- Record quarterly revenue of $24.4 million - up over 80% from same
quarter of previous year
- Solid performances in both core businesses - OEM and
Direct-to-Hospital
- Record quarterly profits of $6.2 million - after deducting merger
expenses and purchase accounting adjustments of $2.1 million
TORONTO, April 27 /CNW/ - CEDARA SOFTWARE CORP. (TSX:CDE/NASDAQ:CDSW),
named Fastest Growing Healthcare Company for 2004 by America's foremost market
research firm Frost and Sullivan, today announced record financial results for
the 2005 fiscal year third quarter ended March 31, 2005.
Cedara's revenues for the quarter were $24.4 million, up 81% from
$13.5 million in the same quarter of the previous year. This is the second
quarter to include the impact of Cedara's acquisition of eMed Technologies
which closed on October 8, 2004. Cedara's revenue from sales to OEM customers
grew over 21% for the quarter, compared to the same quarter last year, and
represented 67% of total third quarter revenue. Revenue from sales directly to
hospitals, imaging centres and medical clinics accounted for the other 33%.
Net income for the quarter was $6.2 million, up 21% compared to net
income of $5.1 million in the same quarter last year. Reported net income for
the quarter incorporates $1.2 million of expenses associated with the proposed
merger with Merge Technologies Inc. and $0.9 million of purchase accounting
adjustments associated with the acquisition of eMed. Despite these non-
operating expenses, diluted earnings per share were $0.18, similar to that
achieved last year.
For the nine months ended March 31, 2005, revenues were $59.7 million, up
67% from $35.7 million in the previous year. Net income for the nine months
ended March 31, 2005 was $14.3 million, up 34% from $10.7 million. Diluted
earnings per share of $0.43 were up from $0.38 in the previous year.
Strong growth in revenue for the quarter included a 36% increase in
software license revenue to $13.2 million. Sales of solutions and workstations
(including bundled software and hardware) increased to $5.3 million. Support
services revenue increased to $3.8 million, while engineering services revenue
declined slightly to $2.1 million.
The gross margin of $18.3 million for the quarter, or 75% of revenue,
includes margin from sales directly to hospitals and imaging clinics at an
average of 56% of revenue and a number of new software license arrangements
entered into in the quarter that traditionally have higher margins.
Operating expenses in the third quarter increased to $12.0 million. The
increase reflects: inclusion of eMed's operating expenses which were not
included in prior comparative periods, the impact of acquisition-related
charges, and increased spending on sales and marketing activities. For the
nine months ended March 31, 2005, operating expenses increased $13.7 to
$30.2 million.
"We are delighted with Cedara's continued success in the medical imaging
global marketplace and our seventh consecutive quarter of strong revenue and
profits," said Abe Schwartz, Cedara's President and Chief Executive Officer.
"With the completion of our pending merger with Merge eFilm, we will become an
even stronger company."
"Cedara continues to be successful because of our excellent engineers,
leading technologies and long-term customer relationships," said Brian Pedlar,
Cedara's Chief Financial Officer. "The market is very excited about Cedara's
industry-leading clinical applications and suite of new technologies. We are
building a very special company with a unique ability to execute on Cedara's
dual strategy of selling world-class medical technologies to OEMs and directly
to hospitals and imaging centres."
On January 18, 2005, Cedara announced it had signed a definitive
agreement to merge with Merge Technologies Incorporated (NASDAQ: MRGE), d.b.a.
Merge eFilm, in an all-stock transaction. The merger is subject to shareholder
and regulatory approval. A special meeting of Cedara shareholders is set for
May 24, 2005 at 10:00 am at the Toronto Stock Exchange auditorium.
Conference Call Information
The Cedara Software Corp. third quarter fiscal 2005 conference call and
web cast to discuss results and corporate strategy is scheduled for 11:00 am
EST on Thursday, April 28, 2005. The conference call can be accessed via audio
web cast by visiting:
http://www.cedara.com/investors/teleconference_webcast.htm
Participants in the conference call are asked to dial 416-405-9328 or
1-800-387-6216, five to ten minutes prior to the April 28th, 2005, 11:00 am
start of the teleconference to participate in the call. This conference call
will be recorded and will be available on instant replay at the end of the
call, until midnight May 31st, 2005. To listen to the replay, please dial
416-695-5800 or 1-800-408-3053, and enter pass code 3150235 followed by the
number sign.
