EX-99.1 2 exhibit99-1.htm EXHIBIT 99.1 Novadaq Technologies Inc.: Exhibit 99.1 - Filed by newsfilecorp.com


For Immediate Release

NOVADAQ Reports Second Quarter 2015 Financial Results

Toronto, Ontario – July 28, 2015 - 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 second quarter ended June 30, 2015. Unless otherwise indicated, all dollar amounts in this press release are expressed in United States (“U.S.”) dollars.

For the three months ended June 30, 2015, NOVADAQ reported revenues of $15.1 million, an increase of 35% from $11.2 million in the second quarter of 2014. Product sales increased by $3.9 million, or 38%, primarily due to a 64% increase in recurring revenue and a 24% increase in capital sales.

“At the start of the year, we initiated our transformation from a company that was characterized by its partnership-based business model to one driven primarily by its own direct sales,” commented Arun Menawat, NOVADAQ’s President and Chief Executive Officer. “Moving forward, the following metrics will be shared with the investment community so they can better measure our progress over time.”

    Q1-2015     Q2-2015     Change  
                   

REVENUES (million’s)

                 

Recurring

$ 4.9   $ 5.7     +15%  

Capital

$ 3.6   $ 6.5     +82%  

Total Direct

$ 8.5   $ 12.2     +43%  

Partnered/International

$ 3.2   $ 2.9     -9%  

Total

$ 11.7   $ 15.1     +29%  

 

                 

INSTALLED BASE

                 

Direct Systems

  575     611     +6%  

Recurring Revenue/Direct System

$ 8,566   $ 9,251     +8%  

Second quarter gross profits of $10.7 million (71% margin) compared to gross profits of $6.9 million (62%) in the same period last year.

Net loss for the 2015 second quarter was $6.0 million, or $0.11 basic loss per share, compared with net income of $6.3 million, or $0.11 basic income per share, in Q2-2014. The change was a result of an increase in operating expenses of $11.6 million and a decrease in warrant revaluation income of $4.5 million. Offsetting these amounts was an increase in gross profit of $3.8 million.


Second quarter 2015 operating burn (cash consumed by operating activities before changes in working capital) was $8.7 million compared to $1.5 million in the second quarter of 2014. This difference in operating burn was mainly driven by increased selling and distribution expenses associated with the continued build-out of NOVADAQ’s direct sales and marketing infrastructure. During Q2-2015, working capital improved by $1.0 million, driven by increased accounts payable and accrued liabilities, partially offset by increased inventories, accounts receivable and prepaid expenses and other assets.

Cash and cash equivalents were $124.4 million at June 30, 2015, reflecting a decrease of $8.6 million compared to the cash position as at March 31, 2015.

The Company estimates that the number of procedures performed using SPY technology systems during the second quarter was approximately 9,600, representing an increase of 30% year-over-year and 9% sequentially over the previous quarter.

Revised 2015 Outlook

Earlier this year, NOVADAQ provided a business outlook indicating that it anticipated its full year revenue for the fiscal year ending December 31, 2015 to be approximately $65.0 million, representing total year-over-year revenue growth of approximately 40%. This was based on the Company’s expectation that growth in the first half of 2015 would be in the range of 25% to 35%. Given that actual growth in the first half of 2015 came in at the low end of that range, NOVADAQ is revising its 2015 outlook and now expects its full-year revenue to be approximately $62.5 million. This implies a growth rate of 43% over the second half of 2014.

“As demonstrated by our sales rebound in Q2, we were able to successfully navigate through a transitional first quarter and have begun to resume our strong growth trajectory,” said Dr. Menawat. “We also note that the consensus analyst estimates are generally consistent with our revised guidance”.

Conference Call Details

NOVADAQ is pleased to invite all interested parties to participate in a conference call today, July 28, 2015 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 (Canada and the United States) or 1-201-689-8031 (International) several minutes prior to the beginning of the call.

