C-RAD

Quarterly Report • May 8, 2015

C-RAD AB – Interim report January - March 2015

Press release May 8, 2015

With strong order momentum into the new year

Key events in the period January-March 2015

- Net sales:	- Large order for seven C-RAD systems from Germany and Estonia
Jan-March 15.2 (11.1) MSEK, +37%	- C-RAD further strengthening its global sales organization
	- C-RAD signs sales and service agreement for Switzerland
- Order intake:	- Tender for surface tracking solution at Skandionkliniken has been redone
Jan-March 22.1 (14.7) MSEK, +51%	due to an appeal by a competitor
	- 127% growth order intake with Positioning products
- Operating loss:
Jan-March -1.2 (-1.6) MSEK
- Result per share

Jan-March -0.09 (-0.10) SEK

Key events after the reporting period

• Order for three C-RAD systems from Italy
• C-RAD validates its respiratory gating interface for IBA proton and particle therapy
• C-RAD grows sales organization in the United States
• Employee Warrant Program Oversubscribed
• AGM elects Kicki Wallje-Lund in the Board of Directors

Comparison by quarter Summary financial results

Amounts in KSEK	Jan - March
	Q1 2015	Q1 2014
Net sales	15 247	11 132
Operating loss	-1 172	-1 585
Net results after tax	-1 800	-1 903
Cash 1)	2 364	15 356
Share price 1)	15.2	19.0
Order intake	22 100	14 718
Order backlog	43 700	24 525
1) in SEK, at the closing date 31 March

Comments from Tim Thurn, CEO:

After a strong order intake for FY 2014, the first quarter of 2015 shows a record in both orders and revenues. Order intake totaled 22.1 MSEK during Q1 2015, up 51% from Q1 2014. Orders for Positioning Products (which includes Sentinel, Catalyst and Cyrpa lasers) and related service products increased by 127%. Revenues for the entire group amounted to 15.2 MSEK in Q1 2015. This is an improvement of 37% compared to Q1 2014. It should be noted that in Q1 2015 production activities for the German company IBA Dosimetry did not contribute to orders and revenue, since C-RAD phased out production activities in Q4 2014.

These results confirm that we are on track for achieving our ambitious financial targets: increasing sales by 50% a year through 2017, with a profit margin of 60%. They also indicate that our major investment in expanding our sales force has yielded results, and shall continue. The growing interest in the market must be addressed by competent and experienced people who can get C-RAD's message out to decision-makers in radiation therapy centers.

Recruiting has been proceeding very well: The US, which is expected to be a main sales driver, has five sales/service staff, with two more under recruitment; France started direct sales this January, and has its two people in place; two sales and service staff in Germany will be complemented by an additional sales person; and China will also add one salesperson. In addition, we have opened up the Swiss market through an agreement with MedTech Consulting Cossman that cover sales, service and clinical training. The financing of our expansion has been addressed.

This quarter's new sales include four systems to Estonia – the first sale in the Baltic region – and three systems to Dresden, Germany. Deliveries are phased over Q2-Q3.

Cash flow at the end of the quarter was low and we need to use our bank overdraft with 2.9 MSEK. This can be attributed to the fact that many deliveries took place in March, with payments due in April.

Recent successful appearances at exhibitions include the International Technical Exhibition of Medical Imaging (ITEM) in Japan, where we provided demonstrations of high-end treatments together with our partner Elekta. Our presence at the European Society for Radiotherapy & Oncology (ESTRO), the largest European radiation therapy group, was also marked by positive meetings with clinical customers and a good deal of traffic through our booth.

The Skandionkliniken Uppsala tender that we won in Q3 was appealed by a competitor, resulting in a new tender process. C-RAD has submitted its quotation under the new tender process. A decision is expected soon, but no schedule has been communicated by the customer.

With regard to our joint development with the Franco-Belgian company Cyrpa – in which we hold a minority stake of 29 percent – our joint product demonstrations have been well received in sales discussions with customers. Our current plan calls for integration of Cyrpa in 2016, but overall positive market developments continue to reinforce the benefits of an earlier integration, so we are investigating our options for accelerating this integration.

Overall, we are very pleased with this quarter's performance, and look forward to increased sales activity and a strong order flow due to our expanded sales force, presence and visibility on the international stage.

