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EDAP Reports Third Quarter 2020 Results and Provides Operational Update

EDAP TMS S.A.
·15 min de lecture
  • Generated strongest total revenue quarter of 2020

  • Reported growth in HIFU procedure revenues year-over-year notwithstanding ongoing COVID-19 pandemic

  • Completed sales to renowned healthcare institutions Mount Sinai Health System in New York and Keck Medical Center at the University of Southern California

  • Announced first patients treated in Phase 2 clinical trial assessing Focal One® as a potential treatment for deep rectal endometriosis

  • Increased strong cash position to EUR 19.9 million (USD 23.4 million) as of September 30, 2020

  • Company to host a conference call tomorrow, November 19th, at 8:30 am ET

LYON, France, November 18, 2020 -- EDAP TMS SA (Nasdaq: EDAP) (the “Company”), the global leader in robotic energy based therapies, announced today financial results for the third quarter of 2020 and provided an update on strategic and operational developments.

Marc Oczachowski, EDAP's Chairman and Chief Executive Officer, said: “The third quarter of 2020 was our strongest of the year thus far, a clear signal that we are successfully navigating through the challenges posed by the ongoing COVID-19 pandemic. We closed several notable transactions during the quarter, including a bundled Focal One-ExactVu sale to Mount Sinai Health System in New York, and a Focal One sale to Keck Medical Center of University of Southern California, an early adopter of our first generation HIFU technology, Ablatherm®. At the same time, we continued to grow our sales pipeline, both in the U.S. and internationally.

“Also, during the quarter, we received regulatory approval to initiate a Phase 2 study assessing Focal One® as a potential treatment for deep rectal endometriosis and we initiated patient treatments quickly thereafter. Endometriosis represents an important expansion of our development pipeline as we work to maximize the clinical utility of HIFU across new indications beyond prostate.

“We ended the quarter with a strong cash position of $23.4 million, sufficient to continue to execute on our Focal One-ExactVu commercial plan while advancing HIFU in endometriosis and other soft tissue indications where we believe this non-invasive technology can be beneficial.

“With COVID cases again rising in many parts of the world, including most of the US, we are carefully monitoring the effect on our operations during the fourth quarter. While we are seeing some impact on procedure volumes as hospitals continue to focus on the pandemic, we are nonetheless optimistic that we will be able to announce additional sales by the end of the year,” Mr. Oczachowski concluded.

Third Quarter 2020 Results

Total revenue for the third quarter 2020 was EUR 9.4 million (USD 11.2 million), a decrease of 8.5% compared to total revenue of EUR 10.3 million (USD 11.3 million) for the same period in 2019. Third quarter 2020 revenue reflects the impact of the ongoing COVID-19 pandemic on equipment sales.

Total revenue in the HIFU business for the third quarter 2020 was EUR 2.6 million (USD 3.0 million), a 7.9% decrease compared to EUR 2.8 million (USD 3.1 million) for the third quarter of 2019.

Total revenue in the LITHO business for the third quarter 2020 was EUR 2.4 million (USD 2.9 million), a 27.6% decrease compared to EUR 3.3 million (USD 3.7 million) for the third quarter of 2019

Total revenue in the Distribution business for the third quarter 2020 was EUR 4.4 million (USD 5.2 million), a 6.4% increase compared to EUR 4.2 million (USD 4.6 million) for the third quarter of 2019.

Gross profit for the third quarter 2020 was EUR 4.0 million (USD 4.7 million), compared to EUR 4.7 million (USD 5.1 million) for the year-ago period. Gross profit margin on net sales was 42.0% in the third quarter of 2020, compared to 45.3% in the year-ago period. The decline in gross profit year-over-year was due to in part to lower sales in HIFU business as compared to the year-ago period driven primary by COVID-19.

Operating expenses were EUR 4.3 million (USD 5.0 million) for the third quarter of 2020, compared to EUR 4.4 million (USD 4.9 million) for the same period in 2019.

