ART Advanced Research Technologies Inc. (ART) (TSX: ARA), a
Canadian medical device company and a leader in optical molecular
imaging products for the healthcare and pharmaceutical industries,
announced today its financial results for the first quarter ended
March 31, 2009. ART reported revenues of $95,914 for the
three-month period ended March 31, 2009, compared to $1,241,921 for
the same quarter a year ago. For the 2009 first quarter, the
operating loss increased by $145,231, or 11%, to $1,479,552 from
$1,334,321 for the same period a year ago. The Company posted a net
loss of $1,391,413 ($0.02 per share) for the 2009 first quarter,
compared to $1,279,456 ($0.01 per share) for the corresponding 2008
period. All dollar amounts referenced herein are in U.S. dollars,
unless otherwise stated.
2009 First Quarter Highlights
- In January 2009, ART further reduced expenses and streamlined
the Company, in response to the deteriorating global economic
climate.
Post Quarter Events
- ART secured the sale of SoftScan� breast imaging device to
Gottingen University in Germany, where the device will be used to
measure treatment response for breast cancer.
- Gottingen has also committed to purchase a second SoftScan
system, fully upgraded for use in screening with molecular probes,
subject to grant funding.
- ART participated in the American Association of Cancer
Research (AACR) conference in Denver, Colorado, which was well
attended and generated a number of important leads for ART, further
consolidating our sales funnel.
Revenues
For the three-month period ended March 31, 2009, sales amounted
to $95,914, compared to $1,241,921 for the same quarter a year ago.
During the quarter ended March 31, 2009, sales mainly resulted from
the sale of Fenestra products whereas for the same quarter ended
March 31, 2008, the Company sold one SoftScan unit, one Optix unit,
Fenestra products, and add-ons. During the first quarter of 2009,
the Company sold service contracts, and recognized a total of
$25,218 in services and other revenues. In the first quarter of
2008, the Company had recognized revenue from service contracts in
the amount of $35,709, concluded in the last quarter of 2007.
Gross Margin
During the three-month period ended March 31, 2009, ART
generated a gross margin ratio of 96% from the sales of its
products, compared to 79% for the same period in the previous year.
The gross margin ratio generated on the sales of services and other
revenues was 69% for the three-month period ended March 31, 2009
compared to 49% for the three-month period ended March 31, 2008.
The increase in the product gross margin ratio during the
three-month period ended March 31, 2009, resulted from a different
sales product mix compared to the three-month period ended March
31, 2008. During the first quarter of 2009, most of the sales
resulted from the Fenestra product line which explains the higher
gross margin ratio as compared to the first quarter in 2008, during
which the Company sold more of its other product lines, namely
Optix and SoftScan.
Operating Expenses
The Company's research and development ("R&D") expenditures
for the three-month period ended March 31, 2009, net of investment
tax credits, amounted to $635,910, compared to $854,650 for the
same period a year ago. The decrease of the R&D during the
quarter ended March 31, 2009, compared to the same quarter of last
year mainly resulted from the cost reduction plan which was put in
place during the first days of 2009. As a result, the R&D
headcount decreased by approximately 15% compared to the R&D
headcount at the end of the first quarter of 2008. During the first
quarter of 2009, the R&D team pursued the development of the
next generation of the Optix system and continued to support Optix
users, while collaborating with clients for the development of
applications to demonstrate the utility of the system in research
areas such as oncology, cardiology and neurology.
Selling, general, and administrative ("SG&A") expenses for
the 2009 first quarter totaled $868,946, compared to $1,283,254 for
the same quarter a year ago. The decrease of the SG&A expenses
during the quarter ended March 31, 2009, compared to the same
quarter last year mainly resulted from the cost reduction plan
which took effect during the first days of 2009. In fact, the
Company reduced its workforce and implemented a four day shared
workweek schedule for about 20 percent of the workforce. Senior
management has taken at least a 10 percent salary cut.
