Novadaq Reports Second Quarter 2012 Financial Results

Marketwired

TORONTO, ONTARIO--(Marketwire -08/02/12)- Novadaq® Technologies Inc. ("Novadaq" or the "Company") (NDQ.TO)(NVDQ), a developer of clinically-relevant fluorescence imaging solutions for use in surgical procedures, today announced financial results for its second quarter ended June 30, 2012. Unless otherwise indicated, all dollar amounts in this press release are expressed in United States (U.S.) dollars.

Novadaq reported total second quarter 2012 revenue of $5.4 million, up approximately 48% compared with $3.6 million for the second quarter of 2011. Second quarter of 2012 revenue growth was driven by continued adoption of SPY Elite® and FIREFLY procedures and higher SPY Elite and FIREFLY system sales.

Second quarter of 2012 recurring revenue for Novadaq's SPY businesses increased 124% to $2.5 million from $1.1 million in the second quarter of 2011, and increased 18% sequentially from $2.1 million in the first quarter of 2012.

Second quarter of 2012 operating contribution (cash contributed by operating activities before changes in working capital) was $0.2 million compared with an operating burn of $0.9 million in the second quarter of 2011. During the second quarter, working capital consumed $1.3 million, and $1.7 million was invested, including $1.6 million to build the SPY Elite installed base.

Cash and cash equivalents were $41.6 million at June 30, 2012, reflecting an increase of $33.7 million, compared to the cash position as of March 31, 2012. In April, 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.

Novadaq shipped 130 imaging systems and approximately 4,000 SPY Elite and FIREFLY procedures kits during the second quarter of 2012. The combined installed base of SPY technology in the United States now exceeds 500 systems.

"We are seeing increased adoption in breast reconstruction and partial nephrectomy, our initial markets, as evidenced by the 18% sequential increase in recurring revenues", commented Dr. Arun Menawat, Novadaq's President and CEO. "At the same time, focus on our PINPOINT® endoscopic fluorescence imaging system is increasing. Novadaq plans to market PINPOINT directly, and expects that the product will be familiar to surgeons and hospitals because they are already using SPY technology through our existing installed base. With PINPOINT, the clinical and cost savings benefits of fluorescence imaging will be available to surgeons choosing to perform minimally invasive procedures, which is a large segment of the surgery market. We have started the process of building our sales and marketing team for PINPOINT, and recruitment into the PILLAR™ multi-center clinical study has begun."

Conference Call

Novadaq is pleased to invite all interested parties to participate in a conference call today, Thursday, August 2, 2012, at 4:30 p.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 September 2, 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 393085 when prompted.

The call will be archived for 90 days on the Company's website at http://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 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 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.

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited)
(expressed in U.S. dollars, except common shares outstanding)

As at
As at December 31,
June 30, 2012 2011
----------------------------------
ASSETS
Current assets
Cash and cash equivalents $ 41,646,670 $ 9,633,608
Accounts receivable 2,932,391 2,018,782
Prepaid expenses and other assets 1,096,475 829,625
Inventories 2,341,199 1,755,729

Non-current assets
Property and equipment, net 8,699,235 6,034,674
Deferred tax assets 195,805 248,640
Intangible assets, net 1,690,189 2,272,434
----------------------------------

Total Assets $ 58,601,964 $ 22,793,492
----------------------------------
----------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 3,486,586 $ 2,485,994
Provisions 54,800 41,300
Deferred revenue 419,961 396,859
Deferred partnership fee revenue 1,300,000 1,300,000
Repayable government assistance 181,989 197,760

Non-current liabilities
Deferred tax liabilities 195,805 248,640
Convertible debentures 4,434,794 4,223,454
Deferred revenue 148,722 188,883
Deferred partnership fee revenue 3,941,666 4,591,666
Repayable government assistance 132,816 214,402
Shareholder warrants 11,605,003 8,278,105
----------------------------------

Total Liabilities $ 25,902,142 $ 22,167,063
----------------------------------

Shareholders' Equity
Share capital $ 136,470,817 $ 98,695,023
Contributed surplus 7,215,313 6,772,298
Equity component of convertible
debentures 1,454,353 1,454,353
Deficit (112,440,661) (106,295,245)
----------------------------------

Total Shareholders' Equity $ 32,699,822 $ 626,429
----------------------------------

Total Liabilities and Shareholders' Equity $ 58,601,964 $ 22,793,492
----------------------------------
----------------------------------

Common shares outstanding 39,902,761 32,769,462
----------------------------------
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Novadaq Technologies Inc.

