News | February 26, 2009

iCAD Revenue Up 15 Percent in Q408, Up 41 Percent for Full Year

February 26, 2009 - iCAD Inc. reports a 15 percent increase in total revenue in the fourth quarter and for the full year ending Dec. 31, 2008, total revenue increased 41 percent.

Total revenue for the fourth quarter of 2008 was $9.3 million, a 15 percent increase compared with total revenue of $8.1 million for the fourth quarter of 2007. This increase reflects a $1.3 million or 26 percent increase in revenue from the Company’s digital products. In addition to increased digital sales from its OEM partners, the Company also posted higher sales of its comparative reading solution, TotalLook MammoAdvantage which grew 23% over the fourth quarter of 2007.

Total film-based revenue in the fourth quarter of 2008 was essentially flat versus a very strong fourth quarter of 2007. The significant growth attributable to TotalLook MammoAdvantage was largely offset by the decline in film-based CAD product sales. The decrease in service and supply revenue is due to a decline in labor, parts and supplies associated with the Company’s older film-based products. However, service contract revenue grew 10% over the fourth quarter of 2007, and represents 94% of all service and supply revenue as compared to 76% of all service and supply revenue in the prior-year fourth quarter. Moving forward, the Company expects continued growth in service contract revenue as digital CAD systems sales grow and products transition from warranty to service contracts.

The gross margin for the fourth quarter of 2008 expanded to 83.7 percent from 80.5 percent in the prior-year fourth quarter. Operating expenses for the fourth quarter of 2008 increased to $7.5 million from $5.9 million in the fourth quarter of 2007, largely due to costs associated with the product launch of the Company’s new MRI products and investment in the clinical reader study for the Company’s colon CAD product. For the fourth quarter of 2008, the Company posted net income, including stock-based compensation expense of $508,000, of $321,000 or $0.01 per diluted share, compared with net income, including stock-based compensation expense of $387,000, of $525,000 or $0.01 per share in the fourth quarter of 2007. Additionally, the Company generated $2.1 million in cash in the fourth quarter as compared to $491,000 in the fourth quarter of 2007.

For the fourth quarter of 2008, sales of iCAD’s digital products increased 26 percent to $6.3 million from $5.0 million in the prior-year period. Sales of film-based products were relatively flat at $2.2 million, and service and supply revenue declined slightly to $798,000 from $896,000, both compared with the fourth quarter of 2007.

For the year ended December 31, 2008, total revenue increased 41 percent to $37.5 million compared with total revenue of $26.6 million for the year ended December 31, 2007. The gross margin for 2008 expanded to 83.5 percent from 80.2 percent in 2007. Operating expenses for 2008 were $26.5 million compared with operating expenses of $22.5 million incurred during 2007. The increase is largely due to the costs associated with the launch of the Company’s new MRI products and investment in the clinical reader study for the Company’s colon CAD product. Net income for 2008, including stock-based compensation expense of $1.9 million, increased to $4.4 million or $0.10 per diluted share, compared with a net loss, including stock-based compensation expense of $1.2 million, of ($1.6 million) or ($0.04) per share for 2007.

During 2008 sales of iCAD’s digital solutions increased 63 percent to $26.7 million from $16.4 million in 2007. Film-based product sales of $7.4 million were 10 percent higher than the $6.8 million of film-based product sales recorded during 2007. This growth was led by a 40 percent increase in sales of our comparative reading solution, TotalLook MammoAdvantage. While overall service and supply revenue of $3.3 million declined slightly from $3.4 million reported in 2007, service contract revenue grew 16% and represented 88% of all service and supply revenue for the year.

For more information: www.icadmed.com

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