Exhibit 99.1
CARDIODYNAMICS REPORTS FOURTH QUARTER AND FISCAL 2006 RESULTS
THIRD SEQUENTIAL QUARTER OF REVENUE GROWTH
SAN DIEGO, Feb. 8 /PRNewswire-FirstCall/ -- CardioDynamics (Nasdaq: CDIC),
the innovator and leader of Impedance Cardiography (ICG) technology, today
announced its financial and operating results for the fourth quarter and full
fiscal year 2006. Fourth quarter highlights include the Company's third
sequential quarter of revenue growth, 11% growth in recurring sensor revenue
over fourth quarter 2005, 15% improvement in operating loss compared to fourth
quarter 2005 and publication of the CONTROL cost-effectiveness data in the
American Heart Hospital journal.
2006 Fourth Quarter and Year-End Results:
Net sales for the fourth quarter fiscal 2006 were $8.3 million, an
increase of 6% over the $7.9 million reported in third quarter 2006, but a
decrease of 9% from net sales of $9.2 million for the same quarter last year.
Fiscal 2006 sales were $30.4 million, a decrease of 18% from sales of
$37.0 million reported for fiscal 2005. The sales decline in 2006 was
primarily due to the effects of the Centers for Medicare and Medicaid (CMS)
policy clarification, which reduced use of the Company's ICG technology on
hypertensive patients.
In the fourth quarter 2006, CardioDynamics reported a net loss of
$1.5 million, or $0.03 per diluted share, compared with a net loss of
$13.1 million, or $0.27 per diluted share, reported in the fourth quarter
2005. Excluding non-cash accounting charges of $434,000 associated with the
Company's convertible note, fourth quarter 2006 net loss was $1.0 million or
$0.02 per diluted share. Net loss for the full year 2006 was $6.7 million, or
$0.14 per diluted share, compared with a net loss of $14.9 million, or
$0.31 per diluted share, for the same period in 2005. Excluding a non-cash
net benefit of $794,000 associated with the Company's convertible note, the
net loss for 2006 was $7.5 million or $0.15 per diluted share. The
significant fluctuation between 2005 and 2006 is due largely to a valuation
allowance related to the Company's deferred tax assets of $12.7 million which
was established in the fourth quarter of 2005 as a result of the tax losses
incurred in 2005.
In the fourth quarter of 2006, CardioDynamics reported a loss from
operations of $870,000, an improvement of 15% compared with a loss from
operations of $1.0 million in the fourth quarter of 2005. Operating loss for
the full year 2006 was $6.9 million compared with a loss from operations of
$3.8 million for the same period in 2005. The operating loss for the fourth
quarter 2006 and full year was primarily the result of lower net sales and
gross margin in the ICG business, partially offset by reduced operating
expenses compared with the same periods in 2005.
The Company reported a cash, cash equivalents and short-term investments
balance of $4.7 million, up from $3.6 million at the end of 2005. Operating
cash use for the fourth quarter of 2006 was $334,000 compared with positive
operating cash flow of $57,000 in fourth quarter 2005. For the year, the
Company used $2.0 million of cash from operations compared with $138,000 in
2005.
Operating Highlights:
ICG devices sold during fourth quarter 2006 totaled 197, including
126 BioZ monitors, 40 ICG modules and 31 Medis ICG monitors. The number of
ICG systems and modules sold to date now totals over 7,000, up 13% over fourth
quarter 2005. As of November 30, 2006, the Company employed 58 field sales
associates, including 31 U.S. territory managers and 19 clinical application
specialists compared with 74 field associates at the end of 2005.
Combined ICG and electrocardiograph (ECG) sensor revenue for fourth
quarter 2006 was $4.1 million, representing 50% of total net sales, up 11% or
$432,000 from $3.7 million in 2005. During fourth quarter 2006, Vermed
contributed $2.6 million to consolidated net sales, an increase of 19% from
$2.2 million in 2005. ICG sensor revenue for fourth quarter 2006 was
$1.5 million or 27% of total ICG net sales. In fiscal 2006, combined ICG and
ECG sensor revenue was $16.8 million, an increase of 5% from $16.0 million in
fiscal 2005.
