Attached files
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| 8-K - FORM 8-K - ICAD INC | c14804e8vk.htm |
Exhibit 99.1
Press Release
MARCH 23, 2010
FOR IMMEDIATE RELEASE
ICAD REPORTS 2010 FOURTH QUARTER AND
FULL YEAR FINANCIAL RESULTS
FULL YEAR FINANCIAL RESULTS
Conference Call to be Held Thursday, March 24th at 10:00 a.m. Eastern Time
NASHUA, N.H. (March 23, 2011) — iCAD, Inc. (NASDAQ: ICAD), an industry-leading provider of
advanced image analysis, workflow solutions and radiation therapies for the early identification
and treatment of cancer, today reported financial results for the three and twelve months ended
December 31, 2010.
Financial highlights for the fourth quarter of 2010 include the following (all comparisons are with
the fourth quarter of 2009):
| • | Total revenue of $6.4 million, compared with $8.1 million |
| • | Digital computer-aided detection (CAD) and MRI CAD revenue of $3.9 million, compared
with $5.6 million |
| • | Film-based revenue of $815,000, compared with $1.2 million |
| • | Service and supply revenue of $1.6 million, compared with $1.3 million |
| • | International revenue of $1.3 million, compared with $948,000 |
| • | Gross margin of 86.4%, compared with 84.8% |
| • | Net loss of $2.9 million or $0.06 per share, which includes $2.3 million of
transaction related costs, compared with net income of $317,000 or $0.01 per basic and
diluted share which includes $400,000 of transaction related costs |
Financial highlights for the 2010 full year include the following (all comparisons are with the
2009 full year):
| • | Total revenue of $24.6 million, compared with $28.1 million |
| • | Digital CAD and MRI CAD revenue of $15.4 million, compared with $18.3 million |
| • | Film-based revenue of $3.3 million, compared with $5.8 million |
| • | Service and supply revenue of $5.8 million, compared with $4.0 million |
| • | International revenue of $4.0 million, compared with $3.7 million |
| • | Gross margin of 87.2%, compared with 83.6% |
| • | Net loss of $6.2 million or $0.14 per share, which includes $3.4 million of
transaction related costs, compared with a net loss of $2.0 million or $0.04 per basic
and diluted share, which includes $486,000 of transaction related costs |
Non-financial highlights for the fourth quarter and recent weeks include the following:
| • | Acquired Xoft, Inc., developer of the Axxent® eBx™ electronic
brachytherapy system. Axxent uses non-radioactive miniaturized X-ray tube technology
to deliver therapy directly to cancer sites with minimal radiation exposure to
surrounding healthy tissue. Axxent is FDA-cleared for the treatment of early stage
breast cancer, endometrial cancer and skin cancer, as well as for the treatment of
other cancers or conditions where radiation therapy is indicated, including
Intraoperative Radiation Therapy (IORT). |
| • | Launched SecondLook® Premier* CAD technology for digital mammography in
Europe and Canada. SecondLook Premier expands on the SecondLook platform and provides
the richest set of clinical decision support tools available in the marketplace today. |
| • | Launched a next-generation MRI product suite for breast, prostate and other organs
that brings together SpectraLook® and VividLook® with the new
OmniLook™ and VersaVue™ Enterprise to offer comprehensive quantitative image analysis
for cancer detection, staging, localization, treatment planning and serial monitoring. |
According to Ken Ferry, President and CEO of iCAD, “Throughout 2010 and in the face of continuing
marketplace challenges, iCAD made significant progress in commercializing new products, advancing
product development initiatives, and in maintaining the operational excellence and financial
discipline that allowed us to expand gross margins and maintain positive cash flow. Importantly,
we executed on our strategic directive to broaden our footprint in oncology with the acquisition of
Xoft, which allows us to bring targeted technologies to cancer patients throughout the continuum of
care, from detection to diagnosis to treatment to therapy monitoring.
