Vascular Solutions Reports First Quarter Results

Vascular Solutions Reports First Quarter Results

- Record revenue increases 10% to $26.1 million, led by strong sales growth in
both catheter products and vein products

- Adjusted earnings per share, excluding the impact of the
previously-announced Guardian product recall, increases 33% to $0.16, with
GAAP earnings per share increasing 8% to $0.13

- Maintaining 2013 revenue guidance of $106-$110 million, an increase of 10%
from 2012 at the midpoint of guidance

- Maintaining adjusted 2013 EPS guidance, excluding the impact of the Guardian
product recall, of $0.66-$0.70, an increase of 13% from 2012 at the midpoint
of guidance, corresponding to 2013 EPS guidance of $0.62-$0.66 on a GAAP basis

MINNEAPOLIS, April 23, 2013 (GLOBE NEWSWIRE) -- Vascular Solutions, Inc.
(Nasdaq: VASC) today reported financial results for the first quarter ended
March 31, 2013. Net revenue increased 10% to a record quarterly level of $26.1
million compared to $23.8 million in the first quarter of 2012. The company's
revenue guidance range for the quarter was $26.0 million to $27.0 million.

U.S. product sales increased 10% to $21.9 million compared to $19.9 million in
the year-ago first quarter, while international product sales increased 9% to
$4.1 million compared to $3.8 million in the year-ago first quarter.

Gross margin was 66.6% in the first quarter, a decrease from 67.1% in the
first quarter of 2012 and a decrease on a sequential basis from 67.2% in the
fourth quarter of 2012. Costs incurred in connection with the
previously-announced recall of the Guardian^® hemostasis valves in the first
quarter were $550,000, equating to a 210 basis point reduction in the overall
gross margin. On an adjusted basis, excluding the impact of the Guardian
product recall, gross margin was 68.7% in the first quarter. Sales of the
Guardian hemostasis valves are expected to recommence in June 2013 with no
additional costs expected to be incurred as a result of the recall. Vascular
Solutions expects gross margin to be between 68% and 69% in the second quarter
of 2013.

Operating income in the first quarter, adjusted to exclude the impact of the
Guardian product recall, was $3.7 million, representing an operating margin of
13.9%.This was an increase of 18% from $3.1 million in operating income and a
13.1% operating margin in the first quarter of 2012. On a GAAP basis,
operating income for the first quarter of 2013 was $2.9 million, representing
an operating margin of 11.1%. Operating income in the first quarter of 2013
was negatively impacted by $317,000 in additional taxes resulting from the new
U.S. medical device excise tax that was effective January 1, 2013. For the
remainder of 2013, Vascular Solutions expects operating margins to be between
16% and 17%.

Adjusted EPS in the first quarter was $0.16, an increase of 33% from $0.12 in
the first quarter of 2012.On a GAAP basis, including the costs associated
with the Guardian product recall, EPS in the first quarter of 2013 was
$0.13.The company's guidance called for first quarter EPS of between $0.15
and $0.16.

"Vascular Solutions continues to grow sales and earnings in a challenging
medical device market through continuous new product innovation, a strategy
which we maintained during the first quarter," said Howard Root, Chief
Executive Officer of Vascular Solutions. "The underlying strength of our
operating performance in the first quarter was masked to a degree by the
impact of the recall of our Guardian hemostasis valves, which we estimate
resulted in $350,000 in lost revenue in addition to $550,000 in recall
expenses.However, we expect to correct this situation in the second quarter
and resume shipments of Guardian products in June without additional expense,
and we are very excited about the second quarter's global re-launch of the
Venture^® catheter that we acquired last year from St. Jude Medical.With
approximately ten additional new products in the pipeline scheduled for U.S.
launch yet this year and 40 total new products in our development pipeline, we
remain optimistic about our revenue and earnings growth for 2013 and beyond,"
Mr. Root added.

First Quarter Revenue by Product Line

Net sales of catheter products, the company's largest product line, were $16.6
million during the first quarter of 2013, an increase of 12% compared to $14.9
million in the first quarter of 2012.

Within the catheter products category, first quarter sales of Pronto^®
aspiration catheters were $5.1 million, stable on both a sequential and
year-over-year basis."This marked the sixth consecutive quarter of steady
results for our Pronto catheter business, and we are pleased with our
performance in a worldwide aspiration catheter market that remains challenging
due to competitive pricing pressures," Mr. Root said. "We are maintaining our
leading share in 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 $4.8 million in the first quarter, an
increase of 48% from the $3.2 million in the year-ago quarter and an increase
of 16% sequentially from the $4.1 million in the fourth quarter. "The
GuideLiner product line continues to experience rapid adoption 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. "The
GuideLiner product line is now in its fourth year on the market and is very
close to emerging as the highest-selling product in our broad portfolio of
more than 70 products."

