|
Volcano Achieves 22 Percent Increase in First Quarter Revenues; Sales Growth, Margin Expansion Drive Profitability
Company Reports New Product Initiatives
in Japan
|
 |
May 4, 2011 -- San Diego --
Volcano Corporation (NASDAQ: VOLC), a leading developer and manufacturer of precision
intravascular diagnosis and therapy guidance tools designed to enhance
the treatment of coronary and peripheral artery disease, said today
that revenues in the first quarter of 2011 increased 22 percent versus
revenues in the first quarter of 2010.
For the quarter ended March 31, 2011, Volcano reported revenues of $81.0 million,
compared with revenues of $66.6 million in the first quarter a year
ago, and gross margin was 65.6 percent in the first quarter of 2011
compared to gross margin of 60.0 percent in the first quarter a year
ago.
The company reported net income on a GAAP basis of $1.2 million, or $0.02 per
diluted share, in the first quarter of 2011, versus a net loss on a
GAAP basis of $4.0 million, or $0.08 per share, in the first quarter
of 2010.
In a separate press release today, the company announced the signing of a supply
agreement with ev3, a Covidien company, under which Volcano will supply
its IVUS (Intravascular Ultrasound) technology for use in ev3's Plaque
Excision Systems, which will work on Volcano's installed base of more
than 5,000 multi-modality systems.
Scott Huennekens,
President and CEO |
|
"Our strong revenue performance for
the quarter reflects our continued success at achieving market share gains
and driving utilization. Sales of our IVUS disposables increased nearly
24 percent, driven primarily by a 40 percent increase in Japan, while FM
(Functional Measurement) disposable revenues increased 39 percent, including
52 percent in the U.S. This revenue growth, combined with a very solid
increase in gross margin and continued operating leverage, drove our bottom
line performance in the quarter," said Scott Huennekens, president and
chief executive officer. |
The company said that the natural disasters in Japan negatively impacted revenues by approximately $1 million in the first quarter of 2011 and that it expects an additional combined total impact of $4 million in the second and third quarters of 2011, with activity returning to historical levels by the fourth quarter.
"In spite of the current situation in Japan, we continue to be excited about our opportunities there, not only because of our current strong position in the market, but also due to our continued product innovation," Huennekens noted. "During the first quarter, we received clearance to market both the Eagle Eye Platinum digital IVUS catheter - the most advanced digital IVUS catheter on the market - and the PrimeWire PRESTIGE FFR guide wire in Japan. In addition, we recently received regulatory approval for our VIBE RX Vascular Imaging Balloon Catheter in Japan and expect to initiate the product launch during the current quarter. We believe the VIBE, which combines imaging and therapy on a single catheter, will provide us a meaningful competitive advantage in the market," he
added.
"Volcano has started 2011 with an excellent performance and we believe our one system, many solutions strategy will continue to drive growth, not only with our existing offerings, but also through a rich pipeline of products we plan to roll out over the next two years that could more than double the size of our addressable markets. Despite the short-term issues in Japan, we are on track to meet our long-term revenue, margin expansion, operating leverage and profitability goals," Huennekens
said.
Guidance for 2011
The company provided updated guidance for fiscal 2011. Because of the expected $5 million impact on revenues resulting from events in Japan, the company now expects revenues for fiscal 2011 will be in the range of $342-$347 million compared to prior guidance for revenues of $347-$352 million. Its outlook for gross margins of 64-65 percent and operating expenses of 57-59 percent of revenues for the full year remain unchanged. The company now expects GAAP earnings per share on a diluted basis will be in the range of $0.19-$0.21 compared to prior guidance of $0.22-$0.24 per diluted share, with weighted average shares on a diluted basis of approximately 55.0 million shares.
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 60754968, or via the company's website at http://www.volcanocorp.com. 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 11, at (706) 645-9291, passcode 60754968, and via the company's website at http://www.volcanocorp.com.
About Volcano Corporation
Volcano Corporation is revolutionizing the medical device industry with a broad
suite of technologies that make imaging and therapy simpler, more informative
and less invasive. Our products empower physicians around the world with a new
generation of analytical tools that deliver more meaningful information—using
sound and light as the guiding elements. Founded in cardiovascular care and expanding
into other specialties, Volcano is changing the assumption about what is possible
in improving patient outcomes by combining imaging and therapy together. For
more information, visit the company's website at www.volcanocorp.com.
