For the quarter ended
The company reported net income on a GAAP basis of
For the full year 2012, Volcano reported revenues of
The company reported net income on a GAAP basis of
"We continued to execute our growth strategy in 2012, delivering a double digit increase in revenues, led by a 45 percent increase in annual revenues on a constant currency basis in our FFR (Fractional Flow Reserve) disposable business. Our FFR technology is emblematic of our Functional PCI strategy that provides solutions for healthcare providers seeking both improved clinical and economic outcomes," said
"At the same time, we continued to position the company for long-term growth by targeting addressable markets that are double the size of those we address today through the growth of our base business, development of our pipeline and implementation of business expansion strategies."
"During the fourth quarter," he continued, "we realized two important milestones in this strategy with our acquisitions of Sync-RX and Crux Biomedical. Sync-RX provides us advanced imaging technology that we will incorporate into our multi-modality platform, while Crux brings Volcano a novel inferior vena cava (IVC) filter and related offerings, and is indicative of our strategy to move beyond intravascular imaging to a wide variety of diagnostic and therapeutic solutions for both coronary and peripheral applications."
Guidance for 2013
The company provided guidance for fiscal 2013. It expects revenues will be in the range of
Conference Call Information
The company will hold a conference call at
About Volcano
Note Regarding Use of Non-GAAP Financial Measures
The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The company uses non-GAAP financial measures for financial and operational decision making and as a means to compare period-to-period results. The company believes that they provide useful information about operating results, enhance the overall understanding of operating results and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making.
Constant Currency Basis Revenue Changes: Volcano reports changes in revenue on a constant currency basis, which is a non-GAAP financial measure. Volcano believes that investors' understanding of the company's short-term and long-term financial results is enhanced by taking into consideration the impact of foreign currency translation on revenue. In addition, Volcano's management uses results of operations before currency translation to evaluate the operational performance of Volcano and as a basis for strategic planning.
Volcano reports its expectations of earnings per share performance excluding certain expenses described below; for additional details please see the "Reconciliation of GAAP to non-GAAP EPS Guidance" table in this press release. This accompanying table has more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures.
Exclusion of Acquisition-related Expenses: Volcano excludes acquisition-related expenses because it does not consider these acquisition-related costs and adjustments to be related to the organic continuing operations of the acquired businesses and are generally not relevant to assessing or estimating the long-term performance of the acquired assets. In addition, the size, complexity and/or volume of past acquisitions, which often drive the magnitude of acquisition-related costs, may not be indicative of the size, complexity and/or volume of future acquisitions.
Exclusion of Amortization of Intangibles: Volcano excludes amortization of intangibles because it is a non-cash expense relating primarily to acquisitions. At the time of an acquisition, the intangible assets of the acquired company, such as technology and supplier agreements, are valued and amortized over their estimated lives. Volcano believes that since intangibles represent costs incurred by the acquired company to build value prior to acquisition, Volcano management eliminates the impact of the amortization when evaluating its current operating performance.
Exclusion of Non-cash Interest Expense: In addition to disclosing the financial statement impact of the