Operating loss for the third quarter of 2020 was EUR 0.3 million (USD 0.3 million), compared to an operating profit of EUR 0.3 million (USD 0.3 million) in the third quarter of 2019.

Net loss for the third of 2020 was EUR 1.0 million (USD 1.2 million), or EUR (0.03) per diluted share, as compared to net income of EUR 0.8 million (USD 0.9 million), or EUR 0.03 per diluted share in the year-ago period.

For the first nine months 2020 Results

Total revenue for the first nine months of 2020 was EUR 26.3 million (USD 29.8 million), a decrease of 20.1% compared to total revenue of EUR 32.9 million (USD 36.9 million) for the same period in 2019. As mentioned, year-to-date revenue reflects the impact of the ongoing COVID-19 pandemic on the company’s activities.

Total revenue in the HIFU business for the first nine months of 2020 was EUR 7.1 million (USD 8.0 million), a 37.2% decrease compared to EUR 11.2 million (USD 12.6 million) for the first nine months of 2019.

Total revenue in the LITHO business for the first nine months of 2020 was EUR 8.3 million (USD 9.4 million), a 17.8% decrease compared to EUR 10.1 million (USD 11.3 million) for the first nine months of 2019.

Total revenue in the Distribution business for the first nine months of 2020 was EUR 11.0 million (USD 12.4 million), a 5.6% decrease compared to EUR 11.6 million (USD 13.0 million) for the first nine month of 2019.

Gross profit for the first nine months of 2020 was EUR 11.4 million (USD 12.8 million), compared to EUR 15.9 million (USD 17.8 million) for the year-ago period. Gross profit margin on net sales was 43.2% for the first nine months of 2020, compared to 48.2% in the year-ago period. The decline in gross profit year-over-year was due in part to lower sales in the HIFU business driven by COVID-19.

Operating expenses were EUR 12.8 million (USD 14.5 million) for the first nine months of 2020, compared to EUR 13.7 million (USD 15.4 million) for the same period in 2019.

Operating loss for the first nine months of 2020 was EUR 1.5 million (USD 1.6 million), compared to an operating profit of EUR 2.1 million (USD 2.4 million) for the same period of 2019.

Net loss for the first nine months of 2020 was EUR 2.5 million (USD 2.8 million), or EUR (0.09) per diluted share, as compared to a net income of EUR 2.5 million (USD 2.8 million), or EUR 0.09 per diluted share in the year-ago period.

As of September 30, 2020, the Company recorded a strong cash position of EUR 19.9 million (USD 23.4 million).

Conference Call

An accompanying conference call and webcast will be conducted by management to review the results. The call will be held at 8:30am EDT tomorrow, November 19, 2020. Please refer to the information below for conference call dial-in information and webcast registration.

Conference Call & Webcast
Thursday, November 19, 2020 @ 8:30am Eastern Time

Domestic: 877-451-6152
International: 201-389-0879
Passcode: 13712293
Webcast: http://public.viavid.com/index.php?id=142115

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, EDAP TMS develops, manufactures, promotes and distributes worldwide minimally invasive medical devices for various pathologies 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 Europe and in the U.S. as an answer to all requirements for ideal prostate tissue ablation. With the addition of the ExactVu™ Micro-Ultrasound device, EDAP TMS is now the only company offering a complete solution from diagnostics to focal treatment of Prostate Cancer. EDAP TMS also produces and distributes other medical equipment including the Sonolith® i-move lithotripter and lasers for the treatment of urinary tract stones using extra-corporeal shockwave lithotripsy (ESWL). 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 contains 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 and distribution divisions, as well as the length and severity of the COVID-19 pandemic, including its impacts across our businesses on demand for our devices and services. Factors that may cause such a difference may also 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:

Sept. 30,
2020
Euros



Sept. 30,
2019
Euros

Sept. 30,
2020
$US

Sept. 30,
2019
$US

Sales of medical equipment

5,984

6,877

7,080

7,571

Net Sales of RPP and Leases

1,207

1,228

1,428

1,352

Sales of spare parts, supplies and Services

2,255

2,187

2,668

2,407

TOTAL NET SALES

9,446

10,292

11,176

11,330

Other revenues

(13)

