EDAP Achieves 79% Growth In HIFU Revenue For First Nine Months Of 2016

Highlights at the end of September 30, 2016:
  • Total cumulated revenue in 2016  up 22% year-over-year;
  • Driven by HIFU growth, Gross Margin increases to 45%;
  • 111% growth in HIFU revenues in Q3 of 2016 compared to Q3 2015;
  • Company continues to show operating profit in 2016 at the end of Q3;
  • Strong cash position of EUR 18.8 million as of September 30, 2016.

LYON, France, Nov. 17, 2016 (GLOBE NEWSWIRE) -- EDAP TMS SA (Nasdaq:EDAP), the global leader in therapeutic ultrasound, announced today financial results for the third quarter and nine months ended September 30, 2016, and provided an update on strategic and operational accomplishments. 

Marc Oczachowski, EDAP's Chief Executive Officer, stated, "We performed extremely well through the first nine months of 2016, with total revenues up 22% versus a year ago and, more importantly, HIFU division revenues up 79% from the year-ago period."

"As recently announced, we achieved new installations in prestigious academic centers in the US such as Duke University Hospital, and we continue to actively work in building a strong academic and scientific presence in the US. This is part of our strategy to penetrate the US market with HIFU on a strong clinical basis with leading institutions around the country."

Mr. Oczachowski concluded, "Recent publications in both the New England Journal of Medicine and European Urology are providing extremely encouraging indications that further position HIFU as a modern standard of care therapy for the treatment of prostate cancer. We will be pleased to further discuss these excellent results during our quarterly conference call on Thursday the 17 th of November."

Third Quarter 2016 Results

Total revenue for the third quarter 2016 was EUR 8.0 million (USD 8.9 million), a 24.7% year-over-year increase compared to EUR 6.4 million (USD 7.1 million) for the third quarter 2015.

Total revenue in the HIFU business for this quarter was EUR 2.5 million (USD 2.8 million) compared to EUR 1.2 million (USD 1.3 million) for the third quarter 2015.

For the three months ended September 30, 2016, total revenue for the Lithotripsy division was EUR 5.4 million (USD 6.1 million), compared to EUR 5.2 million (USD 5.8 million), during the year ago period.

Gross profit for the third quarter 2016 was EUR 3.5 million (USD 3.9 million), compared to EUR 2.6 million (USD 2.9 million) for the year ago period. Gross profit margin on net sales was 43.2% in the third quarter of 2016, compared to 40.2% in the year ago period.

Operating expenses were EUR 3.8 million (USD 4.2 million) for the third quarter 2016, compared to EUR 2.8 million (USD 3.2 million) for the same period in 2015.

Operating loss for the third quarter 2016 was EUR 0.3 million (USD 0.4 million), compared with EUR 0.3 million (USD 0.3 million) in the third quarter of 2015.

Net income for the third quarter 2016 was EUR 1.3 million (USD 1.4 million), or EUR 0.04 per diluted share, as compared to net loss of EUR 4.8 million (USD 5.4 million), or EUR 0.19 per diluted share, in the year ago period. Net income in the third quarter of 2016 included non-cash interest income of EUR 1.5 million to adjust the accounting fair value of the outstanding warrants.

First Nine Months 2016 Results

Total revenue for the first nine months of 2016 was EUR 24.9 million (USD 27.8 million), up 21.8% compared to EUR 20.5 million (USD 22.7 million) for the first nine months of 2015.

Gross profit for the first nine months of 2016 was EUR 11.2 million (USD 12.5 million) and gross profit margin on net sales was 45.0%, compared to 41.5 % in the year ago period.

The Company recorded an operating profit for the first nine months of 2016 of EUR 0.1 million (USD 0.1 million), compared with an operating loss of EUR 1.1 million (USD 1.2 million) in the first nine months of 2015.

Net income for the first nine months of 2016 was EUR 5.1 million (USD 5.7 million), or EUR 0.19 per diluted share, as compared to a net loss of EUR 6.8 million (USD 7.5 million), or EUR 0.27 per diluted share, in the first nine months of 2015. Net loss in the first nine months of 2016 included non-cash interest income of EUR 4.4 million to adjust the accounting fair value of the outstanding warrants.

