“This quarter’s progress clearly demonstrates our commitment to our goals of growing and diversifying the business. With a strong balance sheet, the technological superiority of our devices and the strength of our core business infrastructure as the foundation for success, we believe the Company is poised for growth.”
Second Quarter Financial Results
Revenue for the second quarter 2012 was $27.4 million, a decrease of 13.2% compared to $31.6 million in the second quarter 2011. Despite an increase in overall patient volume, patient services revenue declined $3.5 million primarily due to a shift in product mix to event and Holter monitoring which carry a lower reimbursement rate. Additionally, product revenue declined $0.7 million with lower volume due to unusually high sales in the first half of 2011 following the acquisition of Biotel. For the three months ended June 30, 2012, patient revenue was comprised of 43% Medicare and 57% commercial, and MCOT TM patient volume was comprised of 53% Medicare and 47% commercial.
Gross profit for the second quarter 2012 decreased to $16.7 million, or 60.9% of revenue, compared to $18.6 million, or 58.9% of revenue, in the second quarter of 2011. Gross profit for the second quarter 2012 on an adjusted basis was $17.0 million, or 62.0% of revenue, excluding $0.3 million related to restructuring and other nonrecurring charges. The increase in adjusted gross profit percentage was primarily related to the impact of cost reductions implemented at the end of 2011 and lower depreciation.On a GAAP basis, operating expenses for the second quarter 2012 were $18.4 million, a decrease of 15.1% compared to $21.7 million in the second quarter 2011. Operating expenses on an adjusted basis were $17.4 million, a 12.3% decline compared to $19.8 million for the prior year quarter, excluding $1.0 million in the second quarter 2012 and $1.9 million in the second quarter 2011 related to restructuring and other nonrecurring charges. The decrease in operating expenses was driven by the implementation of cost reductions at the end of 2011. These reductions were partially offset by the addition of ECG Scanning’s operating expenditures in the quarter.