-- 1997- A year of strong investment in Research & Development and Production -- Currently finalizing the agreement for the acquisition of the Dutch Company Pie Medical from the Philips Group -- Outlook for 1998
GENOA, Italy, April 3 /PRNewswire/ -- Esaote S.p.A. (OTC Bulletin Board: ESA IM; Milan Ex: ESA), addressed investors at the Borsa Italiana (the Italian Stock Exchange), in the customary meeting with the financial community.
Prof. Carlo Castellano, Chairman and Managing Director of Esaote SpA, has announced that the following have been appointed to the Board of Directors: Prof. Alberto Santa Maria, Dr. Antonio Cantaluppi and Dr. Fulvio Renoldi Bracco. In addition, Dr. Diana Bracco has been appointed Vice Chairman; Andrea Oberti, Managing Director and General Manager and Fabrizio Landi, General Manager for Marketing Sales and Product Development.
As already anticipated, 1997 has been a year of consolidation and transition, characterized by the launch of new products in the second part of the year, strong investments in Research & Development and the production structure. Furthermore, 1997 showed a widening of marketing and the commercial network.
R&D expenditures rose to a total of Lit. 21.9 billion, an increase of 15.9 percent from 1996. The increase in R&D correspondent with the launch of new products during the course of 1997 and the development program in progress. R&D expenses as a percentage of proprietary sales grew in 1997 to 10.1 percent, compared to 8.3 percent in 1996.
The decrease in the gross operating margin of 19.8 percent in 1997 compared to 1996 was due to the large amount spent on R & D and increases in 1997 on sales of distributed products and hospitals systems, characterized by lower margins. Fixed assets grew in 1997 by 12.1 percent compared with 1996.
The management has previously announced that Esaote and Philips Medical Systems International B.V. are finalizing their agreement with regards Esaote's acquisition of the Dutch Company Pie Medical, which is expected to be completed before the end of April.
The letter of intent was signed by the parties on January 22nd and stated that Esaote would acquire 100% of Pie Medical's shares and obtain the right to use the patents and licenses and Philips' technology relating to the business of Pie Medical.
Pie Medical, based in Maastricht with about 150 employees, produces diagnostic ultrasound systems both for human and veterinary use. Pie Medical, operating in the market alongside Esaote, records sales of Lit. 42 billion.
The acquisition of Pie Medical represents an important step for Esaote in the internationalization process with commercial, production and Research & Development synergies.
In a situation characterized by the stabilization of market demand in Europe, picking up in the US market, the constant growth in the Chinese market and by the slowing down in the South East Asian market, Esaote's management predicts that in 1998 there will be a moderate growth in sales relative to the own line of business. Esaote continues with a plan of strong Research and Development investments and production structure investments.
Source: Esaote Biomedica
Contact: Pietro Amoretti, Investor Relations of Esaote Biomedica,
39-10-654-7334, or fax: 39-10-652-0172; or Marilena Michaelidou of the Anne
McBride Company, 212-983-1702, or fax: 212-983-1736