Volcano Corporation : Reports 12 Percent Increase in First Quarter Revenues
05/02/2012| 04:10pm US/Eastern
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SAN DIEGO, May 2, 2012 /PRNewswire/ -- Volcano Corporation (NASDAQ: VOLC), a leading developer and manufacturer of precision guided therapy tools designed to enhance the diagnosis and treatment of coronary and peripheral vascular disease, today said revenues in the first quarter of 2012 increased 12 percent over the same period a year ago.
For the quarter ended March 31, 2012, Volcano reported revenues of $90.4 million versus revenues of $81.0 million in the first quarter a year ago. Year-over-year medical segment revenues increased 15 percent in the first quarter of 2012. Industrial segment revenues in the first quarter declined 48 percent versus a year ago, due to the continued lack of network capacity spending by telecom service providers.
The company reported GAAP net income of $271,000, or $0.00 per diluted share, in the first quarter of 2012, versus net income of $1.2 million, or $0.02 per diluted share in the first quarter of 2011.
"Volcano began 2012 with a solid performance as we continued to increase our market presence as the leading precision guided therapy company. Our growth strategy is being facilitated by the increasing focus on medical necessity, quality and documentation for procedures. By providing precision guided therapy, our Functional PCI technologies address both clinical and economic needs faced by physicians and hospitals," said Scott Huennekens, president and chief executive officer.
"Our activity in the U.S. and Japan met or exceeded our expectations, helping us generate an 18 percent increase in medical disposable revenues, including a 37 percent increase in FFR (Fractional Flow Reserve) disposable sales and a 12 percent increase in sales of IVUS (Intravascular Imaging) disposables. We experienced a nominal decline in Europe due to a slowing economy and our decision to transition to direct in Spain earlier than previously planned. As we have accomplished in Japan and other countries, by going direct we expect to see an acceleration of Volcano growth and market penetration in new direct markets over time," he added.
Guidance for 2012
The company reconfirmed prior guidance for 2012. The company continues to expect that revenues will be in the range of $392-$399 million. The company reconfirmed guidance for gross margins of 64-65 percent and operating expenses of 57-58 percent of revenues in 2012.
The company also reconfirmed that it expects a tax rate of approximately 40 percent and earnings per diluted share of $0.21-$0.24. Weighted average shares on a fully diluted basis at the end of 2012 are expected to be 55.5 million.
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 70731296, 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 9 at (404) 537-3406, passcode 70731296, and via the company's website at http://www.volcanocorp.com.
About Volcano
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 risk that Volcano's revenue, expense, earnings, margin or tax rate projections may turn out to be inaccurate or Volcano may encounter unanticipated difficulty in achieving those projections, the effect of competitive and economic factors, and the company's reactions to those factors, purchasing decisions with respect to the company's products, the pace and extent of market adoption of the company's products and technologies, the inherent uncertainty in the process of obtaining regulatory approval or clearance for Volcano's products or devices, the success of Volcano's growth strategies, risks associated with Volcano's international operations, including currency exchange rate fluctuations, timing and achievement of product development milestones, outcome of ongoing litigation, the impact and benefits of market development, our ability to protect our intellectual property, dependence upon third parties, product introductions, unexpected new data, safety and technical issues, market conditions and other risks inherent to medical and/or telecom 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 most recent annual report on Form 10-K 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,
2012 2011
---- ----
Assets
Current
assets:
Cash and cash
equivalents $63,444 $107,016
Short-term
available-
for-sale