Large order for seven C-RAD systems from Germany and Estonia

C-RAD secured an order for two Catalyst™ systems as well as a Sentinel™ system from Städtisches Klinikum Dresden-Friedrichstadt, which operates in the eastern part of Germany, and was awarded with an order of two Catalyst™ systems as well as two Sentinel™ systems from Tartu University Hospital in Estonia.

The delivery and installation in Germany is expected to occur in Q2 2015. The order includes a service contract for 8 years.

Catalyst™ systems in Estonia will be installed together with Varian TrueBeam linear accelerators.

C-RAD further strengthening its global sales organization

C-RAD has released its strategy for further growth, including a measure to strengthen the sales force in key markets. It has appointed a new sales manager for France and five more persons will be added to the sales organization over the next 12 months.

C-RAD signs sales and service agreement for Switzerland

C-RAD has signed a distribution agreement with MedTech Consulting Cossmann GmbH to market the C-RAD product portfolio to Swiss customers. The new partner will also provide service and clinical training.

Tender for surface tracking solution at Skandionkliniken has been redone, due to an appeal by a competitor

As the result of a public tender, Skandionkliniken had chosen C-RAD to deliver surface tracking solutions for Patient Positioning, Motion Monitoring and Respiratory Gating. A competitor, however, filed an appeal in September 2014. The Administrative Court in Uppsala has decided that for the procurement of the surface tracking solution a new public tender procedure needs to be started.

Order for three C-RAD systems from Italy

C-RAD's Italian distributor – TecnoSan S.a.s. – secured an order for two Catalyst™ systems as well as one Sentinel™ 4DCT system from the Ospedale del Mare cancer clinic in Naples.

C-RAD validates its respiratory gating interface for IBA proton and particle therapy

C-RAD has successfully validated the interface for its Catalyst™ product line, which controls the radiation beam for proton and particle treatment systems. The IBA gating interface validation was performed at Westdeutsches Protonentherapiezentrum Essen, in Germany.

C-RAD grows sales organization in the United States

C-RAD released its strategy for further growth in February, including the expansion of the direct sales and service force in key markets. C-RAD has now further increased its presence in the US by hiring two new regional sales manager for the Midwest and Southeast region.

Employee Warrant Program Oversubscribed

C-RAD has launched a warrant program for its employees, which has generate a great interest. Employees have signed up for a total of 284,330 options, which is 42% more than the initial volume offered.

AGM elects Kicki Wallje-Lund in the Board of Directors

C-RAD's AGM elected Kicki Wallje-Lund as a new board member. She has long experience in business development and board of directors in various international companies and currently has the position as CEO in the Stockholm based company Wellnet AB. Among other board assignments, Kicki is a member of the board for Betsson AB since 2007.

Order intake

Order intake during Q1 2015 amounted to 22.1 MSEK compared to 14.7 MSEK in Q1 2014. It should be noted that during the previous y ear frame order of 3.8 MSEK related to the production for the German company IBA Dosimetry was booked in the first quarter 2014. Orders with po sitioning products incl. related service products has increased by 127% compared to Q1 2014.

Note: orders related to the production for the German company IBA Dosimetry are not included on the graphic.

Revenues

Revenues for Q1 2015 amounted to 15.2 MSEK and increased by 37% from Q1 2014.

Revenues Jan-March (MSEK)
	Q1 2015	Q1 2014
Positioning	13.9	9.1
CYRPA production	0.9	0.1
IBA production		1.2
IBA distribution	0.4	0.7
	15.2	11.1

Financial development

Gross profit

The gross profit margin was 57% in Q1 2015 compared to 55% in the last quarter of the fiscal year 2014. Changes in gross profit can be expected in shorter periods due to the limited volume of systems and the respective configuration of each system. Gross profit margin throughout the entire fiscal year 2014 was 60%.

Cost of goods sold

COGS for Q1 2015 amounted to 6.6 MSEK compared to 3.0 MSEK in Q1 2014. COGS related to revenues during Q1 2014 have been recognized in Q3 and Q4 2014.

Operational expenses

Operational expenses for Q1 2015 amounted to 6.0 MSEK compared to 8.3 MSEK in the previous quarter.

Personnel expenses

Personnel expenses amounted to 6.2 MSEK, compared to 6.0 MSEK in Q1 2014.

Net results after tax

Net results after tax Q1 2015 was negative by 1.8 MSEK, compared to net loss of 1.9 MSEK in Q1 2014.

