Tuesday, Vascular Solutions Inc. (VASC) reported better-than-expected third quarter earnings, helped by double-digit sales growth, strong gross margin, absence of litigation expenses and cost controls.
The company's net income for the third quarter was $1.72 million or $0.11 per share, compared to $15 thousand or $0.00 per share in the year-ago period. During the third quarter of 2008, the company expensed $453 thousand of stock-based compensation expense.
Vascular Solutions' adjusted net earnings for the quarter climbed to $1.36 million or $0.08 per share from $356 thousand or $0.02 per share in the comparable quarter a year before. On average, 4 analysts polled by FirstCall/Thomson Financial expected the company to earn $0.07 per share.
Quarterly net revenues were up 18% to $15.5 million from $13.12 million in the year-ago period. Wall Street analysts had a consensus revenue estimate of $15.49 million.
Net revenue includes product revenue, and license and collaboration revenue. Product revenue includes revenue from hemostat products, extraction catheters, vein products, access products and specialty catheters.
Vascular Solutions stated that its net revenue for the quarter from hemostat products (primarily consisting of the D-Stat Dry, D-Stat Flowable, Thrombi-Gel, Thrombi-Pad and D-Stat Radial products) was $5.7 million, a decline of 4% from the third quarter of 2007.
The decline in revenue from hemostat products was due to the continued reduction in sales of its Duett sealing device, the as-planned conversion from hospital pricing to distributor pricing in Germany, and a modest decline in shipments of Thrombi-Gel to King Pharmaceuticals.
Net sales of extraction catheters (primarily consisting of the Pronto V3 extraction catheter) were up 45% to $3.8 million in the recent third quarter, compared to last year.
The company's vein products (primarily consisting of the Vari-Lase endovenous laser console and kits) raked in quarterly sales of $2.4 million, reflecting an increase of 14% over the third quarter of 2007.
Net sales of access products (primarily consisting of micro-introducer kits, specialty guidewires and snares), rose 106% to $1.6 million in the third quarter from the year-ago period.
Vascular Solutions' specialty catheters (primarily consisting of the Langston dual lumen catheters and Twin-Pass dual access catheters), generated net sales of $1.1 million in the third quarter of 2008, up 53% over the comparable quarter a year before.
Gross margin across all product lines was 66.0% in the third quarter of 2008, down from 66.6% in the third quarter of 2007, principally due to product selling mix.
For the nine months ended September 30, 2008, the company's net income was $1.49 million or $0.09 per share, compared to a net loss of $4.82 million or $0.32 per share in the year-ago period.
The company's total revenue for nine months rose to $44.8 million from $38.5 million in the year-ago period.
Looking ahead to the fourth quarter, Vascular Solutions expects earnings between $0.13 and $0.15 per share, with corresponding adjusted net income expected to be between $0.09 and $0.11 per share.
The company anticipates revenue for the fourth quarter to range between $16.3 million and $16.6 million. FirstCall/Thomson Financial analysts have earnings estimate pegged at $0.10 per share and revenue estimate at $16.83 million.
Based on projected selling mix across products, gross margin on product sales for the fourth quarter of 2008 is expected to be between 65% and 66%.
For 2009, the company anticipates net income to be between $0.56 and $0.64 per share, and adjusted net income to be between $0.40 and $0.45 per share. The company anticipates revenue for 2009 to range between $70 million and $72 million. Wall Street analysts expect the company to earn $0.33 per share, on revenues of $73.93 million for 2009.
Vascular Solutions stated that it has 10 new devices slated for launch in the U.S. during 2009. The company expects the devices to help achieve $100 million in annualized net revenue before the end of 2010.
VASC closed Tuesday's trade at $7.40, up 3.64%, on a volume of 45,812 shares.
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