“Our commitment to our core digital mammography business remains steadfast, as there are
approximately 3,100 film-based mammography systems in the U.S. that have yet to convert to digital
technology. In addition, we have embarked upon several initiatives to grow our revenues in a
number of overseas markets. Our expanding installed base of over 4,000 users offers additional
growth opportunities with increasing service contracts and future product upgrades and
enhancements.”
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Mr. Ferry added, “New products introduced in 2010 are making steady progress. Our recently
launched suite of MRI products continues to receive positive feedback from
clinicians, and we look forward to a growing presence in both breast and prostate MRI CAD. We are
finalizing commercial contracts with OEM companies that develop and market the advanced
visualization, 3-D rendering software for virtual colonoscopy and expect further market penetration
for VeraLook®, our CAD solution for virtual colonoscopy, with partners who are bringing
this life-saving technology to market.
“We closed 2010 with the acquisition of Xoft, developer of the Axxent eBx system. This disruptive
technology stands to be a significant growth engine for iCAD over time, in particular due to a
recently published landmark clinical study comparing IORT (intraoperative radiation therapy) with
traditional external beam radiation and to an expected favorable reimbursement decision from the
Centers for Medicare and Medicaid Services this summer. On February 3, 2011, we issued a voluntary
recall of the FlexiShield Mini device, an optional accessory intended for radiation shielding
during the IORT procedure. The recall only affects the FlexiShield Mini but has no impact on the
safety and efficacy of the radiation therapy delivered by the Axxent Electronic Brachytherapy
System. We are working cooperatively with the FDA on this matter to develop alternative shielding
solutions.
“Throughout 2010 iCAD evolved from a leadership position in image analysis and workflow for the
detection of the most prevalent cancers, to offering a broader portfolio of oncology solutions that
provide targeted analysis, diagnosis and therapy. The addition of the Axxent eBx system offers
unique and differentiated treatment technology, and we remain confident we can create meaningful
synergies over time as we advance these potentially new paradigms around the cancer care cycle,”
concluded Mr. Ferry.
Fourth Quarter Results
Total revenue for the fourth quarter of 2010 was $6.4 million, a decrease of 21% compared with
total revenue of $8.1 million for the fourth quarter of 2009. This reflects a 30% decline in sales
of the Company’s digital and MRI CAD products to $3.9 million from $5.6 million in the prior year
fourth quarter, reflecting challenging macroeconomic conditions as well as the absence from the
market of one of the Company’s major OEM partners as they awaited FDA approval for a new digital
mammography system. The approval was received in November 2010. International revenue for the
fourth quarter of 2010 rose 35% to $1.3 million from $948,000 in the prior year.
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Total film-based revenue for the quarter declined 34% to $815,000 from $1.2 million in the fourth
quarter of 2009. This reflects the continued and expected decline in demand for film-based
products and accessories as the marketplace transitions to digital technologies, as well as softer
demand for digital mammography systems that affect sales of the TotalLook MammoAdvantage, a
digitizing and comparative reading solution that is sold to further optimize workflow in a digital
mammography environment.
Service and supply revenue increased 29% to $1.6 million from $1.3 million in the fourth quarter of
2009, largely due to higher service contract revenue as digital CAD and TotalLook MammoAdvantage
systems transition from warranty to service contracts, underscoring the significant growth
opportunity inherent in the Company’s growing installed base.
iCAD reported a gross margin of 86.4% for the fourth quarter of 2010 compared with 84.8% for the
fourth quarter of 2009, primarily due to cost reductions in materials. Fourth quarter 2010
operating expenses were $8.4 million compared with $6.6 million in the fourth quarter of 2009, due
primarily to an increase of $1.9 million in transaction related expenses.
