Exhibit 99.1
NEWS RELEASE
For Immediate Release
ICAD REPORTS 145% INCREASE IN FIRST QUARTER SALES
NASHUA, New Hampshire (May 3, 2004) - iCAD, Inc. (Nasdaq: ICAD), which designs,
develops and markets Computer Aided Detection (CAD) imaging technology and
systems for the early detection of breast cancer and other medical applications,
today reported its operating results for the first quarter of 2004.
On December 31, 2003, iCAD completed its merger with and acquisition of CADx
Systems, Inc. and its parent company Qualia Computing, Inc. (together, "CADx"),
bringing together two of the three companies approved by the US Food and Drug
Administration (FDA) to market CAD solutions for breast cancer applications in
the United States. iCAD's financial results for the first quarter of 2003, as
reported in this news release, do not include any contribution by CADx Systems,
Inc. or its parent company.
For the quarter ended March 31, 2004, iCAD, Inc. ("the Company") reported that
its sales increased 145% to approximately $5.4 million, when compared with sales
of approximately $2.2 million in the three months ended March 31, 2003. The
sales increase was primarily due to the Company's acquisition of CADx, which was
effective December 31, 2003.
Gross margin improved to 66% of sales in the first quarter of 2004, compared
with 59% of sales in the prior-year period, reflecting manufacturing economies
at increased sales levels and a higher margin contribution from the acquired
CADx product lines.
Operating expenses in the first quarter of 2004 totaled $5,331,234, compared
with $1,220,197 in the quarter ended March 31, 2003. Increased operating
expenses were attributable to (1) combined overhead and operating
infrastructures in the period immediately following the merger of iCAD and CADx,
and (2) nonrecurring operating expenses associated with cost reduction actions
following the merger. During the first quarter of 2004 (and as planned), the
Company reduced its workforce by approximately 36%; closed offices in Tampa,
Florida and San Rafael, California; and reduced or eliminated duplication in
marketing, administrative and other activities. The Company incurred
approximately $525,000 in non-recurring severance and office closure expenses in
the quarter ended March 31, 2004 in connection with these measures.
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Primarily as a result of the expenses relating to the duplication of overhead
resulting from the merger, which were reduced during the first quarter of 2004,
and certain non-recurring expenses associated with cost reduction actions, the
Company reported a net loss of ($1,899,401) or ($0.06) per share, for the three
months ended March 31, 2004, compared with net income of $76,558, or $0.00 per
share, in the first quarter of 2003.
"We are very pleased with our achievements during the first quarter of 2004,"
commented W. Scott Parr, President and Chief Executive Officer of iCAD, Inc.
"Following the acquisition of CADx, we have consolidated and positioned our
current products; organized, supported and greatly expanded our sales channels;
and substantially reduced overhead and our breakeven points. Our sales
accelerated towards the end of the first quarter, our margins are healthy, and
our products are well regarded in the medical imaging industry. Over the balance
of 2004, we anticipate additional achievements as we introduce and aggressively
market our new, lower-cost Second Look 200 solutions for the early detection of
breast cancer, along with ClickCAD fee-per-procedure programs that should make
Computer Aided Detection technology affordable and accessible to smaller volume
mammography clinics and all women at risk of breast cancer."
"During a period of consolidation and attention to profitability," continued
Parr, "we have also redirected our research and engineering resources to
accelerate the delivery of new products that apply our core CAD and clinical
decision support technologies to additional medical applications, including the
early detection of lung and colon cancer. We expect significant progress in
these and additional areas during the balance of 2004."
THE COMPANY WILL HOST A CONFERENCE CALL TODAY, MAY 3, 2004, AT 11:00 AM EDT.
SHAREHOLDERS AND OTHER INTERESTED PARTIES CAN PARTICIPATE IN THE CONFERENCE CALL
BY DIALING 800-915-4836 OR FOR INTERNATIONAL/LOCAL PARTICIPANTS BY DIALING
973-317-5319, A FEW MINUTES BEFORE 11:00 A.M. ON MAY 3, 2004. THE CALL WILL ALSO
BE BROADCAST LIVE ON THE INTERNET AT HTTP://WWW.FIRSTCALLEVENTS.COM/SERVICE/
AJWZ405462738GF12.HTML. A REPLAY OF THE CONFERENCE CALL WILL BE AVAILABLE TWO
HOURS AFTER THE COMPLETION OF THE CONFERENCE CALL FROM MAY 3, 2004 UNTIL MAY 10,
2004 BY DIALING 800-428-6051 FOR PARTICIPANTS IN THE US/CANADA OR FOR
INTERNATIONAL/LOCAL PARTICIPANTS, CALL 973-709-2089 AND ENTER THE CONFERENCE ID
352990. THE CALL WILL ALSO BE ARCHIVED FOR 90 DAYS AT
HTTP://WWW.FIRSTCALLEVENTS.COM/SERVICE/AJWZ405462738GF12.HTML.
