Interim report, January 1 – September 30, 2012
(NGM: BIOL MTF)
The Board and President of Biolight AB (publ) hereby present the interim report for the third quarter 2012.
- Net sales increased by 23% to SEK 2,173 thousand (1,769) in the third quarter, and by 8% to SEK 5,454 thousand (5,047) for the first nine months 2012.
- Net operating loss for the third quarter improved by SEK 1,689 thousand to SEK -1,541 thousand (-3,230).
- The result for the third quarter improved by SEK 1,747 thousand to SEK –1,486 thousand (–3,233).
- Result per share for the third quarter was SEK -0.01 (-0.08), and SEK -0.01 (-0.08) after full dilution.
- The cash flow from operating activities for the third quarter improved by SEK 1,452 thousand to SEK -2,644 thousand (-4,096).
(For table, see attached file)
Letter from Biolight’s President Pär Olausson Lidö
The Company has carried out extensive structural changes that are beginning to show positive results. We are in the middle of a trend characterised by a substantial sales increase and enhanced performance compared to preceding periods.
The main increase in the third quarter is within the animal care market. Our sales volume has increased by about 50% and, apart from new customers, this increase also includes existing ones that have chosen to upgrade their equipment and bought new-generation devices. This is a clear indication that our customers are satisfied with Biolight, and that the need for effective treatment solutions is significant within this market segment.
Just as before, it takes longer to work the human market and for customers to make up their minds. Nevertheless, another three municipalities became customers in the third quarter.
The implementation of the Company’s overall strategy continues according to plan, and here are some examples:
– The whole organisation has moved to a new office in Stockholm, and the Gothenburg branch has been closed.
– A new marketing manager joined the Company on September 1.
– We are in the process of recruiting a new CFO and new salespeople.
– Our new medical device is almost ready for CE certification.
– Co-operation talks initiated with new distributors.
Operations
Biolight AB is a medical technology company that has developed and commercialised the idea of biological effects of pulsating light. Biolight reduces the healing time for wounds and inflammations, relieves pain and contributes to increased circulation in the body. The treatment reduces care time which in turn reduces patient-care costs, while at the same time improving the patients’ quality of life. Biolight also reduces recovery time after physical exertion, which in turn enables more effective training and performance.
Biolight offers a patented system consisting of treatment equipment and unique light therapy programs. The treatment is non-pharmaceutical and is applied externally. Biolight generates its revenue by leasing and selling treatment equipment and treatment programs.
On top of our pure sales efforts, Biolight is focusing on further developing its technology and application areas, as well as clinical trials to verify our method and its effects. New equipment with our new technology installed is in the process of being CE-certified and our first production prototypes have been produced.
The company was recently ISO13485-certified. ISO13485 is a standard for quality management systems in medical equipment.
The Biolight share is listed on the Nordic MTF (Nordic Growth Market AB).
Market and sales
Globally, the wound-care market is large, but it is also conservative and working it takes time. Our methods for working the wound-care market have now changed. This has led to several large players in the geriatric care market evaluating, buying or renting Biolight equipment. Our market penetration efforts continue according to plan.
Biolight also helps alleviate inflammation and pain. Physiotherapy and rehabilitation are therefore a potential market. The US Special Forces have been shown to have a sizeable need for effective rehabilitation methods. Biolight has signed a distributor’s agreement with a US company that markets products to the US military. This distributor has already initiated preparatory marketing efforts in the USA.
Rehabilitation and injury prevention for humans as well as animals is another large potential market for Biolight. When it comes to injuries that are associated with inflammation, wounds and pain, animals are treated in much the same way as humans. The past few years’ efforts in this area have led to Biolight being perceived as a well-known and established brand on the equestrian sports market. In this market, the Company’s sales organisation has been restructured from an internal sales force to the use of agents/retailers.
Net sales and results
Our net sales increased by 23% in the third quarter and our net operating income improved by SEK 1,689 thousand compared to the same quarter last year. The reasons behind this are a much more cost-effective organisation combined with marketing campaigns with attractive prices, enhanced market communication and increasing support to our sales agents. Our new sales strategy was implemented in June, and immediately started showing results in July.
The Company’s current product development costs were SEK 258 thousand in the third quarter. These costs are expected to continue throughout the year and will amount to SEK 200 thousand, plus rent and adjustment costs for the financial function to the amount of SEK 193 thousand. These latter costs will continue until year-end and we estimate they will amount to SEK 300 thousand for the fourth quarter. Despite this, our performance during the third quarter improved by SEK 1,747 thousand compared to the same period last year.
Our net sales over the first nine months of the year increased by 8% and our net operating income improved by SEK 2,726 thousand compared to the same period last year. Our sales growth was higher in the third quarter than in the nine-month period as a whole, as we had no sales growth in the first six months due to the fact that the readjustment of our sales organisation took slightly longer than expected.
Financial position and liquidity
The group’s equity amounted to SEK 17,592 thousand (3,373). At the beginning of the fiscal year, our equity amounted to SEK 5,581 thousand. Our solidity is 87.9% (54.3%). At the beginning of the fiscal year our solidity was 62.4%.
The company does not carry any interest-bearing receivables or debts.
Cash flow
The cash flow from operating activities was SEK -2,644 thousand (-4,096) in the third quarter. This SEK 1,452 thousand improvement can be mainly explained by our stronger operating performance.
Acquisitions and disposals
We have not carried out any acquisitions or disposals during the reporting period.
Investments
Investments in equipment, furniture and fittings were SEK 0 thousand (0) in the third quarter. Sales of fixed assets amounted to SEK 0 thousand (0).
Employees
Our average number of employees during the third quarter was 6, compared to 11 during the same period last year.
Exposure and risk factors
Through its operations, Biolight is exposed to both operational and financial risks. Identifying potential risks and evaluating how to manage them is a continuous process within the company. As the Company is currently in an early commercial phase, the sales development is hard to forecast, and this presents a substantial risk.
The chapter ”Riskfaktorer och särskilda överväganden” (Risk Factors and Special Considerations) in our 2011 Annual Report contains a complete description of the risks the Company has identified and how we have chosen to manage them.
Parent company
The Group includes the Parent Company and the wholly-owned subsidiaries Biolight Patent Holding AB and Biodynam AB. We do not carry out any activity in our subsidiaries, so for all intents and purposes, the group’s accounts correspond to the parent company’s accounts. Consequently, information about the parent company is the same as for the group.
Significant events after the reporting date
We have signed an agreement with Niva Medical Oy. The agreement covers sales and distribution in Finland and the United Arab Emirates. Niva Medical is primarily established in the physiotherapy and rehabilitation segments of the market.
Future reports
Year-end report for 2012 February 15, 2013
Annual report April 2013
Biolight’s financial reports are published on the Company’s web site, www.biolight.se
For further information, please contact:
Pär Olausson Lidö, President, tel: +46 8 753 70 89 or +46 702 15 01 11
(For full report, see attached file)