Quantcast

IMRIS REPORTS STRONG FOURTH QUARTER 2010 RESULTS

February 14, 2011

– Net income of $1.7 million –

WINNIPEG, Feb. 14 /PRNewswire-FirstCall/ – IMRIS Inc. (NASDAQ: IMRS; TSX: IM) (“IMRIS” or
the “Company”) today reported its results for the fourth quarter 2010
highlighted by record financial performance that included strong
revenue growth and the Company’s second consecutive quarter of positive
EBITDA(1) and earnings.  All figures are reported in Canadian dollars.

Highlights:

  • Record quarterly sales revenues of $25.2 million
  • Record quarterly gross profit as a percentage of sales of 46.4%
  • Record quarterly EBITDA of $3.6 million and net income of $1.7 million
  • Order bookings of $24.8 million including the first sale of IMRIScardio
    in the Middle East
  • Agreement with Varian Medical Systems to co-develop advanced new
    radiation therapy product
  • Listing on NASDAQ Global Market and completion of financing for net
    proceeds of $50.9 million

Sales revenues in the fourth quarter of 2010 increased by 26% to $25.2
million
compared with Q4 2009.  Year to date December 31, 2010, sales
increased by 62% to $71.8 million.  Gross profit also increased
significantly, by 31% to $11.7 million in the quarter and by 58% to
$31.0 million for all of 2010.  The Company achieved its second
consecutive quarter of positive EBITDA and net income which were $3.6
million
and $1.7 million respectively.  Net loss for full year 2010 was
$1.4 million, representing an 84% improvement over 2009. 

“2010 has been a solid year of growth for our Company,” said David
Graves
, IMRIS CEO.  “We finished the year with a strong fourth quarter,
contributing to the achievement of annual EBITDA of $2.8 million
Customer orders improved throughout 2010 and were $68 million in the
second half of the year.  We are optimistic that annual order bookings
in 2011 will build on this trend and be significantly higher.”

Financial Highlights:

($ 000′s except per share amounts)

(unaudited)

3 months ended Dec 31 12 months ended Dec 31
2010 2009 Change 2010 2009 Change
Sales 25,167 19,922 26.3% 71,755 44,418 61.5%
Gross profit 11,678 8,931 30.8% 31,040 19,669 57.8%
  Gross profit as % of sales 46.4% 44.8% n/m(2) 43.3% 44.3% n/m
Operating expenses 8,994 8,120 10.8% 31,765 26,782 18.6%
EBITDA 3,608 1,408 156.3% 2,811 (4,951) n/m
Operating income (loss) before: 2,684 811 230.9% (725) (7,113) 89.8%
  Foreign exchange loss (1,034) (367) (181.7%) (814) (2,025) 59.8%
  Interest income (expense) 14 (26) n/m 93 (27) n/m
Net income (loss) 1,664 418 298.1% (1,446) (9,165) 84.2%
Basic earnings (loss) per share 0.04 0.02 100% (0.04) (0.33) 87.9%
Diluted earnings (loss) per share 0.04 0.01 300% (0.04) (0.33) 87.9%
Cash, cash equivalents & accounts receivable 76,236 39,991 90.6% 76,236 39,991 90.6%
Total assets 114,949 65,585 75.3% 114,949 65,585 75.3%

Fourth Quarter and Twelve Month Results

Sales

Sales in the fourth quarter of 2010 were $25.2 million, increasing by
26% from $19.9 million in the fourth quarter of 2009. For the twelve
month period of 2010 sales climbed by 62% to $71.8 million.  The
stronger fourth quarter performance is due to increased system
deliveries in 2010 versus 2009. The year to date increase is due to
increased system deliveries and higher average revenue per system.
IMRIS continues to expand its global footprint to provide top line
growth and additional geographic diversification to the revenue mix. 
Through this strategy, revenues from system installations outside North
America
climbed to 21% of total revenues in 2010 compared with only
2.5% in 2009. Growth in revenues from service contracts also
contributed to higher sales results in 2010.  Revenues from service
contracts contributed $0.7 million in the fourth quarter and $2.1
million
year to date compared with $0.5 million and $1.8 million during
the respective periods in 2009. 

