- Quarterly revenues were $17.8 million, an increase of 54 percent over
the prior year;
- Net loss in the third quarter improved to $3.8 million, or $0.07 per
diluted share, compared with a prior-year net loss of $8.5 million, or
$0.19 per diluted share;
- Quarterly gross margins of 38.2 percent of sales, a 14.4 percent of
sales improvement from the prior year;
- New order bookings of $14.5 million resulted in an ending backlog of
- Entered into a secured loan facility agreement for $25 million with
Deerfield Management Company L.P., a healthcare investment firm with
$3.5 billion of assets under management;
- The spinal surgery team at Duke University Medical Center in Durham, NC,
completed the first surgical cases using VISIUS iCT in October 2013.
WINNIPEG & MINNEAPOLIS, Nov. 4, 2013 /PRNewswire/ - IMRIS Inc. (NASDAQ: IMRS;
TSX: IM) today reported its results for the third quarter ended
September 30, 2013. All figures are reported in U.S. dollars. Third
quarter revenues were $17.8million compared with $11.6 million for the same period last year. Net
loss in the third quarter improved to $3.8 million, or $0.07 per
diluted share, compared with a prior-year net loss of $8.5 million, or
$0.19 per diluted share.
Commented Jay D. Miller, President and Chief Executive Officer of IMRIS:
"We are pleased to report a solid third quarter. Revenue in the quarter
rose 54 percent due to increased revenue from our VISIUS® Surgical Theatres, as well as higher service revenues from maintenance
contracts. Greater sales volumes improved gross margins and
profitability versus the prior-year period. While we continue to expect
lumpy quarterly performance in a challenging healthcare capital
equipment marketplace, we believe the underlying trends in our business
are moving in the right direction. We are excited about the progress we
are making in the continued development of image-guided intraoperative
technologies for the surgical theatre."
| ||3 months ended September 30
|9 months ended September 30|
|($000's except per share amounts)||2013||2012||Change||2013||2012||Change|
| Gross profit as % of sales||38.2%||23.8%||n/m ||35.8%||33.4%||n/m |
Basic loss per share
Diluted loss per share
1 Not Meaningful
2 Adjusted EBITDA is defined as earnings before interest income
(expense) and other, stock based compensation, gain on asset sale,
foreign exchange, embedded derivatives, income taxes and amortization.
Revenue for the three months ended September 30, 2013, rose to $17.8
million compared with $11.6 million for the same period last year.
Revenue from VISIUS Surgical Theatres for the 2013 third quarter was
$4.8 million higher compared with the same period last year, due to
additional scheduled project deliveries of major system components, as
well as increased project installation activities at varying stages of
completion. Reflecting the Company's focus on building service
revenues, extended maintenance contract revenue was $1.4 million higher
than the same period last year. The increase stemmed from additional
extended maintenance contracts from a larger installed base that have
transitioned off warranty to chargeable service programs. Revenue for
the nine months ended September 30, 2013, was $36.1 million compared
with $32.3 million for 2012, due to additional revenue from extended
maintenance contracts, as well as higher revenue from scheduled project
deliveries of major system components.
Gross profit in the 2013 third quarter increased to $6.8 million
compared with $2.8 million for the same period last year. Year-to-date
gross profit was $12.9 million compared with $10.8 million for the same
period last year. Impacting gross profit were additional scheduled
installation activities, due to a high rate of product development
installations for the Company's MR Guided Radiation Therapy (MRgRT) and
iCT systems, as well as higher gross profit from the additional
extended maintenance contracts. Gross profit as a percentage of sales
in the 2013 third quarter was 38.2 percent compared with 23.8 percent
in the same period last year. Year-to-date, gross profit as a
percentage of sales was 35.8 percent compared with 33.4 percent in
2012. Gross profit as a percentage of sales is expected to continue to
vary based on the underlying installations in each quarter, with full
year 2013 gross profit expected to be approximately 35 percent.
IMRIS continued to invest in order to grow the business. Operating
expenses for the 2013 third quarter were $10.8 million compared with
$11.3 million for the same period last year, a decrease of $0.6
million. Total one-time costs during the third quarter to relocate
IMRIS' operations to Minnesota were $0.8 million, compared with no
expenses a year ago. Other operating expenses declined $1.3 million,
mainly due to lower expenses of $2.0 million in research and
development costs primarily for robotics, MRgRT and other ancillary
research projects; these decreases were offset by additional rent and
utilities expense of $0.4 million at the new Minnesota facility and
higher employee-related costs of $0.3 million. Year-to-date operating
expenses were $32.4 million, up $0.4 million compared with 2012,
primarily due to additional one-time relocation costs, offset by lower
research and development costs for robotics, MRgRT and other projects.
