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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Xcounter | LSE:XCT | London | Ordinary Share | SE0000963100 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 275.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jun 2019 to Jun 2024
TIDMXCT
RNS Number : 3048P
XCounter AB
30 September 2011
XCounter AB (publ)
("XCounter" or the "Company")
Interim results for the six months to 30 June 2011
XCounter AB (publ) (AIM:XCT), a technology leader in direct conversion and photon counting digital X-ray imaging for medical, dental and industrial markets, is pleased to announce its Interim results for the six month period to 30 June 2011.
HIGHLIGHTS:
Financial
-- Net sales rose 61.3% to SEK 25.9m (GBP2.5m) (2010: SEK 16.0m (GBP1.6m))
-- Group loss before tax reduced 59.8% to SEK 7.3m (GBP0.7m) (2010: SEK 18.2m (GBP1.8m))
-- Group loss reduced 55.5% to SEK 7.7m (GBP0.7m) (2010: SEK 17.3m (GBP1.7m))
-- Earnings per share before dilution were SEK -0.04 (-GBP0.0039) (2010: SEK -0.21 (-GBP0.020))
-- On 18 January 2011 XCounter successfully completed fundraising of SEK 19.1m (GBP1.8m)
Subsequent to the period-end 30 June 2011, the following events of importance have taken place:
-- The development of our new high speed photon counting detector platform ("PCT") based on CdTe solid state material continues as planned. We have now reached a phase were we are able to generate first X-ray images with good results. This step is a key milestone to continue to fulfil our commitments towards our existing OEM customers for such detector solutions as well as potential OEM customers.
-- As we continue to see increases in revenues, and in order for us to meet the increased volumes, we moved our AJAT operations into a new, modern and functional facility during August. The new facility allows us to increase efficiency, reduce our lead times for deliveries to customers and further improve our quality levels further.
-- On 1 August, Mr. Fredrik Henckel was appointed CEO of our subsidiary Oy AJAT Ltd, in addition to his responsibility as CFO for the XCounter Group.
-- In early July 2011, XCounter received an initial payment of SEK 4.6m (GBP0.4m) following the agreement signed on 29 June, 2011 with a leading healthcare imaging technology company.
Mikael Strindlund, CEO of XCounter said:
"The results we present today are a direct reflection of our intensive work and commitment to transforming XCounter into a leading supplier of high-end X-ray detector. The first half year results for 2011 show a significant improvement over 2010 and have exceeded the management's expectations.
Financial results are clearly an indication of the health of our company, but there are some additional indicators which reflect the progress we have made and the potential within our business. For example, as we announced on 29 June 2011, the signing of a multi-year agreement with a leading healthcare imaging technology company, worth a potential aggregate value of up to EUR 50M further demonstrates that the strategy for the Company is really starting to gain traction. The agreement relates to our fast, new photon counting solid-state detector technologies which provide for superior image quality at minimal radiation dose. We continue to strive to attract further OEM's for this promising, unique X-ray detector technology, in addition to turning the increasing interest in our advance direct conversion methods into other, realizable commercial opportunities in the months and years to come."
For further information, please contact:
XCounter AB (publ) Tel: +46 (0) 8 622 23 00
Mikael Strindlund, CEO
Nomura Code Securities Tel: +44 (0) 20 7776 1200
Phil Walker/Clare Terlouw
Capital MSL Tel: +44 (0) 20 7307 5330
Anna Davies
CEO statement
Our new approach is demonstrating results
We continue to consolidate and strengthen our position as a leading provider of direct conversion detector solutions as well as high-end cutting edge X-ray detectors. Detectors using XCounter's solid-state detector technology, and the new and exciting photon counting technology, enable superior image quality at minimal radiation dose.
XCounter technologies target three independent business segments, where our existing and future detector platforms can efficiently be used: medical, dental and industrial markets. We work closely with our OEM partners to continue to strengthen our position in all of these segments and by maximizing our internal technology synergies, we continue to introduce new generations of high-quality detector solutions which fulfill the performance, quality and price expectations of our customers.
During the first six months of 2011 we built on the strong foundations established during 2010, with significant sales and marketing headway. We were able to win new customers for our novel technology solutions, such as Swiss Medtech company XCAN who decided to implement our detector into their existing product platform.
Our Finnish operations, through our wholly owned subsidiary AJAT, have performed well. In the first six months of 2011 we have seen a significant increase of sales of our dental solutions through an expansion of dental OEM's and new distribution partners. Our direct conversion dental panoramic and cephalometric detectors, as well as the ART Plus dental system in particular, showed very attractive growth rates. Furthermore, our extensive multi-year agreement with a Norwegian company, specializing in industrial technology development within the energy industry, continues to progress according to our expectations.
Collaboration with Artemis Imaging GmbH ("Artemis")
The ongoing collaboration with Artemis for the development of a high end 3D detector for a low-dose, high-resolution breast CT scanner continues to progress according to plan. The development aims to use XCounter's digital direct conversion solid-state detector technology and XCounter's photon counting technology to achieve superior image quality at low radiation dose.
Artemis funds all of XCounter's development costs directly related to this new scanner technology. In return, Artemis secures the exclusivity for the detector system for the above application. We are happy to report that during Q3 the project has now reached a stage where first images with a prototype are being produced and evaluated.
Financial review
On 18 January 2011 XCounter successfully completed a fundraising with net proceeds of SEK 19.1m (GBP1.8m), ultimately enhancing our cash position.
During the first six months of 2011 XCounter recorded revenue of kSEK 25,875 (2010: kSEK 16,038).
Tight cost control continues to be a priority for management. AJAT's operating cost base is now fully included in the consolidated accounts.
The Group loss for the period was SEK 7.7m (GBP0.7m) compared to SEK 17.3m (GBP1.7m) for the same period in 2010. This improvement has exceeded management's expectations for the period.
