Toronto, Ontario – November 10, 2005
Novadaq® Technologies Inc. (TSX: NDQ) today announced its financial
results for the third quarter and nine months ended September 30, 2005.
“Our initiatives in the third quarter were largely focused on
strengthening our position in the U.S. for the SPY® Intra-operative
Imaging System. The establishment of our U.S. subsidiary, the training
of our Sorin sales distribution partners, the hiring of our U.S. based
clinical educators and the appointment of two co-Chief Medical Advisors
will help us to accelerate SPY System placements and will ensure
continued growth for Novadaq in the world’s largest medical technology
market," said Arun Menawat, President and CEO of Novadaq Technologies
Inc. "Also in this quarter, we further advanced our OPTTX™ program by
initiating our clinical trial at Toronto Western Hospital.
Key Developments
• Ramped up placements of the SPY System through Sorin in key cardiac centers in the United States.
• Hired U.S. based clinical educators to support sales to the cardiac surgery market.
• Appointed two co-Chief Medical Advisors who will assist the Novadaq
marketing team and clinical educators in the development and
implementation of physician, hospital and payer targeted initiatives
that will support efforts to establish the SPY System as a standard of
care in cardiac surgery.
• Advanced implementation of educational and marketing programs to
support growth in sales and ensure continuous feedback from clinicians
providing Novadaq with the credibility and critical mass to ramp up
placements and meet commercialization goals.
• Established a U.S. subsidiary to extend infrastructure and ensure
support for sales growth in the world’s largest medical technology
market. Novadaq Corp. will be lead by General Manager, Rick Mangat,
co-founder of Novadaq, co-inventor of the SPY System.
• Executed on clinical advancement for the OPTTX System to treat wet
AMD at Toronto Western Hospital, a leading center for the treatment of
vascular diseases of the eye.
Financial Results
Revenue in 2005 Q3 was $222,425, representing an increase of $204,641
over revenue in 2004 Q3 of $17,784. $117,000 of this increase related
to the capital sale of a SPY imaging device outside the U.S. in
September 2005. No SPY imaging devices were sold in 2004 Q3.
Approximately $88,000 of the increase is attributable to increased
procedural revenue, consumable supply sales, and other non-capital sale
revenue. The SPY System received regulatory clearance in the United
States in January 2005 and the first device was installed in the United
States in March 2005. As at September 30, 2005 there were a total of 10
SPY imaging devices installed in the United States.
Cost of sales increased by $66,786 to $78,405 in 2005 Q3 as compared to
$11,620 in 2004 Q3. Gross profit for the period increased to $144,020
in 2005 Q3 from $6,164 in 2004 Q3. As a percentage of sales, gross
profit increased to 65% in 2005 Q3 from 35% in 2004 Q3. The increase in
gross profit percentage is attributable primarily to the capital sale
of a SPY imaging device in 2005 Q3. The gross profit percentage earned
on capital sales is higher than the percentage earned on procedural
revenue as the procedural gross profit is net of sales commissions, and
the cost of consumable supplies.
Sales and marketing expenses increased to $320,417 in 2005 Q3 from
$36,068 in 2004 Q3. The increase in sales and marketing expenses was a
result of the commercial launch of the SPY System in the United States
in 2005, and included an increase in employee and related office and
travel costs (approximately $227,000), as well as marketing materials
and advertising (approximately $58,000).
Research and development expenses increased by $532,719 to $801,870 in
2005 Q3 from $269,151 in 2004 Q3. This increase is related to several
factors, including design and manufacturing costs for next generation
OPTTX devices for use in clinical trials (increase of approximately
$114,000), which are currently in the testing phase. The overall
increase also reflects employee and related office and travel costs for
additional engineering staff to support design efforts, clinical staff
to plan and execute OPTTX trials (increase of approximately $289,000),
increases in patent costs (approximately $65,000) and regulatory
consulting fees (approximately $37,000).
General and administration expenses increased by $230,019 to $511,727
in 2005 Q3 from $281,708 in 2004 Q3. This increase is related to
increases in employee, office and travel costs (approximately $98,000),
increases in D&O insurance (approximately $75,000) and increases in
professional fees (approximately $52,000).
Depreciation expense decreased by $9,586 from 2004 Q3 to 2005 Q3 as
certain SPY imaging devices that were being used in research and
development in 2004, were converted to revenue producing assets during
2005. Amortization of these devices was included in depreciation
expense in 2004 Q3 and cost of sales in 2005 Q3. Amortization increased
by $5,944 from 2004 Q3 to 2005 Q3 as a result of license payments made
in June 2005 which are capitalized and amortized.
Interest income increased by $199,070 from 2004 Q3 to 2005 Q3 as a
result of the increase in cash and short term investment balances
following completion of the Company’s initial public offering on June
10, 2005.
Net loss increased by $454,713 to $1,126,822 in 2005 Q3 from $672,109
in 2004 Q3. The increase in net loss was primarily related to increases
in sales and marketing expenses (approximately $284,000), research and
development expenses (approximately $532,000) and increased general and
administrative expenses (approximately $230,000). This was partially
offset by increased gross profit (approximately 138,000), increased
foreign exchange gains (approximately $252,000) and increased interest
income (approximately $199,000).
As at September 30, 2005 the Company had cash, cash equivalents and
short-term investments of $24,941,017, an increase of $15,542,743 over
December 31, 2004. The increase in these balances was primarily the
result of the initial public offering completed on June 10, 2005 for
net proceeds of $17,850,019 offset by cash used in operations during
2005 YTD.
The number of common shares outstanding as of September 30, 2005 was 17,991,361.
Conference call
Novadaq will host a conference call on Thursday, November 10, 2005 at
4:30 p.m. ET to discuss its third quarter 2005 results. To access the
conference call by telephone, dial 1-800-814-4890 or 416-644-3427.
Please connect approximately ten minutes prior to the beginning of the
call to ensure participation. The conference call will be archived for
replay until November 17, 2005 at midnight. To access the archived
conference call, dial 416-640-1917 or 1-877-289-8525 enter the
reservation number 21160122 followed by the number sign.
A live audio webcast of the conference call will be available at
www.novadaq.com. Again, please connect at least ten minutes prior to
the conference call to ensure adequate time for any software download
that may be required to join the webcast. The webcast will be archived
at the above website for 90 days
About Novadaq Technologies
Novadaq Technologies (TSX: NDQ) develops and commercializes medical
devices based on its proprietary imaging platform for the diagnosis and
treatment of human vascular and ophthalmic diseases and conditions.
Novadaq's SPY Intra-operative Imaging System enables surgeons to
visually assess coronary vasculature and bypass graft functionality
during the course of cardiac surgery. Novadaq's ophthalmic product, the
OPTTX™ System, is aimed at the diagnosis, evaluation and treatment of
wet Age-related Macular Degeneration (AMD) by using the same core
imaging technology that is used in the SPY System. The OPTTX System is
currently being evaluated in clinical trials.
For more information, please visit the company's website at www.novadaq.com.
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, anticipated financial
performance, business prospects, strategies, regulatory developments,
market acceptance and future commitments. 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, 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.
For additional information:
Arun Menawat
President & CEO
Novadaq Technologies Inc.
Phone: 905-629-3822 x 202
amenawat@novadaq.com
Investor Relations:
Michael Moore
The Equicom Group
Phone: 416-815-0700 x 241
mmoore@equicomgroup.com
Summary financial statements attached:
For complete financial statements please go to www.sedar.com
Third Quarter Summary Financial Statements