Capitalized development costs

Revenues Jan-Sept (MSEK) Capitalized development costs amounted to 11.6 MSEK. Capitalization in Q1 2015 was related to the Gemini project, IBA gating interface and MMI2 Truebeam interface.

CYRPA production IBA production	2,3 Capitalized development costs 4,7	0,9 4,0
IBA distribution	Project 1,8	Carrying amount 1,9	Status
	Catalyst/Sentinel	3.6	Launched
	Catalyst HD	1.0	Launched
	Gemini	6.4	Ongoing development
	IBA and TrueBeam
	MMI 2 Interface	0.6	Ongoing development
		11.6

Financial development

Seasonality

There is a seasonal pattern in C-RAD's operations. The second half of the year and mainly the fourth quarter that 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, and they tend to wait until the end of the year to place orders.

Order backlog

Order backlog represents orders that have been placed but not delivered and invoiced. The backlog amounted to 43.7 MSEK at the end of Q1 2015, compared to 36.4 MSEK at end of 2014.

Order conversion rate - positioning products

Weighted average of the outstanding orders is around 7 months in 2015. This is the time from receiving an order until the order is delivered. The order backlog for positioning products amounted to 37.5 MSEK.

Personnel

At the end of the period the number of employees in the Group amounted to 28 (29) persons.

Exchange rate

The financial statements are presented in SEK, the functional currency of C-RAD. Changes in foreign currencies have an impact on the results. 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 in Q1 2015 was 9.4 (8.9), while the average USD rate in the period was 8.3 (6.5). This has a positive on the comparison of revenues and order intake (between Q1 2015 and Q1 2014) generated in these currencies.

Salary for the employees and other expenses in the European and American subsidiary are booked in the local currency. Even purchase of material and service from foreign countries have a negative impact on the result.

Bank overdraft

Bank overdraft exercised at the closing day by 2.9 MSEK. The total amount of the bank overdraft is 5 MSEK.

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 segment level by the chief decision maker. Such analysis is therefore excluded from this segment reporting. Activities between segments: Some of the personnel employed within the Imaging segment have conducted work for the Positioning segment. Internal sales covers the direct cost of these cross-segmentservices.

	Segment revenues		Segment operating profit
Amounts in KSEK	Q1 2015	Q1 2014	Q1 2015	Q1 2014
Positioning external customers	15 072	9 900	-1 125	-1 569
Imaging external sales	175	1 232	-46	-16
Imaging internal sales	0	591	0	0
Elimination internal sales	0	-591	0	0
Total	15 247	11 132	(1 171)	(1 585)
Share in results of associates			-387	-157
Financial items			-242	-161
Profit/loss before tax			(1 800)	(1 903)

Segment reporting is based on the same accounting principles as applied in the consolidated financial statements 2014. No impairment has been made. Sales by geographical market are based on sales to customersin each country. Two customers each represent over 10 percent of sales from January to March 2015.

	Revenue by geographical market
Amounts in KSEK	Q1 2015	Q1 2014
Nordic	5 066	4 168
DACH	3 231	1 428
RoE	458	1 288
America	4 870	809
Asia	1 622	3 439
	15 247	11 132

(Amounts in SEK)	2015	2014	2014
	Jan-Mar	Jan-Mar	Jan-Dec
Operating income
Net sales	15 247 333	11 131 518	53 191 612
Work performed by the company for its own use and capitalized	1 107 195	1 054 708	3 460 326
Other operating income	2 330 562	129 801	4 031 971
Total operating income	18 685 090	12 316 027	60 683 909
Operating expenses
Raw material and consumables	-6 560 995	-3 047 337	-21 289 961
Other external costs	-5 994 555	-3 957 616	-22 361 312
Personnel costs	-6 202 180	-5 952 379	-25 009 391
Depreciations	-1 099 047	-944 080	-5 028 650
Other operating expenses	0	0	0
Total operating expenses	-19 856 778	-13 901 412	-73 689 314
Operating profits/loss	-1 171 687	-1 585 385	-13 005 405
Result from participation in associated companies	-387 031	-157 162	-260 889
Financial income	5 475	0	153 375
Financial costs	-246 323	-160 914	-279 767
Profit (loss) before tax	-1 799 566	-1 903 461	-13 392 686
Income tax	0	0	7 094 209
Net results for the period	-1 799 566	-1 903 461	-6 298 477
Translation difference from foreign operations	-33 195	-6 606	-623 365
Comprehensive results for the period (1)	-1 832 761	-1 910 067	-6 921 842
Results per share before dilution	0,09	-0,10	-0,31
Results per share after dilution	0,08	-0,09	-0,29

