EDAP TMS S.A.
Aug 23, 2017

EDAP TMS Reports Record Second Quarter and First Half 2017 Results

EDAP-TMS Reports Record Second Quarter and First Half 2017 Results

LYON, France, August 23, 2017 -- EDAP TMS SA (Nasdaq: EDAP), the global leader in therapeutic ultrasound, announced today financial results for the second quarter ended June 30, 2017, and provided an update on strategic and operational accomplishments.

"We are incredibly pleased to announce record second quarter revenue of €9.3 million", said Marc Oczachowski, EDAP's Chief Executive Officer. "Additionally, the 25% growth in HIFU revenues compared to the first quarter of 2017 shows a significant return from our increased sales and marketing efforts. We also submitted our 510(k) filing to the FDA for our novel Ablatherm Fusion device recently, and are working to file a new 510(k) application with the FDA for the Focal One device in the U.S. The addition of these HIFU devices to our U.S. marketing efforts, coupled with the active C-Code, should serve to help our customers service the widest possible range of patients."

Second Quarter 2017 Results

Total revenue for the second quarter 2017 was EUR 9.3 million (USD 10.4 million), compared to EUR 8.2 million (USD 9.2 million) for the second quarter of 2016, a 13.7% increase and the highest second quarter revenue in EDAP's history.

For the three months ended June 30, 2017, total revenue for the Lithotripsy division was EUR 6.4 million (USD 7.2 million), a 33.9% increase compared to EUR 4.8 million (USD 5.4 million) during the year-ago period. During the second quarter of 2017, EDAP sold 7 lithotripsy devices compared to 6 lithotripsy devices sold during the second quarter of 2016.

Total revenue in the HIFU business for the second quarter was EUR 2.9 million (USD 3.2 million) compared to EUR 3.4 million (USD 3.8 million) for the second quarter of 2016. During the second quarter of 2017, EDAP sold 1 Focal One and 2 Ablatherm HIFU devices compared to 1 Focal One and 3 Ablatherm devices during the second quarter of 2016.

Gross profit for the second quarter 2017 was EUR 4.0 million (USD 4.5 million), compared to EUR 3.5 million (USD 3.9 million) for the year-ago period. Gross profit margin on net sales expanded to 43.2% in the second quarter of 2017, compared to 42.2% in the prior year period, primarily due to increase in revenues.  

Operating expenses for the second quarter of 2017 totaled EUR 4.4 million (USD 5.0 million) for the second quarter of 2017, compared to EUR 3.8 million (USD 4.3 million) for the same period in 2016. The increase reflects increased sales and marketing efforts associated with the expansion of the HIFU and UDS businesses.

Operating loss for the second quarter of 2017 was EUR 0.4 million (USD 0.5 million), compared to an operating loss of EUR 0.3 million (USD 0.4 million) in the second quarter of 2016.

Net loss for the second quarter of 2017 was EUR 1.7 million (USD 2.0 million), or loss of EUR 0.06 per diluted share, as compared to net income of EUR 2.5 million (USD 2.8 million), or earnings of EUR 0.09 per diluted share in the year-ago period. Net loss during the second quarter of 2017 included a non-cash interest expense of EUR 0.6 million (USD $0.6 million) to adjust the accounting fair value of the outstanding warrants.

First Six Months 2017 Results

Total revenue for the first half of 2017 was EUR 18.0 million (USD 19.7 million) - a new record level for the period, up 6.3% compared to EUR 16.9 million (USD 18.8 million) for the first half of 2016.
For the six months ended June 30, 2017, total revenue for the Lithotripsy division was EUR 12.8 million (USD 14.0 million), an increase of 24.6% when compared to EUR 10.2 million (USD 11.4 million), during the year ago period. This increase was driven by growth in both the distribution business and lithotripsy device sales.

Total revenue in the HIFU division for the first six months 2017 was EUR 5.2 million (USD 5.7 million) compared to EUR 6.7 million (USD 7.4 million) for the six months ended June 30, 2016. This decrease was primarily due to slow U.S. sales of HIFU devices during the first half of the year, tempered by an increase in HIFU treatment driven revenues.

Gross profit for the first half of 2017 was EUR 7.6 million (USD 8.3 million) and gross profit margin was 42.1%, compared to 45.8% in the year ago period. The contraction in gross profit margin was primarily due to an unfavorable mix of HIFU and UDS segment revenues.

The Company recorded an operating loss for the first half of 2017 of EUR 0.8 million (USD 0.9 million), compared with an operating profit of EUR 0.4 million (USD 0.4 million) in the first six months of 2016.

