iCAD, Inc. Reports Second Quarter 2015 Financial Results

NASHUA, N.H., Aug. 5, 2015 (GLOBE NEWSWIRE) -- 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 and six months ended June 30, 2015.

Second Quarter Highlights:

• Total revenue of $11.1 million, an increase of 15.3% year-over-year
• Gross margin of 70.7%, flat compared to Q2 2014
• Non-GAAP adjusted EBITDA of $1.6 million, or 14.4% of revenue, up from 9.5% in Q2 2014
• Goodwill and long-lived non cash impairment of $27.4 million
• Implemented initiatives to reduce expenses in response to the general uncertainty related to reimbursement for non-melanoma skin cancer treatment in the United States

"Our second quarter results reflect solid performance in our Cancer Detection business offset by uncertainty in our Therapy business related to a reimbursement change for the treatment of non-melanoma skin cancer in the United States," said Ken Ferry, Chief Executive Officer. "While we do not have any definitive updates on reimbursement at this time, we are working with our customers, professional medical societies, and Medicare to obtain clarity with respect to reimbursement. This includes executing our strategy for the upcoming transition to a new CPT code for skin electronic brachytherapy that will be effective on January 1, 2016; a transition that we have been preparing for since the new code was established last year. We believe this transition will provide greater reimbursement stability and potentially be a catalyst for additional regional Medicare providers to cover the use of high dose rate electronic brachytherapy for the treatment of non-melanoma skin cancer. In addition to our efforts on reimbursement, we have reduced expenses to best manage our cost structure during this period of uncertainty."

Mr. Ferry added, "The long-term outlook for our business remains positive. Revenue in the Cancer Detection business is up 8% for the first half of the year, with solid performance in the second quarter with PowerLook upgrades, breast density, and MRI sales all contributing to the growth. During the quarter, we completed the acquisition of a breast density product that will support near and mid-term growth in an expanding market. We also made progress with our clinical initiatives in support of our European regulatory submission for our breast tomosynthesis cancer detection software, putting us on track for a potential European launch at the end of the year. The transition to breast tomosynthesis and the anticipated adoption of our cancer detection software will be a major growth catalyst for our Cancer Detection business in what we believe will be a significant market opportunity over the coming years. In Therapy, we expect growing utilization in breast IORT and expanded our OB-GYN product line with the introduction of a cervical applicator. Also, we continue to believe high dose rate electronic brachytherapy will be an important treatment option for certain non-melanoma skin cancer patients with growing clinical data in support of it."

Second Quarter 2015 Financial Results

Revenue: Total revenue for the second quarter of 2015 increased 15.3% to $11.1 million from $9.7 million as compared to the second quarter of 2014, reflecting a 41.5% decrease in product revenue and an 84.0% increase in service revenue. The Company's revenue in the second quarter was driven by higher utilization of services driven by the acquisitions completed in July 2014, but was also negatively impacted by the anticipated reimbursement change for the treatment of non-melanoma skin cancer in the United States. Service revenue for the second quarter of 2015 was approximately 72% of total revenues compared to approximately 45% of total revenues in the second quarter of 2014.