investments 133,181 112,327
Accounts
receivable,
net 66,365 69,469
Inventories 39,258 41,306
Prepaid
expenses and
other
current
assets 20,342 19,939
Total current
assets 322,590 350,057
Restricted
cash 712 692
Long-term
available-
for-sale
investments 53,022 30,919
Property and
equipment,
net 90,939 81,097
Intangible
assets, net 15,069 15,245
Goodwill 2,487 2,487
Other non-
current
assets 17,170 16,227
$501,989 $496,724
======== ========
Liabilities
and
Stockholders'
Equity
Current
liabilities:
Accounts
payable $12,596 $12,911
Accrued
compensation 17,187 20,251
Accrued
expenses and
other
current
liabilities 17,222 16,689
Deferred
revenues 7,278 7,077
Current
maturities
of long-
term debt 76 72
Total current
liabilities 54,359 57,000
Convertible
senior notes 96,833 95,663
Other long-
term debt 47 74
Deferred
revenues 3,127 3,168
Other 1,806 1,582
Total
liabilities 156,172 157,487
Stockholders'
equity 345,817 339,237
------- -------
$501,989 $496,724
======== ========
VOLCANO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
---------
2012 2011
---- ----
Revenues $90,360 $80,995
Cost of
revenues 29,573 27,874
------ ------
Gross profit 60,787 53,121
Operating
expenses:
Selling,
general and
administrative 44,345 35,460
Research and
development 13,649 13,088
Amortization
of
intangibles 872 855
Total
operating
expenses 58,866 49,403
------ ------
Operating
income 1,921 3,718
Interest
income 230 243
Interest
expense (1,472) (2,005)
Exchange rate
loss (175) (388)
Other, net (96) -
--- ---
Income before
income tax 408 1,568
Income tax
expense 137 412
--- ---
Net income $271 $1,156
==== ======
Net income
per share:
Basic $0.01 $0.02
===== =====
Diluted $ - $0.02
=== === =====
Shares used
in
calculating
net income
per share:
Basic 52,929 51,766
====== ======
Diluted 54,985 54,215
VOLCANO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(in thousands)
(Unaudited)
Three Months Ended
March 31,
---------
2012 2011
---- ----
Operating
activities
Net
income $271 $1,156
Adjustments
to
reconcile
net
income
to net
cash
provided
by
operating
activities:
Depreciation
and
amortization 5,791 5,560
Amortization
of
investment
premium,
net 269 736
Accretion
of
debt
discount
on
convertible
senior
notes 1,212 1,138
Non-
cash
stock
compensation
expense 3,617 3,094
Other
non-
cash
adjustments 306 873
Changes
in
operating
assets
and
liabilities (961) (12,359)
---- -------
Net
cash
provided
by
operating
activities 10,505 198
------ ---
Investing
activities
Purchase
of
short-
term
and
long-
term
available-
for-
sale
securities (110,762) (83,908)
Sale or
maturity securities
of
short-
term
and
long-
term
available-
for-
sale 67,577 98,790
Capital
expenditures (14,437) (6,747)
Cash
paid
for
other
intangibles
and
investments (758) (313)
Proceeds
from
foreign
currency
exchange
contracts - 374
Payment
for
foreign
currency
exchange
contracts - (817)
--- ----
Net
cash
(used
in)
provided
by
investing
activities (58,380) 7,379
------- -----
Financing
activities
Repayment
of
debt (22) (10)
Proceeds
from and
sale
of
common
stock
under
employee
stock
purchase
plan 4,887 4,694
exercise
of
common
stock
options
Net
cash
provided
by
financing
activities 4,865 4,684
Effect
of
exchange
rate
changes
on
cash
and
cash
equivalents (562) (2,686)
---- ------
Net
(decrease)
increase
in
cash
and
cash
equivalents (43,572) 9,575
Cash
and
cash
equivalents,
beginning
of
period 107,016 43,429
------- ------
Cash
and
cash
equivalents,
end of
period $63,444 $53,004
======= =======
VOLCANO CORPORATION
REVENUE SUMMARY
(in millions)
(unaudited)
Three Months Percentage
Ended Change
March 31,
---------
2012 2011 2011 to 2012
---- ---- ------------
Medical segment:
Consoles:
United States $5.2 $5.9 (12)%
Japan 0.9 0.6 42
Europe 1.1 2.4 (55)
Rest of world 0.9 1.0 (7)
Total Consoles $8.1 $9.9 (18)
IVUS single-
procedure
disposables:
United States $19.7 $18.2 8%
Japan 26.6 22.2 20
Europe 5.4 5.5 (2)
Rest of world 1.8 1.7 8
Total IVUS
single-
procedure
disposables $53.5 $47.6 12
FM single-
procedure
disposables:
United States $11.7 $8.1 45%
Japan 1.8 0.9 92
Europe 6.2 5.1 21
Rest of world 0.5 0.6 (21)
Total FM single-
procedure
disposables $20.2 $14.7 37
Other $6.6 4.9 36%
Sub-total
medical segment $88.4 $77.1 15
Industrial
segment $2.0 3.9 (48)
Total $90.4 $81.0 12
===== =====
SOURCE Volcano Corporation
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