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FOCL, EDAP TMS S.A.
EDAP TMS S.A. is a medical technology company focused on the development, manufacturing, marketing, and sale of non-invasive therapeutic ultrasound and energy-based medical devices.
Our technologies are primarily used in urology, with a current focus on the treatment of prostate cancer.
We have realigned our business to focus exclusively on applications leveraging our proprietary High Intensity Focused Ultrasound ("HIFU") technology, driven commercially by our flagship product, Focal One Robotic HIFU.
The business
What it sells, where the money comes from, the kind of company it is.
Next report By 11/13 · the 10-Q for the quarter ended late September · due within 45 days of period end · has filed ~45 days after · the wire records it on arrival
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What it is
- Revenue is Goods (69%), Spare parts and services (16%) and RPP's and leases (15%).
- Situation
- Unprofitable. No sustained operating profit across the record; an earnings multiple has nothing to rest on. What the record does show is revenue, the gross-margin trajectory, and the burn against the cash on hand. Distress / turnaround. Thin interest coverage, or operating cash burned against real debt, across the record. The balance sheet carries this situation; the debt schedule sets the clock.
- What moves the needle
- The installed base and what follows it. What decides it: placing the device, then the higher-margin consumables and service it drags along, and the R&D and regulatory path to the next generation. On its own account, the filing leans hardest on supplier & input dependence, set against the numbers in what the filing emphasizes, below.
Every line is arithmetic on the company's filings, shown in full in the sections below.
Where the money comes from
read the 10-K →Goods is 69% of revenue, with Spare parts and services the other meaningful line at 16%.
- Goods69%$49M
- Spare parts and services16%$11M
- RPP's and leases15%$10M
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record
Ten years of arithmetic, read across the cycle.
Revenue up 38.8% year over year
figures computed from the filing's XBRL
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2025 the business turned a $29M loss into ($18M) of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.
| FY2025 | FY2024 | |
|---|---|---|
| Reported net income | ($29M) | ($21M) |
| Depreciation & amortizationnon-cash charge added back | +$3M | +$3M |
| Working capital & othertiming of cash in and out, other non-cash items | +$9M | +$3M |
| Cash from operations | ($16M) | ($15M) |
| Capital expenditurecash put back in to keep running and to grow | −$1M | −$1M |
| Owner earnings | ($18M) | ($16M) |
| Owner-earnings marginowner earnings ÷ revenue | -25% | -23% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
“Based on the remediation activities performed and the results of the testing conducted during 2025, management concluded that the previously identified material weaknesses were remediated as of December 31, 2025.”
The figures below are only as sound as the controls that produced them. read the note →
Will it survive?
- Can it pay its interest? -31.3×Does not cover its interestOperating income ($25M) ÷ interest expense $789K
What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
- Net cashCash $20M − debt $18M
What this means
Cash and short-term investments exceed every dollar of debt by $2M, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Long (60+ days)DSO 110 + DIO 116 − DPO 106 days
What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.
Is it a good business?
- Below averageNOPAT ($20M) ÷ invested capital $17M (debt + equity − cash)Industry peers: median -4%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Consumes cashOwner earnings ($18M) = operating cash ($16M) − maintenance capex $1MIndustry peers: median 4%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -25% of revenue this year.
- Are earnings backed by cash? ($16M)Loss, and burning cashNet income ($29M) · cash from operations ($16M)
In the filing’s words The filing discloses a material weakness in its financial controls — the reported numbers here, and the record built on them, are only as reliable as the controls that produced them.
What this means
The company reported a net loss, so a conversion ratio isn't meaningful. What matters then is whether operations still threw off cash, here, they did not.
How is the cash used?
- Not enough data
What this means
The filing data didn't include the inputs for this check.
- Investing or harvesting? 0.36×HarvestingCapex $1M ÷ depreciation & amortization as filed $3M
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
The promise and the pay packet
- Heavy selling costSelling and marketing $27M ÷ revenue $71M
What this means
Sales and marketing as a share of revenue, kept apart from administrative overhead because it answers a different question: how much a business must spend to win the next customer. A company whose product pulls customers in spends little here and keeps the difference; one that must buy its growth is running to stand still, and the spending has to keep rising for revenue to keep rising. Read it beside the growth rate, not alone.
Graham’s defensive tests · 1 of 3 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size MissRevenue ≥ $2B · $71M
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity NearCurrent ratio ≥ 2× · 1.54×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt PassDebt ≤ working capital · $18M vs $20M WC
What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-0.66/share (latest year $-0.78), the averaged base the calculator's gate runs on, and book value is $0.52/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
All figures as filed; the source filing is linked above.
Current Position
as of the latest quarter, Jun 30, 2026Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
- Cash & short-term investments$22M
- Receivables$10M
- Inventory$8M
- Other current assets$19M
- Debt due within a year$848K
- Accounts payable$12M
- Other current liabilities$24M
From the company's latest filing.
Management, ownership & pay
read the proxy →From the proxy: how much of the business the people running it own, and how they are paid.
- Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Peers, Medical Devices & Equipment
The same industry, side by side on owner economics. Each column names the period it is read over, and a median resting on fewer than three years carries that count beside it; the group median at the foot is the line to read each figure against.
| Company | Revenuelatest FY, USD | Gross marginmedian over the record | Op. marginmedian over the record | ROICmedian over the record | Owner earn. marginmedian over the record |
|---|---|---|---|---|---|
| BFLYButterfly Network Inc. | $98M | 37% | -263.0% | -134% | -179% |
| BLFSBioLife Solutions Inc. | $96M | 66% | -9.6% | -4% | 4% |
| CBLLCeriBell Inc. | $89M | 87% | -65.6% | -113%2y | -56% |
| DCTHDelcath Systems Inc. | $85M | 81% | -33.4% | -127% | -51% |
| IRMDiRadimed Corporation | $84M | 77% | 26.4% | 51% | 25% |
| FOCLEDAP TMS S.A. | $71M | 42%2y | -33.5%2y | -111%2y | -24%2y |
| ELMDElectromed Inc. | $64M | 77% | 10.8% | 11% | 7% |
| APTAlpha Pro Tech Ltd. | $59M | 38% | 6.7% | 9% | 6% |
| Group median | — | 71% | -21.5% | -58% | -10% |
The price
What a price has to assume.
What the price implies
reverse-DCFEDAP TMS S.A. is profitable, but owner earnings are negative this year because capital spending currently outruns operating cash, a build-out, so the owner-earnings reverse-DCF has no positive base to grow. We read the price from both ends instead: type a price to see the steady-state profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.
Enter a price to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.
Manual order: ← FNLC its page in the Manual FOR →
Industry order: ← EW the Medical Devices & Equipment chapter GEHC →