Friday, October 07, 2011 10:02:01 AM
Cardiovascular Systems Announces Preliminary First-Quarter Financial Results
Revenue of $18.7 Million Is Below Guidance Range, Grows 3 Percent Over Prior Year’s First Quarter
Company Still Expects Double-Digit Growth for the Full Year of Fiscal 2012
Conference Call Scheduled for Today, October 6, 2011, at 3:45 PM CT (4:45 PM ET)
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Press Release Source: Cardiovascular Systems, Inc. On Thursday October 6, 2011, 4:05 pm EDT
ST. PAUL, Minn.--(BUSINESS WIRE)-- Cardiovascular Systems, Inc. (CSI) (Nasdaq:CSII - News), a medical device company developing and commercializing innovative interventional treatment systems for vascular disease, today announced preliminary revenue of approximately $18.7 million for the fiscal 2012 first quarter ended September 30, 2011, compared with $18.2 million in the first quarter of fiscal 2011.
The fiscal 2012 first-quarter net loss is expected to be in the range of $(3.9) million to $(4.2) million, or $(0.22) to $(0.24) per common share, including approximately $(400,000), or $(0.02) per common share, of expenses related to conversion and valuation changes of convertible debt. Net loss was $(4.3) million, or $(0.28) per common share, in the fiscal 2011 first quarter.
CSI’s first-quarter results are preliminary and subject to the company’s management and independent auditors completing their customary quarterly review procedures.
David L. Martin, CSI president and chief executive officer, commented, “After five consecutive quarters of double-digit revenue growth, CSI’s growth slowed in the fiscal 2012 first quarter and was below our guidance. While we are still reviewing the results, we believe several factors disrupted growth in the short-term, but will lead to higher revenue growth in the future.”
The following factors affected first-quarter fiscal 2012 revenue growth:
1. PAD (peripheral arterial disease) procedures are shifting from hospitals to physician office-based labs. This transition is expected to increase the number of PAD procedures performed in the future. In the short-term, however, hospital-based procedures and related purchases are decreasing. Purchases in the new office-based labs are lagging, due to the time dedicated to open those facilities and to limited cash resources that constrain their inventory levels. Sales to these labs are also highly competitive, which extends selling cycles.
2. Customer demand for conversion to the Stealth 360° PAD System was stronger than expected. The Stealth 360° customer base grew more than 120 percent to 240 accounts in the just-completed quarter. This higher demand consumed selling time, as sales professionals installed the new device in accounts, and reduced purchases in the short-term, as customers transitioned inventory between product lines. The Stealth 360° also has significantly fewer crown configurations, reducing the number of devices the customer needs to have in inventory.
3. Significant changes are under way in sales and marketing. With the May 2011 addition of Kevin Kenny as executive vice president of sales and marketing, many important changes to the sales and marketing organization and programs are in progress. These changes are necessary to build a foundation for higher growth in the future, but can be disruptive initially.
4. A general decline in PAD procedures occurred. Typically, PAD surgical procedures slow down in the summer months. Several sources indicate that the decline was more significant in 2011. While CSI does not believe this was a major cause for the lower revenue in the quarter, it likely heightened the effect of the other factors identified.
Martin continued, “We believe the sluggish first-quarter revenue growth is temporary, and we expect double-digit revenue growth for the full fiscal year. In fact, revenue in the month of September improved significantly as the short-term effect of these factors began to subside, growing 14 percent over September 2010. We remain confident that the strength of our Stealth 360° in an underserved PAD market, supported by unprecedented clinical data demonstrating its excellent safety and effectiveness, will result in attractive, sustainable growth over the long term.”
CSI will update fiscal 2012 guidance and provide guidance for second quarter of fiscal 2012 during its first-quarter earnings announcement, expected to be in early November.
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