Esaote Group approves the 1997 semi-annual report - consolidated sales to 136 billion lire (US$78.6 million) - income before taxes equal to 7.5 billion lire (US$4.3 million) - new products' launch - agreement for a supply of medical devices in Argentina.
GENOA, Italy, Sept. 18 /PRNewswire/ -- The Board of Directors of Esaote SpA (OTC: ESA IM; Milan Ex: ESA), at the meeting held today, approved the consolidated balance sheet as of June 30, 1997.
For the first six months of 1997 ended June 30, 1997, consolidated sales amounted to 136.0 billion lire, in comparison to 135.1 billion for the same period last year (+0.6%). International sales, equal to 71.7 billion lire in the first half of 1997, represented 52.7% of total consolidated sales in comparison with 73.7 billion lire (54.5% of consolidated sales) in the corresponding period of 1996.
Sales in Italy recorded a positive increase of 4.6%, starting from 61.4 billion lire in the first half of 1996 to reach 64.3 billion lire in the same period of 1997.
Esaote Group's international sales suffered the situation of some markets (in particular European countries and Russia), that in the first half of 1997, were characterized by a persistent stagnation of demand due to the controlling of health costs.
The launch of the Chinese subsidiary has been particularly positive. In only three months Esaote China Ltd. has reached very good results in net sales and profits.
For the first six months of 1997, gross operating income amounted to 14.5 billion lire, in comparison with 18.5 billion lire in the first six months of 1996. The reduction in the gross operating income was due to an increase of distributed products and turnkey supplies on consolidated sales.
Income before taxes decreased from 10.5 billion lire in the first half of 1996 to 7.5 billion lire in the same period last year. For the first six months of 1997, net income before minority interests amounted to 4.0 billion lire, in comparison with 5.5 billion lire in the same period of 1996. Net income after minority interests in the first half of 1997 amounted to 3.6 billion lire, in comparison with 5.5 billion lire in the same period of 1996.
Prof. Carlo Castellano, Chairman and CEO of Esaote SpA stated: "1997 is a year of consolidation and transition for Esaote. We are involved in widening research and development, marketing strategies and the sales network and production in order to support the launch of new products. During the last several weeks we launched the AU5 Harmonic for Ultrasound, Artoscan M for dedicated MRI, and the Archimed for Cardiology."
"As we stated at the Bear Stearns Health Care Conference in New York recently," Prof. Castellano added, "we expect that our new products and the undertaken actions, will allow us to consolidate our competitive position in the coming years. In ultrasound -- the company's core business -- with AU5 Harmonic, we are going to strengthen our position as the leading European manufacturer and among the international leaders in our market."
AU5 Harmonic, recently launched at the VIII World Congress of the World Federation for Ultrasound in Medicine and Biology in Buenos Aires, is the first multidisciplinary ultrasound system which, in its standard configuration, allows the user to optimize ultrasound diagnostic examinations through the use of contrast agents.
Artoscan M -- the new dedicated MRI system, besides allowing its installation in small places, offers images of a better quality in a shorter average time.
Archimed is the new range of EKG product, presented at the European Congress of Cardiology in Stockholm at the end of August. Lined up with the more advanced market trends, Archimed proposes electrocardiographer as an element of a cardiology informatic network, in order to make the management of data and patients' case histories more efficient.
During the first half of 1997 Esaote further strengthened research and development, incurring expenses equal to 11.2 billion lire, in comparison with 10.1 billion lire in the same period last year. As a consequence, in the first half 1997, research and development costs as a percent of proprietary products sales grew to 11.0% from 8.7% in the first half 1996.
Esaote's product renewal plan, which characterized the first six months of 1997, reflected in an increase of the working capital, which, as of June 30, 1997 is equal to 136.7 billion lire, in comparison with 123.5 billion lire as of December 31, 1996. The Company expects this increase to be temporary and bound to be reduced when the products enter the market.
As of June 30, 1997 shareholders' equity amounted to 114.3 billion lire (in comparison with 112.4 billion lire as of December 31, 1996 and with 105.7 billion lire as of June 30, 1996) with a net financial debt of 43.3 billion lire (33.4 billion lire as of December 31, 1996 and 51.7 billion lire as of June 30, 1996). As of June 30, 1997, net financial debt to equity ratio was equal to 0.4, while as of June 30, 1996, the same ratio was 0.5.
The persisting stagnation in some markets, (particularly Germany and Russia), together with a lowering of the sales prices, in 1997 has put strong pressure on the industry. Despite the high expenses in R&D, marketing and the strengthening of sales network and production faced for the launch of new products, Esaote believe as well that, also in 1997, will be able to obtained satisfactory results both in turnover growth and profit.
