SEDAR
Filer Profile Number: 00002006
TORONTO, Feb. 14 /CNW/ - Spectral Diagnostics Inc. (TSX: SDI), a
developer of rapid diagnostic technologies, reported a consolidated loss for
the three months ended December 31, 2005 of $1.8 million (9 cents per share),
compared to a loss of $2.1 million (12 cents per share) for the same period
last year. The consolidated loss for the nine months ended December 31, 2005
was $5.0 million, or 25 cents per share, compared to $5.4 million, or 31 cents
per share, last year.
Sales for the third quarter ended December 31, 2005 amounted to
$1.7 million compared to $2.3 million for the same period last year. For the
nine months ended December 31, 2005 total sales were $6.3 million (2004 -
$7.6 million). The first quarter of fiscal 2005 included a $0.5 million
start-up sale of 15 Endotoxin Activity Assay (EAA(TM)) instruments to launch
the early adapter program for the EAA(TM) product. In addition, the continuing
strength of the Canadian dollar against the U.S. currency had a negative
impact of approximately $0.4 million on recorded revenues in this fiscal year.
Effective at the close of business on February 6, 2006, the Company
completed the sale of its rapid cardiac test business to Nanogen Inc. for a
total consideration of $9 million consisting of $5.7 million in cash and
$3.3 million in freely tradable common shares of Nanogen Inc. The estimated
gain on sale of this business is approximately $3-3.5 million after write-off
of related assets, goodwill, deal costs and other restructuring expenses. In
addition, Nanogen will assume all responsibilities for sales, marketing and
manufacturing operations related to the rapid cardiac test business.
"The third quarter represents the last full quarter that our operating
results will be impacted by disappointing rapid cardiac product sales", said
Dr. Paul Walker, President and Chief Executive Officer. "January results will
be affected as we transition the rapid cardiac test business to Nanogen. By
the end of this fiscal year ending March 31, 2006, however, we will benefit
from the consistent revenues of our royalty and retained reagents business,
and significantly reduced infrastructure", added Dr. Paul Walker.
Spectral is a developer of innovative technologies for comprehensive
disease management. Spectral provides 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
(the Endotoxin Activity Assay). New products include Spectral's rapid West
Nile Virus (WNV) assay. Spectral manufactures the EAA(TM) and WNV assays.
Spectral earns royalties associated with its proprietary reagents. Spectral's
common shares are listed on The Toronto Stock Exchange: SDI.
These consolidated financial statements are not complete as they exclude
accompanying notes, which are an integral part of the financial statements.
More specifically, they exclude the note on the Company's financial situation
and going concern. The complete audited consolidated financial statements for
the years ended March 31, 2005 and 2004, the second quarter ended
September 30, 2004, as well as additional information and the Management's
Discussion and Analysis of financial condition and results of operations, are
filed with the relevant securities regulatory authorities and are available on
the Spectral website at www.spectraldx.com, and on SEDAR at www.sedar.com.
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.
<<
Spectral Diagnostics Inc.
Consolidated Balance Sheets - unaudited
As at December 31, 2005 and March 31, 2005
-------------------------------------------------------------------------
(in thousands of Canadian dollars)
December 31, March 31,
2005 2005
$ $
Assets
Current assets
Cash and cash equivalents 417 1,694
Accounts receivable 2,065 2,760
Inventories 1,584 1,351
Prepaid expenses 281 359
------------ ------------
4,347 6,164
Restricted cash 447 2,013
Capital assets 987 1,158
Purchased technology and trademarks 2,887 3,327
Deferred financing costs 585 804
Goodwill 2,114 2,114
------------ ------------
11,367 15,580
------------ ------------
------------ ------------
Liabilities
Current liabilities
Bank indebtedness 859 929
Accounts payable and accrued liabilities 758 1,582
------------ ------------
1,617 2,511
Convertible notes payable 9,362 7,742
------------ ------------
10,979 10,253
------------ ------------
Shareholders' Equity
Common shares 99,446 99,446
Other equity 5,000 4,897
Deficit (104,058) (99,016)
------------ ------------
388 5,327
------------ ------------
11,367 15,580
------------ ------------
------------ ------------
Spectral Diagnostics Inc.
Consolidated Statements of Operations and Deficit - unaudited
For the three and nine month periods ended December 31, 2005 and 2004
-------------------------------------------------------------------------
(in thousands of Canadian dollars, except share and per share data)
3 Months Ended 9 Months Ended
December 31 December 31
2005 2004 2005 2004
$ $ $ $
Sales 1,707 2,313 6,265 7,648
Cost of Sales 868 996 3,008 3,221
----------- ----------- ----------- -----------
Gross Margin 839 1,317 3,257 4,427
----------- ----------- ----------- -----------
Operating expenses
Sales and marketing 916 1,191 2,996 3,701
General and administrative 775 731 2,334 2,174
Depreciation and amortization 333 347 1,033 1,050
Foreign exchange loss 36 109 175 176
Stock-based compensation 34 65 103 276
Research and product
development 395 - 1,309 1,763
Government assistance (385) - (1,317) (200)
----------- ----------- ----------- -----------
2,104 3,124 6,633 8,940
----------- ----------- ----------- -----------
Loss before the following (1,265) (1,807) (3,376) (4,513)
Interest expense on
convertible notes (540) (300) (1,620) (900)
Other net interest income
(expense) (2) (5) (46) 17
----------- ----------- ----------- -----------
Loss for the period (1,807) (2,112) (5,042) (5,396)
Deficit - Beginning
of period (102,251) (94,942) (99,016) (91,658)
----------- ----------- ----------- -----------
Deficit - End of period (104,058) (97,054) (104,058) (97,054)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Basic and diluted loss
per common share (0.09) (0.12) (0.25) (0.31)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Weighted average
number of common
shares outstanding 19,860,168 18,267,673 19,860,168 17,510,409
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Spectral Diagnostics Inc.
Consolidated Statements of Cash Flows - unaudited
For the three and nine month periods ended December 31, 2005 and 2004
-------------------------------------------------------------------------
(in thousands of Canadian dollars)
3 Months Ended 9 Months Ended
December 31 December 31
2005 2004 2005 2004
$ $ $ $
Cash provided by (used in)
Operating activities
Loss for the period (1,807) (2,112) (5,042) (5,396)
Items not affecting cash
Depreciation and
amortization 333 347 1,033 1,050
Stock-based
compensation expense 34 65 103 276
Accrued interest
on convertible
notes payable 540 300 1,620 900
Changes in non-cash
working capital 354 (206) (284) (1,086)
----------- ----------- ----------- -----------
(546) (1,606) (2,570) (4,256)
----------- ----------- ----------- -----------
Financing activities
Bank indebtedness 184 (150) (70) (160)
Restricted cash 200 593 1,566 2,248
Net cash proceeds on
issuance of common shares 3,272 - 3,359
----------- ----------- ----------- -----------
384 3,715 1,496 5,447
Investing activities
Purchase of capital assets (27) (133) (203) (431)
----------- ----------- ----------- -----------
Increase (decrease) in
cash and cash equivalents
during the period (189) 1,976 (1,277) 760
----------- ----------- ----------- -----------
Cash and cash equivalents -
Beginning of period 606 854 1,694 2,070
----------- ----------- ----------- -----------
Cash and cash equivalents -
End of period 417 2,830 417 2,830
----------- ----------- ----------- -----------
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%SEDAR: 00002006E