Consolidated gross margin as a percentage of net sales for the fourth
quarter of 2006 was 51%; gross margin for the ICG business was 59% and was 36%
for the ECG business. This compares to 50% consolidated gross margin for the
same quarter last year, with 57% for the ICG business and 27% for the ECG
business. The slight increase in overall gross margin during fourth quarter
2006 was largely a result of higher average ICG equipment sales prices and
improved operating efficiencies on higher revenues in the ECG segment. For
the full year of 2006, consolidated gross margin was 52% of net sales, with
62% generated in the ICG business and 35% in the ECG business. These compare
with consolidated gross margin of 58% of net sales in 2005 with 65% for the
ICG business and 39% for the ECG business.
Operating expenses for fourth quarter 2006 decreased 8% to $5.2 million
compared to $5.6 million for the same quarter in 2005. The decrease was
largely due to a 16% decrease in selling and marketing expenses primarily as a
result of realignment of the sales force into four regions and an overall
decrease in the number of sales and marketing personnel. The Company also
experienced a 9% decrease in research and development spending compared to
fourth quarter 2005 principally associated with the completion of phase II of
the BioZ Dx ICG/ECG monitor, a co-developed product with Philips Medical
Systems. These reductions were partially offset by a 25% increase in general
and administrative expenses, the majority of which are audit fees related to
Sarbanes-Oxley compliance. For the fiscal year of 2006, operating expenses
decreased 10% to $22.9 million compared with $25.3 million for fiscal year
2005.
CEO Comments and Outlook:
Michael K. Perry, CardioDynamics' Chief Executive Officer, commented,
"Although 2006 was a challenging year, it was our strongest year for clinical
publications highlighting the importance and cost-effectiveness of ICG in the
treatment of patients and was a year of building a foundation for future
growth. We were pleased to stabilize the business and complete the year with
our third sequential quarter of revenue improvement."
Perry added, "We enter 2007 with a number of potential business catalysts.
We will launch our landmark PREVENT-HF clinical trial, which will be conducted
by many of the world's leading heart failure specialists and is one of the
largest trials ever undertaken in the device-based management of heart
failure. Additionally, we are planning for an active year of product
development and product releases. We have submitted our FDA 510(k)
application for the next release of our BioZ Dx device, which will include the
proprietary BioZ Score being used in PREVENT-HF and the capability to
interface with electronic medical record (EMR) systems. At the beginning of
2007, we launched our BioZ Automated Process (BAP) nationally, which is
already demonstrating significant improvement in the integration of BioZ
technology into the physician office workflow. We intend to continue to make
investments in our direct sales and clinical teams to drive customer
satisfaction, as well as growth in our capital and sensor businesses."
Fiscal 2006 Highlights and Accomplishments:
* Clinical Study Publications:
- Publication of the Company's 11-center, randomized CONTROL study in
the leading high blood pressure journal, Hypertension, demonstrating
that use of BioZ ICG in mild-to-moderate hypertensive patients was
more than two times better than standard care.
- Publication of the CONTROL cost-effectiveness study in the American
Heart Hospital journal demonstrating that use of ICG was
cost-effective in both the short and long-term when compared to
standard care treatment of patients with uncontrolled hypertension.
- Publication of Cleveland Clinic's ED-IMPACT trial in Academic
Emergency Medicine demonstrating a 13% diagnosis change and 39%
treatment change in shortness of breath patients when physicians
used BioZ data after initial assessment.
- Publication of the PREDICT trial in the Journal of the American
College of Cardiology (JACC) demonstrating that when compared to
standard assessment tools, ICG was the most powerful predictor of
short-term heart failure hospitalization or death.
* Product Releases: Market introduction of the proprietary BioZ
AdvaSense(TM) cable/sensor, an advanced, proprietary ICG sensing
system, which ensures data integrity for users and further protects the
Company's recurring revenue stream.
