong Euro continues to impact margins, but during the quarter
the Euro remained constant and did not strengthen further. However,
should the Euro continue to strengthen it would have an adverse
affect on future gross margins. The Company's operating expenses in
the first quarter of 2004 were EUR 2.2 million versus EUR 2.8
million in 2003. The decrease of 21% reflects the savings generated
as a result of the restructuring completed at the end of 2003.
While both divisions generated a cumulative operating profit of EUR
164 thousand in the first quarter, the Company's consolidated
operating loss was EUR 0.2 million in the first quarter of 2004
compared to EUR 1.2 million loss in the first quarter of 2003. The
EUR 1.0 million improvement in operating loss met the Company's
budgeted expectations for the first quarter. The Company was close
to breakeven with a consolidated net loss of EUR 13 thousand in the
first quarter of 2004 compared to EUR 1.4 million in the first
quarter of 2003 and further shows that the Company is on track with
its 2004 expectations. CONSOLIDATED COMPANY The overall performance
of the Company in the first quarter 2004 shows that the
restructuring plan put into place at the end of 2003 has begun to
provide immediate results. The most tangible example of this is the
21% reduction in operating expenses as a direct result of the
restructuring. Additionally, the increased focus by the Company in
its core markets proved beneficial with the 30% increase in
revenues. This however is only the beginning of the process and
there are still challenges and risks that lay ahead. The Company is
pleased with the progress thus far and is looking to improve upon
the results in the future. Cash management remains a high priority
for the management of the Company and cash balances remain strong.
The Company ended the quarter with EUR 9.3 million cash on hand;
the decrease from the previous quarter is from cash used in
operations and from the various severance payments made to former
employees during the quarter. As the Company has previously
announced, there are several severance payments still to be made
with the following schedule: EUR 0.7 million in Q2 and EUR 0.3
million in the balance of the year. These future payments will
affect the timing of the Company's turn to cash-flow positive, but
the Company reiterates its belief that it will not drop below EUR
7.0 million cash on hand during 2004. UROLOGICAL DEVICES AND
SERVICES ("UDS") DIVISION The UDS division returned to operating
profitability during the quarter due, in large part, to the good
start in the implementation of its strategy. Revenues increased
significantly with nine lithotripsy units sold. This continued
strength is indicative of the strong demand for the UDS division's
products in each of its key markets and the first sale of a
lithotripsy unit to HealthTronics in the United States. The UDS
division ended the quarter with a backlog of five machines that are
expected to be delivered over the course of the next quarter.
Additionally, the UDS division's efforts in reducing manufacturing
costs is beginning to bear fruit with a stabilized gross margin
even in light of the continued strength of the Euro. The first
quarter for the UDS division further validated the strategy of
aggressively taking market share, with competitive pricing, while
exercising continued strong control over the division's cost
structure. HIGH INTENSITY FOCUSED ULTRASOUND ("HIFU") DIVISION The
HIFU division reached a historical milestone in the first quarter
of 2004 by achieving its first ever operating profit. Revenues grew
significantly in the quarter with three units sold and the addition
of eight new sites with access to HIFU technology, which brings the
total number of sites with access to HIFU in Europe to 50. The
quarter clearly confirmed the strong interest in HIFU with
Ablatherm(R) from both patients and physicians in Europe. The
restructuring generated clear savings in SG&A thus bringing the
costs of the HIFU division more in line with revenue expectations.
In February, the Company announced an agreement with HealthTronics
Surgical Services, Inc. ("HealthTronics") granting HealthTronics
the right to begin clinical trials with the Ablatherm in order to
pursue marketing approval for the device, from the Food and Drug
Administration ("FDA"), in the United States. HealthTronics informs
the Company that they anticipate that the clinical trails and
application process could take from three to five years.
HealthTronics is currently in the early planning stages in advance
of beginning clinical trails, which could begin by the end of the
year. Hugues de Bantel, President of the Company's two operating
divisions, EDAP S.A. and TMS S.A., commented, "The performance of
the Company during the first quarter clearly confirms that both
operating divisions are on track with the commitments made at the
end of 2003. Strong revenue growth and operating profit, in the
operating divisions, in the first quarter post restructuring is
very encouraging. The overall progress of the business, in the
first quarter, met our expectations. This is the result of a
combination of factors including the continuous implementation of
the strategy to reduce the cost structure of the Company, increase
and strengthen the acceptance of the Company's technologies and a
huge commitment from our team." EDAP TMS S.A. is the global leader
in the development, production, marketing and distribution of a
portfolio of minimally invasive medical devices primarily for the
treatment of urological diseases. The Company currently develops
and markets devices for the minimally invasive treatment of
localized prostate cancer, using High Intensity Focused Ultrasound
(HIFU), through its EDAP SA subsidiary; it is also developing this
technology for the treatment of certain other types of tumors. EDAP
TMS S.A. also produces and commercializes medical equipment for
treatment of urinary tract stones using Extra-corporeal Shockwave
Lithotripsy (ESWL), via its TMS SA subsidiary. In addition, the
Company markets in Japan and Italy devices for the non-surgical
treatment of benign Prostate Hyperplasia (BPH) using Microwave
Thermotherapy (TUMT). For more information, in the U.S., contact
EDAP Technomed Inc., the Company's U.S. subsidiary located in
Atlanta, GA, by phone at (770) 446-9950. For additional information
on the Company, please see the Company's web site at:
http://www.edap-tms.com/. This press release contains, in addition
to historical information, forward-looking statements that involve
risks and uncertainties. These include statements regarding the
Company's growth and expansion plans. Such statements are based on
management's current expectations and are subject to a number of
uncertainties and risks that could cause actual results to differ
materially from those described in the forward-looking statements.
