iCAD Reports Second Quarter Financial Results

Updated

iCAD Reports Second Quarter Financial Results

Total Revenue Increased 30% over Prior Year

Conference Call Begins Tuesday, July 30 at 10:00 a.m. Eastern Time


NASHUA, N.H.--(BUSINESS WIRE)-- iCAD, Inc. (Nasdaq: ICAD) , an industry-leading provider of advanced image analysis, workflow solutions and radiation therapy for the early identification and treatment of cancer, today reported financial results for the three and six months ended June 30, 2013.

"We are pleased to report our second quarter financial results in which we achieved strong revenue growth and adjusted EBITDA profitability compared with the second quarter of 2012. This represents our fourth consecutive quarter of double-digit revenue growth and adjusted EBITDA profitability," said Ken Ferry, President and CEO of iCAD.

"Revenue growth was particularly strong for the Therapy business in the quarter. We saw significant increases in new system placements and therapy source utilization, which is driven by increasing procedure volumes throughout our growing customer base. Moving forward, our efforts to continue to drive significant growth in this area will focus on broader distribution, clinical studies and expanding reimbursement, particularly for the treatment of breast and skin cancers.

"During the second quarter we experienced growth in our Cancer Detection subscription-based products and service revenue, which was offset by weaker new product sales, specifically in international markets. Also in the second quarter, we were pleased to expand our long-standing partnership with Fujifilm through the FDA clearance of our next-generation mammography computer-aided detection platform, PowerLook Advanced Mammography Platform, with Fujifilm's family of Aspire HD Full-Field Digital Mammography Systems.

"Looking ahead, we will continue our focused efforts to execute successfully on our strategy and continue to deliver improved financial results," concluded Mr. Ferry.

Second Quarter Financial Results

Revenue: Total revenue for the second quarter of 2013 increased 30% to $7.7 million from $5.9 million for the second quarter of 2012, driven by a 161% increase in Therapy revenue partially offset by a 14% decline in Cancer Detection product revenue.

Therapy revenue included Xoft™ Axxent™ Electronic Brachytherapy System™ product sales, as well as associated service and supply revenue. Cancer Detection revenue included film, digital mammography, MRI and CT CAD platforms, as well as service and supply revenue from these products.

Three months ended June 30,

Cancer Detection

2013

2012

% Change

Products

$

1,647

$

2,687

(39

)%

Service and supply

2,160

1,746

24

%

Total revenue

$

3,807

$

4,433

(14

)%

Three months ended June 30,

Therapy

2013

2012

% Change

Products

$

2,857

$

849

237

%

Service and supply

1,048

649

61

%

Total revenue

$

3,905

$

1,498

161

%

Gross Margin: Gross profit for the second quarter of 2013 was $5.2 million, or 67.7% of revenue, compared with gross profit for the second quarter of 2012 of $4.2 million, or 70.3% of revenue.

Operating Expenses: Total operating expenses for the quarter ended June 30, 2013 declined to $5.7 million from $6.1 million for the same period in 2012, primarily the result of continued cost-control measures implemented in the fourth quarter of 2011.

Non-GAAP Adjusted EBITDA: Non-GAAP adjusted EBITDA, a non-GAAP financial measure as defined below, was $434,000 for the second quarter of 2013, compared with a loss of $916,000 for the same period in 2012.

Net Loss: The net loss for the second quarter of 2013 was $1.9 million, or $0.17 per share, compared with a net loss for the second quarter of 2012 of $2.9 million, or $0.27 per share.

Non-GAAP Adjusted Net Loss: The Company non-GAAP adjusted net loss, as defined below, for the second quarter of 2013 was $1.3 million, or $0.12 per share, compared with a non-GAAP adjusted net loss for the second quarter of 2012 of $2.7 million, or $0.25 per share.

Cash and Cash Flow: As of June 30, 2013, iCAD had cash and cash equivalents of $12.9 million, compared with $12.7 million as of March 31, 2013 and $13.9 million as of December 31, 2012. In the second quarter of 2013, iCAD generated cash of $239,000. Net cash used for the first six months of 2013 was $1.0 million.

Six Month Financial Results

Revenue: Total revenue for the first half of 2013 increased 27% to $15.6 million from $12.3 million for the first half of 2012, driven by a 106% increase in Therapy revenue partially offset by a 4% decline in Cancer Detection product revenue.

Six months ended June 30,

Cancer Detection

2013

2012

% Change

Products

$

4,320

$

5,304

(19

)%

Service and supply

4,125

3,468

19

%

Total revenue

$

8,445

$

8,772

(4

)%

Six months ended June 30,

Therapy

2013

2012

% Change

Products

$

5,244

$

2,283

130

%

Service and supply

1,953

1,219

60

%

Total revenue

$

7,197

$

3,502

106

%

Gross Margin: Gross profit for the first half of 2013 was $10.9 million, or 69.5% of revenue, compared with gross profit for the first half of 2012 of $8.6 million, or 70.0% of revenue.

Operating Expenses: Total operating expenses for the six months ended June 30, 2013 declined to $11.7 million from $12.5 million for the same period in 2012.

Non-GAAP Adjusted EBITDA: Non-GAAP adjusted EBITDA for the first half of 2013 was $1.0 million, compared with a loss of $1.9 million for the first half of 2012.

Net Loss: The net loss for the first six months of 2013 was $2.6 million, or $0.24 per share, compared with a net loss for the first six months of 2012 of $5.2 million, or $0.48 per share.

