Novadaq Technologies, Inc. Reports Third Quarter 2010 Financial Results
TORONTO, ONTARIO--(Marketwire - November 10, 2010) - Novadaq® Technologies Inc. (TSX: NDQ), a developer of real-time medical imaging systems for use in the operating room, today announced 2010 third quarter revenues of $7,570,000 compared to revenues of $1,723,000 in the third quarter of 2009 and $2,646,000 in the second quarter of 2010. Recurring SPY revenues were $1,056,000 compared to $659,000 to the same period last year and $916,000 in Q2-2010, representing an increase of 60% over Q3-2009 and a 15% increase over Q2-2010. Sales of SPY® products in Q3-2010 included $5,000,000 for completing all milestones associated with the License and Development Agreement with Intuitive® Surgical, Inc.
Q3- 2010 Highlights
-- Signed a North American Sales and Marketing Agreement for SPY with
LifeCell™ Corporation. Received $4,000,000 in fees and $1,000,000 in
private placement funds in exchange for exclusive rights in plastic
reconstructive, gastrointestinal and head and neck surgery. As a result
of the agreement, going forward Novadaq will only recognize net revenues
received from LifeCell.
-- Restructured sales and marketing overhead resulting in approximately 15
people being either transferred to LifeCell or reduced where
redundancies existed.
-- Completed the final milestone associated with the Intuitive Surgical
License and Development Agreement to integrate SPY imaging into the da
Vinci robot and received the final $500,000 milestone payment. According
to the company's completed contract method of revenue recognition,
achieving the final milestone resulted in recognizing $5,000,000 in
completed contract sales.
Highlights Subsequent to Quarter End
-- Executed the definitive Asset Purchase Agreement to essentially purchase
all of the TMR assets from PLC Medical Systems, Inc., ensuring product
supply and expanding the company's presence in international markets.
Financial Results
As at September 30, 2010, the Company had cash and cash equivalents of $8,671,000, which included $5,000,000 received subsequent to signing the LifeCell sales and marketing agreement. Novadaq's net loss of $4,562,000 included a non-cash write-down of $4,829,000 due a change in estimated life of TMR distribution rights. Net loss for the same time period last year was $3,852,000 and $3,525,000 in Q2-2010. The Company's cash provided by operating activities in Q3-2010 was $2,178,000 compared to cash used of $3,117,000 in Q3-2009 and $2,367,000 in Q2-2010. Novadaq's Q3-2010 net loss of $4,562,000 or $0.17 per share, compared to net loss of $3,852,000 or $0.16 per share in Q3-2009. Unless otherwise indicated, all dollar amounts expressed in this press release are United States (U.S.) dollars.
Comment
"As we've continued to report over the past 12 months, SPY has gained significant momentum in plastic reconstructive and gastrointestinal surgery. Our agreement with LifeCell provides us the leading channel to capitalize on this opportunity in our relevant markets. LifeCell is indeed a leader and the premier sales and marketing organization within the plastic reconstructive, gastrointestinal and head and neck surgery markets," said Dr. Arun Menawat, Novadaq's President and CEO. "We are delighted to now be partnered with two industry leaders, LifeCell and Intuitive Surgical. As a result of the significant commercial opportunities these two companies represent, we are increasing our manufacturing and supply capabilities to meet the anticipated growing demands for our SPY products."
Conference Call
Novadaq is pleased to invite all interested parties to participate in a conference call on November 10th, at 10:00 a.m. Eastern Time during which the results will be discussed.
