-- Regained compliance with Nasdaq listing requirements
Second Quarter 2008 Operating Results Discussion
The Company reported a net sales increase of 15% to $6.2 million. ICG sales growth was due to a combination of 8% higher average domestic ICG monitor sales prices, a 20% increase in domestic ICG System sales and an 11% improvement in international and new market revenue (primarily due to increased revenue from pharmaceutical companies). The higher average domestic sales price indicates continued physician acceptance and a solid value proposition for ICG technology. The improvement in international and new market revenue is a result of the Company's increased focus on non-Medicare reimbursement dependant markets. Recurring sensor revenue grew 14% sequentially from first quarter 2008 to $1.7 million, and was up 1% compared to the same period in 2007.
Gross margin as a percentage of sales increased from 63% to 71% in the second quarter of 2008, largely due to a higher net average sales price per unit, lower manufacturing expenses and reduced inventory charges related to potential excess, slow-moving or obsolete inventory. Operating expenses were held flat at $4.9 million and increased revenue, along with improved gross margins, drove a 68% improvement in the operating loss. The reduced operating loss, coupled with sound working capital management, resulted in a 43% reduction in operating cash usage to $490,000 in the quarter, down from an $860,000 operating cash use from continuing operations in the same quarter of 2007.
CEO Comments and Outlook
Michael K. Perry, Chief Executive Officer of CardioDynamics, stated,
"We are very pleased with the 18% revenue growth achieved in the first half
of 2008 and 15% during the second quarter. Sales momentum continues strong
and with stea
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