H.I.G. Capital News

Contact:

David C. Martin Vice President, Corporate Development and Investor Relations Novadaq Technologies Inc. 905-629-3822 ext: 218
dmartin@novadaq.com

Novadaq Reports 2012 Fourth Quarter and Full Year Financial Results

TORONTO, ONTARIO — February 7, 2013 – Novadaq® Technologies Inc. (“Novadaq” or the “Company”) (NASDAQ: NVDQ, TSX: NDQ,), a developer of clinically-relevant fluorescence imaging solutions for use in surgical procedures, today announced financial results for its fourth quarter and full year ended December 31, 2012. Unless otherwise indicated, all dollar amounts in this press release are expressed in United States (U.S.) dollars.

Novadaq reported total revenues for the fourth quarter and full year 2012 of $6.8 million and $23.0 million, respectively, representing increases of 37% and 50% as compared to the same periods in 2011. Growth was due to increased revenue from SPY Elite® and FIREFLY™ procedures and higher SPY Elite and FIREFLY system sales to end users.

Fourth quarter and full year 2012 SPY product revenues were $5.9 million and $19.3 million, respectively, representing increases of 48% and 84% compared to the same periods in 2011. Fourth quarter SPY product recurring revenue increased by 67% to $3.0 million compared to $1.8 million reported in Q4-2011.

Fourth quarter gross profit of $4.6 million (67% margin), represents an increase of 56% compared with $2.9 million (59% margin) in Q4-2011, and an increase of 18% compared with $3.9 million (65% margin) in Q3-2012.

Fourth quarter of 2012 operating contribution (cash contributed by operating activities before changes in working capital) was $1.1 million compared with an operating burn of $0.06 million in the fourth quarter of 2011. During the fourth quarter, working capital consumed $1.8 million, and $1.4 million was invested in fixed assets, including $0.9 million to build the SPY Elite installed base.

Net earnings of $3.1 million for the fourth quarter of 2012 increased by $5.1 million compared with the $2.0 million net loss in fourth quarter 2011. Fourth quarter 2012 earnings per share were $0.08. Excluding the impact of a non-cash $3.4 million warrants revaluation gain in fourth quarter 2012, loss per share was $0.01.

Cash and cash equivalents were $39.0 million at December 31, 2012, reflecting a decrease of $2.2 million, compared to the cash position as of September 30, 2012.

Novadaq shipped 135 SPY Elite and FIREFLY imaging systems during the fourth quarter of 2012. The combined installed base of SPY technology in the United States now exceeds 700 systems. Penetration into the U.S. breast reconstruction market by the end of Q4-2012 was approximately 13%.

“Both the installed base and utilization of SPY imaging systems are growing as surgeons representing multiple specialties continue to report reduced rates of post-operative complications, and lower patient care costs following procedures involving our technologies,” commented Dr. Arun Menawat, Novadaq’s President and CEO. “To further support Novadaq’s long term growth, the commercial and clinical launches of PINPOINT® and LUNA™ are progressing as planned.”

Conference Call
Novadaq is pleased to invite all interested parties to participate in a conference call today, Thursday, February 7, 2013, at 8:30 a.m. Eastern Time during which the results will be discussed.

Those wishing to access the live conference call by telephone should dial 1-877-407-8031 (within Canada and the United States) or 1-201-689-8031 (international callers) several minutes prior to the beginning of the call. A telephonic replay of the conference call will be made available until midnight on March 7, 2013 and can be accessed by dialing 1-877-660-6853 (within Canada and the United States) or 1-201-612-7415 (international callers) and entering the conference identification number 408022 when prompted.

The call will be archived for 90 days on the Company’s website at http://www.novadaq.com under the “Events” tab in the Investors section. In addition, a replay of the call will be available for download to a portable audio player or computer, as an MP3 or podcast file, at the same location on Novadaq’s website.

About Novadaq Technologies Inc.
Enabling surgeons with clinically-relevant, innovative fluorescence imaging solutions to enhance the lives of patients and their surgeons, while reducing health care costs, is Novadaq’s global mission. SPY fluorescence imaging technology provides surgeons with real-time visualization, leading to improved outcomes and reduced costs without exposing the patient to radiation. More than 60 peer-reviewed publications demonstrate that the use of SPY imaging during complex surgery, leads to fewer post-operative complications and lower hospital costs.

SPY Imaging Systems are United States Food and Drug Administration 510(k) cleared for use in seven surgical specialties. The endoscopic version of SPY called PINPOINT®, combines the capabilities of SPY Imaging with high definition (“HD”) visible light visualization offered by conventional endoscopes. Our unique business model of partnering with market-leading companies to drive adoption of our fluorescence imaging technology, while building our own commercial infrastructure is the cornerstone of our corporate strategy for growth.

Forward Looking Statements
Certain statements included in this press release may be considered forward-looking. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. All forward-looking statements are based on Novadaq's current beliefs as well as assumptions made by and information currently available to Novadaq and relate to, among other things, the Company’s strategy, strategic goals, research and development activities, research and clinical testing outcomes, taxes, capital expenditures, future operations, future financial position, future revenues/results, projected costs, prospects and plans and objectives of management.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Due to risks and uncertainties, including the risks and uncertainties identified by Novadaq in its public securities filings available at www.sedar.com, actual events may differ materially from current expectations. Novadaq disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.