Net Loss
The net loss for the quarter ended March 31, 2009 was $1,391,413
or $0.02 per share, compared to $1,279,456 or $0.01 per share for
the quarter ended March 31, 2008.
Financial Outlook
As at March 31, 2009, ART had $ 1,450,037 in cash and cash
equivalents, and a working capital of $2,742,886. ART is also
considering financing options, such as assistance programs for
businesses offered by the different levels of government, to
strengthen the Company's financial situation.
The financial statements, accompanying notes to the financial
statements, and Management's Discussion and Analysis for the
three-month period ended March 31, 2009, will be available online
at www.sedar.com, or at www.art.ca, in the "Investors" section.
Summary financial tables are provided below. A detailed list of the
risks and uncertainties affecting the Company can be found in the
Management's Discussion and Analysis for the year ended December
31, 2008, and in the Company's most recent Annual Information Form,
available on SEDAR at www.sedar.com.
Conference Call
ART will host a conference call today at 5:00 PM (EDT). The
telephone number to access the conference call is (514) 861-1531
when dialing within the Montreal area, or (877) 667-7766 for the
rest of North America. Outside of North America, please dial (514)
861-1531. A replay of the call will be available until May 28,
2009. To listen to the replay from the Montreal area, please dial
(514) 861-2272, or, (800) 408-3053 for the rest of North America.
From outside of North America, please dial (514) 861-2272. The
access code for the replay is 7643478#.
About ART
ART Advanced Research Technologies Inc. is a leader in molecular
imaging products for the healthcare and pharmaceutical industries.
ART has developed products in medical imaging, medical diagnostics,
disease research, and drug discovery with the goal of bringing new
and better treatments to patients faster. The Optix� optical
molecular imaging system, designed for monitoring physiological
changes in living systems at the preclinical study phases of new
drugs, is used by industry and academic leaders worldwide. The
SoftScan� optical medical imaging device is designed to improve the
diagnosis and treatment of breast cancer. Finally, the Fenestra�
line of molecular imaging contrast products provides image
enhancement for a wide range of preclinical Micro CT applications
allowing scientists to see greater detail in their imaging studies,
with potential extension into other major imaging modalities. ART
is commercializing some of these products in a global strategic
alliance with GE Healthcare, a world leader in mammography and
imaging. ART's shares are listed on the TSX under the ticker symbol
ARA. For more information on ART, visit our website at
www.art.ca.
This press release may contain forward-looking statements
subject to risks and uncertainties that would cause actual events
to differ materially from expectations. These risks and
uncertainties are described in the most recent Annual Information
Form and the financial statements for the year ended December 31,
2008, available on SEDAR (www.sedar.com).
ART Advanced Research Technologies Inc.
Balance Sheets
(In U.S. dollars)
March 31, 2009 December 31, 2008
(unaudited)
--------------------------------------------------------------------------
ASSETS
Current assets
Cash $1,450,037 $1,446,086
Term deposits (2008 - 0.67% and 0.90%
matured in January 2009) - 1,700,000
Accounts receivable 1,505,477 1,700,365
Investment tax credits receivable 330,950 779,682
Inventories 1,179,554 1,168,702
Prepaid expenses 504,440 547,127
--------------------------------------------------------------------------
4,970,458 7,341,962
Property, equipment and equipment under
capital leases 381,129 415,932
Patents 1,421,896 1,462,918
Deferred development costs 2,576,895 2,383,180
--------------------------------------------------------------------------
$9,350,378 $11,603,992
--------------------------------------------------------------------------
LIABILITIES
Current liabilities
Bank loan 476,115 489,956
Accounts payable and accrued liabilities 1,587,044 2,224,509
Deferred revenues 129,552 112,926
Current portion of obligations under
capital leases 34,861 35,267
--------------------------------------------------------------------------
2,227,572 2,862,658
Obligations under capital leases 29,222 39,271
--------------------------------------------------------------------------
--------------------------------------------------------------------------
2,256,794 2,901,929
SHAREHOLDERS' EQUITY
Share capital and share purchase warrants 39,087,613 39,142,553
Contributed surplus 4,912,643 4,845,266
Deficit (37,802,104) (36,410,691)
Accumulated other comprehensive income 895,432 1,124,935
--------------------------------------------------------------------------
(36,906,672) (35,285,756)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
7,093,584 8,702,063
--------------------------------------------------------------------------
$9,350,378 $11,603,992
--------------------------------------------------------------------------
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ART Advanced Research Technologies Inc.
