Heart Assist device company Thoratec Corporation reported revenue figures that were pretty flat for the quarter compared with the equivalent period a year ago, and the annual sales picture was similarly unspectacular, albeit within the range predicted a year ago. The company is sounding chirpy about its growth prospects through 2014.
Background
Sales
For the quarter ended December 28, 2013, Thoratec reported revenues of $128.2 million compared with revenues of $128.5 million in the fourth quarter of 2012. For the year, revenues were $502.8 million, an increase of two percent over revenues of $491.7 million in 2012, a significant slow down compared with the sixteen percent annual growth reported a year ago.
As far as the company’s key franchise goes, the HeartMate mechanical circulatory support (MCS) product line contributed $113.0 million, an increase of two percent, driven by expansion of the company’s international business. HeartMate also contributed two percent growth to annual revenues, at $444.4. Thoratec’s CentriMag product line contributed $43.3 million, an increase of 21 percent.
Income
The income figure is complicated by a number of charges taken during the 2012 financial year. The net effect of these made 2013 look significantly better on a GAAP basis, income of $13.1 million comparing with net loss of ($14.4) million, in the same period a year ago.
Factoring out the impairment charges mentioned above, non-GAAP net income was $22.1 million, compared with $22.6 million in the same period a year ago.
For the year, net income on a GAAP basis was $73.3 million, compared with GAAP net income of $56.2 million, in the same period a year ago.
Non-GAAP net income was $104.9 million, compared with 109.2 million in the same period a year ago.
Gross Margin
Factoring out the various charges and other items required by GAAP leaves Thoratec with a (non-GAAP) margin of 65.5 percent compared to 71.7 percent in the same quarter last year, albeit the company is putting the decrease in the non-GAAP gross margin down to some of these factors, coupled with implementation of the U.S. medical device excise tax.
Operating expenses
2012’s operating expenses exceeded those of 2013 ($64.1 million vs 62.9 million), largely due to high project-related expenses and incentive payments.
Guidance
Thoratec says it expects fiscal 2014 revenues to land between $520 million and $535 million, so some 3.5% to 6% up on 2013, albeit that includes an extra week’s sales, the way the calendar works.
Guidance for fiscal 2014 net income per diluted share is a range of $1.28 to $1.38 on a GAAP basis and $1.72 to $1.82 on a non-GAAP basis.
Gross margin is expected to be approximately 70 percent on a GAAP basis and 71 percent on a non-GAAP basis.
Company comments
“We were pleased with our financial performance for the fourth quarter and full year, supported by robust growth in the worldwide market for mechanical circulatory support therapy and our successful launch of HeartMate II in Japan,” said Gary F. Burbach, President and Chief Executive Officer. “Our progress in 2013 in terms of product and market development positions Thoratec well to continue advancing the field of MCS,” he added.
“We expect 2014 will be an eventful year for Thoratec as we launch clinical studies of next generation chronic LVAD technology with HeartMate III, and for the percutaneous acute care market with HeartMate PHP,” Burbach commented. “Our 2014 guidance projects revenue growth for Thoratec that should create a foundation for acceleration in future years as we realize the potential of our exciting pipeline programs.”
Source: Thoratec, Inc., PR Newswire
published: February 5, 2014 in: Cardio, Company News