EDAP Achieves 63% Growth in HIFU Revenue in 2016


2016 Highlights

  • Total revenue for 2016 reached double-digit growth, increasing to EUR 35.6 million (USD 39.3 million)
  • Gross margin for 2016 expanded to 46.1% compared to 42.8% during the prior year period
  • Strong cash position of EUR 22.0 million (USD 23.2 million) as of December 31, 2016

LYON, France, April 3, 2017 -- EDAP TMS SA (Nasdaq:EDAP), the global leader in therapeutic ultrasound, announced today financial results for the fourth quarter and twelve months ended December 31, 2016, and provided an update on strategic and operational accomplishments. 

Marc Oczachowski, EDAP's Chief Executive Officer, stated, "I am thrilled with the performance of our team in 2016. We successfully grew our HIFU revenue more than 63% to EUR 13.8 million, resulting in total 2016 revenue of EUR 35.6 million. EDAP strengthened its HIFU presence in the U.S. during 2016, adding key academic centers to its HIFU user base while significantly expanding operations globally. Ablatherm® and the Focal One® continued to enjoy a warm reception from the global medical community supported by strong, positive clinical data. Notably, Focal One's innovative prostate treatment received clear recognition from the global scientific community when awarded the prestigious Prix Galien Award this past December."

Mr. Oczachowski concluded, "2016 was rich in positive events; please join us Tuesday, April 4, 2017, for a detailed discussion of our continued success and expansion."

Fourth Quarter 2016 Results

Total revenue for the fourth quarter 2016 was EUR 10.7 million (USD 11.4 million), a 9.3% decreased compared to EUR 11.8 million (USD 12.8 million) for the fourth quarter of 2015.

Total revenue in the HIFU business for the fourth quarter was EUR 4.6 million (USD 4.9 million), a 38.3% increase compared to EUR 3.3 million (USD 3.6 million) for the fourth quarter of 2015. 

For the three months ended December 31, 2016, total revenue for the Lithotripsy division was EUR 6.1 (USD 6.5 million), a 27.9% decreased compared to EUR 8.5 million (USD 9.2 million) during the year-ago period.

Gross profit for the fourth quarter 2016 was EUR 5.2 million (USD 5.6 million), compared to EUR 5.3 million (USD 5.7 million) for the year-ago period. Gross profit margin on net sales was 48.8% in the fourth quarter of 2016, compared to 45.0% in the year-ago period.

Operating expenses were EUR 4.9 million (USD 5.2 million) for the fourth quarter of 2016, compared to EUR 3.7 million (USD 4.0 million) for the same period in 2015.

Operating profit for the fourth quarter 2016 was EUR 0.3 million (USD 0.4 million), compared to EUR 1.6 million (USD 1.7 million) in the fourth quarter of 2015.

Net loss for the fourth quarter 2016 was EUR 1.3 (USD 1.4 million), or a loss of EUR 0.04 per diluted share, as compared to net income of EUR 5.1 million (USD 5.5 million), or EUR 0.18 per diluted share in the year-ago period.  Net income in the fourth quarter of 2016 included non-cash interest expense of EUR 0.4 million (USD 0.5 million) to adjust the accounting fair value of the outstanding warrants.

Year Ended 2016 Results

Total revenue for 2016 was EUR 35.6 million (USD 39.3 million), an increase of 10.4% compared to EUR 32.3 million (USD 35.6) for the year ended December 31, 2015.

Total revenue in the HIFU business for 2016 was EUR 13.8 million (USD 15.2 million), an increase of 63.0% compared to EUR 8.5 million (USD 9.4 million) for the year ended December 31, 2015.

Total revenue in the Lithotripsy business for 2016 was EUR 21.8 million (USD 24.0 million), a decrease of 8.3% compared to EUR 23.8 million (USD 26.2 million) for the year ended December 31, 2015.

Gross profit for 2016 was EUR 16.4 million (USD 18.1 million), with gross profit margin on net sales of 46.1%, compared to 42.8% during the prior year period.

The Company recorded operating profit for 2016 of EUR 0.4 million (USD 0.4 million), compared to an operating profit of EUR 0.5 million (USD 0.5 million) during the prior year period.

Full-year net income was EUR 3.8 million (USD 4.2 million), or EUR 0.13 per diluted share, as compared to a net loss of EUR 1.7 million (USD 1.8 million), or a loss of EUR 0.07 per diluted share in 2015. Full-year net income included non-cash interest income of EUR 4.0 million to adjust the accounting fair value of the outstanding warrants.

At December 31, 2016, cash and cash equivalents were EUR 22.0 million (USD 23.2 million).

Conference Call

An accompanying conference call will be conducted by Marc Oczachowski, Chief Executive Officer, and Francois Dietsch, Chief Financial Officer, to go over the results. The call will be held at 8:30 AM ET, on Tuesday, April 4, 2017. Please refer to the information below for conference call dial-in information and webcast registration.

