Interim / Quarterly Report • Aug 30, 2011
Interim / Quarterly Report
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• Three US cancer centers placed orders for RayStation® in August
"Financially, the first six months of the year were weak. The profit is declining faster than the revenues due to the investment in our proprietary RayStation® treatment planning system where costs were incurred for development, marketing and the build-up of the sales and service organizations, but we have not yet benefitted from significant revenues from the product," says Johan Löf, President of RaySearch.
"We are however starting to see results from our RayStation® sales effort. In August, we announced three new orders from clinics in New Jersey and New York with a combined order value exceeding one million US dollars," concludes Johan Löf.
| Amounts in SEK 000s | Jan-June | Apr-June | Full-year | ||
|---|---|---|---|---|---|
| 2011 | 2010 | 2011 | 2010 | 2010 | |
| Net sales | 47,570 | 60,908 | 24,523 | 32,846 | 117,728 |
| Operating profit/loss | 1,964 | 23,764 | -119 | 12,523 | 39,873 |
| Operating margin, % | 4.1 | 39.0 | -0.5 | 38.1 | 33.9 |
| Net profit/loss | 1,265 | 17,354 | -332 | 9,120 | 28,895 |
| Earnings/loss per share, SEK | 0.04 | 0.51 | 0.00 | 0.27 | 0.84 |
| Share price at close of period | 24.00 | 32.80 | 38.00 |
The information in this interim report is such that RaySearch must disclose publicly in accordance with the Swedish Securities and Clearing Operating Act and/or the Financial Instruments Trading Act. The information was submitted for publication on August 30, at 7:45 a.m.
During the first half of 2011, we focused on the strategic shift, where we move from complete dependence on partners to having opportunities to sell directly to clinics in parallel with the partnerbased business model. Accordingly, we have invested a great deal of energy on developing our treatment planning system RayStation® and have expanded our organization with functions for sales and service. This effort has now begun to bear fruit. In June we were able to install the first clinical version of RayStation® at MGH in the US and RISO in the Netherlands. Naturally, it is a critical milestone for us that RayStation® now is available for clinical use.
Also, in terms of sales we are now starting to see results, primarily in North America where our sales team has been in operation since January. In the beginning of August we returned from the major annual American AAPM trade show, which this year was held in Vancouver, where we participated as exhibitor. In connection with the conference, we also organized the first user meeting for existing and prospective RayStation users. Interest for the user meeting exceeded our expectations by far and approximately 200 physicists attended and listened when leading physicists shared their experiences of RayStation® and the algorithms that are included in the system. This contributed to a very large interest for RayStation® at the trade show and we conducted hundreds of demonstrations for potential customers. The major interest in the US has now begun to be evident in our order books. In August, we announced three new orders from clinics in New Jersey and New York with a combined order value exceeding one million US dollars. I also anticipate we will be signing more contracts in the North American market later in the autumn.
We have also focused on RayStation® sales in the European market. We have established a service organization in Stockholm to support our European customers and we are now building up a sales organization in Europe. In the meantime, sales will continue from our head office in Stockholm. We are also setting up relations with distributors in the Asian market and for some countries in southern Europe and we are working intensely to finalize these negotiations later this year.
Financially, the first six months of the year were weak. Revenues declined 21.9 percent to SEK 47.6 M. Earnings declined to SEK 1.3 M from SEK 17.4 M in the first half of 2010. The profit is declining faster than the revenues due to the investment in RayStation® where costs were incurred for development, marketing and the build-up of the sales and service organizations, but we have not yet benefitted from significant revenues from the product. A large part of the decline in revenues was due to weaker trends for the USD and EUR. The number of licenses sold was 421 (568), which, with unchanged exchange rates, correspond to a revenue decline of 10.4 percent.
The decline in the number of licenses was primarily due to lower sales via Philips, which accounts for the majority of partner sales. Historically, Philips' sales of existing products have fluctuated a great deal from one quarter to another, so it is too early to view this as a downward trend. During the first half of the year, Philips experienced some problems with its sales team in the US, which have now been resolved. The company believes that the second half year will be stronger.