Cash flow remains an absolute priority for XCounter and as at 30 June 2011, the Group's net cash position increased to SEK 21.3m (GBP2.1m) compared to SEK 15.6m (GBP1.5m) at the end of the same period in 2010.
Post-period, in early July 2011, XCounter received an initial payment of SEK 4.6m (GBP0.4m) from the newly (29 June, 2011) signed major OEM-agreement with a leading healthcare imaging technology company.
The Directors believe that, with the Group's existing cash resources, the newly signed major OEM-agreement and other ongoing OEM prospects, the current business plan should be sufficient to enable the Group to reach sustainable profitability.
Outlook and going concern
XCounter's progress over the past six months has been substantial and reaffirms our commitment to the strategy we first communicated in 2009. As a management team, we remain resolutely focused on the goals we have established for the company and are committed to taking full advantage of recent commercial progress. In particular:
-- initiatives to create further OEM and dealer accounts for the Group's existing products in the dental and industrial sectors, which shall boost the group's profitable growth;
-- expanding opportunities throughout the X-ray imaging industry with new R&D projects in the medical field; and
-- using the XCounter-AJAT competencies to expand business in existing X-ray markets and new segments, e.g. non-destructive testing; security; small animal imaging etc.
-- in addition, in light of our success from the recent acquisition of AJAT, the Board will continue to evaluate suitable acquisitions which complement our commercial strategy.
XCounter's progress made in the technology development is evidence that the strategy to combine XCounter's photon counting know how with AJAT's detector technology is a perfect foundation to meet the market demand for superior X-ray detectors for low dose high image quality products.
This interim report has been prepared under the assumption of going concern.
Mikael Strindlund
Chief Executive Officer
XCounter AB
SIGNIFICANT RISKS AND UNCERTAINTY FACTORS
Financial risks
The Board considers that the business is a going concern and as a consequence the interim financial statements for the period ended 30 June 2011 were prepared on this basis.
Additional financial risk factors are disclosed under Financial risk management.
Customers and partners of dental and industrial markets
XCounter's five largest partners and customers together accounted for approximately 68% (2010: 70%) of net sales. Accordingly, the loss of a customer could have a significant effect on the Company's earnings and financial position. XCounter puts emphasis in expanding the customer base and key accounts and consequently, the proportion of Company's sales to the largest partners and customers are expected to gradually decline. To expand the customer base and to increase the order intake with price adjustments to maintain competitiveness while increasing net profits is the most significant challenge in an ever evolving, competitive and price pressured market situation.
Early stage of development of medical detector products
Some of XCounter's products and in particular the medical detectors are at an early stage of development. There can be no assurance that any of the Company's product candidates will be successfully developed. The Company may encounter delays and incur additional costs and expenses over and above those currently expected. Further, there can be no assurance that any of the Company's developed products will successfully complete the clinical testing process or that they will meet the regulatory, cost and production requirements necessary for commercial distribution. Even if XCounter products are launched, there can be no guarantee that they will be accepted by the market or that they will generate significant revenues.
Technology change and existing competition
The market for digital X-ray imaging is characterized by significant technological change. XCounter is targeting markets where marketed products already exist and where other companies also develop new products. Research and development by other companies as well as changes in complementary imaging techniques may render the Company's products in development obsolete. Competitors, some of which have considerable financial and other resources may precede the Company in developing and receiving regulatory approval or may succeed in developing a product that is more effective or economically viable. Further, developed products must meet clinical practice and patient expectations. There can be no assurance that the Company's technologies will not be subject to copying, mimicking or reverse engineering.
Product liability
The Company's activities expose it to potential product liability and professional indemnity risks that are inherent in the development and manufacture of medical instruments for diagnostic purposes using X-ray. Any product liability claim brought against the Company could result in an increase in the Company's product liability insurance rates or its ability to obtain such insurance in the future and may result in an obligation to pay damages in excess of such insurance policy limits.
Legislative and regulatory risks
The clinical evaluation, manufacture and marketing of the Company's products are subject to regulation by government and regulatory agencies. In addition, legislative and regulatory change may affect the Company's business and prospects. The commercial success of the Company may also depend in part on the extent to which reimbursement for treatment will be available.
Patents and proprietary rights
The Company's prospects will in part depend on its exploitation of technology. There can be no assurance that, inter alia, patents are issued with respect to the Company's patent applications or that third parties will not assert the ownership, validity or scope of any issued patents. Further, the success of the Company will also depend upon non-infringement of third party patents.
Third party dependence
XCounter will be reliant on securing and retaining partners for additional prototype development, manufacturing and subsequent marketing. The success of the present business model is and will continue to be in part dependent upon the establishment and continuation of satisfactory relationships and licensing of products to third parties.
Dependence on key personnel
The Company's success will depend upon the experience and continued services of executives and technical personnel, whose retention cannot be guaranteed.
Financial risk management
Currency exchange risks
Exchange rate exposure within the Company occurs primarily in translation of AJAT's income statement and balance sheet from Euro to SEK and on AJAT's loan from its collaboration partner Acrorad, from Yen to Eur. The capital loan stipulates a currency cap of +/- 15 % of the currency relation between Yen and Eur based on the situation as at 30 August 2002 when the agreement was signed.
XCounter's group policy at present is not to use hedging arrangements (except for the Acrorad loan) as the potential gains to be derived from managing such arrangements are not considered to be significant. The Company continuously monitors the currency exposure in net flows and is ready to implement hedge contracts if the gains derived from such exchange rate contracts are estimated to be significant.
Furthermore the exchange rates have a significant impact on the cost of goods and competiveness of the Company's products. The raw materials are bought primarily from Japan and are subject to the Eur Yen rates.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents. Prior to making short term investments management considers the working capital requirements of the business and only invests cash in excess of these requirements.