Gross Profit

Gross profit increased by 31% to $11.7 million in the quarter and by 58%
to $31.0 million for all of 2010. The improvements reflect strong year
over year growth in sales revenues and changes in gross profit as a
percentage of sales. Gross profit as a percentage of sales reached a
record 46.4% in the fourth quarter and was 43.3% year to date.  In
2009, gross profit as a percentage of sales was 44.8% and 44.3% in the
fourth quarter and 12 months respectively. The increase in quarterly
gross profit as a percentage of sales reflected the delivery of higher
margined systems during the quarter.   On a year to date basis gross
profit was slightly lower due to the delivery of two lower margin
systems earlier in the year.

Operating Expenses

Throughout 2010, IMRIS continued to carefully manage its investment in
operations, driving strong top line growth while at the same time
improving its financial performance. Operating expenses in the fourth
quarter of 2010 were $9.0 million and $31.8 million year to date,
compared to $8.1 million and $26.8 million during the same periods in
2009.  The 2010 increases include a significant increase in non-cash
amortization expense primarily related to the acquisition of NeuroArm
Surgical Limited at the beginning of the year.  In addition, higher
cash operating costs have been incurred to fund growth in the business,
increasing year over year by $0.5 million in the fourth quarter and by
$3.6 million for all of 2010.  IMRIS continues to leverage its
investment in operations to support long term growth.  The benefits of
this approach are reflected in the decrease in operating expenses as a
percentage of sales, which declined to 44% in 2010 from 60% in 2009.

EBITDA

EBITDA in the fourth quarter of 2010 was $3.6 million compared with $1.4
million
in the fourth quarter of 2009.  Year to date, EBITDA improved
to $2.8 million compared with negative $5.0 million in 2009.  With the
strong performance in Q4 2010, IMRIS achieved full year positive EBITDA
performance – a milestone in the Company’s evolution. The year over
year improvements are primarily due to increased gross profit, net of
the higher cash operating expenses described above. 

Operating and Net Income

Operating income increased to $2.7 million from $0.8 million in the
fourth quarter of 2009 contributing to a strong improvement in the
Company’s annual operating loss which was $0.7 million compared with
$7.1 million during 2009. Net income was $1.7 million in the fourth
quarter of 2010 versus $0.4 million in Q4 2009.  Net loss improved by
84% to $1.5 million year to date. The year over year improvements
reflect higher gross profit net of higher operating expenses to fund
growth in revenues.  Foreign exchange losses arising from translation
of foreign currency cash balances also contributed to the year over
year changes.  The Company reported foreign exchange losses of $1.0
million
and $0.8 million in the fourth quarter and full year 2010
compared with foreign exchange losses of $0.4 million and $2.0 million
during the same respective periods in 2009.

Liquidity and Capital Resources

Cash and cash equivalents at December 31, 2010 totaled $60.4 million
In addition the Company had accounts receivable of $15.8 million, the
majority of which are expected to be collected within the next 60
days.  During the fourth quarter of 2010 the Company completed an
equity financing with the issuance of 11,100,000 common shares,
resulting in net proceeds of $50.9 million.  The proceeds from the
offering will be used to fund research and development, support
continued global market penetration of IMRIS products and additional
working capital associated with accelerated sales and production of
IMRS products.

Backlog(3)

At December 31, 2010, IMRIS reported order backlog of $118.2 million -
5% higher than a year earlier, even after record backlog conversion
that delivered revenues of $71.8 million for the year. In the fourth
quarter, 4 new system orders were received contributing to total
bookings of $24.8 million.  These orders included an IMRISneuro sale in
Europe and the Company’s first IMRIScardio sale in the Middle East.    
During the quarter $25.2 million of backlog was converted into
revenues, and the appreciation of the Canadian dollar late in 2010
resulted in a $1.4 million decrease in the valuation of backlog related
to foreign currencies.  Net of these items, backlog at December 31,
2010
was $118.2 million, including $87.4 million of system orders and
$30.8 million of service contracts. 

