Ophthalmic Imaging Systems Reports Fourth Quarter and Full Year 2010 Financial Results
SACRAMENTO, CA--(Marketwire - April 15, 2011) - Ophthalmic Imaging Systems (OIS) (OTCBB: OISI), a leading Digital Imaging, Image Management and Electronic Medical Records (EMR) company, today reported financial results for the three and 12 months ended December 31, 2010, and provided an update on recent business developments.
"We are reporting 2010 revenues of $18.6 million, the highest in our 25-year history and an increase of 37% from 2009," stated Gil Allon, Chief Executive Officer of OIS. "Our revenue growth reflects the early success of our strategic decision several years ago to expand our ocular health-related product and service offerings. Revenue from OIS EyeScan™, our portable scanning device launched in the 2010 first quarter, was $2.7 million. OIS EyeScan sales also favorably impacted the revenue contribution from customers located outside the U.S., which increased to 18% of the total in 2010 from only 9% in 2009.
"In 2011 we expect continued growth from OIS EyeScan as we increase international distribution, as well as from our EMR/PM products. We received ONC-ATCB certification for both Abraxas and OIS EMR VERSION 4.1.7 last December, which greatly improves our ability to capitalize on anticipated momentum this year in the EMR market."
Abraxas and OIS EMR VERSION 4.1.7 received notification as Complete EHR by the Certification Commission for Health Information Technology (CCHIT®), an ONC-ATCB, in accordance with the applicable eligible provider certification criteria adopted by the Secretary of Health and Human Services. The 2011/2012 criteria support the Stage 1 meaningful use measures required to qualify eligible providers and hospitals for funding under the American Recovery and Reinvestment Act (ARRA).
"We see continued growth opportunity in the U.S. through the introduction of innovative ophthalmic products and services. We believe that as the U.S. healthcare system moves toward managed care, the needs of providers are changing the nature of demand for medical imaging equipment and services. Our strategy is to provide a diverse range of complementary products and services that assist physicians and managed care organizations to deliver high-quality ocular healthcare while reducing costs," added Mr. Allon.
As previously announced, OIS is restating financial results as a result of reclassifying certain derivative instruments, which has no impact on the Company's cash balances or loss from operations. The restated financial results as of and for the fiscal years ended December 31, 2009, 2008 and 2007 and its interim financial results as filed on Form 10-Q for periods ending March 31, June 30 and September 30, 2010 and 2009 are included in its Annual Report on Form 10-K expected to be filed with the Securities and Exchange Commission on April 15, 2011.
Fourth Quarter Financial Results
For the three months ended December 31, 2010, OIS reported an 11% increase in net revenues to $4.8 million from $4.3 million for the same period in 2009. Gross margin for the fourth quarter of 2010 was 52%, compared with 56% for the fourth quarter of 2009 due to the increase in personnel costs to support our service and implementation departments.
Operating expenses for the fourth quarter of 2010 were $3.8 million versus $2.7 million for the prior year period. Sales and marketing expenses increased to $1.9 million from $1.4 million in the prior year primarily due to higher marketing expenses to introduce the OIS EyeScan internationally and in the optometric market and the addition of sales representatives at OIS and Abraxas. General and administrative expenses for the fourth quarter of 2010 were $0.7 million, versus $0.6 million in the prior year period. Research and development expenses increased to $1.2 million from $0.7 million in the 2009 fourth quarter, with the increase due to an increase in software testers at OIS and Abraxas, as well as the impairment of $0.2 million intangible assets related to the electro-optical unit acquired during the Asset Purchase Agreement with MediVision in October of 2009.
The net loss for the fourth quarter of 2010 was $0.8 million, or $0.02 per share, compared with a net loss for the fourth quarter of 2009 of $1.4 million, or $0.05 per share.
Full Year Financial Results
For the year ended December 31, 2010, OIS reported record net revenues of $18.6 million, an increase of 37% from $13.6 million for 2009. The revenue growth is primarily attributable to a $4.8 million increase in product sales, including a $2.7 million contribution from OIS EyeScan.
Gross margin remained relatively flat at 55% and 54% for 2010 and 2009, respectively. Sales and marketing expenses increased to $6.9 million in 2010 from $4.1 million in 2009, due primarily to higher marketing expenses to introduce the OIS EyeScan internationally and in the optometric market, the addition of sales representatives at OIS and Abraxas, and due to additional expenses of CCS Pawlowski GmbH and OIS European operations. General and administrative expenses increased to $2.4 million in 2010 from $2.3 million in 2009, with the increase due primarily to additional expenses of CCS Pawlowski GmbH and OIS European operations, both acquired in the fourth quarter of 2009. Research and development expenses increased to $3.9 million from $2.9 million, due primarily to increased software testing and quality control-related expenses in OIS and Abraxas and the impairment of $0.2 million intangible assets related to Electo-optical Unit acquired during the Asset Purchase Agreement with MediVision in October of 2009.
OIS reported a net loss for the year ended December 31, 2010 of $2.5 million, or $0.09 per share, compared with a net loss for the year ended December 31, 2009 of $6.9 million, or $0.32 per share. The decrease in net loss for 2010 is mainly attributable to a $4.4 million impairment of debt booked in 2009 related to MediVision Medical Imaging, Ltd., OIS' former parent company and current major shareholder. On October 21, 2009, the Company acquired substantially all the assets of MediVision, which include certain European operations as conducted by CCS Pawlowski GmbH (MediVision's German subsidiary at the time), a branch office in Belgium, agreements under which MediVision contracted with third parties for distribution and other services, as well as rights to intellectual property. This acquisition provided OIS with access to new customers, technology and regional control over operations in the European market.
