EDAP TMS S.A. Reports 2004 Second Quarter Financial Results -
Significant HIFU Revenues Growth - VAULX-EN-VELIN, France, July 28
/PRNewswire-FirstCall/ -- EDAP TMS S.A. (NASDAQ:EDAP), 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
second quarter ended June 30, 2004. The Company's revenues for the
second quarter of 2004 were EUR 5.2 million compared with EUR 4.7
million in the same quarter of 2003, an 11% increase from the prior
year same period. Total revenues for the six months ended June 30,
2004 were EUR 11.0 million compared with EUR 9.1 million in the
same period of 2003, a 20% increase. Revenues for the six months
period included the sale of 16 lithotriptors and 5 Ablatherms. The
Company's gross margins, as a percent of sales, improved from 34%
for the second quarter of 2003 up to 39% for the second quarter of
2004 and from 35% for the six months ending June 30, 2003 up to 37%
for the same period of 2004, despite the continuing strengthening
of the Euro against the U.S. Dollar and the Japanese Yen. The
Company's operating expenses in the second quarter of 2004 were EUR
2.5 million versus EUR 3.1 million for the second quarter of 2003
and were EUR 4.7 million for the six months ended June 30, 2004
compared with EUR 5.9 million in the same period of 2003. During
the first six months of 2004, the Company recorded a 20% decrease
in its operating expenses from the prior year same period while
still supporting non-recurring expenses directly related to the
restructuring initiated in December 2003. The Company ended the
quarter with EUR 9.3 million in cash on hand, level with previous
quarter, which confirms that cash is well managed and remains the
top priority for the Company. Hugues de Bantel, Chief Executive
Officer of EDAP TMS commented : "Our 22% increase in revenues, at
constant exchange rate, further validates our aggressive sales
strategy for the two divisions and is very rewarding for our teams.
Operating results improved significantly over the last six months
compared to last year same period with a total group operating loss
of EUR 0.6 million compared with a loss of EUR 2.7 million in 2003.
This is particularly encouraging knowing that this includes a one
time charge of EUR 0.2 million linked to Headquarters'
restructuring. The EUR 2.1 million improvement in our operating
results met the Company's budgeted expectations for the first six
months of the year 2004. Our two divisions recorded a total
operating profit of EUR 103,000 over the second quarter of 2004,
which adds up to EUR 267,000 for the first six months of 2004. The
Company is pleased with the progress thus far and is looking to
improve on the results in the later part of the year." UROLOGICAL
DEVICES AND SERVICES ("UDS") DIVISION Additionally, Hugues de
Bantel commented: "UDS division confirmed its return to
profitability during this quarter partly due to the sustained
demand for our lithotriptors, with seven units sold on the quarter
in a difficult market. Our strategy to aggressively increase our
installed base for ESWL starts bearing fruit with our consumable
revenues recording a 23% increase on last year six months period.
Furthermore, we are pleased with our visibility for the third
quarter with a backlog of 7 units so far." "On the manufacturing
side, cost cutting initiatives coupled with strong management of
our suppliers helped improve our gross margin quarter to quarter.
We are satisfied with the performance of our manufacturing and
lithotripsy division in this difficult competitive market." HIGH
INTENSITY FOCUSED ULTRASOUND ("HIFU") DIVISION Furthermore, Hugues
de Bantel commented : "Our HIFU division experienced another strong
quarter with 2 new Ablatherm units sold, which brings to 5 the
total number of Ablatherm sold since the beginning of the year
compared with only 3 for the whole year of 2003. Total HIFU
revenues for the first six months of 2004 improved by 73% and we
are particularly pleased with the dramatic growth in our HIFU
mobile business revenue which increased by 161% from the prior year
same period. We expect our HIFU mobile business to account for a
significant part of our HIFU revenues in the future as it gives
physicians access to our HIFU technology with the Ablatherm without
significant capital expenses from the hospital. In addition, our
HIFU division expenses decreased by 51% over the period as a result
of the restructuring and tight costs control. Consequently,
operational profit for the first six months of 2004 improved by
110%, from an operating loss of EUR 1.9 million for the same period
of 2003 up to an operating profit amounting EUR 0.2 million in
2004. "The strong performance of our HIFU division and the steady
increase in the number of sites using Ablatherm confirm the growing
acceptance of HIFU with the Ablatherm as a great option to treat
localized prostate cancer. While forecasting growth on a new
technology remains challenging, we can confirm that a greater
visibility now exists for the future quarters on our HIFU business.
