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High-Tech Medical-Digitizing Firm iCAD Posts 82 Percent Quarterly Sales Jump

Posted on: Thursday, 16 March 2006, 18:00 CST

By Karen Spiller, The Telegraph, Nashua, N.H.

Mar. 15--NASHUA -- ICAD's fourth-quarter sales jumped 82 percent over the third quarter, but the company posted a net loss of $1.7 million for the quarter.

The locally based computer aided detection product company also said Tuesday that it expected to request a 15-day extension for the filing of its Form 10-K.

Scott Parr, president and CEO of iCAD, said the company is seeking the extension because of combination of activities related to the potential merger with its competitor and normal audit procedures, among other things.

"We ran out of time. It's as simple as that," Parr said. The company has not requested an extension in the past.

ICAD reported a net loss of $1.7 million, or 5 cents a share, compared with a $658,631 profit, or 2 cents a share, the same time last year. The loss was partly due to an increase in legal expenses.

Some $1.2 million in legal expenses were incurred in the fourth quarter, including about $750,000 associated with the company's ongoing patent arbitration proceedings, and $450,000 associated with settlement and merger discussions with its main competitor.

Also contributing to the loss were increased sales and marketing expenses associated with a doubling in the size of its direct sales force, along with the implementation of expanded direct mail, advertising and trade show programs.

ICAD's fourth-quarter revenue rose to $6.2 million, up from $3.4 million in the third quarter and down from $6.3 million for the quarter ended Dec. 31, 2004.

Parr also said in a conference call with analysts and investors Tuesday that the company is focusing on developing software and other products to detect colon polyps, a precursor many times to colon cancer. ICAD is in the process of setting up an appointment to see U.S. Federal Drug Administration officials, who would have to approve the system.

The company has also decided it will no longer spend much effort developing a lung cancer detection system because, so far, the market for it has not developed yet, Parr said.

ICAD has also inked a deal with China to provide 100 cancer detection systems, 20 of which have already been shipped, Parr said. The systems will be installed mostly in rural health clinics, he said.

The company also reported a backlog of $788,000 in orders as of Dec. 31.

Total product orders taken in the fourth quarter were more than any other quarter in the company's history. More than 150 iCAD systems were shipped in the final quarter of 2005, including five TotalLook systems for the comparative reading of film-based breast studies on digital mammography viewing stations.

For the year ended Dec. 31, 2005, revenue declined to $19.8 million, compared with $23.3 million in the previous year.

ICAD reported a 2005 net loss of $4.7 million, or 13 cents a share, compared with a net loss of $828,263, or 3 cents a share, the same time last year.

Legal expenses of about $2.3 million in 2005 were due mostly to the company's ongoing patent arbitration proceedings and merger discussions.

ICAD ended the year with cash and cash equivalents of $4.6 million and working capital of $3.3 million. The company also maintains a $5 million line of credit of which $4.7 million is available.

In April 2005, iCAD's principal competitor claimed infringement of certain patents. ICAD does not believe it infringes on any valid and enforceable patent of its competitor, and that its competitor does infringe on valid and enforceable iCAD patents. The arbitrator's decision is expected by late March or early April.

ICAD's stock was trading at $1.56 a share at the close of the stock market Tuesday, down two cents from Monday's closing price.

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Copyright (c) 2006, The Telegraph, Nashua, N.H.

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ICAD,

Source: The Telegraph

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