Novadaq Technologies Inc.
TSX : NDQ

Novadaq Technologies Inc.

August 12, 2009 07:30 ET

Novadaq Reports Second Quarter 2009 Financial Results

TORONTO, ONTARIO--(Marketwire - Aug. 12, 2009) - Novadaq® Technologies Inc. (TSX:NDQ), a leading developer of real-time imaging systems for use in the operating room, today announced 2009 second quarter revenues of $1,700,000. In addition, during Q2 2009 the Company received international orders and shipped SPY Systems and consumable supplies for a value of $2,150,000. Because the Company does not have a sufficient collection history in the market in which the equipment was sold, the Company has decided in this instance to record the revenue when the cash is collected for these initial sales. In comparison, recognized revenues in Q2-2008 were $3,457,000. Unless otherwise indicated, all dollar amounts expressed in this press release are United States (U.S.) dollars.

As of June 30, 2009, the Company had cash, cash equivalents and short-term investments totaling $8,229,000. The Company's cash used in operating activities was $376,000 in Q2-2009 compared to $4,194,000 in Q2-2008. Based on the current cash utilization the Company believes it has sufficient cash resources to support operations through the end of year 2010. Novadaq's Q2-2009 net loss was $3,358,000, or $0.14 per share, compared to $4,371,000, or $0.18 per share, in Q2-2008.

The Company also announced that it met the first of three developmental milestones under its License and Development Agreement with Intuitive Surgical (NASDAQ:ISRG) in Q2-2009. Subsequent to the second quarter, Novadaq received 510(k) clearance for the SPY Endoscopic Imaging System from the U.S. Food and Drug Administration (FDA) for use in minimally invasive surgery. SPY scope is currently being trialed in hospitals in the United States and is expected to be commercially launched before the end of this year.

Commenting on the release, Novadaq's CEO and President, Dr. Arun Menawat said, "It is not a surprise that the US healthcare market for capital equipment is difficult, but I am pleased with the results of our international efforts to mitigate potential risks. We believe that the global opportunities will continue to grow, although we will be conservative in recognizing revenues at this early stage."

Conference Call

Novadaq is pleased to invite all interested parties to participate in a conference call on August 12 at 10:00 a.m. Eastern Time during which the results will be discussed.

Those wishing to access the live conference call by telephone should dial 1-877-407-0778 (within Canada and the United States) or 1-201-689-8565 (international callers) several minutes prior to the beginning of the call. A telephonic replay of the conference call will be made available until 08/19/09 at midnight 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 329261 when prompted.

The call will also be webcast live and archived for 365 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.

Novadaq develops and commercializes real-time imaging systems for use in the operating room. Novadaq's SPY® Imaging System uniquely enables surgeons to visualize blood vessels, tumors, tumor margins, blood flow and the lymphatic system in real-time during surgery. This core technology is now being applied across multiple surgical markets such as cardiac, plastic and reconstructive, urological, general, micro and transplant. The PINPOINT™ System for endoscopic autofluorescence imaging is Novadaq's first minimally invasive product. PINPOINT allows surgeons to differentiate between healthy and cancerous tissue in the lung and other hollow organs. To expand its portfolio of minimally invasive products, Novadaq developed SPY scope which combines the typical features of a standard endoscope with the capabilities of SPY Imaging. The ability to visualize tissue perfusion and flow through vessels, ducts and the lymphatic system adds another dimension to the images available to surgeons during endoscopic surgical procedures. Novadaq also leverages its core technology to offer the OPTTX® System, which is designed for the diagnosis, evaluation and treatment of wet Age-related Macular Degeneration (AMD). Novadaq is the exclusive United States distributor of PLC Medical's CO2 HEART LASER™ System, which is used in the same cardiac procedures as the SPY Imaging System. For more information, please visit the company's website at http://www.novadaq.com.

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, results of future clinical tests of PINPOINT, SPY scope and the SPY Imaging System, 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.



Novadaq Technologies Inc.

INTERIM CONSOLIDATED BALANCE SHEET
(Unaudited)
(expressed in U.S. dollars)


As at As at
June 30, December 31,
2009 2008
$ $
--------------------------
ASSETS
Current
Cash and cash equivalents 7,529,703 3,991,833
Short-term investments 699,304 -
Accounts receivable 2,236,030 3,242,490
Current portion of prepaid expenses and other
receivables 1,780,710 1,092,356
Inventory 1,174,720 1,186,878
--------------------------
Total current assets 13,420,467 9,513,557
--------------------------
Long-term investments 150,000 200,000
Long-term receivables 60,124 -
Property, plant and equipment, net 2,154,580 2,585,963
Prepaid expenses and other receivables 215,841 203,094
Deferred development costs 405,195 405,195
Intangible assets, net 9,181,279 9,797,772
--------------------------
25,587,486 22,705,581
--------------------------
--------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 3,381,999 3,311,389
Current portion of deferred revenue 3,834,576 772,805
--------------------------
Total current liabilities 7,216,575 4,084,194
--------------------------
Long-term debt 3,246,017 -
Deferred revenue 458,662 308,850
--------------------------
Total liabilities 10,921,254 4,393,044
--------------------------
Shareholders' equity
Share capital 80,144,379 80,144,379
Contributed surplus 7,487,686 5,304,247
Deficit (72,965,833) (67,136,089)
--------------------------
Total shareholders' equity 14,666,232 18,312,537
--------------------------
25,587,486 22,705,581
--------------------------
--------------------------


Novadaq Technologies Inc.

