TORONTO, Ontario, April 28, 2015 (GLOBE NEWSWIRE) -- Novadaq Technologies Inc. ("NOVADAQ" or the "Company") (Nasdaq:NVDQ) (TSX:NDQ), the leading developer and provider of clinically relevant fluorescence imaging solutions for use in surgical and diagnostic procedures, today announced financial results for its first quarter ended March 31, 2015. Unless otherwise indicated, all dollar amounts in this press release are expressed in United States ("U.S.") dollars.
For the three months ended March 31, 2015, NOVADAQ reported revenues of $11.7 million, an increase of 14% from $10.3 million in the first quarter of 2014. Product sales increased by $1.7 million, or 18%, primarily due to a 45% increase in recurring revenue, partially offset by a 1% decrease in capital sales. Revenue recognized on SPY Elite kit sales increased by 34% as a result of the Company recognizing 100% of SPY Elite sales, offset by an approximate 16% decrease in the number of SPY Elite kits sold.
"While we more than doubled the size of our sales team over the course of the past six months, we didn't have adequate sales coverage early enough in Q1 to maintain overall SPY Elite kit sales volumes," said Arun Menawat, NOVADAQ's President and Chief Executive Officer. "That said, starting from a relatively weak January, SPY Elite kit sales volumes trended up throughout the rest of the first quarter and that positive momentum has thus far continued into Q2."
First quarter gross profits of $7.5 million (64% margin) compared to gross profits of $6.7 million (65%) in the same period last year.
Net loss for the 2015 first quarter was $11.3 million, or $0.20 loss per share, compared with a net loss of $16.1 million, or $0.29 loss per share, in Q1-2014. The decrease in net loss was a result of non-cash warrant revaluation income of $23,000 in Q1-2015, compared to non-cash revaluation expense of $11.9 million in Q1-2014 and an increase in gross profit of $0.8 million. Offsetting these amounts was an increase in operating expenses of $7.9 million.
First quarter 2015 operating burn (cash consumed by operating activities before changes in working capital) was $8.3 million compared to $2.2 million in the first quarter of 2014. This difference in operating burn was mainly driven by increased selling and distribution expenses associated with the continued build-out of NOVADAQ's direct sales and marketing infrastructure. During Q1-2015, working capital consumed was $0.6 million, and $0.9 million was used to build SPY technology systems for evaluation and placement.
Cash and cash equivalents were $133.0 million at March 31, 2015, reflecting a decrease of $8.4 million compared to the cash position as at December 31, 2014.
During the 2015 first quarter, 129 SPY technology systems, including FIREFLY, were shipped globally. Exiting the quarter, the worldwide installed base of SPY technology systems was approximately 1,854.
The Company estimates that the number of procedures performed using SPY technology systems during the first quarter was approximately 8,800, representing an increase of 33% over year-over-year and a decrease of 11% sequentially over the previous quarter.
"To support our transition from a company that has been known best for its partnership based business model to one that is driven primarily by its own direct sales efforts, we invested heavily in our sales force in Q1, with selling and distribution expenses increasing from $7.5 million in Q4-2014 to $12.5 million in Q1-2015," continued Dr. Menawat. "The returns from this sales force investment will begin to be realized starting in the second half of the year."
Current 2015 Outlook
As previously disclosed, based on the Company's business planning and budgeting activities, NOVADAQ anticipates its full year revenue for the fiscal year ending December 31, 2015 to be approximately $65 million, representing total year-over-year revenue growth of approximately 40%.
Conference Call Details
NOVADAQ is pleased to invite all interested parties to participate in a conference call today, April 28, 2015 at 4:30 p.m. Eastern Time, during which the results will be discussed.
Those wishing to access the live conference call by telephone should dial 1-877-407-8031 (Canada and the United States) or 1-201-689-8031 (International) several minutes prior to the beginning of the call.
A replay of the conference call can be accessed by dialing 1-877-660-6853 (Canada and the United States) or 1-201-612-7415 (International) and entering the conference identification number 13607157 when prompted.
