Novadaq Reports First Quarter 2012 Financial Results


TORONTO, ONTARIO--(Marketwire -05/04/12)- Novadaq® Technologies Inc. ("Novadaq" or the "Company") (NDQ.TO - News)(NVDQ - News), a developer of clinically-relevant fluorescence imaging solutions for use in surgical procedures, today announced financial results for its first quarter ended March 31, 2012. Unless otherwise indicated, all dollar amounts in this press release are expressed in United States (U.S.) dollars.

"We are focused on building a sustainable business model based on partnering our SPY fluorescence imaging technology for certain surgical applications with market leading companies and commercializing, on our own, new systems such as PINPOINT® for endoscopic surgery," commented Dr. Arun Menawat, Novadaq's President and CEO.

"The combined installed base of SPY technology in the United States now exceeds 400 systems, and 3,100 open SPY procedure kits were shipped during the first quarter of 2012, increasing SPY recurring revenues by 180% year-over-year. Additionally, with the recent completion of the $40.3 million equity financing, and by sponsoring a multi-center clinical trial called PILLAR™, we have taken the initial steps towards the commercialization of PINPOINT," added Dr. Menawat.

First Quarter Corporate Highlights


-- Novadaq shipped 120 SPY Elite® and FIREFLY systems during the first
quarter. At March 31, 2012, the number of US hospitals with installed
SPY and FIREFLY systems exceeded 400.
-- 3,100 SPY kits for open surgical procedures were shipped to hospitals
during the first quarter, representing a 163% increase over the same
period in 2011, and a 15% sequential increase compared with Q4-2011.
-- In January, Novadaq named MAQUET Cardiovascular as the exclusive US
distributor of Novadaq's CO2 Heart Laser products.
-- In March, Novadaq announced that its common shares were approved for
listing on the NASDAQ Global Market (NASDAQ) under the ticker symbol
-- Also in March, the Company announced that the Centers for Medicare &
Medicaid Services established SPY Vascular Angiography as a new
reimbursable service under the Hospital Outpatient Prospective Payment
System, effective April 1, 2012.
-- Prior to the end of the quarter, Novadaq initiated the multi-center
PILLAR (Perfusion Assessment in Laparoscopic Left Anterior Resection)
clinical trial, which will study the use of PINPOINT endoscopic
fluorescence imaging in up to 150 patients undergoing laparoscopic left
colectomies. Details of the study can be found at:, searching identifier NCT01560377.

Financial Highlights


-- Total revenues in the first quarter were $4.8 million, a 103% increase
compared to $2.3 million in the same period in 2011, due mainly to
increased sales of systems and procedure kits across both of our
commercial SPY businesses (SPY Elite and FIREFLY). Total revenues
decreased sequentially by $228,000 in comparison to Q4-2011 due to
seasonality in SPY Elite capital sales, and lower TMR revenues.
-- First quarter recurring revenues for our SPY businesses totaled $2.1
million, representing year-over-year growth of 180% compared to Q1-2011,
and sequential growth of 16% compared to Q4-2011.
-- Operating burn (cash used in operating activities before changes in
working capital) was close to break-even at $0.08 million in the first
quarter. Excluding the impact of NASDAQ registration fees, operations
would have contributed $0.2 million. This compares with operating burns
of $1.8 million for the same period in 2011, and $0.03 million in Q4-
2011. Working capital contributed $0.6 million during the first quarter
2012, and $1.9 million was invested, including $1.8 million to build the
SPY Elite installed base.
-- At March 31, 2012, cash and cash equivalents totaled $7.9 million, and
32.8 million basic shares were outstanding. Subsequent to the end of the
quarter, the Company raised $40.3 million by way of an underwritten
equity offering (net proceeds approximately $36.9 million), issuing
7,015,000 shares at a price of $5.75 per share.

Conference Call

Novadaq is pleased to invite all interested parties to participate in a conference call today, Friday, May 4, 2012, 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 June 4, 2012 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 account number 286 and the conference identification number 388170 when prompted.

The call will be archived for 90 days on the Company's website at 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 surgeons with clinically-relevant, innovative fluorescence imaging solutions to enhance the lives of patients and their surgeons, 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 50 peer-reviewed publications demonstrate that the use of SPY during complex surgery, leads to fewer post-operative complications and lower hospital costs.

The SPY Imaging System is United States Food and Drug Administration ("FDA") 510(k) cleared for use 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. Our unique business model of partnering with market-leading companies to drive adoption of our fluorescence 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, 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.

