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C-RAD

Earnings Release Feb 13, 2017

3148_10-k_2017-02-13_85c5f146-d503-43f7-af29-27fadba6874a.pdf

Earnings Release

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C‐RAD AB – Consolidated Year‐End report January – December 2016

Press release February 13, 2017

  • Net sales 27.3 (20.1) MSEK, an increase of 36% compared to the previous year.
  • Order intake amounted to 41.9 (26.7) MSEK, an increase of 57% compared to the previous year.
  • Operating loss amounted to ‐4.4 (‐6.1) MSEK.
  • Result per share ‐0.16 (‐0.28) SEK.
  • Large order from US customers for 8.2 MSEK.
  • First order from Ireland received, for 2.5 MSEK.
  • C‐RAD receives the first two orders from General Electric.
  • Direct share issue gives C‐RAD two new larger shareholders and 21.5 MSEK in capital contribution.
  • Therése Björklund is appointed as new CFO.

Key events after the reporting period

  • C‐RAD receives order from MD Anderson, a large cancer treatment center regarded to be one of the best in the US. Order value amounts to approximately 17 MSEK. Delivery of the first systems is expected to start in the first half of 2017 and to be finalized in 2018.
  • Leave to appeal is granted in patent dispute over C‐RAD's right to one of its patents.

Fourth quarter 2016 January‐December 2016

  • Net sales amounted to 82.7 (66.2) MSEK, an increase of 25% compared to the previous year.
  • Order intake 113.5 (88.1) MSEK, an increase of 29% compared to the previous year.
  • Operating loss amounted to ‐30.4 (‐20.4) MSEK.
  • Result per share amounted to ‐1.21 (‐0.99) SEK.

Order intake and net sales

Summary financial result

Q4 jan‐dec
(Amounts in KSEK) 2016 2015 Change 2016 2015 Change
Order intake 41 918 26 677 15 241 113 547 88 100 25 447
Net sales 27 295 20 117 7 178 82 654 66 161 16 493
Gross profit margin 57% 51% 6% 56% 53% 3%
Operating loss 4 444 ‐ 6 122 ‐ 1 677 30 356 ‐ 20 412 ‐ 9 944 ‐
Net results after tax 4 592 ‐ 6 148 ‐ 1 556 31 209 ‐ 21 184 ‐ 10 025 ‐
Cash 12 683 4 426 8 257 12 683 4 426 8 257
Share price * 12.1 15.1 12.1 15.1
Order backlog 83 542 60 233 23 309 83 542 60 233 23 309

* in SEK, end of period

Strong performance across all regions delivering 57 % order intake increase in the fourth quarter

The US market is repeatedly presenting the strongest order intake with 8.7 (7.8) MSEK during the fourth quarter, which underlines the importance of this market for us. It is reassuring to see that the strategy is successful and yielding return. Both the Nordic countries and the German speaking countries showed an outstanding result during Q4 with an increase of 347 % to 8.5 (1.9) MSEK in the German speaking countries and a development of 238 % to 6.1 (1.8) MSEK in the Nordics. Overall, we continue to see a growing attention for the C‐RAD products and the number of large projects is confirming the momentum in the market and trust customers have in C‐RAD as a partner.

We booked orders of 13.4 MSEK during 2016 related to C‐RAD's so called Life‐Cycle‐Business. This segment is at moment primarily covering sales of service contracts. As part of our strategic map the service business has been identified to be one of the elements for future growth, therefore it is encouraging to see strong interest from our customers to have their systems "insured" by a – generally – multi‐year service contract. Aside from the commercial benefit services tighten customer relationship and increase customer satisfaction.

The revenues increased during the fourth quarter with 36% to 27.3 (20.1) MSEK. The order conversion – the period between order intake and revenue recognition – is stable with 6 months. During 2016 C‐RAD made a loss of 30 mSEK. During the year we invested to substantially strengthen our sales organization and hired new sales and service personnel. The results from those investments we see through significant growth in order intake already in Q4. We have a strong organization to support further growth. Moving forward fixed costs will not increase to the same extent as in 2016. Looking at the fourth quarter we see fixed costs on a similar level as in the third quarter.

