NOVADAQ Technologies Inc (NASDAQ:NVDQ) (TSX:NDQ), the leading
provider of proven comprehensive fluorescence imaging solutions
that improve clinical outcomes and reduce healthcare costs in
minimally invasive and open surgeries today reported financial
results for the three months ended March 31, 2017. Unless otherwise
indicated, all dollar amounts in this press release are expressed
in United States (“U.S.”) dollars.
Recent Highlights
- First quarter revenue of $21.1 million, an increase of 19% from
the first quarter of 2016.
- Recurring revenues in the first quarter were $10.0 million,
representing a 43% year-over-year increase.
- Procedures performed using SPY technology systems during the
first quarter were approximately 16,000 representing an increase of
30% year-over-year.
- Completed enrollment of the FILM trial, a study assessing the
safety and utility of lymph node mapping with the PINPOINT system
in patients with uterine and cervical cancers. Initial results to
be presented before the end of the year.
- Introduced the SPY PHI Open Surgery Handheld Fluorescence
Imaging System at the Society of American Gastrointestinal and
Endoscopic Surgeons
The following table sets out certain quarterly
revenue and installed base metrics:
|
|
|
|
|
|
|
Q1-2017 |
|
Q1-2016 |
|
Change |
REVENUES
($M) |
|
|
|
|
|
Recurring |
$10.0 |
|
$7.0 |
|
43 |
% |
Capital |
|
6.9 |
|
|
7.6 |
|
(9 |
%) |
Total Direct |
|
16.9 |
|
|
14.6 |
|
16 |
% |
Indirect
(Partners/International Distributors) |
|
4.2 |
|
|
3.1 |
|
33 |
% |
Total |
$21.1 |
|
$17.7 |
|
19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
INSTALLED
BASE |
|
|
|
|
|
Direct Systems |
|
988 |
|
|
760 |
|
30 |
% |
Recurring
Revenue/Direct System |
$10,075 |
|
$9,153 |
|
10 |
% |
|
|
|
|
|
|
|
“Results of the first quarter were in-line with
our expectations and reflect continued solid execution and strong
demand for our SPY fluorescence imaging technology,” said Rick
Mangat, NOVADAQ’s President and Chief Executive Officer. “We are
encouraged by the early traction we are seeing with the shift in
focus towards recurring revenue in our sales model. I believe we
have only penetrated a small portion of our potential global
customer base.”
First Quarter Financial
ResultsFor the three months ended March 31, 2017 NOVADAQ
reported revenues of $21.1 million, compared to $17.7 million in
the first quarter of 2016. Total direct sales increased by
$2.3 million, or 16%, and total Partnered/International sales
increased by $1.1 million, or 33%, compared to Q1-2016.
First quarter 2017 gross profits increased to
$14.2 million (67% margin) compared to gross profits of $12.7
million (71%) in the same period last year. The decrease in
gross profit percentage was due to a shift in revenues from capital
sales to recurring revenue. The increase in recurring revenue
was mainly driven by higher tissue sales which earns a lower margin
than capital sales.
Net loss for the first quarter of 2017 was $14.1
million, or $0.24 basic loss per share, compared with net loss of
$7.0 million, or $0.12 basic loss per share, in the first quarter
of 2016. The increase in net loss was primarily a result of
higher operating expenses of $7.1 million, non-cash warrant
revaluation income of $1.3 million in the first quarter of 2016,
and higher finance costs $0.3 million, partially offset by an
increase in gross profit of $1.6 million.
First quarter 2017 operating burn (cash consumed
by operating activities before changes in working capital) was
$10.7 million compared to $5.5 million in the first quarter 2016.
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 the
first quarter of 2017, non-cash working capital decreased by $2.2
million.
2017 Financial GuidanceNOVADAQ
continues to expect full year 2017 revenue to be in the range of
$98 to $102 million, representing growth in the range of 22% to 27%
year-over-year. The Company anticipates recurring revenues for the
full year to be in the range of $48 to $50 million, reflecting
growth of 45% to 51% year-over-year. Gross margins are expected to
be in the range of 65% to 70% for the full year 2017.
Webcast and Conference Call
InformationNOVADAQ’s management team will host a
conference call today beginning at 1:30 p.m. PT / 4:30 p.m. ET.
Investors interested in listening to the conference call may do so
by calling 877-407-8031 (within Canada and the U.S.) or
201-689-8031 outside Canada and the U.S.) or from the webcast on
the “Investor Relations” section of the Company’s website at:
www.novadaq.com.
