Gross Profit

Gross profit in the 2013 second quarter was $3.1 million compared with $6.7 million for the same period last year. Year-to-date gross profit was $6.1 million compared with $8.1 million for the same period last year. Impacting gross profit were fewer scheduled installation activities due to a high rate of product development installations for our MR Guided Radiation Therapy (MRgRT) and iCT systems, partially offset by higher gross profit from the additional extended maintenance contracts. Gross profit as a percentage of sales in the 2013 second quarter was 30.4 percent compared with 38.6 percent in the prior-year quarter. Year-to-date, gross profit as a percentage of sales was 33.5 percent compared with 38.8 percent in the prior year. Gross profit as a percentage of sales is expected to continue to vary based on the underlying installations in each quarter, with full year 2013 performance expected to be approximately 36 percent for the year.


Operating Expenses

IMRIS continued to invest in order to grow the business. Operating expenses for the 2013 second quarter were $10.8 million compared with $10.7 million for the same period last year. During the quarter, the company relocated its operations to the U.S. State of Minnesota. Total relocation costs of $0.7 million, additional rent and utilities expense of $0.5 million at the new facility in Minnesota, and higher employee-related costs of $0.9 million were offset by lower expenses of $1.9 million in research and development costs primarily for robotics, MRgRT and other ancillary research projects. Year-to-date operating expenses were $21.6 million, up $0.9 million compared with the same period last year, primarily due to additional one-time costs related to the company relocation, offset by lower research and development costs for robotics, MRgRT and other projects.

Adjusted EBITDA and Operating Loss

Adjusted EBITDA for the 2013 second quarter was negative $6.3 million compared with negative $2.7 million for the same period last year. Adjusted EBITDA for the 2013 second quarter reflects lower gross profit of $3.5 million. Year-to-date, adjusted EBITDA was negative $12.6 million compared with negative $10.0 million for the same period last year. The decrease in adjusted EBITDA stemmed primarily from lower gross profit of $1.9 million, higher operating expenses of $0.9 million, and unfavorable foreign exchange currency impact of $1.0 million.

Net Loss

Net loss for the 2013 second quarter was $8.2 million compared with $4.3 million in the prior-year quarter, mainly due to lower gross profit of $3.5 million and unfavorable foreign currency exchange impact of $0.3 million. The year-to-date net loss was $16.6 million compared with $12.6 million for the same period last year, primarily due to lower gross profit of $1.9 million, higher operating expenses of $0.9 million and unfavorable foreign currency exchange of $1.0 million.

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