-- Investment in Product Development Accelerates --
WINNIPEG, May 12 /CNW/ - IMRIS Inc. (NASDAQ: IMRS; TSX: IM) ("IMRIS" or
the "Company") today reported its results for the first quarter 2011.
The results highlight continued progress in the execution of IMRIS's
overall strategy, including the planned acceleration of product
development investments. All figures are reported in US dollars.
IMRISNV sale to Utah's University Hospital contributes to total backlog of
Q1 revenues of $11.1 million reflecting quarterly variability and
Q1 gross profit as a percentage of revenues of 40.3%
Launch of two new products, IMRIS Intraoperative CT and AccuTrack Neuro
University Hospital in Utah becomes first medical facility to purchase
two IMRIS systems
Europe's first IMRISneuro system unveiled at Tubingen Hospital in Germany
World's first IMRIScardio system launched at Brigham and Women's
IMRIS's financial results exhibit significant variability from quarter
to quarter, with seasonality typically contributing to higher
performance in the second half of the year. These trends are again
evident in 2011 with first quarter revenues at $11.1 million compared
with $12.1 million in 2010 and $24.8 million in the fourth quarter of
2010. Gross profit as a percentage of revenues at 40.3% was largely
unchanged from the first quarter of 2010, equating to gross profit of
$4.5 million versus $4.9 million in Q1 2010. Planned increases in 2011
operating expenses for the Company's focused product development
efforts together with increases to support growth in the business
contributed to negative EBITDA1 and net loss of $4.2 million and $4.6 million respectively compared
with negative EBITDA of $1.0 million and net loss of $2.1 million in Q1
"We are continuing to execute on our priorities for the year,
accelerating product development, investing in the operations for
growth and driving order bookings," said David Graves, IMRIS CEO.
"Favourable and improving market conditions bode well for our Company
as we move into the traditionally higher order flow period of the
year. At the same time we are aggressively advancing our MR guided
radiation therapy solution, robotics program and other product
enhancement initiatives for long term growth."
($ 000's except per share amounts) (unaudited)
3 months ended March 31
Gross profit as % of revenues
Operating loss before:
Foreign exchange gain (loss)
Loss on embedded derivative
Basic and diluted loss per share
Cash, cash equivalents & accounts receivable
First Quarter Results
Revenues in the first quarter of 2011 were $11.1 million, or 8% lower
than in the first quarter of 2010. The marginal decrease from Q1 2010
is due lower installation activities in the first quarter versus the
same period in 2010 and reflective of the quarterly variability in the
Partly offsetting the lower system revenues was growth from service
contracts which added revenues of $0.6 million in the quarter compared
with $0.5 million in Q1 2010. Through the Company's global expansion
strategy, geographic revenue diversification also continued to improve
with 22% of revenues coming from outside North America in the first
quarter of 2011 versus 15% a year earlier.
Consistent with plan, gross profit as a percentage of revenues was 40.3%
in the first quarter, down only marginally from 40.5% in Q1 2010. With
this consistent level of performance, gross profit decreased by only
$0.4 million year over year to $4.5 million due to the marginally lower
year over year revenues arising from lower installation activities.
In support of the Company's priority of accelerating product development
and continuing to invest in operations for long term growth, operating
expenses increased in the first quarter of 2011. Through the quarter,
IMRIS continued to advance its MR guided radiation therapy and MR
guided surgical robotics programs, both representing substantial new
market opportunities. Other development initiatives designed to
further deepen and strengthen IMRIS's product portfolio also moved
forward. These activities increased research and development
expenditures to $2.3 million in the first quarter of 2011 compared with
$1.2 million in Q1 2010. These higher expenses together with general
increases primarily related to staffing to support growth, contributed
to total operating expenses in the first quarter of $9.5 million versus
$6.7 million in Q1 2010.
EBITDA in the first quarter of 2011 was negative $4.2 million compared
with $1.0 million in the first quarter of 2010. The year over year
decrease primarily reflects higher investment in operating expenses for
growth and slightly lower revenues than in the first quarter of 2010.
Operating and Net Loss
Operating loss increased to $5.0 million in the first quarter of 2011
from $1.8 million in the first quarter of 2010 due to the planned
increase in operating expenses and slightly lower revenues in Q1 2011.
Net loss for the first quarter of 2011 was $4.6 million compared with a
net loss of $2.1 million in Q1 2010. The increased net loss reflects
the year over year increase in operating loss, partly offset by a
foreign exchange gain of $0.4 million in the first quarter of 2011
versus a $0.1 million foreign exchange loss and a $0.1 loss on embedded
derivatives in Q1 2010.
Liquidity and Capital Resources
Cash and cash equivalents at March 31, 2011 totaled $52.3 million. In
addition the Company had accounts receivable of $11.5 million, the
majority of which are expected to be collected within the next 60 days.
These funds together with ongoing operating cash flow will be used to
fund the Company's working capital and general corporate purposes.
At March 31, 2011, IMRIS's backlog was $115.1 million, 11% higher than a
year earlier. During the first quarter of 2011, order bookings
totalled $8.1 million and included the sale of IMRISNV to University
Hospital in Utah. During the quarter $11.1 million of backlog was
converted into revenues, and the change in the US dollar versus the
foreign currencies of the orders in backlog, resulted in a $0.9 million
decrease in the value of the backlog. Net of these items, backlog at
March 31, 2011 was $115.1 million, including $82.2 million of system
orders and $32.9 million of service contracts.
