IMRIS reports second quarter 2012 financial results
WINNIPEG, Aug. 9, 2012 /PRNewswire/ – IMRIS Inc. (NASDAQ: IMRS; TSX: IM)
(“IMRIS” or the “Company”) today reported its results for the second
quarter of 2012. All figures are reported in US dollars.
-- Three VISIUS Surgical Theatres sold in second quarter to hospitals in the U.S. -- Second quarter order bookings of $22 million contribute to $46 million in H1 2012 order bookings -- Backlog increases 26% in first six months to $120 million at June 30, 2012 -- Q2 2012 revenues increase to $17 million from Q1 2012 -- Gross profit as a percentage of sales increases to 39% -- Clearance application for Image Guided Surgical Robotics system filed with FDA
During the second quarter of 2012, IMRIS received orders for three
VISIUS Surgical Theatres continuing the trend seen in the first quarter
and bringing total system orders through the first six months of the
year to six new systems. Revenues were $17.2 million in the quarter
compared with $18.9 million in the second quarter of 2011 and during
the first six months of the year were $20.7 million compared with $29.9
million in the first half of 2011. Net loss in the second quarter was
$4.3 million and $12.6 million in the first half of 2012 compared with
$2.9 million and $7.5 million in the second quarter and first half of
_____________________________________________________________________ | |3 months ended June 30|6 months ended June 30 | |($000's except per | (unaudited) | (unaudited) | |share amounts) |______________________|_______________________| | | 2012 | 2011 |Change| 2012 | 2011 |Change| |______________________|_______|_______|______|________|_______|______| |Sales |17,235 | 18,881| (9%) | 20,728 | 29,938| (31%)| |______________________|_______|_______|______|________|_______|______| |Gross profit | 6,658 | 6,321| 5% | 8,052 | 10,774| (25%)| |______________________|_______|_______|______|________|_______|______| | Gross profit as % of| | | | | | | |sales | 38.6%| 33.5% | n/m1 | 38.8%| 36.0%| n/m| |______________________|_______|_______|______|________|_______|______| |Operating expenses |10,731 | 9,413| 14% | 20,670 | 18,881| 9%| |______________________|_______|_______|______|________|_______|______| |Adjusted EBITDA2 |(2,728)|(1,851)|(47%) |(9,950) |(5,701)| (75%)| |______________________|_______|_______|______|________|_______|______| |Operating loss |(4,073)|(3,092)|(32%) |(12,618)|(8,107)| (56%)| |______________________|_______|_______|______|________|_______|______| |Net income (loss) |(4,282)|(2,873)|(49%) |(12,614)|(7,461)| (69%)| |______________________|_______|_______|______|________|_______|______| |Basic earnings (loss) | | | | | | | |per share |(0.09) | (0.06)|(50%) | (0.28) | (0.17)| (65%)| |______________________|_______|_______|______|________|_______|______| |Diluted earnings | | | | | | | |(loss) per share |(0.09) | (0.06)|(50%) | (0.28) | (0.17)| (65%)| |______________________|_______|_______|______|________|_______|______| |Cash & accounts | | | | | | | |receivable3 |45,462 | 59,582|(24%) | 45,462 | 59,582| (24%)| |______________________|_______|_______|______|________|_______|______| |Total assets |90,460 |103,489|(13%) | 90,460 |103,489| (13%)| |______________________|_______|_______|______|________|_______|______|
Second Quarter and Six Month Results:
Revenues in the second quarter of 2012 were $17.2 million and $20.7
million in the first six months of 2012 compared with $18.9 million and
$29.9 million in the second quarter and first half of 2011
respectively. System delivery activities in the second quarter of 2012
were consistent with 2011 levels; however changes in product mix
resulted in revenues decreasing by approximately $2.0 million. On a
year-to-date basis, changes in product mix together with lower
scheduled installations, contributed to a year-over-year decrease in
system revenues during the first half of 2012.
Service contract revenues were $1.2 million in the second quarter of
2012, compared with $0.8 million in 2011 and were $2.2 million in the
first six months of the year compared with $1.4 million in the first
six months of 2011. The higher year-over-year revenues reflect an
increase in the base of VISIUS Surgical Theatres on service programs in
Gross profit was $6.7 million in the second quarter compared with $6.3
million in Q2 2011. The second quarter 2012 gross profit as a
percentage of sales was 38.6% compared to 33.5% in Q2 2011 when the
Company delivered equipment for a collaborative research arrangement,
resulting in overall lower gross margin for the period. Gross profit
in the second quarter of 2012 was negatively impacted by additional
warranty provisions recorded in the period.
In the first half of 2012 gross profit was $8.1 million compared with
$10.8 million in H1 2011. Gross profit as a percentage of sales
increased to 38.8% from 36.0% in the first half of 2011. The
improvement in year-to-date gross profit as a percentage of sales is
attributable to the absence of the delivery of lower margined equipment
for research activities that occurred in the second quarter of 2011.
Consistent with the Company’s strategic plan for long term growth,
investment to support commercialization of IMRIS’s MR guided radiation
therapy product, image guided surgical robotics system and
intraoperative CT continues in 2012. Representing approximately
one-third of the Company’s total operating expenses, research and
development expenditures were $3.4 million in the second quarter of
2012 compared with $2.1 million in Q2 2011 and $7.0 million in the
first half of 2012 compared with $4.6 million in H1 2011. Other cash
operating expenses to support the continued operation and development
of the business in total have decreased in 2012, as the Company
continues to carefully manage costs. Amortization increased by 14% to
$1.0 million in the second quarter of 2012 and by 14% to $2.0 million
in the first six months of the year, reflecting additions in fixed
Adjusted EBITDA and Operating Loss
Adjusted EBITDA in the second quarter of 2012 was negative $2.7 million
compared with negative $1.9 million in the second quarter of 2011.
