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Press Release
iCAD Reports Second Quarter 2005 Operating Results
NASHUA, New Hampshire - July 28, 2005 - iCAD(R), Inc. (Nasdaq: ICAD), an
industry-leading provider of Computer-Aided Detection (CAD) solutions for the
early identification of cancer, today announced financial results for its fiscal
2005 second quarter ended June 30, 2005.
The Company reported revenue for the 2005 second quarter of $4.2 million as
compared to $5.6 million for the same quarter of 2004. Total sales invoices for
the quarter were approximately $4.5 million, before application of sales rebates
of approximately $276,000. Gross margin for the second quarter was 76% compared
to 71% in the prior-year second quarter. Net loss for the second quarter was
($1,083,662), or ($0.03) per share, compared to net income of $46,458, or $0.00
per share, in the prior-year second quarter. Legal expenses of approximately
$535,000, associated principally with the Company's current patent arbitration
proceedings, significantly contributed to the current loss.
For the first six months ended June 30, 2005, revenue was $10.2 million as
compared to $11.1 million for the same period of the prior year. Gross margin
for the first six months improved to 78% compared to 68% in prior-year six
months. Net loss for the first six months of 2005 was ($441,733), or ($0.01) per
share, as compared to a net loss of ($1,852,943), or ($0.06) per share, in the
prior-year six months.
iCAD stated that unit sales and revenues for the Company's high-quality Second
Look(R) 200 and 300 film-based mammography CAD product lines increased from the
first quarter to the second quarter of 2005. Reduced revenue in the second
fiscal quarter was primarily due to a shift in customer demand from iCAD's
higher-priced Second Look 700 film-based mammography CAD product line to the
Company's more affordable Second Look 200 and 300 systems. In the first quarter
of 2005, sales of iCAD's Second Look 700 and since discontinued Second Look 400
and 500 models accounted for approximately $2.1 million in revenues. Sales for
such models amounted to approximately $440,000 during the second quarter of
2005.
"As the only independent, vertically integrated manufacturer and software
developer in our industry, iCAD stands to benefit by delivering
high-performance, upgradeable CAD systems that meet the market's demand for more
cost effective solutions," commented W. Scott Parr, President and CEO of iCAD,
Inc. "Being the lowest cost producer of high-quality CAD systems, we further
believe that we are advantageously positioned for price competition which has
become a factor as our market share has increased at the expense of our
principal competitor. An indirect consequence of price competition in the second
quarter was the decision by our resellers and distributors to reduce their
existing inventories. To complement iCAD's second quarter sales, we estimate
that resellers and distributors sold an additional $1 million worth of iCAD
systems from inventories that existed at the beginning of the quarter."
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Providing an update on previously described patent-related binding arbitration
with the Company's principal competitor, iCAD reported that an arbitration
hearing is scheduled for October 18-21, 2005, with a decision by the Arbitration
Panel scheduled for December 2, 2005. Initial stages of the arbitration process
are currently underway.
The Company also commented on regulatory plans for new products for lung nodule
and colonic polyp identification. "Our submission to Underwriter's Laboratory
and the FDA for approval of a CT product for the identification of lung nodules
has proceeded through initial stages as a `software only' submission and now
appears to require only validation on the specific viewing workstations that
will be offered by our OEM partners. We have completed that validation and are
currently in the process of submitting results," stated Parr. "Additionally, our
development work on a CT product for the identification of colonic polyps has
accelerated. We expect to submit our Premarket Notification 510(k) Application
with the FDA seeking clearance for sale of our product for use in colonic polyp
identification no later than the fourth quarter of this year."
iCAD's management will host a conference call today at 11am ET. Shareholders and
other interested parties may participate by dialing +1 888 873 4896 (domestic)
or +1 617 213 8850 (international) and entering passcode 92520166, a few minutes
before the start of the conference call. The call will also be broadcast live on
the Internet at www.streetevents.com, www.fulldisclosure.com or www.icadmed.com.
A replay of the conference call will be accessible two hours after its
completion through August 4, 2005 by dialing +1 888 286 8010 (domestic) or +1
617 801 6888 (international) and entering passcode 27641810. 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, 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 one thousand women's healthcare centers worldwide. For more
information, call +1 877 iCADnow or visit www.icadmed.com.
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"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 is a registered trademarks of iCAD, Inc.
For iCAD investor relations, contact Kevin
McGrath of Cameron Associates at +1 212
245 4577 or via email at
kevin@cameronassoc.com.
For all other iCAD inquires, contact Monica
Pandolfi of SHIFT Communications at +1 617
681 1235 or via email at
mpandolfi@shiftcomm.com.
###
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iCAD, INC.
