TORONTO, Aug. 10 /PRNewswire-FirstCall/ - Spectral Diagnostics Inc. today reported net income of $4.7 million (24 cents per share) for the first quarter ended June 30, 2006 compared to a loss of $1.7 million (9 cents per share) for the same period last year. First quarter results included a $5.4 million gain on settlement of convertible notes payable pursuant to an agreement with former security holders of IDX Inc. This quarter represents the first reporting period without sales of rapid cardiac tests, which business was sold late in Fiscal 2006. Operating costs were down significantly from the previous year, as the company restructured its operations.
“Revenues were on target for the first quarter and our operating cost structure has now been fully aligned with projected revenues”, stated Anthony Businskas, Executive Vice President and CFO of Spectral. “Our royalty and reagent revenues remain consistent and we are very encouraged by early sales of our EAA(TM) assay in Europe. Revenues and profitability are expected to improve as the year progresses”, Mr. Businskas added.
Spectral is a developer of innovative technologies for rapid diagnostics. Spectral provides accurate and timely information to clinicians enabling the early initiation of appropriate and targeted therapy. Current products include rapid diagnostics for sepsis (EAA(TM)) and West Nile Virus as well as a range of other biological reagents. Spectral’s common shares are listed on The Toronto Stock Exchange: SDI.
Information in this news release that is not current or historically factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information, the future outlook of Spectral and anticipated events or results are assumptions based on beliefs of Spectral’s senior management as well as information currently available to it. While these assumptions were considered reasonable by Spectral at the time of preparation, they may prove to be incorrect. Readers are cautioned that actual results are subject to a number of risks and uncertainties, including the availability of funds and resources to pursue R&D projects, the successful and timely completion of clinical studies, the ability of Spectral to take advantage of business opportunities in the biomedical industry, the granting of necessary approvals by regulatory authorities as well as general economic, market and business conditions, and could differ materially from what is currently expected.
Spectral Diagnostics Inc. Consolidated Balance Sheets - unaudited As at June 30, 2006 and March 31, 2006 ------------------------------------------------------------------------- (in thousands of Canadian dollars) June 30 March 31 2006 2006 $ $ Assets Current assets Cash and cash equivalents 6,383 4,003 Short-term investments 3,350 Accounts receivable 835 877 Inventories 105 43 Prepaid expenses 263 250 ------------------------- 7,586 8,523 Capital assets 261 170 Purchased technology and trademarks 2,235 2,353 Deferred financing costs 168 512 ------------------------- 10,250 11,558 ------------------------- ------------------------- Liabilities Current liabilities Accounts payable and accrued liabilities 827 1,224 ------------------------- 827 1,224 Convertible notes payable 1,840 9,596 ------------------------- 2,667 10,820 ------------------------- Shareholders’ Equity Common shares 101,529 99,446 Other equity 4,974 4,963 Deficit (98,920) (103,671) ------------------------- 7,583 738 ------------------------- 10,250 11,558 ------------------------- ------------------------- Spectral Diagnostics Inc. Consolidated Statements of Operations and Deficit - unaudited For the three months ended June 30, 2006 and 2005 ------------------------------------------------------------------------- (in thousands of Canadian dollars, except share and per share data) 2006 2005 $ $ Sales 747 2,293 Cost of sales 250 1,081 ------------------------- Gross margin 497 1,212 ------------------------- Operating expenses Selling, general and administrative 737 1,723 Amortization 200 358 Foreign exchange loss (gain) 41 (40) Stock-based compensation 11 34 Research and product development 44 293 ------------------------- 1,033 2,368 ------------------------- Loss before the following (536) (1,156) Interest expense on convertible notes payable (205) (540) Interest income 48 2 Gain on settlement of convertible notes payable 5,444 - ------------------------- Net Income (loss) for the period 4,751 (1,694) Deficit - Beginning of period (103,671) (99,016) ------------------------- Deficit - End of period (98,920) (100,710) ------------------------- ------------------------- Basic and diluted income (loss) per common share 0.24 (0.09) ------------------------- ------------------------- Weighted average number of common shares outstanding 19,988,288 19,860,168 ------------------------- ------------------------- Spectral Diagnostics Inc. Consolidated Statements of Cash Flows - unaudited For the three months ended June 30, 2006 and 2005 ------------------------------------------------------------------------- (in thousands of Canadian dollars) 2006 2005 $ $ Cash provided by (used in) Operating activities Income (loss) for the period 4,751 (1,694) Items not affecting cash Amortization 200 358 Stock-based compensation expense 11 34 Accrued interest on convertible notes payable 205 540 Gain on settlement of convertible notes payable (5,444) - Changes in non-cash working capital (580) (627) ------------------------- (857) (1,389) ------------------------- Financing activities Bank indebtedness - (34) Restricted cash - 709 ------------------------- - 675 ------------------------- Investing activities Purchase of capital assets (113) (69) Proceeds on sale of short-term investments 3,350 ------------------------- 3,237 (69) ------------------------- Increase (decrease) in cash and cash equivalents during the period 2,380 (783) Cash and cash equivalents - Beginning of period 4,003 1,694 ------------------------- Cash and cash equivalents - End of period 6,383 911 ------------------------- ------------------------- Non-cash financing activities Retirement of existing convertible notes payable (9,801) Issuance of new convertible note payable 1,840 Issuance of common shares 2,083 Decrease in deferred financing costs on re-issue of warrants 280
Spectral Diagnostics Inc.
CONTACT: Spectral Diagnostics Inc., Anthony Businskas, Executive VP & CFO,(416) 626-3233 ext. 2200