Management monitors rolling forecasts of the Company's liquidity reserve (comprises cash and cash equivalents) on the basis of expected cash flow.
The Company's financial liabilities, trade and other payables, are grouped into relevant maturity groupings based on the remaining period at the balance sheet to the contractual maturity date. All balances equal their carrying balances as the impact of discounting to net present value is not estimated as significant.
Credit risk management
Credit risk is managed by each legal entity within XCounter. Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions as well as credit exposures to customers, including outstanding receivables and committed transactions. For banks and financial institutions, only independently rated parties are accepted. New customers are asked to pre-pay for product or services or issue irrevocable letters of credit.
Cash ow and fair value interest rate risk
Interest rate risk pertains to the risk that changes in interest rates may adversely affect XCounter's earnings. A majority of the Company's borrowing relates to the capital loan from Acrorad, described above. The interest rate on this loan is fixed at 3% and accordingly XCounter does not assess the exposure related to changes in interest rates as significant for the Company's result and financial position.
Capital risk management
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may issue new shares or sell assets to reduce debt.
Consistent with others in the industry, the Company monitors capital on a cash basis assuring that the Company has sufficient working capital to maintain its business.
The Company monitors capital on a basis of total equity. The Company invests its capital mainly in research and development activities.
CONDENSED CONSOLIDATED INCOME STATEMENT
Hot Features
Premium
January- January- January-
(kSEK) June June December
Note 2011 2010 2010
--------- --------- ----------
1,2,3,4
Operating income
Revenue 25,875 16,038 34,841
Other operating income 113 277 277
--------- ----------
Total operating income
Work performed by the
entity and capitalized 25,988 16,315 35,118
Work performed by the
entity and capitalized 3,436 2,314 3,230
--------- --------- ----------
Total work performed
by the entity and capitalized 3,436 2,314 3,230
Operating expenses
Raw material costs -12,963 -7,311 -17,943
Other external costs -6,429 -7,862 -14,081
Personnel costs -17,091 -12,893 -26,101
Reversal of impairment
loss 3,257 - -
Depreciation and amortization
of equipment and intangible
assets -3,453 -4,416 -6,966
Total operating expenses -36,680 -32,482 -65,091
Operating loss -7,256 -13,853 -26,473
Result from financial
items
Financial income 1,350 140 227
Financial expenses -1,407 -4,464 -3,445
--------- --------- ----------
Total result from financial
items -57 -4,324 -3,218
Loss after financial
items -7,313 -18,178 -29,961
Income tax expenses 7 -363 927 1,700
Net loss for the period -7,676 -17,250 -28,261
Net loss attributable:
Parent Company shareholders -7,676 -17,250 -28,261
Basic and diluted loss
per share (SEK) -0.04 -0.21 -0.29
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
January- January- January-
(kSEK) June June December
2011 2010 2010
--------- --------- ----------
Net loss for the period -7,676 -17,250 -28,261
Other comprehensive income
for the period:
Foreign currency translation
difference 1,077 -5,576 -5,198
--------- ----------
Total other comprehensive
income for the period 1,077 -5,576 -5,198
Total comprehensive loss
for the period -6,599 -22,826 -33,459
Total comprehensive loss
attributable to:
Parent Company shareholders -6,599 -22,826 -33,459
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 June 30 June 31 December
(kSEK) Note 2011 2010 2010
--------- --------- ------------
1,2,3
ASSETS
Intangible fixed assets 8 101,445 105,767 99,052
Tangible fixed assets 1,030 2,399 1,569
Deferred tax assets 7 4,997 5,559 5,024
--------- --------- ------------
Total fixed assets 107,473 113,725 105,645
Inventories 5,349 4,691 4,804
Accounts receivable 7,661 2,238 3,495
Other receivables 472 756 2,980
Prepaid expenses and
accrued income 2,818 1,999 2,647
Cash and cash equivalents 21,343 15,562 7,484
--------- --------- ------------
Total current assets 37,643 25,247 21,410
TOTAL ASSETS 145,116 138,968 127,055
EQUITY AND LIABILITIES
Parent Company shareholders
Share capital 19,548 9,059 11,239
New share issue in
progress - 2,169 -
Additional paid in
capital 717,684 723,004 705,708
Retained loss -638,674 -637,407 -630,997
Translation reserve -5,750 -3,434 -6,827
--------- --------- ------------
Equity attributable
to parent company
shareholders 92,808 93,390 79,123
--------- --------- ------------
Total shareholders'
equity 9 92,808 93,390 79,123
Liabilities
Non-Current liabilities
Borrowings 10 16,261 22,881 21,013
Deferred income tax
liabilities 9,251 11,524 10,022
Provisions for other
liabilities and charges - 200 150
--------- --------- ------------
Total Non-current
liabilities 25,512 34,605 31,185
Current liabilities
Trade and other payables 26,796 10,973 16,747
Total current liabilities 26,796 10,973 16,747
Total liabilities 52,308 45,578 47,932
TOTAL EQUITY AND LIABILITIES 145,116 138,968 127,055
Pledged assets - - -
Contingent liabilities - - -
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity
New attributable
Other share to parent
Share contributed issue in Translation Retained company Non-controlling
(kSEK) capital capital progress reserve loss shareholders interest Total
----------------- -------- ------------ --------- ------------ --------- ------------- ---------------- --------
Balance at 1
January 2010 21,776 675,387 - -1,629 -620,157 75,377 14,838 90,216
