Exhibit 99
CARDIODYNAMICS REPORTS 26TH CONSECUTIVE QUARTER OF YEAR-OVER-YEAR
REVENUE GROWTH, THIRD PROFITABLE YEAR, AND 35% INCREASE IN 2004 SALES
Company Posts 26% Increase in Annual ICG Sensor Revenue
SAN DIEGO, March 1 /PRNewswire-FirstCall/ -- CardioDynamics (Nasdaq: CDIC), the
innovator and leader of Impedance Cardiography (ICG) technology, announced today
its financial results for the fourth quarter and full fiscal year 2004.
Highlights included a 35% increase in fiscal year 2004 sales over the prior
year, the 26th consecutive quarter of year-over-year quarterly sales growth, and
the Company's third consecutive profitable year.
2004 Fourth Quarter and Year-End Results:
Net sales for the fourth quarter fiscal 2004 were $11.6 million, an increase of
31% over net sales of $8.9 million for the same quarter last year. Full year
fiscal 2004 sales were $41.0 million, an increase of 35% over sales of $30.3
million reported for fiscal year 2003.
In the fourth quarter of 2004, CardioDynamics generated operating income of
$96,000 compared with $1.0 million in the fourth quarter 2003. Operating income
for fiscal year 2004 grew 26% to $2.9 million compared to $2.3 million in fiscal
2003. In the fourth quarter of 2004, the Company recorded a one-time, non-cash
tax benefit resulting from a full reduction of the valuation allowance for U.S.
deferred taxes. Including the tax benefit, CardioDynamics reported net income in
the fourth quarter of $7.4 million, or $0.15 per diluted share, compared with
net income of $ 1.0 million, or $0.02 per diluted share, reported in the fourth
quarter 2003. Net income for the full year 2004 was $10.1 million, or $0.21 per
diluted share, compared to net income of $2.5 million, or $0.05 per diluted
share, for the same period in 2003.
As a result of improving operating performance over the past several years and
expectations for generating future taxable income, the Company recognized a
non-cash benefit of approximately $7.4 million in fourth quarter 2004 associated
with the removal of its valuation allowance against deferred tax assets. The
valuation allowance adjustment does not affect cash flow until all federal net
operating loss carry forwards, which approximated $23.3 million at November 30,
2004, are fully utilized or have expired.
Operating expenses for fourth quarter 2004 grew 40% to $8.1 million compared
with $5.8 million for the same quarter in 2003. The growth was due to a number
of factors including: the additions of Vermed and Medis; a 30% increase in
research and development costs principally associated with the BioZ Dx, the
recently FDA-cleared, co-developed product with Philips Medical Systems; a 31%
increase in selling and marketing expenses primarily as a result of increased
investment in the Company's sales and clinical personnel; and 108% increase in
general and administrative expenses, the majority of which are related to
regulatory compliance costs associated with Section 404 of the Sarbanes-Oxley
Act. Operating expenses during the quarter were also impacted by adjustments to
the accounts receivable allowance and employee benefit costs for the Company's
recently established self-funded medical plan. For the fiscal year of 2004,
operating expenses grew 27% to $26.4 million compared with $20.9 million for
fiscal year 2003.
Operating Highlights:
ICG devices sold during fourth quarter 2004 totaled 283 units, including 267 ICG
monitors and 16 ICG modules, an increase of 19% from the same quarter last year.
Included in shipments for the fourth quarter were five BioZ systems under the
Company's rental and guarantee programs and 19 Medis ICG monitors. The number of
ICG systems and modules sold to date now totals over 5,000. As of November 30,
2004, the Company employed 88 field sales associates, including 56 U.S.
territory managers and 22 clinical application specialists.
Combined ICG and electrocardiograph (ECG) sensor revenue for fourth quarter 2004
was $3.9 million, representing 34% of total net sales. During the quarter,
Vermed contributed $2.3 million to net sales. ICG sensor revenue for fourth
quarter 2004 was $1.6 million (17% of total ICG net sales), an increase of 6%,
compared to $1.5 million (15% of total ICG net sales) in the same quarter 2003.
In fiscal 2004, overall ICG sensor revenue was $6.5 million, an increase of 26%
from $5.2 million in fiscal 2003.
Cash flow from operations for fiscal year 2004 was $4.4 million (an increase of
96%), an improvement of $2.2 million over 2003. The Company ended the year with
$6.8 million in cash and cash equivalents.
Total gross margin for the fourth quarter 2004 was 71%; gross margin for the ICG
business was 79% and for the Vermed ECG business was 38%. This compares to 77%
for ICG business in the same quarter last year before Vermed was acquired. The
decrease in overall gross margin during fourth quarter 2004 was largely a result
of lower gross margins associated with Vermed's ECG sensor products. The
improvement in gross margin for the ICG business in the quarter was attributable
to lower estimated warranty repair costs and improved manufacturing
efficiencies.
CEO Comments and Outlook:
Michael K. Perry, CardioDynamics' Chief Executive Officer, commented, "2004 was
a year of strategic growth and innovation for CardioDynamics. The Company
achieved 35% revenue growth in 2004 and, excluding incremental Sarbanes-Oxley
expenses, earnings from operations grew 55%. We made two acquisitions enabling
us to expand beyond our core ICG business, increase our presence in Europe, and
reduce the manufacturing costs of our sensors by 30%. We strengthened our sales
and clinical organization and presented the results from our multi-center study
demonstrating ICG to be the most powerful predictor of heart failure. Our close
collaboration with Philips Medical Systems produced the third generation
state-of-the-art ICG monitor, the BioZ Dx."