Sales via Nucletron were largely in line with the preceding year. The company is being acquired by the Swedish company Elekta and the transaction is currently under investigation by the Anti -trust Authorities. The process is anticipated to be completed later in the autumn. There is a risk that Nucletron's customers will wait to place orders until the acquisition has been finalized. In the shortterm, this could have a negative impact on RaySearch's revenues through Nucletron. In the long-term, it is currently unclear whether Elekta's take over will have any significance to this cooperation. There are both positive and negative scenarios for RaySearch, but it is currently too early to draw conclusions either way.
Sales of the COMPASS® quality assurance system via IBA Dosimetry declined slightly during the first half of the year. We are currently focusing on adapting the system to a new detector and the new version will be launched later this year, which has the potential to increase sales via IBA Dosimetry. We are also working on expanding COMPASS® with a sophisticated product that will monitor radiation
doses taking into account changes occurring in a patient's anatomy during the course of treatment. This product was scheduled to be launched in 2011 but has now been postponed to accommodate work on adaptation for the new detector.
The cooperation with Varian is progressing nicely and revenues rose during the first half year, albeit from a low level. The product from the cooperation with TomoTherapy, which has now been acquired by Accuray, continues to sell at approximately the same levels as earlier quarters.
A positive item is that the cooperation with Siemens started generating revenues during the second quarter of 2011. Under the terms of the agreement with Siemens, RaySearch has provided a number of treatment planning modules for advanced radiation therapy. In December we finalized the integration of the modules into Siemens' syngo® Suite for Oncology, an integrated platform for workflow management in radiation therapy clinics. The products have now been installed at one clinic and are undergoing intense testing prior to commencing sales to a broader public.
The remainder of 2011 will be characterized by intense development work. In the autumn, we plan to introduce another version of RayStation®, which will feature greater functionality and comprise a totally complete system for customer installation on a broad scale. RayStation® will include a number of unique tools such as our market-leading tools for multi-criteria optimization and adaptive radiation therapy. In March, we licensed technology from Prince Margaret Hospital (PMH), the world leader in adaptive radiation therapy. The cooperation will both help us develop cutting-edge products and win customer confidence for them, since PMH has invested substantial resources to validate these adaptive algorithms.
We will continue to work with our partners and in parallel continue to strengthen our organization, primarily in sales and marketing. However, we are proceeding cautiously and will build the infrastructure step by step with the goal of a positive profit contribution from the direct sales effort also in the short-term. We also have to deal with other challenges. In May, we were sued by a US company called Prowess, which claims that we have infringed on a US patent controlled by Prowess. We believe there is no infringement and in addition, that the patent should be invalidated since there is prior art in older publications describing the same concept. We have a strong defense and hope to win the case but court processes proceed slowly and nothing significant has happened since May. Consequently, it is still difficult to foresee how long the process will take, and the cost this will entail for RaySearch.
The end of the year will be very interesting. We have now noted an expanding order book, as a result of major interest in RayStation®, primarily in the US, and I am convinced that the customer list will expand during 2011. Naturally, working directly with clinics creates new challenges for us as a company but it's also extremely inspiring to come one step closer the clinical reality. Opportunities to develop important new products will be further enhanced and the potential to create values is much greater.
Stockholm, August 30, 2011
Johan Löf President and CEO RaySearch Laboratories AB (publ)
In April, RaySearch received an order for its RayStation® treatment planning system from RISO, the Radiotherapeutic Institute in Deventer, the Netherlands. RISO is a public independent radiotherapeutic institute that provides radiation therapy treatment for several hospitals in the region. RISO will use RayStation® as its treatment planning system for conventional 3D-CRT treatments as well as more advanced treatments such as IMRT. The order includes functionality covering the full spectrum from all the necessary basic tools needed for patient segmentation and creation of conventional 3D-CRT plans, to advanced tools enabling a more efficient treatment planning process. RISO is planning to start using the system clinically in 2011.
In May the US company Prowess filed a complaint against RaySearch for patent infringement in a court in Baltimore, Maryland. The complaint is based on Prowess' claim that RaySearch has infringed on a US patent in respect of which Prowess has a license. The patent concerns direct optimization of machine parameters in radiation treatment planning and was issued in 2007 by the US patent authority USPTO. Prowess has said that it holds an exclusive license to this patent which is owned by the University of Maryland. RaySearch had previously been involved in discussions with Prowess where RaySearch stated its position that there is no infringement and in addition, that the patent could be invalidated since there is prior art in older publications describing the same concept. These discussions were fruitless and instead Prowess commenced a legal process that is likely to last for a long period of time.
