iCAD Reports First Quarter 2006 Operating Results

NASHUA, N.H., April 27  /PRNewswire-FirstCall/ -- iCAD(R), Inc. (NASDAQ: ICAD), an industry-leading provider of Computer-Aided Detection (CAD) solutions for the early identification of cancer, today reported its financial results for the first quarter ended March 31, 2006.  iCAD sales for the quarter ended March 31, 2006 were $4,373,650 compared with $6,007,607 in the first quarter of 2005. Gross margin remained constant at 79% of sales in the first quarter 2006 and prior-year first quarter. Net loss for the first quarter of 2006 totaled ($1,605,894) or ($0.04) per share, compared with net income of $641,929 or $0.02 per share, in the prior-year quarter.

"Sales in iCAD's first quarter of 2006," indicated W. Scott Parr, President and CEO, "were significantly and adversely affected by discussions underway at the time regarding a potential merger with our principal competitor. The possibility of such a merger required that the Company defer hiring to fill key sales and marketing management positions, and caused a significant distraction to our field sales force".   Parr continued, "Since the February decision by iCAD's Board to terminate such merger discussions, we have made substantial progress in correcting these problems."

"First quarter expenses," Parr explained, "were increased by continuing costs of the Company's patent infringement arbitration with its principal competitor, as well as professional and other expenses associated with merger discussions.  With the conclusion of our successful defense against infringement claims, and a renewed commitment to succeeding independently in our markets, these unplanned expenses are behind us."

On April 24, 2006, iCAD announced that Kenneth W. Ferry would join the Company on May 15, 2006, as President and CEO.  W. Scott Parr will leave the President and CEO positions at that time, and become iCAD's non-executive Vice Chairman of the Board of Directors.

Conference Call

As previously announced, iCAD will host a conference call today, April 27, 2006, at 11:00 am EDT. Shareholders and other interested parties can participate in the conference call by dialing [phone] in the US and Canada or [phone] for international/local participants, and entering passcode 56272639 a few minutes before 11:00 a.m. on April 27, 2006. The call will also be broadcast live on the Internet at http://www.streetevents.com/, http://www.fulldisclosure.com/ and http://www.icadmed.com/ .

A replay of the conference call will be available two hours after its completion on April 27, 2006 until May 4, 2006 by dialing [phone] in the US and Canada or [phone] for international/local participants, and entering passcode 70215480. The call will also be archived for 90 days at http://www.streetevents.com/, http://www.fulldisclosure.com/ and http://www.icadmed.com/.

About iCAD, Inc.

iCAD, Inc. is an industry-leading provider of Computer-Aided Detection (CAD) solutions that enable healthcare professionals to identify cancer and other life-threatening conditions earlier by making medical services more effective, more accessible and more affordable for patients worldwide. Recipient of Frost & Sullivan's Growth Strategy Leadership award and repeatedly recognized as offering "The Winning Combination" of Price and Performance by MD Buyline, iCAD offers a comprehensive range of high- performance, upgradeable CAD systems for the high, mid and low volume mammography markets. As the most frequently selected CAD solution for film- based and digital breast screening, iCAD is entrusted with the task of early cancer detection by almost fifteen hundred women's healthcare centers worldwide. For more information, call +1 877 iCADnow or visit http://www.icadmed.com/.

  "Safe Harbor" Statement under the Private Securities Litigation Reform Act
   of 1995:


Certain statements contained in this News Release constitute "forward- looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such factors include, but are not limited to, the risks of uncertainty of patent protection, the impact of supply and manufacturing constraints or difficulties, product market acceptance, possible technological obsolescence, increased competition, customer concentration and other risks detailed in the Company's filings with the Securities and Exchange Commission.  The words "believe", "demonstrate", "intend", "expect", "estimate", "anticipate", "likely", and similar expressions identify forward- looking statements.  Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date the statement was made.  The Company is under no obligation to provide any updates to any information contained in this release.

  iCAD and Second Look are registered trademarks of iCAD, Inc.


                                  iCAD, INC.

