NOVADAQ Reports 2013 Fourth Quarter and Full Year Financial Results

Marketwired

TORONTO, ONTARIO--(Marketwired - Feb 6, 2014) - Novadaq® Technologies Inc. ("NOVADAQ" or the "Company") (NVDQ)(NDQ.TO), the leading developer and provider of clinically relevant imaging solutions for use in surgical and diagnostic procedures, today announced fourth quarter and full-year 2013 financial results. Unless otherwise indicated, all dollar amounts in this press release are expressed in United States (U.S.) dollars.

NOVADAQ reported total revenues for the fourth quarter and full year 2013 of $10.7 million and $35.0 million, respectively, representing increases of 57% and 52% as compared to the same periods in 2012. Growth was driven by increases in the number of patients treated using NOVADAQ's fluorescence imaging technologies, and increases in capital sales of our devices.

Fourth quarter and full year 2013 SPY technology revenues were $10.0 million and $31.6 million, respectively, representing increases of 71% and 64% compared to the same periods in 2012. Fourth quarter SPY technology recurring revenues increased by 37% to $4.1 million compared to $3.0 million reported in Q4-2012.

Fourth quarter gross profit of $6.7 million (63% margin), represents an increase of 48% compared with $4.6 million (67% margin), in Q4-2012, and an increase of 17% compared with $5.7 million (65% margin) in Q3-2013.

Fourth quarter of 2013 operating burn (cash burn by operating activities before changes in working capital) was $1.4 million compared with an operating contribution of $1.1 million in the fourth quarter of 2012. During the fourth quarter, working capital consumed $0.7 million, and $1.8 million was invested in fixed assets, the majority of which related to building the SPY technology systems installed bases.

Net loss of $2.7 million for the fourth quarter of 2013 increased by $5.8 million compared with the $3.1 million net profit in fourth quarter 2012. Fourth quarter 2013 loss per share was $0.05. Excluding the impact of non-cash $0.4 million warrants revaluation gain in fourth quarter 2013, loss per share was $0.06.

Cash and cash equivalents were $182.3 million at December 31, 2013, reflecting an increase of $95.4 million, compared to the cash position as of September 30, 2013. On October 29, 2013, NOVADAQ closed the sale of 6,250,000 common shares on a bought deal basis, at a price to the public of $16.75 per common share. After the underwriting commissions and other offering expenses, NOVADAQ received net proceeds of approximately US$99.6 million.

NOVADAQ shipped 143 SPY Fluorescence technology imaging systems during the fourth quarter of 2013. The combined installed base of SPY Fluorescence technology increased by 157 systems and now exceeds 1,200 systems. NOVADAQ estimates that its imaging systems were used in more than 6,400 procedures during the quarter.

"Key accomplishments for NOVADAQ in 2013 included the launch of two new imaging systems, PINPOINT and LUNA, the building of our direct U.S. sales team, and the appointment of a highly capable network of distributors in the Asian markets", said Dr. Arun Menawat, NOVADAQ's President and CEO. "Additionally, several clinical studies were presented during the year which confirmed that the use of NOVADAQ's imaging technologies results in significant clinical benefit in our two lead applications, breast reconstruction and colorectal surgery. We also identified new applications for our imaging systems including lymph node mapping, bile duct imaging during cholecystectomy, and visualization of endometriotic lesions during gynecological surgery. Clinical validation studies are currently underway and we expect initial findings to become available later this year."

Conference Call

NOVADAQ is pleased to invite all interested parties to participate in a conference call today, Thursday, February 6, 2014, at 8:30 a.m. Eastern Time during which the results will be discussed.
Those wishing to access the live conference call by telephone should dial 1-877-407-8031 (within Canada and the United States) or 1-201-689-8031 (international callers) several minutes prior to the beginning of the call. A telephonic replay of the conference call will be made available until midnight on March 6, 2014 and can be accessed by dialing 1-877-660-6853 (within Canada and the United States) or 1-201-612-7415 (international callers) and entering the conference identification number 13575239 when prompted.

The call will be archived for 90 days on the Company's website at www.novadaq.com under the "Events" tab in the Investors section. In addition, a replay of the call will be available for download to a portable audio player or computer, as an MP3 or podcast file, at the same location on NOVADAQ's website.

About Novadaq Technologies Inc.

