Continued strong momentum for ProFound AI™ iCAD’s proprietary cancer detection AI technology
 Conference call today at 8:30 a.m. ETNASHUA, N.H., Oct. 30, 2019 (GLOBE NEWSWIRE) — iCAD, Inc. (NASDAQ: ICAD), a global medical technology leader providing innovative cancer detection and therapy solutions today reported its financial and operating results for the three and nine months ended September 30, 2019.Highlights for the Quarter Included:Revenue of approximately $7.9 million, a 27% increase over the third quarter of 2018.Revenue in the ProFound AI™ Cancer Detection segment of approximately $6.1 million, a 55% increase as compared to $3.9 million in the third quarter of 2018.Year to date nine month 2019 revenue of approximately $22.0 million, an 18% increase over the same nine months of 2018.Detection revenue of approximately $15.5 million a 30% increase as compared to $11.9 million for the nine months ended September 30, 2018.Financial Highlights:Gross profit of $6.1 million, or 77%, in the third quarter of 2019, as compared to $4.7 million, or 77%, in the third quarter of 2018.GAAP Net Loss of $3.0 million, or ($0.15) per diluted share, which includes a $0.9 million non-cash charge associated with the fair value accounting treatment of the Q4 2018 convertible debentures.Non-GAAP Adjusted EBITDA loss of ($1.4) million, compared to non-GAAP Adjusted EBITDA loss of ($0.4) million in the third quarter of 2018.Non-GAAP Adjusted net loss of $2.0 million or ($0.10) per diluted share, compared to non-GAAP adjusted net loss of ($1.1) million, or ($0.06) per share) in the third quarter of 2018.“Our overall business continues to demonstrate significant strength,” said Michael Klein, Chairman and Chief Executive Officer of iCAD, Inc.  “In our Detection segment, market demand and adoption for ProFound AI™, our latest, deep-learning, cancer detection software solution for digital breast tomosynthesis, continues to grow meaningfully, as we are beginning to penetrate larger accounts. Investments in our commercial infrastructure throughout 2019 are contributing to our top line sales success.  Importantly, we are well-positioned for long-term growth in this area, as we continue to develop our next-generation algorithm, which is expected to be commercially available in 2020.”“Total Detection revenue was up 55% year-over-year in the third quarter of 2019, and 30% for the first nine months of the year, as compared to the same periods of 2018,” continued Mr. Klein. Detection product revenues are up 54%  for the nine month period, while service revenue declined slightly.  “We remain pleased with our performance in this segment and are excited to have added additional capability to our sales and engineering teams based on our continued success with ProFound AI. In Therapy, CMS’ Q3 proposed Radiation Oncology Bundled Payment Model could provide a significant long-term growth opportunity for our proprietary Xoft® IORT solution. We are excited about the potential implementation of this proposed reimbursement model in 2020.”  We believe this new reimbursement model, if in fact adopted, could improve healthcare by placing an emphasis on the value and quality of care over the volume or quantity of treatments.  This combined, with emerging breast cancer clinical data, and emerging new clinical studies for the treatment of rectal and brain cancer provide continued optimism for Xoft in 2020 and beyond.  As we did in Detection, we are prudently building our commercial infrastructure and pacing investments to prepare for the future anticipated growth of the Therapy business. “We also continue to operate from a position of financial strength.  We ended the third quarter with $17.4 million in cash and cash equivalents, as compared to $12.2 million at the end of 2018.  We remain well-positioned to continue executing on our growth strategy,” concluded Mr. Klein.Third Quarter 2019 Financial Results
Revenue:  Total Detection and Therapy revenue for the third quarter of 2019 was $7.9 million, an increase of $1.7 million, or 27%, compared to the third quarter of 2018, reflecting a 67% increase in product revenue, and a 13% decrease in service and supplies revenue.Cancer Detection revenue for the third quarter, which includes revenue from our mammography, breast density, and the associated service and supplies revenue, increased by approximately $2.2 million or 55% as compared to the third quarter of 2018, driven by growth in both direct and OEM revenues with sales primarily in the Company’s 3D imaging and Density products.  Therapy revenue, for the third quarter of 2019, which includes Xoft^® Axxent® eBx^® System^® sales, as well as the associated service and supplies revenue, decreased by approximately $0.5 million as compared to the third quarter of 2018.Gross Profit:  Gross profit for the third quarter of 2019 was $6.1 million, or 77% of revenue, compared to $4.7 million, or 77% of revenue, for the third quarter of 2018.  