iCAD, Inc. (Nasdaq: ICAD), an industry-leading provider of advanced image analysis, workflow solutions and radiation therapy for the early identification and treatment of cancer, today reported financial results for the first quarter ended March 31, 2012.
"Our results were mixed for the first quarter of 2012. We achieved record sales in the therapy segment of the business and continued to make considerable progress on expense management. However, weak demand in the cancer detection segment negatively affected overall revenue performance," commented Ken Ferry, President and CEO of iCAD.
"We were particularly pleased to see stronger demand for the Axxent Electronic Brachytherapy system driven by the continued growing interest in breast Intraoperative Radiation Therapy (IORT). As a result, we achieved a record volume of new system sales and procedure based consumables in the first quarter of 2012. This momentum underscores our confidence that IORT will continue to gain acceptance as a new standard of care particularly for certain early stage breast cancer patients.
"The cancer detection segment experienced softer demand in the quarter particularly for digital mammography CAD. We continue to focus on the transition to a recurring revenue business model as the installed base of over 4,000 systems represents the largest addressable market opportunity for increased revenues.
"Our strategic plan for 2012 is to drive the adoption of IORT in early breast cancer treatment and to increase recurring revenues in our mammography cancer detection business. We have made good progress on these initiatives in early 2012. In addition, we have made significant progress in lowering our operating costs and strengthened our balance sheet. Moving forward we expect that increasing revenues combined with our disciplined expense management will put us on the road to profitability," concluded Mr. Ferry.
First Quarter Financial Results
Revenue: Total revenue for the first quarter of 2012 decreased 14% to $6.3 million from $7.3 million for the first quarter of 2011. The decrease resulted primarily from a decline in Cancer Detection product revenues due to ongoing challenging market conditions in digital mammography. These declines were offset by significant increases in sales of the Company's Xoft system, which contributed approximately $2.0 million in revenue, representing a 51% increase compared with the first quarter 2011.
Cancer Detection revenue includes film, digital mammography, MRI and CT CAD platforms, as well as service and supply revenue from these products. Therapy revenue includes Xoft Axxent Electronic Brachytherapy product sales, as well as associated service and supply revenue.
Gross Margin: Gross profit for the first quarter of 2012 was $4.4 million, or 69.8% of revenue, compared with $5.1 million, or 69.9% of revenue, for the first quarter of 2011.
Operating Expenses: During the first quarter of 2012, the Company incurred total operating expenses of $6.5 million, a 31% decrease from total operating expenses of $9.4 million for the first quarter of 2011. This substantial decrease is due to ongoing cost saving measures implemented in the second half of 2011.
Net Loss: For the first quarter of 2012, the Company posted a net loss of $2.3 million, or $0.04 per share, compared with a net loss of $4.3 million, or $0.08 per share, for the first quarter of 2011.
Non-GAAP Adjusted Net Loss: For the first quarter of 2012, the Company posted a non-GAAP adjusted net loss of $2.8 million, or $0.05 per share, compared with a non-GAAP adjusted net loss of $3.5 million, or $0.06 per share, in the first quarter of 2011.
Non-GAAP Adjusted EBITDA: Non-GAAP Adjusted EBITDA was a loss of $990,000 in the first quarter of 2012, compared with a loss of $2.3 million in the first quarter of 2011.
Cash and Cash Flow: The Company ended the first quarter of 2012 with cash and cash equivalents of $15.0 million. During the quarter net cash used by operations was $3.9 million. In January 2012 the Company entered into a five-year, $15 million debt facility agreement with Deerfield Management Company LP, a leading healthcare investment fund. Under the terms of the agreement, the Company issued a $15 million principal amount senior secured 5.75% notes, which included a revenue purchase agreement and 2,250,000 warrants.
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