Enabling medical professionals with clinically relevant, point-of-care imaging solutions to enhance the lives of patients and their caregivers, while reducing health care costs, is NOVADAQ's global mission. SPY® fluorescence imaging technology provides surgeons with real-time visualization, leading to improved outcomes and reduced costs without exposing the patient to radiation. More than 80 peer-reviewed publications demonstrate that the use of SPY imaging technologies during complex surgery and diagnostic procedures, leads to lower rates of post-operative complications and lower hospital costs.

SPY Imaging Systems are United States Food and Drug Administration 510(k) cleared for use in seven surgical specialties. The endoscopic version of SPY called PINPOINT®, combines the capabilities of SPY Imaging with high definition ("HD") visible light visualization offered by conventional endoscopes. LUNA™ is used to assess perfusion in patients being treated for non-healing wounds. In August 2013, NOVADAQ acquired the surgical scintigraphy imaging technology, which is being developed for perioperative imaging of sentinel lymph nodes and tumor margins. NOVADAQ's unique business model of partnering with market-leading companies to drive adoption of our imaging technology, while building our own commercial infrastructure, is the cornerstone of our corporate strategy for growth.

Forward Looking Statements

Certain statements included in this press release may be considered forward-looking. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. All forward-looking statements are based on NOVADAQ's current beliefs as well as assumptions made by and information currently available to NOVADAQ and relate to, among other things, the Company's strategy, strategic goals, research and development activities, research and clinical testing outcomes, taxes, capital expenditures, future operations, future financial position, future revenues/results, projected costs, prospects and plans and objectives of management.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Due to risks and uncertainties, including the risks and uncertainties identified by NOVADAQ in its public securities filings available at www.sec.gov and www.sedar.com, actual events may differ materially from current expectations. NOVADAQ disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Novadaq Technologies Inc.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(expressed in U.S. dollars, except common shares outstanding)
As at December 31, 2013 As at December 31, 2012
ASSETS
Current assets
Cash and cash equivalents $ 182,329,782 $ 38,954,181
Accounts receivable 8,502,095 4,056,954
Prepaid expenses and other assets 1,032,431 852,674
Inventories 3,845,695 1,713,577
Non-current assets
Property and equipment, net 13,360,833 10,717,661
Deferred tax assets - 170,442
Intangible assets, net 3,303,647 1,121,808
Total Assets $ 212,374,483 $ 57,587,297
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 7,123,563 $ 3,407,329
Provisions 187,080 85,260
Deferred revenue 380,325 637,864
Deferred partnership fee revenue 1,300,000 1,300,000
Repayable government assistance 17,587 203,148
Non-current liabilities
Deferred tax liabilities - 170,442
Convertible debentures - 4,656,746
Deferred revenue 193,626 144,204
Deferred partnership fee revenue 1,991,666 3,291,666
Repayable government assistance - 17,946
Shareholder warrants 26,065,994 13,002,930
Total Liabilities $ 37,259,841 $ 26,917,535
Shareholders' Equity
Share capital $ 307,103,074 $ 139,946,563
Contributed surplus 8,953,041 7,908,224
Equity component of convertible debentures - 1,454,353
Deficit (140,941,473 ) (118,639,378 )
Total Shareholders' Equity $ 175,114,642 $ 30,669,762
Total Liabilities and Shareholders' Equity $ 212,374,483 $ 57,587,297
Total number of common shares outstanding 54,894,038 40,226,243
Novadaq Technologies Inc.
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED
(expressed in U.S. dollars, except per share amounts)
For the three months ended For the twelve months ended
December 31, 2013 December 31, 2012 December 31, 2013 December 31, 2012
Product sales $ 9,643,337 $ 5,770,240 $ 31,019,451 $ 19,037,096
Royalty revenue 616,460 545,523 1,889,404 1,849,668
Partnership fee revenue 325,000 325,000 1,300,000 1,300,000