Gross profit percent changes are primarily due to changes in the mix of businessOperating Expenses:  Total operating expenses for the third quarter of 2019 were $8.0 million, a $2.0 million, or 34% increase, from $6.0 million in the third quarter of 2018. The increase was driven by increased marketing and sales expenses in support of our commercialization efforts to drive adoption of Profound AI.GAAP Net Loss:  Net loss for the third quarter of 2019 was ($3.0) million, or ($0.15) per diluted share, compared with a net loss of ($1.4) million, or ($0.08) per diluted share, for the third quarter of 2018. GAAP Net Loss includes a $0.9 million non-cash charge associated with the fair value accounting treatment of our convertible debentures issued in December 2018.Non-GAAP Adjusted EBITDA:  Non-GAAP adjusted EBITDA, a non-GAAP financial measure as defined below, for the third quarter of 2019 was a loss of ($1.4) million, compared to a third quarter 2018 non-GAAP adjusted EBITDA loss of ($0.4) million.  Please refer to the section entitled “Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Measures” and the accompanying financial table included at the end of this release for a reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA results for the three-month periods ended September 30, 2019 and 2018, respectively. Nine Months Ended September 30, 2019 Financial Results
Revenue:  Total Detection and Therapy revenue for the nine months ended September 30, 2019, was $22.0 million, an increase of $3.3 million, or 18%, over the same period of 2018, reflecting a 43% increase in product revenue and an 8% decrease in service and supplies revenue.Detection revenue for the nine months ended September 30, 2019, which includes revenue from our mammography, breast density, and the associated service and supplies revenue, increased by approximately $3.5 million, or 30%, as compared to the same period of 2018, driven by growth in the Company’s direct sales of its 2D and 3D imaging products.  Therapy revenue, which includes Xoft® Axxent® eBx® System® sales, as well as the associated service and supplies revenue, for the nine months ended September 30, 2019, decreased by approximately $0.2 million, or 4%, to $6.5 million as compared to the same period of 2018.Gross Profit:  Gross profit for the nine months ended September 30, 2019, was $17.1 million, or 78% of revenue, compared with $14.0 million, or 75% of revenue, in the same nine months of 2018.  Gross profit percent changes are primarily due to changes in the mix of business, additional manufacturing investments and amortization of acquired intangibles.Operating Expenses:  Total operating expenses for the nine months ended September 30, 2019, were $21.5 million, an increase of $2.2 million, or 11%, from $19.4 million in the same nine month period of 2018. The increase was due to increased marketing and sales expenses, partially offset by decreases in engineering and product development costs.GAAP Net Loss:  Net loss for the nine months ended September 30, 2019, was ($10.2) million, or ($0.57) per diluted share, compared with a net loss of ($5.7) million, or ($0.34) per diluted share, for the same nine month period of 2018.  GAAP Net Loss includes a $5.3 million non-cash charge associated with the fair value accounting treatment of our convertible debentures issued in December 2018.Non-GAAP Adjusted EBITDA:  Non-GAAP adjusted EBITDA, a non-GAAP financial measure as defined below, for the nine month period ended September 30, 2019, was a loss of ($3.0) million, compared to non-GAAP adjusted EBITDA loss of ($3.1) million in the same nine month period of 2018.  Please refer to the section entitled “Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Measures” and the accompanying financial table included at the end of this release for a reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA results for the nine-month periods ended September 30, 2019 and 2018, respectively. Cash and Cash Equivalents:  As of September 30, 2019, the Company had cash and cash equivalents of $17.4 million, compared with cash and cash equivalents of $12.2 million at December 31, 2018.Use of Non-GAAP Financial Measures
In its quarterly news releases, conference calls, slide presentations or webcasts, the Company may use or discuss non-GAAP financial measures as defined by SEC Regulation G.  The GAAP financial measures most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the condensed consolidated financial statements. When analyzing the Company’s operating performance, investors should not consider these non-GAAP measures as a substitute for the comparable financial measures prepared in accordance with GAAP.  The Company’s quarterly news releases containing such non-GAAP reconciliations can be found on the Investors section of the Company’s website at www.icadmed.com.About iCAD, Inc.
