EXHIBIT 99.1
News Release
For Immediate Release
ICAD REPORTS 2003 FIRST QUARTER RESULTS
Company DISMISSED FROM MIT LAWSUIT
NASHUA, New Hampshire (May 13, 2003) - iCAD, Inc. (Nasdaq: ICAD), which designs,
develops and markets Computer Aided Detection (CAD) imaging technology and
systems for the early detection of breast cancer, today reported its operating
results for the first quarter of 2003.
Sales of the Company's CAD and medical imaging products for the three months
ended March 31, 2003, totaled $2,214,012, compared with sales of medical imaging
products and total sales of $425,899 and $775,633, respectively, in the quarter
ended March 31, 2002. This reflects an increase of 420% in medical sales and
185% in total sales from period to period. Sales of graphic arts and
photographic products were $349,734 for the quarter ended March 31, 2002. There
were no sales of the Company's graphic arts and photographic products during the
first quarter of 2003 due to the exiting from these product lines in fiscal
2002.
Gross margin improved to 59% of sales in the first quarter of 2003, compared
with 23% of sales in the prior-year period. The increase in gross margin
reflects sales of the Company's CAD product line, which carries a higher gross
margin than the sales of products in the Company's previous product lines.
As a result of the foregoing, the Company recorded net income of $76,558 for the
three months ended March 31, 2003, compared with a net loss of ($521,122) in the
first quarter of 2002.
The Company also announced that iCAD has been dismissed from a complaint filed
against the Company in the United States District Court for the Eastern District
of Texas, entitled The Massachusetts Institute of Technology and Electronics for
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Imaging, Inc. v. Abacus Software Inc. et al., Case No. 501CV344. The plaintiff
initially claimed that the Company had infringed a United States patent alleged
to cover color reproduction system technology through the sale of certain
Company products to customers in the graphic arts/prepress and photographic
markets. The Company has no liability in this matter, and anticipates no further
legal expenses with respect to this litigation.
The Company expects its financial performance during the second quarter of 2003
to be impacted by continuing legal expenses associated with the ongoing R2
Technology case.
W. Scott Parr, iCAD's President & CEO, advised that the Company is preparing for
the proposed acquisition of Instrumentarium Imaging Inc., the Company's
exclusive U.S. distributor for its CAD products, by General Electric Medical
Systems. "We have been advised by our distributor that, as a short-term result
of the proposed GE/Instrumentarium merger, Instrumentarium orders from iCAD may
be reduced during the quarter ending June 30, 2003," noted Parr. "In support of
our distributor's sales activities during the second quarter and thereafter,
iCAD has been developing a more comprehensive internal sales support structure,
including inside and outside sales support staff. This investment will also
prepare us for the launch of additional iCAD products as the year progresses and
help protect us from any unanticipated distribution problems that might possibly
result from the proposed GE/ Instrumentarium merger. Our distributor is
cooperating fully with iCAD in the establishment of these expanded iCAD in-house
capabilities."
"As of result of these factors, which we consider temporary, we do not expect to
achieve profitable operations in the second quarter of 2003. Meanwhile, we
believe that iCAD's investment in the enhancement of its internal sales and
support capabilities will provide benefits to iCAD for many years into the
future," concluded Parr.
iCAD will host an investor conference call at 11:00 a.m. EST today to review
first quarter 2003 operating results. The dial-in number for the conference call
is 800-915-4836 or for local/international callers 973-317-5319. Parties
interested in participating in the conference call should dial in approximately
five minutes prior to 11:00 AM EST. The call will also be broadcast live on the
Internet at http://www.firstcallevents.com/service/ajwz369688532gf12.html.
A replay of the call will be available through May 20, 2003, by dialing
800-428-6051 (international callers dial 973-709-2089). The replay Access Code
is 292768. The call will also be archived for 90 days at
http://www.firstcallevents.com/service/ajwz369688532gf12.html.
About iCAD, Inc.
Computer aided detection from iCAD, Inc. can detect 23% of breast cancers an
average of 14 months earlier than traditional mammography screening. Computer
aided detection
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provides the radiologist with a "second set of eyes" that enhance the
probability of identifying suspicious areas that may have been missed by a
standard mammogram. CAD became eligible for reimbursement in 2002, providing a
financial impetus for women's health centers to adopt the technology.
iCAD offers the fastest CAD system available, the only CAD system to look for
asymmetries, and the most sensitive system available to detect breast masses and
cancers overall. The iCAD system is the only CAD system designed on a relational
database platform, which can improve productivity and reduce operating and
capital costs at women's health centers by offering computer assisted detection
as an integrated or integration-ready part of current or anticipated informatics
systems, digital imaging resources, and workflows. In January 2002, the Company
received approval from the U.S. Food and Drug Administration (FDA) to market its
computer aided detection systems in the United States.
iCAD, the only vertically integrated company in its market, also manufactures
medical film digitizers for a variety of medical imaging and other applications.