Factors that may cause such a difference include, but are not
limited to, those described in the Company's filings with the
Securities and Exchange Commission. EDAP TMS S.A. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Amounts in
thousands of Euro's and U.S. Dollars, except per share data) Three
Months Ended: Three Months Ended: March 31, March 31, March 31,
March 31, 2004 2003 2004 2003 Euros Euros $US $US Net sales of
medical equipment 3,190 1,873 3,954 2,024 Net sales of spare parts,
supplies and Services 2,431 2,481 3,014 2,681 NET SALES 5,621 4,354
6,968 4,705 Other revenues 152 80 188 86 TOTAL REVENUES 5,773 4,434
7,156 4,791 Cost of sales (3,719) (2,849) (4,610) (3,079) GROSS
PROFIT 2,054 1,585 2,546 1,712 Research & development expenses
(391) (732) (484) (791) S, G & A expenses (1,854) (2,093)
(2,299) (2,262) Total operating expenses (2,245) (2,825) (2,783)
(3,053) OPERATING PROFIT (LOSS) (191) (1,240) (237) (1,341)
Interest (expense) income, net (28) 12 (34) 13 Currency exchange
gains (loss), net 272 (184) 337 (199) Other income (loss), net (3)
(57) (4) (62) INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST 50
(1,469) 62 (1,589) Income tax (expense) credit (63) 36 (78) 39 NET
INCOME (LOSS) (13) (1,433) (16) (1,550) Earning per share - Basic
0.00 (0.18) 0.00 (0.20) Average number of shares used in
computation of EPS 7,782 7,782 7,782 7,782 Earning per share -
Diluted 0.00 (0.18) 0.00 (0.20) Average number of shares used in
computation of EPS 7,823 7,821 7,823 7,821 NOTE: Translated for
convenience of the reader to U.S. dollars at the 2004 average three
months noon buying rate of 1 Euro = 1.2395 USD, and 2003 average
three months noon buying rate of 1 Euro = 1.0806 USD. EDAP TMS S.A.
CONSOLIDATED BALANCE SHEETS HIGHLIGHTS (UNAUDITED) (Amounts in
thousands of Euro's and U.S. Dollars) March 31, December 31, March
31, December 31, 2004 2003 2004 2003 Euros Euros $US $US Cash, cash
equivalents and short term investments 9,342 10,429 11,483 13,137
Total current assets 26,140 25,870 32,132 32,588 Total current
liabilities 10,571 10,819 12,994 13,629 Shareholders' Equity 19,027
18,961 23,388 23,885 NOTE: Translated for convenience of the reader
to U.S. dollars at the noon buying rate of 1 Euro = 1.2292 USD, on
March 31, 2004 and at the noon buying rate of 1 Euro = 1.2597 USD,
on December 31, 2003. EDAP TMS S.A. CONDENSED STATEMENTS OF
OPERATIONS BY DIVISION THREE MONTHS ENDED MARCH 31, 2004 (Amounts
in thousands of Euro's ) Total EDAP S.A. TMS S.A. EDAP TMS
Consolida- After HIFU UDS HQ tion Consolida- Division Division
Impact tion Net sales of medical devices 1,191 2,448 - (449) 3,190
Net sales of spare parts, supplies & services 635 1,970 - (174)
2,431 Other revenues 14 138 - 152 TOTAL REVENUES 1,840 4,556 -
(623) 5,773 GROSS PROFIT 730 40% 1,324 30% 0 0 2,054 37% Research
& Development (205) (186) - - (391) Total SG&A plus
depreciation (453) (1,046) (355) - (1,854) OPERATING PROFIT (LOSS)
72 92 (355) 0 (191) CONTACT: Philippe Chauveau / Blandine Confort
33.4.72.15.31.50 Ian Vawter - EDAP Technomed Inc. 1.770.446.9950
DATASOURCE: EDAP TMS S.A. CONTACT: Philippe Chauveau or Blandine
Confort, both of EDAP TMS S.A., +33-4-72-15-31-50; or Ian Vawter of
EDAP Technomed Inc., +1-770-446-9950 Web site:
http://www.edap-tms.com/
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