News Release
For Immediate Release
iCAD REPORTS RECORD SALES, GROSS MARGINS AND EARNINGS IN third Quarter 2004
SECOND LOOK 200 REPRESENTS MOST SUCCESSFUL NEW PRODUCT
ROLL-OUT IN COMPANY'S HISTORY
NASHUA, New Hampshire (October 28, 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 financial results for the third quarter and
nine months ended September 30, 2004.
Third Quarter 2004 Results
Sales for the quarter ended September 30, 2004 approximated $6.0 million,
compared with $1.4 million in the third quarter of 2003. Gross margin improved
to 73% of sales in the most recent quarter, compared with 47% in the prior-year
third quarter.
Net income for the third quarter of 2004 totaled $366,049, or $0.01 per share,
compared with a net loss of ($5,395,367), or ($0.20) per share, in the
prior-year quarter.
"Financial performance in the third quarter of 2004 demonstrated year-to-year
and quarter-to-quarter improvement in sales, gross margin and profitability,"
commented W. Scott Parr, President and Chief Executive Officer of iCAD, Inc.
"The introduction of our new Second Look 200 solution for the early detection of
breast cancer was the most successful product roll-out in our history. The
Second Look 200 offers a new level of value for mammography practices with lower
daily case volumes."
Year-to-Date 2004 Results
Sales for the first nine months ended September 30, 2004 approximated $17
million, compared with $4.9 million in the corresponding period of the previous
year. Gross margin improved to 70% of sales during the first three quarters of
2003, versus 55% in the prior-year period.
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In the first quarter of 2004, the Company reported losses associated with the
December 31, 2003 acquisition and subsequent integration of Qualia Computing,
Inc. and its subsidiary CADx Systems, Inc. As a result, net loss for the first
nine months of 2004 totaled ($1,486,894), or ($0.05) per share, compared with a
net loss of ($6,603,953), or ($0.25) per share, in the corresponding period in
2003.
Conference Call
As previously announced, iCAD will host a conference call today, October 28,
2004, at 11:00 am EDT. Shareholders and other interested parties can participate
in the conference call by dialing 800-901-5218 or for international/local
participants by dialing 617-786-4511 and enter participant passcode 74783302, a
few minutes before 11:00 a.m. on October 28, 2004. 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 the completion of the conference call from October 28, 2004 until November
4, 2004 by dialing 888-286-8010 for participants in the US/Canada or for
international/local participants, call 617-801-6888 and enter the participant
passcode 10653147. The call will also be archived for 90 days at
www.streetevents.com, www.fulldisclosure.com, and www.icadmed.com.
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
than when the cancer is detected at a later stage.
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 completed its merger with and acquisition of 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 to
market CAD solutions for breast cancer applications in the United States. iCAD's
financial results for the three and nine month periods ended September 30, 2003,
as reported in this news release, do not include any contribution by CADx
Systems, Inc. or its parent company. 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.
2
"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 Kevin McGrath of Cameron
Associates at 212.245.4577 or via email at
Kevin@cameronassoc.com]
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ICAD, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
THREE MONTHS NINE MONTHS
SEPTEMBER 30, SEPTEMBER 30,
--------------------------- ----------------------------
2004 2003 2004 2003
Sales $ 5,977,048 $ 1,387,100 $ 17,040,515 $ 4,938,629
Cost of sales 1,617,788 731,607 5,108,481 2,233,775
------------ ------------ ------------ ------------
Gross margin 4,359,260 655,493 11,932,034 2,704,854
------------ ------------ ------------ ------------
Operating expenses:
Engineering and product development 1,072,636 619,762 3,869,033 1,813,560
General and administrative 1,252,077 4,870,119 3,796,245 6,370,414
Marketing and sales 1,529,995 530,485 5,302,534 1,077,189
------------ ------------ ------------ ------------
Total operating expenses 3,854,708 6,020,366 12,967,812 9,261,163
------------ ------------ ------------ ------------
Income (loss) from operations 504,552 (5,364,873) (1,035,778) (6,556,309)
Interest expense - net 138,503 30,494 451,116 47,644
------------ ------------ ------------ ------------
Net income (loss) $ 366,049 $ (5,395,367) $ (1,486,894) $ (6,603,953)
Preferred dividend 30,697 37,316 100,858 110,733
------------ ------------ ------------ ------------
Net income (loss) available to common shareholder $ 335,352 $ (5,432,683) $ (1,587,752) $ (6,714,686)
============ ============ ============ ============
Net income (loss) per share
Basic $ 0.01 $ (0.20) $ (0.05) $ (0.25)
Diluted $ 0.01 $ (0.20) $ (0.05) $ (0.25)
Weighted average number of shares used
in computing income (loss) per share
Basic 34,056,589 26,858,963 33,879,913 26,531,177
Diluted 37,992,937 26,858,963 33,879,913 26,531,177
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ICAD, INC.
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
------------- -------------
2004 2003
------------- -------------
Assets (unaudited)
Current assets:
Cash and equivalents $ 2,435,385 $ 5,101,051
Trade accounts receivable, net of allowance for doubtful
accounts of $434,000 in 2004 and $105,000 in 2003 4,680,989 3,343,296
Inventory 1,001,493 2,123,642
Prepaid and other current assets 481,262 547,014
------------- -------------
Total current assets 8,599,129 11,115,003
------------- -------------
Property and equipment:
Equipment 1,959,265 1,825,147
Leasehold improvements 37,904 26,489
Furniture and fixtures 135,544 133,562
------------- -------------
2,132,713 1,985,198
Less accumulated depreciation and amortization 904,972 717,635
------------- -------------
Net property and equipment 1,227,741 1,267,563
------------- -------------
Other assets:
Patents, net of accumulated amortization
343,843 379,178
Technology intangibles, net of accumulated amortization
5,118,110 5,580,172
Tradename, Distribution agreements and other,
net of accumulated amortization
846,400 1,115,000
Goodwill 43,205,220 43,372,549
------------- -------------
Total other assets 49,680,902 50,279,570
------------- -------------
Total assets $ 59,507,772 $ 62,662,136
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,182,933 $ 3,979,488
Accrued interest 608,668 333,652
Accrued expenses 1,553,590 1,988,476
Deferred revenue 404,204 216,500
Convertible subordinated debentures 10,000 10,000
Current maturities of notes payable 1,500,000 1,233,390
------------- -------------
Total current liabilities 6,259,395 7,761,506
Loans payable to related party
3,630,000 3,630,000
Notes payable, less current maturities 2,250,000 3,375,000
------------- -------------
Total liabilities 12,139,395 14,766,506
------------- -------------
Commitments and contingencies
Stockholders' equity:
Convertible preferred stock, $ .01 par value: authorized
1,000,000 shares; issued and outstanding
7,435 in 2004 and 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 34,253,727 in 2004
and 33,704,809 shares in 2003; outstanding
34,185,851 in 2004 and 33,636,933 shares in 2003 342,537 337,048
Additional paid-in capital 121,349,542 120,395,390
Accumulated deficit (73,373,512) (71,886,618)
Treasury stock at cost (67,876 shares) (950,264) (950,264)
------------- -------------
Total Stockholders' equity 47,368,377 47,895,630
------------- -------------
Total liabilities and stockholders' equity $ 59,507,772 $ 62,662,136
============= =============
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