CardioDynamics Reports 17th Consecutive Quarter of Year-Over-Year Revenue Growth and 20% Increase in Third Quarter 2002 Sales.

Business Editors & Health/Medical Writers

BIOWIRE2K

SAN DIEGO--(BUSINESS WIRE)--Sept. 19, 2002

Company Posts Positive Operating Cash Flow,

Seven-Fold Increase in Net Income and

62% Increase in Recurring Sensor Revenue

CardioDynamics (Nasdaq:CDIC), the innovator and global leader of Impedance Cardiography (ICG) technology and manufacturer of BioZ(R) noninvasive digital cardiac function monitoring systems, today announced its 17th quarter of year-over-year quarterly revenue growth, second consecutive profitable quarter and 20% increase in third quarter 2002 sales over the same period in the prior year.

Third Quarter 2002 Results:

Net sales for third quarter fiscal 2002 were $6.3 million, an increase of 20% over sales of $5.2 million for the same period in fiscal 2001. Gross margin for third quarter 2002 increased to 77.5% of sales, up from 71.8% for the same quarter in fiscal 2001, allowing the company's entire $1.1 million growth in revenue to flow as improved gross margin. The improved gross margin resulted from higher average equipment sales prices, reduced product material cost and an increased mix of sales from its U.S. direct sales force. Net income for the third quarter was $339,000 (up 578%), or $0.01 per diluted share, compared to net income of $50,000, or $0.00 per diluted share reported in third quarter 2001. The improvement in net income was primarily due to increased sales, improved gross margin and better utilization of the company's fixed cost structure.

At the end of third quarter 2002, the company had 65 field sales associates, including 42 domestic sales representatives and 11 clinical sales specialists. The U.S. direct sales team posted a solid 39% growth in sales over third quarter 2001 and increased sales 12% sequentially over second quarter 2002. Sales and marketing expenses ($3.5 million) increased 31% over last year's same quarter as a result of a 23% increase in field personnel coupled with increased commissions on higher sales by our direct sales force.

Operating Highlights:

During third quarter 2002, 165 BioZ Systems were shipped, increasing the company's installed base to over 2,000 BioZ Systems, up 40% from one year ago. Sensor revenue in the third quarter 2002 was $774,000 (12.3% of sales), an increase of 62% over sensor revenue of $477,000 (9.1% of sales) for the same period in fiscal 2001.

The company achieved $189,000 of cash flow from operations, the first quarter of positive operating cash flow in the company's history. Cash collections of $6.2 million were strong and represented 116% of the prior quarter's trade accounts receivable sales. Accounts receivable days sales outstanding have steadily improved over the past two years. The company has over $6.5 million in cash and cash equivalents, and remains essentially debt-free.

CEO Comments and Outlook:

Michael K. Perry, CardioDynamics' Chief Executive Officer, stated, "We are pleased to report our 17th quarter of year-over-year revenue growth, second consecutive quarter of profitability, and first quarter ever of positive cash flow. The third quarter was highlighted by the signing of a significant joint product development agreement with Philips Medical Systems, (formerly Hewlett-Packard's Medical Group), a global leader in clinical diagnostic solutions. Combining our ICG technology with Philips' ECG technology will provide clinicians access to both the electrical and mechanical activity of the heart. We also recently announced an agreement to integrate our technology into Vasomedical's EECP(R) enhanced external counterpulsation systems, a new application for our ICG technology and another step in further establishing our proprietary technology as a standard-of-care."

Perry added, "We look forward to completing a strong year and recording our first full year of profitability. The true test of a company is its ability to execute in a difficult business climate and to consistently achieve its goals. We are proud of our track record of success and plan to continue capitalizing on the numerous opportunities, building a strong business, and increasing shareholder value."

Additional Highlights & Key Accomplishments:

-- Agreement with Philips Medical: Co-Development and OEM Agreement to combine CardioDynamics' ICG technology with Philips' diagnostic 12-lead ECG technology.

-- Partnership with Vasomedical Systems: Vasomedical to integrate CardioDynamics' BioZ(R) ICG Technology with its EECP(R) enhanced external counterpulsation systems.

-- Launch of ICG Web Site: The Web site, www.impedancecardiography.com , will serve as the primary source of ICG accredited education programs, policies and protocols for suggested use, case studies, published clinical evidence, and provide a forum for the exchange of topics related to clinical utilization of ICG in the treatment of chronic and acute diseases.