For the fourth quarter of 2010, the Company posted a net loss, including stock-based compensation
expense of $255,000, of $2.9 million or $0.06 per basic and diluted share, compared with net
income, including stock-based compensation expense of $499,000, of $317,000 or $0.01 per basic and
diluted share in the fourth quarter of 2009. Adjusting for transaction related costs the Company’s
non-GAAP adjusted net loss for the fourth quarter of 2010 was reduced to $638,000 or $0.01 per
basic and diluted share, compared with net income of $718,000 or $0.02 per basic and diluted share
in the fourth quarter of 2009.
| Three months ended December 31, | ||||||||||||
| 2010 | 2009 | % Change | ||||||||||
Digital & MRI CAD revenue |
$ | 3,924,216 | $ | 5,604,552 | -30.0 | % | ||||||
Film based revenue |
815,016 | 1,234,650 | -34.0 | % | ||||||||
Service & supply revenue |
1,631,639 | 1,268,908 | 28.6 | % | ||||||||
Total revenue |
$ | 6,370,871 | $ | 8,108,110 | -21.4 | % | ||||||
Full Year Results
Total revenue for 2010 was $24.6 million, a 13% decline from total revenue of $28.1 million for
2009. The gross margin for 2010 expanded to 87.2% from 83.6% in 2009. The net loss for 2010,
including stock-based compensation expense of $1.5 million, was $6.2 million or $0.14 per share,
compared with a net loss for 2009, including stock-based compensation expense of $2.0 million, of
$2.0 million or $0.04 per share.
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Sales of iCAD’s digital and MRI CAD solutions in 2010 were $15.4 million, down 16% from sales of
$18.3 million in 2009. Sales of film-based products in 2010 were $3.3 million, a decline of 43%
from sales of $5.8 million in 2009. Service and supply revenue in 2010 increased 45% to $5.8
million from $4.0 million in 2009. International revenue increased 7% to $4.0 million from $3.7
million during the prior year. Adjusting for transaction related expenses, the Company’s non-GAAP
adjusted net loss for the 2010 full year was reduced to $2.8 million or $0.06 per basic and diluted
share, as compared with the 2009 full year non-GAAP adjusted net loss of $1.5 million or $0.03 per
basic and diluted share. The Consolidated Statement of Operations does not include the financial
results of Xoft for any period.
| For the year ended December 31, | ||||||||||||
| 2010 | 2009 | % Change | ||||||||||
Digital & MRI CAD revenue |
$ | 15,392,079 | $ | 18,289,780 | -15.8 | % | ||||||
Film based revenue |
3,334,566 | 5,795,703 | -42.5 | % | ||||||||
Service & supply revenue |
5,848,390 | 4,023,782 | 45.3 | % | ||||||||
Total revenue |
$ | 24,575,035 | $ | 28,109,265 | -12.6 | % | ||||||
As of December 31, 2010, iCAD had cash and cash equivalents of $16.3 million, compared with $16.2
million as of December 31, 2009.
Darlene Deptula-Hicks, Executive Vice President and CFO, said, “With disciplined financial
management and operational excellence throughout the year, we expanded gross margins, and when
adjusted for transaction related expenses, slightly reduced operating expenses year over year, and
invested in developing and enhancing our product portfolio, all while maintaining a strong balance
sheet despite a 13% decline in total revenue. Adjusting for transaction related expenses, the
Company’s non-GAAP adjusted net loss for the 2010 full
year was $2.8 million or $0.06 per basic and diluted share, as compared with the 2009 full year
non-GAAP adjusted net loss of $1.5 million or $0.03 per basic and diluted share. Our cash at year
end also takes into account approximately $2.9 million in payments made in connection with the Xoft
acquisition for cash consideration and transaction costs and $704,000 associated with a prior
acquisition that was not consummated.”
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Financial Guidance
iCAD provided financial guidance on December 17, 2010 that the Company expects 2011 total revenue
to be in the range of $34 million to $38 million, with a gross margin in the low to mid 70% range.
The Company plans to update and possibly expand upon this financial guidance at mid-year.
