Araccel AB Report for the Quarter and Nine Months Ended September 30, 2001.Business Editors/Health & Medical Writers HORSHAM Horsham (hôr`shəm), town (1991 pop. 38,356) and district, West Sussex, SE England. Horsham is known primarily for its agricultural and merchandising activities, but it also serves as an engineering center. , Pa.--(BW HealthWire)--Nov. 15, 2001 --Net revenues for the three months and nine months were 19.7 MSEK MSEK Meyer, Suozzi, English & Klein (New York law firm) MSEK Million Swedish Kroner (25.1 MSEK) and 72.2 MSEK (77.5 MSEK), respectively. --Gross profit for the three months and nine months were 11.1 MSEK (14.7 MSEK) and 46.0 MSEK (41.7 MSEK), respectively. --Earnings (loss) before interest, taxes and depreciation (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) for the three and nine months were -6.6 MSEK (0.2 MSEK) and -8.6 MSEK (-3.4 MSEK), respectively. --Net income (loss) after tax for the three and nine months were -11.4 MSEK (-2.8 MSEK) and -22.4 MSEK (-17.2 MSEK), respectively. --The backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. at the end of the period was 58.9 MSEK (70.0 MSEK at 12/31/2000 and 80.0 MSEK at 9/30/2000). --New contract orders net of cancellations during the third quarter of 2001 amounted to 44.2 MSEK as compared to 14.2 MSEK for the comparable period in 2000, an increase of 211%. Important events during the third quarter ----------------------------------------- -A major order was signed in August 2001 with one of the Company's largest customers for 27.1 MSEK for a clinical trial utilizing the ASPlatform. -Frost & Sullivan ranks Araccel's Patient Diary A Patient Diary is a tool used during a clinical trial or a disease treatment to measure treatment compliance. An Electronic Patient Diary registers the diary in a storage device and allows for monitoring the time the medication was taken. No.1 in the industry and No.3 in EDC EDC See: Export Development Corp. . -CenterWatch ranks Araccel as the No.3 EDC company in the industry. Important events since the end of the third quarter --------------------------------------------------- -Gartner Dataquest (Dataquest Inc., San Jose, CA, www.dataquest.com) A major market research and analysis firm in the information field. Dataquest offers market intelligence on more than 25 topics and provides conferences, annual subscriptions and custom research. begins coverage of Araccel recognizing their role as an industry leader and ranked Araccel among the top EDC companies in their October October: see month. Briefing Paper. -Araccel receives a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. Audit Report on the ASPlatform from CRO, Boston Boston, town, England Boston, town (1991 pop. 26,495), E central England, on the Witham River. Boston's fame as a port dates from the 13th cent., when it was a Hanseatic port trading wool and wine. Having recovered from a decline in the 18th and 19th cent. BioStatistics biostatistics /bio·sta·tis·tics/ (-stah-tis´tiks) biometry. bi·o·sta·tis·tics n. The science of statistics applied to the analysis of biological or medical data. . Outlook for remaineder of 2001 ------------------------------ Management is confident that the launch of the new Clinical Digital Assistant combined with the ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). will result in renewed sales momentum as demonstrated by the 211% increase in new contracts during the third quarter of 2001 as compared to the same period last year. The expanded sales force is capitalizing on the interest generated from old and new customers at the DIA conference in July July: see month. 2001 to expand our customer base and contract backlog. REVENUE AND EARNINGS FOR THE THREE MONTHS ENDED SEPTEMBER September: see month. 30, 2001 The Group Net revenues decreased during the third quarter of 2001 by 22% to 19.7 MSEK (25.1 MSEK), of which 48% came from the USA and 52% from Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). . New contract orders net of cancellations during the third
quarter of 2001 amounted to 44.2 MSEK as compared to 14.2 MSEK for the
comparable period in 2000, an increase of 211%. The contract order
backlog decreased by 26% to 58.9 MSEK at the end of the September 2001
(70.0 MSEK at 12/31/2000 and 80.0 MSEK at 9/30/2000). The decline in
contract backlog is due to slower sales in the first half of 2001
