FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of February 2005
Commission File No. 000-19865
CEDARA SOFTWARE CORP.
(Registrant's name)
6509 Airport Road
Mississauga, Ontario, Canada L4V 1S7
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40F.
Form 20-F Form 40-F X
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Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7):
Indicate by check mark whether by furnishing the information
contained in this Form, the registrant is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the Securities
Exchange Act of 1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b) : 82-_______________
Documents Included as Part of this Report:
No.
1. Cedara Software Announces Strong Revenue and Earnings for Second
Quarter
CEDARA
FOR IMMEDIATE RELEASE:
Contact: News Release
Brian Pedlar, Chief Financial Officer
Cedara Software Corp.
(905) 672-2100 ext. 2015
brian.pedlar@cedara.com
Attention: Business/Financial Editors:
Cedara Software Announces
Strong Revenue and Earnings for Second Quarter
o Reflects strong organic growth in Cedara's core OEM business from
medical imaging manufacturers and solution providers
o Includes for the first time results of direct sales to hospitals and
imaging centres from Cedara's recent acquisition, eMed Technologies
TORONTO, February 8, 2005 - CEDARA SOFTWARE CORP. (TSX:CDE/NASDAQ:CDSW), a
leading independent provider of medical imaging technologies for the global
healthcare market, today announced strong financial results for the 2005
fiscal year second quarter ended December 31, 2004.
Cedara's revenues from continuing operations for the quarter were $23.0
million, up 89% from the $12.1 million in the same quarter of the previous
year. This quarter is the first to include the impact of Cedara's recent
acquisition of eMed Technologies which closed October 8, 2004. Accompanying
the positive impact of eMed's operating results was organic growth of 28% in
Cedara's revenue, compared to the same quarter last year.
Net income for the quarter was $4.9 million, up 27% compared to a net income
of $3.9 million in the previous year. This included approximately $1.1 million
of eMed acquisition related charges. Diluted earnings per share were $0.15,
compared to $0.14 in the previous year.
For the six months ended December 31, 2004, revenues were $35.3 million, up
59% from the $22.3 million in the previous year. Net income for the six months
was $8.1 million, compared to $5.6 million in the previous year. Diluted
earnings per share of $0.24 were up from $0.20 in the previous year.
The strong growth in revenue for the quarter included a 75% increase in
software license revenue to $12.5 million. Sales of solutions and workstations
(which includes bundled software and hardware) reached $5.3 million. Support
services revenue increased 42% to $3.0 million, while engineering services
revenue declined slightly to $2.2 million. The change in revenue mix, which
has helped diversify Cedara's business model, delivered a strong gross margin
of $16.3 million or 71% of revenue for the quarter.
Operating expenses in the second quarter increased by $6.0 million, or 114%,
to $11.3 million. This resulted from including eMed's operating expenses in
the current quarter, the impact of acquisition related charges and increased
spending on sales and marketing activities. Prior year operating expenses also
included a one-time gain of $1.2 million from settlement of outstanding loans
to the former CEO. For the six months ended December 31, 2004, operating
expenses were $18.2 million, an increase of $7.1 million or 64%.
"I am extremely pleased to report another quarter of strong revenue growth and
profits," said Abe Schwartz, Cedara's President and Chief Executive Officer.
"The combined increase in revenues and profits this quarter is validation of
Cedara's dual strategy of selling to OEMs as well as hospitals and imaging
centres directly."
On January 18, 2005, Cedara announced that it had signed a definitive
agreement to merge with Merge Technologies Incorporated (NASDAQ: MRGE), d.b.a.
Merge eFilm, in an all-stock transaction. The merger is subject to shareholder
and regulatory approval.
For further information, please contact:
Brian Pedlar, Chief Financial Officer
Cedara Software Corp.,
(905) 672-2100, Extension 2015
brian.pedlar@cedara.com
Conference Call Information
The Cedara Software Corp. second quarter fiscal 2005 conference call and web
cast to discuss results and corporate strategy is scheduled for 11:00 am EST
on Wednesday, February 9, 2005. The conference call can be accessed via audio
web cast by visiting:
http://www.cedara.com/investors/teleconference_webcast.htm .
Participants in the conference call are asked to dial 416-405-9328 or
1-800-387-6216, five to ten minutes prior to the February 9, 2005, 11:00 am
start of the teleconference to participate in the call. This conference call
will be recorded and will be available on instant replay at the end of the
call, until midnight March 9, 2005. To listen to the replay, please dial
416-695-5800 or 1-800-408-3053, and enter pass code 3132861#.