15

(16)

17

TOTAL REVENUES

9,433

10,307

11,160

11,347

Cost of sales

(5,469)

(5,641)

(6,470)

(6,209)

GROSS PROFIT

3,964

4,667

4,690

5,137

Research & development expenses

(1,090)

(886)

(1,289)

(975)

S, G & A expenses

(3,167)

(3,522)

(3,748)

(3,877)

Total operating expenses

(4,257)

(4,408)

(5,037)

(4,852)

OPERATING PROFIT (LOSS)

(293)

259

(347)

285

Interest (expense) income, net

(12)

(40)

(14)

(44)

Currency exchange gains (loss), net

(574)

684

(679)

753

INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST

(879)

903

(1,040)

994

Income tax (expense) credit

(122)

(120)

(145)

(132)

NET INCOME (LOSS)

(1,001)

783

(1,185)

862

Earning per share – Basic

(0.03)

0.03

(0.04)

0.03

Average number of shares used in computation of EPS

29,144,010

28,997,886

29,144,010

28,997,886

Earning per share – Diluted

(0.03)

0.03

(0.04)

0.03

Average number of shares used in computation of EPS for positive net income

29,144,010

29,622,866

29,144,010

29,622,866

NOTE: Translated for convenience of the reader to U.S. dollars at the 2020 average three months’ noon buying rate of 1 Euro = 1.1832 USD, and 2019 average three months noon buying rate of 1 Euro = 1.1008 USD

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

Nine Months Ended:

Nine Months Ended:

Sept. 30,
2020
Euros



Sept. 30,
2019
Euros

Sept. 30,
2020
$US

Sept. 30,
2019
$US

Sales of medical equipment

16,083

22,139

18,204

24,797

Net Sales of RPP and Leases

3,409

4,028

3,858

4,512

Sales of spare parts, supplies and Services

6,795

6,742

7,691

7,551

TOTAL NET SALES

26,287

32,909

29,753

36,860

Other revenues

11

15

12

17

TOTAL REVENUES

26,298

32,924

29,765

36,877

Cost of sales

(14,948)

(17,061)

(16,919)

(19,110)

GROSS PROFIT

11,350

15,863

12,846

17,768

Research & development expenses

(3,058)

(2,884)

(3,461)

(3,231)

S, G & A expenses

(9,743)

(10,857)

(11,027)

(12,161)

Total operating expenses

(12,800)

(13,742)

(14,488)

(15,392)

OPERATING PROFIT (LOSS)

(1,451)

2,121

(1,642)

2,376

Interest (expense) income, net

(51)

(103)

(58)

(115)

Currency exchange gains (loss), net

(631)

788

(714)

883

INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST

(2,133)

2,807

(2,415)

3,144

Income tax (expense) credit

(351)

(317)

(397)

(356)

NET INCOME (LOSS)

(2,484)

2,490

(2,812)

2,789

Earning per share – Basic

(0.09)

0.09

(0.10)

0.10

Average number of shares used in computation of EPS

29,142,788

28,997,866

29,142,788

28,997,866

Earning per share – Diluted

(0.09)

0.08

(0.10)

0.09

Average number of shares used in computation of EPS for positive net income

29,142,788

29,623,683

29,142,788

29,623,683

NOTE: Translated for convenience of the reader to U.S. dollars at the 2020 average nine months’ noon buying rate of 1 Euro = 1.1319 USD, and 2019 average nine months noon buying rate of 1 Euro = 1.1201 USD

