Annual Report • Feb 13, 2014
Annual Report
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First RayStation® order in the United Kingdom
"The year ended very strongly and fourth-quarter sales rose to SEK 90 M, the highest level of quarterly sales ever achieved by the company. Accordingly, full-year revenues rose 12 percent to SEK 204 M," says Johan Löf, CEO of RaySearch.
"In total, more than 80 clinics worldwide have ordered RayStation® and this figure will grow even faster as the system becomes more established and our infrastructure for sales and service continues to expand," Johan Löf concludes.
| AMOUNTS IN SEK 000S | JAN–DEC | OCT-DEC | |||
|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | ||
| Net sales | 204,470 | 182,087 | 90,113 | 76,879 | |
| Operating profit | 8,787 | 22,546 | 34,914 | 26,232 | |
| Operating margin, % | 4.3 | 12.4 | 38.7 | 34.1 | |
| Profit for the period | 6,075 | 19,863 | 32,009 | 25,364 | |
| Earnings per share, SEK | 0.18 | 0.58 | 0.93 | 0.74 | |
| Share price at the end of the period, SEK | 27.40 | 20.80 | 27.40 | 20.80 |
The information in the year-end report is such that RaySearch 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 February 13, 2014 at 7:45 a.m.
During the year, we focused intensely on sales of our RayStation® treatment planning system throughout the world.
Asia is a highly important region for RaySearch and it is of major strategic significance that we received regulatory approval for RayStation® in China in July. We also secured our first order in the Chinese market in August. China is one of the largest radiation therapy markets globally and is also the most rapidly growing market. We have received additional orders and in November the first patient in China was treated with RayStation®, so we have really taken off well in China together with our local distributor Kang Li Da.
In November, we signed a distribution agreement with Hitachi Medical Corporation that will be responsible for marketing, sales and service of RayStation® in the Japanese market from April 1, 2014. The Japanese market for radiation therapy equipment is very large with approximately 700 radiation therapy clinics, and Hitachi has longstanding experience of treatment planning systems and a large customer base, so this agreement is very important for RaySearch.
Although the US economy was characterized by a certain level of financial uncertainty during the period, we still secured many important orders in the US through our local sales company RaySearch Americas. For example, we received orders from the University of Maryland and Columbia University Hospital. We also achieved a breakthrough in the field of proton therapy in the US with an order for a proton system from Provision Cancer Center in Knoxville, Tennessee in August, and three additional orders for proton systems from Procure in Seattle, Princeton and Chicago in the end of the year. This means that we were the most successful supplier of proton treatment planning systems by far in the US market in 2013.
In Europe, we are continuing to build our sales organization and, during the summer, we recruited sales staff in both France and the UK. We also secured our first RayStation customers in Spain and France early in the year and, in October, Oslo University Hospital became our first customer in Scandinavia. This was followed with our first RayStation® customer in the UK in January 2014. We have also secured several other important European customers such as large hospitals in Marseille, France, and in Leeuwarden and Groningen, in the Netherlands. It was also an important milestone that the leading carbon ion center CNAO in Italy became our second customer in the field of radiation therapy with carbon ions when they placed an order in December.
We were also successful in Oceania and have several customers in Australia and New Zealand. In the summer, the first patient treatment with RayStation® in the region was delivered at Auckland Radiation Oncology in Auckland, New Zealand.
In total, more than 80 clinics worldwide have ordered RayStation® and this figure will grow even faster as the system becomes more established and our infrastructure for sales and service continues to expand.
We entered into a collaboration agreement with the Belgian company IBA in May. The collaboration aims at enhancing the tools in RayStation® for treatment planning of various types of proton therapy.
IBA is the global leader in equipment for radiation therapy using protons and has about half of the world's proton centers as its customers. The partnership allows us to ensure that RayStation® is the most competitive treatment planning system for radiation therapy using IBA treatment machines, and it will create the conditions for us to capture a significant market share in the proton field. The orders that we secured from Provision Cancer Center and the Procure centers are signs of the significance of this partnership.
In July we announced a long-term license and development agreement with the German company Brainlab, a world-leading supplier of equipment for Neurosurgery and Stereotactic Body Radiation Therapy. Under the agreement, RaySearch develops software modules for optimizing radiation therapy that will be licensed to Brainlab and integrated into software systems that Brainlab markets to clinics. The first product was delivered in December.
