05:13:45 EDT Thu 28 Mar 2024
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or Name
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LED Medical Diagnostics Inc
Symbol LMD
Shares Issued 88,608,352
Close 2014-11-28 C$ 0.335
Market Cap C$ 29,683,798
Recent Sedar Documents

LED Medical loses $2.69-million (U.S.) in Q3

2014-11-28 19:20 ET - News Release

Dr. David Gane reports

LED MEDICAL DIAGNOSTICS INC. REPORTS 2014 THIRD QUARTER RESULTS

LED Medical Diagnostics Inc. has released its financial results for the third quarter ended Sept. 30, 2014, reported in U.S. dollars and in accordance with international financial reporting standards. The company's results are presented in comparison with the third quarter ended Sept. 30, 2013. All balances are expressed in U.S. dollars unless otherwise stated.

"I am pleased to announce revenue growth of 86 per cent to $4,273,818 during the nine months ended Sept. 30, 2014, as compared to the same prior-year period. We provided annual revenue guidance of $9.0-million to $11.0-million, which the company is working diligently to achieve," stated Dr. David Gane, chief executive officer. "Revenue growth in 2014 is a direct result of optimizing our VELscope distribution channel and by adding new third party digital imaging product lines to complement our VELscope product offering. We have made a substantial investment in our company, which includes inventory as at Sept. 30, 2014, to fulfill the anticipated sales orders to be received in the fourth quarter of fiscal 2014. I am proud of what we have built to date inclusive of the team assembled and the progress we have made to position ourselves to capitalize on the busy sales cycle that lays ahead until the end of the year. We are closer than ever to realizing our goal of becoming a leading player in the North American digital dental imaging market."

Business highlights

Notable business developments and achievements up to the reporting date include the following:

  • In August, 2014, the company announced the availability of its new digital intraoral camera, the LED IC100. Designed with simplicity, functionality and versatility in mind, the LED IC100 intraoral camera captures high-resolution images to provide practitioners with an enhanced patient education tool.
  • On Aug. 19, 2014, the company officially introduced the LED IC200. This product is the second intraoral camera in the company's product portfolio and is elegantly designed to acquire high-resolution intraoral and extraoral images with auto focus and a large depth of field.
  • During September, 2014, the company showcased its new digital imaging products at the California Dental Association 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.
  • On Oct. 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.

Financial highlights

Financial position as at Sept. 30, 2014

Net working capital as at Sept. 30, 2014, was $2,357,635, which includes cash of $815,036.

Three-month comparative results

The company reported revenue of $1,628,643 for the three months ended Sept. 30, 2014, as compared with $911,387 for the three months ended Sept. 30, 2013. Operating loss was $1,977,051 for the three months ended Sept. 30, 2014, as compared with a net loss of $260,326 for the three months ended Sept. 30, 2013.

The company's calculated gross margin was 36 per cent for the three months ended Sept. 30, 2014, which is lower than the 64-per-cent gross margin during the three months ended Sept. 30, 2013. Total operating expenses for the three months ended September, 2014, were $2,577,852 as compared with $840,383 for the three months ended Sept. 30, 2013.

Earnings before interest, taxes, depreciation and amortization for the three months ended Sept. 30, 2014, were negative $1,623,618 compared with negative $139,816 for the three months ended Sept. 30, 2013. Included in the company's net loss of $2,693,861 for the three months ended Sept. 30, 2014, is $777,504 in mark-to-market adjustments on Canadian-dollar-denominated warrants. Exclusive of the mark-to-market adjustment, the company's net loss would be $1,916,357 for the third quarter of fiscal 2014. Included in the company's net loss of $1,959,503 for the three months ended Sept. 30, 2013, is a loss of $2,065,653 in mark-to-market adjustments on Canadian-dollar-denominated warrants resulting in the company's net income of $106,150 exclusive of the mark-to-market adjustment loss.

