C-RAD AB – Consolidated Year End Report 2015

Key events in the period January-December 2015

• Net sales: Jan-Dec 66.2 (53.2) MSEK, +24%
• Order intake: Jan-Dec 88.1 (68.4) MSEK, +29%
• Operating loss: Jan-Dec -20.4 (-13.9) MSEK
• Net results per share: Jan-Dec -0.99 (-0.38)
• C-RAD signs sales and distribution agreement with GE Healthcare
• C-RAD signs agreement with Yale-New Haven Hospital
• Elekta showcases C-RAD products in Japanese showroom
• C-RAD hosts user meeting at ASTRO in cooperation with UTHSC San Antonio
• C-RAD signs sales and service agreement for Australia and New Zealand
• China approves C-RAD’s Cyrpa laser positioning products for use in radiation therapy

Comments from Tim Thurn, CEO:

This final quarter of 2015 has topped off strong developments in all of C-RAD’s markets, and seen the achievement of a number of strategic milestones.

Looking at C-RAD’s financial performance in 2015, order intake totaled 88.1 MSEK. Orders for the largest segment – Positioning Products, which includes Sentinel™ and Catalyst™ – increased by 39% to 63.4 MSEK.

C-RAD Services generated orders of 10 MSEK, which is an increase of 113 % year-on-year. As we increase our installed base, this provides increasing opportunities for service growth and generates additional revenues over the lifetime of our products, while customers secure regular training and outsourced maintenance for the C-RAD product. Revenues for the entire group amounted to 66.2 MSEK in the same period. This is an improvement of 24% compared to 2014.

Looking at the regional distribution in our direct sales regions, sales in Asia and US showed highest growth, with Asia more than doubling. In a significant development, The China Food and Drug Administration approved the sale of C-RAD’s Cyrpa laser systems, which gave the green light for filling 2 MSEK in pending orders. A similar approval process is underway for Catalyst systems, and a certification is expected in the first half of 2016. Due to much preparation, such as successful product presentations at the China Society for Radiation Oncology (CSTRO) conference in October in Chengdu, we anticipate a strong market launch of both products.

The US showed an increase of over 30%, which made it the largest sales region measured in order intake. The fourth quarter saw orders for approximately 10 MSEK from four customers. Following the close of the period, C­­-RAD also secured a 1.7 MSEK order for a Catalyst PT™ system from the prestigious Mayo Clinic Group for its proton therapy treatment center in Phoenix, Arizona. C-RAD has released a specific version of its Catalyst System for use in proton and particle therapy, tailored to perform the high-end radiation therapy treatment techniques that are increasingly common in the U.S. – and expected to grow by 11-17% annually until 2030. As this project is the first of its kind in the U.S., it will enjoy special attention.

Our European markets, excluding the German-speaking cluster, showed a very positive development at 13 MSEK – a single large order from southern Italy accounting for one-third of this in the fourth quarter. We are also seeing the first sales results due to our new direct sales channel in France. In Sweden we achieved another strategic first in the fourth quarter: the first systems installed in a proton therapy environment, at the Skandion Clinic. We closed off the year by adding yet another territory via a sales and service agreement for Australia and New Zealand. This market currently has about 80 radiation therapy centers.

We now also have one person dedicated to developing the OEM sales channel globally, with an initial focus on key partners GE Healthcare and Elekta. The fourth quarter saw two significant developments. GE Healthcare entered into a sales and distribution agreement for C-RAD’s high-end systems used for 4D imaging and virtual simulation in radiation therapy, with GE offering these solutions through its price book, making them available to the GE salesforce and their customers worldwide. First orders are expected early in 2016. We are also conducting joint marketing with Elekta in Japan through their showroom and demonstration center there.

C-RAD’s R&D collaboration with CERN on Gemini system robustness has improved the system setup and resulted in a stable and robust detector with very satisfactory image quality. Given this result, we have initiated commercialization of the product in three steps: I) placing single units with specific clinical partners, (II) addressing OEM customers and industrial partners with small batches, and (III) ramping up to larger quantities.

A final commentary on the rapid growth – a doubling – of our marketing and sales force in our key markets: we have attracted very experienced people, which is in itself an endorsement of C-RAD’s growth potential. We have also made large investments in their salaries and travel expenses that burden our current financial picture, but which we fully expect will begin paying off by the end of 2016. We are thus heading into 2016 with a renewed force and momentum, and the demonstrated ability to capture new opportunities. 

About C-RAD

C-RAD develops innovative solutions for use in advanced radiation therapy. The C-RAD group offers products and solutions for patient positioning, tumor localization and radiation treatment systems. End users are radiation therapy clinics worldwide. All product development is conducted in three fully owned subsidiaries: C-RAD Positioning AB, C-RAD Imaging AB and C-RAD Innovation AB, all of which are located in Uppsala, Sweden. Employees currently number 40. C-RAD’s business originates from research and development at Karolinska Institutet in Solna, Sweden. Sales of the company’s first product, the C-RAD Sentinel^TM, started in 2007. Cooperation agreements have been signed with Elekta (Sweden), Varian (USA) and IBA (Belgium). C-RAD is represented by distributors specialized in radiation therapy on major markets. C-RAD has established three companies for direct sales: C-RAD Inc. in the US, C-RAD GmbH in Germany and C-RAD WOFE in China. Cyrpa International SPRL, a Franco-Belgian laser company, is a wholly owned subsidiary whose operations are being integrated. C-RAD AB is listed on NASDAQ Stockholm.

For more information on C-RAD, please visit www.c-rad.com

For further information:

Tim Thurn, CEO C-RAD AB, Phone +46-18-666930, Email investors@c-rad.com

The above information is price-sensitive and must therefore be disclosed under the Securities Market Act (2007:528).