Spectranetics Corp. says a "temporary disruption" tied to a sales force expansion is to blame for first-quarter sales that fell short of its expectations and triggered a larger-than-anticipated loss.
The Colorado Springs-based medical laser manufacturer said Monday that revenue in the January-to-March quarter grew by just 5 percent from a year ago to $39.6 million, resulting in a loss of $5.7 million to $6.1 million, or 14 to 15 cents a share.
Spectranetics also cut its sales forecast for the year by $6 million, to between $171.5 million and $174 million, and raised its estimate of losses for the year by $4.5 million. The company now expects its 2014 losses to be $7.5 million to $9.5 million, or 7 to 12 cents a share.
The new revenue and profit estimates fall far short of the consensus estimate from stock analysts who follow Spectranetics shares. They had forecast the company would lose 8 cents a share on revenue of $41.4 million during the first quarter and lose 9 cents a share on revenue of $179.4 million for the year.
The company's previous revenue and loss forecast was released Feb. 27 with its fourth-quarter financial results, when it told stockholders to expect red ink the first half of the year as it added 55 people to its sales staff to pitch new products and expand into new markets.
Spectranetics CEO Scott Drake said he was disappointed with the results tied to its "lead management," a reference to the company's lasers that are used to remove infected pacemaker leads.
"We attribute the weakness primarily to temporary disruption associated with the expansion of the U.S. lead management sales team. We are taking immediate action to return lead management to growth in the second half of 2014, driven by a return to double-digit growth in the fourth quarter."
Revenue from sales of products used to remove infected pacemaker leads fell 4 percent from the first quarter of 2013 to $14.5 million. That blunted a 16 percent gain during the same period in the sales of products used to clear blockages in leg arteries. Sales of those products hit $20 million in the first quarter of 2014.
Monday's announcement was made after the nation's stock markets closed for the day. Beforehand, Spectranetics stock fell $1.78, or 6.4 percent, to $26.11.
Spectranetics shares had surged to a record $31.56 on March 19, a few weeks after the company announced it had completed a major test of its laser to treat blockages in stents inserted into leg arteries - a market estimated at $750 million. The company said it hopes to seek federal approval this month to market its laser and related products to clear such blockages. Drake told stock analysts in February that the Food and Drug Administration typically processes such requests in five months.
The numbers released Monday are estimates; the company plans to release complete financial results April 23.
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