RaySearch and Brainlab complement each other well and there is a solid foundation for this partnership to be highly fruitful for both companies for many years to come.
In 2007, we signed a collaborative agreement with TomoTherapy Inc. (currently named Accuray). The agreement entailed RaySearch developing a product known as SharePlan, which was launched by TomoTherapy in 2009. In December, RaySearch and Accuray decided to terminate the agreement and end the partnership. However, RaySearch and Accuray will continue to cooperate to ensure that customer needs are met. The SharePlan functionality will continue to be available for new and existing customers as an integrated module in functionality in RayStation® and existing SharePlan customers will be offered a free upgrade to RayStation®.
The year ended very strongly and fourth-quarter sales rose to SEK 90.1 M (76.9), the highest level of quarterly sales ever achieved by the company. Accordingly, full-year revenues rose 12.3 percent to SEK 204.5 M (182.1). This was attributable to increased deliveries of RayStation® and also to growing partner sales via Brainlab, Varian and Nucletron.
Profit for the final quarter was also at a record level, rising to SEK 32.0 M (25.4). However, we were operating at a loss during the first nine months of the year, which was primarily due to increased costs for the build-up of infrastructure for the selling, marketing and support of RayStation®, higher development costs as a result of increased amortization of capitalized development costs and the costly legal fees we paid in the US because of the patent dispute with Prowess. Consequently, profit for the year declined to SEK 6.1 M (19.9).
In May 2011 we were sued by the US company Prowess, which claims that we have infringed on a US patent that they license. We believe there is no infringement and, in addition, that the patent should be invalidated since there is prior art in numerous older publications describing the same methods. We have a strong case and have high hopes of winning if it goes to trial.
The process continues and we are focusing a great deal of energy on the matter to defend ourselves in the best possible manner. In January 2014 the court arranged a settlement conference at which the parties initiated negotiations regarding a potential settlement. These negotiations have so far not resulted in any agreement. Therefore it remains difficult to predict how long it will take to resolve the dispute and the total costs this will entail for RaySearch. However, it is clear that we will continue to incur substantial legal costs in 2014.
We are continuing to develop a global sales, marketing and support organization for RayStation®. 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 but since there are major fluctuations in deliveries, earnings fluctuate from quarter to quarter. We saw this in 2013, when the fourth quarter was the strongest quarter by far.
In March 2013, we released version 3.5 of RayStation® and already in July we launched the next new version, RayStation® 4.0. This means that we are maintaining a significantly higher development pace than our competitors. The system now supports all treatment techniques with all relevant machines from the leading hardware suppliers for standard radiation therapy with photons. From RayStation® 4.0 the system also includes market-leading tools for treatment planning of radiation therapy with electrons and protons, complementing RayStation's extensive tools for radiation therapy with photons. Treatment planning for protons is an area of growing importance for RaySearch, particularly considering our new partnership with IBA.
We will continue to collaborate with our partners parallel to these activities, even if the forms of our collaborations may be modified. The partnership with TomoTherapy was terminated, but we recently delivered our first development project with our new partner, Brainlab. We are also working with other development projects together with existing partners. Although we are investing considerable resources in RayStation®, the partner model is and will remain a key component of our operations.
Several strategic milestones were reached during 2013 and RayStation® is evolving at a fast pace. While a great deal of work remains ahead for expanding our sales and service organization, interest in the system is rising continuously and we are involved in an increasing number of business discussions throughout the world. It is difficult to predict how rapidly the interest will translate into orders and deliveries, but with our new partnerships and a growing sales organization in existing and new markets, I look forward to 2014 with confidence.
Stockholm, February 13, 2014
Johan Löf President and CEO of RaySearch Laboratories AB (publ)
In January, RaySearch received the first Spanish order for RayStation® from Consorcio Hospitalario Provincial de Castellón (CHPC) in Castellón, Spain. In January, the first French RayStation® order was also received from Institut de Cancérologie Lucien Neuwirth (ICLN) in Saint Priest en Jarez, France. In July, RaySearch received regulatory approval for RayStation® from the Chinese regulatory agency CFDA. This means that RayStation® can be sold in the Chinese market, and, in August RaySearch secured the first order for RayStation® in China, The order came from Ganzhou People's Hospital in Ganzhou, the province of Jiangxi. In October, the first Scandinavian order for RayStation® was received from Oslo University Hospital in Oslo, Norway.
