biolitec Continues Growth in Third Quarter: Sales Revenues Up 31%

Revenues increase by 23% to $13.1 million in nine-month period - Net income of $0.68 million at previous year's level - Successful market launch of biolitec's ELVeS (Endo Laser Vein System) treatment...

EAST LONGMEADOW, MA; 8 AUG 02: biolitec (TM) AG (Frankfurt Exchange: BIB) announced that it was able to continue its growth successfully in the first nine months of fiscal year 2001/2002. Sales revenues were up 31% in the third quarter. Revenues increased by almost 24% to $13.1 million during the nine-month period as compared to the same period last year.

"biolitec AG was again able to buck the general trend and increase its consolidated revenues in the third quarter," said Dr. Wolfgang Neuberger, Chief Executive Officer of biolitec AG.

The largest share in sales was once again generated in probes and optical fibers, which accounted for 56% of the Group's sales revenues. Recording a convincing 40% increase, laser devices generated revenues of $5.3 million. The European share in overall sales was 46%, followed by the United States with 43%. The Asian market showed the strongest increase with a growth rate of 240% to $1.37 million, representing more than 10% of total revenues.

With the start of marketing efforts for the proprietary ELVeS (Endo Laser Vein System) laser treatment, biolitec AG made targeted investments in marketing, advertising, and training activities. The positioning of this novel treatment method resulted in a significant cost increase for marketing and sales (+83%). Expenses for research and development remained stable. As a result, earnings before interest and taxes (EBIT) decreased to $0.68 million.

Despite intensive selling and marketing activities, the Company recorded a net income of $0.68 million, as in the same period of last year.

Since biolitec is expecting a stronger demand before the end of the current calendar year, the company has maintained a high level of stocks in products with stable prices.

The margin for the products sold by biolitec has remained relatively constant. For the strongest-selling products, optical fibers, and laser probes, biolitec achieved a gross margin of about 70%. The margin for lasers showed a slight increase to 61.7%.

One important step as part of the worldwide distribution strategy was the conclusion of an exclusive sales agreement for the supply of medical biolitec diode lasers with the Italian company OPTOSGROUP S.r.l. in Jesi. The five-year agreement is valued in excess of $2.46 million. The OPTOSGROUP system was recently introduced at an international convention in Sydney. The participating ophthalmologists referred to it as a breakthrough in the field of ophthalmology.

Another exclusive five-year agreement for the United States and Canada was concluded with regard to the delivery of biolitec lasers to AngioDynamics, Inc. for the vascular market.

In April, biolitec purchased all of the assets of Quantanova Ltd., UK. Among others, the company, which now operates under the name biolitec Pharma Ltd., owns the photodynamic substance Foscan®. With this revolutionary substance, biolitec AG now possesses all the relevant core competencies for photodynamic therapy. The market launch will be supported by a mix of marketing and sales measures geared towards the target group. biolitec is currently the only company listed on the Neuer Markt which has an approved pharmaceutical substance.

biolitec is the only supplier for photodynamic therapy worldwide that offers all relevant core competencies: photosensitizers, lasers, and optical fibers. Apart from the Dermatology and Tumors / Dysplasias business units, biolitec AG has also successfully developed competencies in the fields of ophthalmology, dentistry, and cosmetics. Sales revenues worth $18.2 million were recorded during fiscal year 2000/2001. Last year, the company employed an average of 175 people. In Germany, biolitec AG is listed on the "Neuer Markt" segment with the security identification number 521340 (symbol: BIB).

About biolitec AG

Established in 1986, biolitec AG manufactures advanced lasers and fiber optic delivery systems for medical and dental applications. Its strength as a vertically integrated manufacturer enables the production of top quality lasers, fibers, handpieces, and accessories -- as well as ongoing research into new medical breakthroughs such as photodynamic therapy (PDT).

For more information, please call biolitec at (800) 934-2377 or visit their website at www.biolitec.com.

biolitec AG
Winzerlaer Straße 2a
07745 Jena, Germany
49 (0) 3641-508 550

biolitec, Inc.
515 Shaker Rd.
East Longmeadow, MA 01028
(800) 934-2377