-- New Analyst Coverage: Alexander K. Arrow, MD, CFA, Managing Director and Senior Medical Analyst at Ladenburg Thalmann & Co. Inc., initiated coverage on the company with a buy recommendation.

Conference Call Information:

Michael K. Perry, Chief Executive Officer, and Steve Loomis, Chief Financial Officer, will host a summary of CardioDynamics' third quarter results in a conference call today at 9:00 AM (EST). To access the conference call, dial 800/349-4174. International participants can call 706/634-7498. A replay of the call will be available for two weeks following the call at 800/642-1687 (Code 5382418). International callers can call 706/645-9291. A Webcast of the conference call is available at http://www.irconnect.com/primecast/02/q3/cdic_3q2002.mhtml.

About CardioDynamics:

CardioDynamics (Nasdaq:CDIC), the ICG Company, is the innovator and global leader of breakthrough medical technology called Impedance Cardiography (ICG). The company's primary products, the BioZ(R) Systems, are being used by leading physicians around the world to help battle the number one killer of men and women -- cardiovascular disease. Partners include GE Medical Systems Information Technologies, Philips Medical Systems, Spacelabs Medical Systems and Vasomedical. The worldwide market potential for BioZ products is estimated to be $5 billion and an additional $800 million in recurring annual revenue for disposables. For additional information or to request an investor package, please refer to the company's Web site at www.cdic.com.

Forward-Looking (Safe Harbor) Statement:

Note: Except for the historical and factual information contained herein, this press release contains forward-looking statements, the accuracy of which are necessarily subject to uncertainties and risks, which include sole dependence on the BioZ product line, and various uncertainties characteristic of companies just emerging from the development stage; as well as other risks detailed in the company's filings with the SEC, including its 2001 Form 10-K. The company does not undertake to update the disclosures contained in this press release.

                   CardioDynamics -- The ICG Company

Results From Operations:
(Unaudited)

                      Three Months Ended         Nine Months Ended
                          August 31,                August 31,
                   ------------------------- -------------------------
                       2002         2001         2002         2001
                   ------------ ------------ ------------ ------------
Net Sales           $6,278,000   $5,231,000  $16,267,000  $13,675,000
Gross Margin         4,867,000    3,757,000   12,017,000    9,703,000
Research &
 Development           559,000      797,000    1,812,000    2,510,000
Selling & Marketing  3,522,000    2,597,000    9,292,000    7,261,000
General &
 Administrative        534,000      419,000    1,395,000    1,265,000
                   ------------ ------------ ------------ ------------
Income (Loss) from
 Operations            252,000      (56,000)    (482,000)  (1,333,000)
Other Income, net       87,000      106,000      239,000      420,000
Provision for
 Income Taxes               --           --       (1,000)      (1,000)
                   ------------ ------------ ------------ ------------
Net Income (Loss)     $339,000      $50,000    ($244,000)   ($914,000)
                   ============ ============ ============ ============

Net Income (Loss)
 per Share,
  -- Basic and
     Diluted            $ 0.01       $ 0.00      $ (0.01)      $(0.02)
                   ------------ ------------ ------------ ------------
Weighted-Average
 Number of Shares
 Outstanding:
  -- Basic          46,144,299   45,591,170   46,064,578   45,545,516
  -- Diluted        47,062,918   47,983,349   46,064,578   45,545,516
                   ------------ ------------ ------------ ------------



Selected Financial Information:

                            August 31,    November 30,
                               2002           2001         Change
                           (Unaudited)      (Audited)
                           ------------   ------------   ------------

Cash & Cash Equivalents     $6,523,000     $6,394,000         2%
Accounts Receivable, net     7,496,000      7,373,000         2%
Inventory, net               3,670,000      2,821,000        30%
Current Assets              20,399,000     18,682,000         9%
Long-term Assets             2,183,000      2,779,000       (27%)
Total Assets                22,582,000     21,461,000         5%
Current Liabilities          2,945,000      2,725,000         8%
Long-term Liabilities          537,000        313,000        72%
Total Liabilities            3,482,000      3,038,000        15%
Shareholders' Equity        19,100,000     18,423,000         4%
                           ============   ============   ============