In May, RaySearch signed a collaboration agreement with the Belgian company IBA, a world-leading supplier of equipment for proton therapy. The aim of the collaboration is to further enhance the tools in RayStation® for the various treatment modalities of proton therapy. This enables clinics throughout the world to make better use of the strength of IBA's treatment machines for a large amount of clinical indications and IBA has added RayStation® to its customer offering.
A new long-term license and development agreement with the German company Brainlab, a world-leading supplier of equipment for Neurosurgery and Stereotactic Body Radiation Therapy, was announced in July. Under the agreement, RaySearch develops software modules for optimizing radiation treatments, which are licensed to Brainlab and integrated into a software system that Brainlab markets to clinics.
RayStation® 3.5 was released in March and received US market clearance in May. Already in July RaySearch announced that the next new version, RayStation® 4.0, had been released for clinical use in several European countries, the US, Japan, Australia and New Zealand, and was also planned to be released in Canada, China and South Korea. The new version includes a large number of new functions and improvements.
It was announced in August that the first cancer patient in Oceania had been treated with a treatment plan created with RayStation®. The system has been used clinically in North America and Europe for some time and this was the first treatment carried out in the region. The treatment took place at Auckland Radiation Oncology in Auckland, New Zealand. In November, it was announced that the first patient in China been treated with a treatment plan created with RayStation®. The treatment took place at the First Hospital of China Medical University in Liaoning, China.
In August, RaySearch secured an order for RayStation® from the Provision Center for Proton Therapy in Knoxville, Tennessee. The order from Provision was an important milestone since it was the first proton center to select RayStation® since RaySearch and IBA initiated a collaboration in the field of proton therapy in May. In December, three additional orders were secured from the proton centers, Seattle ProCure Management LLC in Seattle, Washington, Princeton ProCure Management LLC in Princeton, New Jersey, and CDG Proton Center in Chicago, Illinois. All of these therapy centers will use RayStation® for treatment planning of radiation therapy with protons.
In November, RaySearch announced a new long-term distribution agreement with Hitachi Medical Corporation (Hitachi), based in Tokyo, Japan. Under the agreement, Hitachi will be fully responsible for marketing, sales and support of RayStation® in the Japanese market from April 1, 2014. The Japanese market for radiation therapy is one of the largest in the world, with approximately 700 radiation therapy clinics.
In 2007, RaySearch Laboratories AB and TomoTherapy Incorporated (now Accuray) entered into a software licensing and development agreement. Under the agreement, RaySearch developed a product named SharePlan, which was launched by TomoTherapy in 2009. In December, RaySearch and Accuray agreed to cancel the agreement and end the partnership. However, RaySearch and Accuray will continue to cooperate to ensure that customer needs are supported and maintained.
In December, RaySearch secured an order for RayStation® from CNAO Foundation (Centro Nazionale di Adroterapia Oncologica) in Pavia, Italy. CNAO is a clinical facility created and financed by the Italian Ministry of Health that will supply ion beam therapy to patients from all of Italy. The ion beam therapy delivered at this centers represents the most advanced form of external radiotherapy where the tumor is irradiated with protons or carbon ions instead of photons that are used in conventional radiation therapy.
In January 2014 it was announced that RaySearch had been awarded a contract to supply RayStation® to Tayside Cancer Centre, Ninewells Hospital & Medical School in Dundee, UK. Ninewells will be the first clinical installation of RayStation® in the United Kingdom.
During the fourth quarter of 2013, sales rose 17.2 percent year-on-year to SEK 90.1 M (76.9). Operating profit improved during the quarter to SEK 34.9 M (26.2), corresponding to an operating margin of 38.7 percent (34.1). Profit after tax during the quarter totaled SEK 32.0 M (25.4). The earnings increase was primarily due to higher sales of RayStation® and of the products from the partnerships with Brainlab and Varian
Sales for full-year 2013 increased 12.3 percent year-on-year to SEK 204.5 M (182.1). Sales consist of license revenues via partners and direct sales, as well as support revenues. The total number of licenses sold via partners and direct sales was 1,700 (1,435) and license revenues during 2013 totaled SEK 179.9 M (159.2). The increase in license revenues resulted from a rise in revenues from direct sales of RayStation®, as well as higher sales of products from the partnerships with Brainlab, Varian and Nucletron. Support revenues in 2013 rose to SEK 24.5 M (22.9).