Conference Date: Tuesday, April 4, 2017 8:30 AM ET
Conference dial-in: 877-269-7756
International dial-in: 201-689-7817
Conference Call Name: EDAP-TMS Fourth Quarter and Full Year 2016 Results Call
Webcast Registration: Click Here

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

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 (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,   
2016 2015 2016 2015  
Euros Euros $US $US  
Sales of medical equipment 7,566   9,049   8,093   9,792  
Net Sales of RPP and Leases 1,231 1,151 1,317 1,245  
Sales of spare parts, supplies and
Services
1,875 1,560 2,006 1,688  
TOTAL NET SALES 10,672   11,760   11,417   12,726  
Other revenues 22   32   24   35  
TOTAL REVENUES 10,695   11,792   11,441   12,760  
Cost of sales -5,492   -6,495   -5,875   -7,029  
GROSS PROFIT 5,203   5,297   5,566   5,732  
Research & development expenses -1,135   -565   -1,214   -612  
S, G & A expenses -3,733   -3,147   -3,994   -3,406  
Total operating expenses -4,868   -3,713   -5,208   -4,018  
OPERATING PROFIT (LOSS) 335   1,584   358   1,714  
Interest (expense) income, net -444   3,710   -475   4,015  
Currency exchange gains (loss), net -698   476   -746   516  
Other income (loss), net -   5   -   5  
INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST -807   5,775   -863   6,249  
Income tax (expense) credit -471   -659   -504   -713  
NET INCOME (LOSS)  -1,278   5,116   -1,367   5,536  
 
 
Earning per share - Basic -0.04   0.2   -0.05   0.22  
Average number of shares used in
computation of EPS
28,727,616   25,254,618   28,727,616   25,254,618  
Earning per share - Diluted -0.04   0.18   -0.05   0.19  
Average number of shares used in
computation of EPS for positive net income
28,727,616   28,846,270   28,727,616   28,846,270  

NOTE:  Translated for convenience of the reader to U.S. dollars at the 2016 average three months' noon buying rate of 1 Euro = 1.0697 USD, and 2015 average three months noon buying rate of 1 Euro = 1.0821 USD.

EDAP TMS S.A.
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,   December 31,    December 31,    December 31,
2016 2015 2016 2015
Euros Euros $US $US
Sales of medical equipment 24,045   21,906   26,520   24,168
Net Sales of RPP and Leases 4,906   4,408   5,411   4,864
Sales of spare parts, supplies and 6,628   5,904   7,310   6,513
Services
TOTAL NET SALES 35,579   32,218   39,240   35,545
Other revenues 32   35   35   39
TOTAL REVENUES 35,611   32,253   39,276   35,584
Cost of sales -19,200   -18,468   -21,176   -20,375
GROSS PROFIT 16,411   13,785   18,100   15,209
Research & development expenses -3,868   -2,690   -4,266   -2,968
S, G & A expenses -12,152   -10,608   -13,402   -11,703
Total operating  expenses -16,019   -13,298   -17,668   -14,671
OPERATING PROFIT (LOSS) 392   488   432   538
Interest (expense) income, net 3,949   -2,094   4,355   -2,310
Currency exchange gains (loss), net 103   699   114   771
Other income (loss), net -   -   -   -
INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST 4,444   -907   4,901   -1,001
Income tax (expense) credit -602   -759   -663   -838
NET INCOME (LOSS) 3,842   -1,667   4,238   -1,839
Earning per share - Basic 0.14   -0.07   0.15   -0.07
Average number of shares used in 27,823,313   25,021,966   27,823,313   25,021,966
computation of EPS
Earning per share - Diluted 0.13   -0.07   0.14   -0.07
Average number of shares used in
computation of EPS for positive net income
29,365,583   25,021,966   29,365,583   25,021,966

NOTE:  Translated for convenience of the reader to U.S. dollars at the 2016 average twelve months noon buying rate of 1 Euro = 1.1029 USD, and 2015 average twelve months noon buying rate of 1 Euro = 1.1033 USD.

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

  Dec.  31,   Sept.  30, Dec.  31,   Sept.  30,  
2016 2016 2016 2016
Euros Euros $US $US
Cash, cash equivalents and short
term investments
21,989   18,837 23,202   21,170  
Total current assets 40,514   40,694 42,750   45,734  
Total current liabilities 15,010   14,547 15,838   16,349  
Shareholders' Equity 24,451   25,739 25,800   28,926  

NOTE:  Translated for convenience of the reader to U.S. dollars at the noon buying rate of 1 Euro = 1.0552 USD, on December 31, 2016 and at the noon buying rate of 1 Euro = 1.1238 USD, on September 30, 2016.

EDAP TMS S.A.
CONDENSED STATEMENTS OF OPERATIONS BY DIVISION
TWELVE MONTHS ENDED DECEMBER 31, 2016
(Amounts in thousands of Euros)

                Total After Consolidation  
HIFU Division UDS Division Corporate  
                   
Sales of goods 9,382 14,664 24,045  
Sales of RPPs & Leases 3,547   1,359         4,906  
Sales of spare parts & services 862   5,766         6,628  
TOTAL NET SALES 13,791   21,789         35,579  
   
Other revenues 28   4         32  
 
TOTAL REVENUES 13,819   21,792         35,611  
GROSS PROFIT 8,109 58.70% 8,302 38.10%       16,411 46.10%
(% of Total Revenues)
                   
      -1,416         -3,868  
Research & Development -2,452  
Total SG&A plus depreciation -4,692   -6,145     -1,315   -12,152  
                   
OPERATING PROFIT (LOSS) 964 742 -1,315 392  

Company Contact:

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

Investor Contact:

Rich Cockrell
CG Capital
877-889-1972
investorrelations@cg.capital