TORONTO, Nov. 9 /CNW/ - Spectral Diagnostics Inc. (TSX: SDI) today
announced second quarter financial results that reflected continuing
improvements in its operations. The loss for the three months ended
September 30, 2006 of $0.4 million (2 cents per share) was $1.1 million (6
cents per share) lower than for the same period last year. For the six months
ended September 30, 2006, the Company recorded net income of $4.3 million (19
cents per share), compared to a loss of 17 cents per share a year earlier.
Year-to-date results include a $5.4 million gain on settlement of convertible
notes payable pursuant to an agreement with former security holders of IDx
Inc.
"We are very pleased with the early acceptance of Spectral's new EAA(TM)
instrumentation, our developing distribution relationships and our ability to
maintain a low operating cost base", stated Dr. Paul Walker, President & CEO
of Spectral. "So far, we have placed 20 revenue generating EAA(TM) instruments
worldwide, the majority of which were shipped in the second quarter", added
Dr. Walker.
"The instrumentation placement level in the second quarter is significant
because these instruments will generate improving revenues in subsequent
quarters as utilization of the EAA(TM) assay increases", stated Mr. Anthony
Businskas, Executive Vice President & CFO of Spectral. "Our operating cash
flows improved quarter over quarter and this trend is expected to continue",
added Mr. Businskas.
Spectral is a developer of innovative technologies for rapid diagnostics.
Spectral provides accurate and timely information to clinicians enabling the
early initiation of appropriate and targeted therapy. Current products include
rapid diagnostics for sepsis (EAA(TM)) and West Nile Virus as well as a range
of other biological reagents. Spectral's common shares are listed on The
Toronto Stock Exchange: SDI.
Information in this news release that is not current or historically
factual information may constitute forward-looking information within the
meaning of securities laws. Implicit in this information, the future outlook
of Spectral and anticipated events or results are assumptions based on beliefs
of Spectral's senior management as well as information currently available to
it. While these assumptions were considered reasonable by Spectral at the time
of preparation, they may prove to be incorrect. Readers are cautioned that
actual results are subject to a number of risks and uncertainties, including
the availability of funds and resources to pursue R&D projects, the successful
and timely completion of clinical studies, the ability of Spectral to take
advantage of business opportunities in the biomedical industry, the granting
of necessary approvals by regulatory authorities as well as general economic,
market and business conditions, and could differ materially from what is
currently expected.
<<
Spectral Diagnostics Inc.
Consolidated Financial Statements - unaudited
September 30, 2006 and 2005
(in thousands of Canadian dollars)
Spectral Diagnostics Inc.
Consolidated Balance Sheets - unaudited
As at September 30, 2006 and March 31, 2006
-------------------------------------------------------------------------
(in thousands of Canadian dollars)
September 30 March 31
2006 2006
$ $
Assets
Current assets
Cash and cash equivalents 6,036 4,003
Short-term investments 3,350
Accounts receivable 812 877
Inventories 126 43
Prepaid expenses 188 250
--------------------------
7,162 8,523
Capital assets 245 170
Purchased technology and trademarks 2,117 2,353
Deferred financing costs 158 512
--------------------------
9,682 11,558
--------------------------
--------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 639 1,224
--------------------------
639 1,224
Convertible notes payable 1,877 9,596
--------------------------
2,516 10,820
--------------------------
Shareholders' Equity
Common shares 2,609 99,446
Other equity 4,988 4,963
Deficit (431) (103,671)
--------------------------
7,166 738
--------------------------
9,682 11,558
--------------------------
--------------------------
Spectral Diagnostics Inc.
Consolidated Statements of Operations and Deficit - unaudited
For the six months ended September 30, 2006 and 2005
-------------------------------------------------------------------------
(in thousands of Canadian dollars, except share and per share data)
3 Months Ended 6 Months Ended
September 30 September 30
2006 2005 2006 2005
$ $ $ $
Sales 675 2,265 1,422 4,558
Cost of sales 235 1,059 485 2,140
------------------------ ------------------------
Gross margin 440 1,206 937 2,418
------------------------ ------------------------
Operating expenses
Selling, general and
administrative 674 1,976 1,411 3,699
Amortization 207 342 407 700
Foreign exchange loss 5 119 46 79
Stock-based compensation 14 35 25 69
Research and product
development 53 496 97 914
Government assistance (51) (807) (51) (932)
------------------------ ------------------------
902 2,161 1,935 4,529
------------------------ ------------------------
Loss from operations (462) (955) (998) (2,111)
Interest expense on
convertible notes payable (37) (540) (242) (1,080)
Interest income (expense) 68 (46) 116 (44)
Gain on settlement of
convertible notes payable 5,444 -
------------------------ ------------------------
Net income (loss) for
the period (431) (1,541) 4,320 (3,235)
Deficit - Beginning
of period (103,671) (100,710) (103,671) (99,016)
Restatement of capital 98,920 98,920
Deficit - End of period (431) (102,251) (431) (102,251)
------------------------ ------------------------
------------------------ ------------------------
Basic and diluted net
income (loss) per
common share (0.02) (0.08) 0.19 (0.17)
------------------------ ------------------------
------------------------ ------------------------
Weighted average
number of common
shares outstanding 24,111,424 19,860,166 22,252,951 19,860,166
------------------------ ------------------------
------------------------ ------------------------
Spectral Diagnostics Inc.
Consolidated Statements of Cash Flows - unaudited
For the six months ended September 30, 2006 and 2005
-------------------------------------------------------------------------
(in thousands of Canadian dollars)
3 Months Ended 6 Months Ended
September 30 September 30
2006 2005 2006 2005
$ $ $ $
Cash provided by (used in)
Operating activities
Net income (loss) for
the period (431) (1,541) 4,320 (3,235)
Items not affecting cash
Amortization 207 342 407 700
Stock-based compensation
expense 14 35 25 69
Accrued interest on
convertible notes payable 37 540 242 1,080
Gain on settlement of
convertible notes payable - - (5,444) -
Changes in non-cash
working capital (170) (11) (750) (638)
------------------------ ------------------------
(343) (635) (1,200) (2,024)
------------------------ ------------------------
Financing activities
Bank indebtedness - (220) - (254)
Restricted cash - 657 - 1,366
------------------------ ------------------------
- 437 - 1,112
------------------------ ------------------------
Investing activities
Purchase of capital assets (4) (107) (117) (176)
Proceeds on sale of
short-term investments - - 3,350 -
------------------------ ------------------------
(4) (107) 3,233 (176)
------------------------ ------------------------
Increase (decrease) in
cash and cash
equivalents during
the period (347) (305) 2,033 (1,088)
------------------------ ------------------------
Cash and cash
equivalents
- Beginning of period 6,383 911 4,003 1,694
------------------------ ------------------------
Cash and cash
equivalents
- End of period 6,036 606 6,036 606
------------------------ ------------------------
------------------------ ------------------------
Non-cash financing
activities
Retirement of existing
convertible notes payable (9,801)
Issuance of new convertible
note payable 1,840
Issuance of common shares 2,083
Decrease in deferred financing
costs on re-issue of warrants 280
>>
%SEDAR: 00002006E
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