resulting from the transition of the Company to a new diary, the Araccel
Evolution Clinical Digital Assistant, and a new software platform, the
Araccel Solutions Platform ("ASPlatform").Cost of services amounted during the quarter to 8.6 MSEK (10.4 MSEK), which resulted in a gross margin of 56% (59%). Sales and marketing costs were 6.5 MSEK (33%) (6.1 MSEK (24%)), general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. were 7.0 MSEK (36%) (8.0 MSEK (32%)) and research and development costs were 7.8 MSEK (40%) (2.5 MSEK (10%)). Included in research and development costs during Q3 2001 are increased personnel and related costs of 3.6 MSEK and depreciation of goodwill and software of 1.7 MSEK. Net income (loss) after tax was -11.4 MSEK (-2.8 MSEK), which corresponds to -1.54 SEK SEK In currencies, this is the abbreviation for the Swedish Krona. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. per share (-0.49 SEK per share). The increase in the net loss is primarily a result in the 3.7 MSEK decline in gross profit and the 5.3 MSEK increase in R&D expenses. The increase in R&D expenses are the result of continued development of the ASPlatform and the Company's new electronic diary, the Araccel Evolution Clinical Digital Assistant in 2001. Parent Company Operations in the parent company, Araccel AB (publ) mainly consists group management and assets consist of investments in shares of subsidiary's and intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . Net revenues of the parent company during the third quarter were 3.0 MSEK with earnings (loss) after financial net of -2.2 MSEK. The cash position of the parent company was 3.2 MSEK (3.8 MSEK at 12/31/2000 and 9.6 MSEK at 9/30/2000). REVENUE AND EARNINGS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 The Group Net revenues decreased by 7% during the nine months ended September 30, 2001 to 77.2 MSEK (77.5 MSEK), of which 51% came from the USA and 49% from Europe. New contract orders net of cancellations during the nine months ended September 30, 2001 amounted to 56.5 MSEK as compared to 88.6 MSEK for the comparable period in 2000, a decrease of 36%. The contract order backlog decreased by 26% to 58.9 MSEK at the end of the September 2001 (70.0 MSEK at 12/31/2000 and 80.0 MSEK at 9/30/2000). The decline in new orders and backlog are due to the transition of the Company to a new diary, the Araccel Evolution Clinical Digital Assistant, and a new software platform, the Araccel Solutions Platform ("ASP") during the first half of 2001. Cost of services during the nine months ended September 30, 2001 amounted to 26.2 MSEK (35.7 MSEK), which resulted in a gross margin of 64% (54%). Sales and marketing costs were 18.6 MSEK (26%) (16.9 MSEK (22%)), general and administrative costs were 25.0 MSEK (35%) (16.9 MSEK (22%)) and research and development costs were 21.9 MSEK (30%) (5.2 MSEK (7%)). Included in research and development costs during the nine months ended September 30, 2001 are increased personnel and related costs of 10.3 MSEK and depreciation of goodwill and software of 6.3 MSEK. Net income (loss) after tax was -22.4 MSEK (-17.2 MSEK), which corresponds to -3.02 SEK per share (-3.25 SEK per share). The net loss for the nine months ended September 30, 2001 is primarily a result of increased costs of R&D (16.7 MSEK) and general and administrative costs (8.0 MSEK) The net loss in 2000 included a restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). reserve for the write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of goodwill and trademarks (6.3 MSEK) and global operations Global Operations is a first-person shooter computer game developed by Barking Dog Studios and published by both Crave Entertainment and Electronic Arts. It was released in March of 2002, following its public multiplayer beta version which contained only the Quebec map. realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. resulting from the Technilogix acquisition in April 2000 (12.2 MSEK). Parent Company Net revenues of the parent company were 5.0 MSEK with earnings (loss) after financial net of -4.6 MSEK. FINANCIAL SITUATION The Company generated operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. of 0.1 MSEK during the nine months ended September 30, 2001 (-15.5 MSEK). Total depreciation expense in the nine months ended September 30, 2001 was 14.2 MSEK and represents non-cash costs. Cash at the end of the period amounted to 25.7 MSEK (25.6 MSEK at 12/31/2000 and 20.1 MSEK at 9/30/2000). Solidity so·lid·i·ty n. 1. The condition or property of being solid. 