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CardioDynamics Reports First Fiscal Quarter 2007 Results Tuesday 04/10/2007 9:00 AM ET - PR Newswire CardioDynamics (Nasdaq: CDIC), the innovator and leader of Impedance Cardiography (ICG) technology, today reported financial results for fiscal first quarter 2007.
Highlights of First Quarter 2007 Compared with First Quarter 2006 -- Net sales increased 10% to $7.2 million, from $6.5 million -- ICG revenue increased 15% to $4.7 million, from $4.1 million -- Net loss improved 52%, with a loss of $1.7 million, ($0.03) per diluted share, from a loss of $3.5 million, or ($0.07) per diluted share -- Operating cash usage decreased 59% to $288,000, from $711,000 -- Cash and short-term investments increased 56% to $4.2 million, compared with $2.7 million -- Installed base of BioZ monitors and modules increased 13% to over 7,000 units, from 6,250 Additional Key Operating Results for the First Quarter 2007 -- International revenue grew 14% to $505,000, from $443,000 in the first quarter of 2006 -- Total sensor revenue was $4.0 million, representing 55% of sales, up from $3.9 million, or 60% of sales in the first quarter of 2006 -- Overall gross profit margin was 59%, compared with 56% in the first quarter of 2006 -- ICG gross profit margin was 74%, compared with 68% in the first quarter of 2006 -- Operating expenses were reduced 20% to $5.6 million, down from $7.0 million in the first quarter of 2006 -- ICG device sales totaled 138 units, including 122 ICG monitors, 81 of which were BioZ Dx systems, 23 BioZ monitors, and 18 Medis ICG monitors, compared with 138 units in first quarter of 2006 -- Field headcount totaled 64 field associates, including 32 U.S. territory managers and 23 clinical application specialists, compared with 62 field associates in first quarter 2006 including 38 territory managers and 15 clinical application specialists. The Company reported a net sales increase of 10% to $7.2 million, resulting from 15% growth in the ICG business compared with the first quarter last year. ICG growth was primarily driven by a 20% productivity improvement in capital equipment sales by territory managers over the first quarter of 2006.
Total sensor revenue was $4.0 million, with ICG sensor revenue stable at $1.5 million, and ECG sensor revenue growing 2% to $2.5 million from $2.4 million in the first quarter of 2006. As a result of the clinical sales team's focused customer service efforts, ICG recurring revenue stabilized following disruptions caused by Medicare's hypertension policy decisions. ECG revenue growth in the quarter was impacted due to severe weather in the Northeast during February, resulting in an order backlog increase of 13% during the quarter.
Overall gross margin percentage increased 3% to 59%, largely due to the improved mix of ICG business revenue and ICG gross profit margin increasing 6% to 74%. The ICG margin improvement was primarily due to a 12% higher net average sales price per unit, increased overhead absorption on higher overhead rate and reduced inventory reserve requirements. This was partially offset by a 6% decrease in the ECG gross margin to 30% as a result of higher material costs and increased discounts to group purchasing organizations.
The 20% lower operating costs were primarily due to a decrease in general and administrative expenses during the period, the majority of which was driven by regulatory compliance costs associated with Section 404 of the Sarbanes-Oxley Act being incurred earlier in the year and lower year-end audit fees. In addition, there were 10% fewer employees resulting from a March 2006 corporate restructuring as well as reduced bad debt expense resulting from strong accounts receivable collections during the quarter. Reduced operating expenses helped drive operating cash usage down 59% to $288,000, and improved the net loss by 52%, to $1.7 million, ($0.03) per diluted share.
Michael K. Perry, Chief Executive Officer of CardioDynamics, stated, "We were encouraged by the 10% overall revenue growth and 15% growth in the ICG business, our first quarterly year over year revenue growth in the past seven quarters. The 20% increase in territory manager productivity was an important contributor to top line growth and is a result of the changes we made early last year in our direct sales model and sales management team; improved sales training; increased clinical sales headcount; and focused attention on customer service. The 20% reduction in operating expenses and the ongoing reduction in cash utilization and net losses are positive effects of the difficult, but necessary, two-year restructuring of our business following the changes in Medicare's hypertension policy. Our employees have passionately labored as a team to stabilize our business, address the concerns of customers who bought under the original Medicare policy and further penetrate the market through educating the medical community on our latest clinical studies and the clinical value of our technology."
Perry continued, "In our first fiscal quarter, we were pleased to commence enrollment in our landmark PREVENT-HF trial, a 35-center heart failure trial which, if positive, has the potential to place ICG into heart failure treatment guidelines. Moreover, our sole source, three-year contract with Premier Purchasing Partners, a leading health care group purchasing organization, has the potential to add $1 million annually of additional revenue to our ECG business. Lastly, with additional field sales and clinical personnel added over the past two quarters, we look forward to continuing our positive trends and turning stabilization of the business into sustainable growth."
-------------------- This is not a recommendation to buy or sell securities.
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