For Immediate Release
 | Press Release |
iCAD Reports First Quarter 2006 Operating Results
NASHUA, New Hampshire - April 27, 2006 - iCAD®, Inc. (Nasdaq: ICAD), an industry-leading provider of Computer-Aided Detection (CAD) solutions for the early identification of cancer, today reported its financial results for the first quarter ended March 31, 2006. iCAD sales for the quarter ended March 31, 2006 were $4,373,650 compared with $6,007,607 in the first quarter of 2005. Gross margin remained constant at 79% of sales in the first quarter 2006 and prior-year first quarter. Net loss for the first quarter of 2006 totaled ($1,605,894) or ($0.04) per share, compared with net income of $641,929 or $0.02 per share, in the prior-year quarter.
“Sales in iCAD’s first quarter of 2006,” indicated W. Scott Parr, President and CEO, “were significantly and adversely affected by discussions underway at the time regarding a potential merger with our principal competitor. The possibility of such a merger required that the Company defer hiring to fill key sales and marketing management positions, and caused a significant distraction to our field sales force”. Parr continued, “Since the February decision by iCAD’s Board to terminate such merger discussions, we have made substantial progress in correcting these problems.”
“First quarter expenses,” Parr explained, “were increased by continuing costs of the Company’s patent infringement arbitration with its principal competitor, as well as professional and other expenses associated with merger discussions. With the conclusion of our successful defense against infringement claims, and a renewed commitment to succeeding independently in our markets, these unplanned expenses are behind us.”
On April 24, 2006, iCAD announced that Kenneth W. Ferry would join the Company on May 15, 2006, as President and CEO. W. Scott Parr will leave the President and CEO positions at that time, and become iCAD’s non-executive Vice Chairman of the Board of Directors.
Conference Call
As previously announced, iCAD will host a conference call today, April 27, 2006, at 11:00 am EST. Shareholders and other interested parties can participate in the conference call by dialing +1 866 713 8310 in the US and Canada or +1 617 597 5308 for international/local participants, and entering passcode 56272639 a few minutes before 11:00 a.m. on April 27, 2006. 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 available two hours after its completion on April 27, 2006 until May 4, 2006 by dialing +1 888 286 8010 in the US and Canada or +1 617 801 6888 for international/local participants, and entering passcode 70215480. The call will also be archived for 90 days at www.streetevents.com, www.fulldisclosure.com and www.icadmed.com.
About iCAD, Inc.
iCAD, Inc. is an industry-leading provider of Computer-Aided Detection (CAD) solutions that enable healthcare professionals to identify cancer and other life-threatening conditions earlier by making medical services more effective, more accessible and more affordable for patients worldwide. Recipient of Frost & Sullivan’s Growth Strategy Leadership award and repeatedly recognized as offering “The Winning Combination” of Price and Performance by MD Buyline, iCAD offers a comprehensive range of high-performance, upgradeable CAD systems for the high, mid and low volume mammography markets. As the most frequently selected CAD solution for film-based and digital breast screening, iCAD is entrusted with the task of early cancer detection by almost fifteen hundred women’s healthcare centers worldwide. For more information, call +1 877 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 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.
iCAD and Second Look are registered trademarks of iCAD, Inc.
For more information on iCAD, Inc., contact Kevin McGrath of Cameron Associates at
+1 212 245 4577 or via email at kevin@cameronassoc.com.
iCAD, INC.
Consolidated Statements of Operations
| | | Three Months | | | Three Months | |
| | | March 31, 2006 | | | March 31, 2005 | |
| | | (unaudited) | | | (unaudited) | |
| | | | | | | | |
| Sales | | $ | 4,373,650 | | $ | 6,007,607 | |
| Cost of sales | | | 918,879 | | | 1,273,573 | |
| Gross margin | | | 3,454,771 | | | 4,734,034 | |
| | | | | | | | |
| Operating expenses: | | | | | | | |
| Engineering and product development | | | 1,319,198 | | | 1,016,048 | |
| General and administrative | | | 1,749,053 | | | 1,222,208 | |
| Marketing and sales | | | 1,985,687 | | | 1,750,966 | |
| Total operating expenses | | | 5,053,938 | | | 3,989,222 | |
| | | | | | | | |
| Income (loss) from operations | | | (1,599,167 | ) | | 744,812 | |
| | | | | | | | |
| Interest expense - net | | | 6,727 | | | 32,883 | |
| | | | | | | | |
| Net income (loss) before provision for income taxes | | | (1,605,894 | ) | | 711,929 | |
| | | | | | | | |
| Provision for income taxes | | | - | | | 70,000 | |
| | | | | | | | |
| Net income (loss) | | | (1,605,894 | ) | | 641,929 | |
| | | | | | | | |
| Preferred dividend | | | 30,432 | | | 30,432 | |
| | | | | | | | |
| Net income (loss) attributable to common stockholders | | $ | (1,636,326 | ) | $ | 611,497 | |
| | | | | | | | |
| Net income (loss) per share: | | | | | | | |
| Basic and Diluted | | $ | (0.04 | ) | $ | 0.02 | |
| | | | | | | | |
Weighted average number of shares used in computing income (loss) per share: | | | | | | | |
| Basic | | | 36,863,386 | | | 36,384,185 | |
| Diluted | | | 36,863,386 | | | 38,754,414 | |
iCAD, INC.
