Vancouver, British Columbia – April 30, 2015 – LED Medical Diagnostics Inc. (“LED Medical” or the “Company”) today announced its financial results for the fourth quarter and full year ended December 31, 2014, reported in United States dollars and in accordance with International Financial Reporting Standards (“IFRS”). The Company’s results are presented in comparison to the fourth quarter and full year ended December 31, 2013. All balances are expressed in United States dollars unless otherwise stated.
LED Medical is pleased to announce revenue growth of 256% for the fiscal year ended December 31, 2014 with total revenue of $9 million as compared to the prior fiscal year, and revenues for the three months ended December 31, 2014 of $4.6 million, an increase of 2073% from the three months ended December 31, 2013. The Company expects continued strong revenue growth in fiscal year ending December 31, 2015 with revenue guidance of $15 million to $16 million.
“I am proud of the way the team has executed in 2014, especially in Q4 which is the height of sales seasonality in the dental business,” stated Dr. David Gane, CEO of LED Medical. “I remain encouraged by the positive impact this revenue growth has had on our business. Our specialized focus in the dental imaging space and our “white glove” approach to customer support has proven to be a key competitive advantage for us”. Dr. Gane added, “Now is the time for us to create new efficiencies by leveraging our investment in our sales and marketing infrastructure with product portfolio expansion. Continued execution coupled with optimization of our cost structure is the most direct path to future growth, sustainable earnings and shareholder value.”
Lamar Roberts, President of LED Dental added, “We feel that our ability to rapidly grow revenues positions us well to expand our product portfolio with technologies that most synergistically fit our revenue ecosystem. Our model has shown the ability to scale up quickly while creating product and company relationships with deep integrations. We now anticipate the operating leverage that is inherent within our model to drive bottom line results as well. While our financials accurately express the value creation we have worked hard for, we feel the intangibles we are acquiring in the process of continued growth are equally valuable in positioning us to be a defensible leader in the space over the long term.”
Three-Month Comparative Results
The Company reported revenue of $4.6 million for the three months ended December 31, 2014 as compared to $0.2 million for the three months ended December 31, 2013. Net loss was $0.6 million for the three months ended December 31, 2014, as compared to a net loss of $1.4 million for the three months ended December 31, 2013. Inclusive of accounting adjustments, the Company’s calculated gross margin2 was 31% for the three months ended December 31, 2014, as compared to negative 97% in the three months ended December 31, 2013. Total operating expenses for the three months ended December 31, 2014 were $2.0 million as compared to $1.0 million for the three months ended December 31, 2013. Core operating expenses3 (excluding stock-based compensation, deferred share unit compensation and other operating expenses) for the three months ended December 31, 2014 were $2.3 million, as compared to $1.0 million for the three months ended December 31, 2013. EBITDA1 for the three months ended December 31, 2014 was negative $0.8 million compared to negative $1.2 million for the three months ended December 31, 2013.
Twelve-Month Comparative Results
The Company reported revenue of $9.0 million for the year ended December 31, 2014 as compared to $2.5 million for the year ended December 31, 2013. Net loss was $6.1 million for the year ended December 31, 2014 as compared to a net loss of $7.0 million for the year ended December 31, 2013. Gross margin2 was 39% for the year ended December 31, 2014, a decrease from 46% in the year ended December 31, 2013. Total operating expenses for the year ended December 31, 2014, were $9.1 million as compared to $4.8 million for the year ended December 31, 2013. Core operating expenses3 (excluding stock-based compensation, deferred share unit compensation and other operating expenses) for the year ended December 31, 2014 were $8.4 million, as compared to $3.3 million for the year ended December 31, 2013. EBITDA1 for the year ended December 31, 2014 was negative $4.9 million, as compared to negative $2.1 million for the year ended December 31, 2013.
Financial Guidance for Fiscal Year 2015
The Company is reaffirming guidance for the full fiscal year ending December 31, 2015 (“fiscal year 2015”). This guidance is intended solely to give investors an understanding of management’s expectations for the full fiscal year in light of recent industry sales trends, seasonality of the business and recognition that much of the sales generated in the dental industry occur in the fourth quarter. The guidance does not take into account, or give effect for, any events that are beyond the Company’s reasonable control.
