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CardioNet Inc. Reports Operating Results (10-Q)

November 09, 2010 | About:
10qk

10qk

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CardioNet Inc. (BEAT) filed Quarterly Report for the period ended 2010-09-30.

Cardionet Inc. has a market cap of $136.6 million; its shares were traded at around $5.66 with and P/S ratio of 1. BEAT is in the portfolios of RS Investment Management, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Revenues. Total revenues for the three months ended September 30, 2010 decreased to $27.5 million from $33.3 million for the three months ended September 30, 2009, a decrease of $5.8 million, or 17.6%. MCOT revenue declined $5.0 million substantially due to a decrease in MCOT reimbursement rates. Additionally, there was a decrease in event, Holter and other revenue of $0.8 million for the three months ended September 30, 2010 compared to the three months ended September 30, 2009.

Gross Profit. Gross profit decreased to $15.5 million for the three months ended September 30, 2010 from $21.5 million for the three months ended September 30, 2009. The decrease of $6.0 million was due to a decrease in revenue related to lower MCOT reimbursement rates totaling $4.7 million. The remaining $1.3 million reduction resulted largely from lower Event and Holter volume, partially offset by lower cost of sales resulting from our Company-wide cost reduction initiatives for the three months ended September 30, 2010 compared to the three months ended September 30, 2009. Gross profit as a percentage of revenue declined to 56.6% for the three months ended September 30, 2010 compared to 64.5% for the three months ended September 30, 2009.

General and Administrative Expense. General and administrative expense was $8.7 million for the three months ended September 30, 2010 compared to $9.7 million for the three months ended September 30, 2009. The decrease of $1.0 million, or 10.5%, was due primarily to our restructuring efforts resulting in a decrease in professional fees of $0.7 million, payroll costs of $0.5 million, and stock compensation expense of $0.3 million. The decrease was offset by an increase in consulting costs of $0.2 million, depreciation expense of $0.2 million and other costs of $0.1 million. As a percent of total revenues, general and administrative expense was 31.7% for the three months ended September 30, 2010 compared to 29.2% for the three months ended September 30, 2009.

Revenues. Total revenues for the nine months ended September 30, 2010 decreased to $91.2 million from $107.3 million for the nine months ended September 30, 2009, a decrease of $16.1 million, or 15.0%. MCOT revenue decreased $13.8 million due to a decrease in MCOT reimbursement rates totaling $24.0 million. The decrease in reimbursement rates was offset by an increase in volume of 11%, or $7.9 million. Additionally, there was a decrease in event, Holter and other revenue of $2.3 million for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009, due primarily to volume declines.

General and Administrative Expense. General and administrative expense was $26.9 million for the nine months ended September 30, 2010 compared to $29.7 million for the nine months ended September 30, 2009. The decrease of $2.8 million, or 9.5%, was due primarily to our cost reduction efforts resulting in a decrease in stock compensation expense of $1.9 million, professional fees of $1.3 million, payroll costs of $0.8 million, and other costs of $0.3 million. The decrease was offset by an increase in consulting costs of $0.8 million and depreciation expense of $0.7 million. As a percent of total revenues, general and administrative expense was 29.5% for the nine months ended September 30, 2010 compared to 27.7% for the nine months ended September 30, 2009.

As of September 30, 2010, our principal source of liquidity was cash and cash equivalents of $10.6 million, available-for-sale investments of $32.2 million and net accounts receivable of $38.1 million. The Company has no short or long-term debt and does not anticipate needing to secure financing from external sources for cash to operate the business. The Company had working capital of $70.3 million as of September 30, 2010. We believe that our existing cash and cash equivalent balances will be sufficient to meet our anticipated cash requirements for the foreseeable future.

Read the The complete Report

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