ART Advanced Research Technologies Announces Fourth Quarter and Year end 2005 Financial Results.MONTREAL Montreal (mŏn'trēôl`), Fr. Montréal (môNrāäl`), city (1991 pop. 1,017,666), S Que., Canada, on Montreal island, surrounded by St. Lawrence River and Rivière des Prairies. -- Company Continues to Gain Market Share With Significant Increase in Revenues ART Advanced Research Technologies Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :ARA Ara or Arrah (both: ŭ`rə), city (1991 pop. 157,082), Bihar state, NE India, on the Son Canal. A major road and rail junction, it is the administrative center for a district that produces grain, sugarcane, and oilseed. ) (ART), a Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. medical device company and a leader in optical molecular imaging products for the healthcare and pharmaceutical industries, today announces its financial results for the fourth quarter and year ended December December: see month. 31, 2005. All dollar amounts referenced herein are in US dollars, unless otherwise stated. ART reported sales of $1,239,700 for the three-month period ended December 31, 2005, up by 107% from $599,000 for the same quarter a year ago. Total revenues for the year ended December 31, 2005 were $4,125,550 compared with $1,935,000 for 2004, an increase of 113%. The Company posted a net loss of $3,313,319($0.08 per share) for the 2005 fourth quarter, compared to $2,714,207 ($0.06 per share) for the corresponding 2004 period.The net loss for the year ended December 31, 2005 totaled $13,129,184 or ($0.31 per share), compared with a net loss of $9,928,603 or ($0.24 per share) in 2004. Financial Highlights (in US dollars) For the three-month period ended December 31, 2005 sales were $1,239,700, up by 107% from $599,000 for the same quarter a year ago. No maintenance sales were recorded during the 2005 fourth quarter and during the corresponding quarter in 2004.For the year ended December 31, 2005 revenues were $4,125,550, compared to $1,935,000 for the year ended December 31, 2004. Products sales for the year ended December 31, 2005 amounted to $3,626,100 compared to $1,935,000 a year ago.Maintenance sales totaled $499,450 compared to nil in the year ended December 31, 2004. The increase in revenues comes from an increase in the Company's eXplore Optix product and maintenance sales as the Company pursued its market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" in preclinical preclinical /pre·clin·i·cal/ (-klin´i-k'l) before a disease becomes clinically recognizable. pre·clin·i·cal adj. 1. optical imaging.During the year ended December 31, 2005, the Company sold 19 eXplore units, including 1 demo demo - /de'moh/ 1. A demonstration of a product, often of an early version or prototype. A demo is a far more effective way of inducing bugs to manifest themselves than any number of test runs, especially when important people are watching. 2. demo version. 3. unit, as compared to 11 units and no demo units in 2004. The following information provides a discussion and analysis on the expenses for the 2005 fourth quarter and the year ended December 31, 2005 compared to the same periods of 2004.The majority of these expenses, which include the cost of sales and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , are incurred in Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents .Following a rapid appreciation of the Canadian currency over the US, non-favorable variances were created for these expenses in the current periods compared to same periods of last year. Cost of sales for the 2005 fourth quarter was $816,949 compared to $306,625 in the fourth quarter of 2004.The gross margin for the quarter ended December 31, 2005 was 34% compared to 49% for the same quarter a year ago.For the year ended December 31, 2005, the total cost of sales was $2,789,585 compared to $915,087 in the year ended December 31, 2004. As a result, ART generated a combined gross margin of 32% during the year ended December 31, 2005, and 53% last year. The combined gross margin decrease during the 2005 fourth quarter and year ended December 31, 2005 compared to last year was due to: 1) the fact that ART transitioned to the new multiwavelength base system which is a more costly system and offered the possibility to its existing customers to upgrade their base system to the new system at a preferential pref·er·en·tial adj. 1. Of, relating to, or giving advantage or preference: preferential treatment. 2. price; and 2) the rapid appreciation of the Canadian currency over the U.S.During the year ended December 31, 2005, ART generated a gross margin of 34% from the sales of its products and a gross margin of 18% from sales resulting from maintenance. Cost of sales consisted principally of raw materials, royalties Not to be confused with Royal family. Royalties (sometimes, running royalties) are usage-based payments made by one party (the "licensee") to another (the "licensor") for ongoing use of an asset, most typically an intellectual property (IP) right. and manufacturing costs. The Company's research and development ("R&D") expenditures for the three-month period ended December 31, 2005, net of investment tax credits amounted to $2,216,146, compared to $2,007,223 for the same period a year ago. The Company's research and development ("R&D") expenditures for the year ended December 31, 2005, net of investment tax credits amounted to $9,154,960, compared to $7,511,485 for the year ended December 31, 2004. The R&D expenditures consist principally of the salaries and benefits for personnel involved in R&D projects, of consultation fees paid for clinical studies, the cost associated with the preparation and conduct of the clinical studies and of the cost of prototypes. The increase in R&D expenditures for the 2005 quarter and the year ended December 31, 2005 compared to last year relates to the medical sector and is mainly due to the cost associated with the preparation and conduct of the clinical studies, which include the manufacturing of the SoftScan clinical prototypes, the negotiation of the protocols with the selected sites and the cost related to site selection both in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of and in the US. During the year ended December 31, 2005, the manufacturing costs to build the SoftScan clinical prototypes were $1,369,309. The Company also made the decision to build three additional SoftScan prototypes in