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Any statements in this press release regarding Volcano's business that are not historical facts may be considered "forward-looking statements," including statements regarding Volcano's growth and other strategies and ability to execute on those strategies, competitive positioning, target markets, development of its base business and pipeline, benefits from recent acquisitions, benefits from its products and technologies and financial guidance. Forward-looking statements are based on management's current expectations and are subject to risks and uncertainties that may cause Volcano's actual results to differ materially and adversely from statements contained herein. Some of the potential risks and uncertainties that could cause actual results to differ
include the risk that Volcano's revenue, expense, earnings, earnings per share, margin or other projections may turn out to be inaccurate or Volcano may encounter unanticipated difficultly in achieving those projections; global and regional macroeconomic conditions, generally, and in the medical device and telecom industries specifically; currency exchange rate fluctuations; the effect of competitive factors and the company's reaction to those factors; purchasing decisions with respect to the company's products; the pace and extent of market adoption of the company's products and technologies; uncertainty in the process of obtaining regulatory approval or clearance for Volcano's products or devices; the success of Volcano's growth and other strategies including integration of recently-acquired businesses and our ability to integrate businesses from any future acquisitions; risks
associated with Volcano's international operations; timing and achievement of product development milestones; outcome of ongoing or future litigation, investigations and claims; the impact and benefits of market development and the related size of Volcano's addressable markets; our ability to protect our intellectual property; dependence upon third parties; unexpected new data, safety and technical issues; market conditions and other risks inherent to medical and/or telecom device development and commercialization. These and additional risks and uncertainties are more fully described in Volcano's filings made with the
|
| |||
|
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
|
(in thousands) | |||
|
|
December 31, | ||
|
2012 |
2011 | ||
|
Assets |
|||
|
Current assets: |
|||
|
Cash and cash equivalents |
|
| |
|
Short-term available-for-sale investments |
140,960 |
112,327 | |
|
Accounts receivable, net |
76,348 |
69,469 | |
|
Inventories |
52,811 |
41,306 | |
|
Prepaid expenses and other current assets |
21,773 |
19,939 | |
|
Total current assets |
622,527 |
350,057 | |
|
Restricted cash |
711 |
692 | |
|
Long-term available-for-sale investments |
44,385 |
30,919 | |
|
Property and equipment, net |
104,385 |
81,097 | |
|
Intangible assets, net |
50,657 |
15,245 | |
|
Goodwill |
51,577 |
2,487 | |
|
Other non-current assets |
28,102 |
16,227 | |
|
Total Assets |
|
| |
|
Liabilities and Stockholders' Equity |
|||
|
Current liabilities: |
|||
|
Accounts payable |
|
| |
|
Accrued compensation |
23,227 |
20,251 | |
|
Accrued expenses and other current liabilities |
23,476 |
16,689 | |
|
Deferred revenues |
9,789 |
7,077 | |
|
Contingent consideration |
2,908 |
- | |
|
Current maturities of long-term debt |
53 |
72 | |
|
Total current liabilities |
75,737 |
57,000 | |
|
Convertible senior notes |
382,300 |
95,663 | |
|
Other long-term debt |
1,119 |
74 | |
|
Deferred revenues |
4,661 |
3,168 | |
|
Contingent consideration, non-current portion |
27,323 |
- | |
|
Other non-current liabilities |
2,859 |
1,582 | |
|
Total liabilities |
493,999 |
157,487 | |
|
Stockholders' equity |
408,345 |
339,237 | |
|
Total Liabilities and Stockholders' Equity |
|
| |
|
| |||||||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
|
(in thousands, except per share data) | |||||||||||||||
|
(unaudited) | |||||||||||||||
|
Three Months Ended |
Year Ended December 31, | ||||||||||||||
|
2012 |
2011 |
2012 |
2011 | ||||||||||||
|
Revenues |
$ |
102,477 |
$ |
92,748 |
$ |
381,866 |
$ |
343,546 | |||||||
|