Nine-month comparative results

The company reported revenue of $4,273,818 for the nine months ended Sept. 30, 2014, as compared with $2,303,860 for the nine months ended Sept. 30, 2013. Operating loss was $4,816,499 for the nine months ended Sept. 30, 2014, as compared with a net loss of $1,923,094 for the nine months ended Sept. 30, 2013.

The company's calculated gross margin was 47 per cent for the nine months ended Sept. 30, 2014, which is lower than the 60-per-cent gross margin during the nine months ended Sept. 30, 2013. Total operating expenses for the nine months ended September, 2014, were $6,812,708 as compared with $3,302,749 for the nine months ended Sept. 30, 2013.

EBITDA for the nine months ended Sept. 30, 2014, was negative $4,061,343 compared with negative $916,082 for the nine months ended Sept. 30, 2013. Included in the company's net loss of $5,505,294 for the nine months ended Sept. 30, 2014, is $693,979 in mark-to-market adjustments on Canadian-dollar-denominated warrants. Exclusive of the mark-to-market adjustment, the company's net loss would be $4,811,315 for this fiscal 2014 period. Included in the company's net loss of $5,494,416 for the nine months ended Sept. 30, 2013, is $3,822,587 in mark-to-market adjustments on Canadian-dollar-denominated warrants. Exclusive of the mark-to-market adjustment, the company's net loss would be $1,671,829.

Financial guidance for fiscal year 2014

The company is providing guidance for the full fiscal year ending Dec. 31, 2014. 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.

                FINANCIAL GUIDANCE FOR FISCAL YEAR 2014

Full fiscal year ending Dec. 31, 2014            Quantitative guidance 
                                                                            
Net revenues                                              $9.0M-$11.0M                                                                           

Financial statements and management's discussion and analysis

Please see the interim condensed consolidated financial statements and related management's discussion and analysis for more details. The interim condensed consolidated financial statements for the nine months ended Sept. 30, 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 a more detailed explanation and analysis are readily available in the MD&A. These reports have been filed on SEDAR and also posted to the company's website.

                                            
          CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND
                              COMPREHENSIVE LOSS    
                         (expressed in U.S. dollars)                                                 
                                                                           
                   Three months   Three months    Nine months    Nine months
                          ended          ended          ended          ended
                       Sept. 30,      Sept. 30,      Sept. 30,      Sept. 30,
                           2014           2013           2014           2013

Revenues          $   1,628,643  $     911,387  $   4,273,818  $   2,303,860
Cost of goods
sold                  1,027,842        331,330      2,277,609        924,205
Total                   600,801        580,057      1,996,209      1,379,655
Expenses
Sales and
marketing             1,621,028        158,776      3,910,005        818,111
Research and
development             215,625        121,706        721,548        322,257
Administration          387,766        439,391      1,425,999      1,121,264
Stock-based
compensation            331,695         45,898        709,546        597,691
Deferred share
unit
compensation                 --         65,149             --        380,580
Other
operating
expenses                 21,738          9,463         45,610         62,846
Total                 2,577,852        840,383      6,812,708      3,302,749
Operating (loss)     (1,977,051)      (260,326)    (4,816,499)    (1,923,094)
Other income
(expenses)
Mark-to-market
adjustments
on Canadian-
dollar-
denominated
warrants               (777,504)    (2,065,653)      (693,979)    (3,822,587)
Foreign
exchange
(loss) gain              60,694        366,435          5,184        255,364
Total                  (716,810)    (1,699,218)      (688,795)    (3,567,223)
Net income
(loss) before
incomes taxes        (2,693,861)    (1,959,544)    (5,505,294)    (5,490,317)
Income taxes                 --            (41)            --          4,099
Net income
(loss) and
comprehensive
income (loss)
for the period    $  (2,693,861) $  (1,959,503) $  (5,505,294) $  (5,494,416)
Income (loss)
per share --
basic and
diluted                  ($0.03)        ($0.03)        ($0.07)        ($0.12)

We seek Safe Harbor.

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