ABOUT ICAD, INC.
iCAD develops, engineers, manufactures and markets computer aided detection
(CAD) products for the early detection of breast cancer and other health-care
related applications. Early detection of breast cancer can save lives and often
permits less costly, less invasive and less disfiguring cancer treatment options
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than when the cancer is detected at a later stage. Computer-aided detection from
iCAD can detect 25% of breast cancers, an average of 14 months earlier than
screening mammography alone.
iCAD is the only independent, integrated digitizer hardware and CAD software
company offering computer aided detection solutions. As such, iCAD is able to
reduce costs at each step in the CAD product design, production and assembly
process. The Company believes its vertical integration of CAD and hardware
development results in better integration of software and film digitizer
components, lower production costs and reduced administrative overhead. These
achievements have allowed iCAD to progressively enhance its CAD product line,
while reducing the costs of CAD to many customers and allowing more women to
realize the benefits inherent in the early detection of breast cancer.
On December 31, 2003, iCAD merged with and acquired CADx Systems, Inc. and its
parent company Qualia Computing, Inc., bringing together two of the three
companies approved by the US Food and Drug Administration (FDA) to market
computer aided (CAD) systems for the detection of breast cancer in the United
States. The Company is headquartered in Nashua, New Hampshire and its common
stock is listed on The Nasdaq Stock Market under the symbol "ICAD". More
information on iCAD's products can be found at 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 other 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 more information on iCAD, Inc.,
contact, Ed Coghlan at (818) 893-7453 or via
email at edcoghlan@icadmed.com
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ICAD, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS THREE MONTHS
March 31, 2004 March 31, 2003
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(unaudited) (unaudited)
Sales $ 5,426,881 $ 2,214,012
Cost of sales 1,829,246 909,585
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Gross margin 3,597,635 1,304,427
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Operating expenses:
Engineering and product development 1,712,041 584,253
General and administrative 1,379,506 396,232
Marketing and sales 2,239,687 239,712
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Total operating expenses 5,331,234 1,220,197
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Income (loss) from operations (1,733,599) 84,230
Interest expense - net 165,802 7,672
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Net income (loss) (1,899,401) 76,558
Preferred dividend 33,250 36,505
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Net income (loss) available to common stockholders $ (1,932,651) $ 40,053
============== ==============
Net income (loss) per share
Basic and diluted $ (0.06) $ 0.00
Weighted average number of shares used in
computing earnings per share
Basic and diluted 33,708,252 26,350,248
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ICAD, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
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Assets 2004 2003
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Current assets:
Cash and equivalents $ 3,940,120 $ 5,101,051
Trade accounts receivable, net of allowance for doubtful
accounts of $319,543 in 2004 and $105,000 in 2003 2,524,817 3,343,296
Inventory 1,180,922 2,123,642
Prepaid and other current assets 986,079 547,014
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Total current assets 8,631,938 11,115,003
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Property and equipment:
Equipment 1,914,199 1,825,147
Leasehold improvements 37,904 26,489
Furniture and fixtures 135,544 133,562
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2,087,647 1,985,198
Less accumulated depreciation and amortization 768,699 717,635
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Net property and equipment 1,318,948 1,267,563
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Other assets:
Patents, net of accumulated amortization 366,949 379,178
Technology intangibles, net of accumulated amortization 5,426,151 5,580,172
Tradename, Distribution agreements and other,
net of accumulated amortization 1,025,467 1,115,000
Goodwill 43,261,952 43,205,220
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Total other assets 50,080,519 50,279,570
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Total assets $ 60,031,405 $ 62,662,136
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Liabilities and Stockholders' Equity
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Current liabilities:
Accounts payable $ 2,351,248 $ 3,979,488
Accrued interest 476,581 333,652
Accrued expenses 2,207,081 1,988,476
Deferred revenue 319,986 216,500
Convertible subordinated debentures 10,000 10,000
Current maturities of notes payable 1,535,126 1,233,390
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Total current liabilities 6,900,022 7,761,506
Loans payable to related party 3,630,000 3,630,000
Notes payable, less current maturities 3,056,155 3,375,000
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Total liabilities 13,586,177 14,766,506
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Commitments and contingencies
Stockholders' equity:
Convertible preferred stock, $ .01 par value: authorized
1,000,000 shares; issued and outstanding
7,435 in 2004 and 7,435 in 2003, with the aggregate
liquidation value of $1,257,500 in 2004 and 2003, plus
7% annual dividend 74 74
Common stock, $ .01 par value: authorized
50,000,000 shares; issued 33,844,809 in 2004
and 33,704,809 shares in 2003; outstanding
33,776,933 in 2004 and 33,636,933 shares in 2003 338,448 337,048
Additional paid-in capital 120,842,989 120,395,390
Accumulated deficit (73,786,019) (71,886,618)
Treasury stock at cost (67,876 shares) (950,264) (950,264)
-------------- --------------
Total Stockholders' equity 46,445,228 47,895,630
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Total liabilities and stockholders' equity $ 60,031,405 $ 62,662,136
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