NOVADAQ Reports Third Quarter 2016 Financial Results


TORONTO, Nov. 02, 2016 (GLOBE NEWSWIRE) -- NOVADAQ Technologies Inc. ("NOVADAQ" or the “Company") (NASDAQ:NVDQ) (TSX:NDQ), the leading developer and provider of clinically relevant fluorescence imaging solutions for use in surgical and diagnostic procedures, today announced financial results for its third quarter ended September 30, 2016. Unless otherwise indicated, all dollar amounts in this press release are expressed in United States (“U.S.”) dollars.

For the three months ended September 30, 2016, NOVADAQ reported revenues of $22.2 million, an increase of 30% from $17.0 million in the third quarter of 2015.  Total direct sales increased by $4.5 million, or 32%, and total Partnered/International sales increased by $0.7 million, or 20%, compared to Q3-2015.

The following table sets out certain supplemental quarterly revenue and installed base metrics to assist investors in following the Company’s progress over time:

 Q3-2016 Q3-2015 Change
      
REVENUES (millions)     
Recurring$8.6  $6.1   +42%
Capital  9.7     7.7   +25%
Total Direct  18.3     13.8   +32%
Partnered/International  3.9     3.2   +20%
Total$22.2  $17.0   +30%
      
INSTALLED BASE     
Direct Systems 875     647   +35%
Recurring Revenue/Direct System  $9,821  $9,352   +5%

The Company estimates that the number of procedures performed using SPY technology systems during the third quarter was approximately 14,100 representing an increase of 34% year-over-year and 6% sequentially over the previous quarter.

Third quarter gross profits rose to $15.9 million (72% margin) compared to gross profits of $12.6 million (74%) in the same period last year. 

Net loss for the third quarter of 2016 was $10.9 million, or $0.19 basic loss per share, compared with net loss of $3.7 million, or $0.07 basic loss per share, in Q3-2015.  The increase in net loss was primarily a result of an increase in operating expenses of $8.2 million and the non-cash warrant revaluation income of $2.3 million recognized in Q3-2015. Offsetting these amounts was an increase in gross profit of $3.3 million.

Third quarter 2016 operating burn (cash consumed by operating activities before changes in working capital) was $7.7 million compared to $3.5 million in the third quarter of 2015. The difference to operating burn was mainly driven by increased operating expenses associated with the continued build-out of NOVADAQ’s direct sales and marketing infrastructure. During Q3-2016, non-cash working capital increased by $1.5 million.

Cash and cash equivalents were $72.2 million at September 30, 2016, reflecting a decrease of $11.8 million compared to the cash position as at June 30, 2016.

“Since my appointment, I have refocused our efforts towards recurring revenue growth. I am pleased that our efforts have resulted in a forty two percent increase year over year,” commented Rick Mangat, NOVADAQ’s President and Chief Executive Officer. “Recurring revenue growth will continue to be management’s primary objective as we build our business.”

Conference Call Details

NOVADAQ is pleased to invite all interested parties to participate in a conference call today, November 2, 2016 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 1-866-320-0174 (within Canada and the United States) or 1-785-424-1631 (outside of Canada and the U.S.) several minutes prior to the beginning of the call.

A replay of the conference call can be accessed by dialing 1-877-481-4010 (within Canada and the United States) or 1-919-882-2331 (outside of Canada and the U.S.) and entering the conference identification number 10122 when prompted.

The call will also be archived for 90 days on the Company’s website at novadaq.com under the “Events” tab in the Investor’s section. 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.

NOVADAQ’s global mission is to enable physicians with point-of-care imaging solutions that provide real time clinically significant and actionable information to improve care quality and lower healthcare costs. Using NOVADAQ’s SPY fluorescence imaging technology, physicians can personalize therapy and achieve optimal results through the precise visualization of blood flow in vessels, micro-vessels, tissue perfusion and critical anatomical structures during the course of treatment. SPY technology enables the delivery of personalized therapies and the achievement of the optimal results for each individual patient. More than 225 peer-reviewed publications demonstrate that the use of SPY technology will reduce post-procedure complication rates and the cost of care for a broad variety of surgical treatments for cancer, cardiovascular diseases and other conditions, helping to ensure that patients benefit from the very best possible treatment and outcome.

