Knobias Clip Report (10-10-2008) CDIC
Submitted By Knobias ClipReport
CDIC: CEO Discusses Q3 Results and Return to Positive Operating Income
By Fain Hughes, fhughes@knobias.com
Shares of CardioDynamics International Corp. (CDIC) reported financial results for fiscal third quarter ended August 31, 2008 after the bell on Thursday.
The Company reported a net sales increase of 8% to $6.1 million for the third fiscal quarter 2008 and a 15% year-to-date sales increase to $18.0 million, up from $15.7 million for the same period a year ago. Net loss from continuing operations was $432,000, or $0.06 per share, down from $1.4 million, or $0.19 per share, for the same period last year.
Michael K. Perry, CEO of CardioDynamics, commented in a conference call, “This quarter marks our 7th consecutive quarter of year-over-year growth and the best year-to-date growth in the last four years. We also achieved a very significant milestone and generated positive operating income. This important goal was accomplished one quarter earlier than we had planned.”
He added, “We have significantly improved our operating expense structure and gross margin to generate an additional $2.4 million of operating income on $2.3 million of revenue growth generated so far this year. Our gross margins continued to expand in Q3 to 75%. This was three percentage points higher than the same period last year. Our margins benefited from higher average unit sales prices, reduced manufacturing overhead costs and lower inventory reserve requirements. We also reduced operating expenses by 8% in the quarter.”
“FY08 is shaping up to be a solid year for us and gives us continued confidence that we have the business back on a growth path. Q4 has historically been our strongest quarter. We expect that to be the case again this year. We are a little cautious with the economic climate, so growth may be a couple of percentage points below our goal of 15% growth. We should generate positive EBITDA again in Q4 and should be close to positive cash flow. As we look to fiscal 2009, we are planning for 10% top line growth with $27 million in revenue. Hopefully, we will overachieve that conservative plan. The additonal goals for 2009 include generation of positive EBITDA for the year and be slightly cash flow positive.”
Mr. Perry concluded, “We have made substantial efforts to accelerate our return to profitability. As you look at the improving fundamentals in our business and the continued prospects for growth going forward, the market value of our company seems exceptionally undervalued at below .4 x current year’s revenue.”
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