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

Sept. 30,
2020
Euros



June. 30,
2020
Euros

Sept. 30,
2020
$US

June 30,
2020
$US

Cash, cash equivalents and short-term treasury investments

19,929

15,704

23,364

17,647

Account receivables, net

11,572

12,607

13,567

14,167

Inventory

9,455

9,365

11,084

10,523

Other current assets

604

631

708

709

TOTAL CURRENT ASSETS

41,560

38,307

48,722

43,046

Property, plant and equipment, net

5,928

6,072

6,950

6,823

Goodwill

2,412

2,412

2,827

2,710

Other non-current assets

1,739

1,794

2,039

2,016

TOTAL ASSETS

51,639

48,585

60,538

54,596

Accounts payable & other accrued liabilities

9,122

9,618

10,694

10,808

Deferred revenues, current portion

2,695

2,519

3,160

2,831

Short term borrowing

1,459

887

1,711

997

Other current liabilities

5,825

1,820

6,829

2,045

TOTAL CURRENT LIABILITIES

19,102

14,845

22,394

16,681

Obligations under operating and finance leases non-current

1,724

1,906

2,021

2,141

Long term debt, non-current

1,219

1,193

1,429

1,341

Deferred revenues, non-current

821

1,100

963

1,236

Other long term liabilities

3,626

3,673

4,251

4,128

TOTAL LIABILITIES

26,493

22,717

31,059

25,528

TOTAL SHAREHOLDERS’EQUITY

25,146

25,867

29,480

29,068

TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY

51,639

48,585

60,538

54,596

NOTE: Translated for convenience of the reader to U.S. dollars at the noon buying rate of 1 Euro = 1.1723 USD, on September 30, 2020 and at the noon buying rate of 1 Euro = 1.1237 USD, on June 30, 2020.

EDAP TMS S.A.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands of Euros)

Sept. 30, 2020
Euros

June 30, 2020
Euros

Sept. 30, 2020
$US

June 30 2020
$US

NET INCOME (LOSS)

(2,484)

(1,483)

(2,812)

(1,640)

Adjustments to reconcile net income (loss) to net cash generated by (used in) operating activities

2,211

1,457

2,503

1,612

OPERATING CASH FLOW

(273)

(25)

(309)

(28)

Increase/Decrease in operating assets and liabilities

(1,735)

(1,774)

(1,964)

(1,963)

NET CASH GENERATED BY (USED IN) OPERATING ACTIVITIES

(2,008)

(1,799)

(2,273)

(1,991)

Short term investments(1)

(1,708)

(1,786)

(1,933)

(1,976)

Additions to capitalized assets produced by the company and other capital expenditures

(1,508)

(844)

(1,707)

(933)

NET CASH GENERATED BY (USED IN) INVESTING ACTIVITIES

(3,216)

(2,630)

(3,640)

(2,909)

NET CASH GENERATED BY (USED IN) FINANCING ACTIVITIES

2,248

(2,444)

2,544

(2,704)

NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

312

(44)

1,281

(204)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(2,665)

(6,968)

(2,088)

(7,808)

(1) Short term investments are comprised of money market funds

NOTE: Translated for convenience of the reader to U.S. dollars at the 2020 average nine months’ noon buying rate of 1 Euro = 1.1319 USD, and 2019 average nine months noon buying rate of 1 Euro = 1.1201 USD


EDAP TMS S.A.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS BY DIVISION
NINE MONTHS ENDED SEPTEMBER 30, 2020
(Amounts in thousands of Euros)



HIFU
Division



ESWL
Division



Distribution
Division



Reconciling
Items



Total After Consolidation



Sales of goods



3,095



3,408



9,580



16,083

Sales of RPPs & Leases

2,594

659

156

3,409

Sales of spare parts & services

1,351

4,217

1,226

6,795

TOTAL NET SALES

7,041

8,284

10,962

26,287

Other revenues

11

0

0

11

TOTAL REVENUES

7,052

8,284

10,962

26,298

GROSS PROFIT
(% of Total Revenues)

3,877

55.0 %

3,490

42.1%

3,982

36.3%

11,350

43.2%



Research & Development



(1,763)

(1,006)

(289)

(3,058)

Total SG&A plus depreciation

(2,870)

(2,154)

(3,599)

(1,119)

(9,743)



OPERATING PROFIT (LOSS)



(756)



331



94



(1,119)



(1,451)

Attachment