Building for the Future
Through the first quarter of 2011 IMRIS continued to move forward with a
number of product development initiatives designed to broaden and
deepen the Company's capabilities in the provision of image guided
therapy solutions. In addition to the new MR-guided radiation therapy
solution which IMRIS is co-developing with Varian Medical Systems and
its MR guided surgical robotics system, the Company also moved forward
with three planned neurosurgical imaging product enhancements:
AccuTrack - application software that is designed to enable the surgeon to
utilize an ergonomic lightweight probe to quickly and accurately
localize target anatomy before and at any time during a neurosurgical
procedure by permitting automatic image registration of patient anatomy
to intra operative MR images, rather than manual image registration to
preoperative MR images. The solution is expected to assist surgeons in
addressing the effects of brain shift during a neurosurgical
procedure. AccuTrack has CE Mark regulatory approval in Europe and is
FDA 510(k) Pending in the United States.
Stereotactic Adaptor - a fully integrated head fixation system integrated with IMRIS's
flexible head coil is designed to permit MR imaging during stereotactic
neurosurgical procedures. The device will enable imaging in the
surgical position and avoids the need to transport the patient between
imaging and surgical departments. The device, which has received FDA
clearance, may be useful in a number of stereotactic applications.
Intraoperative Computed Tomography - will provide hospitals with intraoperative CT imaging capabilities in
a fully integrated image guided therapy suite. The system is designed
to permit CT imaging on a timely basis during the course of a procedure
to assist clinicians in making better decisions for improved patient
outcomes. The system will not require the patient to be transported for
CT scanning, so the optimum patient positioning is always maintained.
Clinical workflow and access to the patient is not impacted and the CT
scanner is removed completely from the operating room when imaging is
The Company continues to anticipate a strong year of growth in system
orders in 2011. A number of factors are expected to contribute to this
forecast including an improved capital spending environment in the US
healthcare sector, growing recognition of the value IMRIS solutions
offer and increased orders from outside the United States as the
Company's investments in other territories gain traction. The Company
has established an internal goal of achieving a "book to bill" ratio of
1.5 for the 2011 - 2012 timeframe. Book to bill is defined as the
ratio of system orders backlog at the end of a 12 month period divided
by the revenues earned in those previous 12 months. This level of
performance has been established as a goal, recognizing that with the
quarterly variability inherent in order flow and customer
installations, actual book to bill results in certain periods within
the two year time frame may be significantly above or below this goal.
Based on currently known installation schedules, revenue performance in
2011 is now expected to reflect system order backlog conversion into
revenues at rates comparable to the 79% achieved in 2010. Consistent
with prior years, and the trend in the first quarter of 2011, quarterly
performance is expected to be variable with a trend toward higher order
flow, revenue, and financial performance in the back half of the year.
Gross profit as a percentage of sales will be lower over the next two
quarters as the early installations of the Company's newest products
IMRISNV and IMRIScardio continue to be rolled out. As these products
become more established in the market, the Company's overall gross
profit as a percentage of revenues is expected to increase into the mid
In support of the Company's priorities for the year, operating expenses
are expected to increase over 2010 levels. Higher year over year
quarterly research and development expenditures are planned for the
year and are expected to be at levels similar to actual research and
development expenditures incurred in Q1 2011. Spending in this area
will primarily be used to advance development of the MR guided
radiation therapy and MR guided surgical robotics products. Limited
increases are anticipated in other operational areas and amortization
expense will increase modestly.
The Company's full financial statements as well as management's
discussion and analysis will be available at www.sedar.com, www.sec.gov and www.imris.com.
Management will host a conference call to discuss the results at 5:00 ET today, Thursday May 12, 2011. Following management's presentation, there will be a
question-and-answer session for analysts and institutional investors.
To participate in the teleconference, please call 416-644-3417 or 1-877-974-0446. To access the live audio webcast, please visit IMRIS's website at www.imris.com. A taped rebroadcast will be available to listeners following the call
until midnight (ET) on May 19, 2011. To access the rebroadcast, please
call 416-640-1917 or 877-289-8525 and enter passcode 4438032#. The
webcast will also be archived on IMRIS's website.
IMRIS (NASDAQ: IMRS; TSX: IM) is a global leader in providing image
guided therapy solutions. These solutions feature fully integrated
surgical and interventional suites that incorporate magnetic resonance,
fluoroscopy and computed tomography to deliver on demand imaging during
procedures. The Company's systems serve the neurosurgical,
cardiovascular and neurovascular markets and have been selected by
leading medical institutions around the world.
For more information, visit www.imris.com.
This press release may contain or refer to forward-looking information
based on current expectations. In some cases, forward-looking
statements can be identified by terminology such as "anticipate",
"may", "expect", "believe", "prospective", "continue" or the negative
of these terms or other similar expressions concerning matters that are
not historical facts. These statements should not be understood as
guarantees of future performance or results. Such statements involve
known and unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements to be materially different
from those implied by such statements. Although such statements are
based on management's reasonable assumptions, there can be no assurance
that actual results will be consistent with such statements.
Forward-looking statements are subject to significant risks and
uncertainties, and other factors that could cause actual results to
differ materially from expected results. These forward-looking
statements are made as of the date hereof and we assume no
responsibility to update or revise them to reflect new events or
1 We define EBITDA as earning before financing interest income (expense),
foreign exchange gain (loss), embedded derivatives, income taxes, and
2 Not measurable.
3 See "Non-GAAP Financial Measures" in the Company's Q1 2011 MD&A for
further information on backlog.
SOURCE IMRIS Inc.
For further information:
| Kelly McNeill |
Executive Vice President Finance and
Administration and Chief Financial Officer
| Brad Woods |
Director Investor Relations
& Corporate Communications