Novadaq Reports First Quarter 2011 Financial Results
TORONTO, ONTARIO-- Novadaq® Technologies Inc. (TSX:NDQ - News), a developer of real-time medical imaging systems for use in the operating room, today announced its financial results for the first quarter ended March 31, 2011. Unless otherwise indicated, all dollar amounts in this press release are expressed in United States (U.S.) dollars.
Dr. Arun Menawat, Novadaq's President and CEO, commented, "During the first quarter we made significant progress in driving the adoption of our SPY imaging technology through our strategic partnerships and key opinion leading surgeons. Looking to the remainder of the fiscal year, we will continue to focus on positioning SPY® imaging technology for the operating room by continuing to enhance its clinical value."
Corporate Highlights
-- At the end of January 2011, LifeCell™ Corporation ("LifeCell™")
trained its entire selling organization on Novadaq's latest generation
SPY system designed specifically for LifeCell™'s markets, SPY Elite,
and commenced full product launch in the U.S. in February 2011. SPY
Elite seamlessly integrates Novadaq Technologies Inc.'s ("Novadaq") SPY
quantification software technology into the system operating software
which allows surgeons to more easily visualize and quantitatively
compare perfusion in real-time while in the operating room.
-- In mid-February, Intuitive Surgical®, Inc. ("Intuitive Surgical"),
received 510(k) clearance for the SPY integrated visualization system
from the FDA and began a U.S. limited launch for the product in key
opinion leading centers. The system will enable surgeons performing
robotic surgery to simultaneously perform fluorescence imaging during a
variety of surgeries that will be targeted by Intuitive Surgical.
-- During the first quarter, LifeCell™ and Intuitive Surgical combined
installed about 20 of Novadaq's new fluorescence imaging systems.
-- Completed the acquisition of substantially all of the Transmyocardial
Revascularization ("TMR") business assets from PLC Medical, Inc.
-- In March 2011, SPY Imaging was featured in a Diabetic Foot Conference
("DFCon 2011") sponsored workshop that included a live case
demonstration. DFCon is the largest conference of its type held annually
in the world.
-- SPY imaging was the topic of two presentations named "best-in-class" at
the American Society of Reconstructive Micro-surgery and was featured in
an article authored by surgeons at the Cleveland Clinic in the Canadian
Journal of Plastic Surgery.
-- During the first quarter of 2011, Novadaq completed the required
transition from Canadian Generally Accepted Accounting Principles to
International Financial Reporting Standards ("IFRS") in accordance with
International Accounting Standards Board. As such, the Company's first
quarter financial statements are presented in accordance with IFRS.
First Quarter Financial Highlights
-- Total revenue increased by 7% to $2.9 million, compared to $2.7 million
for the first quarter of 2010. Year over year growth includes a $284,000
increase in TMR products mainly due to a capital laser sale and a 15%
increase in TMR consumable sales. Sales increased by $624,000, or 27%,
as compared to the previous quarter due to increased service sales of
$699,000 resulting from the TMR acquisition, increased TMR product sales
of $57,000, offset by lower SPY sales of $132,000.
-- Gross profit increased by 2% to $1.1 million compared to the same
quarter last year, mainly due to increased TMR product margins and
increased service margins.
-- Sales and marketing expenses decreased by 30% to $1.3 million, compared
to $1.8 million in the first quarter of 2010. The decrease was primarily
related to the transitioning of sales to the partnerships.
-- Research and development expenses were $1.0 million compared to $878,000
in the same quarter a year ago as a result of product development
expenses related to SPY Elite.
-- General and administration expenses increased to $1.1 million from
$798,000 a year ago. The majority of this increase was primarily related
to higher legal, accounting and professional fees.
-- Net loss decreased by 13% to $2.4 million, compared to a net loss of
$2.7 million in the first quarter of 2010. Compared to the fourth
quarter 2010 and the first quarter 2011, net loss decreased by 24%.
-- The Company successfully raised gross proceeds of CDN $15,000,000 from a
private placement, strengthening the balance sheet. As at March 31,
2011, Novadaq had cash and cash equivalents of $17.1 million.