----------------- -------- ------------ --------- ------------ --------- ------------- ---------------- --------
Total
comprehensive
loss for the
first half-year
2010:
Net loss - - - - -17,250 -17,250 - -17,250
Other
comprehensive
loss - - - -1,805 - -1,805 - -1,805
Decrease Share
capital -17,421 17,421 - - - - -
New share issue 4,703 18,947 - - 23,650 - 23,650
New share issue
in progress - - 2,169 - - 2,169 - 2,169
Share-based
payments - 393 - - 393 - 393
Non-controlling
interest - - - - - - -14,838 -14,838
Issue for
non-cash
consideration
for
Acquisition - 10,857 - - - 10,857 - 10,857
----------------- -------- ------------ --------- ------------ --------- ------------- ---------------- --------
Balance at 30
June 2010 9,058 723,004 2,169 -3,434 -637,407 93,390 - 93,390
Total
comprehensive
loss for the
second half-year
2010:
Net loss - - - - -11,011 -11,011 - -11,011
Other
comprehensive
loss - - - -3,393 - -3,393 - -3,393
Correction
decrease Share
capital - -17,421 - - 17,421 - - -
Correction new
share issue -31 31 - - - - - -
Share-based
payments - 94 - - - 94 - 94
Issue for
non-cash
consideration
for
Acquisition 2,212 - -2,169 - - 43 - 43
Balance at 31
December 2010 11,239 705,708 - -6,827 -630,997 79,123 - 79,123
Balance at 1
January 2011 11,239 705,708 - -6,827 -630,997 79,123 - 79,123
----------------- -------- ------------ --------- ------------ --------- ------------- ---------------- --------
Total
comprehensive
loss for the
half-year 2011:
Net loss - - - - -7,676 -7,676 - -7,676
Other
comprehensive
loss - - - 1,077 - 1,077 - 1,077
New share issue 8,309 11,973 - - - 20,282 - 20,282
Share-based
payments - 3 - - - 3 - 3
Balance at 30
June 2011 19,548 717,684 - -5,750 -638,674 92,808 - 92,808
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
January
- January - January -
(kSEK) June June December
Note 2011 2010 2010
-------- ---------- ----------
1,2,3
Cash flows used in operating
activities
Profit/loss after financial
items -7,313 -18,178 -29,961
Adjustments for:
Reversal of impairment loss -3,257 - -
Depreciation of tangible
assets 560 1,086 1,400
Amortization of intangible
assets 2,894 3,259 5,566
Net finance costs 1,390 887 714
Gain/loss on sale of property,
equipment - 71 539
Equity-settled share-based
payment 3 393 485
Change in provisions -150 -3,000 -3,050
Currency exchange financial
items -1,285 3,491 3,211
----------------------------------- ------ -------- ---------- ----------
Total adjustments 155 6,187 8,865
----------------------------------- ------ -------- ---------- ----------
Change in
-inventories -458 -670 -1,034
-trade and other receivables -3,544 -831 -2,349
-creditors 1,671 3,200 4,941
-trade and other payables - -2,826 -1,913
Change in working capital -2,331 -1,127 -355
Cash generated from operating
Activities -9,489 -13,117 -21,451
Interest paid -120 -69 -38
Income taxes paid - -15 -15
----------------------------------- ------ -------- ---------- ----------
Net cash from operating
activities -9,609 -13,201 -21,504
Cash flows from investing
activities
Interest received - - 216
Acquisition of material
assets -397 -1,015 -1,884
Contribution/income for
development 6,845 - 1,873
Capitalized expenditure
for development -3,436 -2,892 -3,230
Proceeds from sale of property
etc - - 309
Acquisition of subsidiary,
net of cash - -1,776 -1,953
Purchase of short term investment - - -29
----------------------------------- ------ -------- ---------- ----------
Net cash used in investing
activities 3,012 -5,683 -4,698
Cash flows from financing
activities
Change in other loans - -266 -752
Repayment of loan - -1,401 -1,314
Proceeds from the sale of
own shares 20,282 23,650 23,650
----------------------------------- ------ -------- ---------- ----------
Net cash from financing
activities 20,282 21,983 21,584
----------------------------------- ------ -------- ---------- ----------
Net increase/decrease in
cash and
cash equivalents 13,685 3,098 -4,619
Cash and cash equivalents
1 January 7,484 13,287 13,287
Effect of exchange rate
fluctuations on
cash held 174 -823 -1,184
----------------------------------- ------ -------- ---------- ----------
Cash and cash equivalents
end period 21,343 15,562 7,484
----------------------------------- ------ -------- ---------- ----------
CONDENSED INCOME STATEMENT FOR THE PARENT COMPANY
January- January- January-
(kSEK) June June December
Note 2011 2010 2010
--------- --------- ----------
1,2,3
Revenue
Revenue 1,342 399 1,689
Total revenue 1,342 399 1,689
Operating income
Other operating income 15 189 189
Work performed by
the entity and capitalized 2,717 578 2,071
--------- --------- ----------
Total operating income 2,732 767 2,260
Operating expenses
Other external costs -4,315 -6,616 -10,418
Employee benefit expenses -11,518 -8,562 -17,107
Reversal of impairment
loss 3,257 - -
Depreciation and amortization
of equipment and intangible
assets -308 -626 -960
Total operating expenses -12,884 -15,804 -28,485
Operating loss -8,810 -14,637 -24,539
Result from financial
items
Other interest income
and similar profit
items 143 100 63
Interest expenses
and similar profit
items -41 -12 -167
--------- --------- ----------
Total result from
financial items 102 88 -104
Loss after financial
items -8,707 -14,549 -24,643
Tax on profit for
the year 7 - - -
Net loss for the period -8,707 -14,549 -24,643
CONDENSED BALANCE SHEET STATEMENT FOR THE PARENT COMPANY
30 June 30 June 31 December
(kSEK) Note 2011 2010 2010
--------- --------- ------------
1,2,3
ASSETS
Intangible fixed assets 42,123 39,246 38,865
Tangible fixed assets 396 1,549 691
Capital loan for subsidiary 1,360 1,467 1,344
Financial fixed assets 6 57,204 57,204 57,204
--------- --------- ------------
Total fixed assets 101,082 99,465 98,104
Accounts receivable - 687 -