2. Soundness of mind, moral character, or finances. Noun 1. ratio improved to 71.5% (70.7% at 12/31/2000 and 67.7% at 9/30/2000). The number of shares outstanding at the end of September 2001 is 7,397,494 (7,247,494). Investments during the nine months ended September 30, 2001 were 5.2 MSEK (47.4 MSEK) and consisted primarily of fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → . PERSONNEL At end of September 2001, the group employed 83 (90) full time people, of which all are outside of Sweden Sweden, Swed. Sverige, officially Kingdom of Sweden, constitutional monarchy (2005 est. pop. 9,002,000), 173,648 sq mi (449,750 sq km), N Europe, occupying the eastern part of the Scandinavian peninsula. . The US operations had 53 employees, the UK 17 employees, and the Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. 13 employees. NAME CHANGE During the second quarter, MiniDoc AB changed its name to Araccel AB to reflect the evolution of the company to a global biomedical bi·o·med·i·cal adj. 1. Of or relating to biomedicine. 2. Of, relating to, or involving biological, medical, and physical sciences. information technology company focused on accelerating drug development through clinical informatics Clinical Informatics is a sub-field of medical informatics. It focuses on computer applications that address medical data (collection, analysis, representation). Clinical informatics is a combination of information science, computer science, and clinical science designed to assist . Future reporting dates for 2001: February 28, 2002 Quarter and year ended December 31, 2001 Please visit the company's website www.araccel.com. This report has not been subject to review by Araccel's auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together , Ohrlings PricewaterhouseCoopers. Stockholm, November 13, 2001 Araccel AB (publ) Araccel AB is a global biomedical information technology company that provides clinical informatics solutions to the pharmaceutical industry to accelerate drug development. The company develops and markets electronic research and development (e-R&D) pharmaceutical software and system solutions that captures clinical data, improves processes and provides metric reports on clinical trial data for enhancing and accelerating drug development. Araccel AB is the market leader in its area and has 15 of the 20 largest pharmaceutical companies on its customer list. Araccel AB has its headquarters in Stockholm, Sweden and has operations in the US, UK, and Netherlands, which operate under the name Araccel. The company has approximately 2,700 stockholders and is quoted on the NGM See NetWare Global Messaging. Equity list in Stockholm. Stocks are traded via D. Carnegie AB. Accounting Principles This interim report was prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the FASC FASC First American Scientific Corporation FASC Federation of Automobile Sports of the People's Republic of China FASC Financial Accounting Standards Committee (American Accounting Association) FASC Florida Association of Student Councils recommendation RR20:Interim Reports. The same accounting principles have been used here as in the most recent annual report. Certain reclassifications have been made to make the financial statements in 2000 comparable to 2001. The FASC recommendation RR9:Income Tax means, among other things, that the group account for net operating tax loss carry-forwards if there is a high likelihood that these tax deductions Tax deduction An expense that a taxpayer is allowed to deduct from taxable income. tax deduction See deduction. can be utilized against future net taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. . The total amount of tax loss carry-forwards in the group amounts to approximately 137.8 MSEK at December 31, 2000. The main components of the group tax loss carry-forwards are from the parent company, Araccel AB of approximately 79.8 MSEK (28% income tax rate) and Araccel Corporation, the American subsidiary, of approximately 58.0 MSEK (35% income tax rate). As it is currently not certain that these tax loss carry-forwards will be utilized, the group has chosen not to account for any future tax benefit from these tax loss carry-forwards.
