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iCAD Reports First Quarter Financial Results

  iCAD Reports First Quarter Financial Results

Total Revenue Increases 25% and Therapy Revenue Increases 64% over Prior Year

     Conference Call Begins Tuesday, April 30 at 10:00 a.m. Eastern Time

Business Wire

NASHUA, N.H. -- April 29, 2013

iCAD, Inc. (Nasdaq: ICAD), an industry-leading provider of advanced image
analysis, workflow solutions and radiation therapy for the early
identification and treatment of cancer, today reported financial results for
the three months ended March 31, 2013.

“We were pleased with the financial results for the first quarter of 2013. The
quarter’s highlights include continued strong sales growth for cancer therapy
products and disciplined expense management. This combination contributed
significantly to the achievement of over a half million dollars of adjusted
EBITDA profitability in the quarter,” said Ken Ferry, President and CEO of
iCAD. "Products and service revenue each increased by 25%, which underscores
the progress we have made in both categories.

“During the first quarter, our Cancer Detection products increased 7%,
demonstrating solid progress with our CAD solutions. In addition, we were
pleased to announce our collaboration with Invivo, a Philips Healthcare
Business and a worldwide leader in MRI. In March, we released a
next-generation platform for prostate and breast imaging that integrates our
advanced MRI image analysis software products with Invivo’s suite of MRI
product solutions for global commercial sale. This partnership aligns the
commercial strategy of our MRI products similar to that of our successful
mammography business.

“The strong growth in Therapy revenue demonstrates the growing adoption of the
Xoft^® Axxent^® Electronic Brachytherapy System^® for the treatment of breast
and skin cancers. We also continue to make progress with new therapy
procedures and global expansion for the Xoft System, specifically with the
recent FDA clearance for our cervical applicator and new distribution
agreements in China and Russia,” added Mr. Ferry.

First Quarter Financial Results

Revenue: Total revenue for the first quarter of 2013 increased 25% to $7.9
million from $6.3 million for the first quarter of 2012, driven by a 64%
increase in Therapy revenue as well as a 7% increase in Cancer Detection
product revenue.

Therapy revenue includes Xoft Axxent Electronic Brachytherapy product sales,
as well as associated service and supply revenue. Cancer Detection revenue
includes film, digital mammography, MRI and CT CAD platforms, as well as
service and supply revenue from these products.

                      
                           Three months ended March 31,
                            2013      2012     % Change 
Products                   $ 5,060    $ 4,051    25       %
Service and supply          2,870     2,292    25       %
Total revenue              $ 7,930    $ 6,343    25       %
                                                                
                          Three months ended March 31,
                            2013      2012     % Change 
Cancer Detection           $ 4,638       $ 4,339       7        %
Therapy                     3,292     2,004    64       %
Total revenue              $ 7,930    $ 6,343    25       %
                                                       

Gross Margin: Gross profit for the first quarter of 2013 was $5.6 million, or
71.2% of revenue, compared with gross profit for the first quarter of 2012 of
$4.4 million, or 69.8% of revenue.

Operating Expenses: Total operating expenses for the first quarter of 2013
declined to $6.0 million from $6.5 million for the same period in 2012,
primarily the result of continued cost-control measures implemented in the
fourth quarter of 2011.

Non-GAAP Adjusted EBITDA: Non-GAAP adjusted EBITDA, a non-GAAP financial
measure as defined below, was $592,000 for the first quarter of 2013, compared
with negative $967,000 for the same period in 2012.

Net Loss: The net loss for the first quarter of 2013 was $727,000, or $0.07
per share, compared with a net loss for the first quarter of 2012 of $2.3
million, or $0.21 per share.

Non-GAAP Adjusted Net Loss: The Company posted a non-GAAP adjusted net loss,
as defined below, for the first quarter of 2013 of $1.2 million, or $0.11 per
share, compared with a non-GAAP adjusted net loss for the first quarter of
2012 of $2.8 million, or $0.26 per share.

Use of Non-GAAP Financial Measures

In its quarterly news releases, conference calls, slide presentations or
webcasts, the Company may use or discuss non-GAAP financial measures as
defined by SEC Regulation G. The GAAP financial measures most directly
comparable to each non-GAAP financial measure used or discussed, and a
reconciliation of the differences between each non-GAAP financial measure and
the comparable GAAP financial measure, are included in this press release
after the condensed consolidated financial statements. When analyzing the
Company's operating performance, investors should not consider these non-GAAP
measures as a substitute for the comparable financial measures prepared in
accordance with GAAP. The Company's quarterly news releases containing such
non-GAAP reconciliations can be found on the Investors section of the
Company's website at www.icadmed.com.

