CardioNet, Inc. (NASDAQ:BEAT), a leading wireless medical
technology company with a current focus on the diagnosis and
monitoring of cardiac arrhythmias, today reported results for the
fourth quarter and full year ended December 31, 2009.
2009 Highlights
Major achievements:
- 2009 MCOTTM patient volume
increased to 113,000, a 50% increase over 2008
- 2009 revenue increased to $141
million, a 17% increase over 2008
- DSO reduced by 16 days compared
to the third quarter 2009
- Monitored over 300,000 patients
nationally since inception
- Secured 50 new payor contracts
in 2009, covering approximately 7.5 million lives for total covered
lives of over 200 million
- $8 million of annualized cost
reductions implemented in 2009
- Awarded 15th U.S. Patent which
covers Biological Signal Management (15 additional U.S. patents are
pending; 19 international patents have been issued and 28 are
pending)
- Initiated process with CMS to
seek a national price
- Commercial reimbursement
stabilized in second half of the year
- 29 published abstracts or
studies referencing CardioNet’s MCOTTM
- $49 million in cash and no debt
as of December 31, 2009
2010 Goals
Key objectives planned for 2010:
- Generate approximately 30% to
40% MCOTTM patient volume growth compared to 2009
- Achieve additional $15 million
in cost savings over the next 18 months
- Obtain national reimbursement
from CMS and contracts with remaining large commercial payors
- Launch new MCOTTM platform with
enhanced clinical applications and significantly lower product
costs
- EBITDA positive in the second
half of 2010
President and CEO Commentary
Randy Thurman, Chairman, President and Chief Executive Officer
of CardioNet, commented: “2009 was an extraordinary year for
CardioNet in many ways, headlined by the major accomplishment
of a 50% increase in patient volume. This clearly demonstrates
physician acceptance of CardioNet’s MCOTTM technology, which is one
of the first significant commercial applications in wireless
medicine. CardioNet’s leadership in wireless mobile cardiac
outpatient telemetry is underscored by a majority of physicians
choosing CardioNet over competing products. Physician and patient
feedback indicates this success is due to our comprehensive
reporting capabilities, excellent customer service, and
demonstrated diagnostic superiority, supported by 29 published
abstracts and peer reviewed papers referencing CardioNet’s MCOTTM.
CardioNet remains the only company in the industry with this level
of clinical data supporting the efficacy and acceptance of our
technology. We are also the only company whose device was shown to
be superior to other monitoring technologies in a published
clinical trial.
“MCOTTM’s high volume growth in 2009 was contrasted by the
unexpected decision by Highmark Medicare Services to cut our
reimbursement by one-third. This reduction, as well as the decline
in reimbursement by some commercial payors, impacted the Company’s
ability to remain profitable. In response, CardioNet has taken
affirmative steps to return to operational profitability and ensure
the continued availability of MCOTTM to the physicians and patients
benefiting from the technology. These initiatives aim to improve
productivity and reduce costs while also working with CMS to obtain
an appropriate national reimbursement rate. In addition, CardioNet
has nearly $50 million in cash and no debt, providing us with the
flexibility to pursue all appropriate means to enhance stakeholder
value, including evaluating strategic alternatives.
“Turning to 2010, our focus will be on continuing to grow volume
and build market share, combined with expanding our efforts to
reduce expenses in order to better adjust to the difficult
reimbursement climate. These cost reductions will in no way impact
the unparalleled service that we provide to physicians and
patients. We also expect to enhance our service offering with the
launch of our next generation MCOTTM device in 2010. This cutting
edge technology will allow us to advance MCOTTM into other areas of
monitoring and positions us to enter international markets. In
addition, the cost of our next generation device is expected to be
significantly lower, and we should benefit from this beginning in
2011.
“In 2009, the business experienced unexpected volatility
primarily as a result of the reduced reimbursement. In response, we
have made steady progress on every front including national
reimbursement, cost reductions and volume growth. However, until we
experience a period of stability and progress on our initiatives,
and therefore gain more predictability, we will not provide
specific revenue and earnings guidance. We are providing outlook on
2010 volume growth and expense reduction targets.
“To summarize, we are optimistic about the future of CardioNet.
We have responded to the unexpected reimbursement challenges of
2009 by strengthening and streamlining our operations. CardioNet
and CMS are engaged in a constructive process which could lead to
national reimbursement at an appropriate rate. We have almost $50
million in cash and no debt which will enable us to invest in our
future. With our diagnostic superiority, our advanced and
increasing reporting capabilities, and exceptional service, we
expect to expand our leadership in mobile cardiac outpatient
telemetry.”
