Elekta AB - publ - Interim Report for the Three Months Ended July 31, 2001.Business/Medical Editors STOCKHOLM, Sweden--(BW HealthWire)--Sept. 27, 2001 Elekta AB (publ)-- -- Operating profit was improved by SEK 50 M to SEK 33 M (loss: 17) and the operating margin increased to 6 percent (neg: 4). -- Strong order bookings, up 105 percent to SEK 703 M (343). Order backlog increased 11 percent during first quarter. -- Net sales rose 38 percent to SEK 544 M (394). -- The convertible debenture loan of SEK 233 M was 98-percent converted. -- Equity/assets ratio strengthened to 52 percent. -- Full-year earnings for fiscal year 2001/02 are expected to show a distinct improvement compared with 2000/01. Elekta's strategy is to provide clinically effective and cost-efficient solutions and services for improved management of cancer and brain disorders - aimed at enhanced quality of life. Market Despite the worldwide economic downturn, the healthcare market continued to invest in clinically effective, cost-efficient and gentle treatment methods for cancer and brain disorders. This benefited Elekta, which offers a sophisticated, high-technology precision radiation-based product range covering both of these treatment areas. The most important markets for Elekta during the first quarter (May-July, 2001) were Europe - particularly the UK and the Netherlands as regards radiation treatment of cancer - and the US in the area of non-invasive radiosurgery radiosurgery /ra·dio·sur·gery/ (-ser´jer-e) surgery in which tissue destruction is performed by means of ionizing radiation rather than by surgical incision. in the brain using Leksell Gamma Knife Gamma Knife A trademark for a radiologic nonsurgical device used in stereotactic radiosurgery. Gamma knife A surgical tool that focuses beams of radiation at the head, which converge in the brain to form a lesion. (R). Strategic ventures The development of therapies for cancer is focusing increasingly on high-precision radiation treatment. Elekta conducts long-term development efforts aimed at improving treatment methods and results in cancer care. Elekta is a leading innovator of solutions for precise radiation solutions, such as intensity modulated mod·u·late v. mod·u·lat·ed, mod·u·lat·ing, mod·u·lates v.tr. 1. To adjust or adapt to a certain proportion; regulate or temper. 2. radiotherapy (IMRT IMRT Intensity-modulated radiation therapy Radiation oncology A format for delivering high-dose RT to regions–eg, nasopharynx, that are surrounded by radiation-sensitive areas; in IMRT, a broad radiation field is divided into hundreds of small pencil beams, ). As part of these efforts, Elekta entered into a cooperation agreement in July with ADAC ADAC Allgemeiner Deutscher Automobil Club (German automobile club) ADAC Aboriginal Drug and Alcohol Council ADAC Art Directors and Artists Club (Sacramento, California) ADAC Alcohol and Drug Abuse Council , a company within Philips Medical Systems. ADAC contributes with its newly developed dose-planning system, ePinnacle, and Elekta with its state-of-the-art radiation treatment system for cancer, Elekta Precise Treatment System. This combination of newly developed, advanced systems makes it possible to perform radiation treatment of cancer using IMRT, resulting in greater treatment efficacy. Elekta has received approval from the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. in the US to distribute its system for image registration and tumor tumor: see neoplasm. localization Customizing software and documentation for a particular country. It includes the translation of menus and messages into the native spoken language as well as changes in the user interface to accommodate different alphabets and culture. See internationalization and l10n. during radiation treatment of cancer, iViewGT, in the US. The system is a key component in the further development of IMRT. In June, Elekta officially inaugurated its majority owned company in China, which creates new and improved opportunities to effectively cultivate and contribute to the rapidly growing Chinese medical-technology market - one of the world's largest. Order bookings and order backlog Group order bookings showed a highly positive trend during the first quarter. On a rolling 12-month basis, order bookings amounted to 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. 2,763 M, up 48 percent. Order bookings for the first quarter increased 105 percent to SEK 703 M (343). Neurosurgical products showed an increase of 142 percent, to SEK 223 M (92), while oncology products increased 91 percent to SEK 480 M (251). The Group order backlog increased 11 percent and amounted to SEK 2,352 M at July 31, 2001, compared with SEK 2,112 M at April 30, 2001. Favorable order bookings in the oncology area in Europe Order bookings in Europe, the Middle East and Africa Europe, the Middle East and Africa, usually abbreviated to EMEA, is a regional designation used for government, marketing and business purposes. It is particularly common amongst North American based companies, who often divide their international operations into the rose 55 percent to SEK 288 M (186). Upgrades and service displayed a strong trend during the quarter. Substantial investments are being made in cancer care in the UK and the Netherlands. Strong sales of Leksell Gamma Knife in US As a result of strong order bookings, particularly for Leksell Gamma Knife during the first quarter, order bookings in North and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. increased by 112 percent to SEK 252 M (119). Seasonally weak order bookings in Japan Order bookings in Japan were limited mainly for seasonal reasons and amounted to SEK 11 M (13). Favorable demand in Asia A major need for healthcare and demand for more advanced cancer care in the region resulted in strong order bookings for oncology products, mainly in China and Taiwan. Order bookings in Asia increased to SEK 152 M (25). Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight The Group's net sales rose 38 percent to SEK 544 M (394). Exchange-rate movements - particularly the weakening of the Swedish krona Noun 1. Swedish krona - the basic unit of money in Sweden krona Swedish monetary unit - monetary unit in Sweden ore - a monetary subunit in Denmark and Norway and Sweden; 100 ore equal 1 krona against the US dollar, the euro and the British pound - contributed to a 13-percent improvement in net sales. Net sales increased to SEK 184 M (137) for neurosurgical products and to SEK 360 M (257) for oncology products. Net sales of aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. products and services increased 19 percent to SEK 165 M (138). Net sales for rolling 12 months amounted to SEK 2,310 M, an increase of 26 percent. Result Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. improved by SEK 50 M to SEK 33 M (loss: 17). The improvement was mainly due to substantially higher utilization of capacity and favorable product mix during this quarter. The operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the quarter improved to 6 percent (neg: 4). For the rolling 12-month period, the operating margin was 6 percent. Investments in research and development amounted to SEK 30 M (25). These investments, which are expensed as incurred, corresponded to 6 percent (6) of net sales. Net financial items amounted to income of SEK 2 M (expense 1), including net interest expenses of SEK 5 M (8), of which the convertible debenture Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. loan accounted for SEK 5 M (6). Earnings from participations in associated companies associated company associate n → Partnerfirma f associated company n → società collegata amounted to SEK 3 M (2), and foreign exchange differences totaled SEK 4 M (5). Profit after net financial items amounted to SEK 35 M (loss: 18). The profit after taxes was SEK 23 M (loss: 10). Earnings per share amounted to SEK 0.80 (loss: 0.36). Return on equity amounted to 8 percent and return on capital employed Return on capital employed (ROCE) Indicator of profitability of the firm's capital investments. Determined by dividing Earnings Before Interest and Taxes by (capital employed plus short-term loans minus intangible assets). was 14 percent (3). Investments and depreciation Investments in intangible and tangible fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → amounted to SEK 9 M (5). Amortization/depreciation of intangible and tangible fixed assets totaled SEK 15 M (15). Liquidity and financial position Cash flow before investments amounted to SEK 53 M (16), as a result of the reported profit. Cash flow after investments and divestments amounted to SEK 46 M (10). The Group's liquid assets Cash, or property immediately convertible to cash, such as Securities, notes, life insurance policies with cash surrender values, U.S. savings bonds, or an account receivable. amounted to SEK 469 M on July 31, 2001, compared with SEK 434 M on April 30, 2001. Of the bank balances held, SEK 169 M (SEK 130 M on April 30, 2001) is pledged, primarily as guarantees for customer advances received. Convertible debenture loan in a nominal amount of SEK 229 M was converted. The outstanding SEK 4 M is due for repayment by December 31, 2001. The conversion resulted in 3,808,250 new Series B shares. The total number of shares is 31,661,867. Other interest-bearing liabilities amounted to SEK 44 M. The equity/assets ratio strengthened to 52 percent following the conversion of convertible debenture loan and the inclusion of deferred tax receivables in the balance sheet. See changed accounting principles. Employees The average number of employees in the Group was 874 (778). The number of employees at the close of the period was 888, compared with 854 on April 30, 2001. It is estimated that the increase in the number of employees for the full fiscal year will amount to circa 120 persons or 14 percent. The increase is occurring as a result of increased volumes and a focus on selected strategic areas where future profitable growth opportunities are considered to be favorable. Parent Company Parent Company operations comprise Group management, joint Group functions and financial management. The Parent Company's loss before net financial items amounted to SEK 5 M (loss: 6). The average number of employees was 13 (12). Future prospects Despite the prevailing political and economic uncertainty in the world, the assessment remains that net sales and operating profit for fiscal year 2001/02 as a whole are expected to be substantially better than in 2000/01. Net sales during the second quarter are expected to be on a level with the first quarter. Investments in research and development and the strengthening of the marketing and service organization, particularly in the US and Asia, will continue. Financial information A six-month interim report will be issued on December 12, 2001. Stockholm, September 27, 2001 ELEKTA AB (publ) Laurent Leksell President For additional information, please contact: Lars Jonsteg, Senior Vice President, Corporate Relations, Elekta AB (publ), tel. +46 8-587 254 82. Further information about Elekta is available at: www.elekta.com Change in accounting principles The Swedish Financial Accounting Standards Council's new recommendation regarding income tax resulted in a change of accounting principles for Elekta. The income statements and balance sheets for preceding year were adjusted in accordance with the new principles. Loss carry-forwards and other temporary differences, totaling SEK 209 M at April 30, 2001, were reported as a deferred tax receivable, resulting in a corresponding increase in shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. . With this exception the same accounting principles have been applied as in Elekta's latest annual report. This interim report has been prepared in accordance with the Swedish Financial Accounting Standards Council's recommendation RR 20, Interim reports. The Company's auditors have not reviewed this interim report. Please contact Patrick Lyon of Taylor Rafferty for Tabular information at 212-889-4350. |
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