At September 30, 2016, cash and cash equivalents, including short-term treasury investments, were EUR 18.8 million (USD 21.2 million).

Conference Call

EDAP will hold a conference call on Thursday, November 17 th, 2016 at 8:30 a.m. EST to discuss the results and provide an update on recent business developments. The dial-in numbers are 1-888-348-6419 in the U.S., and 1-412-902-4235 for international callers.  The conference ID number for both is 10095751. A live webcast of the conference call will be available online from the investor relations page of the Company's corporate website at www.edap-tms.com.

After the live event, the webcast will remain available on EDAP's website, www.edap-tms.com, through December 19, 2016.  In addition, a dial-in replay of the call will be available.  The replay dial-in numbers are 1-844-512-2921 for domestic callers and 1-412-317-6671 for international callers.  Please use event passcode 10095751.

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. 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 :
  September 30,  2016  Euros   September 30,  2015 Euros   September 30,  2016  $US   September 30,  2015  $US
Sales of goods   5,218       3,754       5,836       4,178  
Net Sales of RPP and Leases   1,098       1,138       1,228       1,266  
Sales of spare parts and Services   1,674       1,514       1,873       1,685  
TOTAL NET SALES   7,990       6,406       8,936       7,129  
Other revenues   2       1       2       1  
TOTAL REVENUES   7,992       6,407       8,938       7,130  
Cost of goods   (3,099 )     (2,262 )     (3,466 )     (2,517 )
Cost of RPP and Leases   (459 )     (648 )     (514 )     (721 )
Cost of spare parts & services   (979 )     (921 )     (1,095 )     (1,025 )
Cost of sales   (4,537 )     (3,830 )     (5,075 )     (4,262 )
               
GROSS PROFIT   3,454       2,578       3,864       2,868  
Research & development expenses   (1,032 )     (612 )     (1,154 )     (682 )
Marketing & Sales expenses   (2,028 )     (1,518 )     (2,269 )     (1,689 )
G & A expenses   (725 )     (704 )     (811 )     (783 )
Total operating expenses   (3,786 )     (2,834 )     (4,234 )     (3,154 )
               
OPERATING PROFIT (LOSS)   (332 )     (257 )     (371 )     (286 )
Interest (expense) income, net   1,502       (4,460 )     1,680       (4,963 )
Currency exchange gains (loss), net   130       (80 )     145       (89 )
Other income (loss), net   -       (2 )     -       (2 )
               
INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST   1,301       (4,798 )     1,455       (5,340 )
Income tax (expense) credit   (40 )     (31 )     (44 )     (35 )
               
NET INCOME (LOSS)   1,261       (4,830 )     1,411       (5,375 )
Earnings per share - Basic   0.04       (0.19 )     0.05       (0.22 )
Average number of shares used in computation of Basic EPS   28,727,616       24,972,752       28,727,616       24,972,752  
Earnings per share - Diluted   0.04       (0.19 )     0.05       (0.22 )
Average number of shares used in computation of Diluted EPS   30,251,966       24,972,752       30,251,966       24,972,752  
               

NOTE: Translated for convenience of the reader to U.S. dollars at the 2016 average three months' noon buying rate of 1 Euro = 1.1184 USD, and 2015 average three months' noon buying rate of 1 Euro = 1.1128 USD.
EDAP TMS S.A.  CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)  (Amounts in thousands of Euros and U.S. Dollars, except per share data)
               
  Nine Months Ended :   Nine Months Ended :
  September 30, 2016  Euros   September 30,  2015  Euros   September 30,  2016  $US   September 30,  2015  $US
Sales of goods   16,480       12,857       18,356       14,275  
Net Sales of RPP and Leases   3,675       3,258       4,094       3,617  
Sales of spare parts and Services   4,752       4,344       5,293       4,822  
TOTAL NET SALES   24,907       20,458       27,742       22,714  
Other revenues   10       3       11       4  
TOTAL REVENUES   24,917       20,461       27,753       22,717  
Cost of goods   (8,660 )     (7,303 )     (9,646 )     (8,108 )
Cost of RPP and Leases   (1,972 )     (1,940 )     (2,197 )     (2,154 )
Cost of spare parts & services   (3,076 )     (2,730 )     (3,427 )     (3,030 )
Cost of sales   (13,709 )     (11,972 )     (15,269 )     (13,292 )
               
