Exhibit 1.1
CardioDynamics Reports 20th Consecutive Quarter of Year-Over-Year
Revenue Growth and 30% Increase in Second Quarter 2003 Sales
SAN DIEGO--(BUSINESS WIRE)--June 18, 2003--
Company Records 71% Increase in Recurring Sensor Revenue over Second
Quarter 2002
CardioDynamics (Nasdaq: CDIC), the innovator and leader of
Impedance Cardiography (ICG) technology and manufacturer of BioZ(R)
noninvasive cardiac function monitoring systems, today reported its
20th consecutive quarter of year-over-year revenue growth and a 30%
increase in second quarter 2003 sales over the same period in the
prior year.
Second Quarter 2003 Results:
Net sales for fiscal second quarter 2003 were $7.3 million, an
increase of 30% over net sales of $5.6 million for the same period in
fiscal 2002. Net sales for the six months ended May 31, 2003 were
$13.7 million, an increase of 37% over net sales of $10.0 million for
the same period in 2002. Gross margin for the second quarter 2003
increased to 77% of sales, up from 72% for the same quarter in fiscal
2002, the result of a decrease in sensor costs and higher average net
revenue per unit due to modified leasing company incentive programs.
Net income for the second quarter was $518,000, or $0.01 per
share, compared with net income for the second quarter 2002 of
$47,000, or $0.00 per share. The improvement in net income for the
second quarter 2003 was primarily due to increased sales and higher
gross margin, along with improved sales and overall employee
productivity. For the six months ended May 31, 2003, net income was
$634,000, compared to a net loss of $583,000 for the same period in
2002.
Operating Highlights:
During second quarter 2003, 192 BioZ Systems were shipped,
increasing the total number of BioZ Systems sold to over 2,600
systems, up 38% from one year ago. Recurring sensor revenue in the
second quarter 2003 was $1.2 million (16% of sales), up 71% from
$701,000 (12% of sales) in the same quarter 2002. The recurring sensor
revenue growth was attributable to the expansion of the installed base
of BioZ Systems and initial success of the Company's program to assist
in the workflow integration of BioZ Systems in physician offices.
Cash flow from operations for the second quarter 2003 was
$420,000, an improvement of $573,000 compared with second quarter
2002. This represented the fourth consecutive quarter of positive
operating cash flow and a three-fold increase in operating cash flow
compared to the first quarter 2003. Second quarter 2003 accounts
receivable cash collections were $7.5 million, representing 117% of
first quarter 2003's sales. The Company ended the quarter with $7.2
million in cash and cash equivalents.
CEO Comments and Outlook:
"With 20 consecutive quarters of revenue growth, we continue our
tradition of delivering solid improvement in financial performance. We
experienced a significant increase in second quarter net income and
operating cash flow over the same period last year, which is a
testament to the Company's operating discipline and sound business
model," stated Michael K. Perry, CardioDynamics' chief executive
officer. "We are especially pleased with the strong progression in
recurring sensor revenue thus far this year. Over the last four years,
sensor revenue has grown from 3% of sales to now over 16%, and we
anticipate that strong sensor growth will continue. We are beginning
to reap the benefits of the Company's investment in clinical sales
specialists who are training and supporting our customers and helping
to establish our technology as a standard of care."
Perry added, "We are on course for a strong year and are building
a solid foundation that will support continued market penetration and
growth. Our technology is making a genuine contribution to healthcare
and positively impacting a disease that is the leading cause of death
in the industrialized world."
Additional Highlights and Accomplishments:
-- Four U.S. patents issued, including one underlying the
Company's novel AERIS(TM) (Adaptive Extraction & Recognition
of Impedance Signals) processing and three others relating to
the unique design features of the BioZtect(R) sensor system.
-- One million shares formerly owned by the Paulson Trust sold to
institutional investors in privately negotiated transactions.
-- Cleveland Clinic ICG Study presented at the American College
of Cardiology 52nd Scientific Sessions demonstrating ICG to
have a significant correlation (0.89) as compared to the
invasive pulmonary artery catheter procedure.
