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Volcano Reports 36 Percent Increase in First Quarter Revenues
IVUS Disposable and FM Disposable Revenues
Grow 32 Percent and 69 Percent, Respectively

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Volcano Corporation

May 3, 2010 -- San Diego -- Volcano Corporation (Nasdaq: VOLC), a leading developer and manufacturer of precision intravascular therapy guidance tools designed to enhance the diagnosis and treatment of coronary and peripheral vascular disease, said today that revenues for the first quarter of 2010 increased 36 percent over the first quarter of 2009.

For the quarter ended March 31, 2010, Volcano reported revenues of $66.6 million compared with revenues of $49.0 million a year ago.

For the first quarter of 2010, the company reported a net loss on a GAAP basis of $4.0 million, or $0.08 per share, versus a net loss on a GAAP basis of $7.6 million, or $0.16 per share, in the same period a year ago.

Excluding stock-based compensation expense of $3.1 million and $2.7 million in the first quarter of 2010 and 2009, respectively, Volcano reported a net loss on a non-GAAP basis of $921,000, or $0.02 per share, versus a net loss on a non-GAAP basis of $4.9 million, or $0.10 per share, in the first quarter of 2009.

"We continued to execute on our growth strategies by increasing the installed base of our multi-modality platforms and generating increased market share and utilization for our offerings," said Scott Huennekens, president and chief executive officer. "Key drivers of our year-over-year growth included a 58 percent increase in intravascular ultrasound (IVUS) disposable revenues in Japan, 46 percent growth in our U.S. functional measurement (FM) disposable sales and increased market penetration in Europe, where IVUS and FM disposable revenues increased 32 percent and 92 percent, respectively," he continued.

"During the quarter, we continued our sales force expansion initiative and benefitted from our transition to a direct sales model in Japan. In addition, we pursued technology innovation and expect to introduce five product enhancements or new offerings during the balance of the year as we increase momentum, expand our tools to serve patients and clinicians and leverage our multi-modality platform. We also have more than one dozen clinical trials involving our current or future product offerings either underway or expected to begin enrollment in the near future," he added.

Guidance for 2010
The company reconfirmed prior guidance for fiscal 2010.

Conference Call Information
The company will hold a conference call at 2 p.m., Pacific Daylight Time (5 p.m., Eastern Daylight Time), today. The teleconference can be accessed by calling (631) 291-4555, passcode 67521804, or via the company's website at Please dial in or access the webcast 10-15 minutes prior to the beginning of the call. A replay of the conference call will be available through May 10, at (706) 645-9291, passcode 67521804, and via the company's website.

About Volcano Corporation
Volcano Corporation (NASDAQ: VOLC) offers a broad suite of devices designed to facilitate endovascular procedures, enhance the diagnosis of vascular and structural heart disease and guide optimal therapies. The company's intravascular ultrasound (IVUS) product line includes ultrasound consoles that can be integrated directly into virtually any modern cath lab. Volcano IVUS offers unique features, including both single-use digital and rotational IVUS imaging catheters, and advanced functionality options, such as VH(R) IVUS tissue characterization and ChromaFlo(R). Volcano also provides functional measurement (FM) consoles and single-use pressure and flow guide wires and is developing a line of ultra-high resolution Optical Coherence Tomography (OCT) systems and catheters. Currently, more than 5,200 Volcano IVUS and FM systems are installed worldwide, and more than half of Volcano's revenues are derived from outside the United States. Volcano's wholly-owned subsidiary, Axsun Technologies, Inc., develops and manufactures optical monitors, lasers and optical engines used in telecommunications, medical imaging, spectroscopy and other industrial applications. For more information, visit the company's website at

Non-GAAP Financial Measures
This press release includes certain non-GAAP financial information as defined by the U.S. Securities and Exchange Commission Regulation G. Pursuant to the requirements of this regulation, a reconciliation of this non-GAAP financial information to our financial statements as prepared under generally accepted accounting principles (GAAP) in the United States is included in this press release. Non-GAAP financial measures provide an indication of our performance before certain charges. Our management believes that in order to properly understand our short-term and long-term financial trends, investors may wish to consider the impact of these charges. These charges results from factors and circumstances that vary in frequency and/or impact on continuing operations. Our management believes that these items are not reflective of our core operating activities and should be excluded when comparing our current operating results with those of prior periods. In addition, stock-based compensation is a non-cash expense. Finally, our management uses results of operations before certain charges to evaluate the operational performance of the company, as a basis for strategic planning and for forecasting and planning future periods. Investors should note that the non-GAAP financial measures used by the company may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as those of other companies. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures in accordance with GAAP, and are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures as detailed below.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Any statements in this press release regarding Volcano's business that are not historical facts may be considered "forward-looking statements," including statements regarding the company's financial guidance for 2010, market adoption of the company's technology, growth strategies, timing and achievement of product development milestones, market development and product introductions and sales. Forward-looking statements are based on management's current preliminary expectations and are subject to risks and uncertainties, which may cause Volcano's results to differ materially and adversely from the statements contained herein. Some of the potential risks and uncertainties that could cause actual results to differ from the results predicted are detailed in the company's annual report on Form 10-K, quarterly reports on Form 10-Q and other filings made with the Securities and Exchange Commission. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made. Volcano undertakes no obligation to update any forward-looking statements to reflect new information, events or circumstances after the date they are made, or to reflect the occurrence of unanticipated events.