During 2016 C‐RAD made a loss of 30 mSEK. During the year we invested to substantially strengthen our sales organization and hired new sales and service personnel. The results from those investments we see through significant growth in order intake already in Q4. We have a strong organization to support further growth. Moving forward fixed costs will not increase to the same extent as in 2016. Looking at the fourth quarter we see fixed costs on a similar level as in the third quarter.

The gross profit margin has continued to increase, both on a quarterly sight to 57 % (51 %) and to 56 % (53 %) on an annual sight. At the same time, we could reduce the stock levels for material substantially. This confirms the positive development seen during previous quarters and is the result of the optimization of the supply chain C‐RAD did during 2016.

As announced on January, 30 MD Anderson decided in favor of the C‐RAD solution to equip four of their centers with the innovative C‐RAD Catalyst HD and Sentinel 4DCT systems – an order worth 17 MSEK, to be booked as order intake during the first quarter 2017. As the US market is representing almost half of the world‐wide radiation therapy market these results are very encouraging. The size of the market in the US shows a high unexploited potential for the C‐RAD product portfolio.

Overall, we continue to see an increasing demand for the C‐RAD products and that our solutions are gaining broader market acceptance. The success is confirming the interest and the confidence customers have in C‐RAD´s cutting edge solutions. With the combination of the market acceptance and with our strong organization we see significant growth opportunities for the future, whereas individual quarters might be volatile especially for order intake, says Tim Thurn, CEO of C‐RAD.

C‐RAD has been informed that Lars Nyberg bought one million B shares

C‐RAD's Chairman of the Board, Lars Nyberg, bought one million B shares from the three biggest shareholders, Per Hamberg, Olle Stenfors and Lars Kling on October 7, 2016.

C‐RAD completes private placement of 2 000 000 shares for a value of 21.5 MSEK and gains two new large shareholders

In October the Board decided on a direct share issue to SVEA Ekonomi AB of 1 400 000 shares for a value of 15.1 MSEK. The decision was taken with the authorization from C‐RAD 's Board at the Annual General Meeting 2016. At the Extra General Meeting in November it has been decided on a direct share issue to Lars Nyberg of 600 000 shares for a value of 6.5 MSEK.

C‐RAD's patent right confirmed in verdict in patent dispute concerning "Patient Monitoring Radiation Machines" but the opposing party appealed the verdict and is granted leave to appeal

In its verdict on Oct 27th, 2016, The Stockholm Patent and Market court confirmed C‐RAD's right to the invention named "Patient Monitoring Radiation Machines". Beamocular appealed the verdict to the Patent and Market court at the Svea Hovrätt and was granted leave to appeal in January 2017. Leave to appeal is granted in the large majority of appeals in patent cases. The decision to leave grant to the appeal does in itself not indicate how the appeal court will rule after having heard the case onp the merits.

The appeal court will try the case based on the same material as in the district court. C‐RAD is not aware of any circumstances that change the chances to prevail also in the appeal court. C‐RAD's view is that nothing new has happened, and C‐RAD's assessment of its chances to successfully defend its right to the invention remains unchanged.

Large order for cutting‐edge C‐RAD solution from U.S. Customers

C‐RAD has secured an order for Catalyst HD™ and Sentinel 4DCT™ systems including multi‐year service contracts for two radiation therapy centers. The total order value is 8.2 MSEK.

C‐RAD receives the first orders from General Electric

C‐RAD and GE Healthcare have entered a sales and distribution agreement for Sentinel 4DCT™ systems and Cyrpa High Impact Technology (HIT) laser systems at end of last year. C‐RAD has now received the first orders for two Sentinel 4DCT systems from General Electric. The systems are ordered for customers in Europe and the total order value is approximately 1 MSEK.

St. Vincent's Private Hospital first customer in Ireland for advanced C‐RAD Catalyst™ system

St. Vincent's private hospital has invested in the hospital's radiation therapy treatment center with the installation of C‐RAD Catalyst HD™ and Sentinel 4DCT™ systems. The hospital and its patients are the first in Ireland to benefit from C‐RAD's advanced surface tracking systems. The order has a total value of more than 2.5 MSEK.

C‐RAD to supply advanced surface tracking solution to German customer

C‐RAD has secured an order for Catalyst HD™ and Sentinel 4DCT™ systems for the radiation therapy center in Gera, Germany. The order has a total value of approximately 3 MSEK.

