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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6 K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
EDAP TMS S.A. Files
EDAP TMS S.A. Reports 2006 Results;
Ablatherm-HIFU Treatments Grow
March 14, 2007
EDAP TMS S.A.
Parc Activite La Poudrette Lamartine
4/6 Rue du Dauphine
69120 Vaulx-en-Velin - France
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [ ]
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [X]
This report on Form 6-K with respect to the Company's 2006 annual results, is
hereby incorporated by reference in the registration statement of EDAP TMS S.A.
on Form F-3, file number 333-136811.
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EDAP TMS S.A. REPORTS 2006 RESULTS; ABLATHERM-HIFU TREATMENTS GROW
EUROPE'S RPP PROGRAM: ON TRACK TO GROUP PROFITABILITY
THE USA: EDAP'S NEW AND EXCITING OPPORTUNITY
LYON, France, March 14 /PRNewswire-FirstCall/ -- EDAP TMS S.A. (Nasdaq:
EDAP), the global leader in High Intensity Focused Ultrasound (HIFU) treatment
of prostate cancer and the international leader in the development, production,
and distribution of a wide portfolio of minimally invasive medical devices
primarily for the treatment of urological diseases today reported financial
results for the fourth quarter and year ended December 31, 2006 and discussed
its outlook for 2007 expected HIFU growth.
Key highlights include:
* EDAP achieved a 60% increase in RPP revenues even prior to the full
effect of the company's new marketing initiatives. Revenue lines reflect
the company's successful transition from a device development company to
a full marketing and growth urology treatment standard of care business.
* Ablatherm-HIFU is now available at more than 130 centers worldwide with
accelerating center launches and treatment growth.
* EDAP reclaimed full ownership of the US market with an approved trial
protocol and trained centers.
* EDAP's European installed base and strong cash position now afford the
company a clear path to profitability in Europe by the end of 2008,
including spending increases in marketing and clinical programs to drive
Ablatherm-HIFU to an initial target run rate of 5% market share versus
less than 2% today in Europe. This implies initial target run rate of
25% of total hospitals in Europe versus 10% today.
* Ongoing clinicals confirm Ablatherm's unassailable technical superiority
in outcomes, low side effects and consistency of results across centers
in many countries.
EXECUTIVE COMMENTS
Marc Oczachowski, EDAP TMS Chief Operating Officer and CEO-elect commented:
"We believe EDAP is in the best position of its corporate history. We own a
therapeutic prostate cancer technology where global demand will only grow as
more centers and patients learn of its benefits. We have a global sales network
of senior urology device professionals working for EDAP plus more than 50
distribution partners. We have the financial resources to educate these
important decision makers alongside an installed base of 130 plus trained HIFU
centers where patients can immediately receive treatment near their home. We
have clear clinical support showing repeatable outcomes in efficacy and quality
of life preservation, thus clearly now establishing HIFU as a standard of care
for prostate cancer. And we now have full access to the US market opportunity
through reclaimed ownership of the clinical program at a time when HIFU is far
more established and highly regarded as a high value future therapy. We are
confident and excited to accelerate treatments where we are already approved,
seek reimbursements to further patient access and secure US approval based on
future excellent clinical outcomes at top US centers.
"EDAP is now on the path to breakeven due to our strong European investment
in sales and marketing to expand the market opportunity for Ablatherm-HIFU as
the clear market leader. The investments undertaken during 2006 are now well
tested, marketing programs beginning to show clear results on which we will
build a larger treatment base in HIFU. We expect a natural adoption curve as new
centers begin HIFU therapy, but clearly see centers increase the treatment
potential once fully trained and experienced in Ablatherm techniques.
"Going forward, EDAP will report results by two clear market opportunities.
First, starting now, we will provide steady updates on centers, treatments and
RPP penetration throughout Europe where our marketing programs will drive
further adoption toward our ultimate goals of profitability and standard of care
status.
"Second, we will report on the continued execution of our US program seeking
FDA approval for a future market launch. We now own this market opportunity with
already a significant part of the clinical program concluded -- securing the
study protocol approval. During the transition we took the time and effort to
cement a solid professional relationship with FDA and our clinical parties to
ensure complete communication. We are now in the final stages of determining the
business arrangements to support the trial going forward, but are not lacking in
choices of suitable options to not only fully secure this program, but to do so
in a manner more beneficial to EDAP than the prior agreement with HeathTronics.
Our clinical centers are very enthusiastic, we are pleased with our opportunity
to secure approval and feel confident we can achieve success based on our many
years of European clinical experience demonstrating the consistency of Ablatherm
outcomes. We believe the US program is now well on its way to a successful
launch and a much greater market opportunity for EDAP."