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." Forward-looking statements are
based on management's current expectations and are subject to risks and uncertainties
that may cause Volcano's actual results to differ materially and adversely from
statements contained herein. Some of the potential risks and uncertainties that
could cause actual results to differ include the pace and extent of market adoption
of the company's products and technologies, growth strategies, the impact of
events in Japan, timing and achievement of product development milestones, outcome
of ongoing litigation, the impact and benefits of market development, dependence
upon third parties, product introductions, unexpected new data, safety and technical
issues, market conditions and other risks inherent to medical device development
and commercialization. These and additional risks and uncertainties are more
fully described in Volcano's filings made with the Securities and Exchange Commission,
including our recent annual report on Form 10-K for the year ended December 31,
2010, 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 disclaims any 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
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
(in thousands)
|
|
|
(Unaudited)
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
2011
|
|
2010
|
|
| Assets
|
|
|
|
|
| Current assets:
|
|
|
|
|
| Cash and cash equivalents
|
$ 53,004 |
|
$ 43,429 |
|
| Short-term available-for-sale investments
|
153,228
|
|
175,283
|
|
| Accounts receivable, net
|
60,329
|
|
59,133
|
|
| Inventories
|
43,858
|
|
40,499
|
|
| Prepaid expenses and other current assets
|
7,634
|
|
6,643
|
|
| Total current assets
|
318,053
|
|
324,987
|
|
| Long-term available-for-sale investments
|
33,285
|
|
26,804
|
|
| Property and equipment, net
|
58,440
|
|
56,503
|
|
| Intangible assets, net
|
16,558
|
|
17,103
|
|
| Goodwill
|
2,487
|
|
2,487
|
|
| Other non-current assets
|
3,941
|
|
3,682
|
|
|
$ 432,764 |
|
$ 431,566 |
|
|
|
|
|
|
| Liabilities and Stockholders' Equity
|
|
|
|
|
| Current liabilities:
|
|
|
|
|
| Accounts payable
|
$ 14,788 |
|
$ 13,895 |
|
| Accrued compensation
|
13,935
|
|
18,241
|
|
| Accrued expenses and other current liabilities
|
17,105
|
|
21,960
|
|
| Deferred revenues
|
5,973
|
|
5,898
|
|
| Current maturities of long-term debt
|
70
|
|
56
|
|
| Total current liabilities
|
51,871
|
|
60,050
|
|
| Long-term debt
|
92,334
|
|
91,236
|
|
| Deferred revenues
|
2,640
|
|
2,466
|
|
| Other
|
3,127
|
|
3,478
|
|
| Total liabilities
|
149,972
|
|
157,230
|
|
| Stockholders' equity
|
282,792
|
|
274,336
|
|
|
$ 432,764 |
|
$ 431,566 |
|
|
|
|
|
|
VOLCANO CORPORATION
| |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| |
|
(in thousands, except per share data)
| |
|
(Unaudited)
| |
| |
| Three
Months Ended March 31,
| |
| 2011
| | 2010
| |
| Revenues
| $
| 80,995
| | $
| 66,572
| |
| Cost of revenues
| | 27,874
| | | 26,638
| |
| Gross profit
| | 53,121
| | | 39,934
| |
| Operating expenses:
| | | | | | |
| Selling, general and administrative
| | 35,460
| | | 33,079
| |
| Research and development
| | 13,088
| | | 9,858
| |
| Amortization of intangibles
| | 855
| | | 573
| |
| In-process research and development
| | -
| | | 32
| |
| Total operating expenses
| | 49,403
| | | 43,542
| |
| Operating income (loss)
| | 3,718
| | | (3,608)
| |
| Interest income
| | 243
| | | 85
| |
| Interest expense
| | (2,005)
| | | (7)
| |
| Exchange rate loss
| | (388)
| | | (121)
| |
| Other, net
| | -
| | | (10)
| |
| Income (Loss) before provision for income taxes
| | 1,568
| | | (3,661)
| |
| Provision for income taxes
| | 412
| | | 375
| |
| Net income (loss)
| $
| 1,156
| | $
| (4,036)
| |
| Net income (loss) per share:
| | | | | | |
| Basic
| $
| 0.02
| | $
| (0.08)
| |
| Diluted
| $
| 0.02
| | $
| (0.08)
| |
| Shares used in calculating net income (loss) per share:
| | | | | | |
| Basic
| | 51,766
| | | 49,743
| |
| Diluted
| | 54,215
| | | 49,743
| |
|
|
|
|
|
|
|
VOLCANO CORPORATION
|
|
|
REVENUE SUMMARY
|
|
|
(in millions)
|
|
|
(unaudited)
|
|
|
|
|
Three Months Ended March 31,
|
|
Percentage Change
|
|
|
2011
|
|
2010
|
|
2010 to 2011
|
|
| Medical segment:
|
|
|
|
|
|
|
| Consoles:
|
|
|
|
|
|
|
| United States
|
$ 5.9 |
|
$ 4.2 |
|
41 %
|
|
| Japan
|
0.6
|
|
1.3
|
|
(48)
|
|
| Europe
|
2.4
|
|
1.9
|
|
24
|
|
| Rest of world
|
1.0
|
|
1.3
|
|
(23)
|
|
| Total Consoles
|
$ 9.9 |
|
$ 8.7 |
|
15
|
|
|
|
|
|
|
|
|
| IVUS single-procedure disposables:
|
|
|
|
|
|
|
| United States
|
$18.2
|
|
$16.4
|
|
12 %
|
|
| Japan
|
22.2
|
|
15.8
|
|
40
|
|
| Europe
|
5.5
|
|
5.3
|
|
3
|
|
| Rest of world
|
1.7
|
|
1.1
|
|
53
|
|
| Total IVUS single-procedure disposables
|
$47.6
|
|
$38.6
|
|
24
|
|
|
|
|
|
|
|
|
| FM single-procedure disposables:
|
|
|
|
|
|
|
| United States
|
$ 8.1 |
|
$ 5.3 |
|
52 %
|
|
| Japan
|
0.9
|
|
0.8
|
|
11
|
|
| Europe
|
5.1
|
|
4.0
|
|
28
|
|
| Rest of world
|
0.6
|
|
0.4
|
|
41
|
|
| Total FM single-procedure disposables
|
$14.7
|
|
$10.5
|
|
39
|
|
|
|
|
|
|
|
|
| Other
|
$ 4.9 |
|
3.7
|
|
32 %
|
|
| Sub-total medical segment
|
$77.1
|
|
$61.5
|
|
26
|
|
|
|
|
|
|
|
|
| Industrial segment
|
$ 3.9 |
|
5.1
|
|
(24)
|
|
| Total
|
$81.0
|
|
$66.6
|
|
22
|
|
|
|
|
|
|
|
Source: Volcano
Corporation
|