Condensed consolidated statement of comprehensive income

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

(Amounts in SEK)
Assets	31-03-2015	31-03-2014	31-12-2014
Assets
Intangible assets
Capitalized development expenditure	11 597 301	10 888 883	10 901 443
Patents, licenses and similar rights	993 179	1 821 560	1 342 029
	12 590 480	12 710 443	12 243 472
Tangible assets
Equipment	3 752 153	3 033 174	4 057 105
Financial assets
Shares of associates	7 912 793	8 403 551	8 299 824
Long-term receivables	4 964 255	4 688 523	4 964 254
Total financial assets	12 877 047	13 092 074	13 264 078
Other non-current assets
Deferred tax asset	7 094 209	0	7 094 209
Total non-current assets	36 313 890	28 835 691	36 658 864
Current assets
Inventory	10 224 124	6 385 946	8 032 454
Trade receivables	15 800 691	13 416 189	15 241 464
Other receivables	2 935 085	1 020 699	4 690 063
Prepayments and accrued income	946 544	1 207 279	417 372
Cash and bank	2 364 271	15 356 372	7 623 091
Total current assets	32 270 715	37 386 485	36 004 443
Total assets	68 584 605	66 222 176	72 663 309

Condensed consolidated statement of financial position

(Amounts in SEK)
Equity and liabilities	31-03-2015	31-03-2014	31-12-2014
Equity
Share capital	3 041 639	3 041 639	3 041 639
Additional paid in capital	171 952 413	171 992 821	171 331 689
Retained earnings	-136 724 999	-126 557 105	-128 037 092
Translation differance	-33 195
Profit (loss) for the period	-1 799 566	-1 910 067	-6 298 477
Total equity	36 436 291	46 567 288	40 037 759
Long term liabilities
Convertible bonds	11 758 850	11 678 034	11 667 483
Other long term liabilities	5 000 000	0	5 000 000
	16 758 850	11 678 034	16 667 483
Current liabilities
Accounts payable	6 393 978	4 006 854	6 635 323
Warranty provisions	900 000	680 000	900 000
Bank overdraft	2 892 205
Other current liabilities	1 540 036	166 924	3 617 915
Accrued expenses and deferred income	3 663 245	3 123 076	4 804 830
Total current liabilities	15 389 464	7 976 854	15 958 067
Total liabilities	32 148 314	19 654 888	32 625 551
Total equity and liabilities	68 584 605	66 222 176	72 663 309
Pledges	13 620 000	7 670 000	13 620 000
Contingent liability	-	-	-

Condensed consolidated statement of financial position

(Amounts in SEK)
Statement of cash flow	2015	2014	2014
	Jan-Mar	Jan-Mar	Jan-Dec
Operating activities
Profit (loss) before financial items	(1 171 687)	(1 903 461)	(13 005 405)
Adjustment for non-cash items, etc	(1 657 998)	46 534	(953 483)
Interests received	5 475	0	0
Interests paid	(246 323)	(160 914)	(279 767)
Cash flow from operating activites before working capital changes	(3 070 533)	(2 017 841)	(14 238 654)
Working Capital Changes	(4 985 901)	(3 705 053)	(2 373 180)
Cash flow from operating activites	(8 056 434)	(5 722 894)	(16 611 834)
Cash flow from investing activites		0	(2 070 836)
Cash flow from financing activities	2 892 205	10 834 688	15 834 687
Net increase (decrease) in cash and cash equivalents	(5 164 229)	5 111 794	(2 847 983)
Cash and cash equivalents at beginning of period	7 623 092	10 261 549	10 261 549
Exchange rate differences	(94 592)	(16 971)	209 527
Cash and cash equivalents at end of period	2 364 271	15 356 372	7 623 093

(Amounts in SEK)
Statement of changes in equity	2015	2014	2 014
	Jan-Mar	Jan-Mar	Jan-Dec
At beginning of period	40 037 759	38 027 839	38 027 838
Share increase	0	11 375 000	11 375 000
Issue expense	0	(540 313)	(540 313)
Equity part of convertible loan	(40 408)	40 409	(161 632)
Translation differance	(1 761 494)	(425 579)	(2 364 658)
Changes in the period	(1 801 902)	10 449 517	8 308 397
Loss for the period	(1 799 566)	(1 910 067)	(6 298 477)
Closing balance at end of period	36 436 291	46 567 289	40 037 759

