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CALGARY, March 30 /CNW/ - Imaging Dynamics Company Ltd. (IDC or the Company) (TSX: IDL) a global supplier in the high growth digital radiography (DR) equipment market, today reported financial results for the fourth quarter and the full year ended December 31, 2006. For the 2006 year, IDC reported a loss of $0.14 per share before one time write downs, for a full-year loss of $0.25 per share after write downs on revenues of $39,030,402. For the fourth quarter, the Company reported a loss of $0.07 per share before one-time write downs, on revenues of $12,533, 867 and a loss of $0.19 per share after write downs.
Commenting on the results of 2006, Darryl Stein, President & CEO of IDC said, "In 2006, the Company focused its efforts on top line sales growth, market share capture and channel development. Significant investments were made in new products, new geographies and new markets. These investments added over 50 new channel partners globally and growth through new products into the veterinary and chiropractic markets. IDC has invested into building a global distribution network, and a broad array of products to meet the growing demand for digital technology.
The Company has experienced exceptional growth over the last two years - revenues growing by over 550% in that period - with a strategy that has taken more time, money and resources than was anticipated, negatively affecting the Company's financial performance with respect to expenses and write downs.
The introduction of new products to displace earlier models equated to a higher rate of inventory obsolescence than in the past, and an increased learning curve for the Company's technical personnel and integration efforts.
The focus in 2007 is to reap the benefits of investments made in 2006. The Company's operations and infrastructure are being revamped to more effectively support the sales engine we have created. We started restructuring the operations of the Company in late Q3 of 2006. New management and staff were hired; new processes and new tools are being implemented, including the implementation of a new Enterprise Resource Planning (ERP) system. In January 2007 the financial modules were implemented, and the testing and validation of the manufacturing, inventory, purchase order and sales order modules has been completed and will go live during April 2007. This provides full financial and operational connectivity with a direct impact on the efficiencies and profitability of the organization.
The internal restructuring and implementation efforts have been arduous but essential to the long-term health of the business. We made a deliberate decision to give the Company time to complete implementing all of the restructuring efforts and as such revenues booked for Q1 will be soft, but for all the right reasons. I am confident that within 60 days IDC will not only be positioned, but capable of delivering on the significant opportunities ahead of us."
Imaging Dynamics Company Ltd.
Consolidated Balance Sheets
As at December 31 2006 2005
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Assets
Current Assets
Cash and cash equivalents $ 5,901,192 $ 5,667,373
Receivables 21,222,060 16,053,945
Inventory 16,556,720 6,910,871
Pre-paids and deposits 930,053 3,285,707
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44,610,025 31,917,896
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Property, plant and equipment 1,710,938 1,317,921
Intangible assets 278,511 293,745
Deferred development costs 782,917 1,748,844
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$ 47,382,391 $ 35,278,406
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Liabilities and Shareholders' Equity
Current Liabilities
Short-term borrowing $ 4,297,033 $ 2,906,090
Payables and accruals 15,180,338 6,669,160
Customer deposits 580,890 635,316
Current portion of capital lease
obligations 9,966 9,988
Current portion of long-term debt 56,000 56,000
Warranty liability 817,873 465,551
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20,942,100 10,742,105
Capital lease obligations 19,084 28,637
Long-term debt 14,013 39,013
Deferred lease inducement 49,600 74,400
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21,024,797 10,884,155
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Shareholders' Equity
Share capital 65,466,454 50,898,031
Contributed surplus 3,473,709 2,071,943
Deficit (42,582,569) (28,575,723)
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26,357,594 24,394,251
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$ 47,382,391 $ 35,278,406
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Imaging Dynamics Company Ltd.
Consolidated Statements of Operations and Deficit
For the year ended December 31 2006 2005
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Revenues, net $ 39,030,402 $ 28,878,669
Cost of goods sold (24,983,024) (16,124,069)
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Gross Profit 14,047,378 12,754,573
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Expenses
Sales and marketing 9,192,053 4,389,562
General and administrative 3,870,636 2,296,236
Production and manufacturing 1,847,623 1,521,724
Research and development 2,360,160 1,541,369
Foreign exchange (gain) loss (161,825) 2,854
Warranty 890,433 654,511
Stock-based compensation 1,593,263 588,632
Bad debts 1,094,339 -
Amortization of property, plant
and equipment 398,722 289,718
Amortization of deferred development costs 484,769 172,522
Amortization of patents 35,837 28,842
Interest 329,725 130,895
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21,935,735 11,616,866
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(Loss) income before interest and
other items (7,888,357) 1,137,707
Inventory write-down (4,776,213) -
Deferred development costs write down (1,663,507) -
Interest and other income 321,231 210,777
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Net (loss) income $(14,006,846) $ 1,348,484
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Net (loss) income per share
Basic $ (0.25) $ 0.03
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Diluted $ (0.25) $ 0.02
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About IDC:
IDC is an emerging world leader in providing affordable Digital Radiography (DR) systems. IDC Xplorer and Xaminer Direct Capture technologies replaces conventional film based X-ray and provides a cost effective alternative to inefficient cassette based Computed Radiography (CR) systems. The IDC product line provides the industry's highest resolution radiographic images in the digital format needed for modern Electronic Medical Records networks, without the use of film, chemistry, cassettes or expensive imaging plates. IDC is based in Calgary, Alberta, Canada and trades on the TSX under the symbol "IDL" and has approximately 58.5 million shares outstanding.
For more information, visit www.imagingdynamics.com.
Statements in this release which describe IDC's intentions, expectations or predictions, or which relate to matters that are not historical facts are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performances or achievements of IDC to be materially different from any future results, performances or achievements expressed in or implied by such forward-looking statements. IDC may update or revise any forward-looking statements, whether as a result of new information, future events or changing market and business conditions. Known and unknown risks and uncertainties include: the early stage of commercialization of IDC's products; the infancy of the digital radiography industry in general; IDC's ability to manufacture its products with a sufficient level of quality and in volumes which satisfy market demand; the ability of IDC to establish direct and indirect sales channels; the ability of IDC to establish industry partnerships; IDC's ability to attract and retain key personnel; the strength and breadth of IDC's patents; and other factors relating to general economic conditions, specific industry conditions and IDC's particular situation.