                    Consolidated Statements of Operations


                                          Three Months       Three Months
                                         March 31, 2006     March 31, 2005
                                           (unaudited)       (unaudited)

  Sales                                      $4,373,650        $6,007,607
  Cost of sales                                 918,879         1,273,573
  Gross margin                                3,454,771         4,734,034

  Operating expenses:
    Engineering and product development       1,319,198         1,016,048
    General and administrative                1,749,053         1,222,208
    Marketing and sales                       1,985,687         1,750,966
        Total operating expenses              5,053,938         3,989,222

  Income (loss) from operations              (1,599,167)          744,812

  Interest expense - net                          6,727            32,883

  Net income (loss) before provision
   for income taxes                          (1,605,894)          711,929

  Provision for income taxes                          -            70,000

  Net income (loss)                          (1,605,894)          641,929

  Preferred dividend                             30,432            30,432

  Net income (loss) attributable to
   common stockholders                      $(1,636,326)         $611,497

  Net income (loss) per share:
   Basic and Diluted                             $(0.04)            $0.02

  Weighted average number of shares
   used in computing income (loss) per share:
   Basic                                     36,863,386        36,384,185
   Diluted                                   36,863,386        38,754,414


                                 iCAD, INC.

                         Consolidated Balance Sheets

                                            March 31,       December 31,
                                              2006              2005
                 Assets                    (unaudited)
  Current assets:
    Cash and cash equivalents              $3,233,402        $4,604,863
    Trade accounts receivable, net of
     allowance for doubtful
     accounts of $463,000 in 2006 and
     $450,000 in 2005                       2,814,555         3,958,392
    Inventory                               3,097,089         2,517,467
    Prepaid and other current assets          274,111           176,133
        Total current assets                9,419,157        11,256,855

  Property and equipment:
    Equipment                               3,140,901         3,038,344
    Leasehold improvements                    120,012           120,012
    Furniture and fixtures                    149,803           149,803
                                            3,410,716         3,308,159
    Less accumulated depreciation and
     amortization                           1,691,121         1,523,724
        Net property and equipment          1,719,595         1,784,435

  Other assets:
    Patents, net of accumulated
     amortization                             204,988           224,519
    Technology intangibles, net of
     accumulated amortization               4,193,987         4,348,008
    Tradename, distribution agreements
     and other, net of accumulated
     amortization                             342,450           398,733
    Goodwill                               43,515,285        43,515,285
        Total other assets                 48,256,710        48,486,545

        Total assets                      $59,395,462       $61,527,835

  Liabilities and Stockholders' Equity
  Current liabilities:
    Accounts payable                       $4,546,868        $4,250,574
    Accrued interest                           55,169            48,167
    Accrued salaries and other expenses     1,264,671         1,868,736
    Deferred revenue                          679,002           499,279
    Current maturities of note payable      1,500,000         1,500,000
        Total current liabilities           8,045,710         8,166,756

  Loans payable to related party              258,906           258,906
  Note payable, less current maturities             -           375,000
        Total liabilities                   8,304,616         8,800,662

  Commitments and contingencies

  Stockholders' equity:
  Preferred stock, $ .01 par value:
   authorized 1,000,000 shares; issued and
   outstanding 6,374 in 2006 and 2005,
   with an aggregate liquidation value
   of $1,739,000 in 2006 and 2005,
   plus 7% annual dividend                         64                64
  Common stock, $ .01 par value:
   authorized 50,000,000 shares; issued
   36,931,262 shares in 2006 and
   2005; outstanding 36,863,386
   shares in 2006 and 2005                     369,312           369,312
  Additional paid-in capital               130,750,998       130,781,430
  Accumulated deficit                      (79,079,264)      (77,473,369)
  Treasury stock at cost (67,876
   common shares)                             (950,264)         (950,264)
        Total stockholders' equity          51,090,846        52,727,173

        Total liabilities and
         stockholders' equity              $59,395,462       $61,527,835


DATASOURCE: iCAD, Inc.



CONTACT:  Kevin McGrath of Cameron Associates for iCAD, Inc.,

[phone], 



Web site:  http://www.icadmed.com/ 

Copyright