Novadaq Technologies: Novadaq Reports Third Quarter 2013 Financial Results

The following excerpt is from the company's SEC filing.

Toronto, Ontario — October 22, 2013 – Novadaq® Technologies Inc. (“Novadaq” or the “Company”) (NASDAQ: NVDQ, TSX: NDQ), a developer of clinically-relevant imaging solutions for use in surgical and outpatient wound care procedures, today announced financial results for its third quarter ended September 30, 2013. Unless otherwise indicated, all dollar amounts in this press release are expressed in United States (U.S.) dollars.

Novadaq reported total third quarter 2013 revenues of $8.9 million, representing an increase of 49% as compared to third quarter of 2012. Revenue growth was driven primarily by continued adoption of SPY® technology procedures and higher capital system sales. Third quarter of 2013 recurring revenues for Novadaq’s SPY businesses increased by 23% year-over-year to $3.5 million, and sales of SPY technology capital equipment, including PINPOINT®, LUNA™ SPY Elite®, and Firefly™, increased to $4.5 million representing an increase of 119% compared with the year ago quarter.

Third quarter gross profit of $5.7 million (65% margin), represents an increase of 49% compared with $3.9 million (65% margin) in Q3-2012.

Third quarter of 2013 operating contribution (cash contributed by operating activities before changes in working capital) was $0.6 million compared with an operating contribution of $0.1 million in the third quarter of 2012. This difference was driven mainly by higher revenues and gross profit, offset by increased selling and distribution expenses associated with the build-out of the PINPOINT and LUNA sales and marketing infrastructure. During the third quarter, working capital contributed $1.2 million, and $3.7 million was invested in fixed assets, including $1.2 million to build SPY systems, and $2.5 million to acquire assets and intellectual property related to the surgical scintigraphy imaging technology, the surgical marker, nerve and lymph node localization, and erythrocyte labelling.

Net loss of $6.9 million for the third quarter of 2013 decreased by $2.4 million compared with the $9.3 million net loss in third quarter 2012. Third quarter of 2013 loss per share was $0.14. Excluding the impact of non-cash $5.9 million warrants revaluation expense in third quarter 2013, loss per share was $0.02, compared with $0.03 in third quarter 2012.

Cash and cash equivalents were $86.9 million at September 30, 2013, reflecting a decrease of $1.6 million, compared to the cash position as of June 30, 2013.

During the third quarter of 2013, Novadaq shipped 160 SPY technology systems. One hundred and thirty nine systems were shipped to hospitals, and the installed base grew to approximately 1,100 systems. Novadaq estimates that SPY imaging was used in 16% of breast reconstruction surgeries in the United States exiting the quarter.

“The most notable achievement for Novadaq in the third quarter was the sale of 31 PINPOINT, LUNA and SPY Elite systems,” commented Dr. Arun Menawat, Novadaq’s President and CEO. “We remain focussed on building our direct sales team further and continuing clinical studies to drive adoption of our PINPOINT and LUNA systems.”

Novadaq is pleased to invite all interested parties to participate in a conference call today, Tuesday, October 22, 2013, at 8:30 a.m. Eastern Time during which the results will be discussed.

Those wishing to access the live conference call by telephone should dial 1-877-407-8031 (within Canada and the United States) or 1-201-689-8031 (international callers) several minutes prior to the beginning of the call. A telephonic replay of the conference call will be made available until midnight on November 22, 2013 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 conference identification number 100629 when prompted.

The call will be archived for 90 days on the Company’s website at http://www.novadaq.com/investors/events. 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.

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 80 peer-reviewed publications demonstrate that the use of SPY imaging during complex surgery, leads to fewer 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 August 2013, Novadaq acquired the surgical scintigraphy imaging technology, which is being developed for perioperative imaging of sentinel lymph nodes and tumor margins. Our unique business model of partnering with market-leading companies to drive adoption of our imaging technology, while building our own commercial infrastructure, is the cornerstone of our corporate strategy for growth.

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.

The above information was disclosed in a filing to the SEC. To see this filing in its entirety, click here.

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