A replay of the call will be available for 48
hours by calling (877) 481-4010 (within Canada and the U.S.) or
(919) 882-2331 (outside Canada and the U.S.), using Conference
ID:10307. The call will also be archived on the NOVADAQ
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 250 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. The SPY PHI open surgery portable,
handheld imager is FDA (510)k cleared and CE Marked and is
indicated for the visualization of blood flow and tissue perfusion
in plastic, reconstructive, micro and gastrointestinal
surgeries. 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. SPY PHI is a trademark of NOVADAQ
Technologies, Inc. DermACELL is a registered
trademark of LifeNet Health, Inc.
|
Novadaq Technologies Inc. |
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION |
(Unaudited) |
(expressed in U.S. dollars, except common shares
outstanding) |
|
|
|
|
As at March 31, 2017 |
|
|
As at December 31, 2016 |
|
ASSETS |
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
56,139,164 |
|
$ |
62,382,649 |
|
Accounts
receivable |
|
|
28,430,680 |
|
|
27,791,574 |
|
Prepaid
expenses and other assets |
|
|
5,767,149 |
|
|
5,776,463 |
|
Inventories |
|
|
4,644,628 |
|
|
4,295,565 |
|
|
|
|
94,981,621 |
|
|
100,246,251 |
|
|
|
|
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
|
|
Long-term
receivables |
|
|
961,341 |
|
|
298,073 |
|
Other
assets |
|
|
398,676 |
|
|
- |
|
Investments |
|
|
289,284 |
|
|
- |
|
Property
and equipment, net |
|
|
19,627,354 |
|
|
19,508,471 |
|
Intangible assets, net |
|
|
16,665,216 |
|
|
16,847,287 |
|
|
|
|
|
|
|
|
|
Total
Assets |
|
$ |
132,923,492 |
|
$ |
136,900,082 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities |
|
$ |
17,373,654 |
|
$ |
19,223,889 |
|
Provisions |
|
|
438,121 |
|
|
510,203 |
|
Deferred
revenue |
|
|
2,837,372 |
|
|
2,156,096 |
|
Income
taxes payable |
|
|
24,033 |
|
|
24,433 |
|
Distribution rights payable |
|
|
250,000 |
|
|
250,000 |
|
Other
liabilities |
|
|
489,212 |
|
|
445,252 |
|
|
|
|
21,412,392 |
|
|
22,609,873 |
|
Non-current
liabilities |
|
|
|
|
|
|
|
Deferred
revenue |
|
|
617,538 |
|
|
729,209 |
|
Distribution rights payable |
|
|
1,353,025 |
|
|
1,581,127 |
|
Long-term
debt |
|
|
9,617,245 |
|
|
- |
|
|
|
|
|
|
|
|
|
Total
Liabilities |
|
$ |
33,000,200 |
|
$ |
24,920,209 |
|
|
|
|
|
|
|
|
|
Shareholders'
Equity |
|
|
|
|
|
|
|
Share
capital |
|
$ |
340,224,517 |
|
$ |
337,974,247 |
|
Contributed surplus |
|
|
22,842,855 |
|
|
23,042,165 |
|
Deficit |
|
|
(263,144,080 |
) |
|
(249,036,539 |
) |
|
|
|
|
|
|
|
|
Total
Shareholders' Equity |
|
$ |
99,923,292 |
|
$ |
111,979,873 |
|
|
|
|
|
|
|
|
|
Total
Liabilities and Shareholders' Equity |
|
$ |
132,923,492 |
|
$ |
136,900,082 |
|
|
|
|
|
|
|
|
|
Total number of
common shares outstanding |
|
|
57,802,861 |
|
|
57,445,151 |
|
Novadaq Technologies Inc. |
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF LOSS AND
COMPREHENSIVE LOSS |
(Unaudited) |
(expressed
in U.S. dollars) |
|
|
|
|
For the three months ended |
|
|
|
|
March 31, 2017 |
|
|
|
March 31, 2016 |
|
|
|
|
|
|
|
|
|
|
Product sales |
|
$ |
19,167,044 |
|
|
$ |
16,779,708 |
|
Royalty revenue |
|
|
525,750 |
|
|
|
495,250 |
|
Service revenue |
|
|
1,382,459 |
|
|
|
451,113 |
|
Total
revenues |
|
|
21,075,253 |
|
|
|
17,726,071 |
|
Cost of
sales |
|
|
6,849,840 |
|
|
|
5,068,043 |
|
Gross
profit |
|
|
14,225,413 |
|
|
|
12,658,028 |
|
|
|
|
|
|
|
|
|
|
Selling and
distribution expenses |
|
|
21,264,284 |
|
|
|
15,308,081 |
|
Research and
development expenses |
|
|
3,924,099 |
|
|
|
3,163,368 |
|
Administrative
expenses |
|
|
2,911,640 |
|
|
|
2,556,259 |
|
Total operating
expenses |
|
|
28,100,023 |
|
|
|
21,027,708 |
