EDAP Reports Third Quarter 2020 Results and Provides Operational Update

Planet edap Inc.
Nov 18,2020

EDAP Reports Third Quarter 2020 Results and Provides Operational Update

 

  • Generated strongest total revenue quarter of 2020
  • Reported growth in HIFU procedure revenues year-over-year notwithstanding ongoing COVID-19 pandemic
  • Completed sales to renowned healthcare institutions Mount Sinai Health System in New York and Keck Medical Center at the University of Southern California
  • Announced first patients treated in Phase 2 clinical trial assessing Focal One® as a potential treatment for deep rectal endometriosis
  • Increased strong cash position to EUR 19.9 million (USD 23.4 million) as of September 30, 2020
  • Company to host a conference call tomorrow, November 19th, at 8:30 am ET

LYON, France, November 18, 2020 -- EDAP TMS SA (Nasdaq: EDAP) (the “Company”), the global leader in robotic energy based therapies, announced today financial results for the third quarter of 2020 and provided an update on strategic and operational developments. 

Marc Oczachowski, EDAP's Chairman and Chief Executive Officer, said: “The third quarter of 2020 was our strongest of the year thus far, a clear signal that we are successfully navigating through the challenges posed by the ongoing COVID-19 pandemic. We closed several notable transactions during the quarter, including a bundled Focal One-ExactVu sale to Mount Sinai Health System in New York, and a Focal One sale to Keck Medical Center of University of Southern California, an early adopter of our first generation HIFU technology, Ablatherm®. At the same time, we continued to grow our sales pipeline, both in the U.S. and internationally.

“Also, during the quarter, we received regulatory approval to initiate a Phase 2 study assessing Focal One® as a potential treatment for deep rectal endometriosis and we initiated patient treatments quickly thereafter. Endometriosis represents an important expansion of our development pipeline as we work to maximize the clinical utility of HIFU across new indications beyond prostate.   

“We ended the quarter with a strong cash position of $23.4 million, sufficient to continue to execute on our Focal One-ExactVu commercial plan while advancing HIFU in endometriosis and other soft tissue indications where we believe this non-invasive technology can be beneficial.

“With COVID cases again rising in many parts of the world, including most of the US, we are carefully monitoring the effect on our operations during the fourth quarter. While we are seeing some impact on procedure volumes as hospitals continue to focus on the pandemic, we are nonetheless optimistic that we will be able to announce additional sales by the end of the year,” Mr. Oczachowski concluded.  

Third Quarter 2020 Results

Total revenue for the third quarter 2020 was EUR 9.4 million (USD 11.2 million), a decrease of 8.5% compared to total revenue of EUR 10.3 million (USD 11.3 million) for the same period in 2019. Third quarter 2020 revenue reflects the impact of the ongoing COVID-19 pandemic on equipment sales.

Total revenue in the HIFU business for the third quarter 2020 was EUR 2.6 million (USD 3.0 million), a 7.9% decrease compared to EUR 2.8 million (USD 3.1 million) for the third quarter of 2019.

Total revenue in the LITHO business for the third quarter 2020 was EUR 2.4 million (USD 2.9 million), a 27.6% decrease compared to EUR 3.3 million (USD 3.7 million) for the third quarter of 2019

Total revenue in the Distribution business for the third quarter 2020 was EUR 4.4 million (USD 5.2 million), a 6.4% increase compared to EUR 4.2 million (USD 4.6 million) for the third quarter of 2019.

Gross profit for the third quarter 2020 was EUR 4.0 million (USD 4.7 million), compared to EUR 4.7 million (USD 5.1 million) for the year-ago period. Gross profit margin on net sales was 42.0% in the third quarter of 2020, compared to 45.3% in the year-ago period. The decline in gross profit year-over-year was due to in part to lower sales in HIFU business as compared to the year-ago period driven primary by COVID-19.

Operating expenses were EUR 4.3 million (USD 5.0 million) for the third quarter of 2020, compared to EUR 4.4 million (USD 4.9 million) for the same period in 2019.

Operating loss for the third quarter of 2020 was EUR 0.3 million (USD 0.3 million), compared to an operating profit of EUR 0.3 million (USD 0.3 million) in the third quarter of 2019.

Net loss for the third of 2020 was EUR 1.0 million (USD 1.2 million), or EUR (0.03) per diluted share, as compared to net income of EUR 0.8 million (USD 0.9 million), or EUR 0.03 per diluted share in the year-ago period.