SPY Imaging Systems are U.S. Food and Drug Administration 510(k) cleared, Health Canada licensed, CE Marked and registered worldwide for use in multiple surgical specialties and medical applications. The endoscopic version of SPY technology, known as PINPOINT, combines the fluorescence imaging capabilities of SPY with the high definition visible light visualization to establish a new standard in the quality and performance of minimally invasive surgery. NOVADAQ’s LUNA System is used to visualize blood flow and tissue perfusion while treating patients with atherosclerotic cardiovascular disease that impairs blood flow to the extremities and increases the risk for the development of complications such as acute and chronic non-healing wounds and limb loss. NOVADAQ is the exclusive worldwide distributor of LifeNet Health’s DermACELL acellular tissue products for wound and breast reconstruction surgery.

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, SPY, PINPOINT, LUNA and the illumination square design are registered trademarks of Novadaq Technologies Inc. LifeNet Health and DermACELL are registered trademarks of LifeNet Health.   


Novadaq Technologies Inc.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

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

    As at
 September 30,
2016
  As at
 December 31,
2015
 
ASSETS          
Current assets          
Cash and cash equivalents  $ 72,242,278  $ 106,790,202 
Accounts receivable    27,147,891   21,767,746 
Prepaid expenses and other assets    5,349,777   3,362,854 
Inventories    9,841,011   10,680,885 
     114,580,957   142,601,687 
           
Non-current assets          
Property and equipment, net    18,276,931   14,830,114 
Intangible assets, net    17,270,487   18,539,790 
           
Total Assets  $ 150,128,375 $ 175,971,591 
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Current liabilities          
Accounts payable and accrued liabilities  $ 14,705,029  $ 12,145,572 
Provisions    527,703   454,579 
Deferred revenue    1,834,348   1,124,808 
Income taxes payable    -   12,500 
Distribution rights payable    250,000   250,000 
Other liabilities    871,915   - 
     18,188,995   13,987,459 
Non-current liabilities          
Deferred revenue    757,143   849,299 
Distribution rights payable    1,557,098   1,735,012 
Shareholder warrants    -   16,437,795 
           
Total Liabilities  $ 20,503,236  $ 33,009,565 
           
Shareholders' Equity          
Share capital  $ 337,954,002  $ 322,687,011 
Contributed surplus    22,207,281   16,400,830 
Deficit    (230,536,144)  (196,125,815)
           
Total Shareholders' Equity  $ 129,625,139  $ 142,962,026 
           
Total Liabilities and Shareholders' Equity  $ 150,128,375  $ 175,971,591 
           
Total number of common shares outstanding    57,440,151   56,253,327 
           
           

Novadaq Technologies Inc.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

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

    For the three months ended   For the nine months ended 
     September 30,
2016
    September 30,
2015
    September 30,
2016
    September 30,
2015
 
                      
Product sales  $ 20,736,079  $ 16,290,455  $ 56,563,992  $ 41,694,967 
Royalty revenue    493,665    442,877    1,544,187    1,435,397 
Service revenue    929,159    302,635    1,892,984    663,371 
Total revenues    22,158,903    17,035,967    60,001,163    43,793,735 
Cost of sales    6,267,329    4,476,721    16,980,917    13,077,456 
Gross profit    15,891,574    12,559,246    43,020,246    30,716,279 
                      
Selling and distribution expenses    19,288,831    13,369,862    53,664,528    41,360,587 
Research and development expenses    4,754,669    3,981,417    12,643,600    12,732,661 
Administrative expenses    2,782,479    1,318,839    12,600,519    6,464,054 
Total operating expenses    26,825,979    18,670,118    78,908,647    60,557,302 
                      