Intercompany receivables 1,085 - -
Other receivables 472 756 2,187
Prepaid expenses and accrued
income 885 1,092 1,696
Cash and cash equivalents 11,366 5,689 255
Total current assets 13,809 8,224 4,138
TOTAL ASSETS 114,891 107,689 102,242
EQUITY AND LIABILITES
Share capital 19,548 9,059 11,239
New share issue in progress - 2,169 -
Statutory reserve 274,180 291,601 274,180
--------- --------- ------------
Total restricted equity 293,728 302,829 285,419
Share premium reserve 433,609 421,604 421,636
Share-based payment 9,896 9,800 9,893
Loss brought forward -626,031 -618,809 -601,388
Net loss for the period -8,707 -14,549 -24,643
--------- --------- ------------
Total non-restricted equity -191,233 -201,954 -194,502
Total equity 9 102,495 100,875 90,917
Long term provisions for
other liabilities and charges - 200 150
Total provisions - 200 150
Accounts payable - trade 1,059 929 2,619
Short term liabilities 682 1,600 673
Short term intercompany loan - - 1,814
Other liabilities 10,655 4,085 6,069
--------- --------- ------------
Total current liabilities 12,396 6,614 11,175
TOTAL EQUITY AND LIABILITIES 114,891 107,689 102,242
Pledged assets - - -
Contingent liabilities - - -
CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE PARENT COMPANY
Restricted
equity Non-restricted equity
New Net
share Share Share- loss
Share Statutory issue in premium based Retained for the Total
capital reserve progress reserve payment loss period equity
Balance at 1
January 2010 21,776 274,180 - 391,801 9,407 -565,131 -53,678 78,355
--------------- -------- ---------- --------- -------- -------- --------- -------- --------
Distribution
of net losses
as resolved
by the Annual
General
meeting - - - - - -53,678 53,678 -
Decrease Share
capital -17,421 17,421 - - - - - -
New share
issue 4,703 - - 18,947 - - - 23,650
New share
issue in
progress - - 2,169 - - - - 2,169
Share-based
payments - - - - 393 - - 393
Issue for
non-cash
consideration
for
Acquisition - - - 10,857 - - - 10,857
Net loss first
half-year - - - - - - -14,549 -14,549
Balance at 30
June 2010 9,059 291,601 2,169 421,604 9,800 -618,809 -14,549 100,875
Correction
decrease
Share
capital - -17,421 - - - 17,421 - -
Correction new
share issue -31 - - 31 - - - -
New share
issue in
progress - - - - - - - -
Share-based
payments - - - - 93 - - 93
Issue for
non-cash
consideration
for
Acquisition 2,212 - -2,169 - - - - 43
Net loss
second
half-year - - - - - - -10,094 -10,094
Balance 31
December
2010 11,239 274,180 - 421,636 9,893 -601,388 -24,643 90,917
Balance at 1
January 2011 11,239 274,180 - 421,636 9, 893 -601,388 -24,643 90,917
--------------- -------- ---------- --------- -------- -------- --------- -------- --------
Distribution
of net losses
as resolved
by the Annual
General
meeting - - - - - -24,643 24,643 -
New share
issue 8,309 - - 11,973 - - - 20,282
Share-based
payments - - - - 3 - - 3
Net loss
second
half-year - - - - - - -8,707 -8,707
Balance at 30
June 2011 19,548 274,180 - 433,609 9,896 -626,301 -8,707 102,495
CONDENSED STATEMENT OF CASH FLOWS FOR THE PARENT COMPANY
January January January
- - -
June June December
(kSEK) Note 2011 2010 2010
-------- -------- ----------
1,2,3
Cash flows used in operating
activities
Profit/loss after financial
items -8,707 -14,549 -24,643
Adjustments for:
Reversal of impairment loss -3,257 - -
Depreciation of tangible
assets 308 554 960
Net finance costs - -33 88
Gain/loss on sale of property,
equipment - 71 539
Equity-settled share-based
payment 3 393 485
Change in provisions -150 -3,000 -3,050
Currency exchange financial
items -78 - -
----------------------------------- ------ -------- -------- ----------
Total adjustments -3,174 -2,015 -978
----------------------------------- ------ -------- -------- ----------
Change in
-trade and other receivables 1,441 1,648 286
-change in creditors -959 -2,825 798
-trade and other payables - - -1,051
----------------------------------- ------ -------- -------- ----------
Change in working capital 482 -1,177 33
Cash generated from operating
activities -11,399 -17,741 -25,587
----------------------------------- ------ -------- -------- ----------
Interest paid -73 - -5
Net cash from operating
activities -11,472 -17,741 -25,592
Cash flows from investing
activities
Interest received - - 33
Contribution/income for
development 6,845 - 1,873
Capitalized expenditure
for development -2,717 -578 -2,071
Proceeds from sale of property
etc - - 309
Acquisition of subsidiary,
net of cash - -1,776 -1,953
Purchase of short term investment -13 - -15
----------------------------------- ------ -------- -------- ----------
Net cash used in investing
activities 4,115 -2,354 -1,824
Cash flows from financing
activities
Change in intercompany loans -1,814 - 1,800
Repayment of loan - -1,401 -1,314
Proceeds from the sale of
own shares 20,282 23,650 23,650
----------------------------------- ------ -------- -------- ----------
Net cash from financing
activities 18,468 22,249 24,136
----------------------------------- ------ -------- -------- ----------
Net increase/decrease in
cash and
cash equivalents 11,111 2,154 -3,280
Cash and cash equivalents
1 January 255 3,535 3,535
Cash and cash equivalents
end period 11,366 5,689 255
----------------------------------- ------ -------- -------- ----------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. General information
1.1 The Company
XCounter is a technology leader in direct conversion and photon counting digital X-ray imaging for medical, dental and industrial markets. The Company was founded in 1997 and is listed on the London Stock Exchange's AIM market. The Company is based in Stockholm, Sweden and Espoo, Finland. The address to the head office is Svardvagen 11D 6tr, SE-182 33 Danderyd, Sweden.
