Vascular Solutions Reports Record Fourth Quarter Results

Vascular Solutions Reports Record Fourth Quarter Results

  *Q4 net revenue increased 14.5% to $25.3 million
  *Q4 earnings per share grew 39% to $0.18
  *Provides 2013 guidance of $106-$110 million in net revenue and $0.66-$0.70

MINNEAPOLIS, Feb. 5, 2013 (GLOBE NEWSWIRE) -- Vascular Solutions, Inc.
(Nasdaq:VASC) today reported financial results for the fourth quarter ended
December 31, 2012. Net revenue increased 14.5% from the fourth quarter of 2011
to a record $25.3 million. U.S. product revenue increased 17% to $21.5 million
while international product revenue increased 4% to $3.8 million compared to
the year-ago fourth quarter. Net revenue was within the company's guidance
range of $25.0 million to $26.0 million.

Gross margin across all product lines was 67.2% in the fourth quarter of 2012,
an increase from 65.7% in the fourth quarter of 2011, and a sequential
increase from 66.7% in the third quarter of 2012. Most of the year-over-year
improvement in product gross margin was the result of increasing sales of
higher margin products and the January 2012 purchase of the intellectual
property relating to the Pronto^® catheters, which resulted in the elimination
of royalty expenses on the Pronto products.

Operating income for the fourth quarter was $4.7 million, representing an
operating margin of 18.5% and an increase from an operating margin of 15.6% in
the fourth quarter of 2011.

Net income for the fourth quarter of 2012 was $3.1 million, a 41% increase
from the year-earlier fourth quarter. Earnings per diluted share were $0.18,
an increase of 39% from the $0.13 reported in the year-earlier quarter. EPS in
the fourth quarter of 2012 exceeded the company's guidance range of

"During the fourth quarter we continued the very strong performance that
characterized our first three quarters of 2012," commented Howard Root, Chief
Executive Officer of Vascular Solutions. "Revenue reached a record quarterly
level, and we surpassed our long-term milestone of attaining $100 million in
annualized sales. For the full year, we are proud to have delivered our 9^th
consecutive year of double-digit product revenue growth while continuing to
improve our operating profits by an even higher percentage and generating
record operating cash flows."

Fourth Quarter Revenue by Product Line

Net sales of catheter products, the company's largest product line, were $15.6
million during the fourth quarter of 2012, an increase of 14% compared to
$13.7 million in the fourth quarter of 2011.

Within the catheter products category, fourth quarter sales of Pronto
aspiration catheters were $5.0 million, stable on both a sequential and
year-over-year basis. "We are pleased with the steady performance of our
Pronto business in a worldwide aspiration catheter market that remains
challenging due to competitive pricing pressures," Mr. Root said. "We are
maintaining our leading share of this market due to the superior features and
benefits of the Pronto catheter, and we remain focused on broadening our
product offerings in the aspiration catheter market."

Sales of the GuideLiner^® catheter were $4.1 million in the fourth quarter, an
increase of 57% from the $2.6 million in the year-ago quarter. "We expect
continued rapid growth of GuideLiner as more and more physicians in both the
U.S. and abroad recognize the clinical benefits of this unique product in
challenging interventions," Mr. Root said. "Now entering its fourth year on
the market, the GuideLiner is quickly on its way to becoming our
highest-selling product in our broad portfolio of catheter products."

Other catheter products that contributed significantly to the year-over-year
sales increase during the fourth quarter were the Guardian^® hemostasis valve
and related inflation device, which combined grew by 16%, and micro-Introducer
kits, which also grew by 16%. In addition, sales of SuperCross™ microcatheters
increased by 160% in the fourth quarter as the adoption of the angled tip
versions continued to spread.

Net sales of hemostat products (mainly consisting of D-Stat^® Dry, D-Stat
Flowable and D-Stat Radial) were $5.4 million in the fourth quarter, a
decrease of 1% from the $5.5 million in the year-ago quarter. "The femoral
artery hemostat patch market remains intensely competitive, but we have
maintained our position of market leadership through the clinical advantages
of our thrombin-based D-Stat Dry and Thrombix^® products," Mr. Root said.

"We are now well on our way to restoring growth in our hemostat business,
mainly by offering new product solutions for the rapidly-growing radial artery
segment of the market," Mr. Root said."In June, we acquired the Accumed™
wrist positioning splint, which our direct U.S. sales force has begun to
transition into material sales. In October, we launched the R-Band™ radial
hemostatic device under an exclusive U.S. distribution agreement with the
device's manufacturer, Lepu Medical Technology, which in the fourth quarter
our direct U.S. sales force conducted successful evaluations and
conversions.In 2013 we expect to launch additional products for the U.S.
radial access market that should continue this trend."

