EDAP Reports Second Quarter 2022 Results

EDAP Reports Second Quarter 2022 Results




EDAP Reports Second Quarter 2022 Results

  • Announced Focal One® HIFU reimbursement raised to urology APC Level 6 under CMS Outpatient Prospective Payment System (OPPS) proposed rule for CY23
  • Second quarter 2022 total revenue of approximately EUR 14.2 million (USD 15.0 million), an increase of 36.7% as compared to EUR 10.4 million (USD 12.4 million) for the second quarter 2021
  • 79% growth in HIFU revenues for the first half of 2022 compared to same period in 2021
  • Strong cash position of $48.5 million as of June 30, 2022
  • Company to host Focal One Expert User Panel event in New York City on Thursday, September 29
  • Second quarter conference call and webcast scheduled for tomorrow, Thursday, August 25, at 8:30 am ET

LYON, France, August 24, 2022 — EDAP TMS SA (Nasdaq: EDAP) (the “Company”), a global leader in robotic energy-based therapies, announced today unaudited financial results for the second quarter 2022.

Marc Oczachowski, EDAP’s Chairman and Chief Executive Officer, said: “For the second quarter 2022, we generated strong year-over-year revenue growth of nearly 37% driven by contribution from all three business segments, including our core HIFU business, which grew nearly 50% over the prior year period. The measured investments that we continue to make in our US team and infrastructure continue to bear fruit as HIFU, and specifically Focal One, becomes integral to the modern prostate cancer treatment paradigm.”

“Our pipeline of sales prospects continues to grow, driven by a combination of new world-renowned healthcare institutions that have adopted Focal One, and champion this technology, and our growing presence at important medical meetings such as the annual meeting of the American Urological Association this past May. These trends, together with the proposed increase in reimbursement for CY23 indicated in the preliminary CMS Outpatient Prospective Payment System (OPPS) rule, give me great optimism for the future adoption of our Focal One platform.” Mr. Oczachowski concluded.

Ryan Rhodes, Chief Executive Officer of EDAP US, stated, “Following the close of the second quarter, we learned that the Centers for Medicare and Medicaid Services, in its proposed OPPS rule for calendar year 2023, raised Focal One HIFU reimbursement to APC Level 6 from Level 5 currently. It is difficult to overstate the positive impact such a change would have on expanding patient procedure access should the increase stand in the final rule, which we expect to be published in November. We are very pleased with this proposed increase to hospital reimbursement and believe it more accurately reflects the significant clinical value that HIFU brings to the urology suite.”

“We also will be hosting an in-person Focal One Expert User Panel Event in New York City in September, to coincide with Prostate Cancer Awareness Month. The event will feature presentations from several renowned thought leaders and will also include a demonstration of the Focal One procedure.”

Year-to-Date Results

Total revenue for the six months ended June 30, 2022, was EUR 27.1 million (USD 29.5 million), an increase of 31.5% from total revenue of was EUR 20.7 million (USD 24.8 million) for the same period in 2021.

Total revenue in the HIFU business for the six months ended June 30, 2022, was EUR 6.8 million (USD 7.4 million), an increase of 78.8% as compared to EUR 3.8 million (USD 4.6 million) for the six months ended June 30, 2021.

Total revenue in the LITHO business for the six months ended June 30, 2022, was EUR 5.8 million (USD 6.3 million), an increase of 11.6% from EUR 5.2 million (USD 6.2 million) for the six months ended June 30, 2021.

Total revenue in the Distribution business for the six months ended June 30, 2022, was EUR 14.6 million (USD 15.9 million), a 24.8% increase compared to EUR 11.7 million (USD 14.0 million) for the six months ended June 30, 2021.

Gross profit for the six months ended June 30, 2022, was EUR 12.0 million (USD 13.0 million), compared to EUR 8.6 million (USD 10.3 million) for the year-ago period. Gross profit margin on net sales was 44.0% for the six months ended June 30, 2022, compared to 41.6% for the comparable period in 2021. The increase in gross profit year-over-year was due to higher sales effect on fixed costs, particularly in the HIFU business.

