Dr. David Gane reports
LED MEDICAL DIAGNOSTICS INC. REPORTS
2014 FOURTH QUARTER AND FULL-YEAR
RESULTS
LED Medical Diagnostics Inc. has released its financial results for the fourth quarter and full year ended Dec. 31,
2014, in U.S. dollars and in accordance with international financial reporting standards. The company's results are presented in comparison with the fourth quarter and full year ended
Dec. 31, 2013. (All balances are expressed in U.S. dollars unless otherwise stated.)
Financial highlights
LED Medical is pleased to announce revenue growth of 256 per cent for the fiscal year ended Dec. 31, 2014,
with total revenue of $9-million as compared with the prior fiscal year, and revenues for the three months ended
Dec. 31, 2014, of $4.6-million, an increase of 2,073 per cent from the three months ended Dec. 31, 2013.
The company expects continued strong revenue growth in fiscal year ending Dec. 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, chief executive officer 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 Dec. 31, 2014, as compared with $200,000 for the three months ended Dec. 31, 2013. Net loss was $600,000 for the three months
ended Dec. 31, 2014, as compared with a net loss of $1.4-million for the three months ended Dec.
31, 2013. Inclusive of accounting adjustments, the company's calculated gross margin was 31 per cent for the three
months ended Dec. 31, 2014, as compared with negative 97 per cent in the three months ended Dec. 31,
2013. Total operating expenses for the three months ended Dec. 31, 2014, were $2.0-million as compared with $1.0-million for the three months ended Dec. 31, 2013. Core operating expenses (excluding stock-based compensation, deferred share unit compensation and other operating expenses) for the three months
ended Dec. 31, 2014, were $2.3-million, as compared with $1.0-million for the three months ended
Dec. 31, 2013. Earnings before interest, taxes, depreciation and amortization for the three months ended Dec. 31, 2014, were negative $800,000 compared with negative $1.2-million for the three months ended Dec. 31, 2013.
Twelve-month comparative results
The company reported revenue of $9.0-million for the year ended Dec. 31, 2014, as compared with $2.5-million for the year ended Dec. 31, 2013. Net loss was $6.1-million for the year ended Dec. 31,
2014, as compared with a net loss of $7.0-million for the year ended Dec. 31, 2013. Gross margin was
39 per cent for the year ended Dec. 31, 2014, a decrease from 46 per cent in the year ended Dec. 31, 2013.
Total operating expenses for the year ended Dec. 31, 2014, were $9.1-million as compared with $4.8-million for the year ended Dec. 31, 2013. Core operating expenses (excluding stock-based
compensation, deferred share unit compensation and other operating expenses) for the year ended Dec.
31, 2014, were $8.4-million, as compared with $3.3-million for the year ended Dec. 31, 2013. EBITDA
for the year ended Dec. 31, 2014, was negative $4.9-million, as compared with negative $2.1-million for
the year ended Dec. 31, 2013.
Financial guidance for fiscal year 2015
The company is reaffirming guidance for the full fiscal year ending Dec. 31, 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, from which 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.
Business highlights
Notable business developments and achievements up to the reporting date included the following:
- In April, 2015, the company announced that it will be serving as a partner in 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 16, 2015, the company announced a pilot program for oral cancer screenings at various
London Drugs pharmacies in the Lower Mainland of British Columbia. This program has been endorsed by the
B.C. 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 its 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 financing 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 finance 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 patients in the United States and
Canada.
- On Dec. 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 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.
- 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.
Please see the audited consolidated financial statements and related management's discussion and analysis
for more details. The audited consolidated financial statements for the year ended Dec. 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 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.
We seek Safe Harbor.
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