Condensed consolidated statement of changes in equity

Parent company Financial Statements

(Amounts in SEK)
Income statement	2015	2014	Statement of Financial Position	2015	2014
	Jan-Mar	Jan-Mar		Jan-Mar	Jan-Mar
Total income	5 810 981	3 267	Assets
			Tangible assets	76 809	104 864
Personnel costs	-1 711 346	-1 385 328	Shares in group companies	68 874 000	57 124 000
Other costs	-2 290 396	-1 582 755	Investments in associates	8 986 293	8 986 293
Total operating expenses	-4 001 742	-2 968 083	Receivables in Group companies	38 790 845	33 844 367
			Other receivables	6 608 065	5 494 280
Result from financial items	-133 794	-55 511	Cash and bank	169 962	9 716 937
Result before tax	1 675 445	-3 023 594	Total assets	123 505 973	115 270 741
Tax	0	0
Net results	1 675 445	-3 023 594
			Equity and liabilities
Statement of comprehensive results			Share capital	3 041 639	3 041 639
Net results	1 675 445	-3 023 594	Other equity	100 491 879	94 176 759
Translation difference from foreign operations			Total equity	103 533 518	97 218 398
Total comprehensive results	1 675 445	-3 023 594
			Convertible bonds	11 718 442	11 718 442
Statement of cash flow	2015	2014	Long term liabilities	5 000 000
	Jan-Mar	Jan-Mar	Other liabilities	3 254 013	6 333 901
Operating activities			Total liabilities	19 972 455	18 052 343
Profit (loss) before tax	1 675 445	-3 023 594
Adjustment for non-cash items	5 611		Total equity and liabilities	123 505 973	115 270 741
Cash flow from operating activites before
working capital changes	1 681 056	-3 023 594
Working Capital Changes	-4 523 855	-308 604	Statement of changes in equity	2015	2014
Cash flow from operating activites	-2 842 799	-3 332 198		Jan-Mar	Jan-Mar
Cash flow from investment activities
Cash flow from financing activities		10 834 688	At beginning of period	101 858 072	89 404 037
Net change in cash and cash equivalents	-2 842 799	7 502 490	Share increase		10 834 688
Cash and cash equivalents at beginning of period	3 012 761	2 214 448	Other	1	3 267
Cash and cash equivalents at end of period	169 962	9 716 938	Net results for the period	1 675 445	-3 023 594
			Closing balance at end of period	103 533 518	97 218 398

	2015 31-mar	2014 31-mar	2014 31-dec
Number of shares	20 275 323	20 275 323	20 275 323
Average number of shares	20 275 323	19 878 656	20 176 156
Average number of diluted shares	21 500 739	21 104 072	21 401 572
Number of options outstanding	1 225 416	1 225 416	1 225 416
Solvency	53%	70%	55%
Result per share before dilution	(0,09)	(0,10)	(0.31)
Result per shares after dilution	(0,08)	(0,09)	(0.29)
Equity per share before dilution	1,80	2,34	1.97
Equity per share after dilution	1,69	2,21	1.86
Operating margin	Neg.	Neg.	Neg.

Accounting principles

Accounting principles

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.

Applied accounting principles are consistent with what is stated in note 1 in the Financial Statements for 2014.

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

Exchange rates

Orders and income statement are translated at the period-average exchange rate while order backlog and balance sheet items are translated at the closing rate.

Capitalized development costs

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

Deferred tax

Deferred tax asset is reviewed at the end of each reporting period and adjusted in line with the probable future taxable re sult.

Other information

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

Uppsala, 8 May 2015

Börje Bengtsson		Tim Thurn	Peter Hamberg
Chairman of the Board		CEO	Board member
Bengt Rolén		Frank Lohr
Board member		Board member
Brian Holch Kristensen		Kicki Wallje-Lund
Board member		Board member
Financial information, publication dates:
Half year report	August 14, 2015
Interim report Q3	November 6, 2015
Year end report	February 5, 2016
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 is listed on Nasdaq Stockholm Small Cap.

The information in the interim report is such that C-RAD is required to disclose publicly in accordance with the Swedish Securities and Clearing Operations Act and/or the Swedish Financial Instruments Trading Act. The information was submitted for publication on May 8, 2015 at 3.00 pm.