About Cedara Software Corp
Cedara Software Corp. is a leading independent provider of medical
imaging technologies. Cedara's software is deployed in hospitals and clinics
worldwide and is licensed by many of the world's leading medical device and
healthcare information technology companies. Approximately 28,000 medical
imaging systems and 6,400 Picture Archiving and Communications System (PACS)
workstations have been licensed to date. Cedara recently acquired eMed
Technologies Corporation, widely known as a provider of innovative PACS and
teleradiology solutions that have been installed in over 2,000 hospitals and
imaging centres. Cedara is unique in that it has technologies and expertise
that span all the major digital imaging modalities including computed
tomography (CT), magnetic resonance imaging (MRI), digital X-ray, mammography,
ultrasound, echo-cardiology, angiography, nuclear medicine, positron emission
tomography (PET) and fluoroscopy. Furthermore, the Company's medical imaging
offerings are used in all aspects of clinical workflow including the capture
of a patient's digital image; the archiving, communication and manipulation of
digital images; sophisticated clinical applications to analyze digital images;
and even the use of imaging in minimally-invasive surgery. On January 18,
2005, Cedara announced that it had signed a definitive agreement to merge with
Merge Technologies Incorporated (NASDAQ: MRGE), d.b.a. Merge eFilm, in an
all-stock transaction. The merger is subject to shareholder and regulatory
approval.
Certain statements contained in this news release are forward-looking
within the meaning of securities laws and are based on current expectations
that are subject to a number of assumptions, uncertainties and risks, and the
actual results may differ materially from what is currently expected. In
particular, statements relating to the healthcare imaging software market and
market share, relating to the Company's expectations concerning its licensed
software products, relating to the Company's expectations as to revenues,
costs and cash flows, relating to the acquisition of eMed and relating to the
proposed merger with Merge eFilm are forward looking statements. The
assumptions, uncertainties and risks upon which these forward looking
statements are based include, but are not limited to: dependence on key
personnel of the Company, dependence on major customers and individual
contracts, fluctuations in quarterly financial results, competitive pressures
(including price competition), rapid technological change, exchange rate
fluctuations, risks associated with international operations, dependence on
intellectual property rights, regulatory clearances and approvals for new
products, risks relating to product defects and product liability, adverse
consequences of financial leverage, ability to service debt, continued
acceptance of the Company's products, regulatory changes to the health care
industry, seasonality, economic and political conditions, risks relating to
the acquisition of eMed and risks relating to the proposed merger with Merge
eFilm including risks associated with obtaining regulatory and shareholder
approvals without unexpected delays or conditions, timely implementation and
execution of merger integration plans, retention of customers and the
Company's original employees, successfully leveraging Merge eFilm's and the
Company's comprehensive product offering to the combined customer base and
sustaining continued growth at rates approximating recent levels. Further
information about these risks and uncertainties can be found in the continuous
disclosure documents filed from time to time by Cedara with the securities
regulatory authorities, which documents are available at
http://www.sedar.com/.
Three pages of consolidated financial statements follow:
<<
CEDARA SOFTWARE CORP.
Consolidated Balance Sheets
(In thousands of Canadian dollars)
-------------------------------------------------------------------------
March 31, June 30,
2005 2004
-------------------------------------------------------------------------
(Unaudited)
Assets
Current assets
Cash and cash equivalents $ 36,640 $ 40,510
Short-term investments - 10,902
Accounts receivable 16,907 7,449
Inventory 1,792 268
Prepaid expenses and other assets 2,377 881
-------------------------------------------------------------------------
57,716 60,010
Capital assets 2,189 2,201
Long-term investments 2,839 510
Intangible assets 11,623 373
Goodwill 33,682 9,053
-------------------------------------------------------------------------
$ 108,049 $ 72,147
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities
Bank indebtedness $ 12,700 $ -
Accounts payable and accrued liabilities 8,820 4,207
Deferred revenue 5,360 861
Current liabilities of discontinued operations - 986
-------------------------------------------------------------------------
26,880 6,054
Long-term liability 201 -
Non-current portion of provision for loss on
sublease 8 44
Shareholders' equity
Capital stock 163,587 161,536
Contributed surplus 962 388
Deficit (81,545) (95,875)
Cumulative translation adjustment (2,044) -
-------------------------------------------------------------------------
80,960 66,049
-------------------------------------------------------------------------
$ 108,049 $ 72,147
-------------------------------------------------------------------------
-------------------------------------------------------------------------
CEDARA SOFTWARE CORP.
