Vancouver, British Columbia - April 28, 2017 -
LED Medical Diagnostics Inc. ("LED Medical" or the
"Company") today announced its financial results for the fourth quarter and full year ended
December 31, 2016, reported in United States dollars and in accordance with International Financial
Reporting Standards ("IFRS"). The Company's results are presented in comparison to the fourth
quarter and full year ended December 31, 2015. All balances are expressed in United States dollars
unless otherwise stated.
"LED experienced a decline in revenue in fiscal 2016 of $10.2 million from $13.1 million in the
prior fiscal 2015, which is partially attributable to the Company experiencing cash constraints in
late fiscal 2016 that hindered its ability to purchase inventory in order to capitalize on sales
opportunities during the height of seasonality for capital equipment purchases in the US dental
market. This was addressed by the Companys recent capitalization initiatives tied to the
acquisition of Apteryx Inc. in early fiscal 2017," commented Company CEO Dr. David Gane. "The
integration of Apteryx into our business is going well and we anticipate a positive impact on
financial performance over the balance of the year due to our newly expanded customer base and
software product offerings at higher gross margins."
LED Medical reported revenue of $10.2 million as compared to the prior fiscal year revenue of $13.1
million, and revenues for the three months ended December 31, 2016 of $1.9 million.
Three-Month Comparative Results
The Company reported revenue of $1.9 million for the three months ended December 31, 2016 which is
down 67% compared to $5.6 million for the three months ended December 31, 2015 and 25% lower
compared to $2.5 million for the three months ended September 30, 2016. Net loss was $1.39 million
for the three months ended December 31, 2016, as compared to a net loss of $1.1million for the
three months ended December 31, 2015. Inclusive of accounting adjustments, the Company's calculated
gross margin2 was 14% for the three months ended December 31, 2016, as compared to 29% in the three
months ended December 31, 2015. Total operating expenses for the three months ended December 31,
2016 were $1.52 million as compared to $2.55 million for the three months ended December 31, 2015.
Core operating expenses3 (excluding stock-based compensation, deferred share unit compensation and
other operating expenses) for the three months ended December 31, 2016 were $1.4 million, as
compared to $2.4 million for the three months ended December 31, 2015.
Twelve-Month Comparative Results
The Company reported revenue of $10.2 million for the year ended December 31, 2016 which is down
22% compared to $13.1 million for the year ended December 31, 2015. Net loss was $5.4 million for
the year ended December 31, 2016 as compared to a net loss of
$5.2 million for the year ended December 31, 2015. Gross margin2
year ended December 31, 2016, a decrease from 27% in the year ended December 31, 2015. Total operating
expenses for the year ended December 31, 2016, were $7.0 million as compared to $8.8 million for
the year ended December 31, 2015. Core operating expenses3
(excluding stock-based compensation,
deferred share unit compensation and other operating expenses) for the year ended December 31, 2016
were $7.0 million, as compared to $8.3 million for the year ended December 31, 2015.
Business Highlights, Financial Statements and Management's Discussion & Analysis
On Feb 13, 2017, LED Medical Diagnostics announced the closing of the acquisition of Apteryx, Inc.
(Apteryx), an Ohio-based imaging software company, for an aggregate purchase price of US$10.25
million. Through a combination of debt and equity, the Company successfully raised gross proceeds
totaling approximately C$14.4 million with which to make the acquisition.
"These two related transactions provided LED a needed re-capitalization of its business as well as
the addition of a new profitable business unit expected to transform the Company in 2017,"
commented LED CEO Dr. David Gane. "The revenue decrease in 2016 is largely attributed to the
Company's low available cash position at September 30, 2016 and resultant inability to purchase
inventory to take advantage of Q4 sales opportunities during the height of sales seasonality,"
added Dr. Gane.
Gross Margins in Q4 2016 were abnormally low due to lower margins on imaging sales due to year-end
competitive pricing pressures and a significant year-end inventory adjustment.
