Novadaq Technologies, Inc. Reports Fourth Quarter And Full Year 2014 Financial Results

TORONTO, Feb. 25, 2015 (GLOBE NEWSWIRE) -- Novadaq Technologies Inc. ("NOVADAQ" or the "Company") (Nasdaq:NVDQ) (TSX:NDQ), the leading developer and provider of clinically relevant fluorescence imaging solutions for use in surgical and diagnostic procedures, today announced its fourth quarter and full year 2014 financial results. Unless otherwise indicated, all dollar amounts in this press release are expressed in United States ("U.S.") dollars.

Fourth Quarter 2014 Operating Results

For the three months ended December 31, 2014, NOVADAQ reported revenues of $13.0 million, an increase of 21% from $10.7 million in the fourth quarter of 2013. Significantly lower than expected capital sales of SPY Elite achieved by our former partner, LifeCell Corporation ("LifeCell"), combined with the negative impact of inventory adjustments resulting from the termination of NOVADAQ's SPY Elite distribution agreement with LifeCell, resulted in SPY Elite product revenues declining 41% to $2.5 million in Q4-2014 from $4.2 million in Q4-2013. This was more than offset by 34% growth in product sales for all other product lines, driven by a 76% increase in PINPOINT and LUNA sales which totaled $5.8 million in the fourth quarter of 2014 compared to $3.3 million in the same period last year.

Fourth quarter gross profits of $9.1 million (70% margin) represented an increase of 35% compared to gross profits of $6.7 million (63% margin) in the same period last year. The increased gross profit percentage in Q4-2014 was partly due to partnership fee revenue recognized as a result of the transfer of all marketing and distribution rights to the SPY Elite System from LifeCell to NOVADAQ.

Net loss for the 2014 fourth quarter was $17.6 million, or $0.32 loss per share, compared with a net loss of $2.7 million, or $0.05 loss per share, in Q4-2013. The 2014 fourth quarter net loss included a one-time termination fee of $4.5 million paid to LifeCell. Excluding the LifeCell termination payment and the impact of $7.4 million in non-cash expense related to the revaluation of warrants in the period, the Q4-2014 loss per share was $0.10.

Fourth quarter 2014 operating burn (cash consumed by operating activities before changes in working capital) was $7.6 million compared to $1.4 million in the fourth quarter of 2013. This difference in operating burn was mainly driven by increased sales and distribution expenses associated with the continued build-out of NOVADAQ's direct sales and marketing infrastructure and the one-time termination fee of $4.5 million paid to LifeCell. During Q4-2014, working capital consumed was $1.5 million, and $0.4 million was used to build SPY technology systems for evaluation and placement.

During the 2014 fourth quarter, 125 SPY technology systems, including FIREFLY, were shipped globally. Exiting the quarter, the worldwide installed base of SPY technology systems was approximately 1,725.

The Company estimates that the number of procedures performed using SPY technology systems during the fourth quarter was approximately 9,900, representing an increase of 55% year-over-year and 9% sequentially over the previous quarter.

"Our direct sales team had an outstanding quarter," said Dr. Arun Menawat, NOVADAQ's President and Chief Executive Officer. "In fact, despite an approximate $2 million shortfall from SPY Elite sales, we were still able to achieve record quarterly revenues."

Full Year 2014 Operating Results

For the year ended December 31, 2014, NOVADAQ's revenues were $46.6 million, an increase of 33% from $35.0 million in 2013. Full year 2014 gross profits of $30.5 million (66% margin) represented an increase of 38% compared to gross profits of $22.1 million (63% margin) in 2013. Full year 2014 operating burn was $12.5 million compared to $0.8 million in 2013. NOVADAQ's net loss for the year ended December 31, 2014 was $24.4 million, or $0.44 loss per share, compared to $22.3 million, or $0.47 loss per share, in 2013.

Cash and cash equivalents were $141.4 million at December 31, 2014, reflecting a decrease of $40.9 million compared to the cash position as at December 31, 2013.

"Revenue from our directly marketed products, PINPOINT and LUNA, more than doubled in 2014," commented Dr. Menawat. "Now, bringing our flagship product, SPY Elite, back into the control of our direct sales team, and securing the exclusive rights to market DermACELL tissue products, while requiring investment during the first half of 2015, positions us well for significant growth in the second half of the year and beyond," commented Dr. Menawat.

Current 2015 Outlook

As previously disclosed, based on the Company's business planning and budgeting activities, NOVADAQ anticipates its full year revenue for the fiscal year ending December 31, 2015 to be approximately $65 million, representing total year-over-year revenue growth of approximately 40%.