TORONTO, Nov. 8 /CNW/ - Spectral Diagnostics Inc. (TSX:SDI) today announced its financial results for the third quarter ended September 30, 2007.
"Spectral is a company focused on the role that endotoxin plays in disease processes. Our primary goal is to commercialize our core product, the EAA(TM) Endotoxin Activity Assay, which is the only FDA cleared endotoxin assay clinically indicated for the rapid diagnosis of sepsis," said Dr. Paul Walker, President and CEO of Spectral Diagnostics. "In our third quarter, we made outstanding progress on this path towards commercialization, resulting from our participation at this year's International Sepsis Forum and the completion of three key international distribution agreements for EAA(TM)."
Highlights
- Solidified distribution agreements for EAA(TM) with industry leaders
in three geographical territories: Menarini Diagnostics for Germany,
Estor S.p.A for Italy and Toray Medical for Japan, with an option for
expansion into other Asian countries.
- Toray Medical will combine the EAA(TM) for use with its therapeutic
Toraymyxin for the treatment of sepsis.
- Co-sponsored key scientific session with Toray Medical entitled
"Endotoxemia - Detection, Consequence and Intervention" at
International Sepsis Forum 2007 highlighting the growing recognition
of the role that endotoxin plays in the onset of sepsis.
Financial Review
For the three months ended September 30, 2007, Spectral reported sales of $739,000, a ten per cent increase compared to $675,000 in sales for the corresponding period in 2006. For the nine-month period ended September 30, 2007, the Company reported sales of $2,318,000 compared to $2,429,000 for the same period in 2006. Sales for the nine-month period in 2006 included $252,000 of rapid cardiac test revenues related to the business that was sold to Nanogen. Sales for the nine-month period ended September 30, 2007 are primarily comprised of the Company's EAA(TM) product and its Troponin I reagents.
For the three months ended September 30, 2007, the Company reported a loss of $382,000, or ($0.02) per share, compared with a loss of $431,000 or ($0.02) per share for the corresponding period in 2006, an improvement in operating results of $49,000. For the nine months ended September 30, 2007, the Company reported a loss of $968,000, or ($0.04) per share, compared with net income of $4,707,000, or $0.22 per share for the same period in 2006. Net Income for the nine months ended September 30, 2006 included a one time gain of $2.4 million related to the Company's sale of its rapid cardiac test business and a one time gain of $5.4 million on the settlement of certain convertible notes payable. Excluding these gains, Spectral's current year nine-month operating results reflected a $2.2 million improvement over the same period in 2006.
About Spectral Diagnostics
Spectral is a developer of innovative technologies for comprehensive disease management. Spectral technologies provide accurate and timely information to clinicians enabling the early initiation of appropriate and targeted therapy. Current products include Spectral's FDA approved rapid diagnostic for sepsis (EAA(TM)) and its FDA approved rapid diagnostic for West Nile Virus (RapidWN(TM)), as well as a range of other biological reagents. Spectral is listed on TSX under the symbol SDI.
Forward-looking statement
Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Implicit in this information, particularly in respect of 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.
The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this statement.
Spectral Diagnostics Inc.
Consolidated Financial Statements - unaudited
Nine months ended September 30, 2007
(in thousands of Canadian dollars)
Spectral Diagnostics Inc.
Consolidated Balance Sheets - unaudited
-------------------------------------------------------------------------
(in thousands of Canadian dollars)
September 30 December 31
2007 2006
$ $
Assets
Current assets
Cash - 945
Short-term investments 5,213 5,057
Accounts receivable 813 762
Inventories 353 183
Prepaid expenses 85 130
------------------------
6,464 7,077
Deferred charges 176 70
Property, plant and equipment 321 166
Purchased technology and trademarks 1,713 2,022
------------------------
8,674 9,335
------------------------
------------------------
Liabilities
Current liabilities
Bank indebtedness 349 -
Accounts payable and accrued liabilities 304 504
------------------------
653 504
Convertible notes payable 1,966 1,843
------------------------
2,619 2,347
------------------------
Shareholders' Equity
Common shares 2,524 2,520
Other equity 5,520 5,489
Deficit (1,989) (1,021)
------------------------
6,055 6,988
------------------------
8,674 9,335
------------------------
------------------------
Spectral Diagnostics Inc.