Shareholders's Equity
As at March 31, 2009
(In U.S. dollars)
Common Shares Preferred Shares
--------------------------------------------------------------------------
Number Amount Number Amount
--------------------------------------------------------------------------
Balance as at January 1,
2008 94,540,592 $23,030,023 8,341,982 $7,907,043
Net loss
Translation adjustment
--------------------------------------------------------------------------
Comprehensive loss
--------------------------------------------------------------------------
Issue of shares for cash 53,101,296 7,100,000
Share issue expenses
Stock-based compensation
Deferred share units
Expired warrants
--------------------------------------------------------------------------
Balance as at December
31, 2008 94,540,592 23,030,023 61,443,278 15,007,043
--------------------------------------------------------------------------
(unaudited)
Net loss
Translation adjustment
--------------------------------------------------------------------------
Comprehensive loss
--------------------------------------------------------------------------
Stock-based compensation
Expired warrants
--------------------------------------------------------------------------
Balance as at March 31,
2009 94,540,592 $23,030,023 61,443,278 $15,007,043
--------------------------------------------------------------------------
Share Capital
and Share
Purchase
Warrants Warrants
--------------------------------------------------------------------------
Number Amount Total
--------------------------------------------------------------------------
Balance as at January 1, 2008 4,855,791 $1,280,876 $32,217,942
Net loss
Translation adjustment
--------------------------------------------------------------------------
Comprehensive loss
--------------------------------------------------------------------------
Issue of shares for cash 7,100,000
Share issue expenses
Stock-based compensation
Deferred share units
Expired warrants (594,907) (175,389) (175,389)
--------------------------------------------------------------------------
Balance as at December 31, 2008 4,260,884 1,105,487 39,142,553
--------------------------------------------------------------------------
(unaudited)
Net loss
Translation adjustment
--------------------------------------------------------------------------
Comprehensive loss
--------------------------------------------------------------------------
Stock-based compensation
Expired warrants (200,000) (54,940) (54,940)
--------------------------------------------------------------------------
Balance as at March 31, 2009 4,060,884 1,050,547 39,087,613
--------------------------------------------------------------------------
Accumulated
Other
Contributed Comprehensive
Surplus Deficit Income Total
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Balance as at
January 1, 2008 $4,537,336 $(31,007,264) $3,326,739 $9,074,753
Net loss (4,819,230) (4,819,230)
Translation adjustment (2,201,804) (2,201,804)
--------------------------------------------------------------------------
Comprehensive loss (4,819,230) (2,201,804) (7,021,034)
--------------------------------------------------------------------------
Issue of shares for
cash 7,100,000
Share issue expenses (584,197) (584,197)
Stock-based
compensation 84,065 84,065
Deferred share units 48,476 48,476
Expired warrants) 175,389
--------------------------------------------------------------------------
Balance as at December
31, 2008 4,845,266 (36,410,691) 1,124,935 8,702,063
--------------------------------------------------------------------------
(unaudited)
Net loss (1,391,413) (1,391,413)
Translation adjustment (229,503) (229,503)
--------------------------------------------------------------------------
Comprehensive loss (1,391,413) (229,503) (1,620,916)
--------------------------------------------------------------------------
Stock-based
compensation 12,437 12,437
Expired warrants 54,940
--------------------------------------------------------------------------
Balance as at March 31,
2009 $4,912,643 $(37,802,104) $895,432 $7,093,584
--------------------------------------------------------------------------
ART Advanced Research Technologies Inc.
