VNUS Medical Technologies Reports Fourth-Quarter 2007 Results: 54% Revenue Growth and Fourth Quarter Profitability
Net revenues for the fourth quarter increased 54% to $20.6 millioncompared with $13.3 million for the fourth quarter of 2006 and increased 18%when compared to the third quarter of 2007 at $17.5 million. The increase innet revenues from the prior quarters was due to continuing higher sales ofdisposable ClosureFAST(TM) catheters and ClosureRFS devices, and higheroverall international sales. Fourth quarter disposable catheters and deviceunit sales increased in 2007 53% compared to the fourth quarter of 2006 andincreased 19% sequentially. After adjusting for deferral of RF generatorrevenues in 2006, revenues in the fourth quarter of 2007 grew 41% compared tothe fourth quarter of 2006.
Fourth-quarter net income was $0.9 million, compared with a net loss of$2.0 million for the fourth quarter of 2006 and a net loss of $2.2 million forthe third quarter of 2007. Gross margins in the fourth quarter improved to65.8% compared to 64.3% in the fourth quarter of 2006, and compared to 61.5%sequentially. Patent litigation expenses included in the fourth quarter were$647,000, compared to $628,000 in the comparable quarter in 2006 and $2.9million in the third quarter in 2007. Fully diluted earnings per share forthe fourth quarter was $0.05, compared with net loss per share of $0.13 forthe fourth quarter of 2006 and a net loss per share of $0.14 for the thirdquarter of 2007. Net income for the fourth quarter of 2007 included theeffect of a non-cash charge for stock-based compensation of $411,000 or $0.03per share. This compared with a non-cash charge for stock-based compensationof $502,000, or $0.03 per share for the corresponding quarter of 2006 and$588,000, or $0.04 per share for the third quarter of 2007.
Net revenues for 2007 were $70.9 million, an increase of 37% compared with$51.7 million for 2006. Annual unit sales in unit catheters and devicesincreased 38% compared to 2006. The 2007 net loss was $5.5 million or $0.36per share compared to 2006 net loss of $7.3 million or $0.48 per share. Netloss for 2007 and 2006 included patent litigation expenses of $5.2 million and$2.7 million, respectively. Excluding $1.9 million of RF generator revenuesoriginally deferred in 2006 and subsequently recognized in 2007, net revenuesin 2007 increased 29%.
VNUS' balance sheet at December 31, 2007 included cash, cash equivalentsand short-term investments of $63.3 million, approximately $0.6 million lessthan the third quarter of 2007 due primarily to increased working capital tosupport growth.
"Our fourth quarter results substantially exceeded our expectations inevery aspect of our business," said VNUS President and Chief Executive OfficerBrian E. Farley. "Strong market acceptance of our ClosureFAST catheter,exceptional growth in international sales, and substantial increases in RFgenerator sales along with our gains in manufacturing efficiencies which ledto lower cost of goods and higher gross margins all contributed to ourprofitable quarter. We also continue to be very pleased by the latest datareported in the fourth quarter from both the multi-center clinical trial ofthe ClosureFAST catheter and from the Recovery Trial, a single-blindedcomparative clinical trial of the ClosureFAST catheter to endovenous laserablation. Together these trials show that the VNUS Closure procedure allowssuperior patient recovery compared to laser treatment and excellent efficacyat one year of over 96%. We believe the ClosureFAST catheter is emerging asthe preferred treatment for venous reflux which is reflected in our strongfinancial growth."
VNUS also announced today its business outlook for the first-quarter
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