In August, RaySearch received three new orders for RayStation® from the Valley Hospital Cancer Center in Paramus, New Jersey; Advanced Radiation Oncology Services in Nyack, New York and Health Quest Systems in LaGrange, New York. They will use RayStation® as the treatment planning system for conventional 3D-CRT treatments as well as more advanced treatments such as IMRT. The orders include basic functionality as well as advanced tools such as RaySearch's solution for multicriteria optimization. This highly intuitive tool lets the clinician evaluate the impact of changing different treatment priorities in real-time, which has a large potential to speed up the time-consuming treatment planning optimization process.
During the second quarter of 2011, sales declined 25.3 percent year-on-year and amounted to SEK 24.5 M (32.8). Operating profit declined during the quarter and amounted to a loss of SEK 0.1 M (profit: 12.5), corresponding to a negative operating margin of 0.5 percent (pos: 38.1). A loss after tax of SEK 0.5 M (profit: 9.1) was reported during the quarter. The strong sales decline was primarily attributable to lower license revenue from the cooperation with Philips. The increasing costs were explained by costs for development, marketing and the build-up of sales and service for RayStation®.
During the first half of 2011, sales dropped 21.9 percent year-on-year and amounted to SEK 47.6 M (60.9). Sales consist primarily of license revenue via partners and support revenue. The total number of licenses sold via partners and direct sales amounted to 421 (568) and license revenue during the first half of 2011 amounted to SEK 38.8 M (51.0). The decline in license revenue was due mainly to lower volumes for products sold via Philips. During the first half of the year, Philips made changes in its North American sales organization and lacked certain language versions in Europe. The decline via Philips was partially offset by the strong revenue increase from direct sales of RayStation®. Support revenue during the first half of 2011 fell 10.6 percent to SEK 8.8 M (9.9) since declining support revenue for older products was not fully offset by support revenue from new products.
The company is dependent on trends in USD and EUR exchange rates in relation to SEK, since invoicing is denominated in USD and EUR, while the majority of expenses are denominated in SEK. During the first half of 2011, revenue in USD was reported at an average exchange rate of SEK 6.27, compared with SEK 7.37 during the corresponding period in 2010. During the first half year, revenue in EUR was booked at an average exchange rate of SEK 8.93, compared with SEK 9.69 during the yearearlier period. Consequently, the exchange rates had a negative impact on sales. With unchanged exchange rates, sales would have decreased 10.4 percent compared with the corresponding period in 2010. A sensitivity analysis of currency exposure shows that the effect on operating profit for the first half of 2011 from a change in the average USD exchange rate of +/- 10 percent would have been +/- SEK 3,0 M and the corresponding effect of a change in the average EUR exchange rate of +/- 10 percent would have been +/- SEK 1.5 M. The company pursues the currency policy set by the Board of Directors.
Operating profit for the first half of 2011 amounted to SEK 2.0 M (23.8), corresponding to an operating margin of 4.1 percent (39.0). Operating expenses, excluding exchange-rate gains and losses, increased SEK 7.9 M from the first half of 2010 to SEK 44.9 M. Other operating expenses pertain to exchange-rate losses, with the net of these amounting to a loss of SEK 0.4 M (loss: 0.1) during the first half of 2011. The increase in operating expenses was mainly due to higher costs for research and development and higher costs for marketing and sales and service staff as a result of the direct sales of RayStation®.
At June 30, 2011, 64 (56) employees were engaged in research and development. Research and development costs include payroll costs, consulting fees, computer equipment and premises. Before capitalization and amortization of development costs, research and development costs totaled SEK 43.4 M (35.8). The increase was due mainly to more employees in research and development activities. During the first half of 2011, capitalized development costs totaled SEK 30.1 M (22.9). Amortization of capitalized development costs during the first half of 2011 amounted to SEK 16.1 M (13.2). Research and development costs after adjustments for capitalization and amortization of development costs totaled SEK 29.2 M (26.1).
