ev3 Inc. (ev3), a cardiovascular devices company, has reported net sales of $422.1 million for the full year of 2008, compared with the net sales of $284.1 million in the previous year-end. It has also reported net loss of $335.6 million, or $3.22 loss per share, for the full year of 2008, compared with the net loss of $165.7 million, or $2.37 loss per share, in the previous year-end.
ev3’s net sales were $106.1 million in the fourth quarter of 2008, up 15% increase over the same quarter of the prior year. Fourth quarter net product sales totaled about $105.6 million and up 22%, versus the prior year quarter. Research collaboration revenues were about $469 thousand in the fourth quarter of 2008 against $6.0 million in the fourth quarter of 2007. By product segment, fourth quarter neurovascular net sales increased by 32%, and peripheral vascular net product sales increased by 18%. On a geographic basis, ev3 US net sales, excluding revenues from the prior Merck research and collaboration agreement, increased about 14% over the prior year quarter. International net sales increased 41% over the prior year quarter. Changes in foreign currency exchange rates had a negative impact of about $2.7 million on fourth quarter of 2008 net sales against the fourth quarter of the prior year.
Atherectomy net sales totaled about $88.8 million in 2008 against $20.9 million for the period from October 5 to December 31 in 2007 relating to the acquisition of FoxHollow. Changes in foreign currency exchange rates had a positive impact of about $5.0 million on full-year 2008 net sales against 2007.
Robert Palmisano, president and chief executive officer of ev3, commented, “Our performance in the fourth quarter reflects continued sales expansion across both our peripheral vascular and neurovascular businesses. Notably, the performance in our neurovascular segment and international business in the fourth quarter underscores the positive progress we continue to make on our global launch activities for our Axium Progressive Coil System and further penetration of our Onyx Liquid Embolic System.”
Palmisano commented further, “In addition, fourth quarter revenues in our peripheral vascular business segment were led by a particularly strong contribution from our core peripheral vascular products. Despite the competitive activity and lack of market growth that we saw in atherectomy throughout 2008, we remain optimistic about the longer term outlook for atherectomy and are committed to improving our execution and productivity under new sales leadership, adding new plaque excision products and developing clinical data to support procedural expansion.”
ev3’s GAAP net loss for the fourth quarter of 2008 increased to $(291.1) million against $(107.9) million in the fourth quarter of 2007. The company’s GAAP net loss for the fiscal year ended December 31, 2008 increased to $(335.6) million against $(165.7) million for the year ended December 31, 2007. ev3’s net loss per common share for the fourth quarter and fiscal year ended December 31, 2008 was $(2.78) and $(3.22), respectively, against $(1.06) in the fourth quarter of 2007 and $(2.37) in the full-year ended December 31, 2007. The fourth quarter of 2008 and full-year net loss include non-cash asset impairment charges related to goodwill and other intangible assets of $288.8 million and $299.3 million, respectively. The fourth quarter of 2007 net loss reflects an acquired in-process research and development charge of $70.7 million and $10.3 million of merger related integration expenses.
For the fourth quarter of 2008, ev3’s non-GAAP adjusted net income was $7.9 million, or $0.08 per diluted share. For the fiscal year ended December 31, 2008, ev3’s non-GAAP adjusted net income was $9.9 million, or $0.09 per diluted share. Non-GAAP adjusted net income and adjusted net earnings per share for the fourth quarter and full-year exclude non-cash amortization expense of $6.8 million and $31.1 million, non-cash stock-based compensation of $3.5 million and $15.2 million, and non-cash asset impairment charges related to goodwill and other intangible assets of $288.8 million and $299.3 million, respectively.
ev3 recorded its second consecutive quarter of positive cash flow with cash and cash equivalents increasing $13.7 million in the fourth quarter of 2008 against the end of the third quarter of 2008. Cash and cash equivalents totaled $59.7 million as of the end of fourth quarter of 2008. This increase was primarily due to cash generated by operations.
Palmisano continued, “We continue to emphasize profitability and cash generation as well as positive product sales growth as our prime objectives, so I was very encouraged to see another quarter of solid progress in these areas. We see additional opportunities to drive profitability throughout 2009 by improving our sales execution, increasing margins and optimizing our cost structure. We are confident that we have the right organizational alignment and strategic programs in place to position us for future success.”
An investor presentation summarizing the company’s fourth quarter 2008 results is available at http://ir.ev3.net.
ev3 expects fiscal year 2009 net sales to be in the range of $415 to $430 million against $402.2 million of product sales in 2008. Net product sales growth on a constant currency basis is expected to be about 7% to 10%. Foreign currency exchange rate fluctuations are expected to negatively impact revenue growth by 3% to 4% in 2009. ev3 expects non-GAAP adjusted earnings per share to be in the range of $0.38 to $0.44 per diluted share, an increase of $0.29 to $0.35 over 2008, based on about 105.5 million of outstanding shares. ev3’s adjusted net earnings per share guidance excludes estimated amortization expense of about $21.8 million and non-cash stock-based compensation of about $13.4 million.
The company expects first quarter 2009 net sales to be in the range of $95 to $99 million against $95.1 million of net product sales in the first quarter of 2008 and non-GAAP adjusted net earnings per share to be in the range of $(0.03) to $0.00 per diluted share, based on about 105.2 million of outstanding shares. ev3’s non-GAAP adjusted net earnings per share excludes estimated amortization expense of about $5.9 million and non-cash stock-based compensation of about $3.3 million.