C‐RAD appoints new CFO

Therése Björklund was appointed new CFO of C‐RAD in December, 2016.

C‐RAD receives Chinese FDA approval for Catalyst System

In March 2016, the China Food and Drug Administration approved C‐RAD's Catalyst™ system for sales on the Chinese market. This was later, in Q2, followed by the first order from China.

Preferential rights issue

At the AGM on April 14th, it was decided upon a rights issue that provided C‐RAD AB 45.4 MSEK before issue costs.

Bill Dowd appointed president of US subsidiary C‐RAD Inc.

C‐RAD has appointed a dedicated manager for its North American operations. Bill Dowd will commence in the role of President of C‐RAD Inc. on July 11, 2016. His' business background has long focused on sales of high‐end medical equipment. Over the past ten years, he has been working in the field of radiation therapy for the US subsidiary of Nucletron, later acquired by Elekta, as Vice President of Sales and Marketing.

Lars Nyberg was elected as new Member of the Board and as Chairman of C‐RAD

C‐RAD's EGM elected Lars Nyberg as new Member of the Board and Chairman of the Board for C‐RAD. During 2007‐2013, he was President and CEO of TeliaSonera AB. In 1995‐2003, Chairman of the Board and CEO of US‐based IT company NCR Corp (NYSE:NCR). He continued as Chairman of the Board until 2005. Lars has held several managerial positions in Philips and he was a member of the Philips Group Management Committee.

Significant events after the reporting period

C‐RAD and MD Anderson Cancer Center concluded agreement to supply innovative SIGRT solution

MD Anderson, regarded to be one of the best cancer centers in the US 1 , signs an agreement with C‐RAD covering delivery of C‐RAD's innovative surface tracking systems to four of the client's cancer centers in Texas. The order value is approximately 17 MSEK. Delivery of the first systems is expected to start in the first half of 2017 with finalization of the project implementation during 2018.

1 http://www.livestrong.com/article/121428‐cancer‐hospitals/

Order intake

Order intake during the fourth quarter amounted to 41.9 MSEK compared to 26.7 MSEK in the previous year. Order intake growth was primarily driven by DACH and ROE region, followed by the Nordic region. The total amount of order intake during 2016 amounted to 113.5 MSEK, compared to 88.1 MSEK in 2015, out of which for service contracts 13.4 (10.0) MSEK. USA and Asia show the largest order intake for the full year 2016.

*ROE (Rest of Europe): Europe excl. DACH and Nordic, **DACH: Germany, Austria, Switzerland, ***CYRPA order intake reported separately until July 2015

Revenues

Revenues increased from 20.1 MSEK during the fourth quarter 2015 to 27.3 MSEK during the fourth quarter 2016, an increase by 36%. After a consistently good order intake during the year, the US accounted for a big part of deliveries and hence net sales during the fourth quarter. The average delivery time is about 6 months and deliveries during the quarter occurred based on above all order intake secured in Q3 and Q4 2016.

Revenues for 2016 amounted to 82.7 MSEK compared to 66.2 MSEK in 2015.

Gross profit

Gross profit was 57% during the fourth quarter 2016, compared to 51% in the corresponding period in 2015. Fluctuations in gross profit can be expected in shorter periods as it is dependent on the product mix and market. The increase in the fourth quarter is a result of C‐RAD's work to optimize the supply chain, as well as a favorable exchange rate development.

Operational expenses

Operational expenses for the fourth quarter 2016 amounted to 8.7 (7.8) MSEK and for the full year 2016 33.7 (26.6) MSEK. The increase is mainly related to the expansion of sales and service business.

Personnel expenses

Personnel expenses for the fourth quarter 2016 amounted to 12.1 (8.7) MSEK. For the full year 2016 personnel expenses amounted to 41.5 MSEK compared to 31.1 MSEK in 2015. The increase is mainly related to the expansion of operations, which entails sales resources being enhanced. The average number of employees increased from 38 in Q4 2015 to 45 in the corresponding period in 2016.

