Cedara (NASDAQ:CDSW)
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Cedara Software Announces Record Quarterly Revenue and Earnings
- Record quarterly revenue of $24.4 million - up over 80% from same quarter of
previous year
TORONTO, April 27 /PRNewswire-FirstCall/ -- CEDARA SOFTWARE CORP.
(TSX:CDE/NASDAQ:CDSW), named Fastest Growing Healthcare Company for 2004 by
America's foremost market research firm Frost and Sullivan, today announced
record financial results for the 2005 fiscal year third quarter ended March 31,
2005.
Cedara's revenues for the quarter were $24.4 million, up 81% from $13.5 million
in the same quarter of the previous year. This is the second quarter to include
the impact of Cedara's acquisition of eMed Technologies which closed on October
8, 2004. Cedara's revenue from sales to OEM customers grew over 21% for the
quarter, compared to the same quarter last year, and represented 67% of total
third quarter revenue. Revenue from sales directly to hospitals, imaging
centres and medical clinics accounted for the other 33%.
Net income for the quarter was $6.2 million, up 21% compared to net income of
$5.1 million in the same quarter last year. Reported net income for the quarter
incorporates $1.2 million of expenses associated with the proposed merger with
Merge Technologies Inc. and $0.9 million of purchase accounting adjustments
associated with the acquisition of eMed. Despite these non- operating expenses,
diluted earnings per share were $0.18, similar to that achieved last year.
For the nine months ended March 31, 2005, revenues were $59.7 million, up 67%
from $35.7 million in the previous year. Net income for the nine months ended
March 31, 2005 was $14.3 million, up 34% from $10.7 million. Diluted earnings
per share of $0.43 were up from $0.38 in the previous year.
Strong growth in revenue for the quarter included a 36% increase in software
license revenue to $13.2 million. Sales of solutions and workstations
(including bundled software and hardware) increased to $5.3 million. Support
services revenue increased to $3.8 million, while engineering services revenue
declined slightly to $2.1 million.
The gross margin of $18.3 million for the quarter, or 75% of revenue, includes
margin from sales directly to hospitals and imaging clinics at an average of
56% of revenue and a number of new software license arrangements entered into
in the quarter that traditionally have higher margins.
Operating expenses in the third quarter increased to $12.0 million. The
increase reflects: inclusion of eMed's operating expenses which were not
included in prior comparative periods, the impact of acquisition-related
charges, and increased spending on sales and marketing activities. For the nine
months ended March 31, 2005, operating expenses increased $13.7 to $30.2
million.
"We are delighted with Cedara's continued success in the medical imaging global
marketplace and our seventh consecutive quarter of strong revenue and profits,"
said Abe Schwartz, Cedara's President and Chief Executive Officer. "With the
completion of our pending merger with Merge eFilm, we will become an even
stronger company."
"Cedara continues to be successful because of our excellent engineers, leading
technologies and long-term customer relationships," said Brian Pedlar, Cedara's
Chief Financial Officer. "The market is very excited about Cedara's
industry-leading clinical applications and suite of new technologies. We are
building a very special company with a unique ability to execute on Cedara's
dual strategy of selling world-class medical technologies to OEMs and directly
to hospitals and imaging centres."
On January 18, 2005, Cedara announced it had signed a definitive agreement to
merge with Merge Technologies Incorporated (NASDAQ:MRGE), d.b.a. Merge eFilm,
in an all-stock transaction. The merger is subject to shareholder and
regulatory approval. A special meeting of Cedara shareholders is set for May
24, 2005 at 10:00 am at the Toronto Stock Exchange auditorium.
Conference Call Information
The Cedara Software Corp. third quarter fiscal 2005 conference call and web
cast to discuss results and corporate strategy is scheduled for 11:00 am EST on
Thursday, April 28, 2005. The conference call can be accessed via audio web
cast by visiting:
http://www.cedara.com/investors/teleconference_webcast.htm
Participants in the conference call are asked to dial 416-405-9328 or
1-800-387-6216, five to ten minutes prior to the April 28th, 2005, 11:00 am
start of the teleconference to participate in the call. This conference call
will be recorded and will be available on instant replay at the end of the
call, until midnight May 31st, 2005. To listen to the replay, please dial
416-695-5800 or 1-800-408-3053, and enter pass code 3150235 followed by the
number sign.
