NEWS RELEASE
ICAD REPORTS RECORD SALES, GROSS MARGINS AND
EARNINGS IN FOURTH QUARTER 2004
NASHUA, New Hampshire (March 2, 2005) - 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 fourth quarter and
year ended December 31, 2004.
Fourth Quarter 2004 Results
Sales for the quarter ended December 31, 2004 approximated $6.3 million,
compared with $1.6 million in the fourth quarter of 2003. Gross margin improved
to 77% of sales in the most recent quarter, compared with 55% in the prior-year
fourth quarter.
Net income for the fourth quarter of 2004 totaled $658,631 or $0.02 per share,
compared with a net loss of ($1,594,455) or ($0.06) per share, in the prior-year
quarter.
Year Ended December 31, 2004 Results
Sales for the year ended December 31, 2004 approximated $23.3 million, compared
with $6.5 million for the year ended December 31, 2003. Gross margin improved to
72% of sales for the year ended 2004, versus 55% in the prior-year period.
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 year
ended December 31, 2004 totaled ($828,263), or ($0.03) per share, compared with
a net loss of ($8,198,408), or ($0.31) per share, for the year ended December
31, 2003.
Balance sheet improvements were also noted as of December 31, 2004, as
contrasted with the previous year. Cash and cash equivalents increased to $8
million, from $5.1 million a year earlier. Total assets increased by almost $2.5
million. Total liabilities decreased from $14.8 million to $8.2 million, with
significant reductions in accounts payable and in notes payable. These
improvements are due, in large part, to the private placement to institutional
investors completed by the Company in December 2004.
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"The introduction of our new Second Look 200(TM) solution for the early
detection of breast cancer was the most successful product roll-out in our
history," commented W. Scott Parr, President and Chief Executive Officer of
iCAD, Inc.
Jerrod Davis, Radiology Administrator at Twin Lakes Regional Hospital in Twin
Lakes, KY, explained why the Second Look 200 is so successful at his facility,
"The Second Look 200 has taken mammography to a whole new level for us.
Mammography used to be a service that we provided because we had to. It made the
doctors feel uncomfortable because of the litigious nature of the modality and
it was a revenue loss for our hospital. The Second Look 200 gives the doctors
assurance, and increases our revenues so that it is no longer a loss. And that
means that we are now providing a better, more confident service to the
community. The Second Look 200 runs perfectly. It is always there and running
for us."
Parr also emphasized that the Company's ClickCAD fee-per procedure program aims
to make the Second Look 200 solution for early detection of breast cancer even
more affordable and accessible to more women at risk. Timothy Stephens,
Radiology Administrator at Calumet Medical Center in Chilton, WI, agreed:
"ClickCAD gave us the ability to offer increased services to our community. We
did not have the capital budget to afford CAD and at our low patient volumes, we
would have never been able to cost justify CAD. With ClickCAD, CAD is a standard
of care that is a part of every mammogram that we perform. CAD is good for
everyone involved. It is good for the patient, requires no additional work for
the staff, gives the doctors peace of mind and increases our revenue. The Second
Look 200 has run flawlessly since we installed it."
"In 2004," continued Parr, "we completed the transformation of iCAD from a
manufacturer of printing and photo scanning equipment with limited
opportunities, to a growing world leader in the much larger market for early
detection of cancer solutions. Record financial performance in the fourth
quarter of 2004, demonstrating year-to-year and quarter-to-quarter improvement
in sales, gross margin and profitability, illustrates the fundamental nature of
our transformation."
CONFERENCE CALL
AS PREVIOUSLY ANNOUNCED, ICAD WILL HOST A CONFERENCE CALL TODAY, MARCH 2, 2005,
AT 11:00 AM EST. SHAREHOLDERS AND OTHER INTERESTED PARTIES CAN PARTICIPATE IN
THE CONFERENCE CALL BY DIALING 800-599-9795 OR FOR INTERNATIONAL/LOCAL
PARTICIPANTS BY DIALING 617-786-2905 AND ENTER PARTICIPANT PASSCODE 59829565, A
FEW MINUTES BEFORE 11:00 A.M. ON MARCH 2, 2005. 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 MARCH 2, 2005 UNTIL MARCH 9,
2005 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 51137744. THE CALL WILL ALSO BE ARCHIVED FOR 90 DAYS AT
WWW.STREETEVENTS.COM, WWW.FULLDISCLOSURE.COM, AND WWW.ICADMED.COM.
