LINKOPING, Sweden, Sept. 3, 2002 (PRIMEZONE) -- Sectra reports increased order bookings, sales and profits for the first quarter of the 2002/2003 fiscal year. Order bookings rose 13 % to SEK 105.9 million (93.8) and sales increased 183 % to SEK 142.0 million (50.2). Profit before tax rose to SEK 19.8 million (2.1), corresponding to a profit margin of 14 %. Earnings per share rose to SEK 0.43 (0.05).
"The positive development in sales and earnings during the period, which is traditionally the company's weakest quarter, can primarily be explained by Sectra having completed the installation of a number of digital radiology systems. Among other undertakings, the extensive digitization project at the Sodersjukhuset hospital in Stockholm was inaugurated," explained Jan-Olof Bruer, Sectra's President and CEO. "Certain partial deliveries within on-going projects were also brought forward, strengthening the figures."
Sales within the Company's main fields, medical IT and secure communication continue to perform well. During the first quarter, Sectra received a number of orders for its digital radiology system, in Sweden and from abroad. Agreements signed included one for the digitization of radiology operations within the County Council of Vastmanland. Following the close of the quarter, Sectra has also taken an important step into the private healthcare market through an agreement with Medicinsk Rontgen AB, Sweden's largest private healthcare provider in radiology.
The international trend is moving in the direction of an entirely new defense structure using network-based information processing. During the period, the Swedish Defense ordered further development of equipment used to protect communication transmission of speech, data and video at high speeds within the framework of the Defense's investments in network-based defense. Sectra also signed a framework agreement with Saab for delivery of the eavesdrop-secure Tiger GSM telephone.
The market for wireless information systems has been negatively affected by the general market conditions with low investment volumes within the financial market and the aerospace industry.
"Sectra has a strong technology platform. Our solutions are aimed at growth markets. Our strong position in our home market provides us with a solid base for international expansion. Therefore, it is our assessment that Sectra will continue to expand with favorable profitability," concluded Jan-Olof Bruer.
For further information, please contact:
Sectra AB, Dr. Jan-Olof Bruer, President and CEO, +46 13 23 52 09, job@sectra.se
Visit Sectras website http://www.sectra.com
Sectra's operations
Sectra has its roots in Linkoping Technical University and is one of Sweden's fastest growing high-tech companies in the IT area. Since the mid-1980s, Sectra has successfully conducted development and sales of high-technology medical IT and telecommunications products. Today, the business includes products in medical systems, secure communication systems and wireless information systems.
Business is conducted in six countries with a total of 250 employees. Sales for the fiscal year May 2001-April 2002 reached SEK 426 million. Since March 1999, Sectra's shares have been quoted on the O list of the Stockholm Exchange.
Interim Report for Sectra AB (publ) three months ended July 31, 2002
Period in brief (May-July 2002 in parentheses)
- Order bookings totaled SEK 105.9 million (93.8), up 13 %.
- Sales rose 183 % to SEK 142.0 million (50.2).
- Profit before tax increased to SEK 19.8 million (2.1), which
implies a profit margin of 14 %.
- Earnings per share amounted to SEK 0.43 (0.05).
Significant events during the first quarter
- The County Council for Vastmanland, Sweden, ordered Sectra's
comprehensive solution for digital radiology.
- In Finland, the Kuopio University Hopital ordered Sectra's digital
system for handling and archiving X-ray images, PACS, through
Sectra's cooperation partner, Commit; Oy.
- Saab AB signed a framework agreement for Sectra's eavesdrop-secure
Tiger(R) GSM telephone.
- The Swedish Defense entrusted Sectra with further development of
equipment for high-speed encryption to ensure secure transmission
of speech, data and video.
Significant events after the end of the quarter
- The Swedish private healthcare provider Medicinsk Rontgen AB
ordered Sectra's comprehensive solution for digital radiology
diagnostics for its operations in the Swedish counties of
Stockholm and Vastmanland, and the region of Skane. The contract
period is eight years and the order value amounts to SEK 4-8
million annually.
Market
The market for medical systems is presently in a strong growth phase, with hospitals increasingly electing to modernize their radiology operations through the introduction of digital systems. The countries that have advanced the furthest in the transition to digital radiology are Norway, Sweden, the U.S. and Germany. Today, Sectra has the largest share of its installations of digital radiology systems in Scandinavia and the U.S. (via partners). In Scandinavia, Sectra's market share in sales of film-free radiology installations is about 60%. Market cultivation is also under way elsewhere in Western Europe.
The market for secure communication systems within the defense sector is characterized by increased investment in IT systems, while traditional defense investments are declining. Internationally, the trend is toward a completely new defense structure with network-based information management. The flow of information in network-based defense will demand high security standards.
The market for wireless information systems is adversely affected by the general market situation, with low investment volumes in the finance market and the aerospace industry.
