Gross margin as a percentage of sales increased from 72% to 75% in the third quarter of 2008, largely due to a 10% average unit sales price improvement, lower inventory reserve requirements, reduced manufacturing overhead costs, and a reduction of sales returns reserve.
Operating expenses were reduced 8% (or $398,000) to $4.8 million, driven primarily by improved efficiencies, reduced personnel expenses, lower accounting fees and bad debt provisions, all part of an ongoing cost containment focus in support of the Company's plan to regain profitability.
The operating loss improved 78% to $254,000, compared to an operating loss of $1.2 million for the same period in 2007. The year-to-date operating loss was $1.6 million, a 61% improvement from $4.0 million in the same nine month period of 2007.
CEO Comments and Outlook
Michael K. Perry, Chief Executive Officer of CardioDynamics, stated, "We were very pleased with our performance in the third quarter, particularly the rate of improvement we are making in reducing the operating loss. Excluding non-cash expenses for depreciation, amortization and stock option compensation, we experienced positive income from operations for the first time in 15 quarters and one quarter ahead of plan. Achieving our seventh consecutive quarterly year-over-year revenue growth and 15% growth year-to-date is encouraging and a testament to the continued growth potential for ICG."
Perry continued, "Our goal remains to achieve positive operating cash
flow in the fourth quarte
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