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EDAP TMS SA : EDAP Reports Q4 and Full Year 2018 Results

Reports record revenues for the fifth consecutive year

  • Record fiscal year 2018 revenues of €39.2 million
  • Q4 2018 HIFU net sales increased 79% year-over-year
  • Profitable and cash flow positive during the fourth quarter of 2018
  • Completed first U.S. sale of Focal One at the end of 2018
  • Ended the year with a strong cash position of $22.3 million

LYON, France, April 1, 2019 -- EDAP TMS SA (EDAP) ("the Company"), the global leader in therapeutic ultrasound, announced today financial results for the fourth quarter and full year 2018 and provided a strategic and operational update. 

Marc Oczachowski, EDAP's Chief Executive Officer, said: "We are very pleased to report our fifth consecutive year of growth during 2018, achieving total revenue of €39.2 million. As announced, one of the major milestones during the year was FDA clearance of Focal One in June, and just six months later, we completed the first U.S. sale of Focal One to the John Wayne Cancer Institute. We followed that up with three additional U.S. Focal One sales in less than sixty days. Our HIFU sales and marketing development teams have also been very active outside of the U.S., with the opening of new markets and further expansion in existing countries such as Brazil.

"We experienced very strong momentum during the fourth quarter in the adoption of our HIFU technology in the U.S. and internationally. Our teams are fully focused on leveraging this positive trend to further develop our sales pipeline for 2019," Mr. Oczachowski concluded.

Fourth Quarter 2018 Results

Total revenue for the fourth quarter 2018 was €13.3 million (USD 15.1 million), an increase of 25.0% compared to €10.6 million (USD 12.6 million) for the fourth quarter of 2017.

Total revenue in the HIFU business for the fourth quarter was €4.3 million (USD 4.9 million), a 77.1% increase compared to €2.5 million (USD 2.9 million) for the fourth quarter of 2017. During the quarter, EDAP sold four Focal One devices (including the first one in the U.S.) versus one Focal one in the same period of 2017, and recorded a 14.1% increase in HIFU treatment revenues.

For the three months ended December 31, 2018, total revenue for the Lithotripsy division was €8.9 (USD 10.2 million), a 9.4% increase compared to €8.2 million (USD 9.7 million) during the year-ago period.

Gross profit for the fourth quarter 2018 was €6.0 million (USD 6.8 million), compared to €4.4 million (USD 5.3 million) for the year-ago period. Gross profit margin on net sales was 45.0% in the fourth quarter of 2018, compared to 41.8% in the year-ago period.

Operating expenses were €5.1 million (USD 5.8 million) for the fourth quarter of 2018, compared to €4.6 million (USD 5.5 million) for the same period in 2017.

The Company recorded an operating profit for the fourth quarter 2018 of €0.8 million (USD 1.0 million), compared to an operating loss of € 0.2 million (USD 0.2 million) in the fourth quarter of 2017.

The Company recorded a net profit for the fourth quarter 2018 of €1.0 million (USD 1.2 million), or a profit of €0.04 per diluted share, as compared to a net loss of €0.1 million (USD 0.1 million), or a loss of €0.00 per diluted share in the year-ago period.

Year Ended 2018 Results.

Total revenue for 2018 was €39.2 million (USD 46.2 million) an increase of 9.6% compared to €35.7 million (USD 40.7 million) for the year ended December 31, 2017.

Total revenue in the HIFU business for 2018 was €11.0 million (USD 13.0 million), an increase of 16.1% compared to €9.5 million (USD 10.8 million) for the year ended December 31, 2017. During the year 2018, EDAP sold seven HIFU devices, compared to five HIFU devices sold during the year 2017.

Total revenue for the UDS division for 2018 was €28.1 million (USD 33.2 million), growth of 7.3% compared to €26.2 million (USD 29.9 million). During the year 2018, EDAP sold 33 Lithotripsy devices compared to 40 Lithotripsy devices during the year ago period. The increase was driven by a 31.8% growth in the sales of distribution products.

Gross profit for 2018 was €16.9 million (USD 19.9 million) with gross profit margin on net sales of 43.2% compared to 41.5% during the prior year period.

The Company recorded an operating loss for 2018 of €1.3 million (USD 1.5 million) compared to an operating loss of €2.0 million (USD 2.3 million) during the prior year period.

Full-year net loss was €0.3 million (USD 0.4 million), or a loss of €0.01 per diluted share, as compared to a net loss of €0.7 million (USD 0.8 million), or a loss of €0.02 per diluted share in 2017. Full-year 2018 net loss included non-cash interest income of €0.9 million to adjust the accounting fair value of the outstanding warrants.

As of December 31, 2018, cash and cash equivalents were €19.5 million (USD 22.3 million).

Conference Call

An accompanying conference call will be conducted by Philippe Chauveau, Chairman of the Board; Marc Oczachowski, Chief Executive Officer; and François Dietsch, Chief Financial Officer, to review the results. The call will be held at 8:30 AM ET, on Tuesday April 2, 2019. Please refer to the information below for conference call dial-in information and webcast registration.

Conference Call & Webcast
Tuesday, April 2nd @ 8:30am Eastern Time
Domestic:                    877-451-6152
International:               201-389-0879
Passcode:                    13687660
Webcast:                     http://public.viavid.com/index.php?id=133296
           

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 for almost 40 years, EDAP TMS develops, manufactures, promotes and distributes worldwide minimally invasive medical devices for urology 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 2013 as the answer to all requirements for ideal prostate tissue ablation as a complement to the existing FDA cleared Ablatherm® Robotic HIFU and Ablatherm® Fusion. As a pioneer and key player in the field of extracorporeal shock wave lithotripsy (ESWL), EDAP TMS exclusively utilizes the latest generation of shock wave source in its Sonolith® range of ESWL systems. 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 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.