Information About Non-GAAP Measures
iCAD is supplementing its GAAP financial results by providing non-GAAP measures to evaluate the
operating performance of the Company. From time to time, the Company considers and uses non-GAAP
measures as a supplemental measure of operating performance in order to provide the reader with an
improved understanding of underlying performance trends. Non-GAAP net income for the fourth
quarter and fiscal year ending December 31, 2009 and 2010 excludes the effect of transaction
related expenses associated with the acquisition of Xoft, Inc. in December 2010 and with a prior
acquisition that was not consummated. Management finds these non-GAAP measures to be useful for
internal comparison to historical operating results and believes this information is useful to
investors for the same purposes. See the attached “Reconciliation of GAAP Net Income/(Loss) to
Non-GAAP Net Income/(Loss)” for an explanation of the amounts excluded from net income to arrive at
the adjusted non-GAAP income or loss. Readers are reminded that non-GAAP information is merely a
supplement to, and not a replacement for, GAAP financial measures.
Conference Call
iCAD management will host an investment community conference call beginning at 10:00 a.m. Eastern
time on Thursday, March 24, 2011 to discuss these results and answer questions. Shareholders and
other interested parties may participate in the conference call by dialing 800-299-7635 (domestic)
or 617-786-2901 (international) and entering passcode 52212023. The call will also be broadcast
live on the Internet at www.streetevents.com, www.fulldisclosure.com and
www.icadmed.com.
A replay of the conference call will be accessible two hours after its completion through March 31,
2011 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and entering passcode
90176316. The call will also be archived for 90 days at www.streetevents.com,
www.fulldisclosure.com and www.icadmed.com.
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| * | Investigational Device. Limited by Federal Law to Investigational Use Only. Available Outside US. |
About iCAD
iCAD, Inc. is an industry-leading provider of advanced image analysis and workflow solutions that
enable healthcare professionals to better serve patients by identifying pathologies and pinpointing
the most prevalent cancers earlier. iCAD offers a comprehensive range of high-performance,
upgradeable Computer-Aided Detection (CAD) systems and workflow solutions for mammography, Magnetic
Resonance Imaging (MRI) and Computed Tomography (CT). iCAD recently acquired Xoft, Inc., developer
of the Axxent® eBx™ electronic brachytherapy system. Axxent uses non-radioactive
miniaturized X-ray tube technology and is FDA-cleared for the treatment of early stage breast
cancer, skin cancer and endometrial cancer. The Axxent System is also cleared for use in the
treatment of other cancers or conditions where radiation therapy is indicated including
Intraoperative Radiation Therapy (IORT). For more information, call (877) iCADnow or visit
www.icadmed.com.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:
Certain statements contained in this News Release constitute “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve a number of known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by such forward-looking
statements. Such factors include, but are not limited to, the Company’s ability to defend itself in
litigation matters, the Company’s ability to identify a replacement for the Axxent FlexiShield
Mini, the risks relating to the Company’s acquisition of Xoft including, the expected benefits of
the acquisition may not be achieved in a timely manner, or at all; the Xoft business operations may
not be successfully integrated with iCAD’s and iCAD may be unable to achieve the expected
synergies, business and strategic objectives following the transaction, the risks of uncertainty of
patent protection; the impact of supply and manufacturing constraints or difficulties; product
market acceptance; possible technological obsolescence; increased competition; customer
concentration; and other risks detailed in the Company’s filings with the Securities and Exchange
Commission. The words “believe”, “demonstrate”, “intend”, “expect”, “estimate”, “anticipate”,
“likely”, and similar expressions identify forward-looking statements. Readers are cautioned not to
place undue reliance on those forward-looking statements, which speak only as of the date the
statement was made. The Company is under no obligation to provide any updates to any information
contained in this release.
For iCAD, contact Darlene Deptula-Hicks at 603-882-5200 x7944, or via email at
ddeptula@icadmed.com
ddeptula@icadmed.com
For Investor Relations, contact Anne Marie Fields of Lippert/Heilshorn & Associates at
212-838-3777 x6604 or via email at afields@lhai.com
212-838-3777 x6604 or via email at afields@lhai.com
For media inquiries, contact Liza Heapes of MSL Boston
at 617-369-8787 or via e-mail at liza.heapes@mslgroup.com
at 617-369-8787 or via e-mail at liza.heapes@mslgroup.com
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- Tables to Follow -
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iCAD, Inc.