Loss from operations    (10,934,405)   (6,110,872)   (35,888,401)   (29,841,023)
                      
Finance costs    (24,028)   (26,048)   (72,086)   (78,144)
Finance income    69,688    55,935    236,701    165,622 
Warrants revaluation adjustment        2,320,640    1,324,293    8,681,901 
Loss before income taxes    (10,888,745)   (3,760,345)   (34,399,493)   (21,071,644)
Income tax recovery (expense)    (6,991)   48,163    (10,836)   48,163 
Net loss and comprehensive loss for the period  $ (10,895,736) $ (3,712,182) $ (34,410,329) $ (21,023,481)
                      
Basic loss and comprehensive loss per share for the period  $ (0.19) $ (0.07) $ (0.60) $ (0.38)
Diluted loss and comprehensive loss per share for the period  $ (0.19) $ (0.11) $ (0.61) $ (0.52)
                      
                      

Novadaq Technologies Inc.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

      For the three months ended   For the nine months ended 
      September 30,
2016
    September 30,
2015
    September 30,
2016
    September 30,
2015
 
OPERATING ACTIVITIES                       
Net loss and comprehensive loss for the period    $ (10,895,736) $ (3,712,182) $ (34,410,329) $ (21,023,481)
Items not affecting cash                       
Depreciation of property and equipment      1,710,285    1,332,001    4,417,244    3,829,545 
Amortization of intangible assets      396,499    423,199    1,269,303    1,286,926 
Stock-based compensation      1,114,908    707,335    6,752,943    3,973,123 
Imputed interest on distribution rights payable      24,028    26,048    72,086    78,144 
Shareholder warrants revaluation adjustment          (2,320,640)   (1,324,293)   (8,681,901)
       (7,650,016)   (3,544,239)   (23,223,046)   (20,537,644)
Changes in non-cash working capital                       
Increase in accounts receivable      (3,425,514)   (3,443,309)   (5,380,145)   (5,232,488)
Decrease (increase) in inventories      1,298,580    (1,543,051)   839,874    (2,597,980)
Increase in accounts payable and accrued liabilities and provisions      573,411    2,340,826    2,617,248    7,861,884 
Increase (decrease) in income taxes payable          29,341    (12,500)   29,341 
Decrease (increase) in prepaid expenses and other assets      (192,288)   305,109    (1,986,923)   (2,215,278)
Increase in deferred revenue      213,464    326,854    709,540    589,200 
Net change in non-cash working capital balances related to operations      (1,532,347)   (1,984,230)   (3,212,906)   (1,565,321)
                        
Increase (decrease) in non-current deferred revenue      (87,800)   (138,232)   (92,156)   83,083 
Cash used in operating activities      (9,270,163)   (5,666,701)   (26,528,108)   (22,019,882)
                        
INVESTING ACTIVITIES                       
Addition of property and equipment      (4,031,014)   (2,728,119)   (10,719,475)   (5,563,740)
Disposal of property and equipment      1,482,490    415,719    2,855,414    1,168,385 
Cash used in investing activities      (2,548,524)   (2,312,400)   (7,864,061)   (4,395,355)
                        
FINANCING ACTIVITIES                       
Proceeds from exercise of options      24,046    11,740    78,912    742,445 
Proceeds from exercise of warrants                  699,209 
Payment of distribution rights payable              (250,000)    
Cash provided by (used in) financing activities      24,046    11,740    (171,088)   1,441,654 
                        
Net decrease in cash and cash equivalents      (11,794,641)   (7,967,361)   (34,563,257)   (24,973,583)
Net foreign exchange difference      2,261    (23,604)   15,333    (51,863)
Cash and cash equivalents at beginning of period      84,034,658    124,413,063    106,790,202    141,447,544 
                        
Cash and cash equivalents at end of period    $ 72,242,278  $ 116,422,098  $ 72,242,278  $ 116,422,098 

 


            

Contact Data