Conference Call

iCAD management will host an investment community conference call on Tuesday,
April 30, 2013 beginning at 10:00 a.m. Eastern Time to discuss these results
and answer questions. Shareholders and other interested parties may
participate in the conference call by dialing 866-318-8616 (domestic) or
617-399-5135 (international) and entering passcode 41827499. The call also
will be broadcast live on the Internet at www.streetevents.com,
www.earnings.com and www.icadmed.com.

A replay of the conference call will be accessible two hours after its
completion through May 7, 2013 by dialing 888-286-8010 (domestic) or
617-801-6888 (international) and entering passcode 87063234. The call will
also be archived for 90 days at www.streetevents.com, www.earnings.com and
www.icadmed.com.

About iCAD, Inc.

iCAD is an industry-leading provider of advanced image analysis, workflow
solutions and radiation therapies for the early identification and treatment
of common cancers. iCAD’s Xoft System offers radiation treatment for
early-stage breast cancer that can be administered in the form of
intraoperative radiation therapy or accelerated partial breast irradiation.
The Xoft System is also cleared for the treatment of non-melanoma skin cancer,
cervical and endometrial cancers. iCAD offers a comprehensive range of
high-performance, upgradeable CAD solutions for mammography and advanced image
analysis and workflow solutions for Magnetic Resonance Imaging, for breast and
prostate cancers and Computed Tomography for colorectal cancer. For more
information, call 877-iCADnow, or visit 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
Company’s ability to defend itself in litigation matters, to achieve business
and strategic objectives, the risks of uncertainty of patent protection, the
impact of supply and manufacturing constraints or difficulties, uncertainty of
future sales levels, protection of patents and other proprietary rights, the
impact of supply and manufacturing constraints or difficulties, product market
acceptance, possible technological obsolescence of products, increased
competition, litigation and/or government regulation, changes in Medicare
reimbursement policies, risks relating to our existing and future debt
obligations, competitive factors, the effects of a decline in the economy or
markets served by the Company; and other risks detailed in the Company’s
filings with the Securities and Exchange Commission. The words “believe”,
“demonstrate”, “intend”, “expect”, “estimate”, “will”, “continue”,
“anticipate”, “likely”, “seek”, 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 additional disclosure
regarding these and other risks faced by iCAD, please see the disclosure
contained in our public filings with the Securities and Exchange Commission,
available on the Investors section of our website at http://www.icadmed.com
and on the SEC’s website at http://www.sec.gov.



iCAD, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands except for per share data)
                                                            
                                                  Three Months Ended March 31,
                                                  2013              2012
Revenue:
Products                                          $  5,060          $ 4,051
Service and supplies                                 2,870           2,292  
Total revenue                                        7,930            6,343
                                                                      
Cost of revenue:
Products                                             1,355            1,107
Service and supplies                                 694              577
Amortization of acquired intangibles                 233             232    
Total cost of revenue                                2,282            1,916
                                                                     
Gross profit                                         5,648           4,427  
                                                                      
Operating expenses:
Engineering and product development                  1,866            2,212
Marketing and sales                                  2,438            2,646
General and administrative                           1,672           1,595  
Total operating expenses                             5,976            6,453
                                                                     
Loss from operations                                 (328   )         (2,026 )
                                                                      
Gain from change in fair value of warrant            431              599
Interest expense                                     (826   )         (835   )
Other income                                         6               9      
Other (expense) income, net                          (389   )         (227   )
                                                                     
Loss before income tax expense                       (717   )         (2,253 )
                                                                      
Income tax expense                                   (10    )         (11    )
                                                                     
Net loss and comprehensive loss                   $  (727   )       $ (2,264 )
                                                                      
Net loss per share:
Basic and diluted                                 $  (0.07  )       $ (0.21  )
                                                                      
Weighted average number of shares used in
computing loss per share:
Basic and diluted                                    10,820          10,776 
                                                                             
                                                                             

iCAD, INC. AND SUBSIDIARY
                                                         
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands except for share data)
                                                                  
                                                   March 31,      December 31,
Assets                                             2013           2012
                                                                  
