EDAP first-quarter revenue decreases to EUR 4.3 million

First Quarter 2010 Highlights:

• Approval and launch of Sonolith i-sys in Japan and Sonolith i-move in Europe
• Total revenue in line with expectations after strong fourth quarter 2009
• Robust cash position of EUR 11.3 million (USD 15.3 million) as anticipated
• HIFU expansion continues surpassing 22,000 treatments in Q1.

EDAP TMS SA (Nasdaq:EDAP), the global leader in therapeutic ultrasound, announced today financial results for the first quarter ended March 31, 2010.

Revenue for the first quarter 2010, was EUR 4.3 million (USD 5.9 million), compared to EUR 5.4 million (USD 6.9 million) for the first quarter of 2010. Total revenue for the first quarter 2010 reflected traditional seasonality for HIFU and lithotripsy device sales following a strong fourth quarter 2009.

Total revenue for the HIFU division was EUR 1.6 million (USD 2.2 million) in the first quarter 2010, compared to EUR 2.0 million (USD 2.6 million) for the same period last year. Results for the first quarter 2010 reflect the sale of one previous owned Ablatherm-HIFU machine at a discounted price compared to the new machine sales. At the beginning of the second quarter 2010, the Company is actively developing a pipeline of sales and expects future quarters to reflect these transactions.

For the three months ended March 31, 2010, total revenue for the lithotripsy division was EUR 2.7 million (USD 3.8 million), compared to EUR 3.3 million (USD 4.3 million) during the year ago period. During the first quarter 2010, the Company recorded sales of six lithotripsy machines, including one Sonolith i-sys device, compared to seven machines, including three Sonolith i-sys devices, sold in the prior year period. The Company has a solid pipeline of lithotripsy projects and its sales team is actively working on maturing these deals. At the beginning of the second quarter 2010, the Company already has a strong backlog of six lithotripsy systems, including four Sonolith i-sys devices and one recently launched Sonolith i-move system.

Gross profit for the first quarter 2010 was EUR 1.7 million (USD 2.3 million), compared to EUR 2.1 million (USD 2.7 million) in the year ago period. Gross profit margin was 39.6% in the first quarter 2010, compared to 39.7% in the year ago period.

Operating expenses decreased to EUR 3.1 million (USD 4.2 million) for the first quarter 2010, compared to EUR 3.4 million (USD 4.4 million) for the same period 2009. First quarter 2010 operating expenses included EUR 0.6 million related to the U.S. FDA ENLIGHT clinical trial for Ablatherm-HIFU.

Operating loss was EUR 1.4 million (USD 1.9 million) for the first quarter 2010, compared to EUR 1.3 million (USD 1.6 million) for the year ago period. Excluding U.S. FDA trial expenses, first quarter 2010 operating loss was EUR 0.8 million.

Net loss for the first quarter 2010 was EUR 2.6 million (USD 3.5 million), or EUR 0.24 per diluted share, compared to a net loss of EUR 3.1 million (USD 4.0 million), or EUR 0.32 per diluted share, in the year ago period. The first quarter 2010 net loss included a non-cash interest expense of EUR 1.0 million (USD 1.3 million) to adjust the Company's convertible debt and outstanding warrants to fair value, compared to a EUR 1.2 million (USD 1.6 million) non-cash expense during the prior year period.

At March 31, 2010, cash and cash equivalents, including short-term treasury investments, were EUR 11.3 million (USD 15.3 million). The current cash position continues to leave the Company well funded to pursue its strategic development projects, both in the U.S. and Europe.

Marc Oczachowski, EDAP's Chief Executive Officer, commented, "Entering the second quarter 2010, we are encouraged by the expected return of capital equipment sales from our robust pipeline of projects. While revenues in the first quarter 2010 reflected anticipated seasonality and an uncertain economic climate in Europe, we are confident in the growth of our business and continued penetration of our expanded product portfolio in key markets. Turning to our newest product, the European launch of the Sonolith i-move was a significant milestone, validating EDAP as a leader in the development and innovation of high-end technology. The approval highlights our successful execution of regulatory processes and approvals for multiple devices in major global markets."

Mr. Oczachowski, continued, "Our strategy remains to aggressively expand our business by investing in development projects that will sustain EDAP's long-term growth. We will continue our efforts to reach profitability through global operating efficiencies and business development initiatives."