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 second quarter-ended June 30, 2012.
Second Quarter 2012 and Recent Highlights
President and CEO Commentary
- Signed definitive merger agreement to acquire all outstanding shares of cardioCORE Lab, Inc., a leading research services business
- Received IDTF designation and billing number for San Francisco monitoring center
- Generated positive adjusted EBITDA of $1.7 million in the second quarter 2012
- Experienced increased patient volume year over year and sequentially
- Realized benefit from cost reductions in the quarter; on track to realize $7.5 million of annualized cost reductions
- $34.1 million in cash and investments as of June 30, 2012
- Reached an agreement to settle outstanding patent infringement litigation
Joseph Capper, President and Chief Executive Officer of CardioNet, commented: “During the second quarter, we made tremendous progress toward meeting our strategic goal of revenue diversification while delivering solid earnings. On Monday, we announced that we entered into a definitive merger agreement to acquire cardioCORE Lab, Inc. (“Cardiocore”), a research services business, for $23.5 million. This transaction enables us to extend the use of our technology into an adjacent market and, with the FDA’s increased focus on cardiac safety in drug development, we are excited by the growth potential. In addition, as we continue to face a challenging healthcare market where patient census is down and reimbursement pressures remain, this acquisition provides revenue diversification which is not dependent on third party insurance reimbursement. We expect Cardiocore to be accretive to our second half earnings and to be cash flow positive for 2012.
“Looking to earnings, we saw an improvement in our second quarter operating results with increased overall patient volume and positive adjusted EBITDA, as well as a decrease in our overall cost structure stemming from the $7.5 million of annualized cost reductions implemented at the end of 2011. Our revenue was impacted by a shift in our product mix to event and Holter monitoring with the full quarter impact of ECG Scanning. However, revenue included the reimbursement benefit from monitoring patients out of our west coast monitoring facility for which we recently received our IDTF designation. With this approval in hand, we are now able to bill all of the claims that were outstanding at quarter end. We expect to receive the majority of the cash by the end of the third quarter.