About Cedara Software Corp
Cedara Software Corp. is a leading independent provider of medical imaging
technologies. Cedara's software is deployed in hospitals and clinics worldwide
and is licensed by many of the world's leading medical device and healthcare
information technology companies. Approximately 28,000 medical imaging systems
and 6,400 Picture Archiving and Communications System (PACS) workstations have
been licensed to date. Cedara recently acquired eMed Technologies Corporation,
widely known as a provider of innovative PACS and teleradiology solutions that
have been installed in over 2,000 hospitals and imaging centres. Cedara is
unique in that it has technologies and expertise that span all the major
digital imaging modalities including computed tomography (CT), magnetic
resonance imaging (MRI), digital X-ray, mammography, ultrasound,
echo-cardiology, angiography, nuclear medicine, positron emission tomography
(PET) and fluoroscopy. Furthermore, the Company's medical imaging offerings are
used in all aspects of clinical workflow including the capture of a patient's
digital image; the archiving, communication and manipulation of digital images;
sophisticated clinical applications to analyze digital images; and even the use
of imaging in minimally-invasive surgery. On January 18, 2005, Cedara announced
that it had signed a definitive agreement to merge with Merge Technologies
Incorporated (NASDAQ:MRGE), d.b.a. Merge eFilm, in an all-stock transaction.
The merger is subject to shareholder and regulatory approval.
Certain statements contained in this news release are forward-looking within
the meaning of securities laws and are based on current expectations that are
subject to a number of assumptions, uncertainties and risks, and the actual
results may differ materially from what is currently expected. In particular,
statements relating to the healthcare imaging software market and market share,
relating to the Company's expectations concerning its licensed software
products, relating to the Company's expectations as to revenues, costs and cash
flows, relating to the acquisition of eMed and relating to the proposed merger
with Merge eFilm are forward looking statements. The assumptions, uncertainties
and risks upon which these forward looking statements are based include, but
are not limited to: dependence on key personnel of the Company, dependence on
major customers and individual contracts, fluctuations in quarterly financial
results, competitive pressures (including price competition), rapid
technological change, exchange rate fluctuations, risks associated with
international operations, dependence on intellectual property rights,
regulatory clearances and approvals for new products, risks relating to product
defects and product liability, adverse consequences of financial leverage,
ability to service debt, continued acceptance of the Company's products,
regulatory changes to the health care industry, seasonality, economic and
political conditions, risks relating to the acquisition of eMed and risks
relating to the proposed merger with Merge eFilm including risks associated
with obtaining regulatory and shareholder approvals without unexpected delays
or conditions, timely implementation and execution of merger integration plans,
retention of customers and the Company's original employees, successfully
leveraging Merge eFilm's and the Company's comprehensive product offering to
the combined customer base and sustaining continued growth at rates
approximating recent levels. Further information about these risks and
uncertainties can be found in the continuous disclosure documents filed from
time to time by Cedara with the securities regulatory authorities, which
documents are available at http://www.sedar.com/.
Three pages of consolidated financial statements follow:
CEDARA SOFTWARE CORP.
Consolidated Balance Sheets
(In thousands of Canadian dollars)
-------------------------------------------------------------------------
March 31, June 30,
2005 2004
-------------------------------------------------------------------------
(Unaudited)
Assets
Current assets
Cash and cash equivalents $ 36,640 $ 40,510
Short-term investments - 10,902
Accounts receivable 16,907 7,449
Inventory 1,792 268
Prepaid expenses and other assets 2,377 881
-------------------------------------------------------------------------
57,716 60,010
Capital assets 2,189 2,201
Long-term investments 2,839 510
Intangible assets 11,623 373
Goodwill 33,682 9,053
-------------------------------------------------------------------------
$ 108,049 $ 72,147
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities
Bank indebtedness $ 12,700 $ -
Accounts payable and accrued liabilities 8,820 4,207
Deferred revenue 5,360 861
Current liabilities of discontinued operations - 986
-------------------------------------------------------------------------
26,880 6,054
Long-term liability 201 -
Non-current portion of provision for loss on
sublease 8 44
Shareholders' equity
Capital stock 163,587 161,536
Contributed surplus 962 388
Deficit (81,545) (95,875)
Cumulative translation adjustment (2,044) -
-------------------------------------------------------------------------
80,960 66,049
-------------------------------------------------------------------------
$ 108,049 $ 72,147
-------------------------------------------------------------------------
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CEDARA SOFTWARE CORP.