Consolidated Statements of Operations
| Three Months | Twelve Months | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenue |
$ | 6,370,870 | $ | 8,108,110 | $ | 24,575,035 | $ | 28,109,265 | ||||||||
Cost of revenue |
864,475 | 1,229,777 | 3,146,651 | 4,621,784 | ||||||||||||
Gross margin |
5,506,395 | 6,878,333 | 21,428,384 | 23,487,481 | ||||||||||||
Operating expenses: |
||||||||||||||||
Engineering and product development |
1,800,158 | 1,615,390 | 6,596,104 | 7,217,146 | ||||||||||||
Marketing and sales |
2,843,688 | 2,862,964 | 11,485,081 | 11,037,716 | ||||||||||||
General and administrative |
3,788,352 | 2,109,712 | 9,919,431 | 7,353,585 | ||||||||||||
Total operating expenses |
8,432,198 | 6,588,066 | 28,000,616 | 25,608,447 | ||||||||||||
Income (loss) from operations |
(2,925,803 | ) | 290,267 | (6,572,232 | ) | (2,120,966 | ) | |||||||||
Miscellaneous income |
— | — | 275,000 | — | ||||||||||||
Interest income (expense) — net |
15,152 | 21,131 | 73,269 | 109,772 | ||||||||||||
Net income (loss) before provision for income taxes |
$ | (2,910,651 | ) | $ | 311,398 | $ | (6,223,963 | ) | $ | (2,011,194 | ) | |||||
Provision (benefit) for income taxes |
— | (6,000 | ) | — | (43,570 | ) | ||||||||||
Net income (loss) |
$ | (2,910,651 | ) | $ | 317,398 | $ | (6,223,963 | ) | $ | (1,967,624 | ) | |||||
Net income (loss) per share |
||||||||||||||||
Basic |
$ | (0.06 | ) | $ | 0.01 | $ | (0.14 | ) | $ | (0.04 | ) | |||||
Diluted |
$ | (0.06 | ) | $ | 0.01 | $ | (0.14 | ) | $ | (0.04 | ) | |||||
Weighted average number of shares used
in computing income (loss) per share |
||||||||||||||||
Basic |
45,962,424 | 45,656,705 | 45,827,813 | 45,511,883 | ||||||||||||
Diluted |
45,962,424 | 45,883,597 | 45,827,813 | 45,511,883 | ||||||||||||
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iCAD, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(unaudited)
| December 31, | December 31, | |||||||
| 2010 | 2009 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 16,268,978 | $ | 16,248,031 | ||||
Trade accounts receivable, net of allowance for doubtful
accounts of $50,000 in 2010 and $84,000 in 2009 |
3,388,619 | 4,692,614 | ||||||
Inventory, net |
3,489,258 | 1,094,115 | ||||||
Prepaid expenses and other current assets |
580,922 | 393,490 | ||||||
Total current assets |
23,727,777 | 22,428,250 | ||||||
Property and equipment: |
||||||||
Equipment |
4,435,783 | 2,873,012 | ||||||
Leasehold improvements |
539,052 | 72,612 | ||||||
Furniture and fixtures |
354,541 | 344,700 | ||||||
Marketing assets |
296,700 | 292,613 | ||||||
| 5,626,076 | 3,582,937 | |||||||
Less accumulated depreciation and amortization |
2,851,607 | 2,661,083 | ||||||
Net property and equipment |
2,774,469 | 921,854 | ||||||
Other assets: |
||||||||
Deposits |
675,106 | 63,194 | ||||||
Intangible assets, net of accumulated amortization |
21,164,684 | 6,482,928 | ||||||
Goodwill |
45,689,106 | 43,515,285 | ||||||
Total other assets |
67,528,896 | 50,061,407 | ||||||
Total assets |
$ | 94,031,142 | $ | 73,411,511 | ||||
Liabilities and Stockholders’ Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 2,500,266 | $ | 1,365,558 | ||||
