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Vascular Solutions Expects Record Q4 Growth

The company piled up nearly $1M in legal costs last year, but its largest product segment led strong sales growth.

Despite needing to reduce its earnings guidance after separate bouts of litigation caused legal costs to pile up, Maple Grove-based medical device maker Vascular Solutions, Inc., is on pace for an 11th straight year of double-digit revenue growth.
 
On Thursday, the company announced preliminary fourth-quarter and year-end results for 2014, including a record $33.6 million for its quarter ending December 31. Vascular said the preliminary results were released in advance of several investor meetings planned in the coming weeks. If the preliminary results hold, the fourth quarter results will represent an increase of 15.5 percent from $29.1 million in the same period a year ago. It would also exceed the top end of the company’s forecast of $32.5 million to $33.5 million for the quarter.
 
Vascular Solutions said it would also complete its 11th straight year of double-digit revenue growth: For 2014, revenue is expected to be $126.1 million, up 14 percent from 2013’s revenue of $110.5 million.
 
"Our performance was strong both domestically and overseas and across a broad range of product offerings, and was driven by the clinical utility of our medical devices and the value they provide for our customers and their patients,” CEO Howard Root said in a statement.
 
Last spring, in a quarterly report, the company warned that legal costs would impact its 2014 earnings growth, revising its expectations for the year in the process. Vascular Solutions sued Boston Scientific in 2013 for allegedly infringing on three of its patents related to its guided catheter products. It won a preliminary injunction that briefly barred Boston Scientific from selling the product amid ongoing litigation between the firms but Vascular Solutions said in April 2014 that the injunction was lifted. “Above-budget legal expenses” of $430,000 reduced per-share earnings at the time. Also, in February, the company paid $520,000 to settle an unrelated civil lawsuit that accused it of improperly marketing a medical product.
 
For its final 2014 quarter, at least on a preliminary basis, domestic revenues grew 8 percent to $26.8 million and international revenue climbed nearly 59 percent to $6.7 million. A 71 percent increase in sales of Vascular’s GuideLiner guide extension catheter keyed a 24 percent rise in sales of catheter products, the company’s largest product segment.
 
The figures announced Thursday are pending the completion of normal year-end accounting procedures and an independent audit. Full financial results will be reported on February 3, including the company’s forecast for the first quarter and full year of 2015.
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