FINANCIAL RESULTS
For the full year 2006, the company reported total revenues of EUR 20.2
million compared to EUR 20.7 million in 2005 including revenues directly related
to sales of HIFU Revenue-Per-Procedure (RPP) of EUR 2.8 million compared to EUR
1.7 million in 2005, a 60% increase. As expected, these revenues reflect the
successful shift of the business model from sales of devices to sales of
procedures. This fundamental business model change was initiated in early 2006
to accelerate market adoption through ease of access to Ablatherm-HIFU. Company
gross margins remained steady at 41 percent reflecting increased HIFU margin and
slightly lower UDS margin due to changes in revenue mix.
Total expenses for 2006 increased 16%, mainly in sales, marketing and
clinicals dedicated to building the Company's aggressive marketing strategy to
drive new site adoption. During the first six months of 2006 the company
strengthened its clinical team to achieve Ablatherm-HIFU's standard of care
status in Europe. In the second half EDAP launched its first-ever marketing
program to drive doctor and patient adoption based. Senior sales experts doubled
the existing sales force starting in late 2006 focused on business growth in key
European countries. The Company expects to see early results on its RPP program
beginning in Q1 2007 and accelerating throughout the year.
EDAP's balance sheet remains strong with EUR 10.9 million (including EUR 1
million of short term treasury investments), enough to fully fund upcoming
corporate operations and added marketing and sales expenses until profitability
is achieved in Europe.
The Company reported for the full year 2006 an Operating Loss of EUR 3.1
million, in line with expectations and backed by the July 2006 PIPE funding.
This is connected to the announced acceleration in clinical and marketing &
sales expenses, to achieve undisputed standard of care status for HIFU and
prepare for and aggressive promotion and marketing campaign for Ablatherm-HIFU
in key European markets in 2007 and 2008.
Eric Soyer, EDAP TMS Chief Financial Officer, commented: "The 2006 results
are in line with our expectations and previous announcements as we focused on
expanding our HIFU RPP business, now established as EDAP's growth model. We
clearly see this new business model offering HIFU treatments with no up-front
capital investment for hospitals is perfectly adapted to meet market needs. Our
2006 RPP revenues reflect this adoption with a 60% increase compared to 2005,
and we expect this trend to continue as we will see acceleration in 2007 from
our aggressive marketing plans. By implementing this new strategy and while
keeping a strong R&D focus, we successfully transitioned in 2006 from a
manufacturing device oriented company, focused on confirming its clinical
credibility and validating HIFU's technical superiority, to a marketing company
fully dedicated to dramatically accelerating treatment growth."
HIFU DIVISION: RPP ABLATHERM-HIFU TREATMENTS DRIVING GROWTH
During 2006 the company built EDAP's first-ever marketing programs aimed
at the broad medical and patient communities. EDAP's time and investment in
clinical expertise and site build out prior to 2006 enabled a successful launch
addressing major European markets. The company expects growing adoption by
doctors due to both the attractiveness of Ablatherm-HIFU therapy compared to
other treatment methodologies as well as market pressures from patient demand.
The added cost of reinforcing the European sales force as well as new
marketing programs, as anticipated, pushed the HIFU division to a loss for the
full year. However, seeing the full market opportunity in Europe and EDAP's
strong corporate resources, management believes these investments will
dramatically increase urologist and patient demand and grow the number of
treatments, especially in the RPP program. The company is already seeing clear
positive effects of growth in lowering costs of goods sold, mainly through the
growing percentage of RPP treatments. These benefits will further accelerate as
EDAP adds market scale. Gross margin reflects these shifts and continue to
climb, achieving 53 percent for 2006. Total expenses in the HIFU division rose
15 percent, primarily in marketing and clinical activities.
EDAP Ablatherm-HIFU:
Annual Annual
2004 Growth 2005 Growth 2006
-------------- -------------- -------------- -------------- --------------
Cumulative number
of treatments 6,700 +2,100 8,800 +2,800 11,600
Number of RPP
treatments 427 +194 621 +315 936
Number of HIFU
treatment sites 63 +33 96 +36 132
During the course of 2006, EDAP launched 36 sites, sites bringing EDAP's
global Ablatherm-HIFU center count to 132. Ablatherm institutions represent the
best centers in their respective communities bringing top urology experts to
support EDAP and Ablatherm-HIFU. Treatments as of December 31, 2006 totaled over
11,600 a 32% percent increase from 2005, and treatments for the whole year 2006
reached approximately 2,800, including 936 RPP treatments.