The call will also be archived for 90 days on the Company's website at novadaq.com under the "Events" tab in the Investor's section. A replay of the call will be available for download to a portable audio player or computer, as an MP3 or podcast file, at the same location on NOVADAQ's website.
About Novadaq Technologies Inc.
Enabling medical professionals with clinically relevant, point-of-care imaging solutions to enhance the lives of patients and their caregivers, while reducing health care costs, is NOVADAQ's global mission. SPY fluorescence imaging technology provides surgeons with real-time visualization, leading to improved outcomes and reduced costs without exposing the patient to radiation. More than 130 peer-reviewed publications demonstrate that the use of SPY imaging technologies during complex surgery and diagnostic procedures, leads to lower rates of post-operative complications and lower hospital costs.
SPY Imaging Systems are United States Food and Drug Administration 510(k) cleared for use in seven surgical specialties. The endoscopic version of SPY called PINPOINT, combines the capabilities of SPY Imaging with high definition ("HD") visible light visualization offered by conventional endoscopes. LUNA is used to assess perfusion in patients being treated for non-healing wounds. In December 2014, NOVADAQ and LifeNet Health jointly announced the signing of a multi-year agreement appointing NOVADAQ the exclusive worldwide distributor of LifeNet Health's DermACELL acellular tissue products for wound and breast reconstruction surgery.
Forward-Looking Statements
Certain statements included in this press release may be considered forward-looking. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. All forward-looking statements are based on NOVADAQ's current beliefs as well as assumptions made by and information currently available to NOVADAQ and relate to, among other things, the Company's strategy, strategic goals, research and development activities, research and clinical testing outcomes, taxes, capital expenditures, future operations, future financial position, future revenues/results, projected costs, prospects and plans and objectives of management.
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Due to risks and uncertainties, including the risks and uncertainties identified by NOVADAQ in its public securities filings available at www.sec.gov and www.sedar.com, actual events may differ materially from current expectations. NOVADAQ disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
NOVADAQ, SPY, PINPOINT and LUNA are registered trademarks of Novadaq Technologies Inc. DermACELL is a registered trademark of LifeNet Health.
| Novadaq Technologies Inc. | ||
| INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | ||
| (Unaudited) | ||
| (expressed in U.S. dollars, except common shares outstanding) | ||
|
|
As at March 31, 2015 |
As at December 31, 2014 |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | $133,014,195 | $141,447,544 |
| Accounts receivable | 14,937,658 | 13,503,303 |
| Prepaid expenses and other assets | 2,191,903 | 1,205,250 |
| Income taxes recoverable | 29,341 | 29,341 |
| Inventories | 7,213,011 | 6,798,198 |
| 157,386,108 | 162,983,636 | |
| Non-current assets | ||
| Property and equipment, net | 13,432,609 | 13,647,819 |
| Intangible assets, net | 19,813,514 | 20,249,915 |
| Total Assets | $190,632,231 | $196,881,370 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities | ||
| Accounts payable and accrued liabilities | $7,389,341 | $5,345,539 |
| Provisions | 308,954 | 335,204 |
| Deferred revenue | 590,179 | 403,816 |
| Distribution rights payable | 250,000 | 250,000 |
| 8,538,474 | 6,334,559 | |
| Non-current liabilities | ||
| Deferred revenue | 824,896 | 551,875 |
| Distribution rights payable | 1,656,867 | 1,630,819 |
| Shareholder warrants | 21,436,142 | 25,873,085 |