Accrued salaries and other expenses |
4,548,880 | 2,118,698 | ||||||
Accrued liability relating to acquisition |
971,870 | — | ||||||
Deferred rent |
380,961 | 80,588 | ||||||
Deferred revenue |
4,905,960 | 3,139,567 | ||||||
Total current liabilities |
13,307,937 | 6,704,411 | ||||||
Contingent consideration liability |
5,000,000 | — | ||||||
Long-term warranty expense |
15,003 | 23,275 | ||||||
Long-term deferred rent |
401,565 | — | ||||||
Long-term deferred revenue |
961,273 | 375,183 | ||||||
Long-term settlement costs |
1,135,348 | — | ||||||
Total liabilities |
20,821,126 | 7,102,869 | ||||||
Commitments and contingencies |
||||||||
Stockholders’ equity: |
||||||||
Preferred stock, $.01 par value: authorized 1,000,000 shares;
none issued |
— | — | ||||||
Common stock, $.01 par value: authorized 85,000,000
shares; issued 46,035,246 in 2010 and 45,746,736 in 2009;
outstanding 45,967,370 in 2010 and 45,678,860 in 2009 |
460,352 | 457,467 | ||||||
Additional paid-in capital |
163,185,185 | 150,062,733 | ||||||
Accumulated deficit |
(89,485,257 | ) | (83,261,294 | ) | ||||
Treasury stock at cost (67,876 shares) |
(950,264 | ) | (950,264 | ) | ||||
Total stockholders’ equity |
73,210,016 | 66,308,642 | ||||||
Total liabilities and stockholders’ equity |
$ | 94,031,142 | $ | 73,411,511 | ||||
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iCAD, Inc.
Reconciliation of GAAP Net Income/(Loss) to Non-GAAP Net Income/(Loss)
(unaudited)
(unaudited)
| Three Months Ended | Basic | Diluted | Three Months Ended | Basic | Diluted | |||||||||||||||||||
| December 31, | Earnings | Earnings | December 31, | Earnings | Earnings | |||||||||||||||||||
| 2010 | Per Share | Per Share | 2009 | Per Share | Per Share | |||||||||||||||||||
GAAP net loss |
$ | (2,910,651 | ) | $ | (0.06 | ) | $ | (0.06 | ) | $ | 317,398 | $ | 0.01 | $ | 0.01 | |||||||||
Deal related costs |
2,273,103 | 400,292 | ||||||||||||||||||||||
Non-GAAP net income (loss) |
$ | (637,548 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | 717,690 | $ | 0.02 | $ | 0.02 | |||||||||
Weighted average number of shares used
in computing income (loss) per share
Basic and diluted |
45,962,424 | 45,962,424 | 45,656,705 | 45,883,597 | ||||||||||||||||||||
| Year Ended | Basic | Diluted | Year Ended | Basic | Diluted | |||||||||||||||||||
| December 31, | Earnings | Earnings | December 31, | Earnings | Earnings | |||||||||||||||||||
| 2010 | Per Share | Per Share | 2009 | Per Share | Per Share | |||||||||||||||||||
GAAP net loss |
$ | (6,223,963 | ) | $ | (0.14 | ) | $ | (0.14 | ) | $ | (1,967,624 | ) | $ | (0.04 | ) | $ | (0.04 | ) | ||||||
Deal related costs |
3,413,197 | 485,947 | ||||||||||||||||||||||
Non-GAAP net loss |
$ | (2,810,766 | ) | $ | (0.06 | ) | $ | (0.06 | ) | $ | (1,481,677 | ) | $ | (0.03 | ) | $ | (0.03 | ) | ||||||
Weighted average number of shares used
in computing income (loss) per share
Basic and diluted |
45,827,813 | 45,827,813 | 45,511,883 | 45,511,883 | ||||||||||||||||||||
###
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