Dr. David Gane reports
LED MEDICAL DIAGNOSTICS INC. REPORTS 2013 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, 2013, reported 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, 2012. (All balances are expressed in U.S. dollars unless otherwise stated.)
Business highlights
Notable business developments and achievements up to the reporting date included the following:
- On Dec. 3, 2013, the company announced that it entered a non-exclusive distribution partnership with Burkhart Dental Supply in the
U.S. market.
- On Dec. 10, 2013, the company announced that it entered a non-exclusive distribution partnership with Benco Dental Supply in the
U.S. market.
- On Jan. 14, 2014, the company announced that it signed an agreement
with the B.C. Cancer Agency to create and commercialize a
progression-risk assessment test for oral cancer. The test is based on a
quantifiable genetic phenomenon known as loss of heterozygosity or
LOH.
- On Jan. 21, 2014, the company announced that it entered a non-exclusive distribution partnership with Patterson Dental in the U.S. and Canadian markets.
- On Feb. 25, 2014, the company announced the appointment of Lamar
Roberts as president of its wholly owned U.S. subsidiary, LED Dental Ltd.
- On March 26, 2014, the company announced the appointment of Dr. Jeffrey
Brooks as vice-president of imaging of its wholly owned subsidiary LED
Dental.
- On April 2, 2014, the company announced that its wholly owned U.S.
operating subsidiary, LED Dental, released a new brand initiative to
further its goal of providing advanced imaging technologies to dental
and specialty practices in the United States and Canada. The branding
initiative includes a new logo to further unify the business under the
LED imaging name.
- On April 3, 2014, the company announced that the LED imaging division of
its wholly owned subsidiary, LED Dental, is partnering with Ray
Co. Ltd., a subsidiary of Samsung, to sell, install and provide support
for the Rayscan alpha -- expert dental imaging system.
"Two thousand fourteen is expected to be a transformational year for LED as our new management team expands our VELscope distribution network and transitions the company from a single-product strategy to a diverse portfolio of digital imaging products," said the company's chief executive officer, Dr. David Gane. "The execution of our strategy, which will take an investment in time and capital in the current year, is designed to position the company for long-term, sustainable growth and success as a leading player in the dental imaging market."
Financial highlights
Financial position as at Dec. 31, 2013
Working capital as at Dec. 31, 2013, was $4,445,795, which includes cash of $4,358,986. This is compared with negative working capital of $96,749 at Dec. 31, 2012, which included cash of $969,584.
Three-month comparative results
The company reported revenue of $215,714 for the three months ended Dec. 31, 2013, as compared with $1,389,994 for the three months ended Dec. 31, 2012. Net loss was $1,460,801 for the three months ended Dec. 31, 2013, as compared with a net loss of $174,630 for the three months ended Dec. 31, 2013.
Inclusive of accounting adjustments, the company's calculated gross margin was 51 per cent for the three months ended Dec. 31, 2013, which is slightly higher as compared with 46 per cent in the three months ended Dec. 31, 2012. Total operating expenses for the three months ended Dec. 31, 2013, were $1,509,487 as compared with $740,547 for the three months ended Dec. 31, 2012, representing a 108-per-cent increase. Core operating expenses (excluding stock-based compensation, deferred share unit compensation and other operating expenses) for the three months ended Dec. 31, 2013, were $1,209,950, as compared with $725,989 for the three months ended Dec. 31, 2012, representing a 67-per-cent increase.
Earnings before interest, taxes, depreciation and amortization for the three months ended Dec. 31, 2013, were negative $1,238,255 compared with negative $83,502 for the three months ended Dec. 31, 2012.
Twelve-month comparative results
The company reported revenue of $2,519,574 for the year ended Dec. 31, 2013, as compared with $6,312,754 for the year ended Dec. 31, 2012. Net loss was $6,955,217 for the year ended Dec. 31, 2013, as compared with a net loss of $866,933 for the year ended Dec. 31, 2012.
Gross margin was 46 per cent for the year ended Dec. 31, 2013, a decrease from 57 per cent in the year ended Dec. 31, 2012. Total operating expenses for the year ended Dec. 31, 2013, were $4,812,236 as compared with $4,355,188 for the year ended Dec. 31, 2012, representing a 10-per-cent increase. Core operating expenses (excluding stock-based compensation, deferred share unit compensation and other operating expenses) for the year ended Dec. 31, 2013, were $3,291,582, as compared with $4,295,412 for the year ended Dec. 31, 2012, representing a 23-per-cent decrease.
Earnings before interest, taxes, depreciation and amortization for the year ended Dec. 31, 2013, were negative $2,120,231, as compared with negative $728,135 for the year ended Dec. 31, 2012.
Financial statements and management's discussion and analysis
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, 2013, 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. A more detailed explanation and analysis are readily available in the MD&A. These reports have been filed on SEDAR and are also posted to the company's website.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(expressed in U.S. dollars)
Three months Three months
ended ended Year ended Year ended
Dec. Dec. Dec. 31, Dec. 31,
31, 2013 31, 2012 2013 2012
Revenues $ 215,714 $ 1,389,994 $ 2,519,574 $ 6,312,754
Cost of goods sold 424,018 747,510 1,348,223 2,745,477
Total (208,304) 642,484 1,171,351 3,567,277
Expenses
Sales and marketing 434,577 349,248 1,252,688 2,564,798
Research and
development 120,623 94,980 442,880 523,492
Administration 474,750 281,761 1,596,014 1,207,122
Stock-based
compensation 309,818 -- 907,509 --
Deferred share unit
compensation (149,967) -- 230,613 --
Other operating
expenses 319,686 14,558 382,532 59,776
Total expenses 1,509,487 740,547 4,812,236 4,355,188
Operating (loss) (1,717,791) (98,063) (3,640,885) (787,911)
Other expenses
Mark-to-market
adjustments on
Canadian-
dollar-denominated
warrants 545,259 (77,729) (3,277,328) (3,843)
Foreign exchange
(loss) gain (280,322) 1,161 (24,958) (64,511)
Other income -- 91 -- 2,172
Total other expenses 264,937 (76,477) (3,302,286) (66,182)
Net (loss) and
comprehensive (loss)
before income taxes (1,452,854) (174,540) (6,943,171) (854,093)
Income taxes 7,947 12,046 12,840
Net (loss) and
comprehensive (loss)
for the year $ (1,460,801) $ (174,540) $ (6,955,217) $ (866,933)
We seek Safe Harbor.
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