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Stephen Kilmer
Investor Relations
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skilmer@novadaq.com

NOVADAQ Reports Third Quarter 2014 Financial Results

TORONTO - November 6, 2014 - Novadaq® Technologies Inc. (“NOVADAQ” or the “Company”) (NASDAQ:NVDQ; TSX:NDQ), the leading developer and provider of clinically relevant fluorescence imaging solutions for use in surgical and diagnostic procedures, today announced financial results for its third quarter ended September 30, 2014. Unless otherwise indicated, all dollar amounts in this press release are expressed in United States (“U.S.”) dollars.

NOVADAQ reported third quarter 2014 revenues of $12.1 million, compared to $8.9 million in the third quarter of 2013, representing an increase of 36%. NOVADAQ’s strategy of investing in a direct sales team resulted in $5.5 million in PINPOINT® and LUNA® sales compared to $2.1 million in the third quarter of last year. Overall third quarter 2014 sales of SPY technology capital equipment were $6.8 million, an increase of 63% compared to the year ago quarter, and recurring revenues increased by 20% year-over-year to $4.2 million.

Third quarter gross profits of $7.8 million (64% margin) represented an increase of 37% compared to profits of $5.7 million (65% margin) in the same period last year.

Net income of $3.0 million for the third quarter of 2014 increased by $9.9 million compared with the $6.9 million net loss in third quarter of 2013. Third quarter 2014 earnings per share were $0.05. Excluding the impact of a non-cash $6.7 million warrants revaluation gain in the period, the loss per share was $0.06.

Third quarter 2014 operating burn (cash consumed by operating activities before changes in working capital) was $1.1 million compared to an operating contribution of $0.6 million in the third quarter of 2013. This difference in operating burn was mainly driven by increased sales and distribution expenses associated with the continued build-out of NOVADAQ’s direct sales and marketing infrastructure. During the period, working capital consumed was $2.5 million, and $0.7 million was used to build SPY technology systems for evaluation and placement.

Cash and cash equivalents were $157.8 million at September 30, 2014, reflecting a decrease of $4.3 million, compared to the cash position as at June 30, 2014.

During the third quarter, 98 SPY® technology systems, including FIREFLY™, were shipped globally. Exiting the quarter, the worldwide installed base of SPY technology systems was approximately 1,600.

The Company estimates that the number of procedures performed using SPY technology systems during the third quarter was approximately 9,100, representing an increase of 47%, year-over-year and a sequential increase of 22% over the previous quarter.

Subsequent to the end of the quarter, NOVADAQ and LifeCell™ Corporation agreed to transfer all marketing and distribution rights to the Spy Elite® system from LifeCell to NOVADAQ. The transfer will be effective November 30, 2014. LifeCell will provide certain services during a transition period from December 1, 2014 to December 31, 2014 for a service fee equal to approximately the revenue share pursuant to the distribution agreements. The parties terminated the distribution agreement, signed in September 2010, related to the marketing and distribution of the Spy Elite system in the fields of open plastic reconstructive, gastrointestinal, head and neck, and other surgery and also terminate agreements that were signed in November 2011 related to the marketing and distribution of the Spy Elite system in the interventional and vascular fields. The original expiry dates of these agreements were September 2015 and November 2017, respectively. The termination agreement provided for, along with other customary terms, a one-time payment of U.S. $4.5 million to LifeCell at the time of termination. The two parties also agreed to settle any and all legal disputes.

“We were pleased with our sales performance in a quarter that historically is known to be seasonally weaker in our industry,“ said Dr. ArunMenawat, NOVADAQ’s President and CEO. “While not yet reflected in our financial results, the signing of our first multi-unit, multi-site LUNA agreement with SerenaGroup™ at the end of the quarter marked the achievement of an important commercial milestone for our Company. Soon thereafter, we announced exclusive SPY technology distribution agreements with Kirloskar Technologies in India and Mizuho in Japan. These achievements, combined with recently announced transfer of SPY Elite back to NOVADAQ, well positions us for continued direct sales success and global growth.”

Conference Call Details
NOVADAQ is pleased to invite all interested parties to participate in a conference call today, November 6, 2014 at 4:30 p.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 (Canada and the United States) or 1-201-689-8031 (International) several minutes prior to the beginning of the call.

A replay of the conference call can be accessed by dialing 1-877-660-6853 (Canada and the United States) or 1-201-612-7415 (International) and entering the conference identification number 13593897 when prompted.

The call will also be archived for 90 days on the Company’s website at novadaq.com under the “Events” tab in the Investor’s section. 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 medical professionals with clinically relevant, point-of-care imaging solutions to enhance the lives of patients and their caregivers, 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 100 peer-reviewed publications demonstrate that the use of SPY imaging technologies during complex surgery and diagnostic procedures, leads to lower rates of 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 visualiza
tion offered by conventional endoscopes. LUNA™ is used to assess perfusion in patients being treated for non-healing wounds

Forward Looking Statement:
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.sec.gov and 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.