Elekta AB -publ- Interim Report for the Nine Months Ended January 31, 2002.Business Editors STOCKHOLM, Sweden--(BUSINESS WIRE)--March 12, 2002 Elekta AB-- -- Operating profit for the first nine months of the fiscal year improved by SEK 108 M to SEK 133 M (25), and the operating margin rose to 7.0 percent (1.7). -- On a rolling 12-month basis, operating profit was SEK 200 M, corresponding to an operating margin of 7.6 percent. -- Strong trend of order bookings in most markets, up 33 percent to SEK 2,076 M (1,566). -- Net sales rose 32 percent to SEK 1,913 M (1,452). -- Operating profit in the fourth quarter is expected to be higher than in the same quarter last fiscal year. Elekta's strategy is to provide clinically expedient and cost-effective solutions and services for the improved treatment of cancer and neurological diseases Noun 1. neurological disease - a disorder of the nervous system nervous disorder, neurological disorder disorder, upset - a physical condition in which there is a disturbance of normal functioning; "the doctor prescribed some medicine for the disorder"; with the aim of providing a better quality of life. Market Elekta's products and treatment methods for cancer and neurological disorders This is a list of major and frequently observed neurological disorders (e.g. Alzheimer's disease), symptoms (e.g.back pain), signs (e.g. aphasia) and syndromes (e.g. Aicardi syndrome). continued to be in heavy demand. Elekta has a sophisticated, modern, high-technology product range based on precision radiation in both of these treatment areas. The development of treatment methods for cancer is focusing increasingly on high-precision radiation treatment. Elekta is a leading supplier of solutions for high-precision radiation, such as intensity-modulated radiation treatment (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, ). IMRT enables the radiation dose to be more precisely adapted to the tumor's three-dimensional shape and specific radiation sensitivity, without healthy tissue being damaged, thereby improving the patient's treatment result and quality of life. Demand for non-invasive radiation surgery is growing. Today, some 235 people out of every million suffer from the type of brain disease that is suitable for radiation surgery 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). The areas of illness in which radiation surgery is rising sharply are certain metastases Metastasis (plural, metastases) A tumor growth or deposit that has spread via lymph or blood to an area of the body remote from the primary tumor. Mentioned in: Malignant Melanoma in the brain, and functional disorders functional disorder n. A physical disorder in which the symptoms have no known or detectable organic basis but are believed to be the result of psychological factors such as emotional conflicts or stress. Also called functional disease. . Radiation treatment using Leksell Gamma Knife is characterized by the high quality of care provided and its cost-effectiveness, as well as being gentle to the patient. Order bookings and order backlog Order bookings developed favorably during the first nine months, up 33 percent 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. 2,076 M (1,566). Neurosurgery neurosurgery /neu·ro·sur·gery/ (noor´o-sur?jer-e) surgery of the nervous system. neu·ro·sur·ger·y n. Surgery on any part of the nervous system. products rose 53 percent to SEK 691 M (453) and oncology products by 24 percent to SEK 1,385 M (1,113). Order bookings during the third quarter amounted to SEK 732 M (571), an increase of 28 percent. On a rolling 12-month basis, order bookings amounted to SEK 2, 912 M, an increase of 26 percent. Group order backlog rose 10 percent and amounted to SEK 2,326 M at January 31, 2002 compared with SEK 2,112 M as of April 30, 2001. Demand in Europe positive Order bookings in Europe region, including the Middle East and Africa, declined by 1 percent to SEK 836 M (847) during the period. The market shows favorable demand and growth. During the same period in the preceding fiscal year, many large orders were placed in the U.K to upgrade cancer care. Most of these contracts were awarded to Elekta. Order bookings for neurosurgery products rose significantly in Europe. Orders were received for a Leksell Gamma Knife unit in Sweden and the first Leksell Gamma Knife unit in Greece. Very strong trend in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. Strong demand in North America for both neurosurgery and oncology products resulted in a 101-percent rise in order bookings to SEK 824 M (411). Order bookings in the third quarter developed highly favorably for all product areas. The after-market for both product areas also developed well. Continued weak Japanese economy Order bookings in Japan totaled SEK 145 M (140). Decisions on investments in hospital care in Japan usually occur during the last months of Elekta's fiscal year. The market reflects the continued sluggish economic trend in Japan. Strong development in Asia Elekta's operations in the region developed well, resulting in strong order bookings, primarily in China, Taiwan and Australia. Order bookings in Asia rose sharply by 59 percent to SEK 267 M (168). 