CDIC reports inline, but the market was expecting more internal growth, it would appear. I think CDIC is seeing product transition issues (new portable EKG/ICG device developed with Phillips due out later this year), as well as the competition for medical sales reps and focus on integrating acquisitions mentioned by management on the CC. Methinks CDIC might be a buy towards year end, with new product released and munches digested. CDIC might get some help form study results before then, but earnings is the key.
>>SAN DIEGO--(BUSINESS WIRE)--June 23, 2004-- CardioDynamics (Nasdaq:CDIC - News), the innovator and leader of Impedance Cardiography (ICG) technology and manufacturer of BioZ® noninvasive cardiac function monitoring systems, today reported its 24th consecutive quarter of year-over-year quarterly sales growth and a 41% increase in second quarter 2004 sales over the same period in the prior year.
Second Quarter 2004 Results:
Net sales for second quarter 2004 were $10.3 million, an increase of 41% over sales of $7.3 million for the same period last year with Vermed contributing 28% of the sales growth in the quarter. Net income for second quarter 2004 was $958,000, or $0.02 per share, up 85% compared with $518,000, or $0.01 per share, reported in second quarter of 2003. For the six months ended May 31, 2004, net income was $1.7 million, or $0.03 per fully diluted share, compared to net income of $634,000, or $0.01 per share, for the same period in 2003.
Operating Highlights:
During the second quarter 2004, 201 BioZ Systems were sold, increasing the total number of BioZ Systems sold to approximately 3,400 systems, up 30% from one year ago. ICG sensor revenue grew 38% in the second quarter 2004 to $1.7 million (20% of total ICG sales), up from $1.2 million (16% of total ICG sales) in the same quarter of 2003. With the acquisition of Vermed, combined ICG and electrocardiograph (ECG) sensor revenue accounted for 36% of total revenue in the quarter.
The Company sold 115 BioZ ICG modules for GE Healthcare's Solar® Systems in the second quarter, bringing the total sold this year to 169 modules. During second quarter 2004, the largest end user BioZ ICG module sale in the Company's history occurred with 13 ICG modules being purchased by the VA Hospital, San Antonio, Texas. There are now an estimated 650 BioZ ICG modules in hospitals worldwide.
Operating cash flow for second quarter 2004 was $898,000, up 114% from $420,000 achieved in second quarter 2003. The Company ended the quarter with $6.3 million in cash and short-term investments along with $6.7 million in bank borrowings. The lower cash and short-term investments balance and new debt are a result of the acquisition of Vermed during the quarter.
Gross margin for the second quarter was 72%, compared to 77% in the same quarter last year. The decrease was a result of lower gross margins associated with Vermed's ECG sensor products.
CEO Comments:
"We completed our second quarter a stronger, larger, and more diversified Company. As previously reported, we announced two acquisitions this quarter -- Vermed, the fourth largest manufacturer of ECG electrodes in the United States and Medis, GmbH, the European ICG leader," stated Michael K. Perry, CEO of CardioDynamics. The integration process which began this quarter contributes to the groundwork for our success in 2004 and beyond. We increased our employees to 221 and have already started building state-of-the-art equipment needed for manufacturing BioZtect® sensors at our Vermed facility."
Perry concluded, "This has been an exciting year for CardioDynamics. We are beginning to see the significant synergies and benefits from our acquisitions. We look forward to improving ICG sensor margins by ramping ICG sensor capacity at Vermed and capitalizing on growing opportunities in Europe with Medis. As we look to the latter part of 2004, we anticipate the release of clinical results from our major heart failure trial, PREDICT, as well as the release of Phase I, the ICG portion, of the co-developed Philips ICG/ECG monitor. With nearly three million patients monitored to date, our proprietary ICG technology continues to improve patient outcomes and save lives as we work to deliver increased shareholder value."
Additional Highlights and Accomplishments
Acquisitions:
Acquisition of Vermed, the leading independent manufacturer of ECG electrodes in the United States. The acquisition, which was immediately accretive, will enhance the intellectual property of CardioDynamics' ICG sensor technology, increase the recurring sensor revenue mix of its business, and improve predictability of operating results.
Acquisition of Medis, GmbH, a privately-held European cardiology and vascular diagnostic device company. The acquisition, which closed on June 2, 2004, will increase CardioDynamics' European presence, add complementary technologies to its existing ICG product platforms, and enhance its technology portfolio and product development capability. The acquisition will be included in the Company's third quarter earnings results.
Clinical Studies and Medical Meetings:
Publication of seven peer-reviewed articles in Congestive Heart Failure March/April 2004 supplement, refining the important role of ICG in clinical practice.
Selection of ICG by the U.S. Department of Veterans Affairs to assess the effectiveness, safety and dosage of a newly-developed heart failure drug in its two-year, multi-center prospective Phase II study.
Co-sponsorship of the First International Acute Heart Failure Syndromes Meeting in Cannes, France. Other sponsors included Northwestern University, Abbott Laboratories, Amgen, GlaxoSmithKline, Medtronic Inc., and Pfizer Inc.
Presentations at the American College of Cardiology 53rd Scientific Sessions demonstrating ICG's accuracy and value in the management of heart failure patients.
Conference Call Information:
Michael K. Perry, Chief Executive Officer, will host a summary of CardioDynamics' second quarter 2004 results in a conference call today at 4:30 p.m. (EDT). To access the conference call, dial 800-346-7359 (Code 7784). International participants can call 973-528-0008 (Code 7784). A replay of the call will be available for one month following the call at 800-332-6854 (Code 7784). The international replay number is 973-528-0005 (Code 7784). The Internet webcast can be accessed at irconnect.com. <<
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Cheers, Tuck |