Fourth Quarter Financial Results
Revenues for the fourth quarter of 2009 were $33.3 million
compared to $34.4 million in the fourth quarter of 2008, a decrease
of $1.1 million. For the fourth quarter 2009, the Company’s payor
mix was 34% Medicare and 66% commercial. While the increased MCOTTM
patient volume drove additional revenue, it was offset by the full
quarter impact of the previously announced Medicare rate reduction
as well as lower commercial reimbursement. Gross profit declined to
$20.3 million in the fourth quarter of 2009, or 60.9% of revenues,
compared to $23.9 million in the fourth quarter of 2008, or 69.4%
of revenues.
On a GAAP basis, operating loss was $15.5 million in the fourth
quarter of 2009 compared to operating income of $6.4 million in the
fourth quarter of 2008. Excluding $10.1 million of expense
primarily related to the forfeiture of stock options, adjusted
operating loss was $5.4 million in the fourth quarter of 2009. This
compares to adjusted operating income of $6.5 million in the fourth
quarter of 2008, which excludes $0.1 million of expense related to
the integration of PDSHeart and other restructuring efforts in the
prior year period.
On a GAAP basis, net loss for the fourth quarter of 2009 was
$15.9 million, or a loss of $0.67 per diluted share, compared to
net income of $6.9 million, or $0.29 per diluted share, for the
fourth quarter of 2008. Adjusted net loss for the fourth quarter of
2009 was $5.8 million, or a loss of $0.24 per diluted share,
excluding expenses primarily related to the forfeiture of stock
options. This compares to adjusted net income of $3.7 million, or
$0.16 per diluted share, for the fourth quarter of 2008, which
excludes the impact of integration, restructuring and other
nonrecurring charges as well as NOL utilization.
Full Year 2009 Financial Results
Revenues for the twelve months ended December 31, 2009 increased
to $140.6 million compared to $120.5 million in the comparable
period in the prior year. For the full year 2009, gross profit
increased to $91.9 million, or 65.4% of revenues, compared to $80.5
million, or 66.9% of revenues, in the comparable period in the
prior year.
On a GAAP basis, operating loss for the full year 2009 was $20.6
million compared to operating income of $9.7 million in the prior
year. Excluding $14.6 million of expense related to integration,
restructuring and other nonrecurring charges, adjusted operating
loss was $6.0 million for the full year 2009. This compares to
adjusted operating income of $14.6 million for the full year 2008,
which excludes $4.9 million of integration, restructuring and other
nonrecurring charges.
On a GAAP basis, net loss available to common shareholders,
which is derived by reducing net income by the accrued dividends
and accretion on mandatorily redeemable convertible preferred
stock, was a loss of $20.5 million, or a loss of $0.86 per diluted
share, for the twelve months ended December 31, 2009, compared to
net income available to common shareholders of $6.6 million, or
$0.29 per diluted share, for the same period last year. The
mandatorily redeemable convertible preferred stock, which was
issued in part to finance the March 2007 PDSHeart acquisition, was
converted to common stock in connection with CardioNet’s March 2008
initial public offering.
Adjusted net loss for the full year 2009 was $5.9 million
excluding expenses related to integration, restructuring and other
nonrecurring charges, or a loss of $0.25 per diluted share. This
compares to adjusted net income of $8.7 million, or $0.39 per
diluted share, for the full year 2008, which excludes the impact of
integration, restructuring, other nonrecurring charges, NOL
utilization and dividend accretion.
Heather Getz, CardioNet’s Chief Financial Officer, commented:
“In 2009, CardioNet’s MCOTTM volume grew by 50% and total revenue
grew by nearly 17% over 2008. The positive impact of volume was
offset by the significant reimbursement challenges faced by the
Company during the year. The reduced reimbursement also negatively
affected our gross margin percentages which are down year over year
despite the fact that our cost per patient has declined compared to
2008.
“In the fourth quarter, we gained positive momentum in our cash
collections resulting in a 16-day reduction in our DSO over the
third quarter. This was driven by the process improvements that we
implemented in the fourth quarter of 2009. Our cash balance
increased over $6 million compared to the third quarter 2009,
bolstering our already strong balance sheet which will enable us to
invest for the future.
“Due to the initiatives that have already been implemented, we
enter 2010 with a lower cost structure. We recently began execution
of additional measures aimed at $15 million in cost reductions over
the next 18 months. As a result of these actions, we look forward
to growing our business more efficiently and cost effectively.”
Conference Call
CardioNet, Inc. will host an earnings conference call on
Wednesday, February 17, 2010, at 5:00 PM Eastern Time. The call
will be simultaneously webcast on the investor information page of
our website, www.cardionet.com. The call will be archived on our
website and will also be available for two weeks via phone at
888-286-8010, access code 31396761.
