iCAD records revenue growth of 73%

1 August 2008

Computer-aided cancer detection systems supplier iCAD, Inc. (NASDAQ:ICAD) has announced announced record financial results for the three and six months ended June 30, 2008.

Total revenue for the second quarter of 2008 was $10.5 million, up 73% over last year, with net income of US$2.4m.

In a further sign on growth, the company recently completed acquisition of CAD Sciences, a privately-held medical technology company based in White Plains, NY, USA for US$5m.

“We are especially proud of our financial performance during the second quarter 2008 as it was a record quarter by all financial measurements. We achieved records in revenue, gross margin, net income and cash flow, among other financial metrics relevant for a growing, healthy company,” commented Ken Ferry, iCAD’s President and CEO.

“In addition to the continued strong demand for our digital products, the quarter was positively impacted by the FDA approval of our SecondLook Digital product for use with Fujifilm’s Computed Radiography for Mammography systems.

"SecondLook Digital for FCRm represents a considerable market opportunity as it is the first CAD product approved and available in the US for use with computed radiography, a successful and growing product category for Fujifilm.

"The second quarter of 2008 also benefited from the launch of a new version of our comparative reading solution, TotalLook MammoAdvantage. We expect increasing demand for this advanced comparative reading solution as the transition from film to digital mammography continues, and the need to digitize archived film images grows as well.”

“Growth opportunities for the digital CAD market continue to be strong as there remains considerable room for sustained expansion in the coming years. According to the FDA website, as of the close of the second quarter of 2008, 38% of the installed mammography base in the US had transitioned to digital, leaving 62% of the just over 13,500 systems available for conversion to digital in the coming years. With CAD selling at a nearly one to one attachment rate to digital systems placed, we are confident that there is substantial opportunity for growth over the next two to three years, as these centers continue to migrate to digital technology.”

Commenting on the recently completed acquisition of CAD Sciences, Mr. Ferry said, “Our acquisition of CAD Sciences broadens our leadership position beyond mammography CAD and provides a comprehensive portfolio of advanced image analysis and workflow solutions for the early detection of the most prevalent cancers.

"Magnetic Resonance Imaging (MRI) and Computed Tomography (CT) are demonstrating significant advances in the imaging sector and our internal development program for colon cancer detection with CT, along with this acquisition, extends our reach to the imaging modalities of CT and MRI, in addition to our expertise in film-based, digital radiography and computed radiography.”

“Our integration of this key CAD technology for breast and prostate MRI should provide significant synergy regarding customer call points for our sales team, and we expect physician adoption to be accelerated by iCAD’s strong market position in mammography CAD,” he added.

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