Fiscal Year Ending December 31, 2015 – Quantitative Guidance
Revenue – $15 million – $16 million
Notable business developments and achievements up to the reporting date included the following:
- On April 21, 2015, the Company announced that it will be serving as a strategic partner in the Oral Cancer Foundation’s “Be Part of the Change” program, seeking to promote the importance of routine comprehensive oral screenings and early detection in the fight against oral cancer.
- On April 15, 2015, the Company announced a pilot program for oral cancer screenings at various London Drug pharmacies in the lower mainland of B.C. This program has been endorsed by the BC Oral Cancer Prevention Program.
- On April 9, 2015, the Company announced an agreement with OrthoSynetics which designates LED Dental as the preferred imaging technology supplier for their orthodontic practices. OrthoSynetics provides administrative, marketing and financial services for 350 orthodontic practices across the United States.
- On March 17, 2015, the Company announced the funding of an $8,000 gift to the University of British Columbia to support a research project titled “Prevention Strategies in Early Detection and Diagnosis of Oral Cancer in Vietnam”. This gift will fund the travel costs to Vietnam for two research trainers to deliver training for various levels of health professionals. Oral Cancer is one of the most common cancers in Vietnam, more than six times higher than for patient’s in the US and Canada.
- On December 8, 2014, the Company announced the signing of an exclusive one year distribution agreement with Ray Co. Ltd. to market the RAYSCAN Alpha-Expert dental imaging system and the RIOSensor intraoral sensor in Canada.
- On October 14, 2014, LED Medical announced the renewal of its exclusive international distribution agreement (outside North America) for the VELscope® Vx for a three year term with DenMat Holding LLP. This agreement requires minimum annual purchases of the VELscope® Vx product line by DenMat and is subject to another three-year extension at the mutual agreement of both parties.
- During September 2014, the Company showcased its new digital Imaging products at the California Dental Association (CDA) Annual Conference entitled “CDA Presents the Art and Science of Dentistry”, the American Association of Oral and Maxillofacial Surgeons 94th Annual Meeting, and the American Academy of Periodontology 100th Annual Meeting and Exhibition. The CDA conference alone was attended by more than 27,000 dental professionals.
Financial Statements and Management’s Discussion & Analysis
Please see the audited consolidated financial statements and related Management’s Discussion & Analysis (“MD&A”) for more details. The audited consolidated financial statements for the year ended December 31, 2014 and related MD&A have been reviewed and approved by the Company’s Audit Committee and Board of Directors. The Company has prepared this truncated news release to alert investors to its results and that a more detailed explanation and analysis is readily available in the MD&A. These reports have been filed on SEDAR at www.sedar.com and also posted to www.ledmd.com.
The following and preceding discussion of financial results includes references to Gross Margin, EBITDA, Core Operating Expenses and Working Capital, which are non-IFRS financial measures. The measure of gross margin is provided as management believes this is a good indicator in evaluating the operating performance of the Company. EBITDA is defined as net loss and comprehensive loss and excludes interest; income taxes; depreciation; amortization; finder’s warrants issuance costs; stock-based compensation; deferred share unit compensation; mark to market adjustments on Canadian dollar denominated warrants; foreign exchange gain or loss; and other income. The measure of working capital is provided as management believes this is a good indicator of the operating liquidity available to the Company.
About LED Medical Diagnostics Inc.
Founded in 2003 and headquartered in Burnaby, British Columbia, Canada, LED Medical Diagnostics Inc., through its wholly-owned subsidiaries LED Dental Inc. and LED Dental Ltd, provide dentists and oral health specialists with advanced diagnostic imaging products and software, in addition to the award-winning VELscope® Vx tissue fluorescence visualization technology. Backed by an experienced leadership team and dedicated to a higher level of service and support, LED Dental is committed to providing dental practitioners with the best technology available by identifying and adding leading products to its growing portfolio.
The Company is currently listed on the TSX Venture Exchange (TSX-V) under the symbol “LMD”, the OTCQX under the symbol “LEDIF”, as well as the Frankfurt Stock Exchange under the symbol “LME”. For more information, call 844.952.7327 or visit www.leddental.com/investor-relations.