To access the live audio webcast:
Please login 5-10 minutes prior to the event start time
Go to website: http://www.investorcalendar.com/IC/CEPage.asp?ID=162275
Select "3rd Qtr. 2010 Financial Results", fill in login information, and then click 'OK'
A pop-up window will open to display the audio web conference
To access the live conference call:
Live Participant Dial-In (Toll Free): (877) 407-8033 Live Participant Dial In (International): (201) 689-8033A telephonic replay of the conference call will be made available until midnight on 12/10/10 and can be accessed by dialing 1-877-660-6853 (within Canada and the United States) or 1-201-612-7415 (international callers) and entering the account number 286 and the conference identification number 359775 when prompted. The call will be archived for 365 days on the company's website at http://www.novadaq.com under the "Events" tab in the Investors section. In addition, 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:
Novadaq Technologies develops and markets real-time fluorescence imaging technologies for use in the operating room. The Company's primary core technology platform, SPY Imaging, provides clinically relevant, anatomic and physiologic images during a wide variety of complex open and minimally invasive surgical ("MIS") procedures. SPY empowers surgeons treating life-threatening illnesses such as breast, colon and other cancers and cardiovascular disease to more effectively treat vascular blockages and assess tissue perfusion. More than 40 peer-reviewed publications demonstrate that SPY Imaging leads to fewer post-operative complications and reduced hospital costs. The SPY Imaging System is cleared by the United States Food and Drug Administration ("FDA") for real-time use during open surgical procedures and the endoscopic implementation of SPY Imaging ("SPY Scope") is FDA cleared for real-time use in MIS. The endoscopic SPY System combines all of the capabilities of SPY Imaging with state-of-the-art high definition ("HD") white light visualization offered by conventional endoscopes. The Company's key markets include plastic reconstructive, gastrointestinal, cardiac and general surgery. To realize the full potential of its SPY Imaging technology platform, Novadaq explores technology alliances. Novadaq announced its first alliance with Intuitive, in January 2009, to integrate SPY Imaging into the 3-D HD imaging capabilities of the da Vinci® Surgical Robotic System. In addition, Novadaq entered into an exclusive, North American sales and marketing alliance with LifeCell Corporation ("LifeCell") in plastic and reconstructive, gastrointestinal and head and neck surgery in September 2010. Novadaq is the exclusive United States distributor of PLC's CO2 HEART™ LASER SYSTEM, which is used in the same cardiac procedures as the SPY System. For more information, please visit the company's website at http://www.novadaq.com.
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, results of future clinical tests of PINPOINT, SPY Scope and the SPY Imaging System, anticipated financial performance, business prospects, strategies, regulatory developments, market acceptance and future commitments.
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 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 Technologies Inc.
INTERIM CONSOLIDATED BALANCE SHEET
(Unaudited)
(expressed in U.S. dollars)
As at As at
September 30, December 31,
2010 2009
$ $
------------------------------
ASSETS
Current
Cash and cash equivalents 8,670,587 2,524,958
Accounts receivable 1,699,539 1,398,593
Current portion of prepaid expenses and other
receivables 1,045,835 2,003,681
Inventory 562,699 1,017,268
------------------------------
Total current assets 11,978,660 6,944,500
------------------------------
Long-term investment -- 150,000
Property, plant and equipment, net 1,206,925 1,762,554
Prepaid expenses and other receivables 173,055 189,148
Deferred development costs 405,195 405,195
Intangible assets, net 1,893,344 7,273,564
------------------------------
15,657,179 16,724,961
------------------------------
------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 3,605,318 3,254,575
Current portion of deferred revenue 629,712 710,365
Current portion of deferred license and
development revenue -- 3,000,000
Current portion of deferred revenue of sales
and marketing agreement 800,000 --
------------------------------
Total current liabilities 5,035,030 6,964,940
------------------------------
Long-term debt 3,797,349 3,527,700
Long-term income tax payable 40,115 48,979
Deferred revenue 229,371 238,158
Long-term portion of deferred revenue of sales
and marketing agreement 3,133,333 --
------------------------------
Total liabilities 12,235,198 10,779,777
------------------------------
Shareholders' equity
Share capital 87,917,005 81,188,324
Warrants 916,560 --
Contributed surplus 7,490,606 6,882,280
Deficit (92,902,190) (82,125,420)
------------------------------
Total shareholders' equity 3,421,981 5,945,184
------------------------------
15,657,179 16,724,961
------------------------------
------------------------------
Novadaq Technologies Inc.