Cost of revenues, excluding amortization of intangibles |
34,118 |
30,358 |
128,915 |
114,533 | |||||||||||
|
Gross profit |
68,359 |
62,390 |
252,951 |
229,013 | |||||||||||
|
Operating expenses: |
|||||||||||||||
|
Selling, general and administrative |
45,759 |
40,075 |
172,794 |
147,057 | |||||||||||
|
Research and development |
14,909 |
12,761 |
55,469 |
53,098 | |||||||||||
|
Amortization of intangibles |
770 |
875 |
3,240 |
3,447 | |||||||||||
|
Acquisition related items |
1,858 |
- |
1,858 |
- | |||||||||||
|
Total operating expenses |
63,296 |
53,711 |
233,361 |
203,602 | |||||||||||
|
Operating income |
5,063 |
8,679 |
19,590 |
25,411 | |||||||||||
|
Interest income |
246 |
207 |
902 |
908 | |||||||||||
|
Interest expense |
(2,982) |
(1,212) |
(7,975) |
(7,107) | |||||||||||
|
Exchange rate (loss) gain |
(257) |
184 |
(576) |
(997) | |||||||||||
|
Loss from debt extinguishment |
(4,969) |
- |
(4,969) |
- | |||||||||||
|
Other, net |
2,749 |
(110) |
2,717 |
(112) | |||||||||||
|
Income (loss) before income tax |
(151) |
7,748 |
9,689 |
18,103 | |||||||||||
|
Income tax expense (benefit) |
(2,628) |
(21,674) |
1,667 |
(19,990) | |||||||||||
|
Net income |
$ |
2,477 |
$ |
29,422 |
$ |
8,022 |
$ |
38,093 | |||||||
|
Net income per share: |
|||||||||||||||
|
Basic |
$ |
0.05 |
$ |
0.56 |
$ |
0.15 |
$ |
0.73 | |||||||
|
Diluted |
$ |
0.04 |
$ |
0.54 |
$ |
0.15 |
$ |
0.70 | |||||||
|
Shares used in calculating net income per share: |
|||||||||||||||
|
Basic |
53,924 |
52,634 |
53,475 |
52,300 | |||||||||||
|
Diluted |
55,371 |
54,459 |
55,195 |
54,596 | |||||||||||
|
| |||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
|
(in thousands) | |||||
|
(unaudited) | |||||
|
Year Ended December 31, | |||||
|
2012 |
2011 | ||||
|
Operating activities |
|||||
|
Net income |
$ |
8,022 |
$ |
38,093 | |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||
|
Depreciation and amortization |
23,503 |
23,214 | |||
|
Amortization (accretion) of investment premium (discount), net |
3,256 |
3,805 | |||
|
Accretion of debt discount on convertible senior notes |
5,743 |
4,668 | |||
|
Loss on debt extinguishment |
4,969 |
- | |||
|
Acquisition related items |
231 |
||||
|
Non-cash stock-based compensation expense |
15,079 |
12,991 | |||
|
Other non-cash adjustments |
907 |
(2,350) | |||
|
Deferred income taxes |
1,009 |
(22,771) | |||
|
Changes in operating assets and liabilities |
(12,901) |
(14,054) | |||
|
Net cash provided by operating activities |
49,818 |
43,596 | |||
|
Investing activities |
|||||
|
Purchase of short-term and long-term available-for-sale investments |
(298,260) |
(310,573) | |||
|
Sale or maturity of short-term and long-term available-for-sale securities |
252,937 |
365,639 | |||
|
Capital expenditures |
(43,842) |
(43,248) | |||
|
Cash paid for acquisitions, net of cash acquired |
(54,462) |
- | |||
|
Cash paid for other intangible assets and investments |
(5,824) |
(3,482) | |||
|
Proceeds from sale of long-term investments |
1,500 |
2,355 | |||
|
Procceds from foreign currency exchange contracts |
1,260 |
(3,962) | |||
|
Payment for foreign currency exchange contracts |
(525) |
- | |||
|
Net cash provided by (used in) investing activities |
(147,216) |
6,729 | |||
|
Financing activities |
|||||
|
Repayment of capital lease liability |
(90) |
(51) | |||
|
Proceeds from issuance of the 1.75% convertible senior notes due 2017 |
460,000 |
- | |||
|
Payment of debt issuance costs in connection with the 1.75% convertible senior notes |
(14,611) |
- | |||
|
Purchase of call options in connection with the 1.75% convertible senior notes |
(89,798) |
- | |||
|
Proceeds from warrants issuance in connection with the 1.75% convertible senior notes |
53,686 |
- | |||
|
Repurchase of a portion of 2.875% convertible senior notes due 2015 |
(104,832) |
- | |||
|
Retirement of call options in connection with the retirement of a portion of 2.875% convertible senior notes |
15,156 |
- | |||
|
Retirement of warrants in connection with the retirement of a portion of 2.875% convertible senior notes |
(11,603) |
- | |||
|
Proceeds from sale of common stock under employee stock purchase plan |
3,880 |
3,554 | |||
|