Unaudited Consolidated Statements of Operations
(In thousands of Canadian dollars, except per share amounts)
-------------------------------------------------------------------------
Three Months Ended Nine Months Ended
March 31 March 31
-----------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------
Revenue $ 24,395 $ 13,450 $ 59,709 $ 35,701
Direct costs 6,062 2,737 15,148 7,708
-------------------------------------------------------------------------
Gross margin 18,333 10,713 44,561 27,993
Expenses:
Research and
development 3,044 1,971 7,869 6,385
Sales and marketing 3,400 1,068 8,675 3,480
General and
administration 3,093 1,848 7,992 5,133
Severance costs
(recovery) 171 64 586 (120)
Other charges 1,320 22 2,882 240
Amortization of
intangible assets 647 47 1,248 149
Depreciation and
amortization 330 409 987 1,262
-----------------------------------------------------------------------
12,005 5,429 30,239 16,529
-------------------------------------------------------------------------
Income before interest
expense 6,328 5,284 14,322 11,464
Interest expense, net 115 156 27 758
-------------------------------------------------------------------------
Income from continuing
operations 6,213 5,128 14,295 10,706
Income from discontinued
operations - - 35 -
-------------------------------------------------------------------------
Net income $ 6,213 $ 5,128 $ 14,330 $ 10,706
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings per share from
continuing operations
Basic $ 0.20 $ 0.20 $ 0.45 $ 0.43
Diluted $ 0.18 $ 0.18 $ 0.43 $ 0.38
Earnings per share
Basic $ 0.20 $ 0.20 $ 0.45 $ 0.43
Diluted $ 0.18 $ 0.18 $ 0.43 $ 0.38
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average number
of shares outstanding:
Basic 31,680,694 26,007,932 31,519,494 24,723,842
Diluted 33,801,761 28,749,093 33,477,310 28,047,148
CEDARA SOFTWARE CORP.
Unaudited Consolidated Statements of Cash Flows
(In thousands of Canadian dollars)
-------------------------------------------------------------------------
Three Months Ended Nine Months Ended
March 31 March 31
2005 2004 2005 2004
-------------------------------------------------------------------------
Cash provided by (used
in):
Operating activities:
Net income from
continuing
operations $ 6,213 $ 5,128 $ 14,295 $ 10,706
Items not involving
cash:
Depreciation and
amortization 1,131 456 2,528 1,411
Stock based
compensation
expense 330 - 574 -
Accretion of interest
on convertible
subordinated
debentures - - - 36
Other 85 (99) 910 241
-------------------------------------------------------------------------
7,759 5,485 18,307 12,394
-------------------------------------------------------------------------
Change in non-cash
operating working
capital:
Accounts receivable 684 496 (10,135) (3,372)
Inventory (172) 20 (254) 108
Prepaid expenses and
other assets (413) 154 (673) (206)
Accounts payable and
accrued liabilities (459) (42) 156 (2,380)
Deferred revenue (170) 1,116 1,294 1,253
-------------------------------------------------------------------------
(530) 1,744 (9,612) (4,597)
-------------------------------------------------------------------------
7,229 7,229 8,695 7,797
Investing activities:
Decrease in short term
investments - - 10,902 -
Acquisition of eMed,
net of cash acquired (249) - (36,751) -
Proceeds from sale of
investments in shares - - 273 -
Additions to intangible
assets (41) (12) (61) (66)
Additions to capital
assets (142) (225) (646) (656)
-------------------------------------------------------------------------
(432) (237) (26,283) (722)
Financing activities:
Increase (decrease) in
bank indebtedness (5,124) (8,944) 13,297 (9,493)
Decrease in long-term
liability (36) - (40) -
Issue of shares on
exercise of options 675 775 2,051 1,624
Issue of shares on
equity financing - 47,100 - 47,100
Issue of shares on
exercise of warrants - 105 - 105
-------------------------------------------------------------------------
(4,485) 39,036 15,308 39,336
Effect on exchange rate
changes on cash and
cash equivalents 115 - (1,555) -
-------------------------------------------------------------------------
Change in cash and cash
equivalents from
continuing operations 2,427 46,028 (3,835) 46,411
Change in cash and cash
equivalents from
discontinued
operations - 9 (35) (374)
Cash and cash
equivalents,
beginning of period 34,213 - 40,510 -
-------------------------------------------------------------------------
Cash and cash
equivalents, end of
period $ 36,640 $ 46,037 $ 36,640 $ 46,037
-------------------------------------------------------------------------
-------------------------------------------------------------------------
>>
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