Spectranetics revenue increases 5% to $30.4 million for first quarter 2011

Spectranetics CorporationApr 27 2011

Spectranetics Corporation (Nasdaq: SPNC) today reported financial results for the quarter ended March 31, 2011. The quarter's highlights include:

• Record revenue of $30.4 million achieved, representing 5% growth over prior year first quarter
• Lead Management revenue increased 14% compared with prior year first quarter
• Vascular Intervention revenue increased 4% over fourth quarter 2010 levels
• International revenue grew 17% over prior year first quarter
• Placed 41 laser systems in new accounts, highest level in nearly three years
• Net loss of $154,000, or approximately break-even per share, which is a significant improvement compared with adjusted prior year net loss of $605,000, or $.02 per share
• Received conditional FDA approval to initiate EXCITE In-Stent Restenosis randomized clinical trial
• Received regulatory approval for Lead Locking Device in Japan

Revenue for the first quarter of 2011 was $30.4 million, an increase of 5% compared with revenue of $29.0 million for the first quarter of 2010. The net loss for the first quarter of 2011 was $154,000, or $0.00 per share, compared with a net loss of $958,000, or $0.03 per share, in the first quarter of 2010. The net loss in the first quarter of 2010 included $353,000 in special items. There were no special items in the first quarter of 2011. Excluding special items in the first quarter of 2010, the adjusted net loss was $605,000, or $0.02 per share. A further description of these special items and a reconciliation of these non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with GAAP are provided immediately following the financial tables under "Reconciliation of Non-GAAP Financial Measures."

"Our performance in the first quarter reflected meaningful progress on the key initiatives that support our plan to accelerate revenue growth while establishing profitability in 2011. We delivered sequential growth in Vascular Intervention revenue and 14% revenue growth over the prior year in Lead Management - which is consistent with the financial objectives we outlined earlier this year," said Jason D. Hein, Senior Vice President of Sales, Marketing and Business Development. "I was particularly pleased with the placement of 41 laser systems with new customers during the quarter, a level we haven't achieved in nearly three years, which we expect to contribute to improving revenue levels throughout the remainder of 2011."

Shar Matin, Senior Vice President, Operations, Product Development, and International, stated, "It remains our key objective to return to sustained double-digit revenue growth in 2012. Our strategy to achieve this is centered on marketing and sales execution to capitalize on the continued expansion of our addressable markets, new product introductions in 2012, international growth, particularly in Europe and Japan, and a renewed focus on clinical research as demonstrated by the planned initiation of the EXCITE ISR randomized clinical trial this quarter."

First Quarter 2011 Revenue Review

Lead Management revenue increased 14% to $11.3 million, laser equipment revenue increased 47% to $1.9 million, and service and other revenue increased 11% to $2.5 million, all compared with the first quarter of 2010. Vascular Intervention sales declined 5% to $14.7 million, including three product lines: atherectomy (peripheral and coronary), which decreased 10%, crossing solutions, which increased 4%, and thrombectomy, which decreased 11%, all compared with the first quarter of 2010. Importantly, Vascular Intervention revenue increased 4%, or $0.6 million, as compared with the fourth quarter of 2010, primarily due to improving peripheral atherectomy and crossing solutions revenue.

On a geographic basis, revenue in the United States was $25.6 million in the first quarter of 2011, an increase of 3% from the prior year first quarter. International revenue was $4.9 million, an increase of 17% from the first quarter of 2010.

2011 Outlook

The Company affirmed its previously provided outlook, without revision.

The Company's primary focus in 2011 is to improve the revenue growth rate while establishing profitability. Revenue is anticipated to be within the range of $122.5 million to $126.5 million, which represents an increase over 2010 revenue of 4% to 7%.

Gross margin is expected to be approximately the same as 2010 levels of 71%, but important initiatives designed to improve manufacturing efficiencies in 2012 and beyond will be implemented this year.