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CardioNet Inc. Reports Operating Results (10-Q)

August 02, 2010 | About:
10qk

10qk

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CardioNet Inc. (BEAT) filed Quarterly Report for the period ended 2010-06-30.

Cardionet Inc. has a market cap of $115.07 million; its shares were traded at around $4.77 with and P/S ratio of 0.82. BEAT is in the portfolios of Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC, RS Investment Management.

Highlight of Business Operations:

Revenues. Total revenues for the three months ended June 30, 2010 decreased to $31.9 million from $38.3 million for the three months ended June 30, 2009, a decrease of $6.4 million, or 16.5%. MCOT revenue declined $9.8 million due to a decrease in MCOT reimbursement rates, partially offset by an increase in volume of 12% totaling $4.3 million. Additionally, there was a decrease in event, Holter and other revenue of $0.8 million for the three months ended June 30, 2010 compared to the three months ended June 30, 2009.

Gross Profit. Gross profit decreased to $20.1 million for the three months ended June 30, 2010 from $26.3 million for the three months ended June 30, 2009. The decrease of $6.2 million was due to a decrease in revenue related to lower reimbursement rates totaling $9.8 million, offset slightly by the favorable impact of $2.8 million from higher sales volume and $0.8 million of lower cost of sales resulting from our Company-wide cost reduction initiatives for the three months ended June 30, 2010 compared to the three months ended June 30, 2009. Gross profit as a percentage of revenue declined to 62.9% for the three months ended June 30, 2010 compared to 68.7% for the three months ended June 30, 2009.

General and Administrative Expense. General and administrative expense was $8.5 million for the three months ended June 30, 2010 compared to $9.5 million for the three months ended June 30, 2009. The decrease of $1.0 million, or 10.1%, was due to our restructuring efforts resulting in a decrease in stock based compensation expense of $0.9 million, payroll costs of $0.6 million and $0.5 million of professional fees. This was partially offset by an increase in volume related expenses, as well as recruiting charges totaling $1.0 million. As a percent of total revenues, general and administrative expense was 26.8% for the three months ended June 30, 2010 compared to 24.8% for the three months ended June 30, 2009.

Revenues. Total revenues for the six months ended June 30, 2010 decreased to $63.8 million from $74.0 million for the six months ended June 30, 2009, a decrease of $10.2 million, or 13.8%. MCOT revenue decreased $8.8 million due to a decrease in MCOT reimbursement rates totaling $20.2 million, offset by an increase in volume of 17%, or $10.0 million. Additionally, there was a decrease in event, Holter and other revenue of $1.4 million for the six months ended June 30, 2010 compared to the six months ended June 30, 2009.

Gross Profit. Gross profit decreased to $40.2 million for the six months ended June 30, 2010 from $50.2 million for the six months ended June 30, 2009. The decrease of $10.0 million was due to a decrease in revenue related to lower reimbursement rates totaling $20.2 million, offset slightly by the favorable impact of $8.6 million from higher sales volume and $1.6 million of lower cost of sales resulting from our Company-wide cost initiatives for the six months ended June 30, 2010 compared to the six months ended June 30, 2009. Gross profit as a percentage of revenue declined to 63.0% for the six months ended June 30, 2010 compared to 67.8% for the six months ended June 30, 2009.

General and Administrative Expense. General and administrative expense was $18.2 million for the six months ended June 30, 2010 compared to $20.0 million for the six months ended June 30, 2009. The decrease of $1.8 million, or 8.9%, was due to our cost reduction efforts resulting in a decrease in stock compensation expense of $1.5 million, professional fees of $0.6 million, payroll costs of $0.4 million, and other costs of $0.4 million. The decrease was offset by an increase in consulting costs of $0.6 million and depreciation expense of $0.5 million. As a percent of total revenues, general and administrative expense was 28.6% for the six months ended June 30, 2010 compared to 27.1% for the six months ended June 30, 2009.

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