Exhibit 1.1
CardioDynamics Reports 21st Consecutive Quarter of
Year-Over-Year Revenue Growth and 24% Increase in Third
Quarter 2003 Sales
SAN DIEGO--(BUSINESS WIRE)--Sept. 18, 2003--
Company Posts 146% Increase in Net Income and 90% Increase in Sensor Revenue
CardioDynamics (Nasdaq: CDIC), the innovator and leader of
Impedance Cardiography (ICG) technology and manufacturer of BioZ(R)
noninvasive cardiac function monitoring systems, today announced
record sales, its 21st consecutive quarter of year-over-year revenue
growth, and a 24% increase in third quarter 2003 sales over the same
period in the prior year.
Third Quarter 2003 Results:
Net sales for fiscal third quarter 2003 were $7.8 million, an
increase of 24% over sales of $6.3 million for the same period in
fiscal 2002. Gross margin for the third quarter 2003 was 77.4% of
sales, compared with 77.5% for the same period last year. The company
recorded net income of $833,000 for the third quarter, up 146%, or
$0.02 per share, compared with net income of $339,000, or $0.01 per
share reported in third quarter 2002. The improvement in net income
was primarily due to higher sales volume, increased leverage from the
company's sales and marketing investment, and increased overall
employee productivity. For the nine months ended August 31, 2003, net
income was $1.5 million, compared with a net loss of $244,000 for the
same nine-month period in 2002.
Research and development expenses in the third quarter were
$782,000, an increase of 40% over the same quarter last year, and were
largely attributable to the joint ICG/ECG product development with
Philips Medical Systems.
Operating Highlights:
During third quarter 2003, 199 BioZ Systems were sold, increasing
the total number of BioZ Systems shipped to nearly 2,800, up 36% from
one year ago. Sensor revenue in the third quarter 2003 was $1,473,000
(19% of sales), up 90% over sensor revenue of $774,000 (12% of sales)
for the same quarter in fiscal 2002.
Cash flow from operations for the third quarter 2003 was $637,000,
an improvement of $440,000 compared with third quarter 2002. This
represents the fifth consecutive quarter of positive cash flow from
operations. The company ended the quarter with $7.8 million in cash
and short-term investments (up $1.3 million over the same period last
year), and remains essentially debt-free.
CEO Comments and Outlook:
Michael K. Perry, CardioDynamics' chief executive officer, stated,
"We are pleased to report our 21st consecutive quarter of
year-over-year revenue growth and 6th successive quarter of
profitability. The strong progression in recurring sensor revenue, at
nearly 19% of sales, is especially encouraging. Our clinical sales
specialist team has enabled us to improve customers' clinical
understanding of ICG and maximize office workflow integration. The
quarter was also highlighted by two new analysts initiating coverage
on the company with 'buy' recommendations, a significant increase in
our institutional ownership -- now close to 40%, an ICG study
published in the CHEST journal, and the appointment of Ron Merriman to
our board of directors."
Perry added, "We are on track to complete a strong year and record
our second year of profitability. I am proud of our dedicated team and
the level of service we are providing our customers. We feel we have
the financial strength to execute our aggressive business plan,
advance our technology, and further position the company for future
partnerships and growth opportunities. This is an exciting time for
our noninvasive ICG technology -- with the support of the medical and
investment community, we are making a genuine contribution to
healthcare."
Additional Highlights & Key Accomplishments:
-- Sale of Paulson Trust Stock: Sale of 500,000 shares from the
Allen E. Paulson Trust and 250,000 shares owned personally by the
Trustee, J. Michael Paulson to an institutional investor in a
privately negotiated transaction. Private sales of Paulson shares in
2003 total 1.75 million shares.
-- Addition of Board Member: Ronald L. Merriman, who qualifies as
an "independent director" under Nasdaq rules and as "financial expert"
under the Sarbanes-Oxley Act of 2002, was appointed to the company's
board of directors and will also serve as the chairman of the Audit
Committee.
-- Publication of Independent Clinical Study: An ICG study,
Impedance Cardiography: The Next Vital Sign Technology, was published
in CHEST, an official publication of the American College of Chest
Physicians.
-- New Analyst Coverage: Anthony Green, Senior Research Analyst at
Craig-Hallum Capital Group, LLC, and Adina Dodi, Equity Analyst at B.
Riley & Co., initiated coverage on the company with "buy"
recommendations.
-- Ernst & Young's Entrepreneur of the Year Award: The company's
CEO Michael K. Perry and President Rhonda F. Rhyne were named Ernst &
Young's 2003 San Diego's Entrepreneur of the Year in the medical
products and technology category.
Conference Call Information:
Michael K. Perry, chief executive officer, and Steve P. Loomis,
chief financial officer, will host a summary of CardioDynamics' third
quarter 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 two weeks following the call at
800-332-6854 (Code 7784). International callers can call 973-528-0005
(Code 7784). A Webcast of the conference call is available at
http://www.irconnect.com/primecast/03/q3/cdic_3q2003.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 sensors. For additional information or to request
an investor package, 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 annual profitability, 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
In thousands (except per share information)
- ----------------------------------------------------------------------
Operational Results: Three Months Ended Nine Months Ended
- ---------------------------------
August 31, August 31,
------------------ -----------------
2003 2002 2003 2002
- ----------------------------------------------------------------------
Net Sales $7,808 $6,278 $21,478 $16,267
Cost of Sales 1,768 1,411 5,072 4,250
---------- ------- -------- --------
Gross Margin 6,040 4,867 16,406 12,017
Research and Development 782 559 2,302 1,812
Selling and Marketing 3,935 3,522 11,286 9,292
General and Administrative 528 534 1,506 1,395
---------- ------- -------- --------
Income (Loss) from Operations 795 252 1,312 (482)
Other Income, net 102 87 267 239
Provision for Income Taxes (64) 0 (112) (1)
---------- ------- -------- --------
Net Income (Loss) $833 $339 $1,467 $(244)
========== ======= ======== ========
Net Income (Loss) per Share,
- Basic and Diluted $0.02 $0.01 $0.03 $(0.01)
========== ======= ======== ========
Weighted-average Number of
Shares Outstanding:
- Basic 46,202 46,144 46,190 46,065
========== ======= ======== ========
- Diluted 47,562 47,063 47,296 46,065
========== ======= ======== ========
Selected Balance Sheet Data:
August November
31, 30,
2003 2002 Change
- ----------------------------------------------------------------------
Cash and Short-term Investments $7,831 $6,879 14%
Accounts Receivable, net 8,268 8,616 (4%)
Inventory, net 3,665 3,474 5%
Current Assets 22,449 21,446 5%
Long-term Assets 1,783 2,120 (16%)
Total Assets 24,755 23,566 5%
Current Liabilities 2,627 3,282 (20%)
Long-term Liabilities 771 560 38%
Total Liabilities 3,398 3,842 (12%)
Shareholders' Equity 21,357 19,724 8%
CONTACT: CardioDynamics, San Diego
Bonnie Ortega, 888-522-2342, Ext. 1005
bortega@cardiodynamics.com
or
Irene Paigah, 888-522-2342, Ext. 1012
ipaigah@cardiodynamics.com