| Total Liabilities | $32,456,379 | $34,390,338 |
| Shareholders' Equity | ||
| Share capital | $321,696,298 | $315,651,455 |
| Contributed surplus | 13,060,281 | 12,134,913 |
| Deficit | (176,580,727) | (165,295,336) |
| Total Shareholders' Equity | $158,175,852 | $162,491,032 |
| Total Liabilities and Shareholders' Equity | $190,632,231 | $196,881,370 |
| Total number of common shares outstanding | 56,162,959 | 55,572,568 |
| Novadaq Technologies Inc. | ||
| INTERIM CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS | ||
| (Unaudited) | ||
| (expressed in U.S. dollars) | ||
| For the three month period ended | ||
| March 31, 2015 | March 31, 2014 | |
| Product sales | $11,067,180 | $9,391,391 |
| Royalty revenue | 452,380 | 405,000 |
| Partnership fee revenue | — | 325,000 |
| Service revenue | 171,781 | 176,831 |
| Total revenues | 11,691,341 | 10,298,222 |
| Cost of sales | 4,220,144 | 3,601,897 |
| Gross profit | $7,471,197 | $6,696,325 |
| Selling and distribution costs | 12,497,654 | 6,707,560 |
| Research and development expenses | 3,622,553 | 2,254,918 |
| Administrative expenses | 2,686,706 | 1,980,074 |
| Total operating expenses | $18,806,913 | $10,942,552 |
| Loss from operations | (11,335,716) | (4,246,227) |
| Finance costs | (26,048) | — |
| Finance income | 53,743 | 68,380 |
| Shareholder warrants revaluation adjustment | 22,630 | (11,943,918) |
| Gain on investment | — | 25,000 |
| Loss before income taxes | (11,285,391) | (16,096,765) |
| Income tax expense | — | (14,537) |
| Net loss and comprehensive loss for the period | ($11,285,391) | ($16,111,302) |
| Basic and diluted loss and comprehensive loss per share for the period | ($0.20) | ($0.29) |
| Novadaq Technologies Inc. | ||
| INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (Unaudited) | ||
| (expressed in U.S. dollars) | ||
| For the three month period ended | ||
| March 31, 2015 | March 31, 2014 | |
| OPERATING ACTIVITIES | ||
| Net loss and comprehensive loss for the period | ($11,285,391) | ($16,111,302) |
| Items not affecting cash | ||
| Depreciation of property and equipment | 1,216,374 | 1,152,552 |
| Amortization of intangible assets | 436,401 | 88,324 |
| Stock-based compensation | 1,347,748 | 776,071 |
| Gain on investment | — | (25,000) |
| Imputed interest on distribution rights payable | 26,048 | — |
| Shareholder warrants revaluation adjustment | (22,630) | 11,943,918 |
| (8,281,450) | (2,175,437) | |
| Changes in non-cash working capital | ||
| Increase in accounts receivable | (1,434,355) | (607,656) |
| (Increase) decrease in prepaid expenses and other assets | (986,653) | 290,886 |
| (Increase) decrease in inventories | (414,813) | 243,625 |
| Increase (decrease) in accounts payable and accrued liabilities and provisions | 2,050,284 | (1,146,367) |
| Increase (decrease) in deferred revenue | 186,363 | (30,984) |
| Net change in non-cash working capital balances related to operations | (599,174) | (1,250,496) |
| Increase (decrease) in long-term deferred revenue | 273,021 | (298,817) |
| Cash used in operating activities | ($8,607,603) | ($3,724,750) |
| INVESTING ACTIVITIES | ||
| Purchase of property and equipment | (1,206,099) | (2,290,707) |
| Disposals of property and equipment | 204,935 | 84,780 |
| Redemption of investment | — | 25,000 |
| Cash used in investing activities | ($1,001,164) | ($2,180,927) |
| FINANCING ACTIVITIES | ||
| Repayment of government assistance | — | (17,587) |
| Proceeds from exercise of options | 508,941 | 752,390 |
| Proceeds from exercise of warrants | 699,209 | — |
| Cash provided by financing activities | $1,208,150 | $734,803 |
| Net decrease in cash and cash equivalents | (8,400,617) | (5,170,874) |
| Impact of foreign exchange on cash and cash equivalents | (32,732) | (2,334) |
| Cash and cash equivalents at beginning of period | 141,447,544 | 182,329,782 |
| Cash and cash equivalents at end of period | $133,014,195 | $177,156,574 |