TORONTO, Aug. 10 /CNW/ - Spectral Diagnostics Inc. (TSX: SDI) today
reported net income of $4.7 million (24 cents per share) for the first quarter
ended June 30, 2006 compared to a loss of $1.7 million (9 cents per share) for
the same period last year. First quarter results included a $5.4 million gain
on settlement of convertible notes payable pursuant to an agreement with
former security holders of IDX Inc. This quarter represents the first
reporting period without sales of rapid cardiac tests, which business was sold
late in Fiscal 2006. Operating costs were down significantly from the previous
year, as the company restructured its operations.
"Revenues were on target for the first quarter and our operating cost
structure has now been fully aligned with projected revenues", stated Anthony
Businskas, Executive Vice President and CFO of Spectral. "Our royalty and
reagent revenues remain consistent and we are very encouraged by early sales
of our EAA(TM) assay in Europe. Revenues and profitability are expected to
improve as the year progresses", Mr. Businskas added.
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.
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Spectral Diagnostics Inc.
Consolidated Balance Sheets - unaudited
As at June 30, 2006 and March 31, 2006
-------------------------------------------------------------------------
(in thousands of Canadian dollars)
June 30 March 31
2006 2006
$ $
Assets
Current assets
Cash and cash equivalents 6,383 4,003
Short-term investments 3,350
Accounts receivable 835 877
Inventories 105 43
Prepaid expenses 263 250
-------------------------
7,586 8,523
Capital assets 261 170
Purchased technology and trademarks 2,235 2,353
Deferred financing costs 168 512
-------------------------
10,250 11,558
-------------------------
-------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 827 1,224
-------------------------
827 1,224
Convertible notes payable 1,840 9,596
-------------------------
2,667 10,820
-------------------------
Shareholders' Equity
Common shares 101,529 99,446
Other equity 4,974 4,963
Deficit (98,920) (103,671)
-------------------------
7,583 738
-------------------------
10,250 11,558
-------------------------
-------------------------
Spectral Diagnostics Inc.
Consolidated Statements of Operations and Deficit - unaudited
For the three months ended June 30, 2006 and 2005
-------------------------------------------------------------------------
(in thousands of Canadian dollars, except share and per share data)
2006 2005
$ $
Sales 747 2,293
Cost of sales 250 1,081
-------------------------
Gross margin 497 1,212
-------------------------
Operating expenses
Selling, general and administrative 737 1,723
Amortization 200 358
Foreign exchange loss (gain) 41 (40)
Stock-based compensation 11 34
Research and product development 44 293
-------------------------
1,033 2,368
-------------------------
Loss before the following (536) (1,156)
Interest expense on convertible notes payable (205) (540)
Interest income 48 2
Gain on settlement of convertible notes payable 5,444 -
-------------------------
Net Income (loss) for the period 4,751 (1,694)
Deficit - Beginning of period (103,671) (99,016)
-------------------------
Deficit - End of period (98,920) (100,710)
-------------------------
-------------------------
Basic and diluted income (loss) per common share 0.24 (0.09)
-------------------------
-------------------------
Weighted average number of common shares
outstanding 19,988,288 19,860,168
-------------------------
-------------------------
Spectral Diagnostics Inc.
Consolidated Statements of Cash Flows - unaudited
For the three months ended June 30, 2006 and 2005
-------------------------------------------------------------------------
(in thousands of Canadian dollars)
2006 2005
$ $
Cash provided by (used in)
Operating activities
Income (loss) for the period 4,751 (1,694)
Items not affecting cash
Amortization 200 358
Stock-based compensation expense 11 34
Accrued interest on convertible notes
payable 205 540
Gain on settlement of convertible
notes payable (5,444) -
Changes in non-cash working capital (580) (627)
-------------------------
(857) (1,389)
-------------------------
Financing activities
Bank indebtedness - (34)
Restricted cash - 709
-------------------------
- 675
-------------------------
Investing activities
Purchase of capital assets (113) (69)
Proceeds on sale of short-term investments 3,350
-------------------------
3,237 (69)
-------------------------
Increase (decrease) in cash and cash
equivalents during the period 2,380 (783)
Cash and cash equivalents - Beginning of period 4,003 1,694
-------------------------
Cash and cash equivalents - End of period 6,383 911
-------------------------
-------------------------
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
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%SEDAR: 00002006E
