Vascular Solutions Inc. (NSDQ:VASC) posted fourth-quarter sales of $17.7 million for the three months ended Dec. 31, 2009, up 10.3 percent compared with $16.1 million during the same period in 2008. Net income fell 89 percent to $1.6 million, compared with $14.7 million during Q4 2008:
Vascular Solutions Announces Record Fourth Quarter Results; Net Revenue Increases 11% to Record $18.2 Million; Net Income of $0.10 Per Share
MINNEAPOLIS, Feb. 2, 2010 (GLOBE NEWSWIRE) — Vascular Solutions, Inc. (Nasdaq:VASC) today reported financial results for the fourth quarter ended December 31, 2009. Highlights of the fourth quarter and other recent events include:
- Achieved record net revenue of $18.2 million, an increase of 11% from the fourth quarter of 2008, and completing the sixth consecutive year of double digit percentage sales growth.
- Achieved net income of $1,623,000, or $0.10 per diluted share.
- Achieved positive cash flow of $3.7 million during the fourth quarter, with $17.8 million in cash and cash equivalents on December 31, 2009.
Received $3.5 million on January 22, 2010 as payment of the monetary judgment in the product defamation litigation with Marine Polymer Technologies.
- Launched the GuideLiner™ catheter, D-Stat Rad-Band™ topical hemostat, Gator™ ClipSeal plug, Drainer™ centesis catheter and Guardian® II hemostasis valve in the U.S.
- Issued 2010 guidance of projected revenue growth of approximately 12% and projected earnings growth of approximately 25% over 2009 levels.
Commenting on the results, Vascular Solutions’ Chief Executive Officer Howard Root said: “Once again, in the fourth quarter Vascular Solutions demonstrated double digit percentage sales growth and rapid new product innovation, while at the same time adding substantially to our net income and our positive cash flow. We expect this progress to continue in 2010, with substantial projected growth from the recent launch of our innovative GuideLiner catheter and the expected launch of 10 additional new products in the U.S. throughout the year.”
Gross margin across all product lines was 64.9% in the fourth quarter of 2009, down slightly from 65.0% in the fourth quarter of 2008 due to the selling mix of products. Based on the projected selling mix, gross margin on product sales in the first quarter of 2010 is expected to be between 66% and 67%.
Net income for the fourth quarter was $1,623,000, or $0.10 per share, compared to net income of $14,684,000, or $0.90 per share, in the fourth quarter of 2008. Net income for the fourth quarter of 2008 included $13,207,000 of non-cash income tax gain ($0.81 per share) resulting from recognition of a portion of the Company’s net operating loss carryforwards. Net income for the fourth quarter of 2009 included $360,000 of non-cash stock-based compensation ($264,000 after-tax, or $0.02 per share) and $593,000 of non-cash income tax expense ($0.04 per share) based on a 27% tax rate. Excluding the non-cash income tax gain and one-time thrombin expenses incurred in the fourth quarter of 2008, net income increased by 22% in the fourth quarter of 2009 from the fourth quarter of 2008 on a fully-taxed basis.
Fourth Quarter Net Revenue by Product Line
Net sales of catheter products (consisting of a combination of the extraction catheter, specialty catheter and access product categories reported in previous quarters) were $8.3 million in the fourth quarter, an increase of 21% over the fourth quarter of 2008. Of this amount, net sales of extraction catheters were $4.6 million, net sales of access products were $2.0 million, and net sales of specialty catheters were $1.7 million.
Net sales of extraction catheters increased by 12% over the fourth quarter of 2008. “Sales of our LP, or low profile version of the Pronto® extraction catheter grew by 111% over the fourth quarter of 2008 and 27% sequentially from the third quarter of 2009, driving our sales growth in extraction catheters. Looking forward, we have completed the design freeze for our next generation V4 version of the Pronto catheter, with an expanded range of sizes, enhanced performance and cost reductions all captured in this new version. We expect to launch the new Pronto V4 catheters in the third quarter of 2010,” Mr. Root stated.
Net sales of access products (primarily consisting of micro-introducer kits, specialty guidewires and snares) increased by 22% over the fourth quarter of 2008. “Driving this growth was a combination of competitive market share gains, most notably in our micro-introducer line, and new product sales, most notably our GrebSet™ kit that we launched in the first quarter of 2009 and grew by 71% sequentially. In the fourth quarter we also launched a new version of the Guardian hemostasis valve which we believe will bring improved clinical performance and increasing sales in 2010,” Mr. Root added.
Net sales of specialty catheters (primarily consisting of the Langston® dual lumen catheters, GuideLiner catheter, Twin-Pass® dual access catheters and Minnie™ support catheters) increased by 49% over the fourth quarter of 2008. “In September we received the CE Mark for our new GuideLiner catheter and launched it with our largest independent distributors in the fourth quarter, resulting in international sales of over $250,000 in the fourth quarter. FDA clearance for the GuideLiner was received in November, with initial cases resulting in extremely favorable clinical feedback and visibility with key opinion leaders in interventional cardiology. This initial response confirms our positive outlook that this completely unique new device could relatively quickly grow into greater than $15 million in annualized sales,” Mr. Root added.
Net revenue from hemostat products (primarily consisting of the D-Stat® Dry, D-Stat Flowable and D-Stat Radial products) was $5.9 million during the fourth quarter, an increase of 1% over the fourth quarter of 2008. “In the current cost-conscious hospital environment, we do not project growth in the hemostatic patch market in 2010, and therefore our goal is to maintain our leading market share and ASP, both of which we believe we accomplished in the fourth quarter. We expect sales growth in the hemostat products category to result from new product introductions such as the new D-Stat Rad-Band that we launched in the fourth quarter,” commented Mr. Root.
Net sales of vein products (primarily consisting of the Vari-Lase® laser console and kits) were $3.2 million in the fourth quarter, an increase of 6% over the fourth quarter of 2008. “Our sales force has done an excellent job in maintaining and growing our market share in spite of increasing price competition by some of our laser competitors. The launch of our new WireFiber® and Platinum Bright Tip Vari-Lase fibers is scheduled for the first quarter of 2010, with FDA clearance already received for both products. In January we received FDA clearance for our new 15 Watt Vari-Lase laser console, and we have already transitioned our sales completely to this improved and lower cost console,” commented Mr. Root.
Regarding future guidance, the Company projects 2010 net revenue to increase by approximately 12% from 2009 to between $76 million and $78 million. Corresponding net income on a fully-taxed basis is projected to increase to between $0.53 and $0.57 per fully diluted share, including the one-time litigation gain of $0.13 per share which will be recognized in the first quarter.
With respect to the first quarter, the Company projects net revenue to be between $17.7 million and $18.0 million. Corresponding net income on a fully-taxed basis for the first quarter is expected to be between $0.20 and $0.21 per fully diluted share, including the one-time litigation gain of $0.13 per share. Primarily due to in vitro testing required by the FDA on the Company’s proposed biopsy marker product, R&D expenses in the first quarter are projected to be approximately $0.02 per share (tax affected) higher than customary.
Stock Repurchase Plan Authorized
The Board of Directors has authorized a stock repurchase plan under which up to 1,000,000 shares of the Company’s common stock may be repurchased prior to December 31, 2010. Under the plan, shares may be purchased from time to time through open market transactions, block purchases or private transactions. The timing of purchases and the number of shares to be purchased will depend on market conditions. The plan does not obligate the company to acquire any specific number of shares and may be discontinued at any time. The Company intends to fund such repurchases with currently available working capital.