EXHIBIT 1.1
CardioDynamics Reports 24th Consecutive Quarter of Year-Over-Year
Sales Growth and 41% Increase in Second Quarter 2004 Sales
SAN DIEGO--(BUSINESS WIRE)--June 23, 2004--
Company Begins Integration of Vermed -- 85% Increase in Second
Quarter 2004 Net Income
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
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(R)
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(R) 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
http://www.irconnect.com/primecast/04/q2/cdic_2q2004.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 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
Healthcare and Philips Medical Systems. 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, 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 market size, potential, growth and penetration rates, timing of
clinical presentations and product releases, potential integration
benefits and synergies 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 2003 Form 10-K. The Company does
not undertake to update the disclosures contained in this press
release.
CardioDynamics International Corporation
- ----------------------------------------------------------------------
Consolidated Three Months Ended Six Months Ended
Operational May 31, May 31,
Results:
- ------------ ------------------------- -------------------------
(Unaudited) 2004 2003 2004 2003
------------ ------------ ------------ ------------
Net Sales $10,270,000 $7,285,000 $18,285,000 $13,670,000
Cost of Sales 2,880,000 1,672,000 4,736,000 3,304,000
------------ ------------ ------------ ------------
Gross Margin 7,390,000 5,613,000 13,549,000 10,366,000
Research and
Development 1,229,000 784,000 2,062,000 1,520,000
Selling and
Marketing 4,366,000 3,870,000 8,379,000 7,351,000
General and
Administrative 762,000 479,000 1,339,000 978,000
------------ ------------ ------------ ------------
Income from
Operations 1,033,000 480,000 1,769,000 517,000
Other Income,
net 26,000 77,000 121,000 165,000
Provision for
Income Taxes (101,000) (39,000) (171,000) (48,000)
------------ ------------ ------------ ------------
Net Income $958,000 $518,000 $1,719,000 $634,000
============ ============ ============ ============
Net Income per
Common Share,
-- Basic $0.02 $0.01 $0.04 $0.01
============ ============ ============ ============
-- Diluted $0.02 $0.01 $0.03 $0.01
============ ============ ============ ============
Weighted-
Average Number
of Shares
Used in Per
Share
Calculation:
-- Basic 47,395,703 46,186,787 46,975,089 46,184,021
============ ============ ============ ============
-- Diluted 50,326,233 47,103,950 49,926,388 47,175,870
============ ============ ============ ============
Selected Consolidated Balance
Sheet Data: May 31, November 30,
(Unaudited) 2004 2003 Change
----------- ------------ ------------
Cash and Short-term
Investments $6,265,000 $9,345,000 (33%)
Accounts Receivable, net 9,692,000 9,560,000 1%
Inventory, net 4,604,000 3,163,000 46%
Current Assets 22,571,000 24,113,000 (6%)
Long-term Assets 19,226,000 2,535,000 658%
Total Assets 41,797,000 26,648,000 57%
Current Liabilities 5,758,000 2,909,000 98%
Long-term Liabilities 5,651,000 719,000 686%
Total Liabilities 11,409,000 3,628,000 214%
Shareholders' Equity 30,388,000 23,020,000 32%
CONTACT: CardioDynamics
Bonnie Ortega, Investor Relations
800-778-4825, ext. 1005
bortega@cardiodynamics.com
OR
Irene Paigah, Media Relations
800-778-4825, ext. 1012
ipaigah@cardiodynamics.com