Operating loss was $4.1 million in the second quarter of 2012 compared
with an operating loss of $3.1 million in Q1 2011. The year over year
changes in the second quarter Adjusted EBITDA and operating loss
reflect lower revenues and gross profit combined with higher investment
in research and development as described above. The year-over-year
changes in the first half Adjusted EBITDA and operating loss reflect
lower revenues combined with higher investment in research and
development as described above.
Net loss for the second quarter of 2012 was $4.3 million compared to a
net loss of $2.9 million in Q2 2011. Net loss for the first half of
2012 was $12.6 million compared with a net loss of $7.5 million in the
first half of 2011. The higher net losses in 2012 reflect the
year-over-year increases in operating losses, driven primarily by lower
revenue, lower gross profit and higher operating expenses.
Liquidity and Capital Resources
Cash at June 30, 2012 totaled $34.3 million. In addition, the Company
had accounts receivable of $11.2 million. These funds, together with
ongoing operating cash flow, will be used to fund the Company’s working
capital and general corporate purposes.
At June 30, 2012, IMRIS’ backlog was $119.9 million. During the second
quarter of 2012, $17.2 million of backlog was converted into revenues
and $22.1 million in new orders were received. The change in the US
dollar versus the foreign currencies of the orders in backlog resulted
in a $0.7 million decrease in the value of the backlog. Total backlog
at June 30, 2012 was comprised of $78.8 million of system orders and
$41.1 million in service contracts. The Company evaluates backlog and
individual order conversion on a regular basis and its experience is
that orders typically convert into revenues over 12 to 18 months on
average. One order in backlog which is valued at approximately $9.6
million has not proceeded at a rate that is consistent with the typical
experience by the Company. While the customer has not informed IMRIS of
any change in its plans, the Company is continuing to monitor the
order. Any delay in this order’s progress will have no impact on the
finance guidance that has been provided.
510(k) Application for Image Guided Surgical Robotics System – On August 3, 2012 IMRIS submitted a 510(k) Premarket Notification with
the U.S. Food and Drug Administration (FDA) for clearance of its image
guided surgical robotics system. IMRIS’s system is designed to allow a
surgeon to remotely manipulate instruments accurately and provides MR
imaging for enhanced visualization of patient anatomy during surgical
Image Guided Radiation Therapy Update – On July 16, 2012, The U.S. Food and Drug Administration advised IMRIS
that its initial submission relating to the image guided radiation
therapy system IMRIS and Varian Medical are working to bring to market,
is under consideration for the OIVD Pilot Triage-Quick Review program
which has a goal of completing the review within a total of 30 days.
IMRIS’s initial submission is the first of three components that will
be provided as part of the overall submission for regulatory clearance
of the image guided radiation therapy system.
The Company believes the year over year trend seen in the first half of
2012 of strengthening bookings performance will continue driven by the
underlying clinical demand for VISIUS Surgical Theatres.
In 2012, annual revenues are forecast to be in the range of $57
million. Based on the current installation schedule, third quarter
revenues are anticipated to be in the $12 million to $13 million range.
Full year 2012 gross margin is expected to be comparable to 2011 levels,
with quarterly gross margins expected to vary depending on the timing
of underlying system installations in the respective quarters. In Q3
2012, overall margins are expected to be approximately 30% of revenues
as the Company contributes equipment to a third party partner who will
conduct research activities related to cerebrovascular applications as
part of a collaborative arrangement. Beyond the third quarter of 2012,
the Company’s project margins during the subsequent four quarters are
anticipated to increase into the 40% range.
The Company’s priorities for 2012 remain a focused drive to maximize
bookings with targeted marketing programs together with increased
investment to bring the Company’s image guided surgical robot to
market, Investment in research and development activities also include
continued investment in IMRIS’s image guided radiation therapy product,
and to further improve the capabilities of the VISIUS Surgical
Theatre. In 2012, research & development expenses are expected to be
approximately $13 million to $15 million with the remainder of
operating expenses to remain consistent with 2011 levels.
IMRIS is well positioned to build the current business and add new
products for future growth. With cash and accounts receivable at June
30, 2012 of $45.5 million and order backlog of $115.2 million, the
Company has a strong base from which to continue to fund operations and
Management will host a conference call to discuss the results at 5:00 pm ET today, Thursday, August 9, 2012. Following management’s presentation, there will be a
question-and-answer session for analysts and institutional investors.
To participate in the teleconference, please call 416-644-3419 or 877-974-0447. 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 August 16, 2012. To access the rebroadcast,
please call 416-640-1917 or 877-289-8525 and enter passcode 4557411#.
The webcast will also be archived on IMRIS’ website.
IMRIS (NASDAQ: IMRS; TSX: IM) is a global leader in providing image
guided therapy solutions through its VISIUS Surgical Theatre – a
revolutionary, multifunctional surgical environment that provides
unmatched intraoperative vision to clinicians to assist in decision
making and enhance precision in treatment. VISIUS Surgical Theatres
serve the neurosurgical, cardiovascular and cerebrovascular 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 Not meaningful. We define adjusted EBITDA as earnings before interest income, stock 2 based compensation, foreign exchange, embedded derivatives, income taxes, and amortization. 3 Includes restricted cash pledged as security for letters of credit on certain system installations 4 See "Non-GAAP Financial Measures" in the Company's Q2 2012 MD&A for further information on backlog.
“IMRIS 2012 MD&A”. PDF available at: http://files.newswire.ca/1107/IMRISMDA2012Q2.PDF
“IMRIS 2012 Consolidated Financial Statements”. PDF available at: http://files.newswire.ca/1107/IMRIS_2012Q2Fins.pdf
SOURCE IMRIS Inc.