Net results before tax

Net results before tax during the quarter amounted to ‐4.6 MSEK compared to ‐6.1 MSEK in 2015. As part of our growth and expansion strategy, we have been strengthening our sales resources in terms of direct sales in the key markets of the US, France and China. This has had a direct impact on our income statement, as we incur costs, primarily for personnel and travel expenses, until revenue is generated. By autumn 2016, the planned recruitments and other investments in the sales force were finalized so we do not expect the same growth rate in operational expenses and personnel expenses in the coming year as we have seen during 2016. C‐RAD's operating loss has now improved during two following quarters, which implies that the investments made are starting to generate result.

Capitalized development costs

Capitalized development costs amounted to 21.0 (20.8) MSEK at the end of 2016. Capitalizations during 2016 are related to the Gemini project and Catalyst/Sentinel.

GEMini is continually showing good progress in performance test, both in short‐term repetitive tests and long‐term. Further verification of the product is needed, but we continue to be confident of the technical success of the project.

Capitalized development expenditure
Project Capitalized during period, Q4 Carrying amount Comment
Catalyst/Sentinel 706 608 2 691 008 Products launched, further development, interfaces
etc.
Gemini 909 622 11 078 339 Ongoing development
HIT‐lasers 0 7 246 765 From CYRPA aquisi tion
Total 1 616 230 21 016 112

Seasonality

There is a seasonal pattern in C‐RAD's operations. The second half of the year and the fourth quarter in particulare are usually the strongest periods, both in terms of order intake and revenues. This is due to the fact that a large number of customers are hospitals and clinics, which have annual budgets per calendar year.

Order backlog

The order backlog represents orders that have been received but not delivered and invoiced. The backlog amounted to 83.5 MSEK at the end of 2016 compared to 60.2 MSEK at the end of 2015, an increase of 39%. From the total order backlog, 61.3 (48.3) MSEK involves products and 22.2 (11.9) MSEK service contracts. In the graph below the development of the order backlog is presented. Service contracts are presented separately from Q4 2014 onwards.

Order conversion rate

The weighted average for outstanding orders concerning the products is around six months in 2016. This is the time from receiving an order until the order is delivered and revenue recognized. Service contracts are recognized as revenue over the contract period. The service contract can be up to eight years while the average duration is around five years. This has an impact on the conversion rate of the backlog when it comes to service contracts.

Personnel

At the end of December 2016, the number of employees in the Group amounted to 46 (41).

Exchange rate

The financial statements are presented in SEK, the functional currency of C‐RAD. Sales and orders are largely generated in foreign currency, mainly EUR and USD and, in addition, foreign subsidiaries and associates are included in the consolidation. The average EUR rate during 2016 was 9.5 (9.4), while the average USD rate in the period was 8.6 (8.4).

Deferred tax asset

The deferred tax asset is reviewed every quarter. The deferred tax asset is based on the fundamental assumption that operations will generate taxable income in the future. Although C‐RAD has reported taxable losses in previous reports, we can see a strong and rapidly growing order intake. We forecast that a taxable profit will be generated in coming years and thus that the deferred tax asset of 7.1 MSEK shall remain unchanged. The remaining unused taxable losses amount to 147 MSEK and there are currently no time constraints regarding utilization of the losses against future taxable profits.

Bank overdraft

On the closing day, bank overdraft was unutilized.

Cash flow

During the fourth quarter of 2016, cash‐flow was positive in the amount of 6.9 MSEK. The positive cash flow refers to the new share issue which added cash of in total 21,5 MSEK. Negative cash flow from operations amounted to 3.0 MSEK, while an increase in working capital had a negative impact of 5.2 MSEK on cash flow. The increase in working capital is primarily related to an increase in accounts receivable and a decrease in accounts payable. The utilized bank credit as per Sep 30th was also fully repaid during the quarter. Capitalized development costs are included in investment activities, but not as adjustment for non‐ cash items.

Financing

The Annual General Meeting in April 2016 approved a fully guaranteed rights issue of 45.4 MSEK before issue costs, which amounted to around 5 MSEK. C‐RAD intends to use the proceeds from the rights issue to cover working capital until the Company has achieved a long‐term positive cash flow, which is expected to occur in 2017, repay loans of 15 MSEK and to finance increased sales and marketing activities in the Company's main markets.

