Volcano losses narrow with strong Q4 sales

Volcano, a developer of products for the diagnosis and treatment of coronary and peripheral artery disease, has reported a sharp decrease in net losses for its fiscal 2008 full-year, which ended Dec. 31.

For the fourth quarter, the San Diego-based company booked net income of $1.4 million, a significant turnaround compared with a net loss of $23.7 million in the same period of 2007. Included in the results for the fourth quarter of 2007 were in-process research and development charges of $26.2 million related to Volcano's acquisition of CardioSpectra that was completed in December 2007.

For its 2008 fiscal full year results, Volcano posted a GAAP net loss of $13.7 million, nearly cutting its loses in half compared with a GAAP net loss of $26.6 million in 2007.

Excluding in-process research and development charges of $12.7 million, stock-based compensation expense of $9.5 million and $2.9 million in due diligence, legal and accounting expenses related to a proposed acquisition that was not consummated, the company said its net income was $11.4 million in 2008. The company ended fiscal 2008 with $149.9 million in cash, cash equivalents and short-term available for sale investments.

For the year, Volcano reported revenues of $171.5 million versus revenues of $130.6 million in fiscal 2007, representing a 31 percent increase. Revenues in the fourth quarter rose 23 percent to $49.3 million versus revenues of $40 million in the same period a year ago. The company noted that growth was driven by a 20 percent increase in intravascular ultrasound (IVUS) sales and increased adoption of its functional measurement (FM) offerings.

"In total, we placed 867 IVUS consoles in 2008 versus 597 in 2007, an increase of 45 percent, and also experienced a commensurate growth in our IVUS disposable revenues, which grew 18 percent versus the fourth quarter of 2007 and 26 percent for the year. In addition, our FM business grew 36 percent in the quarter versus the fourth quarter of 2007," said Scott Huennekens, Volcano's president and CEO.

"We continue to build out our direct sales force in the U.S. and Europe and implement our direct distribution strategy in Japan. We also achieved significant progress with our future OCT [optimal coherence tomography], forward-looking IVUS and image guided therapy offerings designed to complement our multi-modality platform strategy and address markets that are potentially larger than those we currently serve. The first of the new forward-looking IVUS devices is expected to be introduced later this year," Huennekens noted.