Significant events during the quarter In medical systems Sectra's successful sales continued and operations have expanded both in Sweden and internationally. Orders received by Sectra included an order for the digitization of the radiology operations of the four hospitals operated by the Vastmanland County Council in Sweden. The order, which is valued at SEK 42 million, includes Sectra's administrative system for patient information (RIS) and its system for handling and archiving X-rays (PACS). In Finland, the university hospital in Kuopio ordered Sectra's PACS through Sectra's cooperation partner, Commit; Oy. In secure communication systems Sectra received continued confidence for its contribution to the development of systems for future network-based defense. The Swedish Defense Forces ordered further development of the high-speed encryption used to protect communication in transmission of voice, data and video. The value of the order amounted to SEK 6 million.
Sectra signed a framework agreement with Saab AB, which increases the company's use of the eavesdrop-secure Tiger GSM telephone.
Sectra MicroDose Mammography
The new digital Sectra MicroDose Mammography(R) system enjoys growing interest from the international market. The mammography system, which is developed in cooperation with the jointly owned associated company Mamea Imaging AB, is based on a sensor technology that makes it possible to achieve the high image quality of current film-based systems, using a radiation dose that is five times lower.
Sales and earnings
During the first quarter, the Group's order bookings increased 13% to SEK 105.9 million (93.8). Net sales rose 183% to SEK 142.0 million (50.2). Profit before tax increased to SEK 19.8 million (2.1), which implies a profit margin of 14 %.
The favorable trend of sales and profit is mainly attributable to the fact that Sectra carried out several installations of digital radiology systems. Among the projects Sectra has completed the extensive digitizing project for the new Center for diagnostic imaging at the hospital Sodersjukhuset in Stockholm.
Financial position
The equity ratio at July 31, 2002 was 46.9 % (56.6) and liquidity was a multiple of 2.8 (3.8). The Company's interest-bearing liabilities amounted to SEK 67.9 M (36.6), of which SEK 45.3 million (33.0) pertains to convertible debentures.
Investments
Investments in the Group amounted to SEK 0.4 million (1.0) and pertained mainly to computer equipment and fixtures and fittings.
Personnel
The number of employees increased during the first quarter by one. Accordingly, the total number of employees at July 31, 2002 was 251 (195).
Share data
The number of shares increased during the quarter by 315,566 Series B shares, through conversion of convertible debentures issued in 1999. Accordingly, at July 31, 2002 share capital amounted to SEK 33,076,511 (32,760,945) distributed among 33,076,511 shares.
At full conversion and exercise of the outstanding convertible programs and personnel options issued fiscal year 2000/2001 and 2001/2002, the number of shares increases to 33,882,411. Total dilution may reach a maximum of 2.4 % of the share capital and 1.4 % of the votes.
At Sectra's Annual General Meeting in June, it was decided to carry out an issue of convertible debentures during the autumn, in a total nominal amount of SEK 33 million which could be subscribed by the Group's employees and external Board members. The conversion period was to be May 15-June 14, 2005. The maximum dilution effect on share capital at full subscription and full conversion would be 1.0 % and on voting rights 0.6%.
The Meeting also approved the Board's proposal involving the issue of an additional maximum of 80,000 personnel stock options for the Group's employees in the US. If these personnel options are fully exercised, employees in the Group will acquire shares in the company corresponding to 0.3 % of the share capital and 0.1% of the voting rights.
Authorization
The Annual General Meeting authorized the Board to decide on a new issue of not more than 3,300,000 Series B shares corresponding to an increase of the share capital of not more than SEK 3,300,000, until the next General Meeting. The authorization is to apply to one or more occasions, and only in connection with market investments or acquisitions. If the entire authorization is exercised, the dilution effect will be about 10 % on the share capital and about 6 % on the voting rights.
Outlook
Sectra has a strong technology platform. The products and system solutions that Sectra develops are aimed at markets with high growth potential. The company's strong position in the domestic market constitutes a solid platform for the ongoing international expansion. The Board's assessment is that Sectra will continue to expand with favorable profitability remains valid.
Accounting principles
This report was prepared in accordance with the Swedish Financial Accounting Standards Council's recommendation RR20. The accounting principles presented in the 2001/2002 Annual Report are unchanged.
Future financial reports
Interim report, six months ended October 31, 2002: December 10, 2002 Interim report, nine months ended January 31, 2003: March 4, 2003 Preliminary year-end report 2002/2003: May 22, 2003 For further information, please contact: Mr. Jan-Olof Bruer, CEO Tel: +46-13-23 52 09 E-mail: job@sectra.se
Financial hearing
Sectra will present this interim report at a financial hearing on September 3 at 12 o'clock noon at the Operaterassen in Stockholm.
The presentation will be available at www.sectra.com as of 7:00 p.m.
Linkoping, Sweden, September 3, 2002
Sectra AB (publ) Board of Directors
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