SAN DIEGO, Sept. 4 CardioDynamics InternationalCorporation (Nasdaq: CDIC), the innovator and leader of Impedance Cardiography(ICG) technology, announced today that it has completed the sale of theCompany's Vermed unit to Medical Device Partners, Inc., a Vermont corporationrecently organized by Vermed's management team, for a cash purchase price of$8 million. Additionally, the Company secured a five-year manufacturing andsupply agreement with Vermed for the Company's proprietary ICG sensors. Thetransaction was approved by the Company's shareholders at its Annual Meetingheld on August 28, 2007, with 95% of the votes cast in favor of the sale.
The Company reported that the decision to sell Vermed was based ondeclining margins and profits in the electrocardiogram (ECG) business, as wellas the desire to focus limited resources on the Company's proprietary ICGbusiness, which the Company's management believes continues to hold thehighest growth potential. Additionally, the manufacturing and supplyagreement provides for maintenance of a long-term, mutually beneficialrelationship with Vermed for ICG sensors. Proceeds from the sale of Vermedare planned to be invested in the higher growth-potential ICG business;including the sales and clinical application specialist teams, incrementalinvestment in clinical trial research aimed at inclusion of ICG into cardiacguidelines and core technology improvement. Proceeds were also used to repaythe Company's remaining $1.4 million of bank debt owed to Comerica, therebyreducing the Company's interest expense.
"We are pleased to complete the sale of Vermed to the unit's managementteam and to inject new capital into our ICG business," stated Michael K.Perry, Chief Executive Officer. "Our objective is to improve the Company'sfinancial health in the near-term while continuing to make judiciousinvestments in strategic areas to establish ICG in the treatment guidelinesfor heart failure and hypertension over the next five years. We haveidentified over $10 million of potential new growth opportunities through ourPhoenix Initiative. Additionally, we are carefully managing our operatingexpenses to continue to trend the business toward a level of positiveoperating cash flow."
Perry added, "We look forward to continuing our excellent workingrelationship with Vermed and the MDP organization through this long-termmanufacturing and supply agreement. Within the next three to five years, webelieve ICG sensors will likely comprise over 50% of the ICG business revenue,and it is essential that we continue to enhance our proprietary position andmaintain cost efficiencies in this important recurring revenue stream."
The Company also reported that all other proposals presented at the AnnualMeeting were approved, including re-election of its Board of Directors andratification of the appointment of BDO Seidman, LLP, as the Company'sindependent auditors.
CardioDynamics International Corporation (Nasdaq: CDIC), "the ICGCompany," is the innovator and leader of an important medical technologycalled impedance cardiography (ICG). The Company develops, manufactures andmarkets noninvasive ICG products. The Company's ICG systems are being used byphysicians around the world to help battle the number one killer of men andwomen -- cardiovascular disease. Its partners include GE Healthcare andPhilips Medical Systems. For additional information, please refer to thecompany's Web site at http://www.cdic.com.
About Vermed, Inc. and Medical Device Partners, Inc.
Vermed, Inc., a wholly owned subsidiary of Medical Device Partners, Inc.,is a supplier of disposable electrodes and related supplies utilized inelectrocardiograph (ECG) and other diagnostic procedures. Vermed has 85employees that design, manufacture and package electrodes from its 45,000square foot facility in Bellows Fall