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icad inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 5, 2011 02:47PM

icad inc. (ICAD) filed Quarterly Report for the period ended 2011-06-30. Icad Inc. has a market cap of $36.5 million; its shares were traded at around $0.67 with and P/S ratio of 1.5.



Highlight of Business Operations:

Service and supply revenue increased 55.8% or $771,000 in the three month period ended June 30, 2011, to $2.2 million compared to $1.4 million in three months ended June 30, 2010. Service and supply revenue includes approximately $400,000 related to the Axxent solution. Service and supply revenue relating to our digital CAD and TotalLookMammoAdvantge systems increased approximately 26% as our installed base transitions from warranty to service contracts. We expect service and supply revenue for both digital CAD and electronic brachytherapy products to increase as our installed base continues to transition from warranty to service contracts.

Engineering and Product Development. Engineering and product development costs for the three month period ended June 30, 2011 increased by $1.8 million or 117%, from $1.5 million in 2010 to $3.3 million in 2011. The increase in engineering and product development costs was primarily due to the increase in personnel and related expenses and consulting costs of approximately $980,000 as a result of our acquisition of Xoft and approximately $800,000 related to reader studies. For the six month period ended June 30, 2011 engineering and product development costs increased by $3.0 million or 97%, from $3.1 million in 2010 to $6.1 million in 2011. The increase in engineering and product development costs was primarily due to the increase in personnel and related expenses and consulting costs of approximately $1.8 million, as a result of our acquisition of Xoft, approximately $800,000 related to reader studies, and approximately $205,000 of costs related to the recall of our Axxent Flexishield.

Marketing and Sales. Marketing and sales expenses for the three month period ended June 30, 2011 increased by $1.3 million or 51%, from $2.6 million in 2010 to $3.9 million in 2011. The increase in marketing and sales expense primarily resulted from personnel and related expenses and various administrative expenses totaling approximately $1.2 million as a result of our acquisition of Xoft. Marketing and sales expenses for the six month period ended June 30, 2011 increased by $2.7 million or 53%, from $5.0 million in 2010 to $7.7 million in 2011. The increase in marketing and sales expense primarily resulted from personnel and related expenses and various administrative expenses totaling approximately $2.5 million as a result of our acquisition of Xoft.

General and Administrative. General and administrative expenses for the three month period ended June 30, 2011 increased by $474,000 or 26%, from $1.8 million in 2010 to $2.3 million in 2011. The increase in general and administrative expense is primarily due to legal expenses relating to our patent litigation and an increase cost of headcount of approximately $156,000 related to the Xoft acquisition which is reflected in general and administrative expense, offset by $1.1 million expense reduction due to an adjustment in the fair value of contingent consideration related to the Xoft acquisition. General and administrative expenses for the six month period ended June 30, 2011 increased by $791,000 or 18%, from $4.3 million in 2010 to $5.1 million in 2011. The increase in general and administrative expense for the six months is primarily due to legal expenses relating to our patent litigation and general and administrative cost of approximately $400,000 related to the Xoft acquisition, offset by $1.1 million expense reduction due to an adjustment in the fair value of contingent consideration related to the Xoft acquisition.

Net cash used for operating activities for the six month period ended June 30, 2011 was $7.2 million, compared to net cash provided by operating activities of $824,000 for the six month period ended June 30, 2010. The cash used for operating activities for the six months ended June 30, 2011 resulted from the net loss of $9.3 million, increases in accounts receivable and prepaid expense totaling $644,000 and a decrease in accrued expenses of $1.3 million, which were partially offset by the decrease in inventory of $1.1 million and an increase in deferred revenue of $774,000, plus non-cash items including depreciation, amortization and loss on disposal of assets totaling $1.6 million and stock based compensation of $584,000. We expect that cash provided by operating activities may fluctuate in future periods as a result of a number of factors, including fluctuations in our operating results, specifically the timing of when we recognize revenue, our accounts receivable collections and the timing of other payments.

The net cash used for investing activities for the three month period ended June, 2011 was $1.4 million, which consisted of additions to property and equipment of $191,000 offset by the disposal of patents, technology and other assets of $57,000 and $1.3 million of cash paid for the acquisition of Xoft, compared to the additions to patents, technology and property and equipment totaling $162,000 for the six months ended June 30, 2010.

Read the The complete Report



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