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CardioNet, Inc. Reports Second Quarter 2011 Financial Results

On a GAAP basis, net loss for the second quarter 2011 was $3.0 million, or a loss of $0.12 per diluted share, compared to a net loss of $2.1 million, or a loss of $0.09 per diluted share, for the second quarter 2010. Excluding expenses related to restructuring and other nonrecurring charges, adjusted net loss for the second quarter 2011 was $1.2 million, or a loss of $0.05 per diluted share. This compares to an adjusted net loss of $0.4 million, or a loss of $0.02 per diluted share, for the second quarter 2010, which also excludes the impact of restructuring and other nonrecurring charges.

Liquidity

As of June 30, 2011, the Company had total cash and investments of $45.0 million compared to $45.5 million as of December 31, 2010, a decrease of $0.5 million primarily due to the prepayment of certain expenses that typically occurs in the first half of the year. As anticipated, accounts receivable increased slightly, with DSO increasing to 85 days. These increases were due to temporary disruptions in the billing and collections area that resulted from the Company’s proactive efforts to reorganize and restructure this function to better support the business. The Company expects that these proactive initiatives will contribute to a lower DSO by year end.

Conference Call

CardioNet, Inc. will host an earnings conference call on Monday, August 8, 2011, 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 16650278.

About CardioNet

CardioNet is a 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 Telemetry TM (MCOT TM). More information can be found at http://www.cardionet.com.

Forward-Looking Statements

This document 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, our ability to complete the integration of Biotel and its operations into our business, the effect of the acquisition on our business operations and financial results, effectiveness of our efforts to address operational initiatives, including cost savings initiatives that affect our business, changes to insurance coverage and reimbursement levels for our products, 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)
June 30, June 30,
2011 2010
 
Revenue $ 31,637 $ 31,939
Cost of revenue   13,018   11,835
Gross profit 18,619 20,104
Gross profit % 58.9% 62.9%
 
Operating expenses:
General and administrative expense 8,985 8,548
Sales and marketing expense 7,395 6,876
Bad debt expense 2,902 4,484
Research and development expense 1,361 1,230
Integration, restructuring and other charges   1,014   1,128
Total operating expenses 21,657 22,266
   
Loss from operations   (3,038)   (2,162)
Interest and other income, net 36 20
 
Loss before income taxes (3,002) (2,142)
Provision for income taxes   (4)   -
Net loss $ (3,006) $ (2,142)
 

Loss per Share:

Basic $ (0.12) $ (0.09)
Diluted $ (0.12) $ (0.09)
 
Weighted Average Shares Outstanding:
Basic 24,401 24,083
Diluted 24,401 24,083
     
 

Six Months Ended

 
Consolidated Statements of Operations (unaudited)
(In Thousands, Except Per Share Amounts)  
June 30, June 30,
2011 2010
 
Revenue $ 65,636 $ 63,755
Cost of revenue   26,670   23,584
Gross profit 38,966 40,171
Gross profit % 59.4% 63.0%
 
Operating expenses:
General and administrative expense 18,660 18,225
Sales and marketing expense 15,460 14,873
Bad debt expense 5,292 9,124
Research and development expense 3,043 2,473
Integration, restructuring and other charges   1,138   3,073
Total operating expenses 43,593 47,768
   
Loss from operations   (4,627)   (7,597)
Interest and other income, net 73 24
 
Loss before income taxes (4,554) (7,573)
Provision for income taxes   (4)   -
Net loss $ (4,558) $ (7,573)
 

Loss per Share:

Basic $ (0.19) $ (0.32)
Diluted $ (0.19) $ (0.32)
 
Weighted Average Shares Outstanding:
Basic 24,350 24,011
Diluted 24,350 24,011
     
 
Summary Financial Data
(In Thousands)  
June 30, December 31,
2011 2010
(unaudited)
 
Cash and investments $ 44,977 $ 45,484
Accounts receivable, net 26,276 24,978
Other receivables, net 2,845 3,041
Days sales outstanding 85 78
Working capital 63,730 60,634
Total assets 152,248 156,692
Total debt - -
Total shareholders’ equity 133,031 134,928
 
 

Three Months Ended

 
June 30, June 30,
2011 2010
 
Stock compensation expense $ 1,231 $ 948

 

Six Months Ended

 
June 30, June 30,
2011 2010
 
Stock compensation expense $ 2,380 $ 1,866
 

Reconciliation of Non-GAAP Financial Measures(In Thousands, Except Per Share Amounts)

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