Amortization of intangible assets during the first half of 2011 amounted to SEK 16.1 M (13.2) and depreciation of tangible fixed assets totaled SEK 0.3 M (0.2). Total amortization and depreciation for the first half of 2011 amounted to SEK 16.4 M (13.4). Amortization and depreciation primarily comprised capitalized development costs.
Profit after tax for the first half of 2011 totaled SEK 1.3 M (17.4), corresponding to earnings per share of SEK 0.04 (0.51).
The majority of RaySearch's existing customers are in the US. It should be noted that the portion of license revenue derived from North America declined during the period. License revenues for the first half of 2011 were distributed as follows: North America 31 percent (51), Asia 32 percent (23), Europe and the rest of the world 37 percent (26).
Cash flow from operating activities during the first half of 2011 decreased to SEK 21.2 M (43.1), which was primarily attributable to lower earnings. Cash flow from investing activities declined to a negative SEK 31.2 M (neg: 24.1) due to higher development expenditure.
Cash flow for the period amounted to a negative SEK 27.0 M (pos: 2.1) including a dividend paid of SEK 17.0 M.
At June 30, 2011, cash and cash equivalents totaled SEK 47.9 M, compared with SEK 82.1 M at June 30, 2010. At June 30, 2011, current receivables amounted to SEK 37.7 M compared with SEK 27.5 M on June 30, 2010. The receivables primarily comprise accounts receivable. RaySearch has no interestbearing liabilities.
Fixed assets primarily comprise capitalized development costs. Investments in intangible fixed assets during the first half of 2011 totaled SEK 30.1 M (23.0) and investments in tangible fixed assets amounted to SEK 1.7 M (1.7).
At the end of the first half of 2011, the number of employees at RaySearch was 77 (62). The average number of employees during the January – June 2011 period was 73 (61).
Since the financial reporting of the Parent Company corresponds in all material matters to the financial reporting of the Group, the comments for the Group are also highly relevant for the Parent Company. Capitalization of development costs is recognized in the Group, but not in the Parent Company. During the period, the tax allocation reserve was redeemed, which had a positive impact of SEK 8.4 M on earnings in the Parent Company.
| Amounts in SEK 000s | Jan-June | Apr-June | ||||
|---|---|---|---|---|---|---|
| 2011 | 2010 | 2011 | 2010 | 2010 | ||
| Net sales | 47,570 | 60,908 | 24,523 | 32,846 | 117,728 | |
| Cost of goods sold | -346 | -31 | -56 | -28 | -92 | |
| Gross profit | 47,224 | 60,877 | 24,467 | 32,818 | 117,636 | |
| Other operating income | 318 | 1,419 | 318 | 1,419 | 0 | |
| Selling expenses | -6,098 | -1,344 | -4,181 | -928 | -4,687 | |
| Administrative expenses | -9,545 | -9,546 | -5,020 | -5,654 | -17,756 | |
| Research and development costs | -29,241 | -26,114 | -15,703 | -15,132 | -53,500 | |
| Other operating expenses | -694 | -1,528 | 0 | 0 | -1,820 | |
| Operating profit/loss | 1,964 | 23,764 | -119 | 12,523 | 39,873 | |
| Result from financial items | 609 | 5 | 360 | -1 | 249 | |
| Profit before tax | 2,573 | 23,769 | 241 | 12,522 | 40,122 | |
| Tax | -1,308 | -6,415 | -573 | -3,402 | -11,227 | |
| Profit/loss for the period1) | 1,265 | 17,354 | -332 | 9,120 | 28,895 | |