Operating expenses were EUR 12.5 million (USD 13.6 million) for the six months ended June 30, 2022, compared to EUR 8.8 million (USD 10.5 million) for the same period in 2021.

Operating loss for the six months ended June 30, 2022, was EUR 0.5 million (USD 0.6 million), compared to an operating loss of EUR 0.2 million (USD 0.2 million) for the six months ended June 30, 2021.

Net income for the six months ended June 30, 2022, was EUR 2.2 million (USD 2.4 million), or EUR 0.06 per diluted share, as compared to a net income of EUR 0.4 million (USD 0.4 million), or EUR 0.01 per diluted share in the year-ago period.

As of June 30, 2022, the company held cash and cash equivalents of EUR 46.3 million (USD 48.5 million), as compared to EUR 47.2 million (USD 53.4 million) as of December 31, 2021.

Second Quarter 2022 Results

Total revenue for the second quarter 2022 was EUR 14.2 million (USD 15.0 million), a 36.7% increase as compared to total revenue of EUR 10.4 million (USD 12.4 million) for the same period in 2021.

Total revenue in the HIFU business for the second quarter 2022 was EUR 3.0 million (USD 3.2 million), an increase of 49.3% as compared to EUR 2.0 million (USD 2.4 million) for the second quarter of 2021.

Total revenue in the LITHO business for the second quarter 2022 was EUR 3.6 million (USD 3.8 million), an increase of 55.7% from was EUR 2.3 million (USD 2.7 million) for the second quarter of 2021.

Total revenue in the Distribution business for the second quarter 2022 was EUR 7.6 million (USD 8.1 million), a 25.5% increase compared to EUR 6.1 million (USD 7.3 million) for the second quarter of 2021.

Gross profit for the second quarter 2022 was EUR 6.2 million (USD 6.6 million), compared to EUR 4.2 million (USD 5.1 million) for the year-ago period. Gross profit margin on net sales was 43.8% in the second quarter of 2022, compared to 40.7% in the year-ago period. The increase in gross profit year-over-year was driven by the higher sales effect on fixed costs.

Operating expenses were EUR 6.6 million (USD 7.0 million) for the second quarter of 2022, compared to EUR 4.6 million (USD 5.6 million) for the same period in 2021.

Operating loss for the second quarter of 2022 was EUR 0.4 million (USD 0.5 million), compared to an operating loss of EUR 0.4 million (USD 0.5 million) in the second quarter of 2021.

Net income for the second quarter of 2022 was EUR 1.8 million (USD 1.9 million), or EUR 0.05 per diluted share, as compared to a net loss of EUR 0.4 million (USD 0.5 million), or EUR 0.01 per diluted share in the year-ago period.

In-person Focal One Expert User Panel Event
The management team of EDAP will host a In-person Focal One Expert User Panel Event in New York City on Thursday, September 29. https://lifesci.rampard.com/WebcastingAppv5/Events/eventsDispatcher.jsp?Y2lk=MjAxNg==

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, August 25, 2022. Please refer to the information below for conference call dial-in information and webcast registration.

Conference Call & Webcast
Thursday, August 25, 2022 @ 8:30am Eastern Time
Domestic:                877-451-6152
International:            201-389-0879
Passcode:                13731177
Webcast:                https://viavid.webcasts.com/starthere.jsp?ei=1558239&tp_key=295933838c