An important milestone in the Company's history occurred in June 2010, when 100% ownership in the Finnish company Oy AJAT Ltd ("AJAT") was reached. AJAT is an OEM supplier of digital solid-state X-ray detectors for dental and industrial application. The acquisition provides a complementary technology that strengthens XCounter's strategy focusing on X-ray imaging using photon counting technology and is an important contribution to the Company's efforts to create a sustainable business providing leading X-ray detectors.
The Company's goal is to become the number one provider of leading edge speciality X-ray detectors. To that end the Company intends to develop and market advanced speciality X-ray applications using state of the art detector technologies and innovative software algorithms such as tomosynthesis 3D and photon counting principles. Important activities in this future work are:
-- initiatives to create new OEM and dealer accounts for the group's existing products in the dental and industrial sector, which shall boost the group's profitable growth;
-- expanding opportunities throughout the X-ray imaging industry with new R&D projects in the medical field
-- using the XCounter-AJAT competencies to expand business in existing X-ray markets and new segments, e.g. non-destructive testing; security; small animal imaging; and
-- given the favourable acquisition of AJAT, the Company will continue to evaluate suitable acquisition targets in line with our strategy
At the AGM held on 26 April 2011 the majority of the Board of Directors were re-elected and currently comprises:
Lothar Koob, aged 63, Chairman, Board member since 2007
Tim Haines, aged 54, Non-Executive Director, Board member since 2006
Dan Kerpelman, aged 52, Non-Executive Director, Board member since 2007
Mikael Strindlund, aged 52, CEO, Board member since 2009
1.2 Personnel and Organisation
At the end of the period the total number of employees amounted to 25 (2010: 27), whereof 16 (2010: 17) are employed by AJAT.
The remuneration committee decided in beginning of August 2011 to revise the bonus section in the CEO agreement regarding his right to subscribe for shares. Instead the CEO will receive a cash pay-out and after tax deduction being obliged to buy XCounter shares. The total amount for the years 2008, 2009 and 2010 is SEK 1.9m excluding social fees (31.42%) and the costs is reserved as per end June 2011.
1.3 Financial data
Revenues for the period to 30 June 2011 amounted to kSEK 25,875 (2010: kSEK 16,038) and relates primarily to AJAT sales of X-ray detectors and systems for dental and industrial use.
Raw material costs of kSEK 12,963 (2010: kSEK 7,311) are mostly attributable to purchases of Cadmium Telluride and other components for manufacturing of AJAT's X-ray-detectors and systems.
Capitalised expenditure for development for the half year to 30 June 2011 amounted to kSEK 3,436 (2010: kSEK 2,314) which is expenditures related to development of a 3D X-ray detector and system, incurred by XCounter and AJAT. Accumulated capitalised development costs as of 30 June 2011 amounted to kSEK 41,615 (2010: kSEK 43,753).
Borrowings as at 30 June 2011 are related to capital loans that AJAT has taken and which are further described under note 9 in this interim report.
2. The Parent Company
XCounter AB (or "the Parent Company") is active in development of photon counting and tomosynthesis based 3D imaging systems for medical and industrial applications based on proprietary X-ray technologies. The current number of employees is 9 end of June 2011. Today's business focus is to concentrate the development activities to products with shortest time to market at the same time as usage of the XCounter AB's resources is optimised. The Parent Company plays a central role in leading and co-ordinating the Group's activities to expand opportunities throughout the X-ray imaging industry aiming at making the Company to the number one provider of leading edge speciality X-ray detectors.
-- Loss for the period to 30 June 2011 a total of SEK 8.7m (GBP0.8m) (2010: SEK 14.5m (GBP1.4m))
-- Net cash at the end of the period of SEK 11.4m (GBP1.1m) (2010: SEK 5.7m (GBP0.6m))
The above described "Significant risks and uncertainty factors" also apply to the Parent Company if not otherwise stated.
3. Significant accounting policies
These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and the applicable provisions of the Annual Accounts Act and do not include all of the information required for full annual financial statements. The interim financial statement for the parent company has been prepared in accordance with the Annual Accounts Act chapter 9.
The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at end for the year ended 31 December 2010. The same apply for the Parent company.
4. Estimates
The preparation of interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended 31 December 2010.
