TORONTO, June 9 /CNW/ - Spectral Diagnostics Inc. (TSX: SDI), a developer
of innovative rapid diagnostic technologies, reported a consolidated loss for
the year ended March 31, 2005 of $7.4 million (40 cents per share) compared to
a loss in the previous year of $2.2 million (13 cents per share). Prior year
results included a one time gain of $3.6 million (22 cents per share) on the
settlement of certain debt. Excluding this gain, the loss in fiscal 2004 was
$5.8 million, or 35 cents per share.
Revenues for the year were $10 million, a drop of $1.8 million from last
year. Cardiac sales were $7.1 million (2004 - $8.9 million). This decline was
attributable primarily to sluggish cardiac product sales stemming from a delay
in the commercialization of the Company's i-Lynx(TM) product which was
successfully launched in the last month of the fiscal year. Sales were also
negatively impacted by the continuing strength of the Canadian currency versus
the U.S. dollar. Technology revenues of $2.9 million were consistent with
prior year levels.
Costs continued to be closely managed. Operating expenses of
$11.5 million, including $1.8 million of net research and development
expenditures, were $0.6 million lower than in the prior year. Accrued interest
expense on convertible notes of IDx Inc. (IDx) amounted to $1.4 million
(2004 - $0.3 million). IDx is a joint venture carrying on specific research
and development activities on behalf of Spectral. IDx accounts are fully
consolidated due to the Company's financial obligations related to IDx
convertible securities.
In November, 2004, the Company completed a private equity financing
resulting in net cash proceeds of $3.3 million. The funds are being utilized
to launch new product lines and for general working capital needs.
"Spectral is well positioned for solid growth in fiscal 2006" stated
Dr. Paul Walker, President and CEO. "Although financial results for the past
year were disappointing, we achieved significant product development
milestones and strengthened our senior management team. The i-Lynx(TM) product
was successfully launched at the end of Fiscal 2005 and significant progress
was made in the commercialization of our new proprietary EAA(TM) sepsis assay.
In addition, we are working towards regulatory approval of our West Nile test
this summer. We are confident that revenues will improve in the upcoming
fiscal year", said Dr. Paul Walker.
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 are
rapid format tests measuring markers of myocardial infarction (Cardiac
STATus(R)). New products include rapid diagnostics for sepsis (EAA(TM)).
Spectral manufactures the EAA(TM) and Cardiac STATus(R). Spectral's common
shares are listed on The Toronto Stock Exchange: SDI.
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Spectral Diagnostics Inc.
Consolidated Balance Sheets
For the years ended March 31, 2005 and 2004
(in thousands of Canadian dollars, except share and per share data)
-------------------------------------------------------------------------
2005 2004
$ $
Assets
Current assets
Cash and cash equivalents 1,694 2,070
Accounts receivable
Trade 2,266 2,172
Other 494 458
Inventories 1,351 1,227
Prepaid expenses 359 468
--------------------------
6,164 6,395
Restricted cash 2,013 4,948
Capital assets 1,158 1,216
Purchased technology and trademarks 3,327 3,937
Deferred financing costs - net of accumulated
amortization of $366 (2004 - $74) 804 1,096
Goodwill 2,114 2,114
--------------------------
15,580 19,706
--------------------------
--------------------------
Liabilities
Current liabilities
Bank indebtedness 929 1,130
Accounts payable and accrued liabilities 1,582 2,256
Current portion of trade and note payable - 590
--------------------------
2,511 3,976
Convertible notes and interest payable - IDx Inc. 7,742 6,302
Other note payable - 399
--------------------------
10,253 10,677
--------------------------
Shareholders' Equity
Common shares 99,446 96,864
Other equity 4,897 3,823
Deficit (99,016) (91,658)
--------------------------
5,327 9,029
--------------------------
15,580 19,706
--------------------------
--------------------------
Going concern
Spectral Diagnostics Inc.
Consolidated Statements of Operations and Deficit
For the years ended March 31, 2005 and 2004
(in thousands of Canadian dollars, except share and per share data)
-------------------------------------------------------------------------
2005 2004
$ $
Revenue
Product sales 7,125 8,898
Development, technology and components revenue 2,876 2,853
--------------------------
10,001 11,751
Cost of sales 4,454 4,888
--------------------------
Gross margin 5,547 6,863
--------------------------
Operating expenses
Sales and marketing 4,755 5,133
General and administrative 2,984 3,123
Depreciation and amortization 1,371 1,537
Foreign exchange loss (gain) 278 (257)
Stock-based compensation 307 894
Research and product development 1,824 1,663
--------------------------
11,519 12,093
--------------------------
Loss before the following (5,972) (5,230)
Interest expense on convertible notes (1,440) (300)
Other net interest income (expense) 54 (264)
Gain on settlement of debt - 3,638
--------------------------
Loss for the year (7,358) (2,156)
Deficit - Beginning of year (91,658) (89,502)
--------------------------
Deficit - End of year (99,016) (91,658)
--------------------------
--------------------------
Basic and diluted loss per common share (0.40) (0.13)
--------------------------
--------------------------
Weighted average number of common shares
outstanding 18,470,610 16,057,518
--------------------------
--------------------------
Going concern
Spectral Diagnostics Inc.
Consolidated Statements of Cash Flows
For the years ended March 31, 2005 and 2004
(in thousands of Canadian dollars, except share and per share data)
------------------------------------------------------------------------
2005 2004
$ $
Cash provided by (used in)
Operating activities
Loss for the year (7,358) (2,156)
Items not affecting cash
Amortization - deferred financing costs 292 74
Amortization 1,079 1,463
Gain on settlement of debt - (3,638)
Deferred revenue - (192)
Realized foreign exchange gain - (281)
Stock-based compensation expense 307 894
Accrued interest on convertible notes payable
- IDx Inc. 1,440 300
Changes in non-cash working capital (819) (1,476)
--------------------------
(5,059) (5,012)
--------------------------
Financing activities
Short-term credit facility (201) 816
Restricted cash 2,935 (4,507)
Net cash received in IDx Inc. - 5,802
Financing costs - (365)
Repayment of trade and note payable (989) (1,241)
Net cash proceeds on issuance of units 3,349 5,844
--------------------------
5,094 6,349
--------------------------
Investing activities
Purchase of capital assets (411) (262)
Increase in technology and other assets - (11)
--------------------------
(411) (273)
--------------------------
Increase (decrease) in cash and cash equivalents
during the year (376) 1,064
Cash and cash equivalents - Beginning of year 2,070 1,006
--------------------------
Cash and cash equivalents - End of year 1,694 2,070
--------------------------
--------------------------
Going concern
These consolidated financial statements are not complete as they exclude
notes, which are an integral part of the financial statements. The complete
audited consolidated financial statements for the years ended March 31, 2005
and 2004, as well as additional information and the Management's Discussion
and Analysis of financial condition and results of operations, will be filed
shortly with the relevant securities regulatory authorities and will be
available on the Spectral web site www.spectraldx.com, and on SEDAR at
www.sedar.com.
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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%SEDAR: 00002006E