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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. iCAD is
the recipient of the 2004 Frost & Sullivan Award for Growth Strategy Leadership,
in recognition of iCAD's exceptional execution of strategies, which has led to
the company's growth in the CAD systems market.
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 month period and year ended December 31, 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.
"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.
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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
THREE MONTHS ENDED FOR THE YEARS ENDED
DECEMBER 31, DECEMBER 31,
--------------------------- ----------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
Sales $ 6,267,947 $ 1,581,677 $ 23,308,462 $ 6,520,306
Cost of sales 1,424,815 707,888 6,533,296 2,941,663
------------ ------------ ------------ ------------
Gross margin 4,843,132 873,789 16,775,166 3,578,643
------------ ------------ ------------ ------------
Operating expenses:
Engineering and product development 963,809 570,497 4,832,842 2,384,057
General and administrative 1,329,865 1,069,307 5,126,110 7,439,721
Marketing and sales 1,780,899 761,429 7,083,433 1,838,618
------------ ------------ ------------ ------------
Total operating expenses 4,074,573 2,401,233 17,042,385 11,662,396
------------ ------------ ------------ ------------
Income (loss) from operations 768,559 (1,527,444) (267,219) (8,083,753)
Interest expense - net 109,928 67,011 561,044 114,655
------------ ------------ ------------ ------------
Net income (loss) $ 658,631 $ (1,594,455) $ (828,263) $ (8,198,408)
Preferred dividend 32,142 33,525 133,000 144,258
------------ ------------ ------------ ------------
Net income (loss) available to common
shareholders $ 626,489 $ (1,627,980) $ (961,263) $ (8,342,666)
============ ============ ============ ============
Net income (loss) per share
Basic $ 0.02 $ (0.06) $ (0.03) $ (0.31)
Diluted $ 0.02 $ (0.06) $ (0.03) $ (0.31)
Weighted average number of shares used
in computing income (loss) per share
Basic 34,587,495 28,179,097 34,057,775 26,958,324
Diluted 37,205,075 28,179,097 34,057,775 26,958,324
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ICAD, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, DECEMBER 31,
------------- -------------
2004 2003
------------- -------------
Assets
Current assets:
Cash and equivalents $ 8,008,163 $ 5,101,051
Trade accounts receivable, net of allowance for doubtful
accounts of $450,000 in 2004 and $105,000 in 2003 5,006,333 3,343,296
Inventory 1,013,806 2,123,642
Prepaid and other current assets 261,286 547,014
------------- -------------
Total current assets 14,289,588 11,115,003
------------- -------------
Property and equipment:
Equipment 2,078,306 1,825,147
Leasehold improvements 37,904 26,489
Furniture and fixtures 135,544 133,562
------------- -------------
2,251,754 1,985,198
Less accumulated depreciation and amortization 944,121 717,635
------------- -------------
Net property and equipment 1,307,633 1,267,563
------------- -------------
Other assets:
Patents, net of accumulated amortization 302,644 379,178
Technology intangibles, net of accumulated amortization 4,964,090 5,580,172
Tradename, Distribution agreements and other,
net of accumulated amortization 756,867 1,115,000
Goodwill 43,515,285 43,205,220
------------- -------------
Total other assets 49,538,886 50,279,570
------------- -------------
Total assets $ 65,136,107 $ 62,662,136
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,006,500 $ 3,979,488
Accrued interest 671,154 333,652
Accrued expenses 1,373,191 1,988,476
Deferred revenue 439,717 216,500
Convertible subordinated debentures -- 10,000
Current maturities of notes payable 1,500,000 1,233,390
------------- -------------
Total current liabilities 5,990,562 7,761,506
Loans payable to related party 300,000 3,630,000
Notes payable, less current maturities 1,875,000 3,375,000
------------- -------------
Total liabilities 8,165,562 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 36,410,170 in 2004
and 33,704,809 shares in 2003; outstanding
36,342,294 in 2004 and 33,636,933 shares in 2003 364,101 337,048
Additional paid-in capital 130,271,515 120,395,390
Accumulated deficit (72,714,881) (71,886,618)
Treasury stock at cost (67,876 shares) (950,264) (950,264)
------------- -------------
Total Stockholders' equity 56,970,545 47,895,630
------------- -------------
Total liabilities and stockholders' equity $ 65,136,107 $ 62,662,136
============= =============
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