For the first nine months 2020 Results

Total revenue for the first nine months of 2020 was EUR 26.3 million (USD 29.8 million), a decrease of 20.1% compared to total revenue of EUR 32.9 million (USD 36.9 million) for the same period in 2019. As mentioned, year-to-date revenue reflects the impact of the ongoing COVID-19 pandemic on the company’s activities.

Total revenue in the HIFU business for the first nine months of 2020 was EUR 7.1 million (USD 8.0 million), a 37.2% decrease compared to EUR 11.2 million (USD 12.6 million) for the first nine months of 2019.

Total revenue in the LITHO business for the first nine months of 2020 was EUR 8.3 million (USD 9.4 million), a 17.8% decrease compared to EUR 10.1 million (USD 11.3 million) for the first nine months of 2019.

Total revenue in the Distribution business for the first nine months of 2020 was EUR 11.0 million (USD 12.4 million), a 5.6% decrease compared to EUR 11.6 million (USD 13.0 million) for the first nine month of 2019.

Gross profit for the first nine months of 2020 was EUR 11.4 million (USD 12.8 million), compared to EUR 15.9 million (USD 17.8 million) for the year-ago period. Gross profit margin on net sales was 43.2% for the first nine months of 2020, compared to 48.2% in the year-ago period. The decline in gross profit year-over-year was due in part to lower sales in the HIFU business driven by COVID-19.

Operating expenses were EUR 12.8 million (USD 14.5 million) for the first nine months of 2020, compared to EUR 13.7 million (USD 15.4 million) for the same period in 2019.

Operating loss for the first nine months of 2020 was EUR 1.5 million (USD 1.6 million), compared to an operating profit of EUR 2.1 million (USD 2.4 million) for the same period of 2019.

Net loss for the first nine months of 2020 was EUR 2.5 million (USD 2.8 million), or EUR (0.09) per diluted share, as compared to a net income of EUR 2.5 million (USD 2.8 million), or EUR 0.09 per diluted share in the year-ago period.

As of September 30, 2020, the Company recorded a strong cash position of EUR 19.9 million (USD 23.4 million).

  

Conference Call

An accompanying conference call and webcast will be conducted by management to review the results. The call will be held at 8:30am EDT tomorrow, November 19, 2020. Please refer to the information below for conference call dial-in information and webcast registration.

Conference Call & Webcast
Thursday, November 19, 2020 @ 8:30am Eastern Time

Domestic:                             877-451-6152
International:                      201-389-0879
Passcode:                             13712293
Webcast:                              http://public.viavid.com/index.php?id=142115

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

A recognized leader in the global therapeutic ultrasound market, EDAP TMS develops, manufactures, promotes and distributes worldwide minimally invasive medical devices for various pathologies using ultrasound technology. By combining the latest technologies in imaging and treatment modalities in its complete range of Robotic HIFU devices, EDAP TMS introduced the Focal One® in Europe and in the U.S. as an answer to all requirements for ideal prostate tissue ablation. With the addition of the ExactVu™ Micro-Ultrasound device, EDAP TMS is now the only company offering a complete solution from diagnostics to focal treatment of Prostate Cancer.  EDAP TMS also produces and distributes other medical equipment including the Sonolith® i-move lithotripter and lasers for the treatment of urinary tract stones using extra-corporeal shockwave lithotripsy (ESWL). For more information on the Company, please visit http://www.edap-tms.com, and us.hifu-prostate.com. Forward-Looking Statements

In addition to historical information, this press release contains 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 and distribution divisions, as well as the length and severity of the COVID-19 pandemic, including its impacts across our businesses on demand for our devices and services. Factors that may cause such a difference may also 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.

