IMRIS Inc. (NASDAQ: IMRS; TSX: IM) today reported financial results for the fourth quarter and full year ended December 31, 2014. All figures are reported in U.S. dollars. The Company's net loss in the 2014 fourth quarter was $6.8 million, or $0.13 per diluted share, on net revenues of $9.6 million. In the prior-year quarter, IMRIS reported a net loss of $21.6 million, or $0.42 per diluted share, on net revenues of $10.0 million. New order bookings were $4.7 million in the quarter resulting in a backlog of $116.4 million.
Commented Jay D. Miller, President and Chief Executive Officer of IMRIS: "In the fourth quarter, revenues were near our expectations, and our gross margins and net loss significantly improved. We remain on track to make further gains in each of these areas. We ended the year with a near-record backlog that positions us well for growth in 2015."
Miller added: "We achieved our goal to submit a 510(k) application of our robotic SYMBIS Surgical System in November and successfully completed a round of financing. Importantly, after year end, we announced a collaboration with Siemens Healthcare to integrate our VISIUS Surgical Theatre with intraoperative MRI into operating suites that Siemens recently sold to Sahlgrenska University Hospital in Sweden. We are pleased to closely partner with Siemens to bring advanced imaging to the operating room."
Fourth-Quarter Operating Review
Revenue for the 2014 fourth quarter was $9.6 million compared with $10.0 million in the same period of 2013, due to the timing of VISIUS Surgical Theatre systems' installation and delivery.
Gross profit for the 2014 fourth quarter was $3.9 million compared with $2.8 million in the same period last year. Gross profit as a percentage of sales in the 2014 fourth quarter was 41.1 percent compared with 27.7 percent in the same period last year. Total gross profit as a percentage of sales in 2013 was negatively impacted by additional costs for the initial installations of the first VISIUS iCT deliveries and other clinical beta sites for certain research projects.
Operating expenses for the 2014 fourth quarter declined to $8.2 million from $22.6 million in the 2013 fourth quarter, partially due to improved operating efficiencies following completion of the Company's relocation to Minnesota and related expenses. Operating expenses for the 2013 fourth quarter were affected by a non-cash research and development charge of $8.3 million related to the completion of a collaborative arrangement, along with one-time costs of $3.5 million related to the relocation.
Foreign exchange expense for the 2014 fourth quarter was $0.8 million compared with $0.6 million in the 2013 fourth quarter, due to a strengthening U.S. dollar against IMRIS' foreign denominated monetary assets. Other expense for the 2014 fourth quarter included interest expense of $0.6 million, debt discount amortization of $0.4 million and debt issuance cost amortization of $0.1 million, as well as other net interest expense and banking fees.
IMRIS' net loss for the 2014 fourth quarter narrowed to $6.8 million, or $0.13 per diluted share, compared with a loss of $21.6 million, or $0.42 per diluted share, in the 2013 fourth quarter.
Adjusted EBITDA for the 2014 fourth quarter was negative $3.3 million, improved from negative $18.8 million in the same period last year. Adjusted EBITDA for the 2014 fourth quarter primarily reflects lower operating expenses. (See Table Four)
During the 2014 fourth quarter, IMRIS received $4.7 million in new orders and converted $9.6 million of backlog into revenues. The change in the U.S. dollar versus the orders denominated in foreign currencies in backlog resulted in a decrease of $2.7 million in the value of the backlog. In the fourth quarter of 2014 one order in backlog was not proceeding at a rate consistent with our expectations. As a result, we have removed this order, valued at approximately $3.2 million, from backlog. Backlog on December 31, 2014, totaled $116.4 million.
IMRIS completed a $3.0 million private placement offering in the 2014 fourth quarter. IMRIS intends to use the net proceeds for working capital and general corporate purposes, including commercialization activities of new products, research and development programs and working capital needs. The Company also obtained a covenant waiver on its debt facility until September 2015.
Cash at December 31, 2014, totaled $5.4 million and accounts receivable were $8.6 million. These funds, together with ongoing operating cash flow, will be used to fund the Company's working capital and overall operations.
2014 Annual Results
Revenue for the full year ended December 31, 2014, totaled $28.9 million compared with $46.0 million in 2013. Net loss in 2014 improved to $30.2 million compared with a net loss of $42.0 million in 2013. Net loss narrowed to $0.58 per diluted share compared with $0.83 per diluted share in 2013.
Gross profit in 2014 was $10.2 million compared with $15.7 million in 2013. Gross profit as a percentage of sales rose to 35.1 percent from 34.0 percent in 2013.
Operating expenses declined to $33.1 million from $55.0 million in 2013, chiefly stemming from lower research and development costs and relocation costs. Foreign exchange expense was $2.2 million compared with $1.2 million in 2013, due to a strengthening U.S. dollar against the Company's foreign denominated monetary assets.
Full-year Adjusted EBITDA was negative $18.6 million compared with negative $33.9 million in 2013. The 2014 Adjusted EBITDA chiefly stems from lower operating expenses of $21.9 million.
Commented Miller: "We are positioned to grow IMRIS' revenues in 2015, and our focus remains on improving new order bookings performance, converting qualified customer prospects to sales, and building our service revenues."
IMRIS' full-year 2015 revenues, comprised of systems, service, upgrades and disposables sales, are expected to be in the range of $40 million to $55 million. The Company anticipates its 2015 first quarter revenues will be in the range of $3.5 million to $4.5 million, with the strongest quarterly revenue following in the second half of 2015.
For the 2015 year, IMRIS anticipates a higher gross profit margin of approximately 42 percent to 45 percent. The expected increase is a result of the Company's multi-source sales strategy, growing services contribution that carry higher margins and completion of lower margin beta sites in prior years. IMRIS forecasts capital expenditures in 2015 to be approximately $2.5 million and operating expenses to be approximately $30 million to $32 million.