On 31th December C‐RAD held a bank overdraft with Nordea of 10 MSEK. As of January 2017, C‐RAD has chosen to decrease the credit facility with Nordea to 2 MSEK and instead signed up with Erik Penser Bank for an agreement including a main credit line of 10 MSEK, as well as an invoice discounting facility for the Swedish company C‐RAD Positioning AB with a max amount of 12 MSEK. The credit line agreement with Erik Penser Bank is valid until further notice with 12 month notice from the financier.

In October, the board decided to use the authorization from the AGM to decide on a private placement. This new share issue ensures a continued stable liquidity despite an increase of the working capital as the company is in an expansion phase. 1 400 000 shares were emitted to a new investor, SVEA Ekonomi AB. The share price was 10.77 SEK per share, based on the average share price for the B‐share according to the official statistics from Nasdaq during the period of 20 trading days ending on October 4th, without discount. At the extra general meeting, it was decided to emit additionally 600 000 shares to Lars Nyberg at the same terms. The EGM, held in November, confirmed that decision. Details of ownership are available at www.c‐ rad.com.

Convertible loans

The maturity date of the convertible loans has been extended for two years from February 28, 2016 until February 28, 2018. Interest terms are revised to Stibor 90 + 2.8% from Stibor 90 + 1%.

Significant risks and uncertainties

Reference is made to the Annual Report for 2015 regarding significant risks and uncertainties, and how these are managed. The capitalized development costs for the Gemini project amounts to 2.8 MSEK for all 2016. Until the project is launched and starts to generate revenues, a certain degree of uncertainty prevails. If the project does not develop in line with expectations, the Company will be forced to write down all or part of the capitalized development costs. Valuations of intangible assets and deferred tax asset are based on future sales and order backlog under the assumption that sufficient funding will be available for future expectations to be fulfilled.

C‐RAD Positioning AB was sued by Beamocular AB on November 28, 2014 at the District Court of Stockholm regarding better title to patent. In the verdict dated October 27, 2016, the Stockholm Patent and Market court confirmed C‐RAD's right to the invention named "Patient Monitoring Radiation Machines". Beamocular has now been granted leave to appeal by the appeal court. C‐RAD has had legal and associated costs of 894 KSEK related to the law suit, whereas approximately 500 KSEK has been booked in previous quarters. As the court saw the claims from Beamocular unfounded, C‐RAD shall be reimbursed by Beamocular in full. No adjustments of the result will be made until the appeal period has passed, the amount is recognized as a contingent asset.

C‐RAD 's future earnings are highly dependent on the market, as well as the company's development. Because the Company is not cash flow positive in the current situation, it may need to raise additional capital if sales doesn't develop according to the plan.

Parent Company

No operations are carried in the Parent Company except for Group Management and administration. During the fourth quarter the parent company wrote down inter‐company receivables of 7.5 MSEK towards three subsidiaries; C‐RAD Positioning AB, C‐RAD Inc and C‐RAD Imaging AB, as well as value of shares in C‐RAD GmbH of 4.4 MSEK corresponding to a capital injection made during the quarter. The writedown is presented within result from financial items.

Segment reporting

Group Management has analyzed the Group's internal reporting and established that the Group's operations are managed and evaluated based on the following segments:

‐ Positioning: Development and sales activities for products in the field of patient positioning during radiotherapy, including Catalyst, Sentinel and HIT lasers.

‐ Imaging: Development of imaging devices and detectors for cancer treatments and dosimetry.

Assets and liabilities are not analyzed on the segment level by executive managers. Such analysis is therefore excluded from this segment reporting.

Segment revenues Segment operating results
Amount in KSEK Jan‐Dec
2016
Jan‐Dec
2015
Jan‐Dec
2016
Jan‐Dec
2015
Positioning external sales 81 946 65 584 ‐29 516 ‐19 622
Imaging external sales 708 577 ‐840 ‐790
Total 82 654 66 161 ‐30 356 ‐20 412
Shares
in
results
of
associated
companies
8 43
Financial income and costs ‐861 ‐814
Profit/loss before tax ‐31 209 ‐21 183

Segment reporting is based on the same accounting principles as applied in the consolidated financial statement for 2015. No impairment has been applied. Sales by geographical market are based on sales to customers in each country. One customer represents over 10 percent of sales from January to December 2016.