Company Contact
Blandine Confort
Investor Relations / Legal Affairs
EDAP TMS SA
+33 4 72 15 31 50
bconfort@edap-tms.com

Investor Contact
Jeremy Feffer
LifeSci Advisors, LLC
212-915-2568
jeremy@lifesciadvisors.com

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

   Three  Months Ended:     Three Months Ended: 
     Sept. 30,
2020
Euros 
 

 
 Sept. 30,
2019
Euros 
   Sept. 30,
2020
$US 
   Sept. 30,
2019
$US 
 
Sales of medical equipment 5,984   6,877   7,080   7,571  
 Net Sales of RPP and Leases 1,207   1,228   1,428   1,352  
Sales of spare parts, supplies and Services 2,255   2,187   2,668   2,407  
 TOTAL NET SALES   9,446     10,292     11,176     11,330   
Other revenues (13)   15   (16)   17  
 TOTAL REVENUES   9,433     10,307     11,160     11,347   
Cost of sales (5,469)   (5,641)   (6,470)   (6,209)  
 GROSS PROFIT   3,964     4,667     4,690     5,137   
Research & development expenses (1,090)   (886)   (1,289)   (975)  
S, G & A expenses (3,167)   (3,522)   (3,748)   (3,877)  
Total operating expenses (4,257)   (4,408)   (5,037)   (4,852)  
 OPERATING PROFIT (LOSS)   (293)     259     (347)     285   
Interest (expense) income, net (12)   (40)   (14)   (44)  
Currency exchange gains (loss), net (574)   684   (679)   753  
 INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST   (879)     903     (1,040)     994   
Income tax (expense) credit (122)   (120)   (145)   (132)  
 NET INCOME (LOSS)

 
 (1,001)     783     (1,185)     862   
Earning per share – Basic (0.03)   0.03   (0.04)   0.03  
Average number of shares used in computation of EPS 29,144,010   28,997,886   29,144,010   28,997,886  
Earning per share – Diluted (0.03)   0.03   (0.04)   0.03  
Average number of shares used in computation of EPS for positive net income

 
29,144,010   29,622,866   29,144,010   29,622,866  

NOTE:  Translated for convenience of the reader to U.S. dollars at the 2020 average three months’ noon buying rate of 1 Euro = 1.1832 USD, and 2019 average three months noon buying rate of 1 Euro = 1.1008 USD

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

   Nine Months Ended:     Nine Months Ended: 
     Sept. 30,
2020
Euros 
 

 
 Sept. 30,
2019
Euros 
   Sept. 30,
2020
$US 
   Sept. 30,
2019
$US 
 
Sales of medical equipment 16,083   22,139   18,204   24,797  
 Net Sales of RPP and Leases 3,409   4,028   3,858   4,512  
Sales of spare parts, supplies and Services 6,795   6,742   7,691   7,551  
 TOTAL NET SALES   26,287     32,909     29,753     36,860   
Other revenues 11   15   12   17  
 TOTAL REVENUES   26,298     32,924     29,765     36,877   
Cost of sales (14,948)   (17,061)   (16,919)   (19,110)  
 GROSS PROFIT   11,350     15,863     12,846     17,768   
Research & development expenses (3,058)   (2,884)   (3,461)   (3,231)  
S, G & A expenses (9,743)   (10,857)   (11,027)   (12,161)  
Total operating expenses (12,800)   (13,742)   (14,488)   (15,392)  
 OPERATING PROFIT (LOSS)   (1,451)     2,121     (1,642)     2,376   
Interest (expense) income, net (51)   (103)   (58)   (115)  
Currency exchange gains (loss), net (631)   788   (714)   883  
 INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST   (2,133)     2,807     (2,415)     3,144   
Income tax (expense) credit (351)   (317)   (397)   (356)  
 NET INCOME (LOSS)

 
 (2,484)     2,490     (2,812)     2,789   
Earning per share – Basic (0.09)   0.09   (0.10)   0.10  
Average number of shares used in computation of EPS 29,142,788   28,997,866   29,142,788   28,997,866  
Earning per share – Diluted (0.09)   0.08   (0.10)   0.09  
Average number of shares used in computation of EPS for positive net income

 
29,142,788   29,623,683   29,142,788   29,623,683  

NOTE:  Translated for convenience of the reader to U.S. dollars at the 2020 average nine months’ noon buying rate of 1 Euro = 1.1319 USD, and 2019 average nine months noon buying rate of 1 Euro = 1.1201 USD 