                          VOLCANO CORPORATION
                             (in thousands)

                                               March 31,           31,
                                                     2010            2009
                                                     ----            ----
     Current assets:
       Cash and cash equivalents                  $60,475         $56,055
       Short-term available-for-sale
        investments                                68,089          66,028
       Accounts receivable, net                    47,452          51,171
       Inventories                                 38,032          37,710
       Prepaid expenses and other current
        assets                                      5,302           5,892
         Total current assets                     219,350         216,856
     Restricted cash                                  533             554
     Property and equipment, net                   44,757          44,734
     Intangible assets, net                        13,094          11,623
     Goodwill                                         931             931
     Other non-current assets                       2,112           2,036
                                                 $280,777        $276,734
                                                 ========        ========

     Liabilities and Stockholders' Equity
     Current liabilities:
       Accounts payable                           $15,185         $13,840
       Accrued compensation                        13,407          14,142
       Accrued expenses and other current
        liabilities                                13,442          25,275
       Deferred revenues                            4,967           4,881
       Current maturities of long-term debt            49              50
         Total current liabilities                 47,050          58,188
     Long-term debt                                    98             110
     Deferred revenues                              2,512           2,376
     Other                                          1,584           1,245
         Total liabilities                         51,244          61,919
     Stockholders' equity                         229,533         214,815
                                                  -------         -------
                                                 $280,777        $276,734
                                                 ========        ========

                           VOLCANO CORPORATION
                  (in thousands, except per share data)

                                               Three Months Ended
                                                   March 31,
                                                2010                2009
                                                ----                ----
     Revenues                                $66,572             $48,959
     Cost of revenues                         26,638              20,649
                                              ------              ------
     Gross profit                             39,934              28,310
     Operating expenses:
       Selling, general and administrative    33,079              25,080
       Research and development                9,858               8,769
       In-process research and development        32                   -
       Amortization of intangibles               573               1,052
                                                 ---               -----
            Total operating expenses          43,542              34,901
                                              ------              ------
     Operating loss                           (3,608)             (6,591)
     Interest income                              85                 301
     Interest expense                             (7)                 (2)
     Exchange rate loss                         (121)             (1,128)
     Other, net                                  (10)                  -
                                                 ---                 ---
     Loss before provision for income taxes   (3,661)             (7,420)
     Provision for income taxes                  375                 194
                                                 ---                 ---
     Net loss                                $(4,036)            $(7,614)
                                             =======             =======
     Net loss per share-basic and diluted     $(0.08)             $(0.16)
                                              ======              ======
     Shares used in calculating net loss per
      share-basic and diluted                 49,743              48,032
                                              ======              ======

                              VOLCANO CORPORATION
                     (in thousands, except per share data)

                                                       Three Months Ended
                                                            March 31,
                                                        2010         2009
                                                        ----         ----

     GAAP operating loss                             $(3,608)     $(6,591)
       Stock-based compensation                        3,083        2,715
       In-process research and development                32            -
     Non-GAAP operating loss                           $(493)     $(3,876)
                                                       =====      =======

     GAAP net loss                                   $(4,036)     $(7,614)
       Stock-based compensation                        3,083        2,715
       In-process research and development                32            -
     Non-GAAP net loss                                 $(921)     $(4,899)
                                                       =====      =======

     GAAP net loss per share-basic and diluted        $(0.08)      $(0.16)
       Stock-based compensation                         0.06         0.06
       In-process research and development                 -            -
     Non-GAAP net loss per share-basic and diluted    $(0.02)      $(0.10)
                                                      ======       ======
     Shares used in calculating net loss per
      share-basic and diluted                         49,743       48,032
                                                      ======       ======

                         VOLCANO CORPORATION
                           REVENUE SUMMARY
                            (in millions)

                                           Three Months            Percentage
                                              Ended                  Change
                                            March 31,              ----------
                                                                   2009 to
                                       2010          2009           2010
                                       ----          ----       --------
    Medical segment:
        United States                  $4.2          $5.0       (16)%
        Japan                           1.3           1.2          7
        Europe                          1.9           1.7         15
        Rest of world                   1.3           0.6         97
      Total Consoles                   $8.7          $8.5          2

      IVUS single-procedure
        United States                 $16.4         $14.2         14%
        Japan                          15.8          10.0         58
        Europe                          5.3           4.0         32
        Rest of world                   1.1           0.9         37
      Total IVUS single-procedure
       disposables                    $38.6         $29.1         32

      FM single-procedure
        United States                  $5.3          $3.6         46%
        Japan                           0.8           0.3        182
        Europe                          4.0           2.1         92
        Rest of world                   0.4           0.3         62
      Total FM single-procedure
       disposables                    $10.5          $6.3         69

      Other                            $3.7           1.7        115%
        Sub-total medical segment     $61.5         $45.6         35

    Industrial segment                 $5.1           3.4         52
           Total                      $66.6         $49.0         36
                                      =====         =====

Source: Volcano Corporation