GROSS PROFIT   11,208       8,489       12,484       9,425  
Research & development expenses   (2,733 )     (2,125 )     (3,044 )     (2,359 )
Marketing & Sales expenses   (6,041 )     (4,926 )     (6,728 )     (5,469 )
G & A expenses   (2,377 )     (2,534 )     (2,648 )     (2,813 )
Total operating expenses   (11,151 )     (9,585 )     (12,420 )     (10,641 )
               
OPERATING PROFIT (LOSS)   57       (1,096 )     63       (1,217 )
Interest (expense) income, net   4,393       (5,804 )     4,893       (6,444 )
Currency exchange gains (loss), net   801       223       892       247  
Other income (loss), net (0)-       (5 )     (1 )     (5 )
               
INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST   5,250       (6,682 )     5,848       (7,419 )
Income tax (expense) credit   (130 )     (100 )     (145 )     (112 )
               
NET INCOME (LOSS)   5,120       (6,783 )     5,703       (7,530 )
Earnings per share - Basic   0.19       (0.27 )     0.21       (0.30 )
Average number of shares used in computation of Basic EPS   27,497,107       24,942,689       27,497,107       24,942,689  
Earnings per share - Diluted   0.19       (0.27 )     0.21       (0.30 )
Average number of shares used in computation of Diluted EPS   29,045,939       24,942,689       29,045,939       24,942,689  
               

NOTE:  Translated for convenience of the reader to U.S. dollars at the 2016 average nine months' noon buying rate of 1 Euro = 1.1138 USD, and 2015 average nine months' noon buying rate of 1 Euro = 1.1102 USD.
EDAP TMS S.A.  CONSOLIDATED BALANCE SHEETS HIGHLIGHTS (Amounts in thousands of Euros and U.S. Dollars)
         
  Sept. 30,  2016 Euros June 30, 2016  Euros Sept. 30, 2016  $US June 30, 2016  $US
         
Cash, cash equivalents and short term investments 18,837 21,940 21,170 24,203
Total current assets 40,694 40,963 45,734 45,188
Total current liabilities 14,547 14,817 16,349 16,345
Shareholders' Equity 25,739 24,358 28,926 26,870
         

NOTE:  Translated for convenience of the reader to U.S. dollars at the noon buying rate of 1 Euro = 1.1238 USD on September 30, 2016 and at the noon buying rate of 1 Euro = 1.1031 USD, on June 30, 2016
EDAP TMS S.A.  CONDENSED STATEMENTS OF OPERATIONS BY DIVISION  NINE MONTHS ENDED SEPTEMBER 30, 2016  (Amounts in thousands of Euros)
                     
  HIFU Division   UDS Division   FDA   Corporate   Total After Consolidation  
                     
Sales of goods   6,047       10,433               16,480    
Sales of RPPs & Leases   2,633       1,042               3,675    
Sales of spare parts & services   543       4,209               4,752    
TOTAL NET SALES   9,223       15,684               24,907    
                     
Other revenues   6       4               10    
                     
TOTAL REVENUES   9,229       15,688               24,917    
                     
GROSS PROFIT (% of Total Revenues)   5,337     58 %   5,871     37 %           11,208     45 %
                     
Research & Development   (1,781 )     (952 )   -     -       (2,733 )  
Total SG&A plus depreciation   (3,027 )     (4,440 )   -     (951 )     (8,418 )  
                     
OPERATING PROFIT (LOSS)   529       479     -     (951 )     57    
Contact: Blandine ConfortInvestor Relations / Legal AffairsEDAP TMS SA+33 4 72 15 31 72bconfort@edap-tms.comInvestors:Lee Roth The Ruth Group646-536-7012lroth@theruthgroup.com

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