Third Quarter Financial Results
Revenue: Total revenue for the third quarter of 2011 was $8.1 million, an increase of approximately $2.5 million, or 44%, compared with total revenue of $5.6 million for the third quarter of 2010. The Axxent eBx system contributed approximately $1.8 million to revenue in the quarter, consisting of approximately $1.3 million in product sales and $441,000 in service and supply revenue. In addition, the quarter featured solid growth in the Company’s CAD business.
|Three months ended September 30,|
|Digital & MRI revenue||$||3,791||$||3,311||15||%|
|Film based revenue||616||748||(18||)%|
|Service & supply revenue||2,298||1,527||51||%|
Gross Margin: Gross profit for the third quarter of 2011 was $5.9 million, or 73.1% of revenue, compared with $4.5 million, or 79.8% of revenue, for the third quarter of 2010.
Goodwill Impairment & Contingent Consideration: In the third quarter of 2011, the Company recorded a non-cash charge of $26.8 million related to the impairment of goodwill. As a result of the sustained decline in the market value of the Company, an interim goodwill impairment analysis was performed using the two-step approach, as required under GAAP. The Company concluded that, based on current market conditions, a portion of goodwill was impaired resulting in a $26.8 million non-cash charge in the third quarter of 2011.In the third quarter of 2011, the Company recorded a non-cash $3.8 million gain on contingent consideration. This gain represents a fair value adjustment to the contingent consideration liability related to the Company’s acquisition of Xoft, Inc. in December 2010.