Electrical Geodesics, Inc Trading Update (4573F)

TIDMEGI

RNS Number : 4573F

Electrical Geodesics, Inc

28 July 2016

Electrical Geodesics, Inc.

Trading Update

EUGENE, OREGON, US, 28 July 2016 - Electrical Geodesics, Inc. ("EGI" or the "Company"), a leading neurodiagnostic medical technology company, today provides a trading update for the six months ended 30 June 2016. EGI intends to announce full, unaudited interim results during the second half of August 2016.

On a preliminary, unaudited basis, the Company expects to report revenues for the six months ended 30 June 2016 of $6.6m, an increase of 27% over the $5.2m reported for the first half of 2015. This follows a strong performance in the second half of 2015. In addition, the Company expects to recognise grant income of $0.9m for the first six months of 2016 (2015: $0.6m). The Company closed the period with a sales order book of $2.2m, all of which is expected to ship in the second half of 2016.

Growth was seen in both North American and Rest of World markets with US & Canadian sales of $3.2m (H1 2015: $2.2m) and RoW $3.4m (H1 2015: $3.0m). The growth in sales can be attributed to a growing interest in EGI's core products within the research market, driven by new product releases and a continued focus on positioning EGI products in key clinical sites.

At the end of June, the Company launched a beta version of its Geodesic Transcranial Electrical Neuromodulation system (GTEN) for use by research customers and also began shipping its GeoSource 3 (GS3) line of products. GTEN offers precise, noninvasive neuromodulation with simultaneous EEG enabling concurrent delivery of therapy and monitoring via the same sensor net. GS3 is a sophisticated electrical source imaging software with a broad range of advanced head modeling features. These new products are targeted to fill the critical unmet needs of EGI's customers in the research market and are expected to provide attractive growth opportunities for the Company. EGI's research customers will be assessing the applicability of these new technologies across a broad range of indications which will highlight the potential of these systems for adoption in the much larger clinical markets. At the same time, the Group introduced its flagship next generation Net Station 5.3 software, which brings increased features and functionality to both research and clinical customers.

Completion of the development of the GTEN hardware and software will now allow the small-scale clinical trial exploring the safety and feasibility of GTEN treatment of focal epilepsy to move from the diagnostic phase to the intervention phase, with the US site now planned to commence treatment in August 2016. The diagnostic phase is underway at the second site, Huashan Hospital.

The Company has entered into a new one-year revolving credit and security agreement with Access Business Finance, establishing an asset-based lending senior secured credit facility bearing interest at the prime rate plus 6.0%, with a minimum rate of 9.5%. As of 30 June 2016, EGI has outstanding borrowings of $1.0m and remaining borrowing availability of approximately $0.6m under the credit facility.

The Company's cash reserves as of 30 June 2016 were approximately $1.1m ($1.2m at 31 December 2015) reflecting the Company's utilization of its credit facility during the period to help manage cash flows. The Directors are carefully managing the Company's cash flows whilst also reviewing potential financing options to increase the working capital available to the Group which would assist the Company in maximizing its growth opportunities.

Don Tucker, CEO of EGI, commented: "For each of the last four quarters, sales have increased when compared to the comparable quarter of the previous year, resulting in sales growth over the last twelve months of almost 20%. Looking forward, we are confident about the prospects for the second half of 2016 and expect to deliver double digit sales growth for the full year." He added: "At the recent meeting of the Organization for Human Brain Mapping in Geneva, EGI received an enthusiastic and favourable response from research customers to the introduction of GTEN and GS3 and the enhanced features of Net Station 5.3. Our continued leadership of human neuroscience technology in the research market should allow EGI to spearhead further innovations in clinical intervention. This scientific leadership position is key to continuing EGI's growth in clinical neurodiagnostics markets while breaking new ground with clinical trials for noninvasive neuromodulation for neurological disorders."

For more information contact:

 
 EGI 
 Ann Bunnenberg                           [phone] 
 
 Peel Hunt LLP (NOMAD and Broker) 
 James Steel, Oliver Jackson         [phone] 
 

Special Note Regarding Forward Looking Statements

All statements, other than statements of historical fact, are forward-looking, including, without limitation, statements regarding: future operating results; market conditions and opportunities; timing and amount of expected shipments; growing interest in EGI's core products; impact of new product releases and clinical sites on sales; new products expected to provide attractive growth opportunities; outcome of clinical trials and their ability to assess safety and feasibility; reviewing potential financing options and their ability to assist the Company in maximizing its growth opportunities; confident about the prospects for the second half of 2016 and double digit sales growth for the full year. Words such as "believe," "anticipate," "expect," "estimate," "project," "will be," "will continue," "will likely result," or words or phrases of similar meanings identify forward-looking statements. Forward-looking statements reflect management's current expectations, plans or projections and are inherently uncertain and actual results could differ materially from such expectations, plans or projections. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Risks and uncertainties that could cause actual results to differ significantly from management's expectations include, but are not limited to, the following: EGI's limited financial and other resources; potential period-to-period revenue or expense fluctuations; production factors and timely access to raw materials; industry cost factors and conditions; competition; government regulation; labor disputes; technological changes; and international business risks. Additional risks and uncertainties not presently known to EGI or which EGI currently deems immaterial also may impair its business or operations. EGI does not intend to release publicly any revisions to any forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No 596/2014 and is disclosed in accordance with the Company's obligation under Article 17 of those Regulations.

Notes to Editors

Electrical Geodesics, Inc. in Summary

Founded in 1992, EGI designs, develops and commercialises a range of non-invasive neurodiagnostic and neuromodulation products used to monitor, interpret and modulate brain activity, based on its proprietary dense array electroencephalography ("dEEG") platform technology. The Company's technology uses up to 256 sensors, providing much higher resolution brain activity data compared to conventional 8 or 16 channel EEG and is used in medical, clinical and research settings in a diverse range of applications including important areas such as the diagnosis and monitoring of epilepsy, neurosurgical planning, sleep assessment, and many others.

EGI's dEEG systems, available in the GES 300 and now the GES 400 lines, capitalise on the Company's unique Hydrocel Geodesic Sensor Net which allows faster, easier, and more convenient placement of many EEG sensors in an even distribution over the entire scalp, providing more accurate and precise diagnosis and measurement. EGI's technology is now widely used in neuroscience research laboratories and is becoming more commonly used in clinics, care centers, and hospitals around the world. Data is measured and visualised using EGI's proprietary amplifier technology and software, providing a complete, advanced, high-resolution EEG platform. The Company's products are compatible with multiple diagnostic and imaging technologies, including magnetic resonance (MR) imaging, functional MRI (fMRI), and magneto-encephalography (MEG).

See our website www.egi.com

Glossary

 
 EEG     Electroencephalography 
 dEEG    Dense-array EEG 
  GTEN    Geodesic transcranial electrical 
          neuromodulation 
 GS3     GeoSource 3 
 MRI     Magnetic resonance imaging 
 fMRI    Functional MRI 
 PET     Positron emission tomography 
 MEG     Magneto encephalography 
 NIRS    Near-infra-red spectroscopy 
 TES     Trans-cranial electrical 
          stimulation 
 TMS     Trans-cranial magnetic stimulation 
 rTMS    repetitive Trans-cranial 
          magnetic stimulation 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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July 28, 2016 02:02 ET (06:02 GMT)