Unaudited Consolidated Statements of Operations
(In thousands of Canadian dollars, except per share amounts)
-------------------------------------------------------------------------
Three Months Ended Nine Months Ended
March 31 March 31
-----------------------------------------------
2005 2004 2005 2004
-------------------------------------------------------------------------
Revenue $ 24,395 $ 13,450 $ 59,709 $ 35,701
Direct costs 6,062 2,737 15,148 7,708
-------------------------------------------------------------------------
Gross margin 18,333 10,713 44,561 27,993
Expenses:
Research and
development 3,044 1,971 7,869 6,385
Sales and marketing 3,400 1,068 8,675 3,480
General and
administration 3,093 1,848 7,992 5,133
Severance costs
(recovery) 171 64 586 (120)
Other charges 1,320 22 2,882 240
Amortization of
intangible assets 647 47 1,248 149
Depreciation and
amortization 330 409 987 1,262
-----------------------------------------------------------------------
12,005 5,429 30,239 16,529
-------------------------------------------------------------------------
Income before interest
expense 6,328 5,284 14,322 11,464
Interest expense, net 115 156 27 758
-------------------------------------------------------------------------
Income from continuing
operations 6,213 5,128 14,295 10,706
Income from discontinued
operations - - 35 -
-------------------------------------------------------------------------
Net income $ 6,213 $ 5,128 $ 14,330 $ 10,706
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings per share from
continuing operations
Basic $ 0.20 $ 0.20 $ 0.45 $ 0.43
Diluted $ 0.18 $ 0.18 $ 0.43 $ 0.38
Earnings per share
Basic $ 0.20 $ 0.20 $ 0.45 $ 0.43
Diluted $ 0.18 $ 0.18 $ 0.43 $ 0.38
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average number
of shares outstanding:
Basic 31,680,694 26,007,932 31,519,494 24,723,842
Diluted 33,801,761 28,749,093 33,477,310 28,047,148
CEDARA SOFTWARE CORP.
Unaudited Consolidated Statements of Cash Flows
(In thousands of Canadian dollars)
-------------------------------------------------------------------------
Three Months Ended Nine Months Ended
March 31 March 31
2005 2004 2005 2004
-------------------------------------------------------------------------
Cash provided by (used
in):
Operating activities:
Net income from
continuing
operations $ 6,213 $ 5,128 $ 14,295 $ 10,706
Items not involving
cash:
Depreciation and
amortization 1,131 456 2,528 1,411
Stock based
compensation
expense 330 - 574 -
Accretion of interest
on convertible
subordinated
debentures - - - 36
Other 85 (99) 910 241
-------------------------------------------------------------------------
7,759 5,485 18,307 12,394
-------------------------------------------------------------------------
Change in non-cash
operating working
capital:
Accounts receivable 684 496 (10,135) (3,372)
Inventory (172) 20 (254) 108
Prepaid expenses and
other assets (413) 154 (673) (206)
Accounts payable and
accrued liabilities (459) (42) 156 (2,380)
Deferred revenue (170) 1,116 1,294 1,253
-------------------------------------------------------------------------
(530) 1,744 (9,612) (4,597)
-------------------------------------------------------------------------
7,229 7,229 8,695 7,797
Investing activities:
Decrease in short term
investments - - 10,902 -
Acquisition of eMed,
net of cash acquired (249) - (36,751) -
Proceeds from sale of
investments in shares - - 273 -
Additions to intangible
assets (41) (12) (61) (66)
Additions to capital
assets (142) (225) (646) (656)
-------------------------------------------------------------------------
(432) (237) (26,283) (722)
Financing activities:
Increase (decrease) in
bank indebtedness (5,124) (8,944) 13,297 (9,493)
Decrease in long-term
liability (36) - (40) -
Issue of shares on
exercise of options 675 775 2,051 1,624
Issue of shares on
equity financing - 47,100 - 47,100
Issue of shares on
exercise of warrants - 105 - 105
-------------------------------------------------------------------------
(4,485) 39,036 15,308 39,336
Effect on exchange rate
changes on cash and
cash equivalents 115 - (1,555) -
-------------------------------------------------------------------------
Change in cash and cash
equivalents from
continuing operations 2,427 46,028 (3,835) 46,411
Change in cash and cash
equivalents from
discontinued
operations - 9 (35) (374)
Cash and cash
equivalents,
beginning of period 34,213 - 40,510 -
-------------------------------------------------------------------------
Cash and cash
equivalents, end of
period $ 36,640 $ 46,037 $ 36,640 $ 46,037
-------------------------------------------------------------------------
-------------------------------------------------------------------------
DATASOURCE: Cedara Software Corp.
CONTACT: Brian Pedlar, Chief Financial Officer, Cedara Software Corp.,
(905) 672-2100 ext. 2015, ;
To request a free copy of this organization's annual report, please go to
http://www.newswire.ca/ and click on reports@cnw.