About CardioNet
CardioNet is the leading provider of ambulatory, continuous,
real-time outpatient management solutions for monitoring relevant
and timely clinical information regarding an individual’s health.
CardioNet’s initial efforts are focused on the diagnosis and
monitoring of cardiac arrhythmias, or heart rhythm disorders, with
a solution that it markets as Mobile Cardiac Outpatient TelemetryTM
(MCOT™). More information can be found at
http://www.cardionet.com.
Forward-Looking Statements
This press release includes certain forward-looking statements
within the meaning of the "Safe Harbor" provisions of the Private
Securities Litigation Reform Act of 1995 regarding, among other
things, our growth prospects, the prospects for our products and
our confidence in the Company’s future. These statements may be
identified by words such as “expect,” “anticipate,” “estimate,”
“intend,” “plan,” “believe,” “promises” and other words and terms
of similar meaning. Such forward-looking statements are based on
current expectations and involve inherent risks and uncertainties,
including important factors that could delay, divert, or change any
of them, and could cause actual outcomes and results to differ
materially from current expectations. These factors include, among
other things, the success of our efforts to address the operational
issues, including cost savings initiatives, and strategic
alternatives described in this press release, changes to
reimbursement levels for our products and the success of our
attempts to achieve a national rate from CMS, the success of our
sales and marketing initiatives, our ability to attract and retain
talented executive management and sales personnel, our ability to
identify acquisition candidates, acquire them on attractive terms
and integrate their operations into our business, the
commercialization of new products, market factors, internal
research and development initiatives, partnered research and
development initiatives, competitive product development, changes
in governmental regulations and legislation, the continued
consolidation of payors, acceptance of our new products and
services and patent protection and litigation. For further details
and a discussion of these and other risks and uncertainties, please
see our public filings with the Securities and Exchange Commission,
including our latest periodic reports on Form 10-K and 10-Q. We
undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events,
or otherwise.
Three Months Ended
Consolidated Statements of Operations (unaudited)
(In Thousands, Except Per Share Amounts) December
31, December 31, 2009 2008 Revenues
$ 33,297 $ 34,428 Cost of revenues 13,028
10,546 Gross profit 20,269 23,882 Gross profit % 60.9 % 69.4
% Operating expenses: General and administrative expense
15,081 10,775 Sales and marketing expense 9,108 5,369 Research and
development expense 1,500 983 Amortization of intangibles 215 246
Integration, restructuring and other charges 9,872
105 Total operating expenses 35,776 17,478
(Loss) income from operations
(15,507 ) 6,404 Interest income, net 10 295
(Loss) income before income taxes (15,497 ) 6,699 Provision
(benefit) from income taxes 400 (227 ) Net
(loss) income $ (15,897 ) $ 6,926
Earnings per Share:
Basic $ (0.67 ) $ 0.30 Diluted $ (0.67 ) $ 0.29 Weighted
Average Shares Outstanding: Basic 23,882 23,434 Diluted 23,882
23,994
Twelve Months Ended
Consolidated Statements of Operations (unaudited)
(In Thousands, Except Per Share Amounts) December 31,
December 31, 2009 2008 Revenues $
140,621 $ 120,454 Cost of revenues 48,688
39,913 Gross profit 91,933 80,541 Gross profit % 65.4 % 66.9
% Operating expenses: General and administrative expense
58,251 39,876 Sales and marketing expense 34,656 21,111 Research
and development expense 5,810 3,999 Amortization of intangibles 884
984 Integration, restructuring and other charges 12,981
4,880 Total operating expenses 112,582 70,850
(Loss) income from
operations (20,649 ) 9,691 Interest income,
net 178 997 (Loss) income before income taxes (20,471 )
10,688 Provision for income taxes 5 1,483
Net (loss) income $ (20,476 ) $ 9,205 Dividends on and
accretion of mandatorily redeemable convertible preferred stock
- (2,597 ) Net (loss) income available to
common shareholders $ (20,476 ) $ 6,608
Earnings per Share:
Basic $ (0.86 ) $ 0.36 Diluted $ (0.86 ) $ 0.29 Weighted
Average Shares Outstanding: Basic 23,771 18,349 Diluted 23,771
22,659
The following table presents detail of the stock based
compensation expense that is included in each functional line item
in the Condensed Statements of Operations above (000’s):
Three Months Ended
Stock based compensation expense (unaudited) (In
Thousands) December 31, December 31,
2009 2008 Stock based compensation expense
included in: Cost of revenues $ 16 $ 13 Research and development
expense 14 18 General and administrative expense 1,236 814 Sales
and marketing expense 83 113 Integration, restructuring and other
charges 9,818 - Total stock based compensation
expense $ 11,167 $ 958
Twelve Months
Ended Stock based compensation expense
(unaudited) (In Thousands) December 31,
December 31, 2009 2008 Stock based
compensation expense included in: Cost of revenues $ 93 $ 37
Research and development expense 79 68 General and administrative
expense 6,162 2,044 Sales and marketing expense 473 475
Integration, restructuring and other charges 9,818
768 Total stock based compensation expense $ 16,625 $ 3,392
Summary Consolidated Balance Sheet
Data (In Thousands) December 31, December
31, 2009 2008 (unaudited) Cash and
cash equivalents $ 49,152 $ 58,171 Accounts receivable, net 40,885
39,431 Working capital 75,383 84,003 Total assets 168,322 165,773
Total debt - 72 Total shareholders’ equity 149,353 150,117
Reconciliation of Non-GAAP Financial
Measures
(In Thousands, Except Per Share
Amounts)
In accordance with Regulation G of the Securities and Exchange
Commission, the table set forth below reconciles certain financial
measures used in this press release that were not calculated in
accordance with generally accepted accounting principles, or GAAP,
with the most directly comparable financial measure calculated in
accordance with GAAP.
