EDAP TMS S.A. Confirms Solid Performance for the First Nine Months
of 2004 - Both Divisions Post Third Consecutive Profitable Quarter
- VAULX-EN-VELIN, France, Oct. 27 /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 strong financial results for the third quarter and nine
months ended September 30, 2004. Both EDAP TMS divisions reported a
third consecutive profitable quarter, improving group operating
results by over EUR 3 million, as of September 2004, versus same
period of 2003. Cash remained strong at over EUR 9 million. This
dramatic improvement was achieved due to a significant increase in
the Company's revenues and operating margins, together with a
further decline in the expenses. The Company's revenues for the
third quarter of 2004 were EUR 5.5 million compared with EUR 4.7
million in the same quarter of 2003, a 17% increase from the prior
year same period. Total revenues for the nine months ended
September 30, 2004 were EUR 16.5 million compared with EUR 13.9
million in the same period of 2003, a 19% increase over year 2003
same period and a 21% increase at constant exchange rate. The
Company's gross margins, as a percent of sales, improved from 30%
for the third quarter of 2003 up to 41% for the third quarter of
2004 and from 33% for the nine months ending September 30, 2003 up
to 38% for the same period of 2004, despite the continuing
strengthening of the Euro against the U.S. Dollar and the Japanese
Yen. However, should the Euro pursue its progression, our 2004
annual operating income could be highly impacted. The Company's
operating expenses in the third quarter of 2004 were EUR 2.5
million versus EUR 2.6 million for the third quarter of 2003 and
were EUR 7.2 million for the nine months ended September 30, 2004
compared with EUR 8.6 million in the same period of 2003. During
the first nine months of 2004, the Company recorded a 16% 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 9.1 million in cash on hand which confirms that
cash remains the top priority for the management. Cash at end of
each quarter of 2004 was EUR 9.3 million for Q1, EUR 9.3 million
for Q2 and EUR 9.1 million for Q3. EDAP: HIGH GROWTH PERFORMANCE
FOR THE HIFU DIVISION EDAP, the HIFU Division, recorded a 108%
increase in its total revenue, for the first nine months of 2004,
and over EUR 3 million improvement in its operating income,
compared with the prior year same period. EDAP - HIFU Division :
Euros 000's First 9 Months Revenue Gross Margin % Operating Income
(Loss) Year 2004 5,064 44% 164 Year 2003 2,450 32% (3,125)
Performance was driven by a strong growth in sales of Ablatherm
units, mobile business and consumables. EDAP recorded a dramatic
158% increase in the sales of its Ablatherm units and a 123%
progression in its Ablatherm treatments sold on a mobile or leasing
basis. The performance of EDAP was strong in key European markets,
confirming its strategy to build up credibility for HIFU technology
in Europe while securing long term growth by strengthening its
distribution network in North America. With more than 55 centers
using Ablatherm for the treatment of localized prostate cancer, and
more than 6,000 patients treated in Europe, EDAP confirms its
strong leadership in HIFU. TMS: CONFIRMED RETURN TO BREAK-EVEN IN A
COMPETITIVE MARKET FOR THE UDS DIVISION The UDS division recorded a
2% increase in revenue for the first nine months of 2004.
Performance was driven specifically by a remarkable 13% increase in
the sales of lithotriptors on a mature market which validates its
strategy to gain market shares. This confirmed again the
attractiveness of its technology and the strength of its
distribution channels. For 2005, the division anticipates, an
increase in its service revenues directly related to this year's
sales of lithotriptors. The UDS division enters the fourth quarter
with a strong backlog of five machines. TMS - UDS Division : Euros
000's Year 2004 Revenue Gross Margin % Operating Income (Loss) Q1
4,556 27% 87 Q2 4,058 30% 12 Q3 4,600 34% 61 The UDS division
confirmed its return to break-even by recording a positive
operating income for each of the three quarters of 2004, versus a
loss of Euros 0,7 million for the total year of 2003. OUTLOOK FOR
QUARTER FOUR 2004 Hugues de Bantel, Chief Executive Officer of EDAP
TMS commented: "Our performance during the first nine months of
2004 once again demonstrated the confirmed interest for our
technologies and the effectiveness of our strategy with a tight
control of our expenses and the systematic plan of COGS reduction
put in place earlier this year. Thanks to a successful combination
of these factors, we have been able to record both an increase in
our revenue and a confirmed improvement in our operating margins.
Sales figures during the third quarter and the first nine months of
2004 confirmed the Group's previous growth trend. EDAP continues
its strong progress in Europe and starts benefiting from the
recognition of HIFU with Ablatherm as an alternative for the
treatment of localized prostate cancer. TMS confirmed its return to
profitability, despite unfavorable exchange rates and will pursue
its aggressive approach of gaining market shares. All the above
positive factors allow the Group to confirm its objective of a
double digit growth for 2004. Our strong cash position places us in
an ideal position to implement our growth development strategy."