IMRIS and Varian Medical Systems to Co-Develop MR-Guided Radiation
Therapy System

On October 5, 2010 IMRIS announced an agreement with Varian Medical
Systems to co-develop an innovative new MR-guided radiation therapy
system for use in treating a variety of cancers.  Under the terms of
the agreement, the two companies will develop a solution that combines
IMRIS’s proprietary MR imaging technology with Varian’s TrueBeam(TM) system. Following successful completion of the development stage of
this project, and subject to necessary regulatory approvals, the
companies anticipate co-branding the new MR-guided radiation therapy
suite and leveraging Varian’s global presence and leadership position
in the fields of radiotherapy and radiosurgery to market the new
product.  

2011 Outlook

The Company anticipates a strong year of growth in system orders in
2011.  A number of factors are expected to contribute to this forecast
including an improved capital spending environment in the US healthcare
sector, growing recognition of the value IMRIS solutions offer and
increased orders from outside the United States as the Company’s
investments in other territories gain traction.   Another solid year of
revenue performance in 2011 is expected with system orders in backlog
forecast to convert into revenues at rates higher than in 2010. 
Consistent with prior years, quarterly performance is expected to
continue to be variable with a trend toward higher order flow, revenue,
and financial performance in the back half of the year. Gross profit as
a percentage of sales will be slightly lower than in 2010 as the early
installations of the Company’s newest products IMRISNV and IMRIScardio
continue to be rolled out.  As these products become more established
in the market, the Company’s overall gross profit as a percentage of
sales is expected to increase into the mid 40% range. In support of the
Company’s priorities for the year, operating expenses as a percentage
of sales are expected to increase marginally over 2010 levels, but with
significantly higher year over year research and development
expenditures which are forecast to increase from 8% of revenues in 2010
to 11% to 12% in 2011.  Spending in this area will primarily be used to
advance development of the MR guided radiation therapy and MR guided
surgical robotics products.  Limited increases are anticipated in other
operational areas and amortization expense will increase modestly.

The Company’s full financial statements as well as management’s
discussion and analysis will be available at www.sedar.com and www.imris.com.

Conference Call

Management will host a conference call to discuss the results at 10:30 a.m. ET today, Monday, February 14, 2011.  Following management’s presentation, there will be a
question-and-answer session for analysts and institutional investors. 
To participate in the teleconference, please call 416-644-3414 or 1-800-814-4859.  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 February 21, 2011.   To access the rebroadcast,
please call 416-640-1917 or 877-289-8525 and enter passcode 4407636#. 
The webcast will also be archived on IMRIS’s website.

About IMRIS

IMRIS (NASDAQ: IMRS; TSX: IM) is a global leader in providing image
guided therapy solutions.  These solutions feature fully integrated
surgical and interventional suites that incorporate magnetic resonance,
fluoroscopy and computed tomography to deliver on demand imaging during
procedures. The Company’s systems serve the neurosurgical,
cardiovascular and neurovascular markets and have been selected by
leading medical institutions around the world.

For more information, visit www.imris.com.

Forward-Looking Statements

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
circumstances.

_____________________________________________

(1) EBITDA is defined as earnings before interest income (expense), foreign
exchange gain (loss), taxes and amortization.  See “Non-GAAP Financial
Measures” in the Company’s Q4 2010 MD&A for a reconciliation of EBITDA
to GAAP measures.

(2) Not measurable.

(3) See “Non-GAAP Financial Measures” in the Company’s Q4 2010 MD&A for
further information on backlog.

SOURCE IMRIS Inc.


Source: newswire



comments powered by Disqus