In the vein products category, fourth quarter net revenues were $4.1 million,
an increase of 48% from the $2.8 million in the year-earlier quarter. Included
in fourth quarter vein product revenue was $1.7 million from the reprocessing
service for ClosureFAST^® radiofrequency catheters that was launched in
January of 2012. "For the full year 2012, our ClosureFAST reprocessing service
contributed $4.4 million to our revenue. The successful launch of this service
has allowed us to restore growth to the vein products segment of our business
and to significantly expand our footprint in the U.S. vein clinic market," Mr.
Root said. "Our reprocessing partner, Northeast Scientific, has now
successfully reprocessed more than 15,000 ClosureFAST vein ablation catheters,
and that volume says a great deal about the reliability and effectiveness of
this program. We expect significant growth in our ClosureFAST reprocessing
service in 2013, and we also intend to benefit by launching additional
ancillary products for vein therapy procedures in 2013 to our expanded vein
clinic customer base."

Full Year Financial Highlights

On a GAAP-reported basis, Vascular Solutions' 2012 net revenue increased 9% to
$98.4 million from $90.0 million in 2011. Accelerated license revenue
associated with the company's collaboration with King Pharmaceuticals, Inc.
boosted 2011 net revenue by $2.5 million. Excluding this accelerated licensing
revenue in 2011, net revenue in 2012 grew 12% from 2011.

U.S. product revenue grew 14% in 2012 to $82.6 million compared to $72.4
million in 2011, while product revenue in international markets grew 9% to
$15.5 million compared to $14.2 million in 2011. On a worldwide basis,
Vascular Solutions' 2012 sales of catheter products grew 16% to $61.3 million,
sales of hemostat products declined 2% to $22.7 million, and revenue from vein
products increased 34% to $14.1 million. Product gross margin in 2012 was
66.8% compared to 65.5% in 2011.

On a reported basis, operating income in 2012 improved 2% to $15.9 million
compared to $15.6 million in 2011. In addition to the accelerated licensing
revenue in 2011, a reduced earn-out payment estimate associated with a
previous acquisition lowered general and administrative expenses in 2011 by
$586,000. Excluding the impact of these items in 2011, the company's 2012
operating income improved 27% and the company's operating margin improved to
16.2% in 2012 compared to 14.3% in 2011.

On a GAAP basis, earnings per diluted share gained 6% to $0.60 in 2012 from
$0.57 in 2011. Excluding the accelerated licensing revenue and reduced
earn-out payment estimate in 2011, Vascular Solutions' 2012 EPS grew 33% from
the corresponding $0.45 in 2011.

During 2012, Vascular Solutions generated $19.2 million in cash from operating
activities, an increase of 32% from the 2011 operating cash flow of $14.6

Financial Guidance

For 2013, Vascular Solutions is providing guidance for net revenue to be
between $106 million and $110 million. The mid-point of this range represents
an increase of 10% from $98.4 million in net revenue recorded in 2012. 

Vascular Solutions is also providing guidance for 2013 net earnings to be
between $0.66 and $0.70 per fully diluted share. The mid-point of this range
represents an increase of 13% from $0.60 per share in 2012. Included in the
company's 2013 earnings guidance are $3.1 million in non-cash stock-based
compensation, $1.7 million in amortization of intangibles, between $1.3
million and $1.5 million for the new U.S. medical device excise tax, and an
assumed 36.5% income tax rate.

For the first quarter of 2013, Vascular Solutions is providing guidance for
net revenue to be between $26.0 million and $27.0 million, which at the
mid-point would represent growth of 11% from the first quarter of 2012. Net
earnings for the first quarter of 2013 are projected to be between $0.15 and
$0.16 per diluted share, representing an increase of between 25% and 33% from
the $0.12 EPS reported in the first quarter of 2012.Included in the company's
net earnings guidance for the first quarter of 2013 are $1.0 million in
non-cash stock-based compensation, $0.4 million in amortization of
intangibles, $0.3 million for the new U.S. medical device excise tax, and an
assumed 30% income tax rate due to the recognition of additional R&D tax

Cash Flow and Balance Sheet Highlights

Vascular Solutions ended 2012 with $11.6 million in cash and cash equivalents,
down from $13.9 million at the end of the third quarter. During the fourth
quarter, the company generated $5.2 million in cash from operations and used
cash of approximately $8.0 million to purchase a building for office
expansion, $0.5 million for the acquisition of the AngioAssist™ and Teirstein
Edge™ products, and $0.8 million for capital expenditures.

