C-RAD AB - Interim report April-June 2016

Key events in the period April-June 2016

• Net sales: Apr-Jun 15.6 (15.1) MSEK, +3%
• Rolling 12m 68.4 (59.4) MSEK +15%
• Order intake: Apr-Jun 30.4 (16.3) MSEK, +87%
• Rolling 12m 93.1 (81.2) MSEK +15%
• Operating loss: Apr-Jun -9.8 (-5.4) MSEK
• Net results per share: Apr-Jun -0.44 (-0.28)
• Rights issue provides C-RAD with 45.4 MSEK before issue costs
• Leading cancer centers in China to be equipped with C-RAD technology

Comments from Tim Thurn, CEO:

Second quarter: Highest quarterly order intake in C-RADs history

The second quarter featured strong demand for our products which provided an all-time high order intake amounting to 30,4 (16.3) MSEK – an increase of impressive 87% compared to the same period in 2015. These figures represent evidence that C-RAD´s strategy to heavily invest in sales and sales related activities in our key markets provides the foundations for continued growth.

Net sales increased to 15,6 (15,1) MSEK. The limited growth in the quarter is partly due to extended order to delivery conversion rate and the temporary slowdown in order intake we had in the first quarter. 

As we are aggressively pursuing the OEM sales channel globally, a first large project that included five Catalyst Systems has been won by an OEM partner and C-RAD received an order worth 4.3 MSEK. 

An additional sizable order came from Ryhov County Hospital in Sweden for three Catalyst HD systems and one Sentinel 4DCT system.  The order has a total value of 5.2 MSEK.

We continue to see significant growth in the sales region Asia. The order intake increased by 206% compared to the same period last year. An order has been received from our Chinese distributor for Catalyst and Sentinel systems, to be installed at leading cancer centers in China. The order has a total value of 7.6 MSEK. We see a considerable high interest among our potential customers in China. In May, C-RAD and our distributor, Beijing HGPT, co-hosted a clinical symposium in Shanghai. International and local clinicians presented their experiences and successful research results with C-RAD systems. The symposium was attended by more than 100 potential customers which underscores the potential of the Chinese healthcare market and shows that C-RAD has a good position for further growth in Asia.

 The North America market, with approximately 2.800 radiation therapy centers, accounts for almost half the global market. The size of this market shows a high potential for the C-RAD solutions. Over the last year North America became for the first time C-RAD´s largest region in terms of order intake, which underlines the importance of this market for us. Revenues for the US increased by 199% in the second quarter compared to the same period last year.  Bill Dowd has been appointed President for our US subsidiary. With Bill we have a seasoned executive with profound experience and a well-established network in the field of radiation therapy. This strongly strengthens our local US organization and is an important milestone in executing our strategy in attracting very talented people to C-RAD.

This growth in our key markets represent further evidence that C-RAD´s strategy of developing sales through local presence provides the foundation for continued growth. 

One initiative to increase our gross profit margin from 53% in 2015 to 60% by 2017, is to develop and optimize our supply chain to lower related costs. As a first step to achieve the target we have signed a manufacturing agreement with Innokas Medical - a Finnish contract design and manufacturing company as operating in the field of medical technology. Innokas Medical provide specialized experts with extensive skills and robust experience in the healthcare area which will contribute in providing first-class products to our customers. The contract covers the manufacturing of the major parts of C-RAD´s Catalyst and Sentinel products. 

In April the Annual General Meeting approved a capital increase and a new share issue totaling 45 MSEK, with preferential right for the Company´s existing shareholders. On the 19th of May C-RAD announced that the fully guaranteed new share issue was completed. 

“I am optimistic going into the second half of 2016. We continue to see strong demand for our innovative cutting edge solutions and with further developed sales activities in our key markets the conditions look good for continued strong growth” says Tim Thurn, CEO of C-RAD. 

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 43. 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 SentinelTM, 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).