CAS Medical Systems, Inc. Reports Third Quarter and Year-to-Date Financial Results
Record Third Quarter and YTD Revenues of $11.7 million and $31.2 million
Branford, Conn. November 6, 2008 CAS Medical Systems, Inc. (NASDAQ: CASM), a leader in non-invasive monitoring that is vital to patient care, today reported revenues of $11.7 million for the third quarter ended September 30, 2008, a 10 percent increase from $10.7 million reported for the same period of 2007. For the nine months ended September 30, 2008, revenues increased 12 percent to $31.2 million from $27.9 million in the same period last year. The Company also reported net income of $329,000 for the quarter, marking a return to profitability after reporting net losses of $562,000 for the first six months of 2008.
Andrew E. Kersey, President and CEO of CASMED, stated, “We are pleased to announce our record revenue for this period, the continued improvement over the prior quarter, and the return to profitability.”
“During the third quarter, we launched our Neonatal/Infant FORE-SIGHT® Cerebral Oximeter system and are encouraged by the progress we are making. The Company sold and installed systems at two of the U.S. News and World Report top ten U.S. children’s hospitals for neonatal care. We are taking steps to strengthen our sales and marketing organization, including the addition of Nathan Harris as VP of Sales and Marketing. We anticipate that these investments will have a positive impact on our business during 2009 and help secure a leadership position in the growing cerebral oximetry marketplace.”
Financial Results for Q3
For the three months ended September 30, 2008, the Company recorded net income of $329,000, or $0.03 per basic and diluted common share, compared to net income of $539,000, or $0.05 per basic and diluted common share, reported for the three months ended September 30, 2007. Net income for the prior year three months included a tax benefit of $155,000 related to an exchange of state tax carry forwards for reduced cash credits.
Pre-tax income for the three months ended September 30, 2008 increased $18,000 to $597,000 from $579,000 reported for the three months ended September 30, 2007. Cost of sales as a percentage of revenues for the third quarter was 63% compared to 62% for the same period of the prior year. Operating expenses grew 7.5 percent but declined to 31% of revenues from 32% for the prior year quarter. FORE-SIGHT related expenses accounted for the increase in operating expenses.
Stock compensation expense was $87,000 for the third quarter of 2008, compared to $86,000 for the same period of the prior year.
Year-to-Date Financial Results
The Company recorded a net loss of $233,000, or ($0.02) per basic and diluted common share, compared to net income of $318,000, or $0.03 per basic and diluted common share, reported for the first nine months of the prior year. Cost of sales as a percentage of sales for the first nine months of 2008 increased to 66 percent from 64 percent during the same period of 2007 primarily as a result of higher costs of sales in the first quarter of 2008. Operating expenses remained at approximately 34 percent of sales for the first nine months of 2008 increasing to $10.7 million from $9.6 million during the same period of 2007. FORE-SIGHT sales and marketing related expenses were responsible for the increased spending.
Stock compensation expense was $318,000 for the first nine months of 2008, compared to $217,000 for the same period of the prior year.
The Company’s income tax benefit of $192,000 for the first nine months of 2008 assumes an effective tax rate of 46 percent before prior period adjustments of $43,000. The income tax benefit of $68,000 recorded for the first nine months of 2007 reflects an effective rate of 31 percent adjusted by an exchange of approximately $155,000 of state tax carry forwards for reduced cash credits payable to the Company.
The Company has generated cash from operations during the first nine months of 2008 of $407,000 compared to $2.6 million of cash used by operations during the same period of 2007.
Conference Call Information
The live call may be accessed by phone at 877-548-7903 (domestic) or 719-325-4875 (international). If you would like to participate, please call at least ten minutes prior to the start time of 10:00 a.m. Eastern Time.
A live audio webcast of the conference call will also be available on the Company's website located at www.casmed.com. Please allow extra time prior to the call to visit the site and download the streaming media software required to join the webcast. An online archive of the webcast will be available within two hours of the end of the live call and archived on the website until December 6, 2008.
About CASMED® - Monitoring What’s Vital
The Company’s product lines include the high-acuity monitoring capabilities of the FORE-SIGHT Cerebral Oximeter; the bedside patient monitoring line of vital signs and cardio-respiratory monitoring products, proprietary non-invasive blood pressure measurement technology, and supplies and service including blood pressure cuffs and products for neonatal intensive care. CASMED products are designed to meet the needs of a full spectrum of patient populations worldwide, ranging from adults to pediatrics and neonates.
For further information regarding CAS Medical Systems, Inc., visit the Company’s website at www.casmed.com.
Statements included in this press release, which are not historical in nature, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements relating to the future financial performance of the Company are subject to many factors including, but not limited to, the customer acceptance of the products in the market, the introduction of competitive products and product development, commercialization and technological difficulties, the impact of actions and events involving key customers and vendors, and other risks detailed in the Company’s Form 10-K for the year ended December 31, 2007 and other subsequent Securities and Exchange Commission filings.
Such statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. When used in this press release the terms "anticipate", "believe", "estimate", "expect", "may", "objective", "plan", "possible", "potential", "project", "will" and similar expressions identify forward-looking statements. The forward-looking statements contained in this press release are made as of the date hereof, and we do not undertake any obligation to update any forward-looking statements, whether as a result of future events, new information or otherwise.
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