Headquartered in Nashua, NH, iCAD is a global medical technology leader providing innovative cancer detection and therapy solutions. For more information, visit www.icadmed.com.“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995
Certain statements contained in this News Release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited, to the Company’s ability to achieve business and strategic objectives, increase sales and acceptance of products, adoption by CMS of a new payment model, which is not assured, implement expansion plans, the risks of uncertainty of patent protection, the impact of supply and manufacturing constraints or difficulties, uncertainty of future sales levels, protection of patents and other proprietary rights, the impact of supply and manufacturing constraints or difficulties, product market acceptance, possible technological obsolescence of products, increased competition, to successfully defend itself in litigation matters, government regulation, changes in Medicare or other reimbursement policies, risks relating to our existing and future debt obligations, competitive factors, the effects of a decline in the economy or markets served by the Company; and other risks detailed in the Company’s filings with the Securities and Exchange Commission. The words “believe,” “demonstrate,” “intend,” “expect,” “estimate,” “will,” “continue,” “anticipate,” “likely,” “seek,” and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date the statement was made. The Company is under no obligation to provide any updates to any information contained in this release. For additional disclosure regarding these and other risks faced by iCAD, please see the disclosure contained in our public filings with the Securities and Exchange Commission, available on the Investors section of our website at http://www.icadmed.com and on the SEC’s website at http://www.sec.gov.Contact:
Media Inquiries:
Jessica Burns, iCAD 
+1-201-423-4492
[email protected]Investor Relations:
Jeremy Feffer, LifeSci Advisors
+ 1-212-915-2568
[email protected]


Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Measures
The Company reports its financial results in accordance with United States generally accepted accounting principles, or GAAP. However, management believes that in order to understand the Company’s short-term and long-term financial and operational trends, investors may wish to consider the impact of certain non-cash or non-recurring items, when used as a supplement to financial performance measures in accordance with GAAP. These items result from facts and circumstances that vary in frequency and/or impact on continuing operations.  Management also uses results of operations before such items to evaluate the operating performance of the Company and compare it against past periods, make operating decisions, and serve as a basis for strategic planning.  These non-GAAP financial measures provide management with additional means to understand and evaluate the operating results and trends in the Company’s ongoing business by eliminating certain non-cash expenses and other items that management believes might otherwise make comparisons of the Company’s ongoing business with prior periods more difficult, obscure trends in ongoing operations or reduce management’s ability to make useful forecasts.  Management believes that these non-GAAP financial measures provide additional means of evaluating period-over-period operating performance.  In addition, management understands that some investors and financial analysts find this information helpful in analyzing the Company’s financial and operational performance and comparing this performance to its peers and competitors.Management defines “Non-GAAP Adjusted EBITDA” as the sum of GAAP Net Loss before provisions for interest expense, other income, stock-based compensation expense, depreciation and amortization, tax expense, severance, gain on sale of assets, loss on disposal of assets, acquisition and litigation related expenses.  Management considers this non-GAAP financial measure to be an indicator of the Company’s operational strength and performance of its business and a good measure of its historical operating trends, in particular the extent to which ongoing operations impact the Company’s overall financial performance.The non-GAAP financial measures do not replace the presentation of the Company’s GAAP financial results and should only be used as a supplement to, not as a substitute for, the Company’s financial results presented in accordance with GAAP. The Company has provided a reconciliation of each non-GAAP financial measure used in its financial reporting and investor presentations to the most directly comparable GAAP financial measure.Management excludes each of the items identified below from the applicable non-GAAP financial measure referenced above for the reasons set forth with respect to that excluded item:Interest expense: The Company excludes interest expense which includes interest from the facility agreement, interest on capital leases and interest on the convertible debentures from its non-GAAP Adjusted EBITDA calculation.Stock-based compensation expense: excluded as these are non-cash expenses that management does not consider part of ongoing operating results when assessing the performance of the Company’s business, and also because the total amount of expense is partially outside of the Company’s control as it is based on factors such as stock price volatility and interest rates, which may be unrelated to our performance during the period in which the expense is incurred.Amortization and Depreciation: Purchased assets and intangibles are amortized over a period of several years and generally cannot be changed or influenced by management after they are acquired. Accordingly, these non-cash items are not considered by management in making operating decisions, and management believes that such expenses do not have a direct correlation to future business operations. Thus, including such charges does not accurately reflect the performance of the Company’s ongoing operations for the period in which such charges are incurred.Severance relates to costs incurred due to the termination of certain employees. The Company provides compensation to certain employees as an accommodation upon termination of employment without cause. Management believes that excluding severance costs from operating results provides investors with a better means for measuring current Company performance.Loss on fair value of convertible debentures.  The Company excludes this non-cash item as it is not considered by management in making operating decisions, and management believes that such item does not have a direct correlation to future business operations.Acquisition related: relates to professional service fees associated with acquisitions.  The Company does not consider these acquisition-related costs to be related to the organic continuing operations of the acquired businesses and are generally not relevant to assessing or estimating the long-term performance of the acquired assets.Litigation related: These expenses consist primarily of settlement, legal and other professional fees related to litigation. The Company excludes these costs from its non-GAAP measures primarily because the Company believes that these costs have no direct correlation to the core operations of the Company.On occasion in the future, there may be other items, such as significant asset impairments, restructuring charges or significant gains or losses from contingencies that the Company may exclude if it believes that doing so is consistent with the goal of providing useful information to investors and management. 
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