CardioNet, Inc. (NASDAQ:BEAT), a leading wireless medical technology company with a current focus on the diagnosis and monitoring of cardiac arrhythmias, reported results for the second quarter ended June 30, 2010.
Second Quarter Highlights
* Appointed Joseph H. Capper as President and Chief Executive Officer
* Achieved gross margin of 63% on revenues of $32 million
* Improved operating results with a loss of $0.09 per diluted share, a $0.14 improvement over the first quarter 2010. On an adjusted basis, the loss per diluted share was $0.02, an $0.11 improvement over the first quarter 2010
* Increased MCOTTM patient volume 12% as compared to the second quarter 2009, bringing the total number of patients monitored by MCOTTM since inception to over 350,000
* Commercial reimbursement rates in the first half of 2010 remained stable with the year-end 2009 rates
* Reduced DSO to 104 days, a reduction of 9 days compared to the first quarter 2010
* Completed initiatives that will yield previously announced $15 million in cost reductions
* EBITDA positive ahead of schedule
* $50 million in cash and investments with no outstanding debt as of June 30, 2010
Financial Results
Revenues for the second quarter 2010 were $31.9 million, a decrease of 16.5% compared to $38.3 million in the second quarter 2009. Increased MCOTTM patient volume during the second quarter 2010 drove additional revenues, but was offset by the impact of the 2009 Medicare and commercial rate reductions. For the three months ended June 30, 2010, payor revenue mix was 34% Medicare and 66% commercial and volume mix was 43% Medicare and 57% commercial.
Gross profit for the second quarter 2010 decreased to $20.1 million, or 62.9% of revenues, compared to $26.3 million, or 68.7% of revenues, in the second quarter 2009. Second quarter 2010 gross profit margin was impacted by the 2009 Medicare and commercial rate reductions, partially offset by increased MCOT patient volume and efficiency improvements that reduced the cost of services.
On a GAAP basis, operating expenses for the second quarter 2010 were $22.3 million, a decrease of 7.8% compared to $24.2 million in the second quarter 2009. Operating expenses on an adjusted basis declined by 14.3% compared to the prior year quarter, excluding $1.7 million in the second quarter 2010 and $0.2 million in the second quarter 2009 related to restructuring and other nonrecurring charges. The decrease in operating expenses was driven by the Company’s cost reduction initiatives across all of the Company’s expense line items in response to the Medicare rate reduction.
On a GAAP basis, net loss for the second quarter 2010 was $2.1 million, or a loss of $0.09 per diluted share, compared to net income of $1.6 million, or $0.07 per diluted share, for the second quarter 2009. Excluding expenses related to restructuring and other charges, adjusted net loss for the second quarter 2010 was $0.4 million, or a loss of $0.02 per diluted share. This compares to adjusted net income of $2.7 million, or $0.11 per diluted share, for second quarter 2009, which excludes the impact of restructuring and other charges.
Total cash and investments were $50.2 million as of June 30, 2010, compared with total cash and investments of $49.2 million as of December 31, 2009, an increase of $1.0 million. Net accounts receivable declined $6.7 million compared to year end 2009. As a result, the second quarter DSO declined to 104 days, an 18 day reduction compared to year end 2009.
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