INTERIM CONSOLIDATED STATEMENT OF LOSS AND
COMPREHENSIVE LOSS AND DEFICIT
(Unaudited)
(expressed in U.S. dollars)
Three-month period ended Nine-month period ended
September 30 September 30
2010 2009 2010 2009
$ $ $ $
-----------------------------------------------------
REVENUE
Product sales 7,215,522 1,332,758 11,611,522 5,334,009
Service revenue 354,815 389,784 1,024,615 1,101,751
-----------------------------------------------------
Total revenue 7,570,337 1,722,542 12,636,167 6,435,760
Cost of sales 2,688,528 1,078,948 5,325,072 3,556,418
-----------------------------------------------------
Gross profit 4,881,809 643,594 7,311,095 2,879,342
-----------------------------------------------------
OPERATING EXPENSES
Sales and marketing 1,798,960 1,751,555 5,535,025 5,406,979
Research and
development 1,369,566 965,346 3,395,207 2,771,625
General and
administration 1,109,125 869,218 2,549,111 2,432,830
Depreciation 53,487 103,841 197,728 302,151
Amortization 154,441 308,247 551,615 924,740
Impairment of inventory -- 266,379 426,600 266,379
Impairment of
intangible assets, net 4,828,605 -- 4,828,605 --
(Gain) loss on foreign
exchange (27,189) 85,854 12,811 107,089
-----------------------------------------------------
Total operating
expenses 9,286,995 4,350,440 17,496,702 12,211,793
-----------------------------------------------------
Loss before the
following: (4,405,186) (3,706,846) (10,185,607) (9,332,451)
-----------------------------------------------------
Impairment of long-term
investment -- -- (125,000) --
Interest expense and
imputed interest
expense (161,442) (149,003) (477,612) (359,473)
Interest income 4,273 3,549 11,449 9,880
-----------------------------------------------------
Net loss and
comprehensive loss for
the period (4,562,355) (3,852,300) (10,776,770) (9,682,044)
-----------------------------------------------------
Deficit, beginning of
period (88,339,835) (72,965,833) (82,125,420) (67,136,089)
-----------------------------------------------------
Deficit, end of period (92,902,190) (76,818,133) (92,902,190) (76,818,133)
-----------------------------------------------------
Basic and diluted loss
per share $(0.17) $(0.16) $(0.40) $(0.39)
-----------------------------------------------------
Novadaq Technologies Inc.
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(expressed in U.S. dollars)
Three-month period ended Nine-month period ended
September 30 September 30
2010 2009 2010 2009
$ $ $ $
-------------------------------------------------
OPERATING ACTIVITIES
Net loss for the period (4,562,355) (3,852,300)(10,776,770) (9,682,044)
Add (deduct) items not
involving cash
Depreciation and
amortization 359,407 589,704 1,237,179 1,767,534
Imputed interest expense 92,107 81,578 269,649 196,579
Impairment of inventory -- 266,379 426,600 266,379
Impairment of intangible
assets 4,828,605 -- 4,828,605 --
Impairment of long-term
investment -- -- 125,000 --
Stock-based compensation 175,707 203,591 608,326 455,637
-------------------------------------------------
893,471 (2,711,048) (3,281,411) (6,995,915)
Net change in non-cash
working capital balances
related to operations 1,284,944 (406,048) 1,844,477 3,147,761
-------------------------------------------------
Cash provided by (used
in) operating activities 2,178,415 (3,117,096) (1,436,934) (3,848,154)
-------------------------------------------------
FINANCING ACTIVITIES
Issuance of convertible
debentures, net of -- -- -- 5,062,409
transaction costs
Exercise of options 33,126 -- 35,084 --
Issuance of common shares
and warrants, net of
transaction costs 1,000,000 4,989 7,610,157 4,989
-------------------------------------------------
Cash provided by
financing activities 1,033,126 4,989 7,645,241 5,067,398
-------------------------------------------------
INVESTING ACTIVITIES
Purchase of property,
plant and equipment (38,579) (30,303) (129,936) (160,257)
Redemption of long-term
investment -- -- 25,000 50,000
Sale of short-term
investments, net -- 699,304 -- --
-------------------------------------------------
Cash (used in) provided
by investing activities (38,579) 669,001 (104,936) (110,257)
-------------------------------------------------
Foreign exchange income
(loss) on cash held in
foreign currency 70,235 (23,869) 42,258 (38,092)
-------------------------------------------------
Net increase (decrease)
in cash and cash
equivalents during the
period 3,243,197 (2,466,975) 6,145,629 1,070,895
Cash and cash
equivalents, beginning
of Period 5,427,390 7,529,703 2,524,958 3,991,833
-------------------------------------------------
Cash and cash
equivalents, end of
period 8,670,587 5,062,728 8,670,587 5,062,728
-------------------------------------------------
Contacts:
Investor Relations:
Novadaq Technologies Inc.
Suzie Robinson
972-488-6508
srobinson@novadaq.com
www.novadaq.com