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

     Sept. 30,
2020
Euros 
 

 
 June. 30,
2020
Euros 
   Sept. 30,
2020
$US 
   June 30,
2020
$US 
Cash, cash equivalents and short-term treasury investments 19,929   15,704   23,364   17,647  
Account receivables, net 11,572   12,607   13,567   14,167  
Inventory 9,455   9,365   11,084   10,523  
Other current assets 604   631   708   709  
 TOTAL CURRENT ASSETS   41,560     38,307     48,722     43,046   
Property, plant and equipment, net 5,928   6,072   6,950   6,823  
 Goodwill  2,412   2,412   2,827   2,710  
Other non-current assets 1,739   1,794   2,039   2,016  
 TOTAL ASSETS   51,639     48,585     60,538     54,596   
Accounts payable & other accrued liabilities 9,122   9,618   10,694   10,808  
Deferred revenues, current portion 2,695   2,519   3,160   2,831  
Short term borrowing 1,459   887   1,711   997  
Other current liabilities 5,825   1,820   6,829   2,045  
 TOTAL CURRENT LIABILITIES   19,102     14,845     22,394     16,681   
Obligations under operating and finance leases non-current 1,724   1,906   2,021   2,141  
Long term debt, non-current 1,219   1,193   1,429   1,341  
Deferred revenues, non-current 821   1,100   963   1,236  
Other long term liabilities 3,626   3,673   4,251   4,128  
 TOTAL LIABILITIES   26,493     22,717     31,059     25,528   
 TOTAL SHAREHOLDERS’EQUITY    25,146     25,867     29,480     29,068   
 TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY   51,639      48,585     60,538     54,596   

NOTE: Translated for convenience of the reader to U.S. dollars at the noon buying rate of 1 Euro = 1.1723 USD, on September 30, 2020 and at the noon buying rate of 1 Euro = 1.1237 USD, on June 30, 2020.

EDAP TMS S.A.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands of Euros)

   Sept. 30, 2020 
Euros 
    June 30, 2020
      Euros 
   Sept. 30, 2020 
$US 
   June 30      2020
$US 
 NET INCOME (LOSS)   (2,484)     (1,483)     (2,812)     (1,640) 
Adjustments to reconcile net income (loss) to net cash generated by (used in) operating activities 2,211       1,457       2,503       1,612
 OPERATING CASH FLOW   (273)     (25)     (309)     (28) 
Increase/Decrease in operating assets and liabilities (1,735)   (1,774)   (1,964)   (1,963)
 NET CASH GENERATED BY (USED IN) OPERATING ACTIVITIES   (2,008)     (1,799)     (2,273)     (1,991) 
Short term investments(1)  (1,708)   (1,786)   (1,933)   (1,976)
Additions to capitalized assets produced by the company and other capital expenditures (1,508)   (844)   (1,707)   (933)
 NET CASH GENERATED BY (USED IN) INVESTING ACTIVITIES   (3,216)     (2,630)     (3,640)     (2,909) 
 NET CASH GENERATED BY (USED IN) FINANCING ACTIVITIES   2,248     (2,444)     2,544     (2,704) 
 NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS   312     (44)     1,281     (204) 
 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   (2,665)     (6,968)     (2,088)     (7,808) 

(1) Short term investments are comprised of money market funds

NOTE:  Translated for convenience of the reader to U.S. dollars at the 2020 average nine months’ noon buying rate of 1 Euro = 1.1319 USD, and 2019 average nine months noon buying rate of 1 Euro = 1.1201 USD 


 

  

EDAP TMS S.A.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS BY DIVISION
NINE MONTHS ENDED SEPTEMBER 30, 2020
(Amounts in thousands of Euros)

     

HIFU
Division 
   

ESWL
Division 
   

Distribution
Division 
   

Reconciling
Items 
   

Total After Consolidation 
 
 

Sales of goods
 

3,095
   

3,408
   

9,580
       

16,083
 
Sales of RPPs & Leases 2,594   659   156       3,409  
Sales of spare parts & services 1,351   4,217   1,226       6,795  
 TOTAL NET SALES

 
 7,041     8,284     10,962         26,287   
Other revenues

 
11   0   0       11  
 TOTAL REVENUES   7,052     8,284     10,962         26,298   
 GROSS PROFIT
(% of Total Revenues) 
 3,877   55.0 %   3,490   42.1%   3,982   36.3%       11,350   43.2% 
 

Research & Development
 

(1,763)
  (1,006)   (289)       (3,058)  
Total SG&A plus depreciation (2,870)   (2,154)   (3,599)   (1,119)   (9,743)  
 

OPERATING PROFIT (LOSS) 
 

(756) 
   

331 
   

94 
   

(1,119) 
   

(1,451) 
 

 

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Source: EDAP TMS S.A.