The company is dependent on exchange-rate trends in the USD and EUR against the SEK, since invoicing is mainly denominated in USD and EUR, while most of the costs are in SEK. During 2013, revenues in USD were recognized at an average exchange rate of SEK 6.51, compared with SEK 6.69 in 2012. During 2013, revenues in Euro were recognized at an average exchange rate of SEK 8.78, compared with SEK 8.60 in 2012. Accordingly, currency effects had a negative impact on sales. At unchanged exchange rates, sales would have increased 13.3 percent compared with 2012. A sensitivity analysis of currency exposure indicates that the impact of a ± 10 percent change in the average USD exchange rate on operating profit in 2013 was ± SEK 9.6 M and that the corresponding effect of a ± 10 percent change in the average EUR exchange rate was ± SEK 6.7 M. The company pursues a currency policy established by the Board of Directors.
Operating profit in 2013 amounted to SEK 8.8 M (22.5), corresponding to an operating margin of 4.3 percent (12.4). Operating expenses, excluding exchange-rate gains and losses, increased SEK 35.1 M year-on-year to SEK 189.3 M. Other operating revenues and other operating expenses refer to exchange-rate gains and losses, with the net of these for 2013 amounting to an expense of SEK 0.3 M (expense: 2.3). The increase in operating expenses derived mainly from higher marketing and personnel costs for sales and service due to activities related to direct sales of RayStation®, increased amortization of capitalized development costs pertaining to RayStation® and higher legal costs arising from the patent dispute with Prowess.
At December 31, 2013, 76 (70) employees were engaged in research and development. Research and development costs include payroll costs, consulting fees and costs for computer equipment and premises. Before capitalization and amortization of development costs, research and development costs totaled SEK 91.5 M (83.6).
During 2013, capitalized development costs totaled SEK 53.6 M (53.4). Amortization of capitalized development costs in 2013 amounted to SEK 52.8 M (48.5). After adjustments for capitalization and amortization of development costs, research and development costs totaled SEK 90.7 M (78.7).
Amortization of intangible fixed assets in 2013 amounted to SEK 52.8 M (48.6) and depreciation of tangible fixed assets to SEK 1.1 M (1.0). Overall, amortization and depreciation during 2013 totaled SEK 53.9 M (49.6). Amortization and depreciation pertained primarily to capitalized development costs.
Profit after tax for 2013 was SEK 6.1 M (19.9), corresponding to earnings per share before and after dilution of SEK 0.18 (0.58)
License revenues in 2013 were distributed as follows: North America 34 percent (32), Asia 27 percent (28), Europe and the rest of the world 39 percent (40).
Cash flow from operating activities in 2013 fell to SEK 31.3 M (87.5), primarily due to the weaker earnings and to working capital rising in 2013 but declining sharply in 2012 because of a sharp decrease in accounts receivables. Cash flow from investing activities declined to a negative SEK 56.5 M (neg: 54.2).
Cash flow for the year amounted to a negative SEK 23.7 M (pos: 33.3). At December 31, 2013, cash and cash equivalents amounted to SEK 38.2 M, compared with SEK 61.9 M on December 31, 2012. At December 31, 2013, current receivables totaled SEK 88.3 M, compared with SEK 61.5 M on December 31, 2012. The receivables primarily comprised accounts receivables.
RaySearch has no interest-bearing liabilities, but available credit facilities have been reduced by SEK 17.5 M as collateral for a bank guarantee of EUR 1.8 M to the Austrian customer, MedAustron.
RaySearch's financial assets and liabilities comprise accounts receivables, cash and cash equivalents, accounts receivables, accounts revenues, accrued expenses and accounts payable. Financial assets and liabilities have short terms. Accordingly, the fair values of all financial instruments are deemed to approximately correspond to the carrying amounts. RaySearch has not applied net accounting to any financial assets or liabilities and has no agreements that permit offsetting.
Fixed assets primarily comprised capitalized development costs. Investments in intangible fixed assets in 2013 amounted to SEK 53.6 M (53.4) and investments in tangible fixed assets to SEK 2.9 M (1.7).
At the end of the fourth quarter, the number of employees in RaySearch was 114 (98). The average number of employees in 2013 was 107 (92).
