iCAD Reports Fourth Quarter and Full-Year 2019 Financial Results

Strong Q4 2019 revenue growth of 35% driven by a 39% increase in revenue from iCAD’s AI Cancer Detection segment

Conference call today at 4:30 p.m. ET

NASHUA, N.H., Feb. 27, 2020 (GLOBE NEWSWIRE) -- iCAD, Inc. (NASDAQ: ICAD), a global medical technology leader providing innovative cancer detection and therapy solutions, today reported its financial and operating results for the quarter and full year ended December 31, 2019.

Recent Highlights:

• Fourth quarter 2019 total revenue of approximately $9.4 million, an increase of approximately 35% over fourth quarter 2018.
• Fourth quarter 2019 revenue in the Cancer Detection segment of approximately $6.9 million, a 39% increase over the fourth quarter of 2018.
• Fourth quarter 2019 detection product revenue of $5.4 million an increase of 59% over the fourth quarter of 2018, driven by a $1.8 million contract with a world-renowned healthcare institution, the largest order in Company history.
• The first metastatic brain tumor was treated in the U.S. using the Xoft® Axxent® System.

“We are pleased with the overall performance of our business in 2019,” said Michael Klein, Chairman and Chief Executive Officer of iCAD, Inc. “In particular our results continue to be especially strong in Detection, as ProFound™ AI further penetrates the market. Our customers report life-threatening cancers being identified earlier and faster with this solution that is changing the landscape of breast cancer detection.”

“We have now completed one full year of the U.S. commercial launch of ProFound™ AI, following the December 2018 FDA approval,” continued Mr. Klein. “Our Detection revenue grew 39% in the fourth quarter of 2019, as compared to the same period of 2018, driven by a $1.8 million contract with a single hospital system in the U.S. Of the 39% growth in the Detection business, software license sales grew an impressive 59% year-over-year. As we enter our second year with ProFound AI, in the commercial marketplace we are confident that our innovation and competitive edge will remain robust and our differentiation will continue to expand.”

“In our Cancer Therapy segment, we are developing multiple new IORT applications targeting large market opportunities, such as brain, prostate and rectal cancer therapeutic indications” continued Mr. Klein.

“We were excited to recently announce that the first metastatic brain tumor was treated in the U.S. using the Xoft® Axxent® System as part of a clinical trial utilizing IORT in patients with large metastases treated with neurological resection. The strong interest in this new application was driven by clinical results reported in the September 2019 issue of World Neurosurgery. In a matched pair study, 30 patients were treated for recurrent GBM with either a single fraction of radiation immediately following surgical resection, without chemotherapy or temozolomide following surgery, or routine postoperative adjuvant chemotherapy +/- concomitant or sequential EBRT. Median overall survival in the IORT group was 24 months versus 21 months for the comparison group. As of September 2019, nine patients were still alive from the IORT group, whereas none of the patients in the comparison group survived.”

“We continue to grow our business from a position of financial strength. We ended the year with $15.3 million in cash and cash equivalents, as compared to $12.2 million at the end of 2018. Looking ahead, we are well-positioned to drive long-term growth and generate significant shareholder value,” concluded Mr. Klein.

Fourth Quarter 2019 Financial Results
Revenue: Total Detection and Therapy revenue for the fourth quarter of 2019 was $9.4 million, an increase of $2.4 million, or 35%, compared to the fourth quarter of 2018, reflecting a 69% increase in product revenue, and a 6% decrease in service and supplies revenue.

Cancer Detection revenue for the fourth quarter, which includes revenue from the Company’s mammography, breast density, and the associated service and supplies revenue, increased by approximately $1.9 million, or 39%, as compared to the fourth quarter of 2018, driven by growth in both direct and OEM revenues with sales primarily in the Company’s 3D imaging and Density products. Therapy revenue for the fourth quarter of 2019, which includes Xoft^® Axxent® eBx^® System^® sales, as well as the associated service and supplies revenue, increased by approximately $0.5 million, or 25%, as compared to the fourth quarter of 2018.

Gross Profit: Gross profit for the fourth quarter of 2019 was $7.2 million, or 76% of revenue, compared to $5.4 million, or 78% of revenue, for the fourth quarter of 2018. Gross profit percent changes were primarily due to changes in the mix of business.

Operating Expenses: Total operating expenses for the fourth quarter of 2019 were $9.1 million, a $0.9 million, or 11%, increase, from $8.2 million in the fourth quarter of 2018. The increase was driven by increased marketing and sales expenses in support of the Company’s commercialization efforts to drive adoption of Profound AI, offset by a decrease in general and administrative expenses due to severance expense in the fourth quarter of 2018.

GAAP Net Loss: Net loss for the fourth quarter of 2019 was ($3.3) million, or ($0.17) per diluted share, compared with a net loss of ($3.3) million, or ($0.20) per diluted share, for the fourth quarter of 2018.