Esaote's Board of Directors informs that an agreement between Esaote and the Provincia de Misiones in Argentina has been signed for a turnkey supply of hospital systems equal to 6.5 million dollars. The modalities and timing of this supply are being settled.
The Esaote Group is a world leader in the non-invasive diagnostic medical equipment market, and the leading European manufacturer of ultrasound systems. Esaote's net sales for 1996 were 275 billion lire with net income of 11.2 billion lire. Additional information about Esaote and its products may be obtained from the Company's web site, http://www.esaote.com/ .
ESAOTE GROUP
Consolidated Balance Sheets
(millions of Italian lire)
June 30, December 31, June 30,
1997 1996 1996
ASSETS
Cash and bank deposits 7,058 16,685 9,162
Trade receivables, net of allowance 169,985 169,776 152,164
Other receivables 4,302 4,503 8,019
Inventories 90,696 69,775 73,522
Deferred income taxes 2,610 2,030 2,552
Prepaid expenses 2,909 1,989 1,541
Total current assets 277,560 264,758 246,960
Investments in affiliates and
other companies 1,092 241 550
Securities held as collateral 1,000 1,000 2,313
Plant and equipment, net 25,476 26,271 26,398
Goodwill, net 5,642 6,349 7,907
Other assets 6,566 6,542 7,509
TOTAL ASSETS 317,336 305,161 291,637
LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term borrowings due to ban 31,599 20,531 16,960
Short-term debt due to other lenders -- 888 41
Current portion of long-term debt 6,770 15,658 12,600
Trade payables 83,359 72,698 63,764
Employee compensation and relate 11,898 11,708 12,352
Sales commissions payable 11,457 12,236 11,331
Income taxes payable, net 786 353 89
Other payables 18,545 22,813 14,824
Accrued liabilities 7,606 4,761 6,105
Total current liabilities 172,020 161,646 138,066
Debenture loan held by employees 836 836 836
Long-term debt 11,120 12,137 30,473
Liability for termination indemnities 16,170 15,519 14,555
Warranty reserve 2,866 2,602 2,018
TOTAL LIABILITIES 203,012 192,740 185,948
Share Capital 45,445 45,445 45,030
Other reserves 49,256 44,581 43,958
Minority interests 1,121 -- --
Retained earnings at beginning of year14,916 11,232 11,232
Net income for the period 3,586 11,163 5,469
TOTAL SHAREHOLDERS' EQUITY 114,324 112,421 105,689
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 317,336 305,161 291,637
The above data, approved by the Board of Directors and not verified by the Board of Statutory Auditors, will receive a negative assurance by Reconta Ernst & Young, as provided for by the recent requirements of Consob.
ESAOTE SPA AND SUBSIDIARIES
Consolidated Income Statements
(millions of Italian lire)
First Half First Half
1997 1996 1996
Net Sales 136,013 135,132 75,054
Other Income 3,007 1,985 4,103
TOTAL REVENUES 139,020 137,122 79,157
Costs and Expenses:
materials 74,953 49,494 107,274
services 32,098 29,359 64,961
personnel 35,548 34,922 64,867
other 2,498 2,386 4,849
net increase (decrease) in
inventories (20,554) 2,454 1,471
TOTAL COSTS AND EXPENSES 124,543 118,612 43,422
GROSS OPERATING INCOME 14,477 18,507 35,735
Depreciation and amortization 5,561 5,160 10,641
NET OPERATING INCOME 8,916 13,347 25,094
Net financial charges 1,911 4,570 6,466
INCOME BEFORE TAXES AND
EXTRAORDINARY 7,005 8,777 18,628
Net extraordinary (income)/ losses(463) (1,365) (840)
INCOME BEFORE INCOME TAXES 7,468 10,142 19,468
Income taxes 3,464 4,673 8,305
TOTAL NET INCOME 4,004 5,469 11,163
Minority Interests 418 -- --
NET INCOME 3,586 5,469 11,163
The above data, approved by the Board of Directors and not verified by the Board of Statutory Auditors, will receive a negative assurance by Reconta Ernst & Young, as provided for by the recent requirements of Consob.
-0- 09/18/97
Source: Esaote Group
CONTACT: Pietro Amoretti of Esaote S.p.A., 011-39-10-6547-334 or
pietro.amorett@esaote.com; or Anne McBride of The Anne McBride Company,
212-983-1702 or mcbrideco@aol.com