Consolidated Statements of Operations
(unaudited)
Three Months Six Months
June 30, June 30,
---------------------------- ----------------------------
2005 2004 2005 2004
Sales $ 4,231,104 $ 5,636,586 $ 10,238,711 $ 11,063,467
Cost of Sales 1,015,364 1,661,447 2,288,937 3,490,693
------------ ------------ ------------ ------------
Gross Margin 3,215,740 3,975,139 7,949,774 7,572,774
------------ ------------ ------------ ------------
Operating expenses:
Engineering and product development 985,408 1,084,356 2,001,456 2,796,397
General and administrative 1,453,152 1,164,662 2,675,360 2,544,168
Marketing and sales 1,846,474 1,532,852 3,597,440 3,772,539
------------ ------------ ------------ ------------
Total operating expenses 4,285,034 3,781,870 8,274,256 9,113,104
------------ ------------ ------------ ------------
Income (loss) from operations (1,069,294) 193,269 (324,482) (1,540,330)
Interest expense - net 14,368 146,811 47,251 312,613
------------ ------------ ------------ ------------
Net income (loss) before provision for income taxes (1,083,662) 46,458 (371,733) (1,852,943)
Provision for income taxes -- -- 70,000 --
------------ ------------ ------------ ------------
Net income (loss) $ (1,083,662) $ 46,458 $ (441,733) $ (1,852,943)
Preferred dividend 30,771 36,911 61,203 70,161
------------ ------------ ------------ ------------
Net income (loss) available to common shareholder$ (1,114,433) $ 9,547 $ (502,936) $ (1,923,104)
============ ============ ============ ============
Net income (loss) per share
Basic $ (0.03) $ 0.00 $ (0.01) $ (0.06)
Diluted $ (0.03) $ 0.00 $ (0.01) $ (0.06)
Weighted average number of shares used
in computing income (loss) per share
Basic 36,616,764 33,872,955 36,501,117 33,790,603
Diluted 36,616,764 35,424,384 36,501,117 33,790,603
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iCAD, INC.
Consolidated Balance Sheets
June 30, December 31,
------------- -------------
2005 2004
---- ----
Assets (unaudited)
Current assets:
Cash and cash equivalents $ 7,937,841 $ 8,008,163
Trade accounts receivable, net of allowance for doubtful
accounts of $510,000 in 2005 and $450,000 in 2004 3,658,236 5,006,333
Inventory 1,765,166 1,013,806
Prepaid and other current assets 361,661 261,286
------------- -------------
Total current assets 13,722,904 14,289,588
------------- -------------
Property and equipment:
Equipment 2,461,884 2,078,306
Leasehold improvements 89,203 37,904
Furniture and fixtures 147,972 135,544
------------- -------------
2,699,059 2,251,754
Less accumulated depreciation and amortization 1,199,090 944,121
------------- -------------
Net property and equipment 1,499,969 1,307,633
------------- -------------
Other assets:
Patents, net of accumulated amortization 263,582 302,644
Technology intangibles, net of accumulated amortization 4,656,049 4,964,090
Tradename, distribution agreements and other,
net of accumulated amortization 577,800 756,867
Goodwill 43,515,285 43,515,285
------------- -------------
Total other assets 49,012,716 49,538,886
------------- -------------
Total assets $ 64,235,589 $ 65,136,107
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,323,480 $ 2,006,500
Accrued interest 53,538 671,154
Accrued salaries and other expenses 1,623,092 1,373,191
Deferred revenue 419,062 439,717
Current maturities of note payable 1,500,000 1,500,000
------------- -------------
Total current liabilities 5,919,172 5,990,562
Loans payable to related party 300,000 300,000
Note payable, less current maturities 1,125,000 1,875,000
------------- -------------
Total liabilities 7,344,172 8,165,562
------------- -------------
Commitments and contingencies
Stockholders' equity:
Convertible preferred stock, $ .01 par value: authorized
1,000,000 shares; issued and outstanding
6,374 in 2005 and 7,435 in 2004, with an aggregate liquidation value of
$1,127,000 in 2005 and $1,257,500 in 2004, plus 7%
annual dividend 64 74
Common stock, $ .01 par value: authorized
50,000,000 shares; issued 36,610,929 in 2005
and 36,410,170 shares in 2004; outstanding
36,543,053 in 2005 and 36,342,294 shares in 2004 367,846 364,101
Additional paid-in capital 130,630,385 130,271,515
Accumulated deficit (73,156,614) (72,714,881)
Treasury stock at cost (67,876 common shares) (950,264) (950,264)
------------- -------------
Total stockholders' equity 56,891,417 56,970,545
------------- -------------
Total liabilities and stockholders' equity $ 64,235,589 $ 65,136,107
============= =============
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