INTERIM CONSOLIDATED STATEMENT OF LOSS AND
COMPREHENSIVE LOSS AND DEFICIT
(Unaudited)
(expressed in U.S. dollars)


Three-month period ended Six-month period ended
June 30 June 30
2009 2008 2009 2008
$ $ $ $
---------------------------------------------------
REVENUE
Product sales 1,352,471 3,056,702 4,001,251 5,408,548
Service revenue 347,081 400,329 711,967 821,145
---------------------------------------------------
Total revenue 1,699,552 3,457,031 4,713,218 6,229,693
Cost of sales 1,117,187 1,625,127 1,477,470 3,093,319
---------------------------------------------------
Gross profit 582,365 1,831,904 2,235,748 3,136,374
---------------------------------------------------
OPERATING EXPENSES
Sales and marketing 1,837,583 3,014,418 3,655,424 5,798,543
Research and development 839,696 1,333,572 1,806,279 2,945,663
General and
administration 721,405 1,604,507 1,563,612 3,063,525
Depreciation 102,646 84,961 198,310 173,776
Amortization 308,247 308,247 616,493 616,494
(Gain) loss on foreign
exchange (9,139) (50,859) 21,235 (1,333)
---------------------------------------------------
Total operating expenses 3,800,438 6,294,846 7,861,353 12,596,668
---------------------------------------------------
Loss before the
following: (3,218,073) (4,462,942) (5,625,605) (9,460,294)
Interest expense (64,150) -- (95,469) --
Imputed interest expense (79,504) -- (115,001) --
Gain on investments -- 25,000 -- 25,000
Interest income 3,343 66,733 6,331 225,153
---------------------------------------------------
Net loss and
comprehensive loss for
the period (3,358,384) (4,371,209) (5,829,744) (9,210,141)
---------------------------------------------------
Deficit, beginning of
period (69,607,449) (55,175,588) (67,136,089) (50,336,656)
---------------------------------------------------
Deficit, end of period (72,965,833) (59,546,797) (72,965,833) (59,546,797)
---------------------------------------------------
---------------------------------------------------

Basic and fully diluted
loss per share (0.14) (0.18) (0.24) (0.38)
---------------------------------------------------
---------------------------------------------------


Novadaq Technologies Inc.

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(expressed in U.S. dollars)


Three month period ended Six month period ended
June 30 June 30
2009 2008 2009 2008
$ $ $ $
---------------------------------------------------
OPERATING ACTIVITIES
Net loss for the period (3,358,384) (4,371,209) (5,829,744) (9,210,141)
Add (deduct) items not
involving cash
Depreciation and
amortization 599,896 606,175 1,177,830 1,193,020
Imputed interest
expense 79,505 -- 115,001 --
Gain on redemption of
long term investment -- (25,000) -- (25,000)
Stock-based
compensation 165,481 402,205 252,046 579,466
---------------------------------------------------
(2,513,503) (3,387,829) (4,284,868) (7,462,655)
Net change in non-cash
working capital
balances related to
operations 2,137,556 (806,464) 3,553,810 1,683,096
---------------------------------------------------
Cash used in operating
activities (375,947) (4,194,293) (731,058) (5,779,559)
---------------------------------------------------
FINANCING ACTIVITIES
Issuance of convertible
debentures, net of
transaction costs -- -- 5,062,409 --
Issuance of common
shares, net -- 9,735 -- 34,735
---------------------------------------------------
Cash provided by
financing activities -- 9,735 5,062,409 34,735
---------------------------------------------------
INVESTING ACTIVITIES
Purchase of property,
plant, and equipment (36,797) (473,711) (129,954) (909,698)
Purchase of TMR business -- -- -- (2,089,284)
Redemption of long-term
investment -- 250,000 50,000 250,000
Sale (purchase) of
short-term
investments, net (699,304) 3,732,672 (699,304) 7,915,070
---------------------------------------------------
Cash (used in) provided
by investing
activities (736,101) 3,508,961 (779,258) 5,166,088
---------------------------------------------------
Foreign exchange income
(loss) on cash held in
foreign currency 5,658 3,510 (14,223) 2,782
---------------------------------------------------
Net increase (decrease)
in cash and cash
equivalents during
the period (1,106,390) (672,087) 3,537,870 (575,954)
Cash and cash
equivalents, beginning
of period 8,636,093 7,514,062 3,991,833 7,417,929
---------------------------------------------------
Cash and cash
equivalents, end of
period 7,529,703 6,841,975 7,529,703 6,841,975
---------------------------------------------------
---------------------------------------------------


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