the event that more sites would be needed to execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution the clinical plan. Selling, general, and administrative ("SG&A") expenses for the 2005 fourth quarter, totaled $971,405, compared to $960,873 for the same quarter a year ago. SG&A expenses for the year ended December 31, 2005, totaled $3,918,236, compared to $3,474,446 for the year ended December 31, 2004. SG&A expenses consist principally of salaries, professional fees and other costs associated with marketing activities. SG&A expenses were engaged to support commercial activities related to the eXplore Optix product as well as support its overall activities. The loss before interest and foreign exchange loss for the 2005 fourth quarter was $2,834,299 compared to $2,732,527 for the same quarter a year ago.For the 2005 fiscal year, the loss before interest and foreign exchange loss was $12,023,037 compared to $10,215,645 a year ago. As a result, the net loss for the three-month period ended December 31, 2005 was $3,313,319 or $0.08 per share, compared to $2,714,207 or $0.06 per share for the three-month period ended December 31, 2004. Net loss for the year ended December 31, 2005 was $13,129,184 or $0.31 per share, compared to $9,928,603 or $0.24 per share for the year ended December 31, 2004. The financial statements, accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. notes to the financial statements Notes to the financial statements A detailed set of notes immediately following the financial statements in an annual report that explain and expand on the information in the financial statements. , and Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial for three-month period ended December 31, 2005, will be available online at www.sedar.com or at www.art.ca.Summary financial tables are provided below. Conference Call ART will host a conference call today at 8:30 AM (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ). The telephone number to access the conference call is (866) 898-9626 (U.S. and Canada).Outside of North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , please dial (416) 340-2216.A replay of the call will be available until March 17, 2005. When dialing in for the replay from North America, please dial (800) 408-3053 or from outside of North America, please dial (416) 695-5800. The access code for the replay is 3176270. A detailed list of the risks and uncertainties affecting the Company can be found in the Company's Annual Report on Form 20-F. This press release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. subject to risks and uncertainties that would cause actual events to differ materially from expectations. These risks and uncertainties are described in ART Advanced Research Technologies Inc.'s regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. filings with Canadian Securities Commissions and with the Securities and Exchange Commission in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . About ART ART Advanced Research Technologies Inc. is a leader in optical molecular imaging products for the healthcare and pharmaceutical industries. ART has developed two products based on its innovative technology. The first is eXplore Optix(TM), a molecular imaging device designed for monitoring physiological physiological /phys·i·o·log·i·cal/ (-loj´i-kal) pertaining to physiology; normal; not pathologic. phys·i·o·log·i·cal or phys·i·o·log·ic adj. Abbr. phys. 1. changes in living systems at the preclinical study phases of new drugs.eXplore Optix(TM) is distributed by GE Healthcare GE Healthcare is a $18 billion (USD) unit of General Electric (GE). It employs more than 46,000 people worldwide and is headquartered in Chalfont St. Giles, Buckinghamshire, United Kingdom. GE Healthcare is the first GE business segment headquartered outside the United States. and is used by industry and academic leaders worldwide to bring new and better treatments to patients faster. The second is SoftScan(R), a medical imaging device designed to improve the diagnosis and treatment of breast cancer. ART is commercializing its products in a global strategic alliance with GE Healthcare, a world leader in mammography mammography, diagnostic procedure that uses low-dose X rays to detect abnormalities in the breasts. The early diagnosis of breast cancer made possible by the routine use of mammography for screening women increases a woman's treatment alternatives and improves her and imaging. ART's shares are listed on the TSX under the ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors ARA. Visit ART online at www.art.ca
ART Advanced Research Technologies Inc.
Balance Sheets
(In U.S. dollars)
(Unaudited)
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December 31, 2005 December 31, 2004
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ASSETS
Current assets
Cash $4,858,085 $631,164
Term deposit, 2.00% (1.45% in 2004),
maturing in April 2006 257,954 249,584
Commercial papers 4.27%
(2.24% to 2.51% in 2004) 4,000,496 10,950,403
Accounts receivable 1,102,124 883,604
Investment tax credits receivable 691,273 815,760
Inventories 1,226,812 1,014,551
Prepaid expenses 399,567 144,882
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12,536,311 14,689,948
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Property and equipment 554,929 547,406
Patents 1,529,092 1,527,533
Deferred costs 611,877 -
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$15,232,209 $16,764,887
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LIABILITIES
Current liabilities
Accounts payable and accrued
liabilities $2,052,381 $2,155,073
Deferred grant 89,872 -
Current portion of convertible
debentures 2,054,600 -
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4,196,853 2,155,073
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Convertible debentures 1,666,543 -
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5,863,396 2,155,073
SHAREHOLDERS' EQUITY
Share capital and share
purchase warrants 87,131,724 80,696,107
Equity component of convertible
debentures 1,510,467 -
Contributed surplus 721,051 474,698
Deficit (82,033,557) (68,122,241)
Cumulative translation adjustment 2,039,128 1,561,250
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9,368,813 14,609,814
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$15,232,209 $16,764,887
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ART Advanced Research Technologies Inc.
