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 2007 First Quarter Results; Ablatherm-HIFU Treatments Grow
May 10, 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.
EDAP TMS S.A. Reports 2007 First Quarter Results; Ablatherm-HIFU
Treatments Grow
European RPP Program on Target for 2008 Profitability;
FDA Trial Launch Positions EDAP for Direct USA Control;
EDAP, China Medical Alliance Unites HIFU Leaders
LYON, France, May 10 /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 first quarter 2007 and updated its HIFU growth expectations.
Key highlights include:
* First quarter RPP Revenues increased 45 percent year over year early in
the company's marketing and growth strategy designed to achieve
European profitability by the end of 2008 on significant treatment
growth.
* Ablatherm-HIFU is now available at more than 150 centers worldwide with
accelerating center launches and treatment growth, including 11 new
sites in the first quarter and an additional seven in the first five
weeks of the second quarter.
* The company reports clear progress on the US trial with the resumption
of active therapy sessions under EDAP sponsorship, the only treating
HIFU for localized prostate cancer trial as primary care in the United
States.
* Gross margins continue to increase as RPP treatment grows and the
company achieves greater efficiency.
* EDAP continued to add to its clinical lead as the HIFU therapy of
choice among doctors based on proven repeatable success and low side
effects. EDAP, as the gold standard in HIFU, reported 10 year
experience results including statistical success at 8 years affirming
Ablatherm-HIFU is competitive to all nonsurgical therapies -- its
primary patient audience.
* The company signed a four-year exclusive agreement with China Medical
Technologies to distribute its products through the European Union and
Russia following CE approval, uniting the top HIFU companies in Europe
and Asia.
EXECUTIVE COMMENTS
Marc Oczachowski, EDAP TMS Chief Executive Officer commented: "EDAP
continues its role as the dominant HIFU company in Europe. Recent clinical
data at the European Association of Urology affirmed EDAP and the Ablatherm-
HIFU as the only HIFU solution in localized prostate cancer able to clearly
demonstrate long term success and low side effects on a consistent therapeutic
platform. Moreover, the user experience shows Ablatherm to be the most adapted
and viable HIFU solution offering effective, efficient and accessible HIFU
care to any center wanting to make this new standard of care available to
patients.
"We engaged in a new marketing strategy late last year with full launch in
2007. These initiatives are bringing HIFU to the broad European medical
community with a strong and positive early response. We are seeing solid
participation and interest in marketing events such as our HIFU tours in
Germany and Italy, our users meeting in France and several workshops in key
hospitals. This is a long term process with a typical center evolving over
several months before offering its first treatment, so we clearly expect the
pace of new center launches and, ultimately, Ablatherm treatments, to
accelerate as we progress in 2007 and 2008, in line with our RPP business plan
expectations. Current increases stem from our efforts late last summer and
fall, the earliest portions of our marketing efforts. We are pleased with the
early signs of success in every major European market, with EDAP being the
clear and indisputable preference among the medical community.
"We are also very excited and enthusiastic to again start USA clinical
sessions toward a future FDA approval of the Ablatherm-HIFU. This is the only
current HIFU trial in the US with excellent response from the clinical sites
affirming the ease of treatment, patient comfort, low side effects and
expected efficacy. We look forward to reporting additional success as more
sites resume treatment, and we add more leading clinical centers now asking us
to join the trial."
FINANCIAL RESULTS
First Quarter 2007 results showed strong increases in RPP revenue while
machine sales in the HIFU division were deferred to later periods. As
anticipated, the company's business plan expects a number of machine sales in
the calendar year, but does not require they be evenly distributed through the
quarters as the company's focus has shifted to the sale of recurring
treatments under its highly successful and growing RPP program. First quarter
revenue was Euro 4.7 million, down 10.3 percent from the same period in 2006
due to this change in revenue mix. The primary difference was a 702,000
decrease in HIFU equipment sales as compared to the prior year quarter, while
RPP revenues increased 45 percent to Euro 1.0 million. The company has already
booked one Ablatherm sale in the second quarter and has a strong pipeline of
expected and potential sales in its most active markets to meet its goal for
the full year. The company's movement away from dependence on equipment sales
continues as RPP revenues increase, but EDAP expects to continue selling
Ablatherm , although not necessarily in equivalent quarterly increments.