INVESTOR COMMUNICATIONS Conference Call and Webcast We look forward
to reporting this progress during our conference call tomorrow
Thursday, October 28, 2004 at 12.00 noon Eastern Daylight Time. To
participate in the live call, 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) 220-1549 beginning two hours after the end of the call until
Friday, November 5, 2004. Road Shows in Early 2005 In quarter one
of 2005, the Senior Management of EDAP TMS SA plans to meet with
its investors in the USA and Europe, through a program of road
shows to share the EDAP TMS story, in view of improving the
Company's valuation and stock trading liquidity. 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. 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: September September September
September 30, 30, 30, 30, 2004 2003 2004 2003 Euros Euros $US $US
Net sales of medical equipment 3,211 2,129 3,920 2,404 Net sales of
spare parts, supplies and Services 2,320 2,349 2,833 2,652 NET
SALES 5,531 4,478 6,753 5,056 Other revenues (13) 241 (15) 271
TOTAL REVENUES 5,518 4,719 6,738 5,327 Cost of sales (3,256)
(3,308) (3,976) (3,734) GROSS PROFIT 2,262 1,411 2,762 1,593
Research & development expenses (360) (792) (439) (894) S, G
& A expenses (2,094) (1,846) (2,557) (2,084) Total operating
expenses (2,454) (2,638) (2,996) (2,978) OPERATING PROFIT (LOSS)
(192) (1,227) (234) (1,385) Interest (expense) income, net 60 35 73
40 Currency exchange gains (loss), net (120) 60 (147) 67 Other
income (loss), net - (3) - (3) INCOME (LOSS) BEFORE TAXES AND
MINORITY INTEREST (252) (1,135) (308) (1,281) Income tax (expense)
credit (7) 14 (9) 16 NET INCOME (LOSS) (259) (1,121) (317) (1,265)
Earning per share - Basic (0.03) (0.14) (0.04) (0.16) Average
number of shares used in computation of EPS 7,781,731 7,781,731
7,781,731 7,781,731 Earning per share - Diluted (0.03) (0.14)
(0.04) (0.16) Average number of shares used in computation of EPS
8,038,156 7,821,195 8,038,156 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 = 1.2211 USD, and 2003 average
three months noon buying rate of 1 Euro = 1,1289 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) Nine Months Ended: Nine Months Ended: September September
September September 30, 30, 30, 30, 2004 2003 2004 2003 Euros Euros
$US $US Net sales of medical equipment 8,839 6,516 10,822 7,294 Net
sales of spare parts, supplies and 7,453 7,004 9,124 7,839 Services
NET SALES 16,292 13,520 19,946 15,133 Other revenues 219 338 269
378 TOTAL REVENUES 16,511 13,858 20,215 15,511 Cost of sales
(10,158) (9,245) (12,437) (10,348) GROSS PROFIT 6,353 4,613 7,778
5,163 Research & development expenses (1,137) (2,344) (1,392)
(2,623) S, G & A expenses (5,836) (6,207) (7,146) (6,947) Non
recurring operating expenses (208) - (254) - Total operating
expenses (7,181) (8,551) (8,792) (9,570) OPERATING PROFIT (LOSS)
(828) (3,938) (1,014) (4,407) Interest (expense) income, net 29 42
36 47 Currency exchange gains (loss), net 72 (656) 87 (734) Other
income (loss), net 4 (164) 5 (184) INCOME (LOSS) BEFORE (723)
(4,716) (886) (5,278) TAXES AND MINORITY INTEREST Income tax
(expense) credit (55) 78 (67) 87 NET INCOME (LOSS) (778) (4,638)
(953) (5,191) Earning per share - Basic (0.10) (0.60) (0.12) (0.67)
Average number of shares used in computation of EPS 7,781,731
7,781,731 7,781,731 7,781,731 Earning per share - Diluted (0.10)
(0.59) (0.12) (0.66) Average number of shares used in computation
of EPS 8,047,393 7,821,195 8,047,393 7,821,195 NOTE: Translated for
convenience of the reader to U.S. dollars at the 2004 average nine
months noon buying rate of 1 Euro = 1.2243 USD, and 2003 average
nine months noon buying rate of 1 Euro = 1.1193 USD. EDAP TMS S.A.
CONSOLIDATED BALANCE SHEETS HIGHLIGHTS (UNAUDITED) (Amounts in
thousands of Euro's and U.S. Dollars) Sept. 30, June 30, Sept. 30,
June 30, 2004 2004 2004 2004 Euros Euros $US $US Cash, cash
equivalents and 9,075 9,282 11,269 11,305 short term investments
Total current assets 23,128 24,703 28,718 30,085 Total current
liabilities 8,829 9,884 10,963 12,038 Shareholders' Equity 18,168
18,476 22,560 22,502 NOTE: Translated for convenience of the reader
to U.S. dollars at the noon buying rate of 1 Euro = 1.2417 USD, on
September 30, 2004 and at the noon buying rate of 1 Euro = 1.2179
USD, on June 30, 2004. EDAP TMS S.A. CONDENSED STATEMENTS OF
OPERATIONS BY DIVISION NINE MONTHS ENDED SEPTEMBER 30, 2004
(Amounts in thousands of Euro's ) EDAP S.A. TMS S.A. EDAP TMS
Consolida- Total After HIFU Division UDS Division HQ tion
Consolidation Impact Net sales of medical devices 2,990 7,113 -
(1,264) 8,839 Net sales of spare parts, supplies & services
2,029 5,927 - (503) 7,453 Other revenues 45 174 - - 219 TOTAL
REVENUES 5,064 13,214 - (1,767) (16,511) GROSS PROFIT 2,255 45%
4,098 31% - - 6,353 39% Research & Development (590) (547) - -
(1,137) Total SG&A plus depreciation (1,501) (3,387) (948) -
(5,836) Non recurring (208) - (208) op. expenses OPERATING PROFIT
(LOSS) 164 164 (1,156) - (828) CONTACT: Hugues de Bantel - Philippe
Chauveau Blandine Confort +33 4 78 26 40 46 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.edap-tms.com/
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