Revenue by geographical
market
Amount in KSEK Jan‐Dec
2016
Jan‐Dec
2015
Nordic 12 796 19 379
DACH (Deutschland, Austria, Switzerland) 8 579 14 289
RoE (Rest of Europe) 10 881 13 553
USA 30 326 9 468
OEM 22 3 307
France 6 361 488
Asia 13 689 5 677
Total 82 654 66 161

Upcoming events

April 6, 2017 Annual Report for 2016 is available at www.c‐rad.com
April 28, 2017 Q1, 2017 report
April 28, 2017 Annual General Meeting
August 16, 2017 Q2, 2017 report
October 25, 2017 Q3, 2017 report
January 31, 2018 Q4, 2017 report

Condensed consolidated statement of comprehensive income

(Amounts in SEK) 2016 2015 2016 2015
Oct-Dec Oct-Dec Jan-Dec Jan-Dec
Operating income
Net sales 27 295 080 20 117 493 82 653 556 66 160 751
Work performed by the company for its own use and capitalized 1 616 230 1 329 971 3 488 777 4 265 767
Other operating income 59 919 1 407 716 507 426 4 536 583
Total operating income 28 971 228 22 855 180 86 649 759 74 963 102
Operating expenses
Raw material and consumables -11 692 401 -10 494 470 -36 273 439 -32 082 943
Other external costs -8 692 101 -7 808 034 -33 682 546 -26 627 610
Personnel costs -12 085 876 -8 697 096 -41 532 458 -31 098 130
Depreciations -944 728 -1 977 670 -5 517 519 -5 566 722
Other operating expenses 0 0 0 0
Total operating expenses -33 415 106 -28 977 270 -117 005 962 -95 375 405
Operating profits/loss -4 443 878 -6 122 090 -30 356 204 -20 412 304
Result from participation in associated companies 0 0 0 43 289
Financial income 1 054 16 024 8 315 23 083
Financial costs -148 987 -42 214 -861 287 -837 911
Profit (loss) before tax -4 591 810 -6 148 279 -31 209 176 -21 183 842
Income tax 0 0 0 0
Net results for the period -4 591 810 -6 148 279 -31 209 176 -21 183 842
Translation difference from foreign operations -100 181 34 320 -325 063 79 028
Comprehensive results for the period (1) -4 691 991 -6 113 959 -31 534 239 -21 104 815
Results per share before dilution -0.16 -0.28 -1.21 -0.99
Results per share after dilution -0.15 -0.26 -1.14 -0.93

(1) 100% attributable to shareholders in the Parent Company

(Amounts in SEK)
Assets
31-12-2016 31-12-2015
Assets
Intangible assets
Capitalized development expenditure 21 016 112 20 839 216
Distribution rights 5 226 182 6 073 626
Patents, licenses and similar rights 739 779 925 907
26 982 073 27 838 749
Tangible assets
Equipment 3 337 095 4 582 811
Financial assets
Long-term receivables 106 162 152 732
Total financial assets 106 162 152 732
Other non-current assets
Deferred tax asset 7 094 209 7 094 209
Total non-current assets 37 519 539 39 668 500
Current assets
Inventory 6 360 335 10 342 084
Trade receivables
/
36 528 223 12 910 054
Other receivables 3 442 969 2 358 817
Prepayments and accrued income 5 568 381 3 919 500
Cash and bank 12 682 863 4 426 075
Total current assets 64 582 771 33 956 531
Total assets 102 102 310 73 625 032
Equity and liabilities 31-12-2016 31-12-2015
Equity
Share capital 4 429 749 3 303 799
Additional paid in capital 255 230 227 193 816 968
Retained earnings -157 523 550 -135 889 279
Profit (loss) for the year
Total equity
-31 534 239
70 602 187
-21 183 842
40 047 645
Long term liabilities
Convertible bonds 11 829 115 11 829 115
Other long-term liabilities 641 834 992 905
12 470 949 12 822 020
Current liabilities
Accounts payable 7 582 201 9 013 795
Warranty provisions 1 225 044 1 064 000
Other current liabilities 2 337 389 6 730 407
Accrued expenses and deferred income 7 884 538 3 947 167
Total current liabilities 19 029 172 20 755 368
Total liabilities 31 500 121 33 577 388
Total equity and liabilities 102 102 310 73 625 032