The Company is headquartered in Nashua, New Hampshire and its common stock is
listed on The Nasdaq Stock Market under the symbol "ICAD".
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 that may cause actual results to differ
materially from such forward-looking statements. Such risks include, but are not
limited to, uncertainties associated with litigation and/or government
regulation, changes in Medicare reimbursement policies, competitive factors, and
other risks that are detailed in the Company's periodic 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 to avoid placing
undue reliance on such forward-looking statements, which speak only as of the
date the statements were made.
For further information, please contact:
RJ Falkner & Company, Inc., Investor Relations Counsel
(800) 377-9893 or via email at info@rjfalkner.com
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ICAD, INC.
Statements of Operations
Three Months Three Months
March 31, 2003 March 31, 2002
-------------- --------------
(unaudited) (unaudited)
Sales $ 2,214,012 $ 775,633
Cost of sales 909,585 595,412
----------- -----------
Gross margin 1,304,427 180,221
----------- -----------
Operating expenses:
Engineering and product development 584,253 189,756
General and administrative 396,232 225,355
Marketing and sales 239,712 267,080
----------- -----------
Total operating expenses 1,220,197 682,191
----------- -----------
Income (loss) from operations 84,230 (501,970)
Interest expense - net 7,672 19,152
----------- -----------
Net income (loss) 76,558 (521,122)
Preferred dividend 36,505 36,505
----------- -----------
Net income (loss) available to common stockholders $ 40,053 $ (557,627)
=========== ===========
Net income (loss) per share
Basic and diluted $ 0.00 $ (0.04)
Weighted average number of shares used in
computing earnings per share
Basic and diluted 26,350,248 15,251,426
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ICAD, INC.
Balance Sheets
March 31, 2003 December 31, 2002
-------------- -----------------
(unaudited) (audited)
Assets
Current assets:
Cash and equivalents $ 712,069 $ 1,091,029
Trade accounts receivable, net of allowance for doubtful
accounts of $62,000 in 2003 and $40,000 in 2002 1,622,239 1,550,167
Inventory 287,726 390,349
Prepaid and other 90,112 85,120
------------- -------------
Total current assets 2,712,146 3,116,665
------------- -------------
Property and equipment:
Equipment 885,931 840,410
Leasehold improvements 19,175 8,051
Furniture and fixtures 35,569 22,271
------------- -------------
Less accumulated depreciation and amortization 940,675 870,732
Net property and equipment 606,898 579,545
------------- -------------
333,777 291,187
------------- -------------
Other assets:
Technology intangible 3,676,036 3,740,553
Distribution agreement 1,487,128 1,513,228
Goodwill 17,415,723 17,415,723
------------- -------------
Total other assets 22,578,887 22,669,504
------------- -------------
Total assets $ 25,624,810 $ 26,077,356
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,137,795 $ 2,232,262
Accrued interest 231,220 229,078
Accrued expenses 1,392,506 1,776,824
Convertible subordinated debentures 10,000 10,000
Current maurities of notes payable 66,680 65,526
------------- -------------
Total current liabilities 3,838,201 4,313,690
Loans payable to related party 200,000 200,000
Notes payable, less current maturities 91,281 108,390
------------- -------------
Total liabilities 4,129,482 4,622,080
------------- -------------
Stockholders' equity:
Convertible preferred stock, $.01 par value: authorized
1,000,000 shares; issued and outstanding
8,550 in 2003 and 2002, with the aggregated
liquidation value of $2,115,000 in 2002 and 2003,
plus 7% annual dividend 86 86
Common stock, $ .01 par value: authorized
50,000,000 shares; issued 26,418,124 in 2003
and 2002; outstanding 26,350,248 shares in
2003 and 2002 264,181 264,181
Additional paid-in capital 85,792,977 85,829,483
Accumulated deficit (63,611,652) (63,688,210)
Treasury stock, at cost (67,876 shares) (950,264) (950,264)
------------- -------------
Total stockholders' equity 21,495,328 21,455,276
------------- -------------
Total liabilities and stockholders' equity $ 25,624,810 $ 26,077,356
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