IDC reports 2007 Q3 results



    CALGARY, Nov. 14 /CNW/ - Imaging Dynamics Company Ltd. (IDC or the
Company) (TSX: IDL) a global supplier in the digital radiography (DR)
equipment market, today reported financial results for the third quarter ended
September 30, 2007.

    2007 Q3 Financial Results
    -------------------------

    Revenues for the three-month period ended September 30, 2007 were
$7.1 million compared to $7.3 million for the same quarter last year. This
excludes $0.2 million in deferred revenues and $4.5 million in orders not
shipped at September 30, 2007.
    Gross margins on sales were at 36.0% for the quarter and 39.5% for the
nine months ended September 30, 2007. This compares to 41.7% and 37% for the
same periods the previous year. Margins for the third quarter of 2007 were
lower due to the weakened U.S. dollar which had an adverse impact on gross
revenues. Further inventory purchased in prior periods when the U.S. dollar
was stronger, was consumed during the current period, which resulted in a
higher cost of sales and contributed to lower gross margins.
    Net loss for the quarter before foreign exchange and bad debts was
$2.2 million or $0.04 per share and net loss including foreign exchange and
bad debts was $3.5 million or $0.06 per share compared to a loss of $2 million
or $0.03 for the same period last year. Net loss year-to-date before foreign
exchange and bad debts was $5.6 million or $0.09 per share and net loss
including foreign exchange and bad debts was $8.2 million or $0.14 per share
compared to $3.4 million or $0.06 per share for the same period last year.
    Commenting on the results, Swapan Kakumanu, CFO, IDC says, "We continued
our focus on the balance sheet and cost controls. We expect to see continued
efforts on both initiatives for the remainder of the year."

    Financial Performance Summary

    
    1.  Reduced receivables by $2.6 million from $16.6 million at
        June 30, 2007 to $14.0 million;
    2.  Collected $7.5 million of receivables during Q3 2007 and another
        $3.0 million since September 30, 2007 till date;
    3.  Excluding $1.9 million inventory that was held at end of Q3 2007 for
        two orders that could not ship, inventory would have reduced by
        $0.6 million at the end Q3 2007 from $13.7 million at end of Q2 2007;
    4.  Revenues were $7.1 million in Q3 2007 compared to $7.3 million in Q3
        2006 in spite of the weakening U.S. dollar;
    5.  Total expenses reduced in Q3 2007 to $6.1 million compared to
        $6.5 million in Q2 2007;
    6.  Operating expense (defined as total expenses less foreign exchange,
        warranty, stock-based compensation, bad debts amortization and
        interest) levels remained almost flat in Q3 2007 compared to Q2 2007;
    7.  The Company incurred an unusual level of foreign exchange loss during
        Q3 2007 of $0.6 million or $0.01 per share. This was due in a large
        part to the decline in US dollar against the Canadian dollar and the
        revaluation of current assets and liabilities denominated in U.S.
        dollars at September 30, 2007;
    8.  The Company also reserved $0.8 million for bad debts during the
        quarter or $0.01 per share. These reserves have been created based on
        the Company's best estimate and the information available at this
        time. However the Company is actively pursuing to collect these
        receivables and when collected these reserves would be reversed;
    

    Darryl Stein, President & CEO of IDC says, "We are continuing to focus on
improving our balance sheet, reducing both expenses and inventory. Taking into
account the more than $5 million in orders that will be carried over into
fourth quarter, our sales growth and demand for product remains strong."