In addition, the recently published articles on our 5-year clinical
results and on the use of HIFU for radiotherapy failures confirm
EDAP clinical leadership on HIFU". Hugues de Bantel concluded:
"This semester performance allows to confirm our key objectives for
the year: double digit growth for the Company revenue and operating
profit in the two divisions. We have now positioned the Company for
a steady long-term growth and we look forward to reporting that
progress during our conference call tomorrow Thursday, July 29,
2004 at 12.00 noon Eastern Standard Time. CONFERENCE CALL AND
WEBCAST To participate in the live call, on Thursday July 29, 2004,
12:00 noon EST, please dial +1 (785) 832-1508. The conference call
will also be broadcast live over the internet via the Investor
Relations Section of the Company's web site at
http://www.edap-tms.com/. If you are unable to participate, a
playback of the conference call will be available by dialing +1
(402) 220-1188 beginning two hours after the end of the call until
Thursday, August 5, 2004. 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
devices for the non-surgical treatment of benign Prostate
Hyperplasia (BPH) using Microwave Thermotherapy (TUMT). For more
information, contact the Investor Relations Department by phone at
+33 (0)4 78 26 40 46. 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. CONTACT: Hugues de Bantel - Philippe Chauveau Blandine
Confort +33 4 78 26 40 46 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: June 30, June 30, June 30, June 30, 2004 2003
2004 2003 Euros Euros $US $US Net sales of medical equipment 2,439
2,514 2,957 2,887 Net sales of spare parts, supplies and Services
2,701 2,174 3,275 2,497 NET SALES 5,140 4,688 6,232 5,384 Other
revenues 80 17 97 20 TOTAL REVENUES 5,220 4,705 6,329 5,404 Cost of
sales (3,183) (3,088) (3,859) (3,546) GROSS PROFIT 2,037 1,617
2,470 1,858 Research & development expenses (386) (820) (468)
(941) S, G & A expenses (1,889) (2,268) (2,290) (2,604) Non
recurring operating expenses (207) - (252) - Total operating
expenses (2,482) (3,088) (3,010) (3,545) OPERATING PROFIT (LOSS)
(445) (1,471) (540) (1,687) Interest (expense) income, net (3) (5)
(4) (6) Currency exchange gains (loss), net (81) (531) (98) (610)
Other income (loss), net 7 (104) 9 (120) INCOME (LOSS) BEFORE TAXES
AND MINORITY INTEREST (522) (2,111) (633) (2,423) Income tax
(expense) credit 15 27 19 31 NET INCOME (LOSS) (507) (2,084) (614)
(2,392) Earning per share - Basic (0.07) (0.27) (0.08) (0.31)
Average number of shares used incomputation of EPS 7,781,731
7,781,731 7,781,731 7,781,731 Earning per share - Diluted (0.06)
(0.27) (0.08) (0.31) Average number of shares used incomputation of
EPS 8,102,979 7,821,195 8,102,979 7,821,195 NOTE: Translated for
convenience of the reader to U.S. dollars at the 2004 average three
months noon buying rate of 1 Euro = 1.2124 USD, and 2003 average
three months noon buying rate of 1 Euro = 1,1483 USD. EDAP TMS S.A.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Amounts in thousands of Euro's and U.S. Dollars, except per share
data) Six Months Ended: Six Months Ended: June 30, June 30, June
30, June 30, 2004 2003 2004 2003 Euros Euros $US $US Net sales of
medical equipment 5,629 4,387 6,900 4,889 Net sales of spare parts,
supplies and Services 5,132 4,655 6,292 5,188 NET SALES 10,761
9,042 13,192 10,077 Other revenues 232 97 284 108 TOTAL REVENUES
10,993 9,139 13,476 10,185 Cost of sales (6,902) (5,937) (8,461)
(6,616) GROSS PROFIT 4,091 3,202 5,015 3,569 Research &
development expenses (777) (1,552) (953) (1,729) S, G & A
expenses (3,743) (4,361) (4,588) (4,860) Non recurring operating
expenses (207) - (255) - Total operating expenses (4,727) (5,913)
(5,796) (6,589) OPERATING PROFIT (LOSS) (636) (2,711) (781) (3,020)
Interest (expense) income, net (31) 6 (37) 7 Currency exchange
gains (loss), net 192 (716) 235 (797) Other income (loss), net 4
(162) 5 (180) INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST
(471) (3,583) (578) (3,990) Income tax (expense) credit (48) 63
(58) 71 NET INCOME (LOSS) (519) (3,520) (636) (3,919) Earning per
share - Basic (0.07) (0.45) (0.08) (0.50) Average number of shares
used incomputation of EPS 7,781,731 7,781,731 7,781,731 7,781,731
Earning per share - Diluted (0.06) (0.45) (0.08) (0.50) Average
number of shares used incomputation of EPS 8,051,689 7,821,195
8,051,689 7,821,195 NOTE: Translated for convenience of the reader
to U.S. dollars at the 2004 average six months noon buying rate of
1 Euro = 1.2259 USD, and 2003 average six months noon buying rate
of 1 Euro = 1.1144 USD. EDAP TMS S.A. CONSOLIDATED BALANCE SHEETS
HIGHLIGHTS (UNAUDITED) (Amounts in thousands of Euro's and U.S.
Dollars) June 30, March 31, June 30, March 31, 2004 2004 2004 2004
Euros Euros $US $US Cash, cash equivalents and short term
investments 9,282 9,342 11,305 11,483 Total current assets 24,703
26,140 30,085 32,132 Total current liabilities 9,884 10,571 12,038
12,994 Shareholders' Equity 18,476 19,027 22,502 23,388 NOTE:
Translated for convenience of the reader to U.S. dollars at the
noon buying rate of 1 Euro = 1.2179 USD, on June 30, 2004 and at
the noon buying rate of 1 Euro = 1.2292 USD, on March 31, 2004.
EDAP TMS S.A. CONDENSED STATEMENTS OF OPERATIONS BY DIVISION SIX
MONTHS ENDED JUNE 30, 2004 (Amounts in thousands of Euro's) EDAP
S.A. TMS S.A. EDAP TMS Consolida- Total HIFU UDS HQ tion After
Division Division Impact Consolida- tion Net sales of medical
devices 2,020 4,408 - (799) 5,629 Net sales of spare parts,
supplies & services 1,470 4,032 - (370) 5,132 Other revenues 58
174 - - 232 TOTAL REVENUES 3,548 8,614 - (1,169) 10,993 GROSS
PROFIT 1,538 44% 2,553 30% - - 4,091 37% Research & Development
(399) (378) - - (777) Total SG&A plus depreciation (976)
(2,071) (696) - (3,743) Non recurring op. expenses - - (207) -
(207) OPERATING PROFIT (LOSS) 163 104 (903) - (636) DATASOURCE:
EDAP TMS S.A. CONTACT: Hugues de Bantel, Philippe Chauveau, or
Blandine Confort, all of EDAP TMS S.A., +33-4-78-26-40-46 Web site:
http://www.edaptechnomed.com/
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