Condensed consolidated statement of cash flow

(Amounts in SEK)
Statement of cash flow 2016
Oct-Dec
2015
Oct-Dec
2016
Jan-Dec
2015
Jan-Dec
Operating activities
Profit (loss) before financial items
Adjustment for non-cash items, etc
Interests received
Interests paid
(4 443 878)
1 625 867
1 054
(148 987)
(6 122 090)
811 699
16 024
(42 214)
(30 356 204)
6 568 658
8 315
(861 287)
(20 412 304)
587 004
23 083
(837 911)
Cash flow from operating activites before working capital
changes
(2 965 944) (5 336 580) (24 640 518) (20 640 127)
Working Capital Changes (5 204 980) 1 814 888 (19 761 808) (2 310 891)
Cash flow from operating activites (8 170 924) (3 521 692) (44 402 326) (22 951 019)
Cash flow from investing activities (810 985) (1 360 302) (3 415 127) (5 954 426)
Cash flow from financing activities 15 918 005 4 794 886 55 884 152 25 733 474
Net increase (decrease) in cash and cash equivalents 6 936 096 (87 108) 8 066 699 (3 171 971)
Cash and cash equivalents at beginning of period 5 729 505 4 633 801 4 426 075 7 623 092
Exchange rate differences 17 264 (120 616) 190 089 (25 046)
Cash and cash equivalents at end of period 12 682 863 4 426 075 12 682 863 4 426 075

Condensed consolidated statement of changes in equity

(Amounts in SEK)
Statement of changes in equity 2016 2015
Jan-Dec Jan-Dec
At beginning of period 40 047 646 38 484 049
Share increase and option program 67 111 985 25 182 500
Issue expenses (5 368 066) (16 150)
Equity part of convertible loan 110 673 (161 632)
Translation and other differences (90 875) (2 257 281)
Changes in the period 61 763 717 22 747 437
Loss for the period (31 209 176) (21 183 842)
Closing balance at end of period 70 602 187 40 047 645

Parent company Financial Statements

(Amounts in SEK)
Income statement 2016 2015
Jan-Dec Jan-Dec
Total income 19 767 970 20 245 834
Other costs -8 094 980 -11 063 299
Other personnel costs -8 998 856 -7 255 904
Avskrivningar materiella tillgångar -23 255 -20 804
Avskrivningar immateriella tilllgångar -847 444 -847 444
Total operating expenses -17 964 535 -19 187 451
Financial income 4 970 5 358
Financial costs -12 717 727 -19 128 663
Result from financial costs -12 712 757 -19 123 305
Result before tax -10 909 322 -18 064 922
Tax 0 0
Net results -10 909 322 -18 064 922
Statement of comprehensive results
Net results -10 909 322 -18 064 922
Translation difference from foreign operations 0 0
Total comprehensive results -10 909 322 -18 064 922
Statement of cash flow 2016 2015
Jan-Dec Jan-Dec
Operating activities
Profit (loss) before tax -10 909 322 -18 064 922
Adjustment for non-cash items 11 054 927 19 124 823
Cash flow from operating activities
before working capital changes 145 605 1 059 902
Working capital changes -27 718 431 -10 342 386
Cash flow from operating activites -27 572 826 -9 282 484
Cash flow from investment activities -28 187 365 -14 100 000
Cash flow from financing activities 56 130 856 20 464 560
Net change in cash and cash equivalents 370 664 -2 917 924
Cash and cash equivalents at beginning of period 94 835 3 012 761
Cash and cash equivalents at end of period 465 500 94 835
Statement of Financial Position 2016 2015
31 Dec 31 Dec
Assets
Intangible assets 5 226 182 6 073 626
Tangible assets 38 362 61 617
Shares in Group companies 108 128 370 84 512 355
Long term receivables 0 0
Investments in associates 0 0
Receivables in Group companies 62 040 485 33 628 156
Other receivables 120 579 296 438
Prepayments and accrued income 690 149 635 521
Cash and bank 465 502 94 835
Total assets 176 709 629 125 302 548
Equity and liabilities
Share capital 4 429 749 3 303 799
Other equity 154 108 662 104 400 198
Total equity 158 538 411 107 703 997
Convertible bonds 11 718 442 11 718 442
Long term liabilities 641 834 992 905
Accounts payable 1 058 449 1 675 658
Liabilities to Group companies 2 439 560 0
Other current liabilities 1 258 649 1 256 930
Accrued expenses and deferred income 1 054 284 1 954 616
Total liabilities 18 171 218 17 598 551
Total equity and liabilities 176 709 629 125 302 548
Statement of changes in equity 2016 2015
Jan-Dec Jan-Dec
At beginning of period 107 704 000 100 304 363
Share increase and option program 61 743 732 25 464 560
Other 0 0
Net results for the period -10 909 322 -18 064 922
Closing balance at end of period 158 538 411 107 704 000