Since the Parent Company's operations match the Group's operations in essentially all respects, the comments for the Group are also largely relevant for the Parent Company. Capitalization of development costs is recognized in the Group, but not in the Parent Company.
The Annual General Meeting will be held at Grünewaldsalen in the Stockholm Concert Hall, Hötorget 8, Stockholm, on May 27, 2014 at 6:00 p.m. The Annual Report for 2013 will be available at RaySearch's office at Sveavägen 25 in Stockholm, approximately one month prior to the date of the Annual General Meeting.
Since RaySearch is in the midst of an expansive and capital-intensive phase, the Board of Directors' proposal to the Annual General Meeting will be that no dividend be paid for 2013. No dividend was paid in 2012.
| AMOUNTS IN SEK 000S | JAN–DEC | OCT-DEC | |||
|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | ||
| Net sales | 204,470 | 182,087 | 90,113 | 76,879 | |
| Cost of goods sold | -6,059 | -3,029 | -3,166 | -2,667 | |
| Gross profit | 198,411 | 179,058 | 86,947 | 74,212 | |
| Other operating income | 3,008 | 1,032 | 924 | 773 | |
| Selling expenses | -53,024 | -36,267 | -16,597 | -13,170 | |
| Administrative expenses | -45,600 | -39,279 | -11,502 | -13,644 | |
| Research and development costs | -90,720 | -78,657 | -24,858 | -21,939 | |
| Other operating expenses | -3,288 | -3,341 | - | - | |
| Operating profit | 8,787 | 22,546 | 34,914 | 26,232 | |
| Result from financial items | 754 | 1,018 | 234 | 676 | |
| Profit before tax | 9,541 | 23,564 | 35,148 | 26,908 | |
| Tax | -3,466 | -3,701 | -3,139 | -1,544 | |
| Profit for the period1) | 6,075 | 19,863 | 32,009 | 25,364 | |
| Other comprehensive income | |||||
| Items to be reclassified to profit or loss | |||||
| Translation difference of foreign operations for the period | 57 | 993 | -420 | 235 | |
| Items not to be reclassified to profit or loss | - | - | - | - | |
| Profit for the period1) | 6,132 | 20,856 | 31,589 | 25,599 | |
| Earnings per share before and after dilution (SEK) | 0.18 | 0.58 | 0.93 | 0.74 |
1) 100% attributable to shareholders in the Parent Company.
| AMOUNTS IN SEK 000S | DEC 31, 2013 | DEC 31, 2012 |
|---|---|---|
| ASSETS | ||
| Intangible fixed assets | 166,678 | 165,926 |
| Tangible fixed assets | 5,567 | 3,711 |
| Total fixed assets | 172,245 | 169,637 |
| Current receivables | 88,283 | 61,515 |
| Cash and cash equivalents | 38,231 | 61,875 |
| Total current assets | 126,514 | 123,390 |
| TOTAL ASSETS | 298,759 | 293,027 |
| EQUITY AND LIABILITIES | ||
| Equity | 223,517 | 217,553 |
| Deferred tax liabilities | 41,348 | 40,966 |
| Accounts payable | 6,925 | 11,717 |
| Other current liabilities | 26,969 | 22,791 |
| TOTAL EQUITY AND LIABILITIES | 298,759 | 293,027 |
| Pledged assets | 37,500 | 37,500 |
| Contingent liabilities | See Note | See Note |
| AMOUNTS IN SEK 000S | JAN–DEC | OCT-DEC | |||
|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | ||
| Earnings before tax | 9,541 | 23,564 | 35,148 | 26,908 | |
| Adjusted for non-cash items1) | 52,753 | 50,551 | 14,115 | 15,550 | |
| Taxes paid | -3,596 | -3,010 | -803 | -4,444 | |
| Cash flow from operating activities before changes in | |||||
| working capital | 58,698 | 71,105 | 48,460 | 38,014 | |
| Cash flow from changes in working capital | -27,416 | 16,346 | -31,180 | -3,915 | |
| Cash flow from operating activities | 31,282 | 87,451 | 17,280 | 34,099 | |
| Cash flow from investing activities2) | -56,542 | -54,165 | -14,457 | -15,689 | |
| Cash flow from financing activities | 1,563 | - | 1,563 | - | |
| Cash flow for the period | -23,697 | 33,286 | 4,296 | 18,410 | |
| Cash and cash equivalents at the beginning of the period | 61,875 | 28,704 | 33,855 | 43,238 | |
| Exchange-rate difference in cash and cash equivalents | 53 | -115 | 80 | 227 | |
| Cash and cash equivalents at the end of the period | 38,231 | 61,875 | 38,231 | 61,875 |
1) These amounts primarily include amortization of capitalized development costs. 2) These amounts primarily include capitalized development costs.