-- Three ICG educational symposia held at the American
Association of Critical-Care Nurses (AACN) and National
Teaching Institute (NTI) Critical Care Exposition.
-- Multi-system BioZ sales to Wilburn Medical, North Carolina;
Advanced Technology, Kuwait; and Beijing Chang Sheng, China.
Conference Call Information:
Michael K. Perry, chief executive officer, will host a summary of
CardioDynamics' second quarter 2003 results in a conference call today
at 4:30 p.m. (EST). To access the conference call, dial 800/346-4174
(Code 7784). International callers can call 973/528-0008 (Code 7784).
A replay of the call will be available for two weeks following the
call at 800/332-6854 (Code 7784). The international replay number is
973/528-0005 (Code 7784). The call will also be available, via
Webcast, at http://www.irconnect.com/primecast/03/q2/cdic_2q2003.html.
About CardioDynamics:
CardioDynamics (Nasdaq: CDIC), the ICG Company, is the innovator
and leader of breakthrough medical technology called Impedance
Cardiography (ICG). The Company's 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, Philips 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 Web site at
www.cdic.com.
Forward-Looking (Safe Harbor) Statement:
Except for the historical and factual information contained
herein, this press release contains forward-looking statements, such
as anticipated sensor growth, estimated cardiovascular and ICG
industry prospects, market size, potential, growth and penetration
rates, the accuracy of which is necessarily subject to uncertainties
and risks including the Company's sole dependence on the BioZ product
line, and various uncertainties characteristic of early growth
companies, as well as other risks detailed in the Company's filings
with the SEC, including its 2002 Form 10-K. The Company does not
undertake to update the disclosures contained in this press release.
CardioDynamics -- The ICG Company
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Operational Results: Three Months Ended Six Months Ended
- --------------------
May 31, May 31,
2003 2002 2003 2002
----------- ----------- ------------ -----------
Net Sales $7,285,000 $5,623,000 $13,670,000 $9,989,000
Cost of Sales 1,672,000 1,560,000 3,304,000 2,838,000
----------- ----------- ------------ -----------
Gross Margin 5,613,000 4,063,000 10,366,000 7,151,000
Research &
Development 784,000 611,000 1,520,000 1,253,000
Selling & Marketing 3,870,000 3,049,000 7,351,000 5,770,000
General &
Administrative 479,000 422,000 978,000 861,000
----------- ----------- ------------ -----------
Income (Loss) from
Operations 480,000 (19,000) 517,000 (733,000)
Other Income, net 77,000 67,000 165,000 151,000
Provision for Income
Taxes (39,000) (1,000) (48,000) (1,000)
----------- ----------- ------------ -----------
Net Income (Loss) $518,000 $47,000 $634,000 $(583,000)
=========== =========== ============ ===========
Net Income (Loss) per
Common Share,
-- Basic and Diluted $0.01 $0.00 $0.01 $(0.01)
=========== =========== ============ ===========
Weighted-Average
Number of Common
Shares Outstanding:
-- Basic 46,186,787 46,113,799 46,184,021 46,024,279
=========== =========== ============ ===========
-- Diluted 47,103,950 47,433,448 47,175,870 46,024,279
=========== =========== ============ ===========
Selected Balance Sheet May 31, Nov. 30,
Data:
- ----------------------
2003 2002 Change
----------- ------------ -----------
Cash $7,179,000 $6,879,000 4%
Accounts Receivable,
net 7,946,000 8,349,000 (5%)
Inventory, net 3,494,000 3,474,000 1%
Current Assets 21,442,000 21,446,000 0%
Long-term Assets 2,376,000 2,120,000 12%
Total Assets 23,818,000 23,566,000 1%
Current Liabilities 2,714,000 3,282,000 (17%)
Long-term Liabilities 685,000 560,000 22%
Total Liabilities 3,399,000 3,842,000 (12%)
Shareholders' Equity 20,419,000 19,724,000 4%
CONTACT: CardioDynamics
Investor Relations
Bonnie Ortega, 888/522-2342, Ext. 1005
bortega@cardiodynamics.com
or
Media Relations
Irene Paigah, 888/522-2342, Ext. 1012
ipaigah@cardiodynamics.com