Operations
(In U.S. dollars)
(Unaudited)
Three-month periods ended March 31
--------------------------------------------------------------------------
2009 2008
--------------------------------------------------------------------------
Sales
Products $70,696 $1,206,212
Services and other revenues 25,218 35,709
--------------------------------------------------------------------------
95,914 1,241,921
--------------------------------------------------------------------------
Cost of sales
Products 2,498 247,793
Services and other revenues 7,705 18,105
--------------------------------------------------------------------------
10,203 265,898
--------------------------------------------------------------------------
Gross margin 85,711 976,023
--------------------------------------------------------------------------
Operating expenses
Research and development, net of investment
tax credits 635,910 854,650
Selling, general and administrative 868,946 1,283,254
Amortization 60,407 172,440
--------------------------------------------------------------------------
1,565,263 2,310,344
--------------------------------------------------------------------------
Operating loss 1,479,552 1,334,321
Financial revenues (88,139) (54,865)
--------------------------------------------------------------------------
Net loss $1,391,413 $1,279,456
--------------------------------------------------------------------------
Basic and diluted net loss per share $0.02 $0.01
--------------------------------------------------------------------------
Basic and diluted weighted average number
of common shares outstanding 94,540,592 94,540,592
--------------------------------------------------------------------------
ART Advanced Research Technologies Inc.
Notes to Financial Statements
(In U.S. dollars)
(Unaudited)
Three-month Periods ended March 31
--------------------------------------------------------------------------
2009 2008
--------------------------------------------------------------------------
OPERATING ACTIVITIES
Net loss $(1,391,413) $(1,279,456)
Items not affecting cash
Amortization 60,407 172,440
Stock-based compensation 12,457 37,080
Net changes in working capital items
Accounts receivable 148,611 395,929
Investment tax credits receivable 431,812 1,140,069
Inventories (44,392) 55,489
Prepaid expenses 27,556 (842,236)
Accounts payable and accrued liabilities (581,498) 239,539
Deferred revenues 20,054 (35,709)
Deferred grant - 5,821
--------------------------------------------------------------------------
Cash flows from operating activities (1,316,406) (111,034)
--------------------------------------------------------------------------
INVESTING ACTIVITIES
Acquisition of property and equipment (6,301) -
Proceeds on disposal of property and equipment - 25,691
Patents (31,087) (89,175)
Deferred development costs (264,162) (295,171)
--------------------------------------------------------------------------
Cash flows from investing activities (301,550) (358,655)
--------------------------------------------------------------------------
FINANCING ACTIVITIES
Repayment of obligations under capital
leases (8,449) (5,538)
--------------------------------------------------------------------------
Cash flows from financing activities (8,449) (5,538)
Effect of foreign currency translation
adjustments on cash and cash equivalents (69,644) (116,739)
--------------------------------------------------------------------------
(78,093) (122,277)
--------------------------------------------------------------------------
Net decrease in cash and cash equivalents (1,696,049) (591,966)
Cash and cash equivalents, beginning of
period 3,146,086 3,587,654
--------------------------------------------------------------------------
Cash and cash equivalents, end of period $1,450,037 $2,995,688
--------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
Cash $1,450,037 $1,001,331
Term deposits - 1,994,357
--------------------------------------------------------------------------
$1,450,037 $2,995,688
--------------------------------------------------------------------------
Supplemental disclosure of cash flow
information
Interest paid $8,062 $8,634
Interest received 1,403 23,750
Fixed assets acquired by means of capital
leases - 129,403
--------------------------------------------------------------------------
Contacts: ART Advanced Research Technologies Inc. Jacques Bedard
Chief Financial Officer 514-832-0777 jbedard@art.ca www.art.ca
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