Current assets:
Cash and cash equivalents                        $ 12,673       $ 13,948
Trade accounts receivable, net of
allowance for doubtful accounts of $82             5,466          4,980
in 2013 and $48 in 2012
Inventory, net                                     1,773          2,119
Prepaid expenses and other current                 558           486       
assets
Total current assets                               20,470        21,533    
                                                                  
Property and equipment, net of
accumulated depreciation and                       1,372          1,483
amortization of $3,796 in 2013 and
$3,627 in 2012
Other assets                                       585            638
Intangible assets, net of accumulated
amortization of $11,174 in 2013 and                14,801         15,230
$10,744 in 2012
Goodwill                                           21,109        21,109    
Total assets                                     $ 58,337      $ 59,993    
                                                                  
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable                                 $ 1,724        $ 1,940
Accrued and other expenses                         2,933          4,142
Interest payable                                   553            499
Warrant liability                                  1,107          1,538
Deferred revenue                                   6,972         6,520     
Total current liabilities                          13,289        14,639    
                                                                  
Deferred revenue, long-term portion                1,642          1,502
Other long-term liabilities                        1,169          1,341
Notes payable                                      15,000        14,846    
Total liabilities                                  31,100        32,328    
                                                                  
Commitments and Contingencies
                                                                  
Stockholders' equity:
Preferred stock, $ .01 par value:
authorized 1,000,000 shares; none                  -              -
issued.
Common stock, $ .01 par value:
authorized 85,000,000 shares; issued
11,021,908 in 2013 and 10,993,933 in
2012;
outstanding 10,836,077 in 2013 and                 110            110
10,808,102 in 2012
Additional paid-in capital                         165,715        165,416
Accumulated deficit                                (137,173 )     (136,446  )
Treasury stock at cost 185,831 in 2013             (1,415   )     (1,415    )
and 2012
Total stockholders' equity                         27,237        27,665    
                                                                  
Total liabilities and stockholders'              $ 58,337      $ 59,993    
equity
                                                                            
                                                                            

  RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO COMPARABLE GAAP MEASURES
             (Unaudited, in thousands, except per share amounts)

The following is a reconciliation of the non-GAAP financial measures used by
the Company to describe the Company's financial results determined in
accordance with United States generally accepted accounting principles (GAAP).
An explanation of these measures is also included below under the heading
"Explanation of Non-GAAP Financial Measures".

While management believes that these non-GAAP financial measures provide
useful supplemental information to investors regarding the underlying
performance of the Company's business operations, investors are reminded to
consider these non-GAAP measures in addition to, and not as a substitute for,
financial performance measures prepared in accordance with GAAP. In addition,
it should be noted that these non-GAAP financial measures may be different
from non-GAAP measures used by other companies, and management may utilize
other measures to illustrate performance in the future. Non-GAAP measures have
limitations in that they do not reflect all of the amounts associated with the
Company's results of operations as determined in accordance with GAAP.


Non-GAAP Adjusted EBITDA
Set forth below is a reconciliation of the Company's "Non-GAAP Adjusted
EBITDA"
(Unaudited, in thousands)
                                   
                                          Three Months Ended March 31,
                                             2013              2012    
GAAP Net Loss                             $   (727   )           $  (2,264  )
                                                                    
Interest Expense                              826                   835
Other income                                  (6     )              (9      )
Stock Compensation                            307                   215
Depreciation                                  183                   241
Amortization                                  430                   523
Tax expense (benefit)                         10                    11
Severance                                     -                     80
Loss (Gain) on warrant                        (431   )              (599    )
Non GAAP Adjusted EBITDA                  $   592               $  (967    )
                                                                    

Non-GAAP Adjusted Net Loss
Set forth below is a reconciliation of the Company's "Non-GAAP Adjusted Net
Loss"
(Unaudited, in thousands, except loss per share)
                                              
                                                  Three Months Ended March 31,
                                                  2013            2012
GAAP Net Loss                                     $  (727    )      $ (2,264 )
Adjustments to net loss:
Severance                                            -                80
Gain on warrant                                      (431    )        (599   )
Non GAAP Adjusted Net Loss                        $  (1,158  )      $ (2,783 )
                                                                      
                                                                      
Net loss per share
GAAP Net loss per share                           $  (0.07   )      $ (0.21  )
Adjustments to net loss (as detailed                 (0.04   )        (0.05  )
above)
Non GAAP Adjusted Net Loss per share              $  (0.11   )      $ (0.26  )
                                                                             