Non-GAAP Adjusted Net Loss: The Company's non-GAAP adjusted net loss for the first six months of 2013 was $2.5 million, or $0.23 per share, compared with a non-GAAP adjusted net loss for the first six months of 2012 of $5.5 million, or $0.51 per share.

Use of Non-GAAP Financial Measures

In its quarterly news releases, conference calls, slide presentations or webcasts, the Company may use or discuss non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measures most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the condensed consolidated financial statements. When analyzing the Company's operating performance, investors should not consider these non-GAAP measures as a substitute for the comparable financial measures prepared in accordance with GAAP. The Company's quarterly news releases containing such non-GAAP reconciliations can be found on the Investors section of the Company's website at www.icadmed.com.

Conference Call

iCAD management will host an investment community conference call on Tuesday, July 30, 2013 beginning at 10:00 a.m. Eastern Time to discuss these results and answer questions. Shareholders and other interested parties may participate in the conference call by dialing 877-703-6106 (domestic) or 857-244-7305 (international) and entering passcode 16130604. The call also will be broadcast live on the Internet at www.streetevents.com, www.earnings.com and www.icadmed.com.

A replay of the conference call will be accessible two hours after its completion through August 6, 2013 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and entering passcode 91450890. The call will also be archived for 90 days at www.streetevents.com, www.earnings.com and www.icadmed.com.

About iCAD, Inc.

iCAD is an industry-leading provider of advanced image analysis, workflow solutions and radiation therapies for the early identification and treatment of common cancers. iCAD's Xoft System offers radiation treatment for early-stage breast cancer that can be administered in the form of intraoperative radiation therapy or accelerated partial breast irradiation. The Xoft System is also cleared for the treatment of non-melanoma skin cancer and endometrial cancer. iCAD offers a comprehensive range of high-performance, upgradeable CAD solutions for mammography and advanced image analysis and workflow solutions for Magnetic Resonance Imaging, for breast and prostate cancers and Computed Tomography for colorectal cancer. 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, to achieve business and strategic objectives, the risks of uncertainty of patent protection, the impact of supply and manufacturing constraints or difficulties, uncertainty of future sales levels, protection of patents and other proprietary rights, the impact of supply and manufacturing constraints or difficulties, product market acceptance, possible technological obsolescence of products, increased competition, litigation and/or government regulation, changes in Medicare reimbursement policies, risks relating to our existing and future debt obligations, competitive factors, the effects of a decline in the economy or markets served by the Company; and other risks detailed in the Company's filings with the Securities and Exchange Commission. The words "believe", "demonstrate", "intend", "expect", "estimate", "will", "continue", "anticipate", "likely", "seek", 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 additional disclosure regarding these and other risks faced by iCAD, please see the disclosure contained in our public filings with the Securities and Exchange Commission, available on the Investors section of our website at http://www.icadmed.com and on the SEC's website at http://www.sec.gov.

iCAD, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands except for per share data)

Three Months Ended June 30,

Six Months Ended June 30,

2013

2012

2013

2012

Revenue:

Products

$

4,504

$

3,536

$

9,564

$

7,587

Service and supplies

3,208

2,395

6,078

4,687

Total revenue

7,712

5,931

15,642

12,274

Cost of revenue:

Products

1,446

969

2,801

2,076

Service and supplies

810

560

1,504

1,137

Amortization of acquired intangibles

234

233

467

465

Total cost of revenue

2,490

1,762

4,772

3,678

Gross profit

5,222

4,169

10,870

8,596

Operating expenses:

Engineering and product development

1,756

1,975

3,622

4,187

Marketing and sales

2,337

2,488

4,775

5,134

General and administrative

1,602

1,603

3,274

3,198

Total operating expenses

5,695

6,066

11,671

12,519

Loss from operations

(473

)

(1,897

)

(801

)

(3,923

)

(Loss) Gain from change in fair value of warrant

(571

)

(213

)

(140

)

386

Interest expense

(834

)

(831

)

(1,660

)

(1,666

)

Other income

6

9

12

18

Other expense, net

(1,399

)

(1,035

)

(1,788

)

(1,262

)

Loss before income tax expense

(1,872

)

(2,932

)

(2,589

)

(5,185

)

Income tax expense

(10

)

(11

)

(20

)

(22

)

Net loss and comprehensive loss

$

(1,882

)

$

(2,943

)

$

(2,609

)

$

(5,207

)

Net loss per share:

Basic and diluted

$

(0.17

)

$

(0.27

)

$

(0.24

)

$

(0.48

)

Weighted average number of shares used in

computing loss per share:

Basic and diluted

10,836

10,794

10,828

10,785

iCAD, INC. AND SUBSIDIARY

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands except for share data)

June 30,

December 31,

Assets

2013

2012

Current assets:

Cash and cash equivalents

$

12,912

$

13,948

Trade accounts receivable, net of allowance for doubtful
accounts of $73 in 2013 and $48 in 2012

6,099

4,980

Inventory, net

1,941

2,119

Prepaid expenses and other current assets

467

486

Total current assets

21,419

21,533

Property and equipment, net of accumulated depreciation
and amortization of $3,947 in 2013 and $3,627 in 2012

1,343

1,483

Other assets

531

638

Intangible assets, net of accumulated amortization
of $11,604 in 2013 and $10,744 in 2012

14,388

15,230

Goodwill

21,109

21,109

Total assets

$

58,790

Originally published