Foreign exchange income for the three and nine month periods ended
September 30, 2013, rose $0.3 million and declined $0.8 million,
respectively, resulting in income of $0.4 million and loss of $0.7
million for those periods, respectively, compared with the same periods
in 2012. The change is due to a weakening U.S. dollar against the
Company's higher net foreign denominated monetary assets compared to
the same period in 2012, which resulted in income on revaluation.
Interest and other expense for the three and nine months ended September
30, 2013, includes interest expense of $88,000, warrant discount
amortization of $49,000 and debt issuance cost amortization of $17,000.
The remainder is other net interest expense and banking fees. Interest
expense, warrant discount amortization, and debt issuance cost
amortization are recognized on an effective interest rate method over
Adjusted EBITDA and Operating Loss
Adjusted EBITDA for the 2013 third quarter was negative $2.5 million and
improved from negative $7.1 million for the same period last year.
Adjusted EBITDA for the 2013 third quarter reflects higher gross profit
of $4.0 million, lower operating expenses of $0.6 million, higher
foreign exchange income of $0.3 million, and higher interest expense of
$0.2 million. Year-to-date, Adjusted EBITDA was negative $15.2 million
compared with negative $17.1 million for the same period last year. The
improvement in negative Adjusted EBITDA stemmed primarily from higher
gross profit of $2.1 million, partially offset by higher operating
expenses of $0.4 million.
Net loss in the 2013 third quarter was down $4.7 million compared with
the same period last year. Net loss improved to $0.07 per diluted share
versus a loss of $0.19 per diluted share in the prior-year quarter. The
decrease in net loss was primarily due to higher gross profit of $4.0
million, lower operating expenses of $0.6 million, and higher foreign
exchange income of $0.3 million, partially offset by higher interest
expense of $0.2 million.
Liquidity and Capital Resources
Cash and restricted cash at September 30, 2013, totaled $28.4 million
and accounts receivable were $14.8 million. These funds, together with
ongoing operating cash flow, will be used to fund the company's working
capital and for general corporate purposes.
On September 16, 2013, IMRIS entered into a secured loan facility
agreement for $25 million and received the $25 million following
execution of the agreement. The loan matures five years from the date
of the agreement and may be prepaid subject to certain restrictions.
The principal amount of the loan is payable in three equal annual
installments on the third, fourth and fifth anniversaries of the date
of the disbursement, except that, if IMRIS achieves certain revenue
targets, the principal payment due on the third anniversary can be
deferred for up to two years and the payment due on the fourth
anniversary can be deferred for one year. The outstanding principal
amount of the loan at any time will accrue interest at a rate of 9
percent per annum. In connection with the loan, the lender received
warrants to purchase 6.1 million shares of IMRIS common stock at an
exercise price of $1.94 per share.
During the 2013 third quarter, $14.5 million in new orders were received
and $17.8 million of backlog was converted into revenues. The change in
the U.S. dollar versus the foreign currencies of the orders in backlog
resulted in a marginal increase in the value of the backlog. Backlog
at September 30, 2013, was $101.4 million and comprised of $47.2
million of system orders and $54.2 million in service contracts.
Duke University Medical Center in Durham, North Carolina, reported in
October 2013 its first surgical spine cases using the VISIUS iCT. IMRIS
expects that with further usage, surgeons will discover the value of
the iCT's on-demand access, improved workflow, and state-of-the-art
image quality and dose management. The Duke neurosurgery team also
recently performed its initial tumor removal cases with its second
purchased system, a VISIUS iMRI. Both the VISIUS iCT and VISIUS iMRI
move in and out of the operating suite on ceiling rails, enabling
surgeons to take high-quality CT and MR images during procedures
without moving or repositioning the patient.
On October 22, 2013, IMRIS announced that neurosurgeons from Huashan
Hospital at Fudan University in Shanghai, China, received the
prestigious Journal of Neuro-Oncology Award at the annual Congress of
Neurological Surgeons (CNS) in San Francisco. Their preliminary results
show that high-field intraoperative MRI (iMRI) within the VISIUS® Surgical Theatre contributes to significantly increased complete
resection rates in glioma tumors. Complete resection rates in the iMRI
group and control group were 86 percent and 53 percent, respectively.