Three Months Ended
(unaudited) December 31, December
31, 2009 2008 Operating (loss) income – GAAP $
(15,507 ) $ 6,404 Nonrecurring charges (a) 10,136
105
Adjusted operating (loss)
income
$ (5,371 ) $ 6,509
Net (loss) income available to common shareholders – GAAP $ (15,897
) $ 6,926 Nonrecurring charges (net of income tax of $0 and
a benefit of $1,370) (a) 10,136 1,475
Adjusted net (loss) income $ (5,761 )
$ 8,401
Impact of NOL utilization
- (4,688 )
Adjusted net (loss) income
excluding NOL utilization $ (5,761 )
$ 3,713
Earnings available to common shareholders per diluted share – GAAP
$ (0.67 ) $ 0.29 Nonrecurring charges per share (a)
0.43 0.06
Adjusted earnings per diluted
share $ (0.24 ) $ 0.35
Impact of NOL utilization
- (0.19 )
Adjusted earnings per diluted
share excluding NOL utilization $ (0.24 )
$ 0.16 (a) In the fourth quarter
of 2009, we incurred $9.9 million for the forfeiture and
acceleration of certain options and $0.2 million of costs in
connection with the since-terminated definitive merger agreement to
acquire Biotel, Inc. In the fourth quarter of 2008, we incurred
$0.1 million of integration, restructuring and other charges.
Twelve Months Ended
(unaudited) December 31, December
31, 2009 2008 Operating (loss) income – GAAP $
(20,649 ) $ 9,691 Nonrecurring charges (a) 14,614
4,880
Adjusted operating (loss)
income
$ (6,035 ) $ 14,571
Net (loss) income available to common shareholders – GAAP $
(20,476 ) $ 6,608
Dividends on and accretion of
mandatorily redeemable convertible preferred stock which converted
to common stock in the first quarter of 2008
- 2,597
Net (loss) income
$ (20,476 ) $ 9,205
Nonrecurring charges (net of income taxes of $0 and $677) (a)
14,614 4,203
Adjusted net (loss)
income $ (5,862 ) $ 13,408
Impact of NOL utilization
- (4,688 )
Adjusted net (loss) income
excluding NOL utilization
$ (5,862 ) $ 8,720
Earnings available to common shareholders per diluted share
– GAAP $ (0.86 )
$ 0.29
Dividends on and accretion of
mandatorily redeemable convertible preferred stock which converted
to common stock in the first quarter of 2008
- 0.11
Diluted earnings per
share
$ (0.86 ) $ 0.40
Nonrecurring charges per share (a) 0.61 0.19
Adjusted earnings per diluted share $
(0.25 ) $ 0.59 Impact of NOL
utilization - (0.20 )
Adjusted earnings per
diluted share excluding NOL utilization $ (0.25
) $ 0.39 (a) In the first
twelve months of 2009, we incurred $9.9 million for the forfeiture
and acceleration of certain options, $2.6 million related to
changes in executive management, $1.1 million of costs in
connection with the since-terminated definitive merger agreement to
acquire Biotel, Inc., and $1.0 million of integration,
restructuring and other charges. In the first twelve months of
2008, we incurred $4.9 million of integration, restructuring and
other charges.
HeartBeam (NASDAQ:BEAT)
Historical Stock Chart
From Jun 2024 to Jul 2024
HeartBeam (NASDAQ:BEAT)
Historical Stock Chart
From Jul 2023 to Jul 2024