VOLCANO REPORTS 35 PERCENT INCREASE IN QUARTERLY REVENUES; IVUS DISPOSABLE REVENUES INCREASE 46
(SAN DIEGO, CA), February 12, 2008Volcano Corporation (NASDAQ: VOLC), a leading provider of
intravascular ultrasound (IVUS) and functional measurement (FM) products designed to enhance the
diagnosis and treatment of coronary and peripheral vascular disease, today reported results for the
fourth quarter and full year 2007.
For the quarter ended December 31, 2007, Volcano reported revenues of $40.0 million, a record
quarter for the company, and a 35 percent increase over revenues of $29.5 million in the same
period a year ago. Revenues for all of 2007 were $130.6 million, a 27 percent increase over
revenues of $103.0 million in fiscal 2006.
For the fourth quarter of 2007, the company reported a net loss on a GAAP basis of $23.7
million, or $0.53 per share. Included in these results is a $26.2 million charge related to
in-process research and development incurred with the companys acquisition of CardioSpectra, Inc.,
which occurred in December 2007. Excluding this charge, the company would have had net income of
$2.4 million, or $0.05 per diluted share. Volcano reported net income on a GAAP basis of $1.4
million, or $0.04 per diluted share, in the fourth quarter of 2006.
Excluding the one-time charge related to the CardioSpectra acquisition and stock-based
compensation expense of $2.0 million, the company reported net income of $4.4 million, or $0.09 per
diluted share, in the fourth quarter of 2007. Excluding stock-based compensation expense of
$901,000, the company reported net income of $2.3 million, or $0.06 per diluted share, in the
fourth quarter of 2006, or an increase of 90 percent.
Weighted average diluted shares in the quarter were 47.8 million versus 38.2 million a year
ago, reflecting the impact of the companys public offering of common stock that was completed in
October 2007. The company ended 2007 with $189.1 million in cash, cash equivalents and short-term
available-for-sale investments. This compares with $95.5 million at the end of 2006. The difference
between the two periods reflects the net proceeds of $122.8 million from the companys stock
offering in October 2007, and the $25.2 million cash payment related to the CardioSpectra
acquisition in December 2007.
Volcano has continued to demonstrate very strong revenue growth throughout 2007, driven by
our growing installed base of IVUS consoles and increased IVUS disposable revenues. Total IVUS
console placements in 2007 were 597, an increase of 48 percent versus 404 IVUS console placements
in 2006. IVUS disposable revenues in the quarter increased 46 percent versus the same quarter a
year ago, including a 28 percent increase in the U.S., noted Scott Huennekens, president and chief
executive officer of Volcano.
This growth in our IVUS business occurred despite a sluggish global PCI market. We believe
the ease of use and integration provided by our s5 family of consoles, along with a growing volume
of data demonstrating the value of IVUS in stenting procedures, is driving our increased market
presence in the IVUS arena, he added. We are encouraged by what appear to be recent favorable
trends in stenting procedures and believe this will further the growth of our IVUS offerings, he
Last week, the company announced it received 510(k) clearance and a CE Mark for its Revolution
rotational IVUS catheter and functional flow reserve (FFR) technology on its s5 family of IVUS
consoles, enabling the commercial launch of these offerings in the United States and Europe. The
company also expects to have regulatory approval for the Rotational catheter on new s5 consoles in
Japan by the second quarter. The company has also recently announced three new partnership
agreements. The first is with Cordis Europe that will enable Cordis to offer their customers
Volcano IVUS for use in Cypher drug-eluting stent procedures. The second was a marketing agreement
with Siemens in Japan under which Siemens will begin selling their Artis and angio systems with the
s5i IVUS console. In addition, the company announced a collaboration with General Electric in Japan
that will enable GE to offer its INNOVA angiographic systems with Volcanos s5i integrated IVUS