Group gross margins continued to improve to 43 percent as compared to 36.5
percent in the last quarter 2006 and 41 percent for the full year 2006. HIFU
gross margins increased still further to 57 percent compared to 53 percent for
the year 2006 as RPP revenue comprises a larger portion of margin and the
accompanying scale efficiency becomes evident.
The Lithotripsy business remains strong with nine units sold as opposed to
10 in the prior year and a backlog of 7 units already at the start of the
second quarter. The pace of lithotripsy sales increased from the fourth
quarter 2006 and the company sees steady demand in the quarters ahead.
Cash remains strong at Euro 9.3 million, down from Euro 10.9 million at
year end. Uses of cash include approximately 800,000 in corporate spending for
marketing and growth initiatives ahead of returns on these efforts, including
300,000 for marketing increases, 200,000 on product development for launch,
200,000 on FDA costs, and 100,000 in leasing activities for the RPP business.
The remaining 800,000 is tied to Ablatherm and lithotripsy device inventory
ahead of sales later in the year. EDAP has historically generated positive
cash flows during each calendar year as early year investments were recouped
in sales. The company remains on plan for cash balances suitable for its
marketing needs for the next two years. Total 2007 cash use is estimated at
less than Euro 4 million.
Eric Soyer, EDAP TMS Chief Financial Officer, commented: "The first
quarter shows a higher than usual cash use due to spending ahead of events
that will recapture these balances. Our company spending remains on track for
our targeted programs for both investing and recouping cash as the HIFU
business accelerates from our marketing spending. Further, the cash balance
does not reflect the at least $600,000 in cash due to EDAP from HealthTronics.
The investment in our future is showing good returns on gross margins, which
are improving from higher RPP contributions along with solid increase in
recurring revenues for a more predictable business ahead. We anticipate
further margin improvement from scale, efficiency and revenue mix as the
growth programs continue to advance the HIFU business."
HIFU DIVISION: CLEAR GROWTH FOLLOWING MARKETING LAUNCH
The HIFU division continued to accelerate its growth programs with strong
early indications of success in the multi-quarter process of educating,
recruiting, training and launching new Ablatherm sites. The current growth
rate at 45 percent on the RPP business affirms the company's program methods
with clear upside as the scale of the program has steadily increased since
early test phases last winter. The company's recent German HIFU tour, EAU
Congress participation, Italian HIFU tour recently started and activities at
local and regional urology events continues to forward the interest of a
growing list of centers at various stages of participation.
"We are seeing nice growth in the RPP programs already from our early
efforts, but have even higher expectations of growth in the periods ahead as
the full programs roll into major European markets," said Oczachowski.
"Doctors who were initially introduced in the German HIFU tour visited EDAP at
the EAU. Many are now taking the next steps to secure approval at their local
centers and enroll in training sessions on Ablatherm-HIFU. This is a process
that unfolds over a few months, but is certainly succeeding. We will add
equipment, on both a mobile and fixed RPP basis, as the demand for therapy
continues to accelerate in the quarters ahead.
"The company's RPP program is accelerating in markets where marketing
efforts have been deployed in concert with strong clinical support for
Ablatherm-HIFU's established long-term standards. By way of example, EDAP is
the only established provider in the German market, the most advanced prostate
cancer HIFU market globally. The company conducted 222 mobile RPP sessions in
the first four months, with 60 sessions in April alone and clear growth ahead.
On an annual run rate this puts EDAP's three mobile units near projected
capacity, the last of which was launched last fall in light of rapidly growing
demand."
2007 RPP Ablatherm-HIFU: Numbers and Revenues:
Q1 2007 April 2007 4 Months
--------- -------- -------- --------
Number of RPP treatments 325 112 437
RPP revenue % vs year ago +45% +64% +49%
Close to 900 treatments have been performed in Q1, bringing to
approximately 12,500 cumulative treatments performed as of end of March 2007.