Conference Call Novadaq is pleased to invite all interested parties to participate in a conference call today, May 12, at 10:00 AM Eastern Time during which these results will be discussed. Those wishing to access the live conference call by telephone should dial 1-877-407-0778 (within Canada and the United States) or 1-201-689-8565 (international callers) several minutes prior to the beginning of the call. A telephonic replay of the conference call will be made available until midnight on June 12, 2011 and can be accessed by dialing 1-877-660-6853 (within Canada and the United States) or 1-201-612-7415 (international callers) and entering the account number 286 and the conference identification number 372027 when prompted. The call will also be audio webcast live and archived for 365 days on the company's website at http://www.novadaq.com under the "Events" tab in the Investor's section. In addition, a replay of the call will be available for download to a portable audio player or computer, as an MP3 or podcast file, at the same location on Novadaq's website. About Novadaq Technologies Inc. Novadaq Technologies develops and markets real-time fluorescence imaging technologies for use in the operating room. The Company's core technology platform, SPY imaging, provides clinically relevant, anatomic and physiologic images during a wide variety of complex open and minimally invasive surgical ("MIS") procedures. SPY empowers surgeons treating life-threatening illnesses such as breast, colon and other cancers and cardiovascular disease to more effectively treat vascular blockages and assess tissue perfusion. More than 40 peer-reviewed publications demonstrate that SPY imaging leads to fewer post-operative complications and reduced hospital costs. The SPY imaging System is cleared by the United States Food and Drug Administration ("FDA") for real-time use during open and MIS surgical procedures. The endoscopic SPY System combines all of the capabilities of SPY imaging with state-of-the-art high definition ("HD") visible light visualization offered by conventional endoscopes. Novadaq announced its first alliance with Intuitive Surgical®, Inc., in January 2009, to integrate SPY Imaging into the 3-D HD imaging capabilities of the da Vinci® Surgical Robotic System. The integrated system received FDA 510(k) clearance to market in February 2011. In addition, in September 2010, Novadaq entered into an exclusive North American sales and marketing alliance with LifeCell™ Corporation, a Kinetic Concepts ("KCI"), Inc. Company, for SPY in open plastic and reconstructive, gastrointestinal and head and neck surgery. Novadaq's cardiac surgery products, including SPY imaging for cardiac applications and a Heart Laser™ System targeted at improving heart surgeries, are marketed through a direct sales team. For more information, please visit the Company's website at http://www.novadaq.com. Forward Looking Statements Certain statements included in this press release may be considered forward-looking. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. All forward-looking statements are based on Novadaq's current beliefs as well as assumptions made by and information currently available to Novadaq and relate to, among other things, results of future clinical tests of PINPOINT, SPY endoscopic technology and the SPY Imaging System, anticipated financial performance, business prospects, strategies, regulatory developments, market acceptance and future commitments. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Due to risks and uncertainties, including the risks and uncertainties identified by Novadaq in its public securities filings actual events may differ materially from current expectations. Novadaq disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additional financial information on following pages.
Novadaq Technologies Inc.
INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS AT MARCH 31, 2011
(Unaudited)
(expressed in U.S dollars)
March 31, 2011 December 31, 2010
--------------------------------------
ASSETS
Current assets
Cash and cash equivalents 17,109,938 5,597,407
Accounts receivable 1,112,069 1,434,964
Prepaid expenses and other 754,610 1,193,423
Inventories 1,578,394 778,984
Non-current assets
Available-for-sale financial
instruments - -
Property and equipment 1,732,114 1,202,468
Prepaid expenses and other - 144,456
Deferred development costs 354,546 405,195
Other intangible assets 2,590,396 1,563,288
--------------------------------------
Total Assets 25,232,067 12,320,185
--------------------------------------
--------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable 4,280,830 2,913,979
Provisions 233,565 19,520
Income taxes payable 20,909 24,066
Deferred revenue 18,615 549,865
Deferred sales and marketing revenue 800,000 800,000
Repayable government assistance 520,765 507,675
Non-current liabilities
Provisions 69,281 -
Convertible debentures 3,988,512 3,891,753
Deferred revenue 16,461 190,609
Deferred sales and marketing revenue 2,733,333 2,933,333
Warrants 4,967,671 1,276,464
--------------------------------------
Total Liabilities 17,649,942 13,107,264
--------------------------------------
Shareholders' Equity
Share capital 98,482,283 87,897,555
Contributed surplus 6,248,704 6,043,684
Equity component of convertible
debentures 1,968,395 1,968,395
Deficit (99,117,257) (96,696,713)
--------------------------------------
Total Shareholders' Equity 7,582,125 (787,079)
--------------------------------------
Total Liabilities and Shareholders'
Equity 25,232,067 12,320,185
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Novadaq Technologies Inc.
INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED MARCH 31, 2011
(Unaudited)
(expressed in U.S dollars)
For the three months ended
March 31, 2011 March 31, 2010
--------------------------------------
Product sales 1,935,892 2,057,439
Milestone revenue - 295,729
Service revenue 964,938 361,969
--------------------------------------
Total revenues 2,900,830 2,715,137
Cost of sales 1,773,057 1,613,682
--------------------------------------
Gross margin 1,127,773 1,101,455
--------------------------------------
Selling and distribution costs 1,275,219 1,823,927
Research and development expenses 1,048,128 877,530
Administrative expenses 1,093,784 797,830
--------------------------------------
Total operating expenses 3,417,131 3,499,287
--------------------------------------
Loss from operations (2,289,358) (2,397,832)
Interest expense (167,578) (155,986)
Interest income 7,085 1,934
Warrant revaluation adjustment 4,307 (52,044)
Gain (loss) on investment 25,000 (125,000)
--------------------------------------
Loss and comprehensive loss for the
period (2,420,544) (2,728,928)
--------------------------------------
--------------------------------------
Basic and diluted comprehensive loss
per share for the period $(0.09) $(0.11)
--------------------------------------
--------------------------------------
Novadaq Technologies Inc.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31
(Unaudited)
(expressed in U.S dollars)
2011 2010
----------------------------
OPERATING ACTIVITIES
Comprehensive loss for the period before tax (2,420,544) (2,728,928)
Items not affecting cash
Depreciation and impairment of property and
equipment 192,210 260,055
Amortization and impairment of intangible
assets 216,183 198,587
Impairment of investment - 125,000
Stock option compensation 205,020 224,733
Finance costs, including imputed interest on
convertible debentures 96,760 87,677
Warrants revaluation adjustment (4,307) 52,044
----------------------------
(1,714,678) (1,780,832)
----------------------------
Changes in working capital
Decrease (increase) in deferred revenue (475,376) 959,805
Decrease (increase) in accounts receivable 322,895 (84,261)
Decrease (increase) in inventories (799,410) 124,055
Increase (decrease) in accounts payable 1,143,129 (333,821)
Decrease (increase) in prepaid expenses and
other 438,812 (133,613)
----------------------------
Net change in non-cash working capital
balances related to operations 630,050 532,165
----------------------------
Cash used in operating activities (1,084,628) (1,248,667)
----------------------------
INVESTING ACTIVITIES
Purchase of property and equipment, net (721,856) (7,498)
Purchase of TMR business (1,000,000) -
Redemptions of long-term investment - 25,000
----------------------------
Cash (used in) provided by investing activities (1,721,856) 17,502
----------------------------
FINANCING ACTIVITIES
Issuance of common shares and warrants 15,278,447 7,121,337
Transaction costs of common shares and
warrants (998,207) (511,180)
----------------------------
Cash provided by financing activities 14,280,240 6,610,157
----------------------------
Net increase in cash and cash equivalents 11,473,756 5,378,992
Net foreign exchange difference 38,775 63,820
Cash and cash equivalents at January 1 5,597,407 2,524,958
----------------------------
Cash and cash equivalents at March 31 17,109,938 7,967,770
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