| AMOUNTS IN SEK 000S | JAN–DEC | |||
|---|---|---|---|---|
| 2013 | 2012 | |||
| Opening balance | 217,553 | 196,697 | ||
| Profit for the period | 6,075 | 19,863 | ||
| Sales of treasury shares | 1,563 | - | ||
| Tax related to sales of own shares | -1,731 | - | ||
| Translation difference for the period | 57 | 993 | ||
| Closing balance | 223,517 | 217,553 |
| JAN–DEC | |||
|---|---|---|---|
| 2013 | 2012 | ||
| Total number of shares (opening and closing balance) | 34,282,773 | 34,282,773 | |
| Holding of treasury shares, opening balance | 299,628 | 299,628 | |
| Sales of treasury shares | -299,628 | - | |
| Holding of treasury shares, closing balance | - | 299,628 |
| AMOUNTS IN SEK 000S | JAN-DEC | OCT-DEC | ||||
|---|---|---|---|---|---|---|
| 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |
| Net sales | 204,470 | 182,087 | 126,103 | 90,113 | 76,879 | 45,772 |
| Operating profit | 8,787 | 22,546 | 27,624 | 34,914 | 26,232 | 14,643 |
| Operating margin, % | 4.3 | 12.4 | 21.9 | 38.7 | 34.1 | 32.0 |
| Profit margin, % | 4.7 | 12.9 | 22.8 | 39.0 | 35.0 | 32.4 |
| Profit for the period | 6,075 | 19,863 | 17,007 | 32,009 | 25,364 | 6,793 |
| Earnings per share, SEK | 0.18 | 0.58 | 0.50 | 0.93 | 0.74 | 0.20 |
| Return on capital employed1, % | 4.4 | 11.4 | 14.6 | |||
| Return on equity1, % | 2.8 | 9.6 | 8.6 | |||
| Equity/assets ratio, % | 74.8 | 74.2 | 75.4 | |||
| Adjusted equity per share at the end of the | ||||||
| period, SEK | 6.52 | 6.35 | 5.74 | |||
| Share price at the end of the period, SEK | 27.40 | 20.80 | 14.45 |
For definitions of key data, refer to the front inside cover of Annual Report 2012.
1 In preceding years, an income measurement based on rolling 12-month figures was used, but as of 2013, and for comparative figures, an annual income measurement has been used.
| AMOUNTS IN SEK 000S | JAN–DEC | OCT-DEC | |||
|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | ||
| Net sales | 179,178 | 181,289 | 70,771 | 77,660 | |
| Cost of goods sold | -809 | -265 | -666 | -151 | |
| Gross profit | 178,369 | 181,024 | 70,105 | 77,509 | |
| Other operating income | 3,008 | 1,032 | 924 | 922 | |
| Selling expenses | -34,561 | -19,366 | -11,528 | -7,691 | |
| Administrative expenses | -45,576 | -38,673 | -11,497 | -13,051 | |
| Research and development costs | -91,516 | -83,559 | -24,724 | -22,159 | |
| Other operating expenses | -3,288 | -3,341 | - | -149 | |
| Operating profit | 6,436 | 37,117 | 23,280 | 35,381 | |
| Result from financial items | 2,176 | -8,889 | 1,654 | -9,215, | |
| Profit after financial items | 8,612 | 28,228 | 24,934 | 26,166 | |
| Appropriations | -941 | -4,985 | -941 | -4,985 | |
| Profit before tax | 7,671 | 23,243 | 23,993 | 21,181 | |
| Tax | -2,510 | -9,035 | -2,510 | -8,139 | |
| Profit for the period | 5,161 | 14,208 | 21,483 | 13,042 |
| AMOUNTS IN SEK 000S | JAN–DEC | OKT-DEC | |||
|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | ||
| Profit for the period | 5,161 | 14,208 | 21,483 | 13,042 | |
| Translation difference for the period | - | - | - | - | |
| Comprehensive income for the period | 5,161 | 14,208 | 21,483 | 13,042 |
| BELOPP I KSEK | DEC 31, 2013 | DEC 31, 2012 |
|---|---|---|
| ASSETS | ||
| Intangible fixed assets | - | 44 |
| Tangible fixed assets | 4,549 | 3,124 |
| Financial fixed assets | 2,266 | 2,171 |
| Total fixed assets | 6,815 | 5,339 |
| Current receivables | 117,159 | 84,140 |
| Cash and cash equivalents | 26,305 | 56,682 |
| Total current assets | 143,464 | 140,822 |
| TOTAL ASSETS | 150,279 | 146,161 |
| EQUITY AND LIABILITIES | ||
| Equity | 100,561 | 95,400 |
| Untaxed reserves | 21,267 | 20,326 |
| Accounts payable | 7,634 | 10,047 |
| Other current liabilities | 20,817 | 20,388 |
| TOTAL EQUITY AND LIABILITIES | 150,279 | 146,161 |
| Pledged assets | 37,500 | 37,500 |
| Contingent liabilities | See Note | See Note |