As of March 31, 2007, we accounted for 143 total trained Ablatherm-HIFU sites,
with 11 new sites trained over Q1, and 7 additional centers in the month of
April alone, bringing the total to 150 trained sites as of today.
US PROGRAMS: EDAP IN FULL CONTROL, TRIAL DRIVING AHEAD WITH SUCCESS
EDAP restarted US clinical sessions in pursuit of future FDA approval for
Ablatherm-HIFU, the only active US trial treating patients for localized
prostate cancer. EDAP has full rights to all revenue and profit earned in the
future and is presently self sponsoring the trials in order to accommodate
immediate and ongoing treatment demand from centers participating in the EDAP
study. The company intends to retain control of this important program and is
in the final stages of positioning its US strategy. Response to the trial is
growing as knowledge of its activity spreads based on the existing clinical
base for Ablatherm-HIFU. The company reported recently the results of
treatments at two centers, with additional centers recruiting and scheduling
patients. Both patients and doctors report early success with the Ablatherm-
HIFU activities under EDAP's direction with high expectations for the trial.
CHINA MEDICAL AGREEMENT MAKES EDAP LEADER FOR INTERNAL AND EXTERNAL HIFU
The company reported an exclusive marketing and sales agreement with China
Medical Technologies to take full marketing rights in Europe and Russia for
this global leading extracorporeal HIFU device. This agreement unites the
leading HIFU companies from Europe and Asia as well as provides EDAP the top
global technologies presently available for both internal and external
applications of HIFU therapy. Clinical efforts are expected to require several
months for full European approval, followed by four years of exclusive
distribution rights.
"We are pleased and excited to begin this relationship with China Medical,
and see many added opportunities for both companies in the future," said
Oczachowski. "Certainly there was careful evaluation by both sides, but this
agreement made the most sense for both companies by joining together the two
dominant HIFU technologies and companies for mutual success. This opens the
door to EDAP for rapid HIFU growth in other pathologies on a known platform
broadly used already. In addition to our leading role in prostate cancer, EDAP
will now have the opportunity to lead Europe ahead using HIFU for many other
pathologies where patients can have the benefit of effective therapy with
minimal recovery and side effects. EDAP's role as a clear clinical leader
played a significant part in this agreement, as this is the only way to assure
success in the medical community. Clear, consistent and scrutinized studies
will continue to play a significant role in making HIFU a new standard of care
in not just prostate cancer, but now in multiple other pathologies."
Participation in Congresses
EDAP will participate strongly in the upcoming American Urology
Association (AUA) meeting to be held in Anaheim, California, May 19 - 22,
2007. Dr. S. Thuroff from Harlaching Hospital, Munich, Germany, will comment
in an Ablatherm-HIFU video session and Dr. F. Murat, from Edouard Herriot
Hospital, Lyon, France, will present long term results with 8 years follow-up.
On May 21, 2007, an Investigator meeting will gather all US physicians
participating in the FDA trials. It's a unique opportunity for EDAP to have
all US investigators all together to share views and details about this
promising study.
Conference Call and Webcast
The company will host a conference call to discuss the results and answer
questions from investors on Friday, May 11, 2007, at noon Eastern Time, 6:00
p.m. Paris Time. Representing the Company on the call will be Philippe
Chauveau, Chairman of the Board, Marc Oczachowski, Chief Executive 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 856440#. 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) 439-4729
or +1 (212) 457-9846 and using access code 327569# beginning one hour after
the end of the call until May 25, 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:
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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.
