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CardioNet cuts $23M from budget, hires Lazard for possible sale

Senior officers are giving up stock options

CardioNet Inc., Conshohocken, will cut $15 million in yearly expenses over the next year and a half after cutting $8 million in the third quarter, chairman-ceo Randy Thurman told investors in a conference call this morning.

"The board has retained the investment advisory firm of Lazard Freres and Company" to review "strategic alternatives," Thurman said, but added he won't comment on whether it will likely be sold. The company has $45 million "cash on hand," and tens of millions more in accounts receivables.

Cuts are needed because CardioNet is collecting lower-than-expected Medicare and other insurance reimbursements. Thurman said sales of the company's online heart monitors are growing rapidly, and new, less-expensive products are in the works. CardioNet "reduced manpower" by automating bill collection, and cutting back outside consultants.

Thurman said the sales group, which grew from around 30 to 140 account execs early this year, will be "rationalized" as account execs are "fine-tuned" to different markets.

He said he and four other top officers are giving up stock options to help save cash, to make the company cash-flow positive late last year, and profitable in 2011.

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