Please see the audited consolidated financial statements
and related Management's Discussion & Analysis
("MD&A") for more details. The audited consolidated financial statements for the year ended December 31, 2016 and related MD&A have been reviewed and approved by the Company's Audit Committee and Board of Directors. The Company has prepared this truncated news release to alert investors to its results and that a more detailed explanation and analysis is readily available in the MD&A. These reports have been filed on SEDAR at www.sedar.com
and also posted to www.ledmd.com
The following and preceding discussion of financial results includes references to Gross Margin and
Core Operating Expenses, which are non-IFRS financial measures. The measure of gross margin is
provided as management believes this is a good indicator in evaluating the operating performance of
the Company. EBITDA is defined as net loss and comprehensive loss and excludes interest; income
taxes; depreciation; amortization; finder's warrants issuance costs; stock-based compensation;
deferred share unit compensation; mark to market adjustments on Canadian dollar denominated
warrants; foreign exchange gain or loss; and other income. The measure of working capital is
provided as management believes this is a good indicator of the operating liquidity available to
About LED Medical Diagnostics Inc.
Founded in 2003 and headquartered in Vancouver, British Columbia, Canada, LED Medical Diagnostics
Inc., through its wholly-owned subsidiaries LED Dental Inc. and LED Dental Ltd, provide dentists
and oral health specialists with advanced diagnostic imaging products and software, in addition to
the award-winning VELscope® Vx tissue fluorescence visualization technology. Backed by an
experienced leadership team and dedicated to a higher level of service and support, LED Dental is
committed to providing dental practitioners with the best technology available by identifying and
adding leading products to its growing portfolio.
The Company is currently listed on the TSX Venture Exchange (TSX-V) under the symbol "LMD", the OTCQB under the symbol "LEDIF", as well as the Frankfurt Stock Exchange under the symbol "LME". For more information, call 844.952.7327 or visit www.leddental.com/investor-relations
Phone: 905-326-1888 x10
David Gane, CEO
Phone: 604-434-4614 x227
Forward Looking Statement
This press release contains statements which, to the extent that they are not recitations of historical fact, may constitute forward-looking information under applicable Canadian securities legislation that involve risks and uncertainties. Such forward-looking statements or information include statements regarding, but not limited to the Company's future growth strategy, its distribution strategy and product offerings, potential expansion of the Company's technology to other medical applications or markets, or the potential introduction of new technologies by the Company. Persons reading this press release are cautioned that such statements or information are only predictions, and that the Corporation's actual future results or performance may be materially different. Factors that could cause actual events or results to differ materially from those suggested by these forward-looking statements include, but are not limited to competition risks, distributor risks, product development risks such as regulatory, design, intellectual property and other factors described in the Corporation's reports filed on SEDAR including its Annual Information Form and financial report for the year ended December 31, 2016. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. All forward-looking statements made in this press release are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by the Company will be realized. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
1 EBITDA or Earnings before Interest, Taxes Depreciation and Amortization is a non-IFRS measure that does not have a standardized meaning and may not be comparable to a similar measure disclosed by other issuers. This measure does not have a comparable GAAP measure. EBITDA referenced here relates to net loss and comprehensive loss and excludes interest, income taxes, depreciation, amortization, finder's warrants issuance costs, stock-based compensation, deferred share unit compensation, mark to market adjustments on Canadian dollar denominated warrants, foreign exchange gain or loss and other income. This measure does not have a comparable IFRS measure and is used by the Company to manage and evaluate the cash operating loss of the business.
2 Gross margin is a non-IFRS measure that does not have a standard meaning and may not be comparable to a similar measure disclosed by other issuers. Gross margin referenced here relates to revenues less cost of sales. This measure does not have a comparable IFRS measure and is used by the Company to manage and evaluate the operating performance of the Company.
3 Core operating expense is a non-IFRS measure that does not have a standardized meaning and may not be comparable to a similar measure disclosed by other issuers. This measure does not have a comparable IFRS measure. Core operating expense includes sales and marketing, research and development and administration expense. The Company believes that the inclusion of this no-IFRS measure financial measure provides investors with an alternative presentation useful to investors' understanding of the Company's core operating results and trends.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.