Published: October 24, 2013
Spectranetics Corp. was back into the black for the first time since the federal government imposed a 2.3 percent tax on medical device sales at the beginning of the year.
The company posted record third-quarter sales Thursday and told stockholders to expect even better results in the final quarter of the year.
But the Colorado Springs-based medical device manufacturer told stock analysts during a conference call Thursday that it will head back into the red early next year as it adds 55 people to its sales staff to market new products and expand into new markets, which company officials expect will accelerate revenue growth later in the year.
Spectranetics earned $343,000, or 1 cent a share. That was down 52 percent from the third quarter of 2012, but represented its first quarterly profit since the tax began. Without the tax and the cost of sales payments related to an acquisition earlier this year, profits would have been $1.01 million higher.
The medical device tax was approved in 2010 as part of the Affordable Care Act.
Revenue during the period was up 12.9 percent from a year earlier to a record $39.8 million, beating the average of forecasts by eight analysts surveyed by Thomson/First Call by nearly $900,000. The profit met the average of analysts' forecasts.
So far this year, the company has lost $1.25 million, or 3 cents a share, compared with profits totaling $1.55 million, or 4 cents a share, from the same period a year ago. Earnings would have been up slightly without the tax and payments related to the acquisition.
Revenue during the nine-month period was up 12.9 percent from a year ago to $116.9 million.
Spectranetics raised its forecasts for the rest of the year: Profitwise, the company expects to break even, instead of accruing a loss of up to $500,000. Revenue is forecast to be $157 million to $158 million, up from $155.5 million to $157.5 million.
However, Guy Childs, the company's chief financial officer, said during the conference call that Spectranetics expects to lose $3 million to $5 million next year as a result of the sales staff expansion. On the same call, CEO Scott Drake said the company expects to gain federal approval by mid-2014 to expand marketing of its lasers for new uses, a potential $750 million market.
"We remain on track with our plans to accelerate revenue growth as we execute several compelling growth drivers," Drake said in a press release announcing the company's financial results.
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