Operations and Deficit
(In U.S. dollars)
(Unaudited)
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Three-month period ended Twelve-month period ended
December 31, December 31, December 31, December 31,
2005 2004 2005 2004
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Sales
Product $1,239,700 $599,000 $3,626,100 $1,935,000
Maintenance - - 499,450 -
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1,239,700 599,000 4,125,550 1,935,000
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Cost of sales
Product 816,949 306,625 2,379,802 915,087
Maintenance - - 409,783 -
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816,949 306,625 2,789,585 915,087
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Gross margin 422,751 292,375 1,335,965 1,019,913
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Operating
expenses
Research and
development,
net of
investment
tax credits 2,216,146 2,007,223 9,154,960 7,511,485
Selling,
general and
administrative 971,405 960,873 3,918,236 3,474,446
Amortization 69,499 56,806 285,806 249,627
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3,257,050 3,024,902 13,359,002 11,235,558
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Operating loss 2,834,299 2,732,527 12,023,037 10,215,645
Interest expense
on convertible
debentures 553,882 - 884,191 -
Interest income (102,650) (71,193) (241,708) (300,221)
Foreign exchange
loss 27,788 52,873 463,664 13,179
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Net loss $3,313,319 $2,714,207 13,129,184 9,928,603
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Deficit,
beginning
of year 68,122,241 56,753,062
Share and share
purchase
warrant issue
expenses 782,132 1,440,576
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Deficit, end
of year $82,033,557 $68,122,241
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Basic and
diluted net
loss per share $0.08 $0.06 $0.31 $0.24
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Basic and
diluted
weighted
average
number of
common shares
outstanding 42,664,523 42,662,523 42,664,523 41,220,856
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Number of
common shares
outstanding,
end of year 42,664,523 42,664,523 42,664,523 41,220,856
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ART Advanced Research Technologies Inc.
Cash Flows
(In U.S. dollars)
(Unaudited)
--------------------------------------------------------------------
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Three-month period ended Twelve-month period ended
December 31, December 31, December 31, December 31,
2005 2004 2005 2004
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OPERATING
ACTIVITIES
Net loss $(3,313,319) $(2,714,207)$(13,129,184) $(9,928,603)
Items not
affecting cash
Amortization 69,499 56,806 285,806 249,627
Stock-based
compensation 66,329 38,574 246,353 142,516
Interest on
convertible
debentures 431,451 - 683,768 -
Net change in
working
capital items
Accounts
receivable 327,956 (11,068) (174,513) (18,427)
Investment tax
credits
receivable (73,969) (346,140) 140,658 382,500
Inventories 639,654 53,456 (140,746) (584,827)
Prepaid
expenses (23,537) (78,375) (239,182) 26,492
Accounts
payable and
accrued
liabilities (397,913) (601,484) (171,772) (74,535)
Deferred grant (43,791) 86,528 -
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Cash flows from
operating
activities (2,317,640) (3,602,438) (12,412,284) (9,805,257)
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INVESTING
ACTIVITIES
Short-term
investments (3,964,668) (3,504,097) 5,784,836 (4,402,764)
Property and
equipment (2,578) (74,959) (222,189) (234,972)
Other assets - (33,083) (5,339) (123,772)
Deferred costs (102,827) - (361,557) -
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Cash flows
from
investing
activities (4,070,073) (3,612,139) 5,195,751 (4,761,508)
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FINANCING
ACTIVITIES
Issue of
senior
convertible
debentures - - 5,000,000 -
Issue of
convertible
preferred
shares - - 5,900,000 -
Common shares
and share
purchase
warrants - 165,495 - 12,888,327
Equity and
debt issue
expenses (5,800) (4,095) (924,041) (1,440,576)
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Cash flows from
financing
activities (5,800) 161,400 9,975,959 11,447,751
Effect of
foreign
currency
translation
adjustments (85,729) 305,797 466,646 551,957
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(91,529) 467,197 10,442,605 11,999,708
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Net increase
(decrease) in
cash and cash
equivalents (6,479,242) (6,747,380) 3,226,071 (2,567,057)
Cash and cash
equivalents,
beginning of
year 11,338,384 8,380,451 1,633,071 4,200,128
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Cash and cash
equivalents,
end of year $4,859,142 $1,633,071 $4,859,142 $1,633,071
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CASH AND CASH
EQUIVALENTS
Cash $4,858,085 $631,164 $4,858,085 $631,164
Commercial
papers 1,057 1,001,907 1,057 1,001,907
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$4,859,142 $1,633,071 $4,859,142 $1,633,071
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Supplemental
disclosure
of cash flow
information
Interest received $86,077 $17,652 $225,135 $246,680
Interest paid $(88,986) $- $(88,986) $-
ART Advanced Research Technologies Inc. (TSX:ARA) |
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