In May 2011, the US company Prowess filed a lawsuit against RaySearch at a court in Baltimore, Maryland, USA. Prowess claims that RaySearch infringed on a US patent for which Prowess has the license. RaySearch believes that there is no infringement and, in addition, that the patent should be invalidated since there is prior art in numerous older publications describing the same methods. The court process is continuing and in January 2014 the court arranged a settlement conference between the parties at which negotiations regarding a potential settlement were initiated. These negotiations have so far not resulted in any agreement. Therefore it is still difficult to predict how long it will take to resolve the dispute and the total costs that this will entail for RaySearch. However, it is clear that RaySearch will have to bear substantial costs in 2014 to defend the company in the best possible manner.
This condensed year-end report for the Group was prepared in accordance with IAS 34 Interim Financial Reporting and the applicable provisions of the Swedish Annual Accounts Act, and in accordance with the Swedish Annual Accounts Act for the Parent Company. 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 2013 have not affected RaySearch during the period and no known changes are expected to affect RaySearch in 2013.
Since RaySearch has only one segment, no segment reporting has been prepared.
RaySearch's financial policy governing the management of financial risks has been 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, legal disputes and strategic partnerships. RaySearch currently has partnerships with Philips, Nucletron, IBA, Varian and Brainlab. 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. The company is also involved in a patent dispute in the US. If RaySearch were to lose or settle this dispute this could have a major impact on its financial position. Refer to the note on page 14.
For more detailed information about RaySearch's financial risk management and operational risks, refer to page 75 of the 2012 Annual Report.
No transactions between RaySearch and related parties materially affected the company's position and earnings during the period.
In 2002, RaySearch Series B shares were reserved in RayIncentive AB for use in RaySearch's employee options programs. The final options program expired on December 31, 2012. In October, 246,894 RayIncentive shares were sold to the profit-sharing foundation, RayFoundation. The remaining 52,734 shares were sold on the market to cover tax expenses related to the transaction. Subsequently, RayIncentive has no remaining holdings in RaySearch. Since December 2013 RayIncentive is a wholly owned subsidiary to RaySearch.
Preparation of the year-end report requires estimates being made by company management that affect the reported amounts of assets, liabilities, revenues and expenses. The actual outcome could deviate from these estimates. The critical sources of uncertainty in the estimates are the same as those in the most recent Annual Report.
This year-end report has not been reviewed by the company's auditors.
Stockholm, February 13, 2014
Erik Hedlund Johan Löf
Chairman of the Board President and Board member
Carl Filip Bergendal Hans Wigzell Board member Board member
Johan Löf, President Tel: +46 (0)8-545 061 30 [email protected]
RaySearch Laboratories AB (publ) Corporate Registration Number 556322-6157 Sveavägen 25 SE-111 34 Stockholm, Sweden
Interim report for the first quarter May 16, 2014 Annual General Meeting May 27, 2014 The Annual General Meeting will be held at Grünewaldsalen in the Stockholm Concert Hall, on Hötorget 8, Stockholm Interim report for the first six months August 27, 2014
ABOUT RAYSEARCH
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, Varian and Brainlab. To date, 15 products have been launched through partners and RaySearch's software is used at over 2,300 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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