Cedara Software Announces Record Quarterly Revenue and Earnings -
Record quarterly revenue of $24.4 million - up over 80% from same
quarter of previous year TORONTO, April 27 /PRNewswire-FirstCall/
-- CEDARA SOFTWARE CORP. (TSX:CDE/NASDAQ:CDSW), named Fastest
Growing Healthcare Company for 2004 by America's foremost market
research firm Frost and Sullivan, today announced record financial
results for the 2005 fiscal year third quarter ended March 31,
2005. Cedara's revenues for the quarter were $24.4 million, up 81%
from $13.5 million in the same quarter of the previous year. This
is the second quarter to include the impact of Cedara's acquisition
of eMed Technologies which closed on October 8, 2004. Cedara's
revenue from sales to OEM customers grew over 21% for the quarter,
compared to the same quarter last year, and represented 67% of
total third quarter revenue. Revenue from sales directly to
hospitals, imaging centres and medical clinics accounted for the
other 33%. Net income for the quarter was $6.2 million, up 21%
compared to net income of $5.1 million in the same quarter last
year. Reported net income for the quarter incorporates $1.2 million
of expenses associated with the proposed merger with Merge
Technologies Inc. and $0.9 million of purchase accounting
adjustments associated with the acquisition of eMed. Despite these
non- operating expenses, diluted earnings per share were $0.18,
similar to that achieved last year. For the nine months ended March
31, 2005, revenues were $59.7 million, up 67% from $35.7 million in
the previous year. Net income for the nine months ended March 31,
2005 was $14.3 million, up 34% from $10.7 million. Diluted earnings
per share of $0.43 were up from $0.38 in the previous year. Strong
growth in revenue for the quarter included a 36% increase in
software license revenue to $13.2 million. Sales of solutions and
workstations (including bundled software and hardware) increased to
$5.3 million. Support services revenue increased to $3.8 million,
while engineering services revenue declined slightly to $2.1
million. The gross margin of $18.3 million for the quarter, or 75%
of revenue, includes margin from sales directly to hospitals and
imaging clinics at an average of 56% of revenue and a number of new
software license arrangements entered into in the quarter that
traditionally have higher margins. Operating expenses in the third
quarter increased to $12.0 million. The increase reflects:
inclusion of eMed's operating expenses which were not included in
prior comparative periods, the impact of acquisition-related
charges, and increased spending on sales and marketing activities.
For the nine months ended March 31, 2005, operating expenses
increased $13.7 to $30.2 million. "We are delighted with Cedara's
continued success in the medical imaging global marketplace and our
seventh consecutive quarter of strong revenue and profits," said
Abe Schwartz, Cedara's President and Chief Executive Officer. "With
the completion of our pending merger with Merge eFilm, we will
become an even stronger company." "Cedara continues to be
successful because of our excellent engineers, leading technologies
and long-term customer relationships," said Brian Pedlar, Cedara's
Chief Financial Officer. "The market is very excited about Cedara's
industry-leading clinical applications and suite of new
technologies. We are building a very special company with a unique
ability to execute on Cedara's dual strategy of selling world-class
medical technologies to OEMs and directly to hospitals and imaging
centres." On January 18, 2005, Cedara announced it had signed a
definitive agreement to merge with Merge Technologies Incorporated
(NASDAQ:MRGE), d.b.a. Merge eFilm, in an all-stock transaction. The
merger is subject to shareholder and regulatory approval. A special
meeting of Cedara shareholders is set for May 24, 2005 at 10:00 am
at the Toronto Stock Exchange auditorium. Conference Call
Information The Cedara Software Corp. third quarter fiscal 2005
conference call and web cast to discuss results and corporate
strategy is scheduled for 11:00 am EST on Thursday, April 28, 2005.