The company made no purchases during the fourth quarter under its stock
repurchase plan. As previously reported, the Board of Directors in January
2012 authorized a stock repurchase plan for up to 1,000,000 shares that ended
on December 31, 2012. During 2012, the company repurchased 425,135 shares
under this authorization at an average price of $11.20 per share. The company
continues to have no debt and has an unused $10 million bank line of credit.

"Vascular Solutions has excellent operating cash flows, a strong balance sheet
and good working capital flexibility, which has allowed us to expand our
revenue opportunities through tuck-in acquisitions and alliances while
continuing to make the internal investments that are fueling our future growth
objectives," Mr. Root said. "During 2012, we added 11 new products to our
portfolio, including five that were brought in through licensing agreements or
acquisitions," Mr. Root added."As we enter 2013, we have a strong pipeline of
internally-developed new products and we remain committed to acquisitions or
alliances that will allow us to leverage our existing call points in
interventional cardiology, interventional radiology, electrophysiology, and
the vein market."

Conference Call & Webcast Information

Vascular Solutions will host a live webcast starting at 3:30 p.m., Central
Time today to discuss the information contained in this press release.The
live web cast may be accessed on the investor relations portion of the
company's web site at audio replay of the call will be
available until Tuesday, February 12, 2013, by dialing 888-203-1112 and
entering conference ID# 1446519.A recording of the call will also be archived
on the Company's web site,, until Tuesday, February 12, 2013.
During the conference call the Company may answer one or more questions
concerning business and financial developments and trends, the Company's view
on earnings forecasts and new product development and financial matters
affecting the Company, some of the responses to which may contain information
that has not been previously disclosed.

(In thousands, except per share data)
                                      Three Months       Twelve Months
                                       EndedDecember 31, EndedDecember 31,
                                      2012      2011      2012      2011
                                      (unaudited)        (note)
Product revenue                       $25,215   $22,009   $98,036   $86,589
License revenue                       89        88        350       3,367
Total revenue                          25,304    22,097    98,386    89,956
Product costs and operating expenses:                             
Cost of goods sold                     8,309     7,582     32,561    29,844
Research and development               2,907     2,699     11,870    10,240
Clinical and regulatory                1,032     1,005     4,358     4,332
Sales and marketing                    6,498     5,808     25,777    24,126
General and administrative             1,509     1,337     6,522     4,997
Amortization of purchased technology   361       210       1,393     831
and intangibles
Operating earnings                     4,688     3,456     15,905    15,586
Interest expense                       (3)      (3)      (13)     (13)
Interest income                        --      4        --      16
Foreign exchange gain/(loss)           11       (7)      --      110
Earnings before income tax             4,696    3,450    15,892   15,699
Income tax expense                     (1,645)  (1,291)  (5,983)  (5,960)
Net earnings                           $3,051    $2,159    $9,909    $9,739
Net earnings per common share - basic  $0.19     $0.13     $0.62     $0.59
Shares used in computing basic net     15,996    16,461    16,004    16,638
earnings per common share
Net earnings per common share -        $0.18     $0.13     $0.60     $0.57
Shares used in computing diluted net   16,603    16,981    16,456    17,184
earnings per common share

                                                    December 31, December 31,
                                                     2012         2011
                                                    (note)       (note)
Current assets:                                                  
Cash and cash equivalents                           $11,554     $13,726
Accounts receivable, net                            13,780       11,728
Inventories                                         13,737       14,788
Prepaid expenses and other                          2,670        1,624
Current portion of deferred tax assets              6,800        5,500
Total current assets                                48,541       47,366
Property, plant and equipment, net                   14,756       5,607
Goodwill                                             10,387       8,117
Intangible assets, net                               12,325       7,948
Deferred tax assets, net of current portion and      1,993        7,445
Total assets                                        $88,002     $76,483
LIABILITIES AND SHAREHOLDERS' EQUITY                             
Current liabilities:                                             
Total current liabilities                           $10,525     $8,716
Long-term deferred revenue and contingent                        
consideration, net                                   610          1,061
of current portion
Shareholders' equity:                                            
Total shareholders' equity                          76,867     66,706
Total liabilities and shareholders' equity          $88,002     $76,483

Note: Derived from the audited financial statements at that date.

