CardioDynamics International Corporation (CardioDynamics) has declared net sales of $24.5 million for the full year of fiscal 2008, compared with the net sales of $21.8 million in the previous year-end. It has also reported net loss of $3.2 million, or $0.45 per share, for the full year of fiscal 2008, compared with the net loss of $16.6 million, or $2.38 per share, in the previous year-end.
Key financial and operating results for fourth quarter 2008 against fourth quarter 2007
Net ICG sales increased 6% to $6.5 million, up from $6.2 million
ICG sensor revenue increased 11% to $1.9 million, or 29% of total sales, up from $1.7 million
ICG monitor and module sales increased 32% to 291 units, 108 of which were BioZ Dx systems, 9 BioZ monitors, 21 Medis monitors and 153 BioZ modules, up from a total of 221 ICG monitors and modules
ICG gross profit margin was 71%, up from 65%
Operating loss was $0.4 million, decreases from $0.8 million, an improvement of 47% $276,000 of cash flow generated from operations against a $234,000 operating cash use
Key financial and operating results of fiscal 2008 against fiscal 2007
Net ICG sales increased 12% to $24.5 million, up from $21.9 million
International sales increased 73% to $4.7 million, up from $2.7 million
994 ICG monitors and modules sold, up 32% from 752, now with over 8,700 ICG monitors and modules sold to date
ICG gross profit margin was 72%, up from 68%
Operating loss improved 58% to $2.0 million, decreases from an operating loss of $4.8 million which includes $1.0 million of non-cash charges for depreciation, amortization and equity compensation in 2008, and $0.9 million in 2007
Additional key operating milestones for the fourth quarter and fiscal 2008
Announced results of significant clinical study with nearly three times the national average blood pressure control rates at the American Society of Hypertension annual meeting;
Announced two important clinical studies correlating BioZ ICG with Ejection Fraction BioZ ICG technology featured in American College of Cardiology (ACC) audio series sales & marketing
Launched Comprehensive Customer Care (C3) program designed to improve ICG customer care, satisfaction and proper utilization Initiated BioZ ICG CERTIFIED program, a global approach to ICG education extending from patients to all call points in physician offices and beyond to insurance payers, medical schools and patient advocacy groups.
BioZ ICG technology integrated with General Electric Healthcare’s Centricity electronic medical record (EMR) system
Fourth Quarter and Fiscal 2008 Operating Results Discussion
The company reported a net sales increase of 6% to $6.5 million in the fourth quarter 2008 and 12% for full year 2008 to $24.5 million, representing the second consecutive year of growth. Fourth quarter ICG sales growth was driven by a combination of a 13% increase in BioZ sales, a 255% increase in ICG Module sales and an 11% increase in ICG sensor revenue.
ICG Module sales were particularly strong in the fourth quarter with purchases by General Electric Medical Systems (GEMS) of 72 ICG Modules and Mindray of 80 ICG Modules. The company also received a firm purchase order in January 2009 from Mindray for an additional 150 ICG Modules deliverable in 2009.
ICG sensor revenue in the fourth quarter was a record $1.9 million, due in part to the clinical sales team’s focused customer service efforts through the launch of the Comprehensive Customer Care (C3) and ICG CERTIFIED programs.
Gross margin as a percentage of sales increased from 68% to 72% in fiscal 2008, largely due to lower manufacturing overhead costs, 9% average unit sales price improvement, and lower inventory reserve requirements.
As part of the company’s efforts to accelerate the return to profitability, tight expense control resulted in a 1% overall reduction in 2008 operating expenses with the most significant savings occurring in non revenue generating areas including General and Administrative expenses, decreases $321,000 and research and development, decreases $188,000. The company surpassed one of its major 2008 goals by achieving $276,000 of positive operating cash flow in the fourth quarter of 2008.
Fourth Quarter 2008 operating loss improved 47% to $442,000, decreases from an operating loss of $830,000 in fourth quarter 2007. The operating loss for fiscal 2008 was $2.0 million, a 58% improvement from fiscal 2007 operating loss of $4.8 million. Fiscal 2008 loss before income taxes, depreciation, amortization and equity compensation was $1.0 million, an improvement of $2.9 million, or 74%
CEO Comments and Outlook
“We were pleased with the continued improvement in our key operating metrics during the fourth quarter and throughout 2008,” stated Michael K. Perry, Chief Executive Officer of CardioDynamics. “Despite the challenging business climate, we achieved our eighth consecutive quarter of revenue growth and accomplished our goal of generating positive operating cash flow, which was $276,000 during the quarter. Our recently introduced Comprehensive Customer Care (C3) and BioZ Certification programs helped grow recurring sensor revenue 11% during the quarter and should contribute appreciably to our growth plans in 2009. International, New Markets and our Medis team were particularly strong contributors on the revenue front, collectively growing 73% in 2008.”
Perry continued, “We are conservatively planning for high single to low double-digit revenue growth in 2009 and have, as a major objective, achievement of positive operating cash flow for the entire year. With over $6 million in cash, we have the financial resources to continue to execute our business plan without the need to access the capital markets during these challenging times.”
Perry concluded, “Looking out over the next two to three years, we hope to be able to achieve solid growth and improved operating performance with our unique technology in a niche market that is less than 6% penetrated and at the very early stages of market adoption. We believe that we may be well positioned to capitalize on the proposed Obama-Biden healthcare reform which focuses on supporting disease management programs as over 75% of total health care dollars are spent on patients with one or more chronic conditions, including diabetes, heart disease and high blood pressure. ICG is ideal to support the disease management programs for heart disease and hypertension.”