TORONTO, Feb. 14 /PRNewswire-FirstCall/ - Spectral Diagnostics Inc. , a developer of rapid diagnostic technologies, reported a consolidated loss for the three months ended December 31, 2005 of $1.8 million (9 cents per share), compared to a loss of $2.1 million (12 cents per share) for the same period last year. The consolidated loss for the nine months ended December 31, 2005 was $5.0 million, or 25 cents per share, compared to $5.4 million, or 31 cents per share, last year.
Sales for the third quarter ended December 31, 2005 amounted to $1.7 million compared to $2.3 million for the same period last year. For the nine months ended December 31, 2005 total sales were $6.3 million (2004 - $7.6 million). The first quarter of fiscal 2005 included a $0.5 million start-up sale of 15 Endotoxin Activity Assay (EAA(TM)) instruments to launch the early adapter program for the EAA(TM) product. In addition, the continuing strength of the Canadian dollar against the U.S. currency had a negative impact of approximately $0.4 million on recorded revenues in this fiscal year.
Effective at the close of business on February 6, 2006, the Company completed the sale of its rapid cardiac test business to Nanogen Inc. for a total consideration of $9 million consisting of $5.7 million in cash and $3.3 million in freely tradable common shares of Nanogen Inc. The estimated gain on sale of this business is approximately $3-3.5 million after write-off of related assets, goodwill, deal costs and other restructuring expenses. In addition, Nanogen will assume all responsibilities for sales, marketing and manufacturing operations related to the rapid cardiac test business.
“The third quarter represents the last full quarter that our operating results will be impacted by disappointing rapid cardiac product sales”, said Dr. Paul Walker, President and Chief Executive Officer. “January results will be affected as we transition the rapid cardiac test business to Nanogen. By the end of this fiscal year ending March 31, 2006, however, we will benefit from the consistent revenues of our royalty and retained reagents business, and significantly reduced infrastructure”, added Dr. Paul Walker.
Spectral is a developer of innovative technologies for comprehensive disease management. Spectral provides accurate and timely information to clinicians enabling the early initiation of appropriate and targeted therapy. Current products include Spectral’s FDA approved rapid diagnostic for sepsis (the Endotoxin Activity Assay). New products include Spectral’s rapid West Nile Virus (WNV) assay. Spectral manufactures the EAA(TM) and WNV assays. Spectral earns royalties associated with its proprietary reagents. Spectral’s common shares are listed on The Toronto Stock Exchange: SDI.
These consolidated financial statements are not complete as they exclude accompanying notes, which are an integral part of the financial statements. More specifically, they exclude the note on the Company’s financial situation and going concern. The complete audited consolidated financial statements for the years ended March 31, 2005 and 2004, the second quarter ended September 30, 2004, as well as additional information and the Management’s Discussion and Analysis of financial condition and results of operations, are filed with the relevant securities regulatory authorities and are available on the Spectral website at www.spectraldx.com, and on SEDAR at www.sedar.com.
Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information, particularly in respect of 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 December 31, 2005 and March 31, 2005 ------------------------------------------------------------------------- (in thousands of Canadian dollars) December 31, March 31, 2005 2005 $ $ Assets Current assets Cash and cash equivalents 417 1,694 Accounts receivable 2,065 2,760 Inventories 1,584 1,351 Prepaid expenses 281 359 ------------ ------------ 4,347 6,164 Restricted cash 447 2,013 Capital assets 987 1,158 Purchased technology and trademarks 2,887 3,327 Deferred financing costs 585 804 Goodwill 2,114 2,114 ------------ ------------ 11,367 15,580 ------------ ------------ ------------ ------------ Liabilities Current liabilities Bank indebtedness 859 929 Accounts payable and accrued liabilities 758 1,582 ------------ ------------ 1,617 2,511 Convertible notes payable 9,362 7,742 ------------ ------------ 10,979 10,253 ------------ ------------ Shareholders’ Equity Common shares 99,446 99,446 Other equity 5,000 4,897 Deficit (104,058) (99,016) ------------ ------------ 388 5,327 ------------ ------------ 11,367 15,580 ------------ ------------ ------------ ------------ Spectral Diagnostics Inc. Consolidated Statements of Operations and Deficit - unaudited For the three and nine month periods ended December 31, 2005 and 2004 ------------------------------------------------------------------------- (in thousands of Canadian dollars, except share and per share data) 3 Months Ended 9 Months Ended December 31 December 31 2005 2004 2005 2004 $ $ $ $ Sales 1,707 2,313 6,265 7,648 Cost of Sales 868 996 3,008 3,221 ----------- ----------- ----------- ----------- Gross Margin 839 1,317 3,257 4,427 ----------- ----------- ----------- ----------- Operating expenses Sales and marketing 916 1,191 2,996 3,701 General and administrative 775 731 2,334 2,174 Depreciation and amortization 333 347 1,033 1,050 Foreign exchange loss 36 109 175 176 Stock-based compensation 34 65 103 276 Research and product development 395 - 1,309 1,763 Government assistance (385) - (1,317) (200) ----------- ----------- ----------- ----------- 2,104 3,124 6,633 8,940 ----------- ----------- ----------- ----------- Loss before the following (1,265) (1,807) (3,376) (4,513) Interest expense on convertible notes (540) (300) (1,620) (900) Other net interest income (expense) (2) (5) (46) 17 ----------- ----------- ----------- ----------- Loss for the period (1,807) (2,112) (5,042) (5,396) Deficit - Beginning of period (102,251) (94,942) (99,016) (91,658) ----------- ----------- ----------- ----------- Deficit - End of period (104,058) (97,054) (104,058) (97,054) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Basic and diluted loss per common share (0.09) (0.12) (0.25) (0.31) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Weighted average number of common shares outstanding 19,860,168 18,267,673 19,860,168 17,510,409 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- Spectral Diagnostics Inc. Consolidated Statements of Cash Flows - unaudited For the three and nine month periods ended December 31, 2005 and 2004 ------------------------------------------------------------------------- (in thousands of Canadian dollars) 3 Months Ended 9 Months Ended December 31 December 31 2005 2004 2005 2004 $ $ $ $ Cash provided by (used in) Operating activities Loss for the period (1,807) (2,112) (5,042) (5,396) Items not affecting cash Depreciation and amortization 333 347 1,033 1,050 Stock-based compensation expense 34 65 103 276 Accrued interest on convertible notes payable 540 300 1,620 900 Changes in non-cash working capital 354 (206) (284) (1,086) ----------- ----------- ----------- ----------- (546) (1,606) (2,570) (4,256) ----------- ----------- ----------- ----------- Financing activities Bank indebtedness 184 (150) (70) (160) Restricted cash 200 593 1,566 2,248 Net cash proceeds on issuance of common shares 3,272 - 3,359 ----------- ----------- ----------- ----------- 384 3,715 1,496 5,447 Investing activities Purchase of capital assets (27) (133) (203) (431) ----------- ----------- ----------- ----------- Increase (decrease) in cash and cash equivalents during the period (189) 1,976 (1,277) 760 ----------- ----------- ----------- ----------- Cash and cash equivalents - Beginning of period 606 854 1,694 2,070 ----------- ----------- ----------- ----------- Cash and cash equivalents - End of period 417 2,830 417 2,830 ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Spectral Diagnostics Inc.
CONTACT: At: Spectral Diagnostics Inc., Dr. Paul Walker, Chief ExecutiveOfficer, (416) 626-3233