A replay of the conference call can be accessed by dialing 1-877-660-6853 (Canada and the United States) or 1-201-612-7415 (International) and entering the conference identification number 13587138 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.

Enabling medical professionals with clinically relevant, point-of-care imaging solutions to enhance the lives of patients and their caregivers, 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 140 peer-reviewed publications demonstrate that the use of SPY imaging technologies during complex surgery and diagnostic procedures, leads to lower rates of post-operative complications and lower hospital costs.

SPY Imaging Systems are United States Food and Drug Administration 510(k) cleared 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. LUNA is used to assess perfusion in patients being treated for non-healing wounds. In December 2014, NOVADAQ and LifeNet Health jointly announced the signing of a multi-year agreement appointing NOVADAQ 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 and LUNA are registered trademarks of Novadaq Technologies Inc. DermACELL is a registered trademark of LifeNet Health.

For more information, please contact:

Stephen Kilmer
Investor Relations
1-647-872-4849
skilmer@novadaq.com


Novadaq Technologies Inc.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

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

    As at     As at  
    June 30,     December 31,  
    2015     2014  
ASSETS            
Current assets            
   Cash and cash equivalents $ 124,413,063   $ 141,447,544  
   Accounts receivable   15,292,482     13,503,303  
   Prepaid expenses and other assets   3,725,637     1,205,250  
   Income taxes recoverable   29,341     29,341  
   Inventories   7,853,127     6,798,198  
    151,313,650     162,983,636  
Non-current assets            
   Property and equipment, net   13,233,230     13,647,819  
   Intangible assets, net   19,386,188     20,249,915  
             
Total Assets $ 183,933,068   $ 196,881,370  
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Current liabilities            
   Accounts payable and accrued liabilities $ 10,827,713   $ 5,345,539  
   Provisions   345,829     335,204  
   Deferred revenue   666,162     403,816  
   Distribution rights payable   250,000     250,000  
    12,089,704     6,334,559  
             
Non-current liabilities            
   Deferred revenue   773,190     551,875  
   Distribution rights payable   1,682,915     1,630,819  
   Shareholder warrants   15,097,511     25,873,085  
             
Total Liabilities $ 29,643,320   $ 34,390,338  
             
Shareholders' Equity            
   Share capital $ 322,043,144   $ 315,651,455  
   Contributed surplus   14,853,239     12,134,913  
   Deficit   (182,606,635 )   (165,295,336 )
             
Total Shareholders' Equity $ 154,289,748   $ 162,491,032  
             
Total Liabilities and Shareholders' Equity $ 183,933,068   $ 196,881,370  
             
Total number of common shares outstanding   56,195,826     55,572,568  


Novadaq Technologies Inc.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

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

    For the three months ended     For the six months ended  
    June 30, 2015     June 30, 2014     June 30, 2015     June 30, 2014  
                         
Product sales $ 14,337,302   $ 10,391,137   $ 25,404,482   $ 19,782,528  
Royalty revenue   540,170     270,000     992,550     675,000  
Partnership fee revenue   -     325,000     -     650,000  
Service revenue   188,955     166,019     360,736     342,850  
Total revenues   15,066,427     11,152,156     26,757,768     21,450,378  
Cost of sales   4,380,591     4,232,023     8,600,735     7,833,920  
Gross profit   10,685,836     6,920,133     18,157,033     13,616,458  
                         
Selling and distribution costs   15,493,072     7,192,559     27,990,725     13,900,119  
Research and development expenses   5,128,691     2,331,027     8,751,244     4,585,945  
Administrative expenses   2,458,509     1,967,253     5,145,215     3,947,329  
Total operating expenses   23,080,272     11,490,839     41,887,184     22,433,393  
                         
Loss from operations   (12,394,436 )   (4,570,706 )   (23,730,151 )   (8,816,935 )
                         