Perry added, "We enter 2005 a larger, stronger, and more diversified company and
are currently focused on launching our new flagship product, the BioZ Dx. We are
optimistic about our new sales partnership programs with PSS (Physician Sales
and Service) and Caligor (a division of Henry Schein) from which we expect to
receive increasing benefits throughout 2005 and beyond. Collectively, these
companies have 1,100 sales representatives that will assist our expanded sales
team in introducing ICG technology to approximately 100,000 physician office
customers. We look forward to a strong and profitable year as we deliver growing
value to our shareholders and customers."
Fiscal 2004 Highlights and Accomplishments:
* Acquisitions: Acquisition of Vermed, the fourth largest manufacturer
of electrocardiograph (ECG) electrodes in the United States, and 80%
of Medis, GmbH, a privately-held European cardiology and vascular
diagnostic device company.
* Clinical Studies and Medical Meetings:
* Presentation of the Company's PREDICT (Prospective Evaluation and
Identification of Decompensation by ICG Test) study, demonstrating
a significant relationship between BioZ ICG parameters and the
occurrence of a major heart failure event (emergency department
visit, hospitalization or death).
* Publication of seven peer-reviewed articles in the March/April
2004 Congestive Heart Failure supplement, confirming the important
role of ICG in clinical practice.
* Presentation to over 500 cardiologists and heart failure
professionals at the American College of Cardiology 53rd
Scientific Sessions, New Orleans, demonstrating accuracy and value
of ICG technology in management of heart failure patients.
* Presentation by Frank Peacock, M.D., Director of Clinical
Operations, Emergency Department at the Cleveland Clinic, of
updated and improved data from the ED-IMPACT (Emergent Dyspnea
Impedance Cardiography-aided Assessment Changes Therapy) study.
* Publication of an ICG hypertension study in the February 2004
issue of Congestive Heart Failure demonstrating a 57% blood
pressure control rate in previously uncontrolled hypertensive
patients in a generalist physician setting.
* Appointments: Appointment of Neil W. Treister, MD, MBA, FACC and Mark
S. Florence to the newly-created positions of Medical Director and
Vice President of Sales, respectively.
* New Analyst Coverage: Initiation of coverage by Daniel Owczarski of
Belmont Harbor Capital with a "buy" recommendation and Jolene Furdek
of Southwest Securities with a "strong buy" recommendation.
* Awards and Recognition: Ranking of 21 in the 2004 Deloitte & Touche
Technology Fast 50, a ranking of the 50 fastest growing technology
companies in San Diego/Orange County (317% five-year revenue growth).
Conference Call and Webcast Information:
Michael K. Perry, Chief Executive Officer, and Steve P. Loomis, Chief Financial
Officer, will host a summary of CardioDynamics' fourth quarter results and
outlook for 2005 in a conference call today at 4:30 PM (EST). 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). A webcast of the call is available at
http://www.irconnect.com/primecast/04/q4/cdic_4q2004.html.
About CardioDynamics:
CardioDynamics (Nasdaq: CDIC), the ICG Company, is the innovator and leader of
breakthrough medical technology called Impedance Cardiography (ICG). The Company
develops, manufactures and markets noninvasive diagnostic and monitoring
technologies and electrodes. The Company's ICG Systems are being used by
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. For additional information, 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 potential growth rates,
success of strategic partner relationships and clinical studies, the accuracy of
which is necessarily subject to uncertainties and risks including the Company's
primary 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 2004 Form 10-K. The Company does
not undertake to update the disclosures contained in this press release.
CardioDynamics International Corporation
In thousands, except per share data (unaudited)
Three Months Ended Fiscal Year Ended
November 30 November 30
----------------------- -----------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Consolidated
Operational Results
Net Sales $ 11,628 $ 8,854 $ 40,988 $ 30,332
Cost of Sales 3,427 2,050 11,637 7,122
Gross Margin 8,201 6,804 29,351 23,210
Research and Development 1,259 969 4,353 3,272
Selling and Marketing 5,561 4,262 18,357 15,548
General and Administrative 1,157 557 3,383 2,062
Amortization of Intangible
Assets 128 -- 334 --
Income from Operations 96 1,016 2,924 2,328
Other Income (expense), net (116) 83 27 351
Income (loss) before Income
Taxes (20) 1,099 2,951 2,679
Income Tax Benefit (Provision) 7,447 (114) 7,209 (227)
Minority Interest (15) -- (37) --
Net Income $ 7,412 $ 985 $ 10,123 $ 2,452
Net Income per Common Share,
- Basic $ 0.15 $ 0.02 $ 0.21 $ 0.05
- Diluted $ 0.15 $ 0.02 $ 0.21 $ 0.05
Weighted-Average Number of
Shares Used in Per Share
Calculation:
- Basic 48,705 46,423 47,668 46,248
- Diluted 49,519 48,919 49,164 47,607
November 30 November 30
2004 2003 Change
----------- ----------- ----------
Selected Consolidated Balance Sheet
Data
Cash and Short-term Investments $ 6,801 $ 9,345 (27)%
Accounts Receivable, net 11,674 9,560 22%
Inventory, net 4,647 3,163 47%
Current Assets 27,257 24,113 13%
Long-term Assets 30,773 2,535 1,114%
Total Assets 58,030 26,648 118%
Current Liabilities 7,764 2,909 167%
Long-term Liabilities 5,338 719 642%
Total Liabilities 13,102 3,628 261%
Minority Interest 194 -- 100%
Shareholders' Equity 44,734 23,020 94%
SOURCE CardioDynamics
-0- 03/01/2005
/CONTACT: investor relations, Bonnie Ortega, ext. 1005, bonnie@cdic.com,
or media relations, Irene Paigah, ext. 1012, ip@cdic.com, both of
CardioDynamics, +1-800-778-4825/
/Web site: http://www.irconnect.com/primecast/04/q4/cdic_4q2004.html /
/Web site: http://www.cdic.com /
(CDIC)