"EDAP reinforces its global leadership in HIFU for prostate cancer," said
Oczachowski. "Only EDAP offers clear repeatability of outcomes demonstrated in
dozens of peer reviewed articles, industry leading success in outcomes, clear
quality of life preservation and consensus medical adoption of HIFU therapy due
to rapid training and clear protocols established for different indications.
With our broad user base, European centers can visit a nearby Ablatherm-HIFU
center to experience the true excellence of this therapy from a peer user, then
receive training to begin offering Ablatherm at their own center with full
confidence in their ability to offer patients the best standard of care. Based
on this strong and recognized clinical and technical superiority, we are now
ready to roll-out our aggressive educational and marketing tools. We recently
launched the first HIFU-Tour in Germany, which has been a great success already
in bringing additional medical interest for starting treatments during 2007 at
new centers plus building a broader referral network to current centers.
Utilizing EDAP's strong presence in urology due to our lithotripsy leadership,
we are well positioned to reach a far broader audience under these new education
initiatives. EDAP also has more than 50 distributors worldwide now beginning to
utilize the marketing tools to educate their contacts about the opportunity of
Ablatherm."
UDS DIVISION: LAUNCHING GLOBAL PLATFORM FOR UROLOGY SALES
The UDS division continues to provide a strong market presence in Europe
and Asia as well as cover significant fixed costs in manufacturing and services
for both divisions. In late 2006 the company expanded its presence with
contracts to sell third-party products into EDAP's sales channel. The company
continues to add contracts for additional product lines. This program leverages
EDAP's fixed cost base with additional products offering incremental revenue and
profit to EDAP without significant up front cost or additional fixed expense.
UDS results for the 2006 year reflect a change in mix within the global
replacement cycle for lithotripters. A higher percentage of sales originated in
Europe where mid-range units dominate the market as opposed to Asia where
high-range units are preferred. Total sales remain strong with 38 units sold in
2006 as EDAP continues to add market share in replacement of aging lithotripters
while continuing strong services and disposable revenues provide steady
revenues.
As previously planned, UDS reported a loss of EUR 0.5 million in 2006 due to
investments in new device developments to be launched in late 2007, aimed at
sustaining the Company's market share in lithotripsy.
BOARD UPDATES
In line with its accelerated growth plans and clear global strategy, EDAP's
Board is also changing. Siemens has resigned from it representation on EDAP's
Board. Holger Schmidt, serving on EDAP's Board since 2001, has been replaced by
Pr. Jean-Philippe Deschamps, effective March 2007. Deschamps is Professor of
Technology and Innovation Management at IMD, in Lausanne, Switzerland. Prior to
joining IMD in November 1996, he was based in Brussels as a corporate
Vice-President with Arthur D. Little and Chairman of the firm's technology and
innovation management practice, which he created in 1981. Before that, he was
Arthur D. Little's first European practice leader for strategy and organization.
He brings thirty years of international management consulting experience
throughout Europe, North America, Asia and the Middle East to EDAP. He Graduated
from Ecole des Hautes Etudes Commerciales in Paris and received his MBA from
INSEAD and from the Harvard Business School. Pr. Deschamps has focused his
research activity on bringing revolutionary medical techniques to a standard of
care status.
"We welcome Jean-Philippe Deschamps to the Board of Directors and look
forward to his contributions as an expert in both technology and innovation
management, expertise we believe will be very useful in the upcoming years as
EDAP embarks on what is clearly becoming a significant growth opportunity for
HIFU in Europe," said Philippe Chauveau, Chairman of EDAP. "The Board of
Directors is becoming more active in supporting EDAP according to the successful
transition well underway in moving this company from its roots as a research and
manufacturing business to what is today one of the top marketing companies for
HIFU therapies in the world. We are addressing numerous growth opportunities in
Europe and hold high expectations for the United States. As such, our updated
Board will bring more resources to successfully deliver on these initiatives."
Participation in Congresses
Consistent with its increased communication effort to establish high
visibility for HIFU in the medical community, EDAP will be participating as a
Gold Sponsor in the next European Association of Urology (EAU) meeting to be
held in Berlin, Germany, March 21 - 24, 2007. The Company is pleased to welcome
all interested parties to EDAP's booth and meet with EDAP's representatives.
EDAP will present at the American Urology Association (AUA) conference to be
held in Anaheim, CA, May 19-24, 2007. EDAP is also rolling out HIFU tours in
Germany and other major European centers to accelerate adoption of
Ablatherm-HIFU in response to clear market demand from both patients and
physicians.