| Earnings/loss per share before full | 0.04 | 0.51 | 0.00 | 0.27 | 0.84 | |
| dilution (SEK) Earnings/loss per share after full |
0.04 | 0.51 | 0.00 | 0.27 | 0.84 | |
| dilution (SEK) |
| Amounts in SEK 000s | Jan-June | Apr-June | |||
|---|---|---|---|---|---|
| 2011 | 2010 | 2011 | 2010 | 2010 | |
| Profit/loss for the period | 1,265 | 17,354 | -332 | 9,120 | 28,895 |
| Translation difference for the period | -92 | - | -2 | - | - |
| Comprehensive income for the period1) |
1,173 | 17,354 | -330 | 9,120 | 28,895 |
1) 100% attributable to shareholders in the Parent Company
| Amounts in SEK 000s | June 30, 2011 | June 30, 2010 | Dec. 31, 2010 |
|---|---|---|---|
| ASSETS | |||
| Intangible fixed assets | 147,878 | 121,799 | 133,981 |
| Tangible fixed assets | 4,097 | 3,184 | 3,157 |
| Deferred tax assets | 3,842 | 8,216 | 3,842 |
| Total fixed assets | 155,817 | 133,199 | 140,980 |
| Current receivables | 37,665 | 27,539 | 39,930 |
| Cash and cash equivalents | 47,904 | 82,092 | 75,016 |
| Total current assets | 85,569 | 109,631 | 114,946 |
| TOTAL ASSETS | 241,386 | 242,830 | 255,926 |
| EQUITY AND LIABILITIES | |||
| Equity | 180,944 | 185,221 | 196,762 |
| Deferred tax liabilities | 43,240 | 37,516 | 41,767 |
| Other long-term liabilities | 642 | 642 | 642 |
| Accounts payable | 4,939 | 4,065 | 5,743 |
| Other current liabilities | 11,621 | 15,386 | 11,012 |
| TOTAL EQUITY AND LIABILITIES | 241,386 | 242,830 | 255,926 |
| Pledged assets | 5,000 | 5,000 | 5,000 |
| Contingent liabilities | none | none | none |
| Amounts in SEK 000s | Jan-June | Apr-June | ||||
|---|---|---|---|---|---|---|
| 2011 | 2010 | 2011 | 2010 | 2010 | ||
| Profit before tax | 2,573 | 23,769 | 241 | 12,522 | 40,122 | |
| Adjusted for non-cash items * | 16,357 | 13,465 | 8,483 | 6,819 | 28,044 | |
| Taxes paid | -1,717 | -546 | -1,203 | -825 | -2,710 | |
| Cash flow from operating | 17,213 | 36,688 | 7,521 | 18,516 | 65,456 | |
| activities before changes in | ||||||
| working capital | ||||||
| Cash flow from changes in working | 3,952 | 6,439 | 2,807 | 15,694 | -2,671 | |
| capital | ||||||
| Cash flow from operating | 21,167 | 43,127 | 10,330 | 34,210 | 62,785 | |
| activities | ||||||
| Cash flow from investing activities ** |
-31,194 | -24,057 | -17,099 | -13,303 | -50,791 | |
| Cash flow from financing activities | -16,991 | -16,991 | -16,991 | -16,991 | -16,991 | |
| Cash flow for the period | -27,020 | 2,079 | -23,762 | 3,916 | -4,997 | |
| Cash and cash equivalents at the | 75,016 | 80,013 | 71,664 | 78,176 | 80,013 | |
| beginning of the period | ||||||
| Exchange-rate difference in cash | -92 | -2 | ||||
| and cash equivalents | ||||||
| Cash and cash equivalents at | 47,904 | 82,092 | 47,904 | 82,092 | 75,016 | |
| the end of the period |
*These amounts include amortization of capitalized development costs.
**These amounts include capitalized development costs.
| Amounts in SEK 000s | Jan-June 2011 |
Jan-June 2010 |
Full-year 2010 |
|---|---|---|---|
| Opening balance | 196,762 | 184,858 | 184,858 |
| Earnings for the period | 1,265 | 17,354 | 28,895 |
| Translation difference for the period | -92 | 0 | 0 |
| Dividend | -16,991 | -16,991 | -16,991 |
| Closing balance | 180,944 | 185,221 | 196,762 |
A dividend corresponding to SEK 0.50/share was paid on the record date of May 30.
