IDC reports second quarter 2010 financial results

CALGARY, Aug. 13 /CNW/ - Imaging Dynamics Company Ltd. ("IDC" or the "Company") (TSX: IDL) a global leader in the high growth digital radiography (DR) equipment market, today reported financial results for the first quarter ended June 30, 2010.

    
    Second Quarter 2010 Highlights

    -   Increased revenue by 64.5 percent to $1.5 million during the second
        quarter of 2010 compared to $0.9 million during the first quarter of
        2010;

    -   Increased gross margins to 37.0 percent for the second quarter of
        2010 compared to 27.7 percent for the first quarter of 2010;

    -   Reduced receivables by $0.2 million compared to December 31, 2009 on
        the collection of approximately $2.7 million during the first half of
        2010; Days Sales Outstanding (DSO) for the quarter reduced to 47 days
        from 72 days for the same quarter last year and, the lowest in the
        last five years;

    -   Reduced inventory by $1.0 million compared to December 31, 2009;

    -   Payables and accruals increased by $0.1 million compared to
        December 31 2009;

    -   Sales and marketing, general and administrative, production and
        manufacturing and research and development expenses were reduced by
        33.3 percent to $1.2 million from $1.8 million during the quarter
        compared to the same quarter last year and were reduced by
        24.3 percent to $2.8 million from $3.7 million on a year to date
        basis compared to the same period last year;

    -   Reduced total expenses by 42.3 percent to $1.5 million from
        $2.6 million during the quarter compared to the same quarter last
        year and reduced by 31.2 percent to $3.3 million from $4.8 million on
        a year to date basis compared to the same period last year;

    -   Purchase orders received during the second quarter and opening
        backlog totaled $2.1 million ($1.5 million shipped and recognized,
        $0.6 million booked to closing backlog);

    -   Gross revenues were lower by 60.6 percent compared to the same
        quarter last year and lower by 62.2 percent on a year to date basis;
        which was largely due to the decline in revenues from Asia Pacific,
        where the orders have been pushed into upcoming quarters of 2010 and
        slower purchasing decisions in other regions; and

    -   Gross margins were 37.0 percent for the quarter compared to
        30.4 percent for the same quarter last year and 33.5 percent compared
        to 28.6 percent on a year to date basis.
    

Net loss for the second quarter of 2010 was $882,932 or $0.01 of basic and diluted loss per share compared to a net loss of $1,425,850 or $0.02 of basic and diluted loss per share for the same quarter last year. Year-to-date net loss was $2,448,240 or $0.03 of basic and diluted loss per share compared to a net loss of $2,939,443 or $0.04 basic and diluted loss per share for the same period last year.

While revenue is trending in the right direction, this period's financial performance is significant in the quarter over quarter improvement in most metrics and specifically the lowest quarterly loss per share since 2008.

Commenting on second quarter 2010 results, M. Thomas Boon, IDC President and Chief Executive Officer stated, "Our results for the quarter were below expectations as orders from the Asia Pacific region lagged forecast and expected orders from Latin America, the Middle East and South Asia are being pushed into the coming quarters. We continue to see signs of increasing market activity in the United States and with the recent announcement regarding our agreement with the China Foundation for Poverty Alleviation, we are quite optimistic that our performance during the second half of 2010 will be considerably better that our year to date results."

Boon continues, "The Company continues to make good progress in reducing expenses, inventory and Days Sales Outstanding while increasing our gross margins to the highest level of the past ten quarters. The management team and the board continue to focus on ensuring there will be adequate working capital and continued growth in the top line. We have an increasingly positive outlook for the global digital radiography market and also for the Company's prospects for the remainder of 2010."

A conference call to review the results will take place on Monday, August 16, 2010 at 10.00 a.m. EDT (8.00 a.m. MDT).

To participate in the call, please dial 647.427.7450 or 888.231.8191 approximately five (5) minutes prior to the designated time.

You will be asked for the topic of the call and a conference code ID, please reference:

    
    -   IDC 2010 - Q2 Financials
    -   Conference Code ID 93566750.


    Imaging Dynamics Company Ltd.
    Consolidated Balance Sheets
    As at                                              June 30   December 31
                                                          2010          2009
    -------------------------------------------------------------------------

    Assets                                          (Unaudited)     (Audited)
    Current Assets
      Cash and cash equivalents                   $    226,339  $    310,957
      Receivables                                      982,758     1,187,101
      Inventory                                      3,803,006     4,830,116
      Prepaids and deposits                            515,826       447,704
                                                   ------------  ------------

                                                     5,527,929     6,775,878
    Property, plant and equipment                      457,268       524,154
    Intangible assets                                  454,869       511,603
                                                   ------------  ------------

                                                  $  6,440,066  $  7,811,635
                                                   ------------  ------------
                                                   ------------  ------------

    Liabilities and Shareholders' Equity
    Current Liabilities
      Loan                                        $  1,000,000  $    500,000
      Note payable                                     200,000             -
      Payables and accruals                          3,639,546     3,516,738
      Customer deposits                                541,734       438,876
      Warranty liability                             1,409,250     1,457,661
                                                   ------------  ------------

                                                     6,790,530     5,913,275
                                                   ------------  ------------
    Shareholders' Equity
      Share capital                                 70,246,559    70,246,559
      Contributed surplus                            5,987,183     5,930,955
      Warrants                                       4,381,787     4,238,599
      Deficit                                      (80,965,993)  (78,517,753)
                                                   ------------  ------------

                                                      (350,464)    1,898,360
                                                   ------------  ------------

                                                  $  6,440,066  $  7,811,635
                                                   ------------  ------------
                                                   ------------  ------------

