Exhibit 99:
COMPANY CONTACT:
Bonnie Ortega, Investor Relations
bortega@cardiodynamics.com
800-778-4825, Ext. 1005
CARDIODYNAMICS REPORTS THIRD QUARTER 2005 RESULTS
SAN DIEGO, CA--October 5, 2005--CardioDynamics (Nasdaq: CDIC), the innovator and
leader of Impedance Cardiography (ICG) technology, today reported its financial
results for its fiscal third quarter 2005.
THIRD QUARTER 2005 RESULTS:
Net sales for third quarter 2005 were $8.8 million, a decrease of 21% over sales
of $11.1 million in the third quarter 2004. For the nine months ended August 31,
2005, net sales were $27.8 million, a decrease of 5% from $29.4 million for the
same period in 2004. ICG revenue for the quarter decreased 24% to $6.6 million
from $8.7 million in the same period in 2004. The decrease in ICG revenue was
primarily due to the continued negative impact resulting from Medicare's policy
clarification restricting hypertension coverage, the short-term productivity
decrease due to the Company's restructuring at the beginning of third quarter,
and the continuing development of the direct-distributor hybrid sales model.
The Company reported a net loss of $474,000, or ($0.01) per diluted share for
the third quarter of 2005, compared with net income of $992,000, or $0.02 per
diluted share reported in the same quarter last year. Net loss for the nine
months ended August 31, 2005, was $1.8 million, or ($0.04) per diluted share,
compared to net income of $2.7 million, or $0.05 per diluted share, for the same
period in 2004.
OPERATING HIGHLIGHTS:
During the third quarter 2005, sales of ICG devices totaled 209 units, including
140 BioZ monitors, 53 ICG modules, and 16 Medis ICG monitors. Of the 140 BioZ
monitors sold, 125 were BioZ Dx systems. There have been over 5,700 ICG systems
shipped worldwide to date, including nearly 1,200 ICG modules. At the end of
fiscal third quarter 2005, field associates totaled 69 people, including 42 U.S.
territory managers and 16 clinical application specialists.
Combined ICG and electrocardiograph (ECG) sensor revenue in the third quarter
2005 was $3.9 million, representing 44% of total sales. During the quarter,
Vermed's ECG sensors contributed $2.2 million to net sales compared to $2.4
million in the same period last year due to a general softening of the ECG
market. ICG sensor revenue for the third quarter 2005 was $1.73 million (26% of
total ICG net sales) up slightly from $1.72 million (20% of total ICG net sales)
for the same quarter last year.
Gross margin percentage in the third quarter 2005 was 60% compared to 69% for
the same period a year ago. Gross margin for the ICG business was 66% and for
the ECG business was 43% compared to 75% and 45% respectively in the same
quarter last year. The decrease in ICG gross margin percentage was a result of
higher BioZ Dx product cost, higher inventory provisions and lower average
selling price of BioZ monitors. Third quarter 2005 gross margin for the ICG
business improved to 66% from 63% in second quarter 2005. The sequential
improvement in gross margin was the result of an increased sales mix of higher
priced BioZ Dx systems and reduced competitive pressure.
The Company achieved positive operating cash flow of $240,000 in fiscal third
quarter 2005, down from $1.7 million compared to the same quarter last year. The
decrease in operating cash flow was principally due to decreased profitability,
higher inventory purchases related to the BioZ Dx and payments of prior year-end
accounting and Sarbanes-Oxley compliance fees. These expenses were offset by
improved accounts receivable cash collections, which were $6.8 million,
representing 115% of the second quarter 2005 trade receivable sales. During the
third quarter 2005, the Company paid down its bank loan by $437,000 and ended
the quarter with $4.2 million of cash and cash equivalents.
As a result of ongoing cost containment measures and the operational
restructuring implemented at the beginning of third quarter 2005, operating
expenses for the quarter decreased 4% to $6.3 million compared with $6.5 million
for the same period in 2004. As previously reported, the Company reduced its
workforce by approximately 10%, which resulted in the consolidation or
elimination of 25 positions.
CEO COMMENTS:
"Third quarter revenue was lower than expected due to the continuing challenges
facing our business, but with tight expense management, our loss in the quarter
was within the range of analysts' estimates," stated Michael K. Perry, CEO of
CardioDynamics. "The 2004 Medicare hypertension clarification continues to
impact our ICG business growth. We are in discussions with CMS to open the
reconsideration review process in an attempt to broaden our ICG hypertension
coverage and are optimistic that the near-term publication of our multi-center
CONTROL study will help facilitate these efforts."