Non GAAP Adjusted Net loss: Non GAAP adjusted net loss for the fourth quarter of 2019 was ($1.9) million, or ($0.10) per diluted share, compared with a Non GAAP adjusted net loss of ($1.2) million, or ($0.07) per diluted share, for the fourth quarter of 2018.

Non-GAAP Adjusted EBITDA: Non-GAAP adjusted EBITDA, a non-GAAP financial measure as defined below, for the fourth quarter of 2019, was a loss of ($1.4) million, essentially flat as compared to the fourth quarter 2018 non-GAAP adjusted EBITDA loss. Please refer to the section entitled “Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Measures” and the accompanying financial table included at the end of this release for a reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA results for the three-month periods ended December 31, 2019 and 2018, respectively.

Year Ended December 31, 2019 Financial Results
Revenue: Total Detection and Therapy revenue for the year ended December 31, 2019, was $31.3 million, an increase of $5.7 million, or 22%, over the year ended December 31, 2018, reflecting a 51% increase in product revenue and a 7% decrease in service and supplies revenue.

Detection revenue for the year ended December 31, 2019, which includes revenue from the Company’s mammography, breast density, and the associated service and supplies revenue, increased by approximately $5.5 million, or 32%, to $22.3 million, as compared to the same period of 2018, driven by growth in the Company’s direct sales of its 2D and 3D imaging products. Therapy revenue, which includes Xoft® Axxent® eBx® System® sales, as well as the associated service and supplies revenue, for the year ended December 31, 2019, increased by approximately $0.2 million, or 3%, to $9.0 million, as compared to the year ended December 31, 2018.

Gross Profit: Gross profit for the year ended December 31, 2019, was $24.2 million, or 77% of revenue, compared with $19.4 million, or 76% of revenue, for the year ended of 2018. Gross profit percent changes were primarily due to changes in the mix of business, additional manufacturing investments and amortization of acquired intangibles.

Operating Expenses: Total operating expenses for the year ended December 31, 2019, were $30.6 million, an increase of $3.1 million, or 11%, from $27.6 million in the year ended December 31, 2018. The increase was due to increased marketing and sales expenses, partially offset by decreases in engineering and product development costs.

GAAP Net Loss: Net loss for the year ended December 31, 2019, was ($13.5) million, or ($0.74) per diluted share, compared with a net loss of ($9.0) million, or ($0.54) per diluted share, for the year ended December 31, 2018.

Non GAAP Adjusted Net loss: Non GAAP adjusted net loss for the year ended December 31, 2019 was ($6.7) million, or ($0.37) per diluted share, compared with a Non GAAP adjusted net loss of ($6.3) million, or ($0.38) per diluted share, for the fourth quarter of 2018.

Non-GAAP Adjusted EBITDA: Non-GAAP adjusted EBITDA, a non-GAAP financial measure as defined below, for the 12 month period ended December 31, 2019, was a loss of ($4.3) million, compared to a non-GAAP adjusted EBITDA loss of ($3.7) million, in the same twelve month period of 2018. Please refer to the section entitled “Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Measures” and the accompanying financial table included at the end of this release for a reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA results for the nine-month periods ended December 31, 2019 and 2018, respectively.

Cash and Cash Equivalents: As of December 31, 2019, the Company had cash and cash equivalents of $15.3 million, compared to cash and cash equivalents of $12.2 million at December 31, 2018.

Convertible Debentures. On February 18, 2020, the Company notified the institutional and accredited investors, including, but not limited to, all of the then current directors and executive officers of the Company (the “Investors”) that as of February 14, 2020, the VWAP of the Company’s common stock, par value $0.01 per share for each of the preceding 30 consecutive Trading Days exceeded $8.00 per share, and in accordance with the terms of the Convertible Debentures, the Company shall cause all of the Investors to convert all of the outstanding principal amount of the Convertible Debentures and the Make Whole Amount (which includes all accrued but unpaid interest through the Forced Conversion Date and all interest that would have accrued through the December 21, 2021 maturity date of the Convertible Debentures but for the conversion), into shares of the Company’s Common Stock on a Forced Conversion Date of February 21, 2020. On February 21, 2020, the Company issued to the Investors an aggregate of 1,816,089 shares of Common Stock, consisting of 1,742,500 shares issued upon conversion of the outstanding principal amount of the Convertible Debentures, and 73,589 shares, known as the Pre-Make Whole Conversion Shares.

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.

About iCAD, Inc.
Headquartered in Nashua, NH, iCAD is a global medical technology leader providing innovative cancer detection and therapy solutions. For more information, 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 achieve business and strategic objectives, increase sales and acceptance of products, adoption by CMS of a new payment model, and that such model will prove beneficial to the Company, which is not assured, implement expansion plans, 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, to successfully defend itself in litigation matters, government regulation, changes in Medicare or other 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; the effects of a Global Pandemic, 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.

Contact:
Media Inquiries:
Jessica Burns, iCAD
+1-201-423-4492
jburns@icadmed.com

Investor Relations:
Jeremy Feffer, LifeSci Advisors
+ 1-212-915-2568
jeremy@lifesciadvisors.com