Consolidated Balance Sheets
| | | | March 31, | | | December 31, | |
| | | 2006 | | | 2005 | |
Assets | | | (unaudited) | | | | |
| Current assets: | | | | | | | |
| Cash and cash equivalents | | $ | 3,233,402 | | $ | 4,604,863 | |
| Trade accounts receivable, net of allowance for doubtful accounts of $463,000 in 2006 and $450,000 in 2005 | | | 2,814,555 | | | 3,958,392 | |
| Inventory | | | 3,097,089 | | | 2,517,467 | |
| Prepaid and other current assets | | | 274,111 | | | 176,133 | |
| Total current assets | | | 9,419,157 | | | 11,256,855 | |
| | | | | | | | |
| Property and equipment: | | | | | | | |
| Equipment | | | 3,140,901 | | | 3,038,344 | |
| Leasehold improvements | | | 120,012 | | | 120,012 | |
| Furniture and fixtures | | | 149,803 | | | 149,803 | |
| | | | 3,410,716 | | | 3,308,159 | |
| Less accumulated depreciation and amortization | | | 1,691,121 | | | 1,523,724 | |
| Net property and equipment | | | 1,719,595 | | | 1,784,435 | |
| | | | | | | | |
| Other assets: | | | | | | | |
| Patents, net of accumulated amortization | | | 204,988 | | | 224,519 | |
| Technology intangibles, net of accumulated amortization | | | 4,193,987 | | | 4,348,008 | |
| Tradename, distribution agreements and other, net of accumulated amortization | | | 342,450 | | | 398,733 | |
| Goodwill | | | 43,515,285 | | | 43,515,285 | |
| Total other assets | | | 48,256,710 | | | 48,486,545 | |
| | | | | | | | |
| Total assets | | $ | 59,395,462 | | $ | 61,527,835 | |
| | | | | | | | |
Liabilities and Stockholders' Equity | | | | | | | |
| Current liabilities: | | | | | | | |
| Accounts payable | | $ | 4,546,868 | | $ | 4,250,574 | |
| Accrued interest | | | 55,169 | | | 48,167 | |
| Accrued salaries and other expenses | | | 1,264,671 | | | 1,868,736 | |
| Deferred revenue | | | 679,002 | | | 499,279 | |
| Current maturities of note payable | | | 1,500,000 | | | 1,500,000 | |
| Total current liabilities | | | 8,045,710 | | | 8,166,756 | |
| | | | | | | | |
| Loans payable to related party | | | 258,906 | | | 258,906 | |
| Note payable, less current maturities | | | - | | | 375,000 | |
| Total liabilities | | | 8,304,616 | | | 8,800,662 | |
| | | | | | | | |
| Commitments and contingencies | | | | | | | |
| | | | | | | | |
| Stockholders' equity: | | | | | | | |
| Preferred stock, $ .01 par value: authorized 1,000,000 shares; issued and outstanding 6,374 in 2006 and 2005, with an aggregate liquidation value of $1,739,000 in 2006 and 2005, plus 7% annual dividend | | | 64 | | | 64 | |
| Common stock, $ .01 par value: authorized 50,000,000 shares; issued 36,931,262 shares in 2006 and 2005; outstanding 36,863,386 shares in 2006 and 2005 | | | 369,312 | | | 369,312 | |
| Additional paid-in capital | | | 130,750,998 | | | 130,781,430 | |
| Accumulated deficit | | | (79,079,264 | ) | | (77,473,369 | ) |
| Treasury stock at cost (67,876 common shares) | | | (950,264 | ) | | (950,264 | ) |
| Total stockholders' equity | | | 51,090,846 | | | 52,727,173 | |
| | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 59,395,462 | | $ | 61,527,835 | |
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