    
    Imaging Dynamics Company Ltd.
    Consolidated Balance Sheets
    (Unaudited)
    -------------------------------------------------------------------------
                                                  September 30   December 31
                                                          2007          2006
                                                  ------------- -------------
    Assets                                          (Unaudited)     (Audited)
    Current Assets
      Cash and cash equivalents                   $    856,671  $  5,901,192
      Receivables                                   13,959,151    21,222,060
      Inventory                                     14,948,156    16,556,720
      Prepaids and deposits                            833,657       930,053
                                                  ------------- -------------

                                                    30,597,635    44,610,025
    Property, plant and equipment                    1,683,632     1,710,938
    Intangible assets                                  249,505       278,511
    Deferred development costs                         192,042       782,917
                                                  ------------- -------------

                                                  $ 32,722,814  $ 47,382,391
                                                  ------------- -------------
                                                  ------------- -------------
    Liabilities and Shareholders' Equity
    Current Liabilities
      Short-term borrowing                        $  1,424,609  $  4,297,033
      Payables and accruals                         10,224,840    15,180,338
      Customer deposits                                243,984       580,890
      Current portion of capital lease
       obligations                                       9,966         9,966
      Current portion of long-term debt                 45,013        56,000
      Warranty liability                             1,072,751       817,873
                                                  ------------- -------------

                                                    13,021,163    20,942,100
    Capital lease obligations                           11,732        19,084
    Long-term debt                                           -        14,013
    Deferred lease inducement                           31,000        49,600
                                                  ------------- -------------
                                                    13,063,895    21,024,797
                                                  ------------- -------------
    Shareholders' Equity
      Share capital                                 65,983,374    65,466,454
      Contributed surplus                            4,495,882     3,473,709
      Deficit                                      (50,820,337)  (42,582,569)
                                                  ------------- -------------

                                                    19,658,919    26,357,594
                                                  ------------- -------------
                                                  $ 32,722,814  $ 47,382,391
                                                  ------------- -------------
                                                  ------------- -------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Imaging Dynamics Company Ltd.
    Consolidated Statements of Operations and Deficit
    (Unaudited)
    -------------------------------------------------------------------------
                              Three Months Ended           Nine Months Ended
                      --------------------------- ---------------------------
                      September 30  September 30  September 30  September 30
                              2007          2006          2007          2006
                      ------------- ------------- ------------- -------------
    Revenues, net     $  7,124,229  $  7,343,979  $ 24,183,298  $ 26,496,535

    Cost of goods
     sold                4,562,914     4,277,880    14,622,698    16,697,094
                      ------------- ------------- ------------- -------------

    Gross profit         2,561,315     3,066,099     9,560,600     9,799,441
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------

    Expenses
      Sales and
       marketing         1,684,343     2,290,015     5,276,372     5,516,422
      General and
       adminis
       -trative            974,160     1,007,927     3,568,289     2,792,444
      Production
       and manufac
       -turing             472,293       539,835     1,264,925     1,290,554
      Research and
       development         852,392       537,628     1,991,605     1,596,753
      Foreign
       exchange loss
       (gain)              552,189      (163,128)    1,671,752       (91,349)
      Warranty              87,467       158,307       632,609       602,686
      Stock-based
       compensation        271,315       375,719     1,090,525       932,170
      Bad debts            772,941             -       999,301             -
      Amortization         344,254       287,615     1,026,733       614,065
      Interest             114,070        66,996       359,290       204,692
                      ------------- ------------- ------------- -------------
                         6,125,424     5,100,914    17,881,401    13,458,437
                      ------------- ------------- ------------- -------------

    Loss before
     interest and
     other income       (3,564,109)   (2,034,815)   (8,320,801)   (3,658,996)

    Interest and
     other income           30,100        64,316        83,033       240,596
                      ------------- ------------- ------------- -------------
    Net loss          $ (3,534,009) $ (1,970,499) $ (8,237,768) $ (3,418,400)
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net loss per share
      Basic and
       diluted        $      (0.06) $      (0.03) $      (0.14) $      (0.06)
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Deficit,
     beginning of
     period           $(47,286,328) $(30,023,624) $(42,582,569) $(28,575,723)

    Net loss            (3,534,009)   (1,970,499)   (8,237,768)   (3,418,400)
                      ------------- ------------- ------------- -------------