Finance costs   (26,048 )       (52,096 )    
Finance income   55,945     59,088     109,687     127,468  
Shareholder warrants revaluation adjustment   6,338,631     10,794,176     6,361,261     (1,149,742 )
Gain on investment               25,000  
Income (loss) before income taxes   (6,025,908 )   6,282,558     (17,311,299 )   (9,814,209 )
Income tax expense       (1,607 )       (16,142 )
Net income (loss) and comprehensive income (loss) for the period ($6,025,908 ) $ 6,280,951 ($17,311,299 ) ($9,830,351 )
Basic income (loss) and comprehensive income (loss) per share for the period ($0.11 ) $ 0.11 ($0.31 ) ($0.18 )
Diluted loss and comprehensive loss per share for the period ($0.22 ) ($0.08 ) ($0.41 ) ($0.18 )


Novadaq Technologies Inc.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

    For the three months ended     For the six months ended  
    June 30, 2015     June 30, 2014     June 30, 2015     June 30, 2014  
OPERATING ACTIVITIES                        
Net income (loss) and comprehensive income (loss) for the period ($6,025,908 ) $ 6,280,951 ($17,311,299 ) ($9,830,351 )
Items not affecting cash                        
   Depreciation of property and equipment   1,281,170     1,248,889     2,497,544     2,401,441  
   Amortization of intangible assets   427,326     188,716     863,727     277,040  
   Stock-based compensation   1,918,040     1,554,107     3,265,788     2,330,178  
   Imputed interest on distribution rights payable   26,048         52,096      
   Gain on investment               (25,000 )
   Shareholder warrants revaluation adjustment   (6,338,631 )   (10,794,176 )   (6,361,261 )   1,149,742  
    (8,711,955 )   (1,521,513 )   (16,993,405 )   (3,696,950 )
Changes in non-cash working capital                        
   Increase in accounts receivable   (354,824 )   (3,689,277 )   (1,789,179 )   (4,296,933 )
   Increase in inventories   (640,116 )   (1,140,867 )   (1,054,929 )   (897,242 )
   Increase in prepaid expenses and other assets   (1,533,734 )   (907,222 )   (2,520,387 )   (616,336 )
   Increase (decrease) in accounts payable and accrued liabilities and provisions 3,470,774 (25,759 ) 5,521,058 (1,172,126 )
   Increase in deferred revenue and deferred partnership revenue 75,983 35,999 262,346 5,015
Net change in non-cash working capital balances related to operations 1,018,083 (5,727,126 ) 418,909 (6,977,622 )
Increase (decrease) in long term deferred revenue and deferred partnership revenue (51,706 ) (365,725 ) 221,315 (664,542 )
                         
Cash used in operating activities   (7,745,578 )   (7,614,364 )   (16,353,181 )   (11,339,114 )
                         
INVESTING ACTIVITIES                        
   Purchase of property and equipment   (1,629,522 )   (2,025,681 )   (2,835,621 )   (4,316,388 )
   Disposals of property and equipment   547,731     263,697     752,666     348,477  
   Purchase of intangible assets including transaction costs       (6,368,753 )       (6,368,753 )
   Redemption of investment               25,000  
Cash used in investing activities   (1,081,791 )   (8,130,737 )   (2,082,955 )   (10,311,664 )
                         
FINANCING ACTIVITIES                        
 Repayment of government assistance               (17,587 )
 Proceeds from exercise of options   221,764     355,414     730,705     1,107,804  
 Proceeds from exercise of warrants       284,276     699,209     284,276  
Cash provided by financing activities   221,764     639,690     1,429,914     1,374,493  
                         
Net decrease in cash and cash equivalents   (8,605,605 )   (15,105,411 )   (17,006,222 )   (20,276,285 )
Impact of foreign exchange on cash and cash equivalents   4,473     2,034     (28,259 )   (300 )
Cash and cash equivalents at beginning of period   133,014,195     177,156,574     141,447,544     182,329,782  
                         
Cash and cash equivalents at end of period $ 124,413,063   $ 162,053,197   $ 124,413,063   $ 162,053,197