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LED Medical Diagnostics Inc. Reports 2014 First Quarter Results

  • May 30, 2014
  • News Releases

Burnaby, British Columbia – May 30, 2014 – LED Medical Diagnostics Inc. (“LED Medical” or the “Company”) today announced its financial results for the first quarter ended March 31, 2014, reported in United States dollars and in accordance with International Financial Reporting Standards (“IFRS”). The Company’s results are presented in comparison to the first quarter ended March 31, 2013. All balances are expressed in United States dollars unless otherwise stated.

Business Highlights

Notable business developments and achievements up to the reporting date included the following:

  • On January 14, 2014, the Company announced that it signed an agreement with the BC Cancer Agency (“BCCA”) to create and commercialize a progression-risk assessment test for oral cancer. The test is based on a quantifiable genetic phenomenon known as “Loss of Heterozygosity” or “LOH”.
  • On January 21, 2014, the Company announced that it entered a non-exclusive distribution partnership with Patterson Dental in the United States and Canadian markets.
  • On February 25, 2014, the Company announced the appointment of Lamar Roberts as president of its wholly owned US subsidiary LED Dental Ltd.
  • On March 26, 2014, the Company announced the appointment of Dr. Jeffrey Brooks as vice president of imaging of its wholly owned subsidiary LED Dental Ltd.
  • On April 2, 2014, the Company announced that its wholly owned US operating subsidiary, LED Dental Ltd. released a new brand initiative to further its goal of providing advanced imaging technologies to dental and specialty practices in the United States and Canada. The branding initiative includes a new logo to further unify the business under the LED Imaging name.
  • On April 3, 2014, the Company announced that the LED Imaging division of its wholly owned subsidiary, LED Dental Ltd., is partnering with Ray Co., Ltd., a subsidiary of Samsung, to sell, install and provide support for the RAYSCAN α – Expert dental imaging system.
  • On April 15, 2014, the Company announced that it entered a non-exclusive distribution partnership with Atlanta Dental Supply and Nashville Dental.
  • On April 22, 2014, the Company announced that the LED Imaging division of its wholly owned subsidiary, LED Dental Ltd., entered a partnership with the UT College of Dentistry. Residents and dental students will receive hands-on training with the RAYSCAN α – Expert, a multifunction digital imaging system, as part of their clinical training.
  • On April 24, 2014, the Company announced that the LED Imaging division of its wholly owned subsidiary, LED Dental Ltd., is launching its LED Imaging Software to integrate with the Company’s growing portfolio of imaging technologies.

“The first quarter of fiscal 2014 will be remembered as a time of transitioning the VELscope Vx line to an expanded and optimized distribution channel and diversifying our product portfolio to include additional digital dental imaging technologies,” states Dr. David Gane, CEO of LED Medical. “Our selection of world class manufacturing partners allows us to resell the finest diagnostic dental imaging products available while leveraging our partners brand identity and significant product investments. We will continue to actively invest in our team and infrastructure throughout 2014 and look forward to launching new imaging products over the course of the year to leverage our newly created sales and marketing asset.”

Financial Highlights

Financial Position as at March 31, 2014

Working capital1 as at March 31, 2014 was $3,438,228, which includes cash of $3,178,080. This is compared to working capital of $4,445,795 at December 31, 2013, which included cash of $4,358,986.

Three-Month Comparative Results

The Company reported revenue of $1,054,886 for the three months ended March 31, 2014 as compared to $309,590 for the three months ended March 31, 2013. Operating loss was $1,206,789 for the three months ended March 31, 2014, as compared to a net loss of $1,286,849 for the three months ended March 31, 2014.

The Company’s calculated gross margin2 was 50% for the three months ended March 31, 2014, which is consistent with the 53% gross margin during the three months ended March 31, 2013. Total operating expenses for the three months ended March 31, 2014 were $1,736,138 as compared to $1,450,073 for the three months ended March 31, 2013, representing a 20% increase. Core operating expenses (excluding stock-based compensation, deferred share unit compensation and other operating expenses) for the three months ended March 31, 2014 were $1,534,712, as compared to $801,521 for the three months ended March 31, 2013, representing a 91% increase.

EBITDA3 for the three months ended March 31, 2014 was negative $1,005,363 compared to negative $638,297 for the three months ended March 31, 2013.

Included in the Company’s net loss of $2,893,999 for the three months ended March 31, 2014, is $1,695,119 in mark to market adjustments on Canadian dollar denominated warrants. Exclusive of the mark to market adjustment, the Company’s net loss would be $1,198,880. Included in the Company’s net loss of $1,333,774 for the three months ended March 31, 2013, is a gain of $38,229 in mark to market adjustments on Canadian dollar denominated warrants. Exclusive of the mark to market adjustment, the Company’s net loss would be $1,372,003.

Financial Statements and Management’s Discussion & Analysis

Please see the audited consolidated financial statements and related Management’s Discussion & Analysis (“MD&A”) for more details.

The interim condensed consolidated financial statements for the three months ended March 31, 2014 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.

Non-IFRS Measures

The following and preceding discussion of financial results includes references to Gross Margin, EBITDA, Core Operating Expenses and Working Capital, 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 the Company.

About LED Medical Diagnostics Inc.

Founded in 2003 and headquartered in Burnaby, British Columbia, Canada, LED Medical Diagnostics Inc. is a leading developer of LED-based visualization technologies for the medical industry. The Company is currently listed on the Toronto Stock Exchange (TSX-V) under the symbol “LMD”, the OTCQX under the symbol “LEDIF”, as well as the Frankfurt Stock Exchange under the symbol “LME”. For more information, visit www.ledmd.com.

LED Dental Inc., a wholly-owned subsidiary, is backed by an experienced leadership team dedicated to a higher level of service and support. LED Dental offers advanced diagnostic imaging equipment that seamlessly integrates into dental practices. The Company is committed to providing dental practitioners with the best technology available by identifying and adding strong products to its growing portfolio. Additionally, the company manufactures the award-winning VELscope® Vx Enhanced Oral Assessment System, the first system in the world to apply tissue fluorescence visualization technology to the oral cavity. The VELscope® Vx is now used to conduct more screenings for oral cancer and other oral mucosal diseases than any other adjunctive device. For more information, call 888.541.4614 or visit www.leddental.com.

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1Working Capital 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. Working capital is defined as current assets less current liabilities. 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

2Gross 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.

3EBITDA 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.

Investor Relations:

Mark Komonoski
Investor Relations
LED Medical Diagnostics Inc.
TSX.V: LMD | OTCQX: LEDIF | FSE: LME

Toll-Free: 877.255.8483
Office: 403.255.8483
Mobile: 403.470.8384
E-Mail:
Skype: mkomonoski

Media Inquiries:

Chris Koch
LED Imaging
Office: 404.502.4438
Email:

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