5. Operating segments
Management has determined the operating segments based on the reports reviewed by the strategic steering committee that are used to make strategic decisions. XCounter manage and reports its operations as a single segment - development, manufacturing and marketing of dedicated X-ray detector technologies. The reportable operating segment derives its revenue mainly from sales of X-ray detectors and systems. There is a major established customer in each product category below, each with more than or approx. 10% of the total revenues:
- Dental sensors: Customer A stands for approx. 28% of total revenues for the Group
- Industrial sensors: Customer B stands for approx. 9% of total revenues for the Group
- Dental systems: Customer C stands for approx. 18% of total revenues for the Group
kSEK
Group Sweden Finland Total
Revenues:
----------------------------- ------- -------- -------
- Systems - 6,857 6,857
----------------------------- ------- -------- -------
- Sensors - 19,018 19,018
----------------------------- ------- -------- -------
- Other 15 98 113
----------------------------- ------- -------- -------
Total revenue from external
customers 15 25,973 25,988
----------------------------- ------- -------- -------
kSEK Group
Non current assets Sweden Finland Total
----------------------- ------- -------- --------
Intangible fixed
assets 42,123 59,322 101,455
----------------------- ------- -------- --------
Tangible fixed assets 396 634 1,030
----------------------- ------- -------- --------
Total 42,519 59,953 102,472
----------------------- ------- -------- --------
6. Business combinations
On 7 May 2009, XCounter AB acquired a Non-controlling stake holding of 49.8% of the share capital of Oy AJAT Ltd. ("AJAT"), a Finnish company developing and manufacturing cutting-edge radiation imaging devices for dental, medical and industrial applications. As a part of the acquisition, XCounter obtained board control of AJAT and also entered into a voting agreement with the selling shareholders pursuant to which XCounter also gained voting control over AJAT. End of June 2010 the remaining 50.2% was acquired and XCounter now holds 100% of the shares for AJAT.
The acquired business contributed revenues of kSEK 25,875 (2010: kSEK 16,038) and net profit of kSEK 3,216 (2010: kSEK -344) to the group.
These amounts have been calculated using the group's accounting policies and by adjusting the result of the subsidiary to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment and intangible assets had applied from 1 January 2010, together with the consequential tax effects.
Details of net assets acquired and goodwill are as follows:
Purchase consideration (amounts in kSEK):
Cash paid 36,781 Non-cash consideration settlement 13,027 Direct costs relating to the acquisition 3,176 Earn-out payments 4,120 ------------------------------------------ ------- Purchase consideration 57,104
As payment for the acquisition of the remaining 50.2% of Oy AJAT Ltd a Non-cash Consideration Settlement was made by issue of 21,696,145 new shares per end of June 2010 as a New Share in progress. By 26 July 2010 the new shares were registered and the total outstanding shares are from then 112,282,570. The affirmed value of the Non-Cash Consideration is kSEK 13,027 and based on the revised IFRS 3 from 2010. The fair value of the shares issued was based on the published mid share price 30 June 2010: 5.25pence (GBP).
A final analysis of the assets and liabilities arising from the acquisition are as follows:
Carrying
(kSEK) Fair value amount
-------------------------------------------- ----------- ---------
Intangible fixed asset excluding
goodwill 51,273 348
Tangible fixed assets 1,141 3,636
Deferred tax assets 7,288 -
Inventory 5,951 5,172
Operating receivables 2,211 2,211
Cash and cash equivalents 10,257 10,257
Deferred tax liabilities -14,957 -
Operating liabilities -3,370 -3,370
Non-current interest-bearing liabilities -21,564 -23,108
Derivate -252
Re-valuation of Non-cash consideration -3,250
Goodwill 22,376 -
-------------------------------------------- -----------
Total value with cash and cash equivalents 57,104
Acquisition costs included in working
capital at 30 June 2010 -672
-------------------------------------------- -----------
Purchase price settled in cash 43,405
Cash and cash equivalent in Oy AJAT
Ltd at 7 May 2009 -10,257
-------------------------------------------- -----------
Effect on the Company's cash and
cash equivalents 33,148
In the accounting for fair values to the acquired company's identifiable assets and liabilities, intangible fixed assets including goodwill have been valued at kSEK 54,380. The intangible fixed assets consist primarily of developed technology and know-how, including thereto related deferred tax liability and goodwill where goodwill refers to future synergy effects related to AJAT's X-ray sensor technology. Other preliminary fair values related to intangible fixed assets in connection with the acquisition consist of internal research and development work, customer relationship, trademark and non-compete agreement. Amortization period for technology, internal research and development work and trademark is ten years whereas customer relationship and non-compete agreements are amortized over eight and three years, respectively.
7. Deferred income tax
XCounter AB has estimated accumulated tax deductible deficits amounting to approximately kSEK 711,477 as of 30 June 2011 (2010: kSEK 676,790). AJAT's estimated accumulated tax deductible deficits amounted to kSEK 21,526 (2010: kSEK 19,526).
Deferred income tax assets are recognised for tax loss carry-forwards to the extent that the realisation of the related tax benefit through the future taxable profits is probable.
XCounter has not recorded any deferred income tax for tax loss carry-forward since XCounter has a history of recent losses and there is not convincing evidence that sufficient taxable profit will be available against which the unused tax losses can be utilised by the entity. As AJAT is a profit generating company, a deferred tax asset of kSEK 4,932 (2010: kSEK 5,089) related to tax losses carry forwards is carried on the Company balance's sheet at 30 June 2011.
8. Intangible assets and Goodwill
The Group has substantial values in Intangible fixed assets containing of both the acquired business of Oy AJAT Ltd as further described above in note 6. Furthermore there is a substantial amount for capitalized development costs of SEK 45.7m. In 2008 an impairment test was made for the current mammography project and the detector solution at that time. The conclusion was that an impairment loss of SEK 45.0m needed to be recognized.
Now for the six months ended 30 June 2011 kSEK 3,257 of the impairment loss was reversed after a review and new valuation of total capitalized costs.
9. Capital and reserves
Issue of ordinary shares
Number of shares for the parent company was 112,393,406 as at 1 January 2011. During the period 1 January to 30 June 2011 the numbers of shares increased by 83,090,082 through two placings of shares and amounted to 195,483,488 at 30 June 2011.
The total number of shares in Oy AJAT Ltd as at 30 June 2011 was 14,801.
Dividend
No dividend was suggested to the Annual General Meeting on 26 April 2011 by the Board of Directors.