(expressed in U.S. dollars)

As at As at
March 31, December 31,
2012 2011
Current assets
Cash and cash equivalents $ 7,894,253 $ 9,633,608
Accounts receivable 2,145,413 2,018,782
Prepaid expenses and other 1,508,354 829,625
Inventories 2,249,449 1,755,729

Non-current assets
Property and equipment 7,500,057 6,034,674
Deferred tax assets 222,546 248,640
Intangible assets 1,977,681 2,272,434

Total Assets $ 23,497,753 $ 22,793,492

Current liabilities
Accounts payable and accrued liabilities 4,341,377 $ 2,485,994
Provisions 41,620 41,300
Deferred revenue 450,238 396,859
Deferred partnership fee revenue 1,300,000 1,300,000
Repayable government assistance 202,556 197,760

Non-current liabilities
Deferred tax liabilities 222,546 248,640
Convertible debentures 4,327,830 4,223,454
Deferred revenue 164,357 188,883
Deferred partnership fee revenue 4,266,666 4,591,666
Repayable government assistance 169,175 214,402
Shareholder warrants 11,876,354 8,278,105

Total Liabilities $ 27,362,719 $ 22,167,063

Shareholders' (Deficiency) Equity
Share capital $ 98,825,650 $ 98,695,023
Contributed surplus 6,895,159 6,772,298
Equity component of convertible debentures 1,454,353 1,454,353
Deficit (111,040,128) (106,295,245)

Total Shareholders' (Deficiency) Equity $ (3,864,966) $ 626,429


Total Liabilities and Shareholders'
(Deficiency) Equity $ 23,497,753 $ 22,793,492

Novadaq Technologies Inc.
(expressed in U.S. dollars)

For the three months ended
March 31, March 31,
2012 2011

Product sales $ 3,654,045 $ 1,735,892
Royalty revenue 608,083 -
Deferred licensing revenue 325,000 200,000
Service revenue 180,247 404,938
Total revenues $ 4,767,375 $ 2,340,830
Cost of sales 2,045,537 1,257,057
Gross margin $ 2,721,838 $ 1,083,773

Selling and distribution costs $ 1,063,487 $ 1,275,219
Research and development expenses 1,161,731 1,048,128
Administrative expenses 1,470,950 1,112,784
Total operating expenses $ 3,696,168 $ 3,436,131

Loss from operations before the following $ (974,330) $ (2,352,358)

Finance costs $ (172,731) $ (167,578)

Finance income 427 7,085

Shareholder warrants revaluation adjustment (3,598,249) 4,307

Gain on investment - 25,000

Loss and comprehensive loss for the period $ (4,744,883) $ (2,483,544)
Basic and diluted loss and comprehensive loss
per share for the period $ (0.15) $ (0.09)

Novadaq Technologies Inc.
(expressed in U.S. dollars)

For the three months ended
March 31, March 31,
2012 2011
Loss and comprehensive loss for the period $ (4,744,883) $ (2,483,544)
Items not affecting cash
Depreciation of property and equipment 418,182 192,210
Amortization of intangible assets 294,753 235,183
Stock-based compensation 253,488 205,020
Finance costs, including imputed interest
on convertible debentures 104,376 96,760
Warrants revaluation adjustment 3,598,249 (4,307)
$ (75,835) $ (1,758,678)
Changes in non-cash working capital balances
(Decrease) increase in deferred revenue $ 40,387 323,772
(Increase) decrease in accounts receivable (126,631) 322,895
Increase in inventories (493,720) (799,410)
Increase in accounts payable and accrued
liabilities 1,845,432 627,129
Decrease (increase) in prepaid expenses
and other (652,635) 438,812
Net change in non-cash working capital
balances related to operations $ 612,833 $ 913,198
(Decrease) increase in long term deferred
revenue (357,650) (239,148)
Cash provided by (used in) operating
activities $ 179,348 $ (1,084,628)
Additions to property and equipment $ (1,913,282) $ (749,265)
Disposals of property and equipment 29,717 27,409
Purchase of TMR business - (1,000,000)
Cash used in investing activities $ (1,883,565) $ (1,721,856)

Issuance of common shares and warrants - $ 15,278,447
Transaction costs of common shares and
warrants - (998,207)
Repayable government assistance $ (40,431) -
Cash (used in) provided by financing
activities $ (40,431) $ 14,280,240

Net (decrease) increase in cash and cash
equivalents during the period $ (1,744,648) $ 11,473,756
Net foreign exchange difference 5,293 38,775
Cash and cash equivalents at beginning of
period 9,633,608 5,597,407

Cash and cash equivalents at end of period $ 7,894,253 $ 17,109,938


Investor and Media Relations: Novadaq Technologies Inc.
David C. Martin
Vice President, Corporate Development and Investor Relations
905-629-3822 ext: 218


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