Cost-cutting efforts helped CardioNet (NSDQ:BEAT) top Wall Street’s expectations for the 4th quarter, despite slipping sales for its mobile cardiac outpatient telemetry systems.
The Conshohocken, Pa.-based heart monitor maker posted revenues of $26.8 million for the 3 months ended Dec. 31, a 6.6% decline from $28.7 million during the same time last year.
Losses widened 937% to $49.8 million, or $2.03 per share, mostly attributable to a $46 million goodwill impairment charge on suppressed market pricing that CardioNet attributed to a U.S. Justice Dept. investigation into allegations that it used inappropriate diagnosis codes when submitting claims for Medicare payments.
"Although results have improved, our stock price has clearly been under pressure, particularly since the announcement of the civil investigative demand in August 2011," president & CEO Joseph Capper said in prepared remarks. "As a result, we were required by accounting guidance to take a non-cash goodwill impairment charge. This charge has no impact on the company’s business operations or cash flow."
CardioNet revealed in September that it received a civil investigative demand from the DOJ, prior to which it had no knowledge of a pending investigation, according to SEC filings.
The company is cooperating with the investigation but has no estimates or predictions regarding the outcome of the investigation or what impact it might have on its business, financial position or operations, according the filings.
Excluding 1-time charges, the company reported losses of $1.1 million, or 4 cents per share, beating analysts’ expectations by 9 cents.
The news sent BEAT shares up 10% to $3.04 as of about 2:45 p.m. today.
"2011 presented a number of challenges for the company and the health care industry overall; however, we improved our year-over-year operating results and are even more excited about the future," Capper added. "With a number of operational improvements in place and the full commercialization of our next-generation MCOT device, we are confident that we can continue to enhance performance and strategically leverage our balance sheet."
Declining MCOT sales drove patient revenues down by $3.9 million, which was largely offset by the revenues from newly acquired Biotel, which brought in $2 million.
CardioNet beat analysts’ forecasts for the full year with adjusted losses of 32 cents per diluted share, beating The Street’s expectations again by 9 cents.
Revenues for 2011 declined slightly to $119 million, compared to $119.9 million for 2010, with non-adjusted losses of $61.4 million, or $2.51 lost per diluted share, more than tripling prior losses of $19.9 million, or 82 cents lost per diluted share.