INTERIM CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(Unaudited)
(expressed in U.S. dollars)

For the three months ended For the six months ended
---------------------------- ----------------------------
June 30, 2012 June 30, 2011 June 30, 2012 June 30, 2011
---------------------------- ----------------------------

Product sales $ 4,511,331 $ 3,045,073 $ 8,165,376 $ 4,780,965
Royalty revenue 346,250 138,750 954,333 138,750
Partnership fee
revenue 325,000 200,000 650,000 400,000
Service revenue 208,924 261,300 389,171 666,238
---------------------------- ----------------------------
Total revenues 5,391,505 3,645,123 10,158,880 5,985,953
Cost of sales 2,087,707 1,449,477 4,133,244 2,706,534
---------------------------- ----------------------------
Gross Profit 3,303,798 2,195,646 6,025,636 3,279,419
---------------------------- ----------------------------

Selling and
distribution costs 1,216,839 1,399,477 2,280,326 2,674,696
Research and
development
expenses 1,378,331 1,270,347 2,540,062 2,318,475
Administrative
expenses 1,637,355 1,140,571 3,108,305 2,253,355
----------- ----------- ----------- -----------
Total operating
expenses 4,232,525 3,810,395 7,928,693 7,246,526
----------- ----------- ----------- -----------

Loss from
operations (928,727) (1,614,749) (1,903,057) (3,967,107)

Finance costs (175,691) (170,811) (348,422) (338,389)
Finance income 14,995 3,619 15,422 10,704
Warrants
revaluation
adjustment (311,110) (2,606,891) (3,909,359) (2,602,584)
Gain on investment - - - 25,000
---------------------------- ----------------------------
Loss and
comprehensive loss
for the period $ (1,400,533) $ (4,388,832) $ (6,145,416) $ (6,872,376)
---------------------------- ----------------------------
---------------------------- ----------------------------
Basic and diluted
loss and
comprehensive loss
per share for the
period $ (0.04) $ (0.13) $ (0.17) $ (0.23)
---------------------------- ----------------------------
---------------------------- ----------------------------

 

Novadaq Technologies Inc.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
(expressed in U.S. dollars)

For the three months ended For the six months ended
---------------------------- ----------------------------
June 30, 2012 June 30, 2011 June 30, 2012 June 30, 2011
---------------------------- ----------------------------
OPERATING
ACTIVITIES
Loss and
comprehensive loss
for the period $ (1,400,533) $ (4,388,832) $ (6,145,416) $ (6,872,376)
Items not affecting
cash
Depreciation of
property and
equipment 495,996 240,060 914,178 432,270
Amortization of
intangible assets 287,492 294,878 582,245 530,061
Stock-based
compensation 362,136 252,914 615,624 457,934
Imputed interest
on convertible
debentures 106,964 99,173 211,340 195,933
Warrants
revaluation
adjustment 311,110 2,606,891 3,909,359 2,602,584
---------------------------- ----------------------------
163,165 (894,916) 87,330 (2,653,594)
---------------------------- ----------------------------
Changes in working
capital
Increase in
accounts
receivable (786,978) (1,346,861) (913,609) (1,023,966)
Increase in
inventories (91,750) (471,904) (585,470) (1,271,314)
Decrease
(increase) in
prepaid expenses
and other 438,620 108,163 (214,015) 546,975
(Decrease)
increase in
accounts payable (876,295) (983,199) 969,137 (356,070)
(Decrease)
increase in
deferred revenue (20,752) (209,665) 19,635 114,107
---------------------------- ----------------------------
Net change in non-
cash working
capital balances
related to
operations (1,337,155) (2,903,466) (724,322) (1,990,268)
---------------------------- ----------------------------

Decrease in long
term deferred
revenue (336,573) (214,192) (694,223) (453,340)
---------------------------- ----------------------------

Cash used in
operating
activities (1,510,563) (4,012,574) (1,331,215) (5,097,202)
---------------------------- ----------------------------

INVESTING
ACTIVITIES
Purchase of
property and
equipment (1,753,917) (1,623,926) (3,667,199) (2,345,782)
Disposals of
property and
equipment 58,743 - 88,460 -
Purchase of TMR
business - - - (1,000,000)
---------------------------- ----------------------------

Cash used in
investing
activities (1,695,174) (1,623,926) (3,578,739) (3,345,782)
---------------------------- ----------------------------

FINANCING
ACTIVITIES
Proceeds from
issuance of
common shares 40,336,250 - 40,336,250 15,273,401
Transaction costs
paid relating to
issuance of
common shares (3,389,352) - (3,389,352) (998,207)
Repayment of
government
assistance (56,926) - (97,357) -
Proceeds from
exercise of
options 73,826 35,118 73,826 40,164
---------------------------- ----------------------------
Cash provided by
financing
activities 36,963,798 35,118 36,923,367 14,315,358
---------------------------- ----------------------------

Net increase
(decrease) in cash
and cash
equivalents 33,758,061 (5,601,382) 32,013,413 5,872,374
Impact of foreign
exchange on cash
and cash
equivalents (5,644) (4,874) (351) 33,901
Cash and cash
equivalents at
beginning of
period 7,894,253 17,109,938 9,633,608 5,597,407
---------------------------- ----------------------------

Cash and cash
equivalents at end
of period $ 41,646,670 $ 11,503,682 $ 41,646,670 $ 11,503,682
---------------------------- ----------------------------
---------------------------- ----------------------------

Contact:

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

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