Conference Call and Webcast
The company will host a conference call to discuss the results and answer
questions from investors on Thursday, March 15, 2007, at noon Eastern Time, 5:00
p.m. Paris Time. Representing the Company on the call will be Philippe Chauveau,
Chairman of the Board, Marc Oczachowski, Chief Operating Officer and Eric Soyer,
Chief Financial Officer. Interested investors may join the call live by dialing
(866) 463-5401 from the United States or +1 (212) 457-9857 from international
locations and entering PIN code 983898#. Investors may also listen to the live
call online at http://www.edap-tms.com .
Investors unable to join the call can access a playback of the conference
call by telephone or online. To access the replay, please dial (866) 439-4554 or
+1 (212) 457-9844 and using access code 324765# beginning one hour after the end
of the call until March 22, 2007, or visit the company's Web site at
http://www.edap-tms.com .
About EDAP TMS S.A.
EDAP TMS S.A. develops and markets Ablatherm, the most advanced and
clinically proven choice for High Intensity Focused Ultrasound (HIFU) treatment
of localized prostate cancer. HIFU treatment is shown to be a minimally invasive
and effective treatment option 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. The
company is also developing this technology for the potential 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).
For more information on the Company, contact Magnolia Investor Relations
at (972) 801-4900, the Corporate Investor Relations Dept at
+33 (0)4 78 26 40 46 or see the Company's Web sites at http://www.edap-tms.com
and http://www.hifu-planet.com .
To sign up for alerts please visit:
http://www.b2i.us/irpass.asp?BzID=1053&to=ea&s=0
In addition to historical information, this press release contains
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 these 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. Ablatherm- HIFU
treatment is in clinical trials but not yet FDA approved or marketed in the
United States.
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:
------------------------------- -------------------------------
December 31, December 31, December 31, December 31,
2006 2005 2006 2005
Euros Euros $US $US
-------------- -------------- -------------- --------------
Sales of medical
equipment 1,957 3,245 2,559 3,853
Net Sales of RPP
and Leases 1,035 894 1,353 1,062
Sales of spare parts,
supplies and Services 1,918 2,263 2,508 2,688
TOTAL SALES 4,910 6,402 6,421 7,603
Warrants granted --- (235) --- (279)
TOTAL NET SALES 4,910 6,167 6,421 7,324
Other revenues (25) 40 (32) 47
TOTAL REVENUES 4,885 6,207 6,389 7,371
Cost of sales (3,100) (3,625) (4,054) (4,305)
GROSS PROFIT 1,786 2,582 2,335 3,067
Research & development
expenses (573) (434) (750) (517)
S,G&A expenses (2,087) (2,100) (2,729) (2,495)
Non-recurring operating
expenses (195) --- (255) ---
Total operating
expenses (2,855) (2,536) (3,734) (3,012)
OPERATING PROFIT (LOSS) (1,070) 46 (1,399) 54
Interest (expense)
income, net 66 100 86 118
Currency exchange gains
(loss), net (100) (11) (131) (12)
Other income (loss), net 3 (13) 4 (16)
INCOME (LOSS) BEFORE
TAXES AND MINORITY
INTEREST (1,101) 122 (1,439) 144
Income tax (expense)
credit (14) (76) (18) (90)
NET INCOME (LOSS) (1,114) 45 (1,458) 54
Earning per share --
Basic (0.13) 0.01 (0.17) 0.01
Average number of
shares used
incomputation of EPS 8,817 7,783 8,817 7,783
Earning per share --
Diluted (0.13) 0.01 (0.17) 0.01
Average number of shares
used incomputation of
EPS for positive net
income 9,536 8,417 9,536 8,417
NOTE: Translated for convenience of the reader to U.S. dollars at the 2006
average three months noon buying rate of 1 Euro = 1.3077 USD, and 2005
average three months noon buying rate of 1 Euro = 1.1876 USD.
