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CardioDynamics Announces Plan to Accelerate Return to Profitability

Tuesday, September 18, 2007 General News J E 4
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SAN DIEGO, Sept. 17 CardioDynamics(Nasdaq: CDIC), the innovator and leader of Impedance Cardiography (ICG)technology, announced today a plan to accelerate the Company's return toprofitability capitalizing on the proceeds from the $8 million sale of Vermed.The plan provides for strategic investments in revenue growth initiatives andexpense reductions, including a 10% reduction in executive salaries.

Following its third consecutive quarterly year over year revenue growthfor its ICG business, ending August 31, 2007, the Company announced details ofa comprehensive revenue growth plan, the Phoenix Initiative. This initiativeincludes programs to enhance revenue growth and address market adoptionchallenges, with revenue growth potential estimated at over $10M million. Inaggregate, the programs have the potential to increase the Company's estimated10% annual revenue growth to 15-20%. Phoenix Initiative highlights includethe YES program, Legacy program, ICG Centers of Excellence Partnershipprogram, Direct Response program, and Pharmaceutical Research Allianceprogram.

As part of the Company's plan to accelerate return to profitability, italso announced a number of expense reductions. The executive management teamis taking a 10% salary reduction and adding additional operational duties totheir daily responsibilities. The Company also announced that it does notintend to fill vacancies in several positions resulting from attrition and theconsolidation of four middle management positions within its corporateoffices. The Company successfully piloted and is implementing an associatetier in its clinical application sales force, which allows the department toreduce overall costs while improving customer satisfaction. Additionally, theCompany identified product design changes to reduce product cost and willimplement them as soon as practical. Collectively, these expense reductionsare estimated to save approximately $2 million annually.

"Now that we have completed the sale of Vermed and injected needed cashinto the recovering ICG business, we felt it was important to accelerate ourefforts to return to positive operating cash flow and profitability as quicklyas possible," stated Michael K. Perry, Chief Executive Officer. "We haveidentified a number of actions to improve top-line revenue growth and reduceexpenses to enhance the cash generating capability of the business. Theseactions will facilitate continued investments in our field sales and clinicalapplication specialist teams, clinical trial research and core technologyimprovement. We believe these investments will drive increased revenue growthand help establish ICG in the treatment guidelines for heart failure andhypertension over the next five years."

Perry added, "We continue to believe the company is undervalued relativeto the growth prospects we have outlined, the 95%+ market share we have builtin the ICG marketplace, our 65+ person direct sales and clinical team, thelarge and growing base of recurring sensor revenue, our 16 filed patents, and$47 million of net operating loss carry-forwards. With over $8 million incash and a renewed focus on returning to profitability, we believe the companyis worth far in excess of its present market capitalization of less than onetimes revenue."

The Company also announced that in the next few weeks it will befinalizing and rolling out plans for its next hypertension clinical trial.The trial is targeted to support expansion of the Company's hypertensionreimbursement with Medicare and private insurance companies.

About CardioDynamics

CardioDynamics (Nasdaq: CDIC), the ICG Company, is the innovator andleader of an important medical technology called impedance cardiography (ICG).The Company develops, manufactures and markets noninvasive ICG products. TheCompany's ICG Systems are being used by physicians around the world to help
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