Volcano fourth quarter revenues increase 14% to $92.7 million

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 fourth quarter of 2011 increased 14 percent versus the fourth quarter of 2010.

For the quarter ended December 31, 2011, Volcano reported revenues of $92.7 million versus revenues of $81.2 million in the fourth quarter a year ago. Year-over-year medical segment revenues increased 20 percent in the fourth quarter of 2011. Industrial segment revenues in the fourth quarter declined 70 percent versus a year ago, due to reduced spending in the telecommunications sector.

The company reported net income on a GAAP basis of $29.4 million, or $0.54 per diluted share, in the fourth quarter of 2011, versus a net loss of $1.7 million, or $0.03 per share, in the fourth quarter of 2010. The results for the fourth quarter of 2011 include a benefit of $22.0 million, or $0.40 per diluted share, related to the release of a portion of the company's deferred tax valuation allowance.

For the full year 2011, Volcano reported revenues of $343.5 million, an increase of 17 percent over revenues of $294.1 million in 2010. Medical segment revenues increased 23 percent and industrial segment revenues decreased 52 percent year-over-year.

The company reported GAAP net income of $38.1 million, or $0.70 per diluted share, in 2011. This compares with GAAP net income of $5.2 million, or $0.10 per diluted share, in 2010. The results for the full year 2011 include the benefit of $22.0 million, or $0.40 per diluted share, related to the release of a portion of the company's deferred tax valuation allowance.

"During the quarter, we continued to advance our mission of being the leading precision guided therapy company by gaining market share for our core businesses through technology innovation and our sales, distribution and market development initiatives," said Scott Huennekens, president and chief executive officer.

"Our total medical disposable business increased approximately 24 percent in the quarter, driven by a 37 percent increase in FFR (Fractional Flow Reserve) disposable revenues and a 19 percent increase in IVUS (Intravascular Ultrasound) disposable revenues.

"A number of important factors are helping to drive our growth. There is a growing volume of data portraying the improved patient outcomes and economic benefits from the use of Functional PCI, or the diagnosis and treatment of lesions with proven ischemia, based on function as defined with FFR—not angiography alone—and the use of intravascular guidance to optimize and confirm the therapy during the procedure. These outcomes are resulting in elevated practice guidelines for FFR and IVUS by leading clinical organizations. In addition, the increasing focus on documenting medical necessity for procedures is creating additional momentum for our technologies," he added.

Guidance for 2012

The company said that it expects revenues for 2012 will be in the range of $392-$399 million, or revenue growth of 14-16 percent and 15-17 percent on a constant currency basis. The company expects gross margin will be 64-65 percent and operating expenses will be 57-58 percent of revenues in 2012. The company 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.