About Cedara Software Corp
Cedara Software Corp. is a leading independent provider of medical imaging
technologies. Cedara's software is deployed in hospitals and clinics worldwide
and is licensed by many of the world's leading medical device and healthcare
information technology companies. Approximately 28,000 medical imaging systems
and 6,400 Picture Archiving and Communications System (PACS) workstations have
been licensed to date. Cedara recently acquired eMed Technologies Corporation,
widely known as a provider of innovative PACS and teleradiology solutions that
have been installed in over 2,000 hospitals and imaging centres. Cedara is
unique in that it has technologies and expertise that span all the major
digital imaging modalities including computed tomography (CT), magnetic
resonance imaging (MRI), digital X-ray, mammography, ultrasound,
echo-cardiology, angiography, nuclear medicine, positron emission tomography
(PET) and fluoroscopy. Furthermore, the Company's medical imaging offerings
are used in all aspects of clinical workflow including the capture of a
patient's digital image; the archiving, communication and manipulation of
digital images; sophisticated clinical applications to analyze digital images;
and even the use of imaging in minimally-invasive surgery.
Certain statements contained in this news release are forward-looking within
the meaning of securities laws and are based on current expectations that are
subject to a number of assumptions, uncertainties and risks, and the actual
results may differ materially from what is currently expected. In particular,
statements relating to the healthcare imaging software market and market
share, relating to the Company's expectations concerning its licensed software
products, relating to the Company's expectations as to revenues, costs and
cash flows, relating to the acquisition of eMed and relating to the proposed
merger with Merge eFilm are forward looking statements. The assumptions,
uncertainties and risks upon which these forward looking statements are based
include, but are not limited to: dependence on key personnel of the Company,
dependence on major customers and individual contracts, fluctuations in
quarterly financial results, competitive pressures (including price
competition), rapid technological change, exchange rate fluctuations, risks
associated with international operations, dependence on intellectual property
rights, regulatory clearances and approvals for new products, risks relating
to product defects and product liability, adverse consequences of financial
leverage, ability to service debt, continued acceptance of the Company's
products, regulatory changes to the health care industry, seasonality,
economic and political conditions, risks relating to the acquisition of eMed
and risks relating to the proposed merger with Merge eFilm including risks
associated with obtaining regulatory and shareholder approvals without
unexpected delays or conditions, timely implementation and execution of merger
integration plans, retention of customers and the Company's original
employees, successfully leveraging Merge eFilm's and the Company's
comprehensive product offering to the combined customer base and sustaining
continued growth at rates approximating recent levels. Further information
about these risks and uncertainties can be found in the continuous disclosure
documents filed from time to time by Cedara with the securities regulatory
authorities, which documents are available at http://www.sedar.com/.
Three pages of consolidated financial statements follow:
CEDARA SOFTWARE corp.
Consolidated Balance Sheets
(In thousands of Canadian dollars)
- ----------------------------------------------------------------------------------------------------------------
December 31, 2004 June 30, 2004
- ----------------------------------------------------------------------------------------------------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 34,213 $ 40,510
Short-term investments - 10,902
Accounts receivable 19,471 7,449
Inventory 1,613 268
Prepaid expenses and other assets 1,962 881
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57,259 60,010
Capital assets 2,373 2,201
Long-term investment 1,026 510
Intangible assets 12,299 373
Goodwill 33,288 9,053
- ----------------------------------------------------------------------------------------------------------------
$ 106,245 $ 72,147
- ----------------------------------------------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Bank indebtedness $ 17,670 $ -
Accounts payable and accrued liabilities 9,218 4,207
Deferred revenue 5,726 861
Current liabilities of discontinued operations - 986
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32,614 6,054
Long-term liability 234 -
Non-current portion of provision for loss on sublease 17 44
Shareholders' equity :
Capital stock 162,912 161,536
Contributed surplus 632 388
Deficit (87,758) (95,875)
Cumulative translation adjustment (2,406) -
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73,380 66,049
- ----------------------------------------------------------------------------------------------------------------
$ 106,245 $ 72,147
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CEDARA SOFTWARE corp.
