SAN DIEGO, March 21, 2002 (PRIMEZONE) -- CardioDynamics (Nasdaq:CDIC), the innovator and global leader of Impedance Cardiography (ICG) technology and manufacturer of BioZ(r) noninvasive digital cardiac function monitoring systems, today reported its financial results for the first quarter 2002.
First Quarter 2002 Results:
Net sales for fiscal first quarter 2002 were $4.4 million, an increase of 10% over sales of $4.0 million for the same period in fiscal 2001. Although the Company did not continue its four-year record of sequential quarterly revenue growth, it was the 15th consecutive quarter of year-over-year quarterly revenue growth. Recurring sensor revenue in first quarter 2002 was $547,000 (13% of sales), up 69% from $324,000 (8% of sales) in the same quarter 2001. Gross margin for the first quarter increased to $3.1 million, up from $2.7 million for first quarter 2001 and increased to 71% of sales, up from 69% in the same quarter last year. Net loss for first quarter was $0.6 million, or ($0.01) per share, compared with a net loss for the first quarter 2001 of $0.5 million, or ($0.01) per share.
Operating Highlights:
During first quarter 2002, 127 BioZ systems were shipped, increasing the Company's installed base to over 1,790 systems, up over 43% from 1,255 one year ago. Included in first quarter shipments were 16 BioZ Systems sold to GE Medical Systems Information Technologies (GEMSIT), United Kingdom. Less than expected sales for the first quarter 2002 were due primarily to: 1) a voluntary retrieval of second-generation shipments of BioZ Systems affecting productivity of the direct sales force; 2) delays in customer purchasing decisions due to post-September 11 economic uncertainties; and 3) a shortfall in hiring progress for the Company's U.S. direct sales force.
During the quarter, the Company identified a product performance problem unique to 43 of its newly released second-generation BioZ systems, which began shipping during the fourth quarter 2001. Field sales and clinical sales personnel were required to focus on regulatory and customer management issues until a solution was implemented later in the quarter.
The Company completed the quarter with 59 field sales associates, including 39 sales representatives and eight clinical sales specialists. Delays in identifying and hiring new field personnel led to the lack of planned growth in the field sales force from fourth quarter, 2001. The Company has accelerated its recruiting efforts in the second quarter and remains committed to reaching its year-end goal of 48 sales representatives and 12 clinical sales specialists.
CEO Comments and Outlook:
Commenting on the results, Michael K. Perry, CardioDynamics' Chief Executive Officer, stated, "While we are not satisfied with our equipment sales and the loss experienced in the first quarter, we believe a number of the challenges faced this quarter were short-term in nature. There are many aspects of our Company of which we are very proud. Despite the uncertainties within the overall economy, we experienced a 10% growth in our business, including a 23% increase in sales by our direct sales force. Continued strong growth in recurring revenue helped reduce the impact of softer-than-planned equipment sales. More than 700,000 patients have now been monitored by our BioZ systems, and we expect to exceed 1 million in the latter half of 2002."
Perry continued, "Our balance sheet remains strong, with virtually no debt and a cash balance of $6.4 million -- essentially unchanged over the prior two quarters. We believe we still can achieve our first profitable year and generate positive cash flow late in the fiscal year. Our immediate focus is to increase revenue growth and restore profitability to the business. We are confident in the long-term prospects of the industry we are creating. With penetration of approximately one percent in physician offices and well under one percent in the hospital market, we are only beginning to capitalize on this enormous market opportunity."
Perry added, "We are also pleased to have reached an agreement with Medtronic on our ICG technology that we are announcing separately today."
Additional First Quarter Highlights and Accomplishments:
Highlights of the quarter included the publication of a significant ICG study in the Journal of Cardiothoracic and Vascular Anesthesia. The study demonstrated that data provided by the Company's noninvasive BioZ was clinically equivalent to the invasive, risky and more costly procedure used in patients following open-heart surgery. The Company was also notified that four manuscripts were submitted for publication consideration in peer-reviewed medical journals. The manuscripts included congestive heart failure, emergency department, and hypertensive patients.
Conference Call Information:
Michael K. Perry, Chief Executive Officer, will host a summary of CardioDynamics first quarter 2002 results in a conference call today at 9:00 AM (EST). To access the conference call, dial 800-349-4174. A replay of the call is available by calling 800-642-1687 (Code 3361254). The call will also be available via webcast and can be accessed at http://www.irconnect.com/primecast/02/q1/cdic_1q2002.mhtml
About CardioDynamics: CardioDynamics (Nasdaq:CDIC), the ICG Company, is the innovator and global leader of breakthrough medical technology called Impedance Cardiography (ICG). The Company's primary products, the BioZ(r) Systems, are being used by leading physicians around the world to help battle the number one killer of men and women -- cardiovascular disease. Partners include GE Medical Systems Information Technologies, Spacelabs Medical Systems, and Vasomedical. The worldwide market potential for BioZ products is estimated to be $5 billion and an additional $800 million in recurring annual revenue for disposables. For additional information or to request an investor package, please refer to the company's Website at www.cdic.com.
Forward-Looking (Safe Harbor) Statement:
Note: Except for the historical and factual information contained herein, this press release contains forward-looking statements, the accuracy of which are necessarily subject to uncertainties and risks, which include sole dependence on the BioZ product line, and various uncertainties characteristic of companies just emerging from the development stage; as well as other risks detailed in the company's filings with the SEC, including its 2001 Form 10-K. The company does not undertake to update the disclosures contained in this press release.
CardioDynamics International Corporation
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Results From Operations: Three Months Ended
February 28,
(Unaudited)
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2002 2001
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Net Sales $ 4,366,000 $ 3,964,000
Gross Margin 3,088,000 2,749,000
Research & Development 642,000 810,000
Selling & Marketing 2,721,000 2,194,000
General & Administrative 439,000 450,000
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Loss from Operations (714,000) (705,000)
Other Income, net 84,000 172,000
Income Taxes -- (1,000)
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Net Loss (630,000) (534,000)
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Net Loss per Share,
- Basic and Diluted $ (0.01) $ (0.01)
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Weighted-Average Number of
Common Shares Outstanding:
- Basic & Diluted 45,932,770 45,519,710
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Selected Financial Information:
February 28, November 30,
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2002 2001
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Cash $ 6,409,000 $ 6,394,000
Accounts Receivable, net 6,981,000 7,373,000
Inventory, net 3,175,000 2,821,000
Current Assets 18,723,000 18,682,000
Long-term Assets 2,657,000 2,779,000
Total Assets 21,379,000 21,461,000
Current Liabilities 2,905,000 2,998,000
Long-term Debt 19,000 40,000
Total Liabilities 2,924,000 3,038,000
Shareholders' Equity 18,456,000 18,423,000