Company Reports Break Even EBITDA in First Quarter Post Apteryx Acquisition
VANCOUVER, BC / ACCESSWIRE / August 17, 2017 / LED Medical Diagnostics Inc. ("LED Medical" or the "Company") (TSX-V: LMD; OTCQB: LEDIF; FRA: LME) today announced its financial results for the second quarter ended June 30, 2017, reported in United States dollars and in accordance with International Financial Reporting Standards ("IFRS"). The Company's results are presented in comparison to the second quarter ended June 30, 2016. All balances are expressed in United States dollars unless otherwise stated.
Business Highlights and Events Subsequent to the Quarter
- Achieved breakeven EBITDA in first full quarter post acquisition of Apteryx.
- Recently signed a significant agreement with a new Dental Service Organization (DSO) representing several hundred practices based on XV Web Product.
- On August 10th VELscope Vx received the prestigious Cellerant Best of Class Technology award, the only dental device to win this award 7 times.
- On July 7th 2017, the Company agreed with the holders of its previously issued 13% senior secured debentures in the principal amount of CDN $385,000 issued in July of 2016 (the "2016 Debentures") to amend the 2016 Debentures by, among other things, extending the terms of the 2016 Debentures until February 10, 2019 and decreasing the interest rate thereof from 13% to 12%. As consideration for such amendments to the 2016 Debentures, LED has issued 391,666 common shares of the Company to the holders of the 2016 Debentures. The Company is issuing the common shares as loan bonuses in accordance with Exchange Policy 5.1 of the TSX Venture Exchange (the "TSX-V"). All securities issued in connection with the transactions are subject to a hold period expiring four months and one day after the closing date.
- LED Medical reported revenue of USD $3.7 million, which is an increase of 77% from the three months ended March 31, 2017 and 1% from the three months ended June 30, 2016.
- The net income was USD $905,000 for the three months ended June 30, 2017, as compared to a net loss of USD $1.1 million for the three months ended June 30, 2016. Inclusive of accounting adjustments, the Company's calculated gross margin was 56% for the three months ended June 30, 2017, as compared to 29% in the three months ended June 30, 2016.
- Total operating expenses for the three months ended June 30, 2017 were USD $2.3 million, as compared to USD $2.1 million for the three months ended June 30, 2016. Core operating expenses (excluding stock-based compensation, deferred share unit compensation and other operating expenses) for the three months ended June 30, 2017 were USD $2.1 million, as compared to USD $2.0 million for the three months ended June 30, 2016.
- The Company had cash of USD $1.5 million as of June 30, 2017. Cash flow used in operations was USD $2.5 million during the six months ended June 30, 2017, compared to USD $1.5 million during the six months ended June 30, 2016. The cash outflows from investing activities during the six months ended June 30, 2017 were USD $10.2 million relating to the purchase of Apteryx, Inc. There were inflows from financing activities for the six months ended June 30, 2017 of $13.6 million attributed to the financing related to the purchase of Apteryx.
"I'm pleased to report that we experienced significant revenue growth over the prior quarter with a solid financial performance culminating in breakeven EBITDA from operations during the three months ended June 30, 2017," stated LED CEO, Dr. David Gane. "The second quarter of 2017 represented the first full quarter of operations with Apteryx as a wholly owned subsidiary of LED and underscores the quality of the Company we acquired as well as the positive impact we expect it to have on our future business growth as dentists increasingly embrace the many benefits of our cloud based imaging software service."
Financial Statements and Management's Discussion & Analysis
Please see the audited consolidated financial statements and related Management's Discussion & Analysis ("MD&A") for more details. The interim consolidated financial statements for the three months ended June 30, 2017 and related MD&A have been reviewed and approved by the Company's Audit Committee and Board of Directors. The Company has prepared this truncated news release to alert investors to its results and that a more detailed explanation and analysis is readily available in the MD&A. These reports have been filed on SEDAR at www.sedar.com and also posted to www.ledmd.com.