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 Group net sales rose 32 percent to SEK 1,913 M (1,452). Exchange-rate movements had a positive 9-percent effect on net sales. Net sales increased 17 percent to SEK 634 M (543) for neurosurgery products and 41 percent to SEK 1,279 M (909) for oncology products. Net sales of after-market products and services increased 24 percent to SEK 545 M (439), and represented 28 percent of consolidated net sales. On a rolling 12-month basis, net sales totaled SEK 2,621 M, an increase of 32 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 during the first nine months by SEK 108 M to SEK 133 M (25). The improvement was primarily attributable to larger volumes and an advantageous product mix. The operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: improved to 7.0 percent (1.7). On a rolling 12-month basis, operating profit was SEK 200 M, corresponding to an operating margin of 7.6 percent, which is in line with the Group's financial objective of an operating margin of 6-8 percent. The operating profit for the third quarter amounted to SEK 53 M (47) corresponding to an operating margin of 7.8 percent (8.3). Investments in research and development increased 14 percent and amounted to SEK 95 M (83). These investments, which are expensed as incurred, corresponded to 5 percent (6) of net sales. Net financial income amounted to SEK 12 M (expense: 18). This included net interest expenses of SEK 1 M (expense: 23), of which 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. loans accounted for expenses of SEK 5 M (18). Earnings from participations in associated companies associated company associate n → Partnerfirma f associated company n → società collegata amounted to SEK 10 M (2), and foreign exchange differences totaled SEK 3 M (3). Profit after net financial items improved to SEK 145 M (7). Profit after taxes amounted to SEK 94 M (5). Earnings per share amounted to SEK 3.04 (0.18) for the first nine months. Return on equity amounted to 12 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 19 percent (3), which is well in line with the Group's objective of a return on capital employed exceeding 15 percent. 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 19 M (30). Amortization/depreciation of intangible and tangible fixed assets totaled SEK 47 M (48). Liquidity and financial position Cash flow before investments was negative and amounted to SEK 51 M (pos. 73). Cash flow after investments and divestments was negative and amounted to SEK 61 M (pos. 50). Tied-up working capital, primarily in accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying , rose during the third quarter as a result of substantial shipments and ongoing installations. On a rolling 12-month basis, cash flow amounted to SEK 115 M. 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 370 M on January 31, 2002, compared with SEK 434 M on April 30, 2001. Of the bank balances held, SEK 53 M was pledged, primarily in the form of guarantees for customer advances received. Other interest-bearing liabilities amounted to SEK 40 M. The equity/assets ratio was 51 percent. The Group's objective for the equity/assets ratio is 40 percent. Convertible debenture loans in a nominal amount of SEK 229 M were converted during the period. The outstanding SEK 4 M was repaid on December 31, 2001. Conversion resulted in 3,808,250 new Series B shares. During Q3, 42,700 new Series B shares were subscribed through executives and key personnel within the Group exercising allotted al·lot tr.v. al·lot·ted, al·lot·ting, al·lots 1. To parcel out; distribute or apportion: allotting land to homesteaders; allot blame. 2. warrants within the framework of the established warrants program. An additional 36,900 Series B shares were subscribed during February. On February 25, 2002 the total number of shares amounted to 31,741,467. Patent dispute Following a jury decision in a lower court in California, US, Elekta has been found liable for damages of approximately USD USD In currencies, this is the abbreviation for the U.S. Dollar. 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. 17 M to a closed American corporation for an alleged patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. in the US. The court has not yet confirmed the jury ruling. Elekta intends to appeal the final ruling to a higher court. This process is expected to take 2-3 years. Elekta's opinion, which is supported by independent legal counsel in the case, is that the presented claim lacks sufficient grounds with respect to the patent infringement issue as well as the size of the jury's damage award and that Elekta's appeal to the higher court has a strong chance of success. Costs of SEK 21 M incurred for this matter during the fiscal year were charged against earnings, most of which during the third quarter. Elekta will not be restricted to deliver any of its products because of the process. Employees The average number of employees in the Group amounted to 898 (790), an increase of 14 percent in accordance with the plans for the fiscal year. The number of employees at the close of the period was 955, compared with 854 on April 30, 2001. The increase in the number of employees are mainly within research and development as well as reinforcing the marketing and service organizations. Parent Company Parent Company operations comprise Group management, joint Group functions and financial management. The Parent Company's loss after net financial items amounted to SEK 6 M (loss: 25). Dividends from subsidiaries are included in the amount of SEK 26 M (-). The average number of employees was 13 (13). Future prospects Operating profit in the fourth quarter is expected to be higher than in the same quarter last fiscal year. Financial information The fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. report will be issued on June 18, 2002. Stockholm March 12, 2002 ELEKTA AB (publ) Laurent Leksell President ---------------------------------------------------------------------- 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. For tabular tab·u·lar adj. 1. Having a plane surface; flat. 2. Organized as a table or list. 3. Calculated by means of a table. tabular resembling a table. and graphical information contact: Taylor Rafferty, 212/889-4350 |
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