News | November 01, 2011

Volcano Reports 18 Percent Increase in Total Third Quarter Revenues

November 1, 2011 – Volcano Corp., a developer and manufacturer of intravascular diagnosis and therapy guidance tools, said revenues for the third quarter of 2011 increased 18 percent versus the third quarter of 2010.

For the quarter ended Sept. 30, Volcano reported revenues of $85.8 million versus revenues of $72.9 million in the third quarter a year ago. Year-over-year medical segment revenues increased 24 percent in the third quarter of 2011. Industrial segment revenues in the third quarter declined 54 percent versus a year ago, due to reduced spending in the telecommunications sector.

The company reported net income on a GAAP basis of $2.6 million, or $0.05 per diluted share, in the third quarter of 2011, versus net income of $5.6 million, or $0.10 per diluted share, in the third quarter of 2010.

For the first nine months of 2011, Volcano reported revenues of $250.8 million, an 18 percent increase over revenues of $212.9 million in the same period a year ago. The company reported GAAP net income of $8.7 million, or $0.16 per diluted share, in the first nine months of 2011. This compares with GAAP net income of $7 million, or $0.13 per diluted share, in the same period in 2010.

"Volcano's medical segment business experienced solid growth in the third quarter, driven by a 48 percent increase in fractional flow reserve (FFR) disposable revenues, as FFR continued its higher market penetration and we continued to gain market share for both our FFR and intravascular ultrasound (IVUS) businesses in key geographies. These gains occurred despite a challenging macro-economic environment that is impacting procedure activity, particularly for our IVUS business," said Scott Huennekens, president and chief executive officer.

"Given the increased focus on comparative effectiveness, we continue to be optimistic about the long-term prospects for our current and future offerings — particularly IVUS — as recent data from the Matrix study reinforces positive outcomes with respect to reduction in deaths and adverse events when using IVUS versus the use of angiography alone," he added.

Huennekens said the company continues to advance its long-term growth strategy. "We are making investments in product development and clinical programs to further our vision as the leading therapy guidance company with a platform that delivers precision-guided therapy and diagnosis utilizing intravascular imaging, physiology and future technologies. Over the next year, we will be introducing enhancements to our current offerings, as well as new products that will enable us to address new markets," he said.

Guidance for 2011

The company said that given current expectations for healthcare procedure activity and telecom business sales, it is narrowing the top range of its revenue guidance for fiscal 2011 from $342-$347 million to $342-$345 million. It continues to expect that gross margin will be 65-66 percent and that operating expenses will be 58-60 percent of revenues. The company expects earnings per diluted share for fiscal 2011 will be $0.19-$0.21. The company said that as a result of its projected ongoing GAAP profitability, it is assessing its ability to release a portion of its deferred tax valuation allowance, which may result in additional estimated net income of approximately $25.0 million, or $0.45 per diluted share, in the fourth quarter of 2011.

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