Net loss for the first half of 2017 was EUR 0.1 million (USD 0.1 million), or EUR 0.00 per diluted share, as compared to a net income of EUR 3.9 million (USD 4.3 million), or EUR 0.14 per diluted share, in the first half of 2016. Net income for the first six months of 2017 included non-cash interest income of EUR 1.4 million (USD 1.5 million) to adjust the accounting fair value of the outstanding warrants

At June 30, 2017, cash and cash equivalents, including short-term treasury investments, were EUR 18.6 million (USD 21.2 million).

Conference Call

An accompanying conference call will be conducted by Philippe Chauveau, Chairman of the Board, Marc Oczachowski, Chief Executive Officer; and Francois Dietsch, Chief Financial Officer, to go over the results. The call will be held at 9:00 AM ET, on Thursday, August 24, 2017. Please refer to the information below for conference call dial-in information and webcast registration.

Conference Date: Thursday, August 24, 2017, 9:00 AM ET
Conference dial-in: 877-269-7756
International dial-in: 201-689-7817
Conference Call Name: EDAP-TMS Second Quarter 2017 Results Conference Call
Webcast Registration: Click Here

Following the live call, a replay will be available on the Company's website, www.edap-tms.com under "Investors Information."

About EDAP TMS SA

EDAP TMS SA markets today Ablatherm® for high-intensity focused ultrasound (HIFU) for prostate tissue ablation in the U.S. and for treatment of localized prostate cancer in the rest of the world. HIFU treatment is shown to be a minimally invasive and effective option for prostatic tissue ablation with a low occurrence of side effects. Ablatherm-HIFU is generally recommended for patients with localized prostate cancer (stages T1-T2) who are not candidates for surgery or who prefer an alternative option, or for patients who failed radiotherapy treatment. Ablatherm-HIFU is approved for commercial distribution in Europe and some other countries including Mexico and Canada, and has received 510(k) clearance by the U.S. FDA. Ablatherm Fusion is not FDA cleared yet. The Company also markets an innovative robot-assisted HIFU device, the Focal One®, dedicated to focal therapy of prostate cancer. Focal One® is CE marked but is not FDA approved. The Company also develops its HIFU technology for the potential treatment of certain other types of tumors. EDAP TMS SA also produces and distributes medical equipment (the Sonolith® lithotripters' range) for the treatment of urinary tract stones using extra-corporeal shockwave lithotripsy (ESWL) in most countries including Canada and the U.S. For more information on the Company, please visit http://www.edap-tms.com, and http://www.hifu-planet.com.

Forward-Looking Statements

In addition to historical information, this press release may contain forward-looking statements. Such statements are based on management's current expectations and are subject to a number of risks and uncertainties, including matters not yet known to us or not currently considered material by us, and there can be no assurance that anticipated events will occur or that the objectives set out will actually be achieved. Important factors that could cause actual results to differ materially from the results anticipated in the forward-looking statements include, among others, the clinical status and market acceptance of our HIFU devices and the continued market potential for our lithotripsy device. Factors that may cause such a difference also may include, but are not limited to, those described in the Company's filings with the Securities and Exchange Commission and in particular, in the sections "Cautionary Statement on Forward-Looking Information" and "Risk Factors" in the Company's Annual Report on Form 20-F.

EDAP TMS S.A.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Amounts in thousands of Euros and U.S. Dollars, except per share data)

                                                                                    Three Months Ended:                                     Three Months Ended:

  June 30,
2017
Euros
  June 30,
2016
Euros
  June 30,
2017
$US
  June 30,
2016
$US
Net sales of goods

Net sales of RPP and Leases
5,966

1,304
  5,262

1,316
  6,670

1,458
  5,896

1,474
 
Net sales of spare parts and
Services
 

2,037
   

1,611
 
2,277
 
1,805
 
TOTAL NET SALES 9,307   8,189   10,405   9,174  
Other revenues 13   8   15   9  
TOTAL REVENUES 9,320   8,197   10,420   9,183  
Cost of sales (5,304)   (4,736)   (5,931)   (5,305)  
GROSS PROFIT 4,016   3,461   4,489   3,878  
Research & development expenses (969)   (887)   (1,083)   (993)  
S, G & A expenses (3,477)   (2,919)   (3,887)   (3,271)  
Total operating expenses (4,446)   (3,806)   (4,970)   (4,264)  
OPERATING PROFIT (LOSS) (430)   (345)   (481)   (386)  
Interest (expense) income, net (575)   2,412   (643)   2,702  
Currency exchange gains (loss), net (625)   483   (699)   541  
Other income (loss), net -   -   -   -  
INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST (1,630)   2,550   (1,823)   2,857  
Income tax (expense) credit (117)   (52)   (130)   (58)  
NET INCOME (LOSS) 

 

 

 
(1,747)   2,498   (1,953)   2,799  
Basic income (loss) per share (0.06)   0.09   (0.07)   0.109  
Basic weighted average shares outstanding 28,997,866   28,288,307   28,997,866   28,288,307  
Diluted income (loss) per share (0.06)   0.08   (0.07)   0.09  
Diluted weighted average shares outstanding 28,997,866   29,826,117   28,997,866   29,826,117  

NOTE:  Translated for convenience of the reader to U.S. dollars at the 2017 average three months' noon buying rate of 1 Euro = 1.1181USD, and 2016 average three months' noon buying rate of 1 Euro = 1.1203 USD.