(In thousands)
                                       Three Months Ended Twelve Months Ended
                                        December 31,       December 31,
                                       2012      2011     2012      2011
                                       (unaudited)        (note)
Net earnings                            $3,051    $2,159   $9,909    $9,739
Additional license revenue(1)           --        --       --        2,517
Amortization of intangibles(2)          361       210      1,393     831
Adjustment of                           136       --       232       586
Non-cash stock-based compensation       762       458      2,983     2,250
Note: Derived from the audited financial statements at that date.

(1)On July 6, 2011, King Pharmaceuticals, Inc. (King) notified the company
that it was terminating the development of the company's Thrombi-Paste
products and terminating efforts to obtain the surgical indication for the
company's Thrombi-Gel products.As a result of King making the decision not to
proceed, the company recognized additional license revenue of $2.5 million in
2011 which represents the remaining deferred license revenue originally
allocated to the Thrombi-Paste products and the surgical indication of the
Thrombi-Gel products as part of the agreements entered into with King in
2007.Starting in the fourth quarter of 2011, amortization of the deferred
revenue will be $51,000 per quarter for the remainder of the 10-year license
period, reflecting the remaining amortization allocated to the continuing
topical use indication of the Thrombi-Gel and Thrombi-Pad^® products.

(2)On April 30, 2010 the company acquired the assets related to the
SmartNeedle^® products from Escalon Vascular Access, Inc.On October 20, 2010
the company acquired the assets related to the snare and retrieval product
line business from Radius Medical Technologies, Inc.On January 27, 2011 the
company acquired the assets related to the Guardian^® hemostasis valves from
Zerusa Limited.On December 22, 2011 the company acquired the exclusive rights
from Northeast Scientific, Inc.'s reprocessing services for the ClosureFast
radiofrequency catheters in the U.S.On January 6, 2012 the company acquired
the intellectual property related to the Pronto^® extraction catheters from
Dr. Pedro Silva and his affiliates.On June 11, 2012 the company acquired the
assets related to the Accumed^TM wrist positioning splint products from
Accumed Systems, Inc.On August 16, 2012 the company acquired the assets
related to the Venture^® Wire Control Catheter products from St. Jude Medical,
Cardiology Division, Inc.On December 21, 2012 the company acquired the assets
related to the Teirstein Edge^TM and AngioAssist^TM docking station from
Shephard Scientific, Inc.As part of these license and asset purchases, the
company allocated $14.9 million to purchased technology and other intangibles
that is being amortized over a period of 9 – 11 years.

(3)On September 30, 2011, in accordance with accounting rules (ASC 805), the
company reduced by $586,000 its estimate of the future earn-out payments to be
made in connection with the October 2010 acquisition of the interventional
snare and retrieval business of Radius Medical, Inc. (Radius), which reduced
general and administrative expenses by the same amount.On March 31, 2012 the
Company further reduced by $96,000 its estimate of the future earn-out
payments to be made to Radius.On December 31, 2012 the Company further
reduced by $136,000 its estimate of the future earn-out payments to be made to
Radius.The Company may make additional adjustments in its estimate of the
earn-out in future periods as warranted by future sales results of the
interventional snare and retrieval products.

About Vascular Solutions

Vascular Solutions, Inc. is an innovative medical device company that focuses
on developing unique clinical solutions for coronary and peripheral vascular
procedures.The company's product line consists of more than 70 products and
services in three categories: catheter products, hemostat products and vein
products.Vascular Solutions delivers its products and services to
interventional cardiologists, interventional radiologists,
electrophysiologists and vein specialists through its direct U.S. sales force
and international independent distributor network.

All listed trademarks are the property of Vascular Solutions, Inc. with the
exception of ClosureFAST, which is a registered trademark of Tyco Healthcare
Group, LP.

The information in this press release contains forward-looking statements that
involve risks and uncertainties. Our actual results could differ materially
from those anticipated in these forward-looking statements. Important factors
that may cause such differences include those discussed in our Annual Report
on Form 10-K for the year ended December 31, 2012 and other recent filings
with the Securities and Exchange Commission. The risks and uncertainties
include, without limitation, risks associated with the need for adoption of
our new products, lack of sustained profitability, exposure to intellectual
property claims, significant variability in quarterly results, exposure to
possible product liability claims, the development of new products by others,
doing business in international markets, the availability of third party
reimbursement, and actions by the FDA.

              For further information, connect to

CONTACT: James Hennen, CFO
         Phil Nalbone, VP
         Vascular Solutions, Inc.
         (763) 656-4300
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