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



    Imaging Dynamics Company Ltd.
    Consolidated Statements of Operations, Comprehensive Loss and Deficit
    (Unaudited)

                              Three Months Ended            Six Months Ended
                       --------------------------  --------------------------
                           June 30       June 30       June 30       June 30
                              2010          2009          2010          2009
                       ------------  ------------  ------------  ------------

    Revenues, net     $  1,535,696  $  3,899,738  $  2,469,514  $  6,533,292

    Cost of goods sold     966,863     2,715,369     1,642,106     4,667,917
                       ------------  ------------  ------------  ------------

    Gross profit           568,833     1,184,369       827,408     1,865,375
                       ------------  ------------  ------------  ------------
                       ------------  ------------  ------------  ------------

    Expenses
      Sales and
       marketing           374,857       571,057       773,662     1,161,129
      General and
       administrative      472,818       757,713     1,236,307     1,488,450
      Production and
       manufacturing       160,397       213,906       371,191       450,212
      Research and
       development         199,746       225,416       426,187       566,736
      Foreign exchange
       loss                 65,192       195,654        40,234       204,940
      Warranty              45,400       153,000        58,500       277,200
      Stock-based
       compensation         23,661       324,364        56,228       405,462
      Amortization          59,791        84,856       123,620       175,134
      Interest              50,994         1,726        68,512         1,726
      Financing costs            -       102,285       143,188       102,285
                       ------------  ------------  ------------  ------------
                         1,452,856     2,629,977     3,297,629     4,833,274
                       ------------  ------------  ------------  ------------
    Loss before interest
     and other income     (884,023)   (1,445,608)   (2,470,221)   (2,967,899)
    Interest and
     other income            1,091        19,758        21,981        28,456
                       ------------  ------------  ------------  ------------
    Net loss, being
     comprehensive
     loss             $   (882,932) $ (1,425,850) $ (2,448,240) $ (2,939,443)
                       ------------  ------------  ------------  ------------
                       ------------  ------------  ------------  ------------

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

    Net loss per share
      Basic and
       diluted        $      (0.01) $      (0.02) $      (0.03) $      (0.04)
                       ------------  ------------  ------------  ------------
                       ------------  ------------  ------------  ------------

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

    Deficit, beginning
     of period        $(80,083,061) $(74,060,844) $(78,517,753) $(72,547,251)
    Net loss, being
     comprehensive
     loss                 (882,932)   (1,425,850)   (2,448,240)   (2,939,443)
                       ------------  ------------  ------------  ------------
    Deficit, end
     of period        $(80,965,993) $(75,486,694) $(80,965,993) $(75,486,694)
                       ------------  ------------  ------------  ------------
                       ------------  ------------  ------------  ------------

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



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

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

                              Three Months Ended            Six Months Ended
                       --------------------------  --------------------------
                           June 30       June 30       June 30       June 30
                              2010          2009          2010          2009
                       ------------  ------------  ------------  ------------
    Cash flows used in
     operating
     activities
      Net loss        $   (882,932) $ (1,425,850) $ (2,448,240) $ (2,939,443)
        Items not
         affecting
         cash
        Financing costs          -        58,311       143,188        58,311
        Amortization        59,791        84,856       123,620       175,134
        Stock-based
         compensation       23,661       324,364        56,228       405,462
        Warranty              (550)      115,436       (48,411)      216,381
                       ------------  ------------  ------------  ------------
                          (800,030)     (842,883)   (2,173,615)   (2,084,155)
      Change in
       non-cash working
       capital (Note 9)    518,450       636,585     1,388,997     1,235,019
                       ------------  ------------  ------------  ------------
                          (281,580)     (206,298)     (784,618)     (849,136)
                       ------------  ------------  ------------  ------------
    Cash flows from
     (used in) financing
     activities
      Loan                       -             -       500,000             -
      Note payable         200,000             -       200,000             -
                       ------------  ------------  ------------  ------------
                           200,000             -       700,000             -
                       ------------  ------------  ------------  ------------
    Net change in
     cash and cash
     equivalents           (81,580)     (206,298)      (84,618)     (849,136)

    Cash and cash
     equivalents
      Beginning of
       period              307,919       461,430       310,957     1,104,268
                       ------------  ------------  ------------  ------------

    End of Period     $    226,339  $    255,132  $    226,339  $    255,132
                       ------------  ------------  ------------  ------------
                       ------------  ------------  ------------  ------------

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

About Imaging Dynamics Company (IDC):

IDC is a medical devices technology company and innovative force in the high growth field of digital radiography (DR) technology. IDC's product line of CCD-based X-Series direct capture technology replaces conventional film-based diagnostic imaging and provides a cost-effective alternative to flat panel (TFT) technology and computed radiography (CR) systems.

Each IDC DR solution provides high resolution radiographic images in the digital format required for today's PACS (Picture Archiving & Communication Systems) and the growing requirements for the electronic health record, all without the use of film, environmentally unfriendly chemicals, cassettes or expensive imaging plates.

Throughout its history, IDC has been recognized by multiple industry organizations and research analysts such as: Frost & Sullivan, Deloitte Technology, MD Buyline, KLAS Enterprises and PROFIT; for its consistent dedication to innovation, global growth and customer focused value proposition.

IDC is based in Calgary, Alberta, Canada.

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: 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.

SOURCE Imaging Dynamics Company Ltd.

For further information: For further information: Mr. M. Thomas Boon, President & Chief Executive Officer, 1.403.251.9939, tboon@imagingdynamics.com; Mr. Swapan Kakumanu, Executive Vice President & Chief Financial Officer, 1.403.251.9939, skakumanu@imagingdynamics.com

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