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
John Fraunces
LifeSci Advisors, LLC
917-355-2395
jfraunces@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:
       June 30,       June 30,       June 30,       June 30, 
    2022   2021   2022   2021
    Euros   Euros   $US   $US
Sales of medical equipment   9,684   6,696   10,245   8,051
Net Sales of RPP and Leases   1,646   1,265   1,741   1,521
Sales of spare parts, supplies and Services   2,820   2,387   2,984   2,870
TOTAL NET SALES   14,151   10,349   14,969   12,443
Other revenues     1     2
TOTAL REVENUES   14,151   10,350   14,969   12,445
Cost of sales   (7,949)   (6,134)   (8,409)   (7,376)
GROSS PROFIT   6,201   4,216   6,560   5,069
Research & development expenses   (1,174)   (925)   (1,242)   (1,112)
S, G & A expenses   (5,455)   (3,718)   (5,770)   (4,470)
Total operating expenses   (6,629)   (4,642)   (7,012)   (5,582)
OPERATING PROFIT (LOSS)   (427)   (427)   (452)   (513)
Interest (expense) income, net   (29)   (20)   (31)   (25)
Currency exchange gains (loss), net   2,412   82   2,551   98
INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST   1,955   (365)   2,068   (439)
Income tax (expense) credit   (128)   (58)   (136)   (70)
NET INCOME (LOSS)   1,827   (424)   1,933   (509)
Earning per share – Basic   0.05   (0.01)   0.06   (0.02)
Average number of shares used in computation of EPS   33,469,053   32,220,414   33,469,053   32,220,414
Earning per share – Diluted   0.05   (0.01)   0.06   (0.02)
Average number of shares used in computation of EPS for positive net income   34,130,859   32,220,414   34,130,859   32,220,414

NOTE: Translated for convenience of the reader to U.S. dollars at the 2022 average three months’ noon buying rate of 1 Euro = 1.0579 USD, and 2021 average three months noon buying rate of 1 Euro = 1.2024 USD 

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

                 
    Six Months Ended:   Six Months Ended:
       June 30,       June 30,       June 30,       June 30, 
    2022   2021   2022   2021
    Euros   Euros   $US   $US
Sales of medical equipment   18,650   13,387   20,287   16,075
Net Sales of RPP and Leases   2,963   2,477   3,223   2,975
Sales of spare parts, supplies and Services   5,536   4,784   6,021   5,744
TOTAL NET SALES   27,148   20,648   29,531   24,794
Other revenues     4     5
TOTAL REVENUES   27,148   20,653   29,531   24,799
Cost of sales   (15,190)   (12,066)   (16,524)   (14,488)
GROSS PROFIT   11,958   8,587   13,008   10,311
Research & development expenses   (2,255)   (1,776)   (2,453)   (2,132)
S, G & A expenses   (10,242)   (6,998)   (11,141)   (8,403)
Total operating expenses   (12,497)   (8,774)   (13,594)   (10,536)
OPERATING PROFIT (LOSS)   (539)   (188)   (586)   (225)
Interest (expense) income, net   (58)   143   (63)   172
Currency exchange gains (loss), net   2,981   571   3,243   685
INCOME (LOSS) BEFORE TAXES AND MINORITY INTEREST   2,384   527   2,593   632
Income tax (expense) credit   (200)   (177)   (218)   (213)
NET INCOME (LOSS)   2,184   350   2,375   420
Earning per share – Basic   0.07   0.01   0.07   0.01
Average number of shares used in computation of EPS   33,467,594   30,705,356   33,467,594   30,705,356
Earning per share – Diluted   0.06   0.01   0.07   0.01
Average number of shares used in computation of EPS for positive net income   34,075,033   31,994,402   34,075,033   31,994,402

NOTE: Translated for convenience of the reader to U.S. dollars at the 2022 average six months’ noon buying rate of 1 Euro = 1.0878 USD, and 2021 average six months noon buying rate of 1 Euro = 1.2008 USD