The following and preceding discussion of financial results includes references to Gross Margin and Core Operating Expenses, which are non-IFRS financial measures. The measure of gross margin is provided as management believes this is a good indicator in evaluating the operating performance of the Company. EBITDA is defined as net loss and comprehensive loss and excludes interest; income taxes; depreciation; amortization; finder's warrants issuance costs; stock-based compensation; deferred share unit compensation; mark to market adjustments on Canadian dollar denominated warrants; foreign exchange gain or loss; and other income. The measure of working capital is provided as management believes this is a good indicator of the operating liquidity available to the Company.
About LED Medical Diagnostics Inc.
Founded in 2003 and headquartered in Vancouver, British Columbia, Canada, LED Medical Diagnostics Inc., through its wholly-owned subsidiaries LED Dental Inc. and LED Dental Ltd., provide dentists and oral health specialists with advanced diagnostic imaging products and software, in addition to the award-winning VELscope® Vx tissue fluorescence visualization technology. Backed by an experienced leadership team and dedicated to a higher level of service and support, LED Dental is committed to providing dental practitioners with the best technology available by identifying and adding leading products to its growing portfolio.
The Company is currently listed on the TSX Venture Exchange (TSX-V) under the symbol "LMD," the OTCQB under the symbol "LEDIF," as well as the Frankfurt Stock Exchange under the symbol "LME." For more information, call 844.952.7327 or visit www.leddental.com/investor-relations.
Bristol Capital Glen Akselrod
Phone: 905-326-1888 x10
LED Dental Chris Koch
LED Medical David Gane, CEO
Phone: 604-434-4614 x227
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward Looking Statements
This press release contains statements which, to the extent that they are not recitations of historical fact, may constitute forward-looking information under applicable Canadian securities legislation that involve risks and uncertainties. Such forward-looking statements or information include statements regarding, but not limited to the Company's future growth strategy, its distribution strategy and product offerings, potential expansion of the Company's technology to other medical applications or markets, or the potential introduction of new technologies by the Company. Persons reading this press release are cautioned that such statements or information are only predictions, and that the Corporation's actual future results or performance may be materially different. Factors that could cause actual events or results to differ materially from those suggested by these forward-looking statements include, but are not limited to competition risks, distributor risks, product development risks such as regulatory, design, intellectual property and otherfactors described in the Corporation's reports filed on SEDAR including its Annual Information Form and financial report for the year ended December 31, 2016. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. All forward-looking statements made in this press release are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by the Company will be realized. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
1 EBITDA or Earnings before Interest, Taxes Depreciation and Amortization is a non-IFRS measure that does not have a standardized meaning and may not be comparable to a similar measure disclosed by other issuers. This measure does not have a comparable GAAP measure. EBITDA referenced here relates to net loss and comprehensive loss and excludes interest, income taxes, depreciation, amortization, finder's warrants issuance costs, stock-based compensation, deferred share unit compensation, mark to market adjustments on Canadian dollar denominated warrants, foreign exchange gain or loss and other income. This measure does not have a comparable IFRS measure and is used by the Company to manage and evaluate the cash operating loss of the business.
2 Gross margin is a non-IFRS measure that does not have a standard meaning and may not be comparable to a similar measure disclosed by other issuers. Gross margin referenced here relates to revenues less cost of sales. This measure does not have a comparable IFRS measure and is used by the Company to manage and evaluate the operating performance of the Company.
3 Core operating expense is a non-IFRS measure that does not have a standardized meaning and may not be comparable to a similar measure disclosed by other issuers. This measure does not have a comparable IFRS measure. Core operating expense includes sales and marketing, research and development and administration expense. The Company believes that the inclusion of this no-IFRS measure financial measure provides investors with an alternative presentation useful to investors' understanding of the Company's core operating results and trends.
SOURCE: LED Medical Diagnostics Inc.
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