Consolidated Statements of Operations, Comprehensive Loss and Deficit -
unaudited
For the nine months ended September 30, 2007 and 2006
-------------------------------------------------------------------------
(in thousands of Canadian dollars, except share and per share data)
3 Months Ended 9 Months Ended
September 30 September 30
2007 2006 2007 2006
$ $ $ $
Sales 739 675 2,318 2,429
Cost of sales 181 235 555 927
------------------------- ------------------------
Gross margin 558 440 1,763 1,502
------------------------- ------------------------
Operating expenses
Selling, general and
administrative 799 674 2,375 3,237
Amortization 134 207 426 693
Foreign exchange loss 27 5 81 118
Stock-based compensation - 14 31 (12)
Research and product
development, net of
tax credits - 2 (125) 237
------------------------- ------------------------
960 902 2,788 4,273
------------------------- ------------------------
Loss from operations (402) (462) (1,025) (2,771)
Interest expense on
convertible notes
payable (41) (37) (123) (476)
Investment income 61 68 180 125
Gain on settlement
of convertible
notes payable - - - 5,444
Gain on sale of rapid
cardiac business - - - 2,385
------------------------- ------------------------
Net income and
comprehensive income
(Loss and comprehensive
loss) for the period (382) (431) (968) 4,707
Deficit - Beginning of
period (1,607) (103,671) (1,021) (104,058)
Restatement of capital 98,920 98,920
------------------------- ------------------------
Deficit - End of period (1,989) (431) (1,989) (431)
------------------------- ------------------------
------------------------- ------------------------
Basic earnings (loss)
per common share (0.02) (0.02) (0.04) 0.22
------------------------- ------------------------
------------------------- ------------------------
Diluted earnings (loss)
per common share (0.02) (0.02) (0.04) 0.20
------------------------- ------------------------
------------------------- ------------------------
Weighted average
number of common
shares outstanding 24,118,424 24,111,424 24,116,966 21,464,120
------------------------- ------------------------
------------------------- ------------------------
Spectral Diagnostics Inc.
Consolidated Statements of Cash Flows - unaudited
For the nine months ended September 30, 2007 and 2006
-------------------------------------------------------------------------
(in thousands of Canadian dollars)
3 Months Ended 9 Months Ended
September 30 September 30
2007 2006 2007 2006
$ $ $ $
Cash provided by
(used in)
Operating activities
Net income and
comprehensive income
(Loss and comprehensive
loss) for the period (382) (431) (968) 4,707
Items not affecting cash
Amortization 134 207 426 697
Stock-based compensation
expense - 14 31 (12)
Accrued interest on
convertible notes payable 41 37 123 476
Unrealized gain on
short-term investments - - (7) -
Gain on settlement of
convertible notes payable - - - (5,444)
Gain on sale of rapid
cardiac business - - - (2,385)
Changes in non-cash
working capital 93 (69) (376) (759)
------------------------- ------------------------
(114) (242) (771) (2,720)
------------------------- ------------------------
Financing activities
Bank indebtedness 314 - 349 (859)
Issuance of common
shares - - 4 -
Restricted cash - - - 447
------------------------- ------------------------
314 - 353 (412)
------------------------- ------------------------
Investing activities
Increase in deferred
charges - (75) (106) (98)
Purchase of property,
plant and equipment (163) (30) (228) (151)
Purchase of technology
and trademarks - - (44) -
Increase in short-term
investments (54) - (149) (5,000)
Proceeds on sale of
short-term investments - - - 3,350
Proceeds on sale of
rapid cardiac business - - - 5,650
------------------------- ------------------------
(217) (105) (527) 3,751
------------------------- ------------------------
Increase (decrease) in
cash during the period (17) (347) (945) 619
------------------------- ------------------------
Cash - Beginning of
period 17 1,383 945 417
------------------------- ------------------------
Cash - End of period - 1,036 - 1,036
------------------------- ------------------------
------------------------- ------------------------
Non-cash financing
activities
Securities received on
sale of rapid cardiac
business (note 4) 3,350
Settlement of existing
convertible notes payable (9,801)
Issuance of new
convertible note payable 1,840
Issuance of common
shares on settlement of
convertible notes payable 2,083
Issuance of warrants on
settlement of convertible
notes payable 280
%SEDAR: 00002006E