Vancouver, British Columbia – August 31, 2015 – LED Medical Diagnostics Inc. (“LED Medical” or the “Company”) today announced its financial results for the second quarter ended June 30, 2015, reported in United States dollars and in accordance with International Financial Reporting Standards (“IFRS”). LED Medical achieved strong annual and sequential growth with revenue of US$3.3 million in the second quarter 2015, an increase of 106% over the second quarter of 2014 and an increase of 34% over the prior quarter ended March 31, 2015. The Company’s results are presented in comparison to the first quarter ended June 30, 2014. All balances are expressed in United States dollars unless otherwise stated.
“I am pleased with our progress year to date in continuing to grow our customer base and related revenue through the expansion of the Company’s product offerings,” stated Dr. David Gane, President and CEO of LED Medical Diagnostics Inc. “We plan to further expand and diversify our product portfolio with the addition of new, complementary imaging products and services to enhance the value we provide to the dental industry and look forward to our continued growth in the future.”
The Company also announced the resignation of Jody Kelly, LED Medical’s Vice President of Finance effective Sept 1, 2015. The Company is engaging an Atlanta based finance service organization to perform certain financial functions, while the Company searches for a permanent replacement.
Notable developments and achievements during the quarter include:
- April 09, 2015 – The Company announced a new agreement with OrthoSynetics, a leading provider of administrative, marketing, and financial services to 350 orthodontic practices across the United States. The agreement designates the Company as the preferred imaging technology supplier for OrthoSynetics.
- April 16, 2015 – The Company announced that it is partnering with London Drugs to provide its VELscope® Vx Enhanced Oral Assessment Systems (“VELscope® Vx System” or “VELscope® Vx”) for a pilot program for oral cancer screenings.
- 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.
- April 30, 2015 – The Company announced that it has launched a new cloud-based imaging solution, LED Imaging Cloud. The web-based system is accessible 24 hours per day, 7 days per week from any location, allowing practitioners real-time, remote access to clinical data for their entire patient database. A solution for both 2D and 3D clinical data, LED Imaging Cloud transcends limitations on CBCT storage found in many current cloud imaging solutions on the market.
- June 15, 2015 – The Company announced an agreement that makes LED Medical subsidiary, LED Dental, the newest provider of 3Shape’s 3D intraoral digital impression and desktop scanners.
- June 23, 2015 – The Company announced the launch of the new VELscope® Vx Imaging Adapter & VELscope Photo System Application from subsidiary LED Dental, delivering integration of the VELscope Vx with the Apple iPod touch®* for clinical photographic documentation and secure image sharing oral lesions.
- July 13, 2015 – The Company announced that its VELscope® Vx Enhanced Oral Assessment System has received the Pride Institute’s “Best of Class” Technology Award, making 2015 the fifth consecutive year that the VELscope has received this distinction as the market-leading device for adjunctive oral screening.
- July 22, 2015 – The Company announced that it has completed a financing of CDN$1,100,000 through the issuance of 10% senior secured debentures of the Company each in the amount of CDN$10,000 (the “Debentures”) and maturing after 12 months.
- August 04, 2015 – The Company announced that it has entered into a distribution agreement with 3D printer manufacturer EnvisionTec Inc., becoming a provider of EnvisionTec’s 3D printing solutions to dentists, dental specialists and dental laboratories across the United States and Canada.
Three Month Comparative Results
The Company reported revenue of US$3.3 million for the three months ended June 30, 2015 representing an increase of 106% over the same period in the prior year of US$1.6 million and an increase of 34% over the prior quarter ended March 31, 2015 of US$2.4 million. The increase in revenue was due primarily to increased sales in the Company’s imaging product offering launched in fiscal 2014.
Gross margin was 31% in the three months ended June 30, 2015 which was lower than the 54% gross margin in the same period in the prior year due to increased revenue contribution from the Company’s new imaging product offering but higher than the 26% gross margin in the three months ended March 31, 2015.
EBITDA was (US$1.1 million) for the three months ended June 30, 2015 compared to EBITDA of (US$1.4 million) in the same period in the prior year and the prior quarter ended March 31, 2015.
The Company had a net loss of US$1.2 million for the three months ended June 30, 2015 compared to net income of US$83,000 in the same period in the prior year and a net loss of US$1.5 million in the prior quarter ended March 31, 2015.
Six Month Comparative Results
The Company reported revenue growth of 116% with US$5.7 million during the first six months of fiscal 2015 compared to US$2.6 million for the six months ended June 30, 2014.
Gross margin was 29% for the six months ended June 30, 2015 compared to gross margin of 53% for the six months ended June 30, 2014. Gross margin decreased over the prior year due to increased revenue contribution attributable from the Company’s imaging product offering launched in fiscal 2014.
EBITDA for the six months ended June 30, 2015 was (US$2.6 million) compared to (US$2.4 million) for the six months ended June 30, 2014.
The Company had a net loss of US$2.6 million and US$2.4 million during the six months ended June 30, 2015 and 2014, respectively.
Financial Position as at June 30, 2015
Working capital as of June 30, 2015 was US$1.4 million including cash and cash equivalents of US$1.5 million. This is compared to net working capital of US$1.5 million as of December 31, 2014, including cash and cash equivalents of US$2.4 million.
Financial Guidance for Fiscal Year 2015
The Company is reaffirming its 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
Financial Statements and Management’s Discussion & Analysis
Please see the interim condensed financial statements and related Management Discussion and Analysis (MD&A) for more details. The interim condensed financial statements for the three months ended June 30, 2015 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 preceding discussion of financial results includes references to Gross Margin, EBITDA and Working Capital, which are non-IFRS financial measures and may not be directly comparable to other issuers. The measure of Gross Margin is defined as revenue less cost of sales and 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 exclusive of 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 defined as current assets less current liabilities 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.