LMD.V: Revenue +240% in 2014, +90% in 2015?
TSX:LMD.V 2014 Revenue Preannouncement: $9.7M In Orders, In-Line w/ Expectations, Should Recognize $8.5M in 2014 This morning (1/21/2015) LED Medical (LMD.V) (LEDIF) issued preliminary sales for the full year 2014 of $9.7 million, $8.5 million of which is expected to be recognized as revenue in fiscal 2014. The $9.7 million of orders is at about the midway of the previous issued guidance of $9.0 million - $11.0 million. The significant order flow towards the end of the year created a backlog which means ~$1.2 million of the orders will be recognized as revenue in early 2015. The implied ~$4.2 million in revenue for Q4 compares to our estimate (prior to the preannouncement) of $5.0 million. LED also provided preliminary 2015 revenue guidance of $15 million to $16 million – compared to our estimate (prior to the preannouncement of $14.2 million). We have now reduced our Q4 2014 estimate by $800k (to $4.2 million) and pushed this $800k to early 2015 – resulting in our 2015 revenue estimate increasing to $15 million. Importantly, LED notes in this morning’s press release that much of ~$6.0 million revenue growth (+240%) from 2013 to 2014 was driven by a significant increase in contribution from VELscope products – indicating that the full initial potential from the company’s dental imaging product line may yet to have been realized. We think the revival in the VELscope line, combined with a much more significant contribution from the dental imaging business bodes well for additional significant revenue growth and improved earnings in 2015 and beyond. In addition, incremental contribution is expected to materialize from the continued build-out of the sales/distribution infrastructure and additions to the imaging product portfolio. As we have recently noted, revenue growth is being driven by the recent expanded distribution of VELscope as well as the newly established digital imaging product line. LED further beefed-up their sales capabilities with the recently signed distribution agreement with DenMat Holdings for VELscope ex-U.S. They also increased their geographic reach for RAYSCAN Alpha-Expert and RIOSensor intraoral sensor, which had previously only included the U.S. market until the announcement in December that LED signed an exclusive distribution agreement with Ray Co. for Canada. While we believe these agreements likely only provided modest contribution in Q4, we think much more substantial revenue will be provided from these territories beginning in early 2015. We are maintaining our Outperform rating and $2.25/share price target. See below for free access to our full report on LED Medical. READ THE LATEST FULL RESEARCH REPORT HERE SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR and to view our disclaimer.
OTC:LEDIF