EDAP TMS S.A.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Amounts in thousands of Euros and U.S. Dollars, except per share data)
Twelve Months Ended: Twelve Months Ended:
------------------------------- -------------------------------
December 31, December 31, December 31, December 31,
2006 2005 2006 2005
Euros Euros $US $US
-------------- -------------- -------------- --------------
Sales of medical
equipment 8,609 10,242 10,899 12,696
Net Sales of RPP
and Leases 3,805 3,146 4,818 2,515
Sales of spare parts,
supplies and Services 7,760 7,563 9,825 10,761
TOTAL SALES 20,174 20,952 25,542 25,972
Warrants granted --- (235) --- (291)
TOTAL NET SALES 20,174 20,717 25,542 25,681
Other revenues 91 93 115 115
TOTAL REVENUES 20,265 20,810 25,658 25,796
Cost of sales (11,946) (12,313) (15,125) (15,263)
GROSS PROFIT 8,319 8,497 10,533 10,533
Research & development
expenses (2,442) (1,784) (3,092) (2,212)
S,G&A expenses (8,703) (8,036) (11,019) (9,962)
Non recurring
operating expenses (267) --- (338) ---
Total operating
expenses (11,413) (9,820) (14,449) (12,174)
OPERATING PROFIT
(LOSS) (3,094) (1,323) (3,917) (1,641)
Interest (expense)
income, net 153 135 194 167
Currency exchange gains
(loss), net (430) 218 (545) 270
Other income (loss), net (5) 9 (6) 11
INCOME (LOSS) BEFORE
TAXES AND MINORITY
INTEREST (3,375) (962) (4,274) (1,192)
Income tax (expense)
credit (56) (103) (70) (128)
NET INCOME (LOSS) (3,431) (1,065) (4,344) (1,321)
Earning per share --
Basic (0.39) (0.14) (0.49) (0.17)
Average number of shares
used incomputation
of EPS 8,817 7,783 8,817 7,783
Earning per share --
Diluted (0.39) (0.14) (0.49) (0.17)
Average number of shares
used incomputation of
EPS for positive net
income 9,558 8,374 9,558 8,374
NOTE: Translated for convenience of the reader to U.S. dollars at the 2006
average twelve months noon buying rate of 1 Euro = 1.2661 USD, and 2005
average twelve months noon buying rate of 1 Euro = 1.2396 USD.
EDAP TMS S.A.
CONSOLIDATED BALANCE SHEETS HIGHLIGHTS (UNAUDITED)
(Amounts in thousands of Euros and U.S. Dollars)
Dec. 31, Sept. 30, Dec. 31, Sept. 30,
2006 2006 2006 2006
Euros Euros $US $US
-------------- -------------- -------------- --------------
Cash, cash equivalents
and short term
investments 10,924 10,540 14,417 13,372
Total current assets 26,393 27,542 34,831 34,942
Total current
liabilities 10,926 11,828 14,419 15,007
Shareholders' Equity 19,300 20,463 25,471 25,961
NOTE: Translated for convenience of the reader to U.S. dollars at the noon
buying rate of 1 Euro = 1.3197 USD, on December 31, 2006 and at the noon
buying rate of 1 Euro = 1.2687 USD, on September 30, 2006.
EDAP TMS S.A.
CONDENSED STATEMENTS OF OPERATIONS BY DIVISION
TWELVE MONTHS ENDED DECEMBER 31, 2006
(Amounts in thousands of Euros)
EDAP S.A. TMS S.A.
HIFU UDS EDAP TMS Consolidation Total After
Division Division HQ Impact Consolidation
-------------- -------------- -------------- -------------- --------------
Sales of
medical
devices 2,633 5,975 (1,720) 8,608
Sales of
spare parts,
supplies &
services 5,000 6,578 (1,293) 11,566
TOTAL NET
SALES 7,633 15,554 (3,013) 20,174
Other
revenues 82 26 (17) 91
TOTAL REVENUES 7,715 15,580 (3,030) 20,265
GROSS PROFIT 4,108 53% 4,511 29% (300) 8,319 41%
Research &
Development (1,231) (1,212) (2,442)
Total SG&A plus
depreciation (3,171) (3,845) (1,687) (8,703)
Non-recurring
expenses (267) (267)
OPERATING PROFIT
(LOSS) (294) (546) (1,954) (300) (3,094)
CONTACT: EDAP TMS S.A. Magnolia Investor Relations
Blandine Confort Matt Kreps
+33 4 78 26 40 46 972 801 4900
SOURCE EDAP TMS S.A.
-0- 03/14/2007
/CONTACT: Blandine Confort of EDAP TMS S.A., +33-4-78-26-40-46; or Matt
Kreps of Magnolia Investor Relations, +1-972-801-4900, for EDAP TMS S.A./
/Web site: http://www.edap-tms.com
http://www.hifu-planet.com
http://www.b2i.us/irpass.asp?BzID=1053&to=ea&s=0 /
(EDAP)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: March 14, 2007
EDAP TMS S.A.
/S/ HUGUES DE BANTEL
------------------------
HUGUES DE BANTEL
CHIEF EXECUTIVE OFFICER