Service revenue 163,555 204,918 811,683 802,296
Total revenues 10,748,352 6,845,681 35,020,538 22,989,060
Cost of sales 4,003,560 2,281,116 12,932,695 8,537,408
Gross profit 6,744,792 4,564,565 22,087,843 14,451,652
Selling and distribution expenses 4,863,437 1,357,015 14,060,861 4,926,376
Research and development expenses 2,281,978 1,640,963 7,974,455 5,958,499
Administrative expenses 2,865,881 1,601,586 7,233,570 6,573,484
Write-down of equipment - - 25,488 -
Write-down of inventory - - 31,285 57,540
Total operating expenses 10,011,296 4,599,564 29,325,659 17,515,899
Loss from operations (3,266,504 ) (34,999 ) (7,237,816 ) (3,064,247 )
Finance costs (3,189 ) (180,405 ) (182,896 ) (707,500 )
Finance income 42,262 20,969 109,089 61,798
Warrants revaluation adjustment 444,995 3,389,066 (15,015,472 ) (8,558,323 )
Gain on investment - - 25,000 25,000
Loss from operations before income taxes (2,782,436 ) 3,194,631 (22,302,095 ) (12,243,272 )
Income tax recovery (expense) 67,500 (100,861 ) - (100,861 )
Net loss and comprehensive loss for the year (2,714,936 ) $ 3,093,770 (22,302,095 ) $ (12,344,133 )
Basic income (loss) and comprehensive income (loss) per share for the period (0.05 ) 0.08 $ (0.47 ) $ (0.32 )
Diluted loss and comprehensive loss per share for the period (0.05 ) - $ (0.47 ) $ (0.32 )
Novadaq Technologies Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED
(expressed in U.S. dollars)
For the three months ended For the twelve months ended
December 31, 2013 December 31, 2012 December 31, 2013 December 31, 2012
OPERATING ACTIVITIES
Loss and comprehensive loss for the year $ (2,714,936 ) $ 3,093,770 $ (22,302,095 ) $ (12,344,133 )
Items not affecting cash
Depreciation of property and equipment 971,446 640,432 3,368,165 2,142,633
Amortization of intangible assets 88,745 284,191 335,428 1,150,626
Stock-based compensation 686,187 395,306 2,543,984 1,316,683
Imputed interest on convertible debentures - 112,335 169,056 433,292
Warrants revaluation adjustment (444,995 ) (3,389,066 ) 15,015,472 8,558,323
Write-down of equipment - - 25,488 -
Write-down of inventory - - 31,285 57,540
Gain on investment - - (25,000 ) (25,000 )
(1,413,553 ) 1,136,968 (838,217 ) 1,289,964
Changes in non-cash working capital
Increase in accounts receivable (2,632,136 ) (1,160,376 ) (4,445,141 ) (2,038,172 )
(Increase) decrease in inventories (165,104 ) 161,195 (2,163,403 ) (604,700 )
Decrease (increase) in prepaid expenses and other assets 109,296 3,658 (9,315 ) 55,149
Increase (decrease) in accounts payable 2,465,369 (1,059,141 ) 3,670,558 839,696
(Decrease) increase in deferred revenue (439,956 ) 262,083 (216,240 ) 263,336
Net change in non-cash working capital balances related to operations (662,531 ) (1,792,581 ) (3,163,541 ) (1,484,691 )
Decrease in long-term deferred revenue (342,228 ) (316,902 ) (1,300,000 ) (1,325,602 )
Cash used in operating activities (2,418,312 ) (972,515 ) (5,301,758 ) (1,520,329 )
INVESTING ACTIVITIES
Purchase of property and equipment (1,958,312 ) (1,592,361 ) (6,424,498 ) (6,511,829 )
Purchase of intangible assets (39,853 ) - (2,517,267 ) -
Disposal of property and equipment 161,403 185,666 387,673 275,521
Redemption of long-term investment - - 25,000 25,000
Cash used in investing activities (1,836,762 ) (1,406,695 ) (8,529,092 ) (6,211,308 )
FINANCING ACTIVITIES
Proceeds from issuance of common shares 104,687,500 - 162,544,000 40,336,250
Transaction costs paid relating to issuance of common shares (5,044,103 ) - (8,225,673 ) (3,389,352 )
Repayable government assistance (49,389 ) (53,726 ) (203,507 ) (191,068 )
Proceeds from exercise of options 85,677 10,209 2,484,553 87,492
Proceeds from exercise of warrants - 202,895 621,912 202,895
Cash provided by financing activities 99,679,685 159,378 157,221,285 37,046,217
Net increase in cash and cash equivalents 95,424,611 (2,219,832 ) 143,390,435 29,314,580
Net foreign exchange difference (8,437 ) (4,011 ) (14,834 ) 5,993
Cash and cash equivalents at beginning of year 86,913,608 41,178,024 38,954,181 9,633,608
Cash and cash equivalents at end of year $ 182,329,782 $ 38,954,181 $ 182,329,782 $ 38,954,181
Contact:
Novadaq Technologies Inc.
David C. Martin
Vice President, Corporate Development and Investor Relations
1-905-629-3822 ext: 218
dmartin@novadaq.com
www.novadaq.com

View Comments (0)