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

                 
       June 30,       December 31,       June 30,       December 31, 
    2022   2021   2022   2021
    Euros   Euros   $US   $US
Cash, cash equivalents and short-term treasury investments   46,334   47,183   48,507   53,405
Account receivables, net   15,888   12,118   16,633   13,716
Inventory   7,906   7,499   8,277   8,487
Other current assets   725   581   759   658
TOTAL CURRENT ASSETS   70,853   67,382   74,176   76,267
Property, plant and equipment, net   5,820   5,173   6,093   5,855
Goodwill   2,412   2,412   2,525   2,730
Other non-current assets   2,210   2,260   2,314   2,558
TOTAL ASSETS   81,294   77,226   85,107   87,409
Accounts payable & other accrued liabilities   11,348   10,786   11,881   12,208
Deferred revenues, current portion   3,958   3,408   4,143   3,857
Short term borrowing   1,906   1,914   1,995   2,167
Other current liabilities   2,590   1,843   2,711   2,086
TOTAL CURRENT LIABILITIES   19,802   17,951   20,730   20,318
Obligations under operating and finance leases non-current   1,427   1,318   1,494   1,492
Long term debt, non-current   4,390   4,930   4,596   5,580
Deferred revenues, non-current   351   440   368   498
Other long term liabilities   3,060   2,534   3,204   2,868
TOTAL LIABILITIES   29,029   27,172   30,391   30,755
TOTAL SHAREHOLDERS’EQUITY   52,265   50,054   54,716   56,655
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY   81,294   77,226   85,107   87,409

NOTE: Translated for convenience of the reader to U.S. dollars at the noon buying rate of 1 Euro = 1.0469 USD on June 30, 2022 and at the noon buying rate of 1 Euro = 1.1319 USD, on December 31, 2021

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

                 
       Six Months Ended      Twelve Months Ended      Six Months Ended      Twelve Months Ended
    June 30,    December 31,    June 30,    December 31, 
    2022   2021   2022   2021
    (Euros)   (Euros)   ($US)   ($US)
NET INCOME (LOSS)   2,184   700   2,375   825
Adjustments to reconcile net income (loss) to net cash generated by (used in) operating activities(1)   1,967   3,225   2,140   3,801
OPERATING CASH FLOW   4,151   3,925   4,515   4,626
Increase/Decrease in operating assets and liabilities   (2,901)   520   (3,156)   613
NET CASH GENERATED BY (USED IN) OPERATING ACTIVITIES   1,250   4,445   1,359   5,239
                 
Additions to capitalized assets produced by the company and other capital expenditures   (1,192)   (1,638)   (1,297)   (1,931)
NET CASH GENERATED BY (USED IN) INVESTING ACTIVITIES   (1,192)   (1,638)   (1,297)   (1,931)
NET CASH GENERATED BY (USED IN) FINANCING ACTIVITIES   34   20,266   37   23,887
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS   (941)   (585)   (4,997)   (3,992)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   (849)   22,488   (4,898)   23,204

(1) including share based compensation expenses for 936 thousand of Euros for the six months ended June 30, 2022 and 1,900 thousand of Euros for the full year ended December 31, 2021.

NOTE: Translated for convenience of the reader to U.S. dollars at the 2022 average six months’ noon buying rate of 1 Euro = 1.0878 USD, and 2021 average twelve months noon buying rate of 1 Euro = 1.1787 USD

EDAP TMS S.A.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS BY DIVISION
SIX MONTHS ENDED JUNE 30, 2022
(Amounts in thousands of Euros)

                                       
       HIFU                ESWL                Distribution                Reconciling      Total After            
    Division       Division       Division       Items   Consolidation      
Sales of goods   3,606        2,291        12,753          18,650       
Sales of RPPs & Leases   2,252        569        141          2,963       
Sales of spare parts & services   937        2,917        1,682          5,536       
TOTAL NET SALES   6,795        5,777        14,576          27,148       
Other revenues                                
TOTAL REVENUES   6,795        5,777        14,576          27,148       
GROSS PROFIT (% of Net Sales)   3,797   55.9 %   2,536   43.9 %   5,624   38.6 %     11,958   44.0 %
Research & Development   (1,560)        (466)        (229)          (2,255)       
Total SG&A plus depreciation   (3,990)        (1,356)        (3,696)        (1,201)   (10,242)       
OPERATING PROFIT (LOSS)   (1,752)        714        1,699        (1,201)   (539)