Explanation of Non-GAAP Financial Measures

The Company reports its financial results in accordance with United States
generally accepted accounting principles, or U.S. GAAP (“GAAP”). However,
management believes that in order to properly understand the Company's
short-term and long-term financial and operational trends, investors may wish
to consider the impact of certain non-cash or non-recurring items, when used
as a supplement to financial performance measures in accordance with GAAP.
These items result from facts and circumstances that vary in frequency and/or
impact on continuing operations. Management also uses results of operations
before such items to evaluate the operating performance of the Company and
compare it against past periods, make operating decisions, and serve as a
basis for strategic planning. These non-GAAP financial measures provide
management with additional means to understand and evaluate the operating
results and trends in the Company's ongoing business by eliminating certain
non-cash expenses and other items that management believes might otherwise
make comparisons of the Company's ongoing business with prior periods more
difficult, obscure trends in ongoing operations, or reduce management's
ability to make useful forecasts. Management believes that these non-GAAP
financial measures provide additional means of evaluating period-over-period
operating performance. In addition, management understands that some investors
and financial analysts find this information helpful in analyzing the
Company's financial and operational performance and comparing this performance
to its peers and competitors.

Management defines "Non-GAAP Adjusted EBITDA" as the sum of GAAP net loss
before provision for income taxes, acquisition-related expenses, total other
(income) expense, stock-based compensation expense, depreciation and
amortization, severance, gain on sale, loss on warrant, amortization of
acquired intangibles, acquisition related, patent litigation and recall costs,
contingent consideration, indemnification asset and goodwill impairment
charges. Management considers this non-GAAP financial measure to be an
important indicator of the Company's operational strength and performance of
its business and a good measure of its historical operating trends, in
particular the extent to which ongoing operations impact the Company's overall
financial performance.

Management defines "Non-GAAP Adjusted Net Loss" as the sum of GAAP net loss
before provision for the gain on sale of asset, severance, transaction, patent
litigation and recall costs, contingent consideration, indemnification asset
and goodwill impairment charges. Management considers this non-GAAP financial
measure to be an important indicator of the Company's operational strength and
performance of its business and a good measure of its historical operating
trends, in particular the extent to which ongoing operations impact the
Company's overall financial performance.

Management excludes each of the items identified below from the applicable
non-GAAP financial measure referenced above for the reasons set forth with
respect to that excluded item:

  *Stock-based compensation expense: excluded as these are non-cash expenses
    that management does not consider part of ongoing operating results when
    assessing the performance of the Company's business, and also because the
    total amount of expense is partially outside of the Company's control as
    it is based on factors such as stock price volatility and interest rates,
    which may be unrelated to our performance during the period in which the
    expense is incurred.
  *Amortization of acquired intangibles: acquisition-related expenses are
    reported at the time acquisition costs are incurred, and purchased
    intangibles are amortized over a period of several years after the
    acquisition and generally cannot be changed or influenced by management
    after the acquisition. Accordingly, these items are not considered by
    management in making operating decisions, and management believes that
    such expenses do not have a direct correlation to future business
    operations. Thus, including such charges does not accurately reflect the
    performance of the Company's ongoing operations for the period in which
    such charges are incurred.
  *Interest expense: In January 2012, the Company entered into a five-year,
    $15 million debt facility agreement. The Company excludes interest expense
    from its non GAAP Adjusted EBITDA calculation.
  *Severance: relates to costs incurred due to the termination of certain
    employees. The Company provides compensation to certain employees as an
    accommodation upon termination of employment without cause. Management
    believes that excluding severance costs from operating results provides
    investors with a better means for measuring current Company performance.
  *Gain (loss) on Warrant: The Company issued warrants in connection with the
    financing and the value changes according to fair value. It is excluded as
    these are non-cash expenses that management does not consider part of
    ongoing operating results when assessing the performance of the Company's
    business, also because the total amount of gain or loss is partially
    outside of the Company's control as it is based on factors such as stock
    price volatility and interest rates, which may be unrelated to our
    performance during the period in which the gain or loss is incurred.

On occasion in the future, there may be other items, such as significant asset
impairments, restructuring charges or significant gains or losses from
contingencies that the Company may exclude if it believes that doing so is
consistent with the goal of providing useful information to investors and
management.

Contact:

iCAD
Kevin Burns, 937-431-7967
kburns@icadmed.com
or
For iCAD investor relations
LHA
Anne Marie Fields, 212-838-3777 x6604
afields@lhai.com
or
For iCAD media inquiries
Schwartz MSL
Helen Shik, 781-684-0770
iCAD@schwartzmsl.com
 
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