TIDMEGI
RNS Number : 0799U
Electrical Geodesics, Inc
13 January 2017
Electrical Geodesics, Inc.
Trading Update
EUGENE, OREGON, US, 13 January 2017 - Electrical Geodesics, Inc.
("EGI" or the "Company"), a leading neurodiagnostic medical
technology company, today provides a trading update for the year
ended 31 December 2016.
On a preliminary, unaudited basis, the Company expects to report
revenues for the year ended 31 December 2016 of approximately
$14.3m, an increase of 5% over the $13.6m reported for 2015 but
with revenues for the second half of 2016 some 9% lower than the
Company's record second half performance in 2015. A weaker than
expected fourth quarter reflects a significant number of sales
opportunities moving into 2017 with customers reporting
uncertainties arising from the US election results and the impact
on research funding and the likely efforts to repeal the Affordable
Care Act. Indications are that a portion of the US commercial
opportunities that were expected to close in the fourth quarter of
2016 will likely finalise in the first half of 2017. International
sales continue to be challenged by the strength of the US dollar
but the major markets in the EU and Asia showed growth over
2015.
On a preliminary, unaudited basis, and in addition to the above
revenues, the Company expects to recognise grant income of
approximately $2.0m for 2016 (2015: $1.5m).
The Company's cash reserves as of 31 December 2016 were
approximately $1.1m ($1.1m at 30 June 2016). Outstanding borrowings
under the Company's revolving credit facility as of 31 December
2016 were $1.8m ($1.0m at 30 June 2016) and eligible collateral
provided remaining availability of approximately $0.5m but was
limited by the $2.0m maximum borrowing amount on the credit
facility. EGI has recently entered into an amendment to the credit
facility increasing the maximum borrowing amount from $2.0m to
$2.3m. The credit facility bears interest at the prime rate plus
6.0%, with a minimum rate of 9.5%. The present borrowing rate is
9.75%. Generally, availability under the credit facility is the sum
of 85% of eligible accounts receivable plus a portion secured by
inventory which is calculated as 15% of eligible accounts
receivable, or $200,000, whichever is less.
During the fourth quarter of 2015 and to a lesser extent the
first quarter of 2016, the Company incurred and deferred $0.4m of
legal, accounting and other costs that were in support of a planned
financing. Due to poor market conditions, this particular financing
was terminated and in September 2016 the Company expensed the
deferred offering costs in their entirety.
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 maintaining necessary levels of liquidity and maximizing
its growth opportunities. The Directors expect to renew the
Company's credit facility which falls due in June 2017. Some
combination of new financing and additional cost controls will
however be required in order for the Company to maintain adequate
levels of liquidity throughout 2017.
Don Tucker, CEO of EGI, commented: "I am pleased that despite
the market delays in the second half of the year, EGI still
delivered revenue growth for 2016 although not quite at the level
which had been expected earlier in the year. I believe the strong
order opportunities for the early months of 2017 reflect the delay
rather than loss of a significant portion of those sales that had
been expected to close in the final quarter of 2016. It is still
early in 2017 but we will have better visibility on the outlook for
2017 at the time of publication of the Group's final results which
are expected to be released on 6 April 2017. Operationally, EGI
achieved strategically critical milestones in 2016 with the release
of our GTEN and GeoSource 3 systems to the research markets and the
release of our flagship, next-generation Net Station 5.3 software
for clinical laboratories. We expect that these products will
continue to impact favourably our sales worldwide in 2017. The
increasing levels of sales of dEEG systems to high-end epilepsy
evaluation centers, both in the US and in Europe, bodes well for
our revenue projections. The adoption of dEEG as a standard of care
by several European neurology societies will further support
continuing clinical growth."
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.
For more information contact:
EGI
Ann Bunnenberg +1 541 687 7962
Peel Hunt LLP (NOMAD
and Broker)
James Steel, Oliver +44 (0) 20 7418
Jackson 8900
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 orders and 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; and confidence about the
revenue opportunities for the first quarter and year of 2017. 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; impacts of the repeal of the
Affordable Care Act and new Presidential administration in the US;
government regulation; labor disputes; technological changes;
continued strengthening of the US Dollar against other world
currencies; and other 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.
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
END
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