As of December 31, 2010, OIS reported $3.9 million in cash and cash equivalents and $2.8 million in total shareholders' equity.
About Ophthalmic Imaging Systems
Ophthalmic Imaging Systems (www.oisi.com) is the leading provider of ophthalmic digital imaging and informatics systems. The Company designs, develops, manufactures and markets digital imaging systems, image management and integrated EMR and PM solutions for the eye care market. With more than 25 years in the ophthalmic imaging business, the Company has consistently introduced new, innovative technologies. Through its wholly owned subsidiary, Abraxas Medical Solutions, the Company provides EMR and PM software to OB/GYN, orthopedic and primary care physicians. The Company markets and supports its products through an extensive network of dealers, distributors and direct representatives.
Statements in this press release which are not historical data are forward-looking statements which involve known and unknown risks, uncertainties, or other factors not under the Company's control, which may cause actual results, performance, or achievements of the Company to be materially different from the results, performance, or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the Company's periodic filings with the Securities and Exchange Commission.
Ophthalmic Imaging Systems
Selected Financial Data
Condensed Consolidated Statements of Operations
THREE MONTHS ENDED 12 MONTHS ENDED DECEMBER
DECEMBER 31, 31,
-------------------------- --------------------------
2010 2009 2010 2009
------------ ------------ ------------ ------------
Statement of Restated Restated
Operations:
Net revenues $ 4,813,587 $ 4,327,970 $ 18,631,912 $ 13,569,300
Cost of sales 2,321,906 1,904,407 8,328,414 6,242,279
----------- ----------- ----------- -----------
Gross profit 2,491,681 2,423,563 10,303,498 7,327,021
Sales and Marketing 1,890,716 1,392,962 6,908,325 4,124,480
General and
Administrative 739,301 605,998 2,433,619 2,255,389
Impairment related
to the debt of
MediVision - - - 4,436,187
Research and
development 1,217,330 745,648 3,880,593 2,559,478
Research and
development-
related party - - - 294,014
----------- ----------- ----------- -----------
Total operating
expenses 3,847,347 2,744,608 13,222,537 13,669,548
----------- ----------- ----------- -----------
Loss from operations (1,355,666) (321,045) (2,919,039) (6,342,527)
Other income
(expense), net 535,762 (1,073,246) 370,410 (665,742)
----------- ----------- ----------- -----------
Net loss before taxes (819,904) (1,394,292) (2,548,629) (7,008,269)
----------- ----------- ----------- -----------
Provision for income
tax expense 72,251 1,236 76,270 (3,787)
----------- ----------- ----------- -----------
Net loss $ (747,653) $ (1,393,056) $ (2,472,359) $ (7,012,056)
Less: Noncontrolling
interest' share (15,369) (8,511) (47,415) (8,511)
----------- ----------- ----------- -----------
Net loss attributable
to OIS $ (732,284) $ (1,384,545) $ (2,424,944) $ (7,003,545)
=========== =========== =========== ===========
Basic loss per share (0.02) (0.05) (0.08) (0.32)
Shares used in the
calculation of basic
EPS $ 30,302,782 $ 26,500,059 $ 28,805,067 $ 21,842,234
=========== =========== =========== ===========
Ophthalmic Imaging Systems
Condensed Balance Sheet
AUDITED AUDITED
AS OF DECEMBER AS OF DECEMBER
31, 2010 31, 2009
Balance Sheet: RESTATED
Assets:
Cash and investments $ 3,905,910 $ 5,406,239
Accounts receivable, net 4,088,269 2,710,987
Accounts receivable, related party - -
Note receivable, related party - -
Inventories, net 1,757,873 991,325
Other current assets 357,380 179,451
----------------- -----------------
Total Current Assets 10,109,432 9,288,002
----------------- -----------------
Licensing agreement - -
Prepaid products - -
Capitalized software development 383,607 767,220
AcerMed asset purchase 190,029 380,053
Capitalized imaging software 168,239 336,475
Goodwill 807,000 807,000
Customer relationship intangibles 411,863 481,364
Other intangibles - 199,000
Other assets 549,316 778,263
----------------- -----------------
Total Assets $ 12,619,486 $ 13,037,377
================= =================
Liabilities:
Accounts payable $ 1,256,515 $ 867,672
Accrued liabilities 2,022,347 1,753,041
Deferred revenue, current portion 1,722,235 1,632,491
Derivative liability financial
instruments 1,698,416 1,863,976
Notes payable - current portion 1,518,099 -
----------------- -----------------
Total Current Liabilities 8,217,612 6,117,180
----------------- -----------------
Deferred revenue, less current portion 251,785 247,231
Notes payable - non-current portion 1,301,523 2,886,698
Other liabilities - 150,000
----------------- -----------------
Total Liabilities $ 9,770,920 $ 9,401,109
================= =================
Stockholders' Equity:
Common stock 21,708,743 19,981,977
Additional paid in capital 65,543 47,044
Accumulated deficit (19,284,427) (16,859,483)
Cumulative translation (58,368) 2,241
----------------- -----------------
Total Ophthalmic Imaging Systems'
equity: 2,431,491 3,171,779
----------------- -----------------
Noncontrolling Interest 417,074 464,489
----------------- -----------------
Total Stockholders' Equity $ 2,848,565 $ 3,636,268
================= =================
Total Liabilities and Stockholders'
Equity $ 12,619,486 $ 13,037,377
================= =================
Contacts:
Gil Allon
CEO
Ariel Shenhar
CFO
(916) 646-2020
Investor Relations
Jody Cain
Lippert/Heilshorn & Associates
(310) 691-7100
Ophthalmic Imaging Systems
221 Lathrop Way, Suite I
Sacramento, CA 95815