Thoratec (NSDQ:THOR) yesterday reported higher-than-forecast earnings for the 4th quarter and 2014, crediting an extra selling week and better utilization rates for its implantable heart pumps.
Pleasanton, Calif.-based Thoratec posted profits of $11.8 million, or 21¢ per share, on sales of $128.0 million for the 3 months ended Jan. 3, for a bottom-line slide of 9.3% on a sales decline of 0.2%.
But adjusted to exclude 1-time items, earnings per share reached 39¢, a full 15¢ ahead of expectations on Wall Street. Full-year profits were off 31.3% to $50.4 million, or 89¢ per share, on a sales decline of 5.0% to $477.6 million, but again adjusted EPS came in ahead of The Street’s $1.26 prediction, at $1.40.
"Our 4th-quarter results marked a good 1st step toward stabilizing revenue growth with results driven by higher utilization of HeartMate II during the quarter," president & CEO Keith Grossman told analysts during a conference call yesterday. "For those of you who have watched this market as long as I have, you know that 1 quarter doesn’t make a trend. That said, we were very pleased to see a re-emergence of market growth during the quarter and we’re also generally pleased with some improvement relative to our recent market share trends and we’re certainly going to press to build off this momentum going forward."
Thoratec said it expects to log adjusted EPS of $1.10 to $1.20 on sales of $450 million to $460 million this year.
Grossman also said the company is narrowing its focus to the ventricular assist device market, discontinuing its work on a structural heart tool and "rescoping" another R&D project.
"Specifically, we’ve moved forward with the decision to discontinue commercialization of the Apica structural heart tool, while at the same time remaining very committed to the continued development of the Apica VAD tool," Grossman said.
Thoratec inked a $75 million deal for Apica Cardiovascular last summer, a year after buying the DuraHeart II heart pump from Terumo Corp. (TYO:4543) in a deal worth up to $43.5 million.
"This decision will save around $4 million of annual operating expense, but more importantly will allow us to focus solely on the VAD-related product that serves as both the strategic rationale and nearly the entire valuation basis of this [Apica] acquisition. Additionally, we’ve moved forward with rescoping the DuraHeart II R&D project that we acquired during 2013. This decision followed a reassessment of how the DuraHeart technology could best fit into our long term product pipeline cadence," Grossman explained.
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