Proceeds from exercise of common stock options |
9,932 |
9,472 | |||
|
Tax benefit related to stock-based compensation |
34 |
165 | |||
|
Net cash provided by financing activities |
321,754 |
13,140 | |||
|
Effect of exchange rate changes on cash and cash equivalents |
(737) |
122 | |||
|
Net (decrease) increase in cash and cash equivalents |
223,619 |
63,587 | |||
|
Cash and cash equivalents, beginning of period |
107,016 |
43,429 | |||
|
Cash and cash equivalents, end of period |
$ |
330,635 |
$ |
107,016 | |
|
| |||||||||||||||
|
REVENUE SUMMARY | |||||||||||||||
|
(in millions) | |||||||||||||||
|
(unaudited) | |||||||||||||||
|
Three Months Ended |
Percentage Change |
Currency Impact |
Constant Currency Percentage Change |
||||||||||||
|
2012 |
2011 |
2011 to 2012 |
Dollar |
Percentage |
|||||||||||
|
Medical segment: |
|||||||||||||||
|
Consoles: |
|||||||||||||||
|
|
|
|
(14) |
% |
$ - |
- |
% |
(14) |
% |
||||||
|
|
1.1 |
0.5 |
136 |
- |
- |
148 |
|||||||||
|
|
2.1 |
1.8 |
18 |
(0.1) |
(6) |
24 |
|||||||||
|
Rest of world |
1.9 |
1.0 |
80 |
- |
- |
80 |
|||||||||
|
Total Consoles |
|
|
5 |
|
(2) |
7 |
|||||||||
|
IVUS single-procedure disposables: |
|||||||||||||||
|
|
|
|
2 |
% |
$ - |
- |
% |
2 |
% |
||||||
|
|
25.4 |
26.5 |
(4) |
(0.8) |
(3) |
(1) |
|||||||||
|
|
5.0 |
5.8 |
(13) |
(0.2) |
(4) |
(9) |
|||||||||
|
Rest of world |
1.6 |
1.5 |
8 |
- |
- |
8 |
|||||||||
|
Total IVUS single-procedure disposables |
|
|
(3) |
|
(2) |
(1) |
|||||||||
|
FFR single-procedure disposables: |
|||||||||||||||
|
|
|
|
34 |
% |
$ - |
- |
% |
34 |
% |
||||||
|
|
5.0 |
1.6 |
222 |
(0.2) |
(10) |
232 |
|||||||||
|
|
7.2 |
6.2 |
15 |
(0.3) |
(6) |
21 |
|||||||||
|
Rest of world |
0.7 |
0.6 |
16 |
- |
16 |
||||||||||
|
Total FFR single-procedure disposables |
|
|
42 |
|
(3) |
45 |
|||||||||
|
Other |
|
|
21 |
% |
|
(1) |
% |
22 |
% |
||||||
|
Sub-total medical segment |
|
|
10 |
|
(2) |
12 |
|||||||||
|
Industrial segment |
|
|
63 |
- |
- |
63 |
|||||||||
|
Total |
|
|
10 |
|
(2) |
12 |
|||||||||
|
| ||||||||||||||
|
REVENUE SUMMARY | ||||||||||||||
|
(in millions) | ||||||||||||||
|
(unaudited) | ||||||||||||||
|
Year Ended |
Percentage Change |
Currency Impact |
Constant Currency Percentage Change | |||||||||||
|
2012 |
2011 |
2011 to 2012 |
Dollar |
Percentage |
||||||||||
|
Medical segment: |
||||||||||||||
|
Consoles: |
||||||||||||||
|
|
|
|
(4) |
% |
$ - |
- |
% |
(4) |
% | |||||
|
|
3.2 |
2.2 |
46 |
- |
- |
46 |
||||||||
|
|
6.3 |
8.1 |
(22) |
(0.6) |
(8) |
(14) |
||||||||
|
Rest of world |
6.3 |
4.8 |
30 |
- |
- |
30 |
||||||||
|
Total Consoles |
|
|
(1) |
|
(2) |
1 |
||||||||
|
IVUS single-procedure disposables: |
||||||||||||||
|
|
|
|
4 |
% |
$ - |
- |
% |
4 |
% | |||||
|
|
99.1 |
95.0 |
4 |
0.6 |
- |
4 |
||||||||
|
|
20.7 |
23.7 |
(13) |
(1.8) |
(8) |
(5) |
||||||||
|
Rest of world |
6.7 |
6.3 |
7 |
- |
- |
7 |
||||||||
|
Total IVUS single-procedure disposables |
|
|
2 |
|
(1) |
3 |
||||||||
|
FFR single-procedure disposables: |
||||||||||||||
|
|
|
|
40 |
% |
$ - |
- |
% |
40 |
% | |||||
|
|
13.9 |
4.9 |
186 |
(0.1) |
(1) |
187 |
||||||||
|
|
26.2 |
23.2 |
13 |
(2.3) |
(10) |
23 |
||||||||
|
Rest of world |
3.1 |
2.1 |
41 |
- |
- |
41 |
||||||||
|
Total FFR single-procedure disposables |
|
|
41 |
|
(4) |
45 |
||||||||
|
Other |
|
|
26 |
% |
|
(1) |
% |
27 |
% | |||||
|
Sub-total medical segment |
|
|
12 |
|
(1) |
13 |
||||||||
|
Industrial segment |
|
|
(3) |
$ - |
- |
(3) |
||||||||
|
Total |
|
|
11 |
|
(1) |
12 |
||||||||
|
| |||
|
RECONCILIATION OF GAAP TO NON-GAAP EPS GUIDANCE | |||
|
(in thousands, except per share data) | |||
|
(Unaudited) | |||
|
2013 | |||
|
| |||
|
From |
To | ||
|
GAAP net loss per share—basic |
|
| |
|
GAAP net loss per share—diluted |
|
| |
|
Acquisition related items |
0.05 |
0.05 | |
|
Amortization of intangibles |
0.04 |
0.04 | |
|
Non-cash interest expense |
0.21 |
0.21 | |
|
Non-GAAP net income per share—diluted |
|
| |
|
Weighted average shares outstanding—basic |
54,400 |
54,400 | |
|
Weighted average shares outstanding—diluted |
56,200 |
56,200 | |
|
Note: Effective tax rate of 38% applied to non-GAAP adjustments |
|||
SOURCE
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