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(13,874,610 |
) |
|
|
(8,369,680 |
) |
|
|
|
|
|
|
|
|
|
Finance costs |
|
|
(285,922 |
) |
|
|
(24,028 |
) |
Finance income |
|
|
52,991 |
|
|
|
89,681 |
|
Warrants revaluation
adjustment |
|
|
— |
|
|
|
1,324,293 |
|
Net loss and
comprehensive loss for the period |
|
$ |
(14,107,541 |
) |
|
$ |
(6,979,734 |
) |
|
|
|
|
|
|
|
|
|
Basic loss and
comprehensive loss per share for the period |
|
$ |
(0.24 |
) |
|
$ |
(0.12 |
) |
Diluted loss and
comprehensive loss per share for the period |
|
$ |
(0.24 |
) |
|
$ |
(0.14 |
) |
Novadaq Technologies Inc. |
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
(expressed
in U.S. dollars) |
|
|
|
|
|
For the three months ended |
|
|
|
|
|
March 31, 2017 |
|
|
|
March 31, 2016 |
|
OPERATING
ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and
comprehensive loss for the period |
|
|
$ |
(14,107,541 |
) |
|
$ |
(6,979,734 |
) |
Items not
affecting cash |
|
|
|
|
|
|
|
|
|
Depreciation of
property and equipment |
|
|
|
2,054,049 |
|
|
|
1,311,122 |
|
Amortization of
intangible assets |
|
|
|
423,199 |
|
|
|
436,402 |
|
Stock-based
compensation |
|
|
|
867,194 |
|
|
|
1,047,343 |
|
Amortization of
deferred financing costs |
|
|
|
41,126 |
|
|
|
— |
|
Imputed interest
on distribution rights payable |
|
|
|
21,898 |
|
|
|
24,028 |
|
Imputed interest
on long-term receivables |
|
|
|
(22,342 |
) |
|
|
— |
|
Shareholder
warrants revaluation adjustment |
|
|
|
— |
|
|
|
(1,324,293 |
) |
|
|
|
|
(10,722,417 |
) |
|
|
(5,485,132 |
) |
Changes
in non-cash working capital |
|
|
|
|
|
|
|
|
|
Increase in
accounts receivable |
|
|
|
(639,106 |
) |
|
|
(8,083 |
) |
Increase in
inventories |
|
|
|
(349,063 |
) |
|
|
(1,013,329 |
) |
Decrease in
accounts payable and accrued liabilities and provisions |
|
|
|
(1,929,033 |
) |
|
|
(1,951,375 |
) |
Decrease in
income taxes payable |
|
|
|
(400 |
) |
|
|
(10,900 |
) |
Decrease in
prepaid expenses and other assets |
|
|
|
9,314 |
|
|
|
336,598 |
|
Increase in
deferred revenue |
|
|
|
681,276 |
|
|
|
367,683 |
|
Net change in
non-cash working capital balances related to operations |
|
|
|
(2,227,012 |
) |
|
|
(2,279,406 |
) |
|
|
|
|
|
|
|
|
|
|
Increase in
long-term receivables |
|
|
|
(640,926 |
) |
|
|
— |
|
(Decrease)
increase in non-current deferred revenue |
|
|
|
(111,671 |
) |
|
|
50,666 |
|
Cash used
in operating activities |
|
|
|
(13,702,026 |
) |
|
|
(7,713,872 |
) |
|
|
|
|
|
|
|
|
|
|
INVESTING
ACTIVITIES |
|
|
|
|
|
|
|
|
|
Addition of
property and equipment |
|
|
|
(2,977,036 |
) |
|
|
(2,774,422 |
) |
Purchase of
intangible assets |
|
|
|
(241,128 |
) |
|
|
— |
|
Disposal of
property and equipment |
|
|
|
804,104 |
|
|
|
512,596 |
|
Purchase of
investments |
|
|
|
(289,284 |
) |
|
|
— |
|
Cash used
in investing activities |
|
|
|
(2,703,344 |
) |
|
|
(2,261,826 |
) |
|
|
|
|
|
|
|
|
|
|
FINANCING
ACTIVITIES |
|
|
|
|
|
|
|
|
|
Net proceeds from
the issuance of debt |
|
|
|
9,177,443 |
|
|
|
— |
|
Proceeds from
exercise of options |
|
|
|
1,227,726 |
|
|
|
37,533 |
|
Payment of
distribution rights payable |
|
|
|
(250,000 |
) |
|
|
(250,000 |
) |
Cash
provided by (used in) financing activities |
|
|
|
10,155,169 |
|
|
|
(212,467 |
) |
|
|
|
|
|
|
|
|
|
|
Net
decrease in cash and cash equivalents |
|
|
|
(6,250,201 |
) |
|
|
(10,188,165 |
) |
Net foreign
exchange difference |
|
|
|
6,716 |
|
|
|
5,951 |
|
Cash and cash
equivalents at beginning of period |
|
|
|
62,382,649 |
|
|
|
106,790,202 |
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents at end of period |
|
|
$ |
56,139,164 |
|
|
$ |
96,607,988 |
|
For more information, please contact:
Lynn Pieper Lewis or Leigh Salvo
(415) 937-5404
investors@novadaq.com