In the wake of a bigger-than-expected first-quarter loss, Spectranetics Corp. CEO Scott Drake said Wednesday the company is taking "immediate action" to boost sales of products designed to remove defective pacemaker leads.
The Colorado Springs medical laser manufacturer warned stockholders April 7 that a "temporary disruption" tied to an expansion of its sales force resulted in a 4 percent decline in revenue generated by that segment compared with the same quarter a year earlier.
As a result, overall revenue growth in the January-to-April quarter slowed to just 5.2 percent, compared with double-digit growth in recent quarters. Losses grew nearly sixfold to $5.66 million, or 14 cents a share.
Drake said the company is taking steps to generate a return to double-digit growth in the fourth quarter. He told stock analysts during a conference call Wednesday that the expansion of the company's sales force in that segment of its business "was not managed as well as it should have been."
Drake said during the conference call that the disruption occurred because two of the company's three experienced representatives for the pacemaker lead segment spent significant time during the quarter training newly hired sales representatives, reducing time spent with customers. The sales force expansion in the other part of Spectranetics' business - using its laser to clear blockages in leg arteries - continued growing at double-digit rates because the expansion in that segment was not proportionally as large, he said.
Guy Childs, the company's chief financial officer, declined to specify what immediate action is being taken. In an email Wednesday, he said Spectranetics "would rather our performance in the future, particularly later in the year, speak to that."
Spectranetics stood by the downward revision in its sales and profit forecasts for the year that it made in warning stockholders about the sales slowdown and higher losses. That forecast calls for revenue of $171.5 million to $174 million and losses of $7.5 million to $9.5 million, or 7 to 12 cents a share.
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