Card Guard AG (Card Guard), a Switzerland based medical devices company, has reported consolidated revenues of $84.3 million for the full year of 2008, up 50% compared with the consolidated revenues in the previous year-end. It also reported a net income of $4.72 million for the full year of 2008, compared with the net loss of $10.81 million in the previous year-end.
Q4 2008 Highlights are as follows:
Consolidated revenues reached $24.84 million, reflecting growth of over 68% in comparison with Q4 2007
Gross profit increased by 88.8% in comparison with Q4 2007, reaching $13.53 million
EBITDA of $5.26 million with a 21.2% margin, versus LBITDA in Q4 2007
EBIT of $4.02 million with a margin of 16.2%, versus LBIT in Q4 2007
Positive operational cash flow of $4.47 million, compared to $2.58 million in Q4 2007
10 new managed care contracts at LifeWatch Services, totalling 445 contracts, and covering over 278 million lives
New reimbursement codes (CPT code 93229) for ACT wireless monitoring services issued in November 2008
LifeWatch awarded a GSA (General Service Administration) Schedule Contract for procurement of ACT wireless monitoring services in U.S. government agencies
Expansion of sales force by about 70% to facilitate expansion of ACT wireless monitoring
The LifeStar ACT wireless monitoring service continued to serve as Card Guard’s growth engine, and generated $14.01 million in Q4 2008. For full fiscal year 2008, revenues from ACT wireless monitoring services amounted to $35.81 million, in comparison with full fiscal year 2007, which totalled $3.64 million. This increase means a near tenfold growth. Card Guard will continue its strong growth in the coming years, based on its expanding sales force, the newly established reimbursement code, the successful launch of its next generation LifeStar ACT III Platinum monitoring system and accelerating utilization of the ACT wireless monitoring service by more than 45% of the top cardiac centres in the U.S.
Q4 2008 Highlights of LifeStar ACT
The next-generation LifeStar ACT III Platinum monitor was successfully launched in the U.S. at the end of Q3 2008. ACT III Platinum is a high-performance wireless system and features a 3- channel ECG and ST deviation analysis (measures ischemic changes) to deliver more sensitive and specific data. ACT III Platinum has an extended sensor memory of six hours, and a flash memory of up to 30 days of data to allow physicians a recall of any of the ECG data for furtherstudy. This next generation solution is expected to break into new niche areas of remote patient monitoring in 2009.
Strong Gross Profit, EBIT and EBITDA
The positive trends seen throughout fiscal year 2008 culminated in strong Gross Profit, EBIT and EBITDA margins. Gross profit for fiscal year 2008 totalled $45.38 million, representing a gross margin of 53.8%, compared with fiscal year 2007 results, showing a gross profit of $24.89 million and a gross margin of 45.4%. EBITDA totalled $15.3 million for fiscal year 2008, with a double digit margin of 18.1%. For comparison purposes, fiscal year 2007 corresponding index of LBITDA was $4.25 million. Card Guard achieved an EBIT of $10.97 million for fiscal year 2008, reflecting an EBIT margin of 13.0%, in comparison with LBIT of $11.71 million reported in fiscal year 2007.
For the past five consecutive quarters, Card Guard reported results with growth trends and improved results from operation, due to the considerable increase of ACT revenues, in addition to rigorous cost controls throughout the organization.
For fiscal year 2008, the breakdown of fiscal year 2008 operating expenses were as follows:
Research & Development expenses, net, in the amount of $4.88 million (5.8% from fiscal year 2008 total revenues, compared to 8% of revenue in fiscal year 2007)
Sales and Marketing expenses totalled $16.12 million (19.1% from fiscal year 2008 total revenues, compared to 22.6% rate in fiscal year 2007)
General and Administration expenses were $14.36 million (17% from fiscal year 2008 total revenues, compared to 23.3% rate in fiscal year 2007)
Card Guard’s careful management of resources resulted in a lower operating expenses from all departments as a percentage of revenue in fiscal year 2008 than those reported in fiscal year 2007.
Stronger Cash flows and Increasing Liquidity
Card Guard realized a significant improvement in its cash flows throughout fiscal year 2008, resulting in net cash provided by operating activities in the amount of $9.89 million for fiscal year 2008. This compares to net cash of $2.42 million used in operating activities throughout fiscal year 2007. As of December 31, 2008, Card Guard has increased its balance of cash, cash equivalents, marketable securities and structures to $24.04 million (out of which cash and cash equivalents amounted $22.0 million). As of December 31, 2007 the balance of cash, cash equivalents, marketable securities and structures was $15.64 million.
The LifeStarTM ACT wireless monitoring service is expected to further drive Card Guard’s revenues in the coming years. For fiscal year 2009, the company is confident in achieving growth of at least 50% in revenues with ongoing strong profitability.