Perry added, "The relationships with PSS and Caligor distributor representatives
accounted for 33 percent of the total domestic sales in the quarter but still
have not enabled our direct sales team achieve the desired incremental sales
productivity. We have made significant progress in fine-tuning the distributor
program and now, for the first time in 2005, have a full sales management team
in place. While our reorganization impacted productivity in the short-term, the
projected $2 million in annual savings is important to restoring profitability
and funding future strategic investments. We were pleased to receive FDA 510(k)
clearance during the quarter for the Phase II BioZ Dx, which adds the ECG
capability to our flagship product. Market response to the BioZ Dx has been
strong with the Dx representing over 90% of net domestic BioZ system sales."
Perry concluded, "In 2006, we plan to expand our Medicare hypertension coverage,
introduce our low-cost ICG product, the BioZ Mx, and launch our new multi-center
PREVENT-HF clinical study. We are confident in our innovative ICG technology and
are focused on returning to sequential revenue growth and profitability."
CONFERENCE CALL INFORMATION:
Michael K. Perry, Chief Executive Officer, will host a summary of
CardioDynamics' third quarter 2005 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://phx.corporate-ir.net/playerlink.zhtml?c=86923&s=wm&e=1119090.
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 including success of distributor
team sales approach, improved sales productivity, publication of clinical
studies, reconsideration of Medicare coverage, short-term nature of
restructuring impact, return to sequential revenue and earnings growth, 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/A.
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 NINE MONTHS ENDED
AUGUST 31, AUGUST 31,
------------------------ ------------------------
SELECTED CONSOLIDATED OPERATIONAL RESULTS 2005 2004 2005 2004
- ------------------------------------------ ---------- ---------- ---------- ----------
Net Sales $ 8,770 $ 11,075 $ 27,818 $ 29,360
Cost of Sales 3,500 3,475 10,924 8,210
---------- ---------- ---------- ----------
Gross Margin 5,270 7,600 16,894 21,150
Research and Development 626 1,036 1,877 3,094
Selling and Marketing 4,505 4,490 14,027 12,796
General and Administrative 1,024 887 3,463 2,226
Amortization of Intangible Assets 119 128 342 206
---------- ---------- ---------- ----------
Income (Loss) from Operations (1,004) 1,059 (2,815) 2,828
Other Income (Expense), net (37) 22 (102) 143
---------- ---------- ---------- ----------
Income (Loss) before Income Taxes and
Minority Interest (1,041) 1,081 (2,917) 2,971
Income Tax Benefit (Provision) 580 (67) 1,152 (238)
Minority Interest in Income of Subsidiary (13) (22) (34) (22)
---------- ---------- ---------- ----------
Net Income (Loss) $ (474) $ 992 $ (1,799) $ 2,711
========== ========== ========== ==========
Net Income (Loss) per Common Share:
- Basic $ (0.01) $ 0.02 $ (0.04) $ 0.06
========== ========== ========== ==========
- Diluted $ (0.01) $ 0.02 $ (0.04) $ 0.05
========== ========== ========== ==========
Weighted-Average Number of Shares
Used in Per Share Calculation:
- Basic 48,803 48,022 48,781 47,325
========== ========== ========== ==========
- Diluted 48,803 50,069 48,781 49,975
========== ========== ========== ==========
AUGUST 31, NOVEMBER 30,
SELECTED CONSOLIDATED BALANCE SHEET DATA 2005 2004 CHANGE
- ------------------------------------------ ------------ ------------ ----------
Cash and Cash Equivalents $ 4,170 $ 6,801 (39)%
Accounts Receivable, net 6,685 11,674 (43)%
Inventory, net 6,423 4,647 38%
Current Assets 21,296 27,257 (22)%
Long-term Assets 32,185 30,773 5%
Total Assets 53,481 58,030 (8)%
Current Liabilities 6,328 7,764 (18)%
Long-term Liabilities 3,986 5,338 (25)%
Total Liabilities 10,314 13,102 (21)%
Minority Interest 227 194 17%
Shareholders' Equity 42,940 44,734 (4)%