SAN DIEGO, July 1 CardioDynamics (Nasdaq: CDIC),the innovator and leader of BioZ(R) Impedance Cardiography (ICG) technology,today reported financial results for fiscal second quarter 2008. Highlightsinclude 18% revenue increase for first half fiscal 2008, 15% quarterly revenueincrease over prior year and sixth consecutive quarter of year over yearrevenue growth.
Sales Highlights of Second Quarter 2008 Compared with Second Quarter 2007
-- Net sales increased 15% to $6.2 million, up from $5.4 million
-- Over 8,200 ICG monitors and modules sold to date, up 12% from 7,300 oneyear ago
-- ICG device sales totaled 217 units, including 137 ICG monitors, 108 ofwhich were BioZ Dx systems, 14 BioZ monitors, and 15 Medis ICG monitors
-- ICG sensor revenue increased 1% to $1.7 million, comprising 28% oftotal sales, and increased 14% sequentially over first quarter 2008
-- International and new market revenue grew 11% to $782,000
Key Financial Results of Second Quarter 2008 Compared with Second Quarter2007
-- Gross profit margin was 71%, up from 63%
-- Operating loss was $476,000, an improvement of $1.0 million, or 68%,from $1.5 million
-- Net loss was reduced 62% to $732,000, or ($0.10) per diluted share,from a net loss from continuing operations of $1.9 million, or ($0.28) perdiluted share
-- Operating cash use was $490,000, down 43%, from an operating cash usefrom continuing operations of $860,000
-- Cash, cash equivalents and short-term investments at May 31, 2008, of$6.9 million, up 47% from $4.7 million at May 31, 2007
Additional Key Operating Milestones for the Second Quarter 2008
-- Released significant ICG study demonstrating nearly three times thenational average blood pressure control rates at the American Society forHypertension Annual Scientific meeting
Second Quarter 2008 Operating Results Discussion
The Company reported a net sales increase of 15% to $6.2 million. ICGsales growth was due to a combination of 8% higher average domestic ICGmonitor sales prices, a 20% increase in domestic ICG System sales and an 11%improvement in international and new market revenue (primarily due toincreased revenue from pharmaceutical companies). The higher average domesticsales price indicates continued physician acceptance and a solid valueproposition for ICG technology. The improvement in international and newmarket revenue is a result of the Company's increased focus on non-Medicarereimbursement dependant markets. Recurring sensor revenue grew 14%sequentially from first quarter 2008 to $1.7 million, and was up 1% comparedto the same period in 2007.
Gross margin as a percentage of sales increased from 63% to 71% in thesecond quarter of 2008, largely due to a higher net average sales price perunit, lower manufacturing expenses and reduced inventory charges related topotential excess, slow-moving or obsolete inventory. Operating expenses wereheld flat at $4.9 million and increased revenue, along with improved grossmargins, drove a 68% improvement in the operating loss. The reduced operatingloss, coupled with sound working capital management, resulted in a 43%reduction in operating cash usage to $490,000 in the quarter, down from an$860,000 operating cash use from continuing operations in the same quarter of2007.
CEO Comments and Outlook
Michael K. Perry, Chief Executive Officer of CardioDynamics, stated, "Weare very pleased with the 18% revenue growth achieved in the first half of2008 and 15% during the second quarter. Sales momentum continues strong andwith steady improvement throughout the business, we completed our sixthconsecutive quarter of year over year revenue growth. We are making very goodprogress in expanding gross margins and reducing the operating loss, down 68%to $476,000, which includes $247,