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:

  December 31,
2018
Euros
  December 31,
2017
Euros
  December 31, 
2018
$US
  December 31, 
2017
$US
Sales of medical equipment

Net Sales of RPP and Leases
9,275

1,566
  7,213

1,219
  10,546

1,781
  8,552

1,446
Sales of spare parts, supplies and
Services
 

2,442
   

2,177
   

2,776
   

2,581
TOTAL NET SALES 13,283   10,610   15,103   12,578
Other revenues 5   16   6   20
TOTAL REVENUES 13,288   10,626   15,109   12,598
Cost of sales (7,306)   (6,193)   (8,307)   (7,342)
GROSS PROFIT 5,982   4,433   6,801   5,256
Research & development expenses (947)   (1,099)   (1,077)   (1,302)
S, G & A expenses (4,188)   (3,513)   (4,762)   (4,164)
Total operating expenses (5,136)   (4,611)   (5,840)   (5,467)
OPERATING PROFIT (LOSS) 846   (178)   962   (211)
Interest (expense) income, net (20)   414   (23)   490
Currency exchange gains (loss), net 222   (134)   253   (159)
INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST 1,048   100   1,191   119
Income tax (expense) credit (15)   (192)   (17)   (227)
NET INCOME (LOSS)                                              1,033   (91)   1,174   (108)
Earning per share - Basic 0.04   (0.00)   0.04   (0.00)
Average number of shares used in  computation of EPS 28,997,866   28,997,866   28,997,866   28,997,866
Earning per share - Diluted 0.04   (0.00)   0.04   (0.00)
Average number of shares used in  computation of EPS for positive net income

 
29,345,366   28,997,866   29,345,366   28,997,866

NOTE:  Translated for convenience of the reader to U.S. dollars at the 2018 average three months' noon buying rate of 1 Euro = 1.1370 USD, and 2017 average three months noon buying rate of 1 Euro = 1.1855 USD.

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

                                                                                                 Twelve Months Ended:                                Twelve Months Ended:

  December 31,
2018
Euros 
  December 31, 
2017
Euros
  December 31, 
2018
$US
  December 31,
2017
$US
Sales of medical equipment 25,070   22,580   29,543   25,732  
Net Sales of RPP and Leases 5,086   5,095   5,994   5,806  
Sales of spare parts, supplies and
Services
9,007   8,011   10,614   9,130  
TOTAL NET SALES 39,163   35,686   46,151   40,668  
Other revenues 19   60   23   68  
TOTAL REVENUES 39,183   35,746   46,173   40,736  
Cost of sales (22,266)   (20,938)   (26,238)   (23,861)  
GROSS PROFIT 16,917   14,808   19,935   16,875  
Research & development expenses (4,088)   (3,881)   (4,817)   (4,423)  
S, G & A expenses (14,144)   (12,954)   (16,668)   (14,762)  
Total operating  expenses (18,232)   (16,835)   (21,485)   (19,185)  
OPERATING PROFIT (LOSS) (1,315)   (2,027)   (1,549)   (2,310)  
Interest (expense) income, net 797   2,643   939   3,011  
Currency exchange gains (loss), net 538   (909)   634   (1,036)  
INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST 20   (294)   23   (335)  
Income tax (expense) credit (358)   (388)   (422)   (442)  
NET INCOME (LOSS) (338)   (681)   (399)   (776)  
Earning per share - Basic (0.01)   (0.02)   (0.01)   (0.03)  
Average number of shares used in  computation of EPS 28,997,866   28,961,928   28,997,866   28,961,928  
Earning per share - Diluted (0.01)   (0.02)   (0.01)   (0.03)  
Average number of shares used in  computation of EPS for positive net income

 

 
28,997,866   28,961,928   28,997,866   28,961,928  

NOTE:  Translated for convenience of the reader to U.S. dollars at the 2018 average twelve months noon buying rate of 1 Euro =1.1784 USD, and 2017 average twelve months noon buying rate of 1 Euro = 1.1396 USD.


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

    Dec. 31,
  2018
  Euros
  Sept.  30,
2018
Euros
  Dec.  31,
2018
$US
    Sept. 30,
2018
$US
 

                                                               

Cash, cash equivalents and short  term investments 19,464     15,942 22,298 18,528    
Total current assets 40,378     36,110 46,257 41,968    
Total current liabilities 16,812     14,092 19,260 16,378    
Shareholders' Equity 24,964     23,874 28,599 27,748    

NOTE:  Translated for convenience of the reader to U.S. dollars at the noon buying rate of 1 Euro = 1.1456 USD, on Dec. 31, 2018 and at the noon buying rate of 1 Euro = 1.1623 USD, on Sept. 30, 2018.

EDAP TMS S.A.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS BY DIVISION
TWELVE MONTHS ENDED DECEMBER 31, 2018
(Amounts in thousands of Euros)

     

HIFU Division
   

UDS Division
     

Corporate
  Total After Consolidation  
 

Sales of goods
 

5,494
   

19,576
         

25,070
 
Sales of RPPs & Leases 3,750   1,336         5,086  
Sales of spare parts & services 1,780   7,227         9,007  
TOTAL NET SALES

 
11,025   28,139         39,163  
Other revenues

 
19   -         19  
TOTAL REVENUES 11,044   28,139         39,183  
GROSS PROFIT
(% of Total Revenues)
5,732 51.9% 11,185 39.7%       16,917 43.2%
 

Research & Development
 

(2,394)
  (1,694)         (4,088)  
Total SG&A plus depreciation (5,664)   (7,234)     (1,246)   (14,144)  
 

OPERATING PROFIT (LOSS)
 

(2,325)
   

2,257
     

(1,246)
   

(1,315)