| Amounts in SEK 000s | Jan-June 2011 |
Full-year 2010 |
|---|---|---|
| Total number of shares (opening and closing balance) | 34,282,773 | 34,282,773 |
| Holding of treasury shares, opening balance | 299,628 | 299,628 |
| Holding of treasury shares, closing balance | 299,628 | 299,628 |
| Average number of treasury shares | 299,628 | 299,628 |
| Amounts in SEK 000s | Full-year | |||
|---|---|---|---|---|
| 2011 | 2010 | 2009 | 2010 | |
| Net sales | 47,570 | 60,908 | 34,662 | 117,728 |
| Operating profit | 1,964 | 23,764 | 16,605 | 39,873 |
| Operating margin, % | 4.1 | 39.0 | 47.9 | 33.9 |
| Profit margin, % | 2.7 | 39.0 | 48.8 | 34.1 |
| Net profit | 1,265 | 17,354 | 12,304 | 28,895 |
| Earnings per share, SEK | 0.04 | 0.51 | 0.36 | 0.84 |
| Return on capital employed, % | 10.3 | 27.6 | 23.5 | 21.0 |
| Return on equity, % | 7.0 | 20.3 | 17.6 | 15.1 |
| Equity/assets ratio, % | 75.0 | 76.3 | 79.2 | 76.9 |
| Adjusted equity per share at the end of | ||||
| the period, SEK | 5.28 | 5.40 | 4.75 | 5.74 |
| Share price at the end of the period, | ||||
| SEK | 24.00 | 32.80 | 25.70 | 38.0 |
| Amounts in SEK 000s | Jan-June | Apr-June | Full-year | ||
|---|---|---|---|---|---|
| 2011 | 2010 | 2011 | 2010 | 2010 | |
| Net sales | 47,570 | 60,908 | 24,523 | 32,846 | 117,728 |
| Costs of goods sold | -346 | -31 | -56 | -28 | -92 |
| Gross profit | 47,224 | 60,877 | 24,467 | 32,818 | 117,636 |
| Other operating income Selling expenses |
0 -3,174 |
1,419 -1,344 |
318 -2,426 |
1,419 -928 |
0 -4,687 |
| Administrative expenses | -9 535 | -9,542 | -5,013 | -5,650 | -17,728 |
| Research and development costs | -43,272 | -35,874 | -23,174 | -20,888 | -75,482 |
| Other operating expenses | -376 | -1,528 | 0 | 0 | -1,820 |
| Operating profit/loss | -9,133 | 14,008 | -5,828 | 6,771 | 17,919 |
| Result from financial items | 489 | 5 | 173 | -1 | 5,038 |
| Profit/loss after financial items | -8,644 | 14,013 | -5,655 | 6,770 | 22,957 |
| Appropriations | 8,427 | - | 8,427 | - | -3,941 |
| Profit/loss before tax | -217 | 14,013 | 2,772 | 6,770 | 19,016 |
| Tax | 179 | -3,810 | -819 | -1,850 | -4,374 |
| Profit/loss for the period | -38 | 10,203 | 1,953 | 4,920 | 14,642 |
| Amounts in SEK 000s | Jan-June | Apr-June | |||
|---|---|---|---|---|---|
| 2011 | 2010 | 2011 | 2010 | 2010 | |
| Profit/loss for the period | -38 | 10,203 | 1,953 | 4,920 | 14,642 |
| Translation difference for the period | - | - | - | - | - |
| Comprehensive income/loss for the period |
-38 | 10,203 | 1,953 | 4,920 | 14,642 |
| Amounts in SEK 000s | June 30, 2011 | June 30, 2010 | Dec. 31, 2010 |
|---|---|---|---|
| ASSETS | |||
| Intangible fixed assets | 179 | 352 | 312 |
| Tangible fixed assets | 4,097 | 3,184 | 3,157 |
| Financial fixed assets | 5,249 | 2,160 | 2,160 |
| Deferred tax assets | 3,842 | 8,216 | 3,842 |
| Total fixed assets | 13,367 | 13,912 | 9,471 |
| Current receivables | 37,609 | 27,539 | 44,727 |
| Cash and cash equivalents | 44,802 | 74,670 | 67,610 |
| Total current assets | 82,411 | 102,209 | 112,337 |
| TOTAL ASSETS | 95,778 | 116,121 | 121,808 |
| EQUITY AND LIABILITIES | |||
| Equity | 62,781 | 75,521 | 79,960 |
| Untaxed reserves | 16,713 | 21,199 | 25,140 |
| Accounts payable | 4,887 | 4,065 | 5,743 |
| Other current liabilities | 11,397 | 15,336 | 10,965 |
| TOTAL EQUITY AND LIABILITIES | 95,778 | 116,121 | 121,808 |
| Pledged assets | 5,000 | 5,000 | 5,000 |
| Contingent liabilities | none | none | none |
This interim report in summary for the Group was prepared in accordance with IAS 34, Interim Financial Reporting and applicable provisions of the Swedish Annual Accounts Act. The Parent Company's financial statements were prepared pursuant to Chapter 9 of the Annual Accounts Act, Interim Financial Reporting. The same accounting policies and basis of computation that were applied in the most recent Annual Report were used to prepare the Group and Parent Company accounts. New or revised IFRS standards during 2010 and 2011 have not affected RaySearch during the period and no known changes are expected to affect RaySearch during 2011.
