Highlights
- Revenues increased 27% year-over-year to EUR 20.3 million (USD 27.4 million) for the first nine months of 2014
- HIFU revenue increased 114% year-over-year during first nine months of 2014
- Positive operating income, excluding FDA-related costs, for three and nine months ended September 30, 2014
- Solid financial profile with cash position of EUR 11.1 million (USD 14.0 million)
- Three Focal One Systems sold during third quarter, demonstrates robust OUS demand for next-generation HIFU device
- Recent FDA guidance on Ablatherm HIFU PMA submission provides clear U.S. regulatory path and opportunity.
EDAP TMS SA, the global leader in therapeutic ultrasound, announced today financial results for the third quarter and nine months ended September 30, 2014 and provided an update on recent strategic and operational developments.
Marc Oczachowski, EDAP's Chief Executive Officer, stated, "We continue to make significant progress on several fronts in the second half of 2014. Of most note is the continued OUS adoption of our world class HIFU technology, which led revenue from this segment of our business to more than double in the first nine months of 2014 compared to the first nine months of 2013 with a total of ten systems sold, up from two in the year-ago period."
"The third quarter was particularly exciting, as we recognized revenue from three Focal One device sales. As reported in recent communication, these 3 devices were sold and installed in recognized and leading prostate cancer centers in France and Germany. This is a clear recognition of the high value of EDAP's broad range of HIFU devices and the increasing need of a complement to surgery, to address the changing prostate cancer patient population."
Mr. Oczachowski continued, "In the U.S., we recently reached an important milestone in our ongoing regulatory efforts with the receipt of a letter from the FDA. This letter provided specific recommendations for amendments to our Ablatherm-HIFU PMA that would make the application approvable. This comprehensive guidance reflects the extensive discussions we have had with the FDA since our Advisory Panel meeting. We are excited by the growth that our HIFU business has achieved to-date and the broader growth potential in the global urology market. In addition, we remain steadfastly committed to advancing the FDA approval process, and to bringing this therapeutic option to prostate cancer patients in the U.S."
Third Quarter 2014 Results
Total revenue for the third quarter 2014 was EUR 6.9 million (USD 9.0 million), a 24% year-over-year increase compared to EUR 5.6 million (USD 7.4 million) for the third quarter 2013. Total revenue included a EUR 0.5 million (USD 0.7 million) one-off revenue related to the licensing of a HIFU patent.
Total revenue for the HIFU division was EUR 2.9 million (USD 3.9 million) for the third quarter 2014, compared to EUR 1.2 (USD 1.7 million) for the same period last year. Results for the third quarter 2014 included the sale of three Focal One devices.
For the three months ended September 30, 2014, total revenue for the lithotripsy division was EUR 4.0 million (USD 5.4 million), compared to EUR 4.3 million (USD 5.8 million), during the year ago period. During the third quarter 2014, the Company recorded sales of seven lithotripsy machines, comprised of five Sonolith i-move devices, one Sonolith i-sys device, and one Sonolith Praktis. This compares to nine devices sold in the third quarter of 2013.
Gross profit for the third quarter 2014 was EUR 3.4 million (USD 4.4 million), compared to EUR 2.2 million (USD 3.0 million) for the year ago period. Gross profit margin on net sales was 45.2% in the third quarter of 2014, compared to 40.3% in the year ago period.
Operating expenses were EUR 3.1 million (USD 4.0 million) for the third quarter 2014, compared to EUR 2.6 million (USD 3.4 million) for the same period in 2013.
Operating income for the quarter was EUR 339,000 (USD 443,000), compared with an operating loss in the third quarter of 2013 of EUR 333,000 (USD 444,000).
Net income for the third quarter 2014 was EUR 6.6 million (USD 8.6 million), or EUR 0.26 per diluted share, as compared to a net loss for the third quarter 2013 of EUR 373,000 (USD 497,000), or EUR 0.02 per diluted share. Net income in the third quarter of 2014 included non-cash interest income of EUR 6.5 million to adjust the accounting fair value of outstanding warrants.
Results for the Nine Months Ended September 30, 2014
Total revenue for the first nine months of 2014 was EUR 20.3 million (USD 27.4 million), up 27.0% compared to EUR 16.0 million (USD 21.1 million) for the first nine months of 2013.
Gross profit for the period was EUR 8.8 million (USD 11.8 million), with gross profit margin on net sales of 41.7%, compared to 37.9% in the year ago period.
Operating loss for the first nine months of 2014 was EUR 707,000 (USD 954,000), an improvement of EUR 2.3 million over operating loss of EUR 3.0 million (USD 3.9 million) in the first nine months of 2013. Excluding FDA-related costs, operating income for the first nine months of 2014 was EUR 0.3 million (USD 0.4 million).
Net income for the nine months ended September 30, 2014 was EUR 2.1 million (USD 2.9 million), or EUR 0.09 per diluted share, as compared to net loss of EUR 4.5 million (USD 5.9 million), or EUR 0.22 per diluted share, in the same period in 2013. Net income in the 2014 period included non-cash interest income of EUR 3.0 million to adjust the accounting fair value of the outstanding warrants.
At September 30, 2014, cash and cash equivalents, including short-term treasury investments, were EUR 11.1 million (USD 14.0 million).