iCAD, Inc. (Nasdaq: ICAD), an industry-leading provider of advanced image analysis, workflow solutions and radiation therapy for the early identification and treatment of cancer, today reported financial results for the three and twelve months ended December 31, 2013.
"Our strong performance throughout 2013 demonstrates the progress we've made with our broadened oncology strategy and, in particular, our Therapy business. Significant revenue growth, combined with a balance of targeted investments and disciplined financial management, allowed us to post non-GAAP Adjusted EBITDA of $1.9 million for the year," said Ken Ferry, President and CEO of iCAD.
"Our Therapy business delivered significant revenue growth with meaningful increases in both product placements and utilization. Revenue from the non-melanoma skin cancer indication was especially strong, with support from three-year clinical data, favorable reimbursement and, most importantly, effective patient outcomes. We will continue to invest in programs to accelerate the market adoption of the Xoft system for the treatment of both skin and early breast cancer. With an estimated U.S. market penetration of less than one percent in both indications, there is considerable room for continued growth. We remain committed to ongoing clinical studies, supporting reimbursement expansion and raising awareness of the clinical benefits of our electronic brachytherapy for a variety of cancer indications.
"The Detection business is delivering on its goal of leveraging our customer base with a balance of new product sales and recurring revenue. We are making progress towards long-term growth through recurring revenue from our service business, new customers and upgrades from our installed base for PowerLook, our next-generation mammography CAD platform, and from our MRI product offering with our strategic partner Invivo, a Philips Healthcare business. Looking forward, we believe the market transition from 2D digital to 3D digital mammography, or tomosynthesis, will provide a significant, multi-year market opportunity for our new 3D software workflow tools currently in development. We look forward to introducing the first product offering sometime later this year or early in 2015," concluded Mr. Ferry.
Fourth Quarter Financial Results
Revenue: Total revenue for the fourth quarter of 2013 increased 16.8% to $9.1 million from $7.8 million for the fourth quarter of 2012, due to a 60.4% increase in Therapy revenue partially offset by an 11.9% decline in Cancer Detection revenue.
Therapy revenue included Xoft™ Axxent™ Electronic Brachytherapy System™ product sales, as well as the associated service and supply revenue. Cancer Detection revenue included film, digital mammography, MRI and CT CAD platforms, as well as service and supply revenue from these products.
Gross Margin: Gross profit for the fourth quarter of 2013 increased to $6.3 million, or 68.8% of revenue, from $5.6 million, or 71.0% of revenue, for the fourth quarter of 2012. The lower gross margin was primarily due to product mix, and the impact of the Medical Device Excise Tax, which went into effect in 2013.
Operating Expenses: Total operating expenses for the fourth quarter of 2013 increased to $6.9 million from $6.3 million for the same period in 2012, as a result of higher commercial and R&D investments, partially offset by ongoing cost-control measures.
Non-GAAP Adjusted EBITDA: Non-GAAP adjusted EBITDA, a non-GAAP financial measure as defined below, was $285,000 for the fourth quarter of 2013, compared with non-GAAP adjusted EBITDA of $102,000 for the same period in 2012.
Net Loss: The net loss for the fourth quarter of 2013 was $4.4 million, or $0.41 per share, compared with a net loss for the fourth quarter of 2012 of $2.7 million, or $0.25 per share.
Non-GAAP Adjusted Net Loss: The non-GAAP adjusted net loss, as defined below, for the fourth quarter of 2013 was $1.5 million, or $0.14 per share, compared with a non-GAAP adjusted net loss for the fourth quarter of 2012 of $1.7 million, or $0.15 per share.
Cash and Cash Flow: As of December 31, 2013, iCAD had cash and cash equivalents of $11.9 million, compared with $10.2 million as of September 30, 2013 and $13.9 million as of December 31, 2012. Net cash used by operations during 2013 was $1.4 million.
2013 Financial Results
Revenue: Total revenue for 2013 increased 17.0% to $33.1 million from $28.3 million for 2012, including a 46.8% increase in Therapy revenue offset by a 2.1% decline in Cancer Detection revenue.
Gross Margin: Gross profit for 2013 was $23.1 million, or 69.8% of revenue, compared with gross profit for 2012 of $20.0 million, or 70.8% of revenue.
Operating Expenses: Total operating expenses for 2013 decreased to $24.9 million from $25.4 million for 2012.
Non-GAAP Adjusted EBITDA: Non-GAAP adjusted EBITDA for 2013 was $1.9 million, compared with a non-GAAP adjusted EBITDA loss of $1.5 million for 2012.
Net Loss: The net loss for 2013 was $7.6 million, or $0.70 per share, compared with a net loss for 2012 of $9.4 million, or $0.87 per share.
Non-GAAP Adjusted Net Loss: The non-GAAP adjusted net loss for 2013 was $5.2 million, or $0.47 per share, compared with a non-GAAP adjusted net loss for 2012 of $8.8 million, or $0.81 per share.