Miller stated: "We have begun to show what this company is capable of
delivering. IMRIS has a compelling line-up of FDA-approved and
development-stage products that will provide a strong foundation for
the future, and the clinical results from our customer base continue to
show the clear benefits of intraoperative imaging. Our objectives
remain to increase our bookings in a continually challenging
environment for healthcare capital equipment, to drive sustained growth
through the adoption of our products and services by customers, to
continue operational improvements and to enhance long-term shareholder
Given the delay in expected customer bookings, including the later than
anticipated FDA approval of the iCT, and construction delays at certain
customer sites, full-year 2013 revenues are expected to be in the range
of $47 million to $49 million, and include revenues from the conversion
of both system and service backlog. Included in this forecast are
revenues associated with orders for the VISIUS Surgical Theatres
equipped with a ceiling mounted CT. IMRIS' quarterly revenue profile
varies depending on the underlying system installations in each period.
The Company anticipates that 2013 fourth-quarter revenues will be lower
than expected and in the $11 million to $13 million range, as certain
customer sites have been delayed and, therefore, impact IMRIS' ability
to deliver and install in the period.
Gross profit as a percentage of sales is forecast to be in the range of
35 percent for the 2013 fourth quarter, as installation activity is
projected to be lower, resulting in full-year 2013 gross profit
guidance of 35 percent.
Taken together, IMRIS anticipates total cash and non-cash operating
expenses in 2013 to be approximately $53 million, as summarized below:
|2013 Forecast||$ Millions|
Cash operating expenses
Minneapolis relocation costs
Research & development charge
| Total ||42.0|
Research & development charge (non-cash)
Stock based compensation (non-cash)
| Total operating expenses||53.0|
The Company's cash requirements in 2013 include funding for operations,
capital investments related to robotics, iCT and MRgRT test labs, costs
related to the U.S. relocation and prepaid development costs associated
with collaborative arrangements. Total capital expenditures for the
2013 fourth quarter are expected to be in the range of $0.8 million to
The Company's full financial statements as well as management's
discussion and analysis will be available at www.sedar.com, www.sec.gov and www.imris.com.
Management will host a conference call to discuss the results at 5:00 pm ET, November 4, 2013. Following management's presentation, there will be a
question-and-answer session for analysts and institutional investors.
To participate in the teleconference, please call 1-416-644-3414 or 1-800-814-4859. To access the live audio webcast, please visit IMRIS' website at www.imris.com. A taped rebroadcast will be available to listeners following the call
until midnight (ET) on November 11, 2013. To access the rebroadcast
from Canada please call 1-877-289-8525 or 1-416-640-1917 and enter
access code 4647943. From the U.S., please call 1-303-590-3030 or
1-800-406-7325 and enter access code 4647943.
IMRIS (NASDAQ: IMRS; TSX: IM) is a global leader in providing image
guided therapy solutions through its VISIUS Surgical Theatre - a
revolutionary, multifunctional surgical environment that provides
unmatched intraoperative vision to clinicians to assist in decision
making and enhance precision in treatment. The multi-room suites
incorporate diagnostic quality high-field MR, CT and angio modalities
accessed effortlessly in the operating room setting. VISIUS Surgical
Theatres serve the neurosurgical, cardiovascular, spinal and
cerebrovascular markets and have been selected by 54 leading medical
institutions around the world. For more information, visit www.imris.com.
This press release may contain or refer to forward-looking information
based on current expectations. In some cases, forward-looking
statements can be identified by terminology such as "anticipate",
"may", "expect", "believe", "prospective", "continue" or the negative
of these terms or other similar expressions concerning matters that are
not historical facts. These statements should not be understood as
guarantees of future performance or results. 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. Although such statements are
based on management's reasonable assumptions, there can be no assurance
that actual results will be consistent with such statements.
Forward-looking statements are subject to significant risks and
uncertainties, and other factors that could cause actual results to
differ materially from expected results. These forward-looking
statements are made as of the date hereof and we assume no
responsibility to update or revise them to reflect new events or
1 See "Non-GAAP Financial Measures" in the Company's Q3 2013 MD&A for
further information on backlog.
SOURCE IMRIS Inc.