EDAP TMS S.A.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Amounts in thousands of Euros and U.S. Dollars, except per share data)

                                                                                    Six Months Ended:                                            Six Months Ended:

  June 30,
2017
Euros
  June 30
2016
Euros
  June 30
2017
$US
  June 30,
2016
$US
Net sales of goods

Net sales of RPP and leases
11,478

2,599
  11,261

2,578
  12,559

2,844
  12,518

2,865
 
Net sales of spare parts and
Services
 

3,879
   

3,078
   

4,244
   

3,421
 
TOTAL NET SALES 17,956   16,917   19,647   18,805  
Other revenues 40   8   43   9  
TOTAL REVENUES 17,996   16,925   19,690   18,813  
Cost of sales (10,427)   (9,171)   (11,410)   (10,195)  
GROSS PROFIT 7,569   7,754   8,280   8,618  
Research & development expenses (1,865)   (1,701)   (2,040)   (1,890)  
S, G & A expenses (6,551)   (5,665)   (7,169)   (6,296)  
Total operating expenses (8,416)   (7,366)   (9,209)   (8,186)  
OPERATING PROFIT (LOSS) (847)   388   (929)   432  
Interest (expense) income, net 1,408   2,891   1,541   3,213  
Currency exchange gains (loss), net (450)   671   (492)   746  
Other income (loss), net -   -   -   -  
INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST 111   3,950   120   4,391  
Income tax (expense) credit (175)   (91)   (191)   (101)  
NET INCOME (LOSS) 

 

 

 
(64)   3,859   (71)   4,290  
Basic income (loss) per share (0.00)   0.14   (0.00)   0.16  
Basic weighted average shares outstanding 28,919,984   26,844,696   28,919,984   26,844,696  
Diluted income (loss) per share (0.00)   0.13   (0.00)   0.15  
Diluted weighted average shares outstanding 28,919,984   28,615,172   28,919,984   28,615,172  

NOTE:  Translated for convenience of the reader to U.S. dollars at the 2017 average six months' noon buying rate of 1 Euro = 1.0942USD, and 2016 average six months' noon buying rate of 1 Euro = 1. 1116 USD.

EDAP TMS S.A.
CONSOLIDATED BALANCE SHEETS HIGHLIGHTS
(Amounts in thousands of Euros and U.S. Dollars)

    June 30,
  2017
  Euros
    Mar.  31,
  2017
  Euros
    June 30,
  2017
  $US
  Mar.  31,
  2017
  $US
 

                                                               

Cash, cash equivalents and short  term investments 18,554     20,321 21,173 21,739      
Total current assets 39,583     40,542 45,171 43,370      
Total current liabilities 13,372     14,052 15,260 15,032      
Shareholders' Equity 25,383     26,904 28,966 28,780      

NOTE:  Translated for convenience of the reader to U.S. dollars at the noon buying rate of 1 Euro = 1.1412 USD, on June 30, 2017 and at the noon buying rate of 1 Euro = 1.0697 USD, on March 31, 2017.

EDAP TMS S.A.
CONDENSED STATEMENTS OF OPERATIONS BY DIVISION
SIX MONTHS ENDED JUNE 30, 2017
(Amounts in thousands of Euros)

     

HIFU Division
   

UDS Division
     

Corporate
  Total After Consolidation  
 

Sales of goods
 

2,626
   

8,852
         

11,478
 
Sales of RPPs & leases 1,898   700         2,599  
Sales of spare parts & services 696   3,183         3,879  
TOTAL NET SALES

 
5,220   12,735         17,956  
Other revenues

 
8   32         40  
TOTAL REVENUES 5,228   12,767         17,996  
GROSS PROFIT
(% of Total Revenues)
2,794

 
53% 4,774 37%       7,569 42%
                   
 

Research & Development
 

(1,211)
  (653)         (1,865)  
Total SG&A plus depreciation  (2,467)   (3,315)       (768)   (6,551)  
 

OPERATING PROFIT (LOSS)
 

(884)

 
   

804
     

(768)
   

(847)
 

Contact
Blandine Confort
Investor Relations / Legal Affairs
EDAP TMS SA
+33 4 72 15 31 72
bconfort@edap-tms.com

Investors
Rich Cockrell
CG CAPITAL
877.889.1972
investorrelations@cg.capital

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Source: EDAP TMS SA

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