* Contracts: Awarded a three-year, multi-source contract with Premier
Purchasing Partners, L.P., the group purchasing division of Premier,
Inc., for non-invasive cardiology equipment. CardioDynamics was the
only supplier awarded in the sub-category of ICG equipment.
* Agreements: Original Equipment Manufacturer (OEM) Agreement with
Mindray, China's leading patient monitoring manufacturer, to integrate
the Company's ICG technology into Mindray's patient monitoring modules
and systems.
* Financing: Completion of $5.25 million convertible debt financing to
the Company's largest institutional shareholder.
* Election of New Directors: Election of Jay A. Warren, an accomplished
medical device industry executive to the Board of Directors.
* Awards and Recognition: Ranking of 38th for an 89%, 5-year growth in
the 2006 Deloitte & Touche Technology Fast 50, a ranking of the 50
fastest growing technology companies in San Diego/Orange County.
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 2007 in a conference call today at 4:30 PM (EST). To
access the conference call, dial 800-346-7359 (Code 89965). International
participants can call 973-528-0008 (Code 89965). A replay of the call will be
available for 30 days following the call at 800-332-6854 (Code 89965). The
international replay number is 973-528-0005 (Code 89965). The Internet
webcast can be accessed at
http://phx.corporate-ir.net/playerlink.zhtml?c=86923&s=wm&e=1458888 or can be
accessed through the Investors section (Investor Overview) of the Company's
website at www.cdic.com.
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 ICG products and
medical device 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 future product
introductions, potential sales growth and penetration rates, presentation or
publication of 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 2005 Form 10-K. The Company does not undertake to update
the disclosures contained in this press release.
Unaudited Results:
The results reported in this press release are unaudited and remain
subject to completion of the annual financial audit by the Company's
independent registered public accounting firm and are therefore subject to
adjustments as result of such audit.
CardioDynamics International Corporation
In thousands, except per share data (unaudited)
Three Months Ended Fiscal Year Ended
November 30 November 30
Consolidated Operational --------------------- ---------------------
Results 2006 2005 2006 2005
- -------------------------- --------- --------- --------- ---------
Net Sales $ 8,325 $ 9,187 $ 30,432 $ 37,005
Cost of Sales 4,043 4,594 14,423 15,518
Gross Margin 4,282 4,593 15,919 21,487
Research and Development 555 610 2,222 2,487
Selling and Marketing 3,315 3,954 15,255 17,981
General and Administrative 1,153 923 4,868 4,387
Amortization of Intangible
Assets 129 123 506 464
Loss from Operations (870) (1,017) (6,932) (3,832)
Other Income (Expense), net (518) 47 450 (55)
Loss before Income Taxes (1,388) (970) (6,482) (3,887)
Income Tax Provision (60) (12,155) (174) (11,003)
Minority Interest (19) (20) (38) (55)
Net Loss $ (1,467) $ (13,145) $ (6,694) $ (14,945)
Net Loss per Common Share,
- Basic and Diluted $ (0.03) $ (0.27) $ (0.14) $ (0.31)
Weighted-Average Number of
Shares Used in Per Share
Calculation:
- Basic and Diluted 48,831 48,803 48,819 48,787
Selected Consolidated Balance November 30 November 30
Sheet Data 2006 2005 Change
- -------------------------------- ----------- ----------- -----------
Cash, Equivalents and Short-term
Investments $ 4,729 $ 3,615 31%
Accounts Receivable, Net 5,520 7,359 (25)%
Inventory, Net 4,239 5,379 (21)%
Current Assets 15,517 18,203 (15)%
Long-term Assets 20,871 21,795 (4)%
Total Assets 36,388 39,998 (9)%
Current Liabilities 5,884 7,217 (18)%
Long-term Liabilities 4,796 2,777 73%
Total Liabilities 10,680 9,994 7%
Minority Interest 375 241 56%
Shareholders' Equity 25,333 29,763 (15)%
SOURCE CardioDynamics
-0- 02/08/2007
/CONTACT: Rhonda F. Rhyne, President of CardioDynamics, +1-800-778-4825,
Ext. 1013/
/Web site: http://www.cdic.com /
(CDIC)