    Deficit, end of
     period           $(50,820,337) $(31,994,123) $(50,820,337) $(31,994,123)
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Imaging Dynamics Company Ltd.
    Consolidated Statement of Cash Flows
    (Unaudited)
    -------------------------------------------------------------------------

    Increase (decrease) in cash and cash equivalents are as follows:

                              Three Months Ended           Nine Months Ended
                      --------------------------- ---------------------------
                      September 30  September 30  September 30  September 30
                              2007          2006          2007          2006
                      ------------- ------------- ------------- -------------
    Cash flows from
     operating
     activities
      Net loss        $ (3,534,009) $ (1,970,499) $ (8,237,768) $ (3,418,400)
        Items not
         affecting
         cash
          Amortization
           of deferred
           lease
           inducement       (6,200)       (6,200)      (18,600)      (18,600)
          Amortization     344,254       287,615     1,026,733       614,065
          Stock-based
           compen
           -sation         271,315       375,719     1,090,525       932,170
          Warranty         (69,697)       42,661       254,878       218,955
                      ------------- ------------- ------------- -------------

                        (2,994,337)   (1,270,704)   (5,884,232)   (1,671,810)
      Change in
       non-cash
       working
       capital           2,471,919       298,316     3,675,465    (8,973,523)
                      ------------- ------------- ------------- -------------

                          (522,418)     (972,388)   (2,208,767)  (10,645,333)
                      ------------- ------------- ------------- -------------

    Cash flows from
     financing
     activities
        Proceeds from
         share
         issuances,
         net                40,000        32,834       448,568    14,249,647
        Repayment of
         capital lease
         obligation         (2,531)       (1,724)       (7,352)       (7,296)
        Short-term
         borrowing,
         net            (2,647,588)        6,823    (2,872,424)    1,565,710
        Repayment of
         long-term debt          -             -       (25,000)      (25,000)
                      ------------- ------------- ------------- -------------

                        (2,610,119)       37,933    (2,456,208)   15,783,061
                      ------------- ------------- ------------- -------------

    Cash flows from
     investing
     activities
        Deferred
         development
         costs
         additions               -       (86,385)            -      (954,595)
        Intangible
         asset
         additions               -       (12,897)            -       (45,431)
        Property,
         plant and
         equipment
         additions        (115,374)     (199,256)     (379,546)     (512,433)
                      ------------- ------------- ------------- -------------

                          (115,374)     (298,538)     (379,546)   (1,512,459)
                      ------------- ------------- ------------- -------------

    Net change in
     cash and cash
     equivalents        (3,247,911)   (1,232,993)   (5,044,521)    3,625,269
    Cash and cash
     equivalents
      Beginning of
       period            4,104,582    10,525,635     5,901,192     5,667,373
                      ------------- ------------- ------------- -------------

      End of period   $    856,671  $  9,292,642  $    856,671  $  9,292,642
                      ------------- ------------- ------------- -------------
                      ------------- ------------- ------------- -------------

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    About IDC:

    IDC (Imaging Dynamics Company) is a medical technology company and
innovative force in the fast-growing field of digital radiography (DR)
technology. IDC's X-Series of direct capture technology replaces conventional
film-based X-rays and provides a cost-effective alternative to cassette based
film or computed radiography (CR) systems.
    Each IDC DR solution provides high resolution radiographic images in the
digital format required for today's electronic medical record networks, all
without the use of film, environmentally harmful chemicals, cassettes or
expensive imaging plates. In addition to its number one ranking for customer
service by MD Buyline, IDC is the recipient of the 2007 Frost & Sullivan
Technology Innovation Award. IDC is based in Calgary, Alberta, Canada.
    You may also visit the IDC Web site: www.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.

    %SEDAR: 00007697E E




For further information:

For further information: Darryl Stein, President and CEO; Swapan
Kakamanu, Chief Financial Officer, 1-866-975-6737, info@imagingdynamics.com,
www.imagingdynamics.com

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Imaging Dynamics Company Ltd.

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