IDC REPORTS 2006 SECOND QUARTER RESULTS
Calgary, Alberta – August 8, 2006 - (TSX: IDL) Imaging Dynamics Company (“IDC” or the Company) a global supplier in the high growth Digital Radiography (DR) equipment market, today reported revenue growth in its second quarter financial results.
(All amounts in this news release are in Canadian dollars unless otherwise noted.)
Revenues for the three-month period ended June 30, 2006 grew 20% to C$8,925,000 compared to revenues of $7,415,000 in the same period in 2005. Sales increased as demand for IDC’s leading Xplorer series of digital x-ray systems continued, and as global shipments of the Company’s new Xaminer OEM series began. A later-than-anticipated production commencement for IDC’s Xaminer during the quarter resulted in lower revenues and gross margins than expected for period.
“Xaminer is well into production and we have been shipping to end-users and distributors around the world,” stated IDC's President and CEO, Darryl Stein. "Preliminary feedback from the field has been encouraging and significant new market interest has been created with the launch of the Xaminer.”
During the second quarter IDC continued to penetrate new markets, including first time sales in Latin America. IDC’s products are becoming widely recognizable and being considered in an increasing number of buying decisions. Management expects long term growth to remain robust as new markets and partnerships with OEMs and distributors gain further traction.
To support OEM partners awaiting the new lower cost Xaminer series, the Company took an interim measure of shipping limited Xplorer product at Xaminer pricing to specific market segments during the first two months of the second quarter. As a result, the Company reported gross margin of 34% compared to 43% for the second quarter of 2005. Management views the gross margin decrease as temporary as Xaminer is now in production and shipping globally to customers.
Sales and marketing expenses for the quarter increased to $1,479,000 from $859,000 in the second quarter of 2005. The increase in expenses coincides with the size and operations of the Company and its international expansion, trade shows and product launches in new verticals such as the orthopedics and veterinarian markets.
Second quarter general and administrative expenses increased to $958,000 from $499,000 in the second quarter of 2005. The increase is related to the Company’s growth over the past year, both on a geographic and employee headcount basis.
Research and development expenses for the second quarter were $527,000, compared to $313,000 in the same quarter of 2005. As a percentage of revenue, R&D costs have decreased from 7% to less than 6% which reflects the maturity of the Company’s core product development. The majority of ongoing R&D involves enhancing specifications, features and functions, of both software and hardware.
For the second quarter of 2006, IDC reported a net loss of $1,285,000, or ($0.02) per share, compared to net earnings of $1,004,000, or $0.02 per share, for the same period in 2005.
Cash and cash equivalents at June 30, 2006 totalled $10,526,000, as compared to $5,667,000 at December 31, 2005, and working capital increased to $33,571,000 as compared to $21,942,000 at December 31, 2005. The Company also has a revolving credit facility with a Canadian Chartered Bank for US$5 million.
In addition to building a qualified distribution channel in the United States combined with successful OEM agreements in China and Europe, IDC continues to pursue additional distribution opportunities especially in new and emerging marketplaces. In addition, the Company’s strategy to diversify its product offering through the development of new products such as the OrthoXP, Xplorer 2200 and the Xaminer series is opening up new markets, both geographically and vertically.
Xaminer Shipping Globally to Customers
IDC’S new Xaminer entered full production during the second quarter. The Xaminer series was designed for the OEM market and was adapted from imaging technology introduced in IDC's highly successful Xplorer series. Xaminer provides a low-cost alternative for digital x-ray, addressing a wide range of markets. The Xaminer appears under numerous OEM brand names.
"The launch of the Xaminer has been eagerly awaited in many geographies, particularly in Asia, Latin America and new vertical markets within North America including veterinary and chiropractic" stated Mr. Stein. “We are pleased to now be shipping into these markets.”
Conference Call
A conference call to review the results will take place on Tuesday August 9, 2006 at 8:00 am EST (6:00 am MST). Darryl Stein, CEO, and Noel Lumsden, CFO, will speak on behalf of the Company. A question-and-answer period will follow a review of the financial results and an update on the Company’s strategies and progress within its markets.
To participate in the call, please dial 416-644-3415, or 1-800-814-4941 approximately 10 minutes prior to the conference call. A recording of the conference call will be available through August 16. Please dial 416-640-1917 or 1- 877-289-8525 and enter the passcode 21199362# to listen to the rebroadcast.
To review the Q2 Financial Statement, please click here >
About IDC:
IDC is an emerging world leader in providing affordable Digital Radiography (DR) systems. IDC Xplorer Direct Capture technology replaces conventional film based X-ray and provides a cost effective alternative to inefficient cassette based Computed Radiography (CR) systems. The IDC Xplorer provides the industry’s highest resolution radiographic images in the digital format needed for modern Electronic Medical Records networks, without the use of film, chemistry, cassettes or expensive imaging plates. IDC is based in Calgary, Alberta, Canada and trades on the TSX under the symbol “IDL” and has approximately 58 million shares outstanding.
For more information, visit http://www.imagingdynamics.com/.
For more information, please contact:
Cory Pala
Investor Relations
(416) 657-2400
cpala@evestor.com
Noel Lumsden
Chief Financial Officer
1.866.975.6737
investor@imagingdynamics.com
Statements in this release which describe IDC's intentions, expectations or predictions, or which relate to matters that are not historical facts are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties which may cause the actual results, performances or achievements of IDC to be materially different from any future results, performances or achievements expressed in or implied by such forward-looking statements. IDC may update or revise any forward-looking statements, whether as a result of new information, future events or changing market and business conditions. Known and unknown risks and uncertainties include: the early stage of commercialization of IDC's products; the infancy of the digital radiography industry in general; IDC's ability to manufacture its products with a sufficient level of quality and in volumes which satisfy market demand; the ability of IDC to establish direct and indirect sales channels; the ability of IDC to establish industry partnerships; IDC's ability to attract and retain key personnel; the strength and breadth of IDC's patents; and other factors relating to general economic conditions, specific industry conditions and IDC's particular situation.