Araccel AB
Third Quarter Nine Months Full Year
Key Financial Information
Summary 2001 2000 2001 2000 2000
-------------------------------------------
Summary of Consolidated
Income Statement (KSEK):
Net revenues 19,696 25,131 72,248 77,453 104,771
Cost of services and
hardware -8,643 -10,400 -26,224 -35,730 -51,251
-------------------------------------------
Gross Profit 11,053 14,731 46,024 41,723 53,520
Sales and marketing costs -6,522 -6,142 -18,571 -16,913 -22,507
Research and development
costs -7,819 -2,481 -21,865 -5,167 -9,788
General and administrative
costs -7,026 -7,971 -25,010 -16,942 -26,311
Other income & expense -145 -5 0 0 137
-------------------------------------------
Operating profit (loss) -10,458 -1,868 -19,422 2,701 -4,949
Group goodwill amortization -1,015 -1,015 -3,045 -2,045 -3,059
Items affecting
comparability 0 156 -249 -17,437 -14,129
-------------------------------------------
Result before financial net
and tax -11,473 -2,727 -22,716 -16,781 -22,137
Net finance income
(expense) 101 -48 342 -383 -225
-------------------------------------------
Net income (loss) before
tax -11,372 -2,775 -22,374 -17,163 -22,362
Tax 0 0 0 0 -708
-------------------------------------------
Net income (loss) after
tax -11,372 -2,775 -22,374 -17,163 -23,070
Other Information:
Results after tax per
weighted average shares
outstanding (SEK) (1.54) (0.49) (3.02) (3.25) (3.98)
Results after tax including
outstanding warrants (SEK) (1.26) (0.38) (2.47) (2.67) (3.10)
Equity per share excluding
outstanding warrants (SEK) 9.12 11.56 11.56
Equity per share including
outstanding warrants (SEK) 7.46 9.41 9.45
Debt ratio 4.7% 6.3% 5.4%
Profit margin 56.1% 58.6% 63.7% 53.9% 51.1%
Solidity ratio 71.5% 67.7% 70.7%
Revenues per employee during
the past 12 months (KSEK) 1,151 1,297 1,435
Shares at period's end
excluding
outstanding
warrants 7,397,494 7,247,494 7,397,494 7,247,494 7,397,494
Shares at period's
end including
outstanding
warrants 9,047,494 8,897,494 9,047,494 8,897,494 9,047,494
Weighted average of
shares excluding
outstanding
warrants 7,397,494 5,647,494 7,397,494 5,286,499 5,795,946
Weighted average of
shares including
outstanding
warrants 9,047,494 7,297,494 9,047,494 6,436,499 7,445,946
9/30/01 9/30/00 12/31/00
---------------------------------
Summary of Consolidated Balance Sheet (KSEK):
Assets
Goodwill 6,673 8,537 12,225
Patient diaries 2,832 0 3,765
Software 26,400 33,000 31,350
Other fixed assets 14,003 12,291 10,216
---------------------------------
Total fixed assets 49,908 53,828 57,556
Other current assets 18,696 49,818 37,840
Cash in bank 25,736 20,051 25,644
---------------------------------
Total current assets 44,432 69,869 63,484
---------------------------------
Total assets 94,340 123,697 121,040
Liabilities and
stockholders' equity:
Stockholders' equity 67,484 83,753 85,528
Long-term liabilities 1,600 3,303 2,800
Current liabilities 25,256 36,641 32,712
---------------------------------
Total liabilities and
stockholders' equity 94,340 123,697 121,040
Changes in Stockholders' Equity:
Equity at beginning of the period 85,528 17,409 17,409
New issues 0 82,350 92,100
Currency translation differences 4,330 1,157 -911
Current period income (loss) -22,374 -17,163 -23,070
---------------------------------
Stockholders' equity at end
of the period 67,484 83,753 85,528
Cash Flow Analysis Summary (KSEK):
Cash flow from the ongoing operation
before changes in operating capital -8,214 -5,322 -887
Changes in operating capital 12,042 -10,183 -4,335
---------------------------------
Cash flow from current operations 3,828 -15,505 -5,222
Investments -5,224 -47,410 -58,922
New issuances of capital stock 0 82,350 92,100
Financing 1,488 0 -3,599
---------------------------------
Net cash flow from investments 1,488 82,350 88,501
---------------------------------
Changes in cash flow 92 19,435 24,357
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