The conference call can be accessed via audio web cast by visiting:
http://www.cedara.com/investors/teleconference_webcast.htm
Participants in the conference call are asked to dial 416-405-9328
or 1-800-387-6216, five to ten minutes prior to the April 28th,
2005, 11:00 am start of the teleconference to participate in the
call. This conference call will be recorded and will be available
on instant replay at the end of the call, until midnight May 31st,
2005. To listen to the replay, please dial 416-695-5800 or
1-800-408-3053, and enter pass code 3150235 followed by the number
sign. About Cedara Software Corp Cedara Software Corp. is a leading
independent provider of medical imaging technologies. Cedara's
software is deployed in hospitals and clinics worldwide and is
licensed by many of the world's leading medical device and
healthcare information technology companies. Approximately 28,000
medical imaging systems and 6,400 Picture Archiving and
Communications System (PACS) workstations have been licensed to
date. Cedara recently acquired eMed Technologies Corporation,
widely known as a provider of innovative PACS and teleradiology
solutions that have been installed in over 2,000 hospitals and
imaging centres. Cedara is unique in that it has technologies and
expertise that span all the major digital imaging modalities
including computed tomography (CT), magnetic resonance imaging
(MRI), digital X-ray, mammography, ultrasound, echo-cardiology,
angiography, nuclear medicine, positron emission tomography (PET)
and fluoroscopy. Furthermore, the Company's medical imaging
offerings are used in all aspects of clinical workflow including
the capture of a patient's digital image; the archiving,
communication and manipulation of digital images; sophisticated
clinical applications to analyze digital images; and even the use
of imaging in minimally-invasive surgery. On January 18, 2005,
Cedara announced that it had signed a definitive agreement to merge
with Merge Technologies Incorporated (NASDAQ:MRGE), d.b.a. Merge
eFilm, in an all-stock transaction. The merger is subject to
shareholder and regulatory approval. Certain statements contained
in this news release are forward-looking within the meaning of
securities laws and are based on current expectations that are
subject to a number of assumptions, uncertainties and risks, and
the actual results may differ materially from what is currently
expected. In particular, statements relating to the healthcare
imaging software market and market share, relating to the Company's
expectations concerning its licensed software products, relating to
the Company's expectations as to revenues, costs and cash flows,
relating to the acquisition of eMed and relating to the proposed
merger with Merge eFilm are forward looking statements. The
assumptions, uncertainties and risks upon which these forward
looking statements are based include, but are not limited to:
dependence on key personnel of the Company, dependence on major
customers and individual contracts, fluctuations in quarterly
financial results, competitive pressures (including price
competition), rapid technological change, exchange rate
fluctuations, risks associated with international operations,
dependence on intellectual property rights, regulatory clearances
and approvals for new products, risks relating to product defects
and product liability, adverse consequences of financial leverage,
ability to service debt, continued acceptance of the Company's
products, regulatory changes to the health care industry,
seasonality, economic and political conditions, risks relating to
the acquisition of eMed and risks relating to the proposed merger
with Merge eFilm including risks associated with obtaining
regulatory and shareholder approvals without unexpected delays or
conditions, timely implementation and execution of merger
integration plans, retention of customers and the Company's
original employees, successfully leveraging Merge eFilm's and the
Company's comprehensive product offering to the combined customer
base and sustaining continued growth at rates approximating recent
levels. Further information about these risks and uncertainties can
be found in the continuous disclosure documents filed from time to
time by Cedara with the securities regulatory authorities, which
documents are available at http://www.sedar.com/. Three pages of
consolidated financial statements follow: CEDARA SOFTWARE CORP.