Notes

Accounting principles

Oct-Dec This interim report is prepared, for the Group, in accordance with IAS 34, RFR1 "Redovisning för koncerner" and the Annual Accounts Act and, for the Parent company, the Annual Accounts Act and RFR 2.

There has been no significant changes to existing accounting policies or new applied acccounting principles in 2016, thus the applied accounting principles are consistent with what is stated in note 1 in the Financial Statements for 2015.

C‐RAD har reviewed what impact IFRS 15, the new standard for revenue recognition, will have on the company's revenue reporting. The Company's assessment is that the application of the new standard will not imply any significant changes to the current revenue recognition for the Group. THe new standard will be applied as of January 1st, 2018.

Updated IFRS standards and interpretations from IFRIC have no impact on the Group or the Parent Company's results or financial position.

Exchange rates

Orders, order back‐log and income statement are translated at the period‐average exchange rate while balance sheet items are translated at the closing rate.

Related party transactions

Per Hamberg and Lars Kling, two of the largest shareholders, lent 2.5 MSEK each to the Company in January 2016, without security. The loan carried an annual interest rate of 8% with quarterly interest payments. The loans were fully repaid in June 2016. No other transactions with related parties occured in the reporting period.

Capitalized development costs

Development expenses that fulfil the recognition criteria in IAS38 are capitalized. At least annually an impairment test is performed. The progress of current development projects is reviewed on a regular basis.

Deferred tax

Deferred tax assets are reviewed at the end of each reporting period and adjusted in line with the probable future taxable result.

Contingent asset

The contingent asset of SEK 893 880 refer to legel and associated costs in conjunction with the Beamocular lawsuit.

Contingent liabilities

Contingent liability of SEK 2 000 000 in the Parent company refer to guarantee committment for subsidiary.

Pledges

The pledges refer to to a chattle mortgage for the Companys credit line with Nordea (security of 12.150.000 SEK) and a chattel mortgage with NUTEK (1,470,000 SEK).

Ratios

2016 2015
31 Dec 31 Dec
Number of shares 29 531 653 22 025 323
Average number of shares 25 703 763 21 339 906
Average number of diluted shares 27 269 087 22 772 251
Number of options outstanding 1 598 746 1 509 746
Solvency 69% 54%
Result per share before dilution (-1.21) (0.99)
Result per shares after dilution (-1.14) (0.93)
Equity per share before dilution 2.75 1.82
Equity per share after dilution 2.59 1.70
Operating margin Neg. Neg.

Other information

This interim report provides a true and fair view of the Group's operations, financial position and earnings. If there are any deviations between the reports in English and Swedish, the Swedish version is valid. This interim report has not been reviewed by the company auditors.

Uppsala, February 13 2017

Lars Nyberg
Chairman of the Board
Tim Thurn
CEO
Bengt Rolén
Board member
Peter Hamberg
Board member
Brian Holch Kristensen
Board member
Kicki Wallje‐Lund
Board member
Börje Bengtsson
Board member

C‐RAD AB (publ)

Bredgränd 18, SE‐753 20 Uppsala, Sweden Telephone +46 (0)18 ‐ 66 69 30 www.c‐rad.com Corp. reg. no 556663‐9174

Since December 2014, C‐RAD AB has been listed on the Nasdaq Stockholm exchange Small Cap list. The information in this interim report is such that C‐RAD is required to disclose pursuant to the EU Market Abuse Regulation. The information was submitted for publication on February 13, 2017 at 8:30 am.

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