Cardiac Science reports net loss in first quarter after merger
9 November 2005
Bothell, WA, USA. Cardiac Science Corporation reported a net loss of $0.6
million for the third quarter, ending 30 Sept 2005.
Reported revenue for the third quarter increased by 22% over the third
quarter of 2004 to $27.4 million, due principally to the effect of the
merger with Quinton Cardiology Systems on 1 September 2005. Revenue for the
quarter consisted mainly of diagnostic cardiology products and services, but
also included $5.5 million of defibrillation products and services. Sales of
products within the diagnostic cardiology lines remained consistent with the
preceding quarter, although the distractions of the merger appeared to
dampen the previously expected growth.
“The delays in obtaining regulatory approvals and the distractions related
to the merger resulted in a suppressed performance during the quarter,” said
John Hinson, president and chief executive officer of Cardiac Science. “We
believe our revenue performance will improve in the fourth quarter, and
remain confident that we will grow revenues even more significantly in
2006,” he added.
Gross profit for the three months ended September 30, 2005 increased to
$12.3 million, resulting in a gross margin of 44.7%, an increase over the
gross margin of 44.0% for the same period in the prior year. Excluding
merger-related charges of approximately $0.7 million, pro forma gross profit
for the three months ended September 30, 2005 would have increased to $13.0
million, or 47.4% of revenues. The improvement in gross margin is due to
changes in sales mix, particularly from higher margins on defibrillation
revenues, as well as ongoing cost reductions.
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