10. Loans and Borrowings
kSEK 25,258 (2010: kSEK 26,917) of the Company's (and AJAT's) borrowings at 30 June 2011 are considered as capital loans in accordance with Chapter 5 of the Finnish Companies Act. The capital loans includes capitalised interest of kSEK 4,775 (2010: kSEK 4,301) as at 30 June 2011, i.e. the principal part is kSEK 20,483 (2010: kSEK 22,616). According to the Finnish Companies Act, capital loans and capitalised interest or other remuneration are subordinated to all the other debts upon dissolution and bankruptcy of the borrower. In addition, repayment of capital loans or payment of interest is only possible when borrowing company has a positive unrestricted equity according to Finnish GAAP. AJAT's unrestricted equity at 30 June 2011 has been increased by a transfer of funds from restricted equity, Share Premium Account, with EUR 651,629. This was made in respect of the new Finnish Companies Act chapter 12 that enables AJAT to repay some of its Capital loans end August 2011 at pro rata to all Capital loan lenders.
The capital loans comprise the following lenders:
-- Acrorad Co., Ltd ("Acrorad"), a collaboration partner to AJAT. The interest term on the loan is fixed at 3%. The loan for the capital stipulates a currency cap of +/- 15 % of the currency relation between Yen and Eur based on the situation as at 30 August 2002. The loan balance was kSEK 19,772 (2010: kSEK 21,337) (kYEN 257,820) (2010: kYEN 251,841)) at 30 June 2011.
-- TEKES, the main public funding organisation for research, development and innovation in Finland. The loan balance at 30 June 2011 was kSEK 2,953 (2010: kSEK 3,007). Interest terms on the loan are 1% below interest prime level (Finnish government interest for these types of loans) and a minimum interest level of 3%. The prime level for 1 January to 30 June 2011 was 1.50% (2010: 1.25%) and for the period 1 July to 31 December 2011 the level is 2.00% (2010: 1.25%).
A group of smaller previous shareholders to AJAT had a loan balance at 30 June 2011 of kSEK 1,223 (2010: kSEK 1,234) and the interest rate is fixed at 3%.
11. Share-based payments
Outstanding option programs in XCounter AB and Oy AJAT Ltd
Terms for the outstanding programs are consistent with those described in the annual financial statements for the year ended 31 December 2010.
12. Related parties
Related parties identified include; Extera Partners LLC ("Extera"), and Acrorad Co.,Ltd ("Acrorad").
The Company purchases: Management consultancy services from Extera, of which the Chairman of the Board, Lothar Koob is a partner. AJAT purchases material from and sells products to Acrorad, a company that owns shares in XCounter, and that also is the major capital loan lender for AJAT.
Sales to related parties
1 January 1 January
to 30 June to 30 June January December
(kSEK) Group 2011 2010 2010
------------------------------- ------------ ------------ -----------------
Acrorad 393 1,765 1,789
------------------------------- ------------ ------------ -----------------
Total sales to related parties 393 1,765 1,789
Purchases from related parties
1 January 1 January
to 30 June to 30 June January December
(kSEK) Group 2011 2010 2010
------------------------------ ------------ ------------ -----------------
Extera partners 69 480 504
Acrorad 4,938 2,005 5,265
Total purchases from related
companies 5,007 2,485 5,769
Purchases from related parties
1 January 1 January
to 30 June to 30 June January December
(kSEK) Parent 2011 2010 2010
------------------------------ ------------ ------------ -----------------
Extera partners 69 480 504
Total purchases from related
companies 69 480 504
13. Other information and events after the balance sheet date
-- The development of our new high speed photon counting detector platform ("PCT") based on CdTe solid state material continues as planned. We have now reached a phase were we are able to generate first X-ray images with good results. This step is a key milestone to continue to fulfil our commitments towards our existing OEM customers for such detector solutions as well as potential OEM customers.
-- As we continue to see increases in revenues, and in order for us to meet the increased volumes, we moved our AJAT operations into a new, modern and functional facility during August. The new facility allows us to increase efficiency, reduce our lead times for deliveries to customers and further improve our quality levels further.
-- On 1 August, Mr. Fredrik Henckel was appointed CEO of our subsidiary Oy AJAT Ltd, in addition to his responsibility as CFO for the XCounter Group.
-- In early July 2011, XCounter received an initial payment of SEK 4.6m (GBP0.4m) following the agreement signed on 29 June, 2011 with a leading healthcare imaging technology company.
Approval of financial statement
The Board of Directors and the Chief Executive Officer certify that the interim report provides a fair and accurate overview of the operations, financial position and results of the Parent company and the Group, and that it describes the significant risks and uncertainties facing the Parent company and the companies in the Group.
Danderyd, 29 September 2011
Lothar Koob Mikael Strindlund
Chairman of the Board CEO
Timothy Haines Daniel Kerpelman
Director Director
Our auditor's review report was submitted on 30 September 2011
KPMG AB
Magnus Jacobsson
Authorized Public Accountant
Auditors' Report on Review of Interim Financial Information
To the Board of Directors of XCounter AB (publ)
Org no. 556542-8918
Introduction
We have reviewed the condensed interim report for the period 1 January - 30 June 2011 for XCounter AB. The Board of Directors and the Managing Director are responsible for the preparation and the presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
Focus and scope of the review
We conducted our review in accordance with the Standard on Review Engagements SOG 2410, Review of Interim Financial Information Performed by the Independent Auditors of the Entity. 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 is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing practices in Sweden. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed on the basis of a review does not give the same level of assurance as a conclusion expressed on the basis of an audit.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, for the Group in accordance with IAS 34 and the Swedish Annual Accounts Act, and for the Parent Company, in accordance with the Swedish Annual Accounts Act.
Stockholm, 30 September, 2011
KPMG AB
Magnus Jacobsson
Authorized Public Accountant
This information is provided by RNS
The company news service from the London Stock Exchange
END
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