Consolidated Balance Sheets (In thousands of Canadian dollars)
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March 31, June 30, 2005 2004
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(Unaudited) Assets Current assets Cash and cash equivalents $
36,640 $ 40,510 Short-term investments - 10,902 Accounts receivable
16,907 7,449 Inventory 1,792 268 Prepaid expenses and other assets
2,377 881
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57,716 60,010 Capital assets 2,189 2,201 Long-term investments
2,839 510 Intangible assets 11,623 373 Goodwill 33,682 9,053
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$ 108,049 $ 72,147
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Liabilities and Shareholders' Equity Current liabilities Bank
indebtedness $ 12,700 $ - Accounts payable and accrued liabilities
8,820 4,207 Deferred revenue 5,360 861 Current liabilities of
discontinued operations - 986
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26,880 6,054 Long-term liability 201 - Non-current portion of
provision for loss on sublease 8 44 Shareholders' equity Capital
stock 163,587 161,536 Contributed surplus 962 388 Deficit (81,545)
(95,875) Cumulative translation adjustment (2,044) -
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80,960 66,049
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$ 108,049 $ 72,147
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CEDARA SOFTWARE CORP. Unaudited Consolidated Statements of
Operations (In thousands of Canadian dollars, except per share
amounts)
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Three Months Ended Nine Months Ended March 31 March 31
----------------------------------------------- 2005 2004 2005 2004
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Revenue $ 24,395 $ 13,450 $ 59,709 $ 35,701 Direct costs 6,062
2,737 15,148 7,708
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Gross margin 18,333 10,713 44,561 27,993 Expenses: Research and
development 3,044 1,971 7,869 6,385 Sales and marketing 3,400 1,068
8,675 3,480 General and administration 3,093 1,848 7,992 5,133
Severance costs (recovery) 171 64 586 (120) Other charges 1,320 22
2,882 240 Amortization of intangible assets 647 47 1,248 149
Depreciation and amortization 330 409 987 1,262
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12,005 5,429 30,239 16,529
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Income before interest expense 6,328 5,284 14,322 11,464 Interest
expense, net 115 156 27 758
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Income from continuing operations 6,213 5,128 14,295 10,706 Income
from discontinued operations - - 35 -
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Net income $ 6,213 $ 5,128 $ 14,330 $ 10,706
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Earnings per share from continuing operations Basic $ 0.20 $ 0.20 $
0.45 $ 0.43 Diluted $ 0.18 $ 0.18 $ 0.43 $ 0.38 Earnings per share
Basic $ 0.20 $ 0.20 $ 0.45 $ 0.43 Diluted $ 0.18 $ 0.18 $ 0.43 $
0.38
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Weighted average number of shares outstanding: Basic 31,680,694
26,007,932 31,519,494 24,723,842 Diluted 33,801,761 28,749,093
33,477,310 28,047,148 CEDARA SOFTWARE CORP. Unaudited Consolidated
Statements of Cash Flows (In thousands of Canadian dollars)
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Three Months Ended Nine Months Ended March 31 March 31 2005 2004
2005 2004
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Cash provided by (used in): Operating activities: Net income from
continuing operations $ 6,213 $ 5,128 $ 14,295 $ 10,706 Items not
involving cash: Depreciation and amortization 1,131 456 2,528 1,411
Stock based compensation expense 330 - 574 - Accretion of interest
on convertible subordinated debentures - - - 36 Other 85 (99) 910
241
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7,759 5,485 18,307 12,394
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Change in non-cash operating working capital: Accounts receivable
684 496 (10,135) (3,372) Inventory (172) 20 (254) 108 Prepaid
expenses and other assets (413) 154 (673) (206) Accounts payable
and accrued liabilities (459) (42) 156 (2,380) Deferred revenue
(170) 1,116 1,294 1,253
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(530) 1,744 (9,612) (4,597)
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7,229 7,229 8,695 7,797 Investing activities: Decrease in short
term investments - - 10,902 - Acquisition of eMed, net of cash
acquired (249) - (36,751) - Proceeds from sale of investments in
shares - - 273 - Additions to intangible assets (41) (12) (61) (66)
Additions to capital assets (142) (225) (646) (656)
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(432) (237) (26,283) (722) Financing activities: Increase
(decrease) in bank indebtedness (5,124) (8,944) 13,297 (9,493)
Decrease in long-term liability (36) - (40) - Issue of shares on
exercise of options 675 775 2,051 1,624 Issue of shares on equity
financing - 47,100 - 47,100 Issue of shares on exercise of warrants
- 105 - 105
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(4,485) 39,036 15,308 39,336 Effect on exchange rate changes on
cash and cash equivalents 115 - (1,555) -
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Change in cash and cash equivalents from continuing operations
2,427 46,028 (3,835) 46,411 Change in cash and cash equivalents
from discontinued operations - 9 (35) (374) Cash and cash
equivalents, beginning of period 34,213 - 40,510 -
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Cash and cash equivalents, end of period $ 36,640 $ 46,037 $ 36,640
$ 46,037
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DATASOURCE: Cedara Software Corp. CONTACT: Brian Pedlar, Chief
Financial Officer, Cedara Software Corp., (905) 672-2100 ext. 2015,
; To request a free copy of this organization's annual report,
please go to http://www.newswire.ca/ and click on reports@cnw.
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