CONTACT: EDAP TMS S.A. Magnolia Investor Relations
Blandine Confort Matt Kreps
+33 4 78 26 40 46 972 801 4900
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:
March 31, March 31, March 31, March 31,
2007 2006 2007 2006
Euros Euros $US $US
Sales of goods 1,902 2,789 2,508 3,367
Net Sales of RPP and
Leases 1,308 971 1,725 1,172
Sales of spare parts
and Services 1,420 1,424 1,872 1,719
TOTAL NET SALES 4,630 5,184 6,105 6,259
Other revenues 36 15 47 18
TOTAL REVENUES 4,666 5,199 6,152 6,277
Cost of goods (1,273) (1,667) (1,679) (2,013)
Cost of RPP and Leases (568) (431) (750) (520)
Cost of spare parts &
services (831) (815) (1,095) (984)
Cost of sales (2,672) (2,913) (3,524) (3,517)
GROSS PROFIT 1,994 2,286 2,629 2,760
Research & development
expenses (616) (595) (813) (718)
Marketing & Sales
expenses (1,341) (1,091) (1,768) (1,317)
G & A expenses (1,183) (1,084) (1,560) (1,309)
Total operating
expenses (3,140) (2,770) (4,141) (3,344)
OPERATING PROFIT (LOSS) (1,147) (484) (1,512) (584)
Interest (expense)
income, net 3 14 4 17
Currency exchange gains
(loss), net (48) (73) (63) (89)
Other income (loss),
net 3 (3) 4 (4)
INCOME (LOSS) BEFORE
TAXES AND MINORITY
INTEREST (1,188) (546) (1,567) (659)
Income tax (expense)
credit (21) (77) (27) (93)
NET INCOME (LOSS) (1,209) (623) (1,594) (753)
Earning per share -
Basic (0.14) (0.08) (0.18) (0.010)
Average number of
shares used
incomputation of
EPS 8,942,007 7,823,331 8,942,007 7,823,331
Earning per share -
Diluted (0.14) (0.08) (0.18) (0.010)
Average number of
shares used
incomputation of
EPS for positive net
income 9,606,863 8,608,255 9,606,863 8,608,255
NOTE: Translated for convenience of the reader to U.S. dollars at the
2007 average three months noon buying rate of 1 Euro = 1.3186 USD, and 2006
average three months noon buying rate of 1 Euro = 1.3077 USD.
EDAP TMS S.A.
CONSOLIDATED BALANCE SHEETS HIGHLIGHTS (UNAUDITED)
(Amounts in thousands of Euros and U.S. Dollars)
March 31, Dec. 31, March 31, Dec. 31,
2007 2006 2007 2006
Euros Euros $US $US
Cash, cash equivalents
and short term investments 9,291 10,924 12,426 14,417
Total current assets 25,699 26,393 34,370 34,831
Total current liabilities 11,368 10,926 15,204 14,419
Shareholders' Equity 18,247 19,300 24,404 25,471
NOTE: Translated for convenience of the reader to U.S. dollars at the
noon buying rate of 1 Euro = 1.3374 USD, on March 31, 2007 and at the noon
buying rate of 1 Euro = 1.3197 USD, on December 31, 2006.
EDAP TMS S.A.
CONDENSED STATEMENTS OF OPERATIONS BY DIVISION
THREE MONTHS ENDED MARCH 31, 2007
(Amounts in thousands of Euros)
EDAP S.A. TMS S.A.
HIFU UDS EDAP TMS EDAP TMS Total After
Division Division FDA Corporate Consolidation
Sales of goods 180 1,722 1,902
Sales of RPPs &
Leases 1,045 264 1,308
Sales of spare
parts & services 385 1,035 1,420
TOTAL NET SALES 1,609 3,021 4,630
Other revenues 7 29 36
TOTAL REVENUES 1,616 3,050 4,666
GROSS PROFIT 920 57% 1,074 35% 1,994 43%
Research &
Development (235) (288) (92) (616)
Total SG&A plus
depreciation (1,019) (905) (105) (495) (2,524)
OPERATING PROFIT
(LOSS) (335) (120) (197) (495) (1,147)
SOURCE EDAP TMS S.A.
-0- 05/10/2007
/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 /
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 :
EDAP TMS S.A.
S/ MARC OCZACHOWSKI
MARC OCZACHOWSKI
CHIEF EXECUTIVE OFFICER