Unaudited Consolidated Statements of Operations
(In thousands of Canadian dollars, except per share amounts)
- ---------------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
December 31 December 31
---------- ------------------------------------------
2004 2003 2004 2003
- ----------------------------------------------------------------------------- ---------------------------------------------
Revenue $ 22,973 $ 12,148 $ 35,314 $ 22,251
Direct costs 6,682 2,607 9,086 4,971
- ---------------------------------------------------------------------------------------------------------------------------
Gross margin 16,291 9,541 26,228 17,280
Expenses:
Research and development 2,907 2,104 4,825 4,414
Sales and marketing 3,587 1,397 5,275 2,412
General and administration 2,986 1,731 4,899 3,285
Severance costs (recovery) 336 (205) 415 (184)
Other charges (income) 493 (217) 1,562 218
Amortization of intangible assets 588 46 601 102
Depreciation and amortization 354 404 657 853
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11,251 5,260 18,234 11,100
- ---------------------------------------------------------------------------------------------------------------------------
Income before interest expense 5,040 4,281 7,994 6,180
Interest income (expense), net (147) (336) 88 (602)
- ---------------------------------------------------------------------------------------------------------------------------
Income from continuing operations 4,893 3,945 8,082 5,578
Income (loss) from discontinued operations 35 (53) 35 -
- ---------------------------------------------------------------------------------------------------------------------------
Net income $ 4,928 $ 3,892 $ 8,117 $ 5,578
- -------------------------------------------------------------------------------------------- ------------------------------
Earnings per share from continuing operations:
Basic $ 0.16 $ 0.16 $ 0.26 $ 0.23
Diluted $ 0.15 $ 0.14 $ 0.24 $ 0.20
Earnings per share:
Basic $ 0.16 $ 0.16 $ 0.26 $ 0.23
Diluted $ 0.15 $ 0.14 $ 0.24 $ 0.20
- ---------------------------------------------------------------------------------------------------------------------------
Weighted average number of shares outstanding:
Basic 31,503,201 24,168,495 31,440,646 27,071,507
Diluted 33,370,845 27,762,206 33,282,965 27,548,191
CEDARA SOFTWARE corp.
Unaudited Consolidated Statements of Cash Flows
(In thousands of Canadian dollars)
- --------------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
December 31 December 31
2004 2003 2004 2003
- --------------------------------------------------------------------------------------------------------------------------
Cash provided by (used in):
Operating activities:
Net income from continuing operations $ 4,893 $ 3,945 $ 8,082 $ 5,578
Items not involving cash:
Depreciation and amortization 1,081 450 1,397 955
Stock-based compensation expense 193 18 244 36
Other (45) 318 551 369
- --------------------------------------------------------------------------------------------------------------------------
6,122 4,731 10,274 6,938
- --------------------------------------------------------------------------------------------------------------------------
Change in non-cash operating working capital:
Accounts receivable (4,723) (1,130) (10,649) (3,900)
Inventory (26) 95 (83) 88
Prepaid expenses and other assets (220) (670) (263) (360)
Accounts payable and accrued liabilities 94 (1,214) 626 (2,335)
Deferred revenue 1,293 (643) 1,477 137
- --------------------------------------------------------------------------------------------------------------------------
(3,582) (3,562) (8,892) (6,370)
- --------------------------------------------------------------------------------------------------------------------------
2,540 1,169 1,382 568
Investing activities:
Decrease in short-term investments 10,962 - 10,902 -
Acquisition of eMed, net of cash acquired (35,730) - (36,502) -
Proceeds from sale of investments in shares 273 - 273 -
Additions to intangible assets (10) (20) (20) (54)
Additions to capital assets (432) (201) (502) (431)
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(24,937) (221) (25,849) (485)
Financing activities:
Increase in long-term liability (5) - (5) -
Issue of shares 1,304 849 1,376 849
Increase (decrease) in bank indebtedness 18,420 (1,778) 18,420 (549)
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19,719 (929) 19,791 300
Effect on exchange rate changes on cash and cash equivalents
(1,506) - (1,586) -
- --------------------------------------------------------------------------------------------------------------------------
Change in cash and cash equivalents from continuing (4,184) 19 (6,262) 383
operations
Change in cash and cash equivalents from discontinued
operations (35) (19) (35) (383)
Cash and cash equivalents, beginning of period 38,432 - 40,510 -
- --------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period $ 34,213 $ - $ 34,213 $ -
- --------------------------------------------------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
February 9, 2005
CEDARA SOFTWARE CORP.
By: /s/ Brian Pedlar
------------------------
Brian Pedlar
Chief Financial Officer