RaySearch has only one segment and, accordingly, no segment reporting was prepared.
RaySearch's financial policy governing the management of financial risks was established by the Board of Directors and represents a framework of guidelines and rules in the form of risk mandates and limits for financial activities. RaySearch is affected primarily by exchange-rate risk. All of RaySearch's net sales are denominated in USD and EUR. In accordance with the established financial policy, no currency hedging is employed. The financial policy is updated at least once annually.
As a result of its activities, RaySearch is exposed to various operational risks, including the following: dependence on key persons, competition and strategic partnerships. RaySearch has partnerships today with Philips, Varian, Siemens, Nucletron, IBA Dosimetry and TomoTherapy. RaySearch also has several research partnerships. If RaySearch were to lose one or more of these partners, this could have a major impact on the company's sales, profit and financial position. This risk decreases as the number of partners and percentage of direct sales increase.
For more detailed information about RaySearch's financial risk management and operational risks, refer to page 72 of the 2010 Annual Report.
No transactions between RaySearch and related parties materially affected the company's position and earnings.
Preparation of the interim report requires that company management makes estimates that affect the reported amounts of assets, liabilities, revenues and expenses. The actual outcome may deviate from these estimates. The critical sources of uncertainty in the estimates are the same as those in the most recent annual report.
This six-month report was subject to review by the company's auditor. The review report is available on page 14.
The Board of Directors and President affirm that the six-month report provides a fair view of the Group's and the Parent Company's operations, financial position and profit and describes the significant risks and uncertainties facing the Parent Company and the companies included in the Group.
Stockholm, August 30, 2011
Erik Hedlund Johan Löf
Chairman President and Board member
Carl Filip Bergendal Hans Wigzell Board member Board member
To the Board of RaySearch Laboratories AB Corporate Registration Number: 556322-6157
I have reviewed the attached interim report for RaySearch Laboratories AB (publ) for the period January 1, 2011 to June 30, 2011. The Board of Directors and the President are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. My responsibility is to express a conclusion on the financial information in this interim report based on my review.
I have conducted my review in accordance with the Swedish standard for such reviews, (SÖG) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Company. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards in Sweden ISA and good auditing practice in general. The measures taken during a review do not enable me to obtain assurance that I would become aware of all significant matters that might be identified in an audit. Thus, the conclusion expressed on the basis of a review does not offer the same degree of assurance as a conclusion based on an audit.
Based on my review, nothing has come to my attention that causes me to believe that the attached interim report has not been prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act for the Group and the Swedish Annual Accounts Act for the Parent Company.
Stockholm, August 30, 2011
Anders Linér Authorized Public Accountant KPMG
Johan Löf, President Tel: +46 (0)8-545 061 30 [email protected]
RaySearch Laboratories AB (publ) Corporate Reg. No: 556322-6157 Sveavägen 25 SE-111 34 Stockholm
Interim report for the third quarter November 24, 2011 Year-end report February 16, 2012
RaySearch Laboratories is a medical technology company that develops advanced software solutions for improved radiation therapy of cancer. RaySearch's products are mainly sold through license agreements with leading partners such as Philips, Nucletron, IBA Dosimetry, Varian, TomoTherapy and Siemens. To date, 15 products have been launched through partners and RaySearch's software is used at some 1,800 clinics in more than 30 countries. In addition, RaySearch offers the proprietary treatment planning system RayStation® directly to clinics. RaySearch was founded in 2000 as a spin-off from Karolinska Institutet in Stockholm and the company is listed in the Small Cap segment on NASDAQ OMX Stockholm.
For more information about RaySearch, visit www.raysearchlabs.com.
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