Other catheter products that contributed significantly to the year-over-year
sales increase during the first quarter were the Langston^® dual-lumen
pressure measurement catheters, which grew 17%; the Twin-Pass^® dual-access
catheters, which grew 19%; specialty guidewires for interventional procedures,
which grew 32%; and the SuperCross™ microcatheters, which grew 51%.As a
result of the recall, sales of Guardian products and related inflation device
decreased 50% to $350,000 in the first quarter.

Net sales of hemostat products (mainly consisting of D-Stat^® Dry, D-Stat
Flowable and radial products) were $5.8 million in the first quarter, a
decrease of 2% from the year-earlier $5.9 million. "We have made excellent
progress in the early stages of our new product launches in the fast-growing
radial artery catheterization market, and we continue to expect this effort to
restore growth to our overall hemostat products category during 2013," Mr.
Root said."Balancing this growth, the femoral artery hemostat patch market
remains intensely competitive, but we have maintained our position of market
leadership because of the clinical superiority of our thrombin-based D-Stat
Dry and Thrombix^® products."

In the vein products category, first quarter net revenues increased 21% to
$3.6 million from $2.9 million in the year-ago quarter. Vein product revenue
during the first quarter included $1.5 million from the reprocessing service
for ClosureFAST^® radiofrequency catheters, compared to approximately $0.5
million in reprocessing revenue in the year-ago first quarter. The ClosureFAST
reprocessing service was launched on January 16, 2012. "Our reprocessing
partner, Northeast Scientific, has now successfully reprocessed more than
20,000 ClosureFAST vein ablation catheters, and that volume is a strong
indication of the reliability and effectiveness of this reprocessing program
that is allowing vein clinics to cut costs and reduce medical waste," Mr. Root
said. "We expect significant continued growth in our ClosureFAST reprocessing
service in 2013, and we also intend to benefit by selling more ancillary
products for vein therapy procedures to our expanded vein clinic customer

Financial Guidance

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

Also for 2013, Vascular Solutions continues to expect net earnings, adjusted
to exclude the effects of the Guardian product recall, of between $0.66 and
$0.70 per fully diluted share, which at the mid-point represents growth of 13%
from $0.60 in 2012.On a GAAP basis, this adjusted earnings guidance
corresponds to net earnings of between $0.62 and $0.66 per fully diluted
share. Both the adjusted and GAAP earnings per share guidance for 2013 include
between $1.3 million and $1.5 million for the U.S. medical device excise tax,
and an assumed 36% effective income tax rate.

For the second quarter of 2013, Vascular Solutions is providing guidance for
net revenue of between $26.5 million and $27.5 million, which at the mid-point
would represent growth of 9% from $24.7 million in the second quarter of 2012.
Net earnings for the second quarter of 2013 are projected to be between $0.16
and $0.17 per fully diluted share, representing an increase of 12% at the
mid-point compared to $0.15 in the second quarter of 2012. The company's net
earnings guidance for the second quarter of 2013 includes $0.35 million for
the U.S. medical device excise tax, and an assumed 38% effective income tax

Cash Flow and Balance Sheet Highlights

Vascular Solutions ended the first quarter of 2013 with $14.1 million in cash
and cash equivalents, up from $11.6 million at the end of the December quarter
of 2012. During the first quarter, the company generated $4.9 million in cash
from operations and used cash of approximately $1.8 million on capital
expenditures and $1.1 million to purchase shares that vested under outstanding
restricted stock awards to satisfy income tax withholding requirements.

"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 capital investments that are necessary to support our
future growth objectives," Mr. Root said."We have a strong pipeline of
internally-developed new products in development 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, April 30, 2013, by dialing 888-203-1112 and entering
conference ID# 4948641.A recording of the call will also be archived on the
Company's web site,, until Tuesday, April 30, 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 Ended
                                                          March 31,
                                                          2013      2012
Product revenue                                           $25,977   $23,706
License revenue                                           87        87
Total revenue                                              26,064    23,793
Product costs and operating expenses:                               
Cost of goods sold                                         8,697     7,838
Research and development                                   3,405     3,074
Clinical and regulatory                                    1,163     1,132
Sales and marketing                                        6,971     6,601
General and administrative                                 2,240     1,686
Medical device excise taxes                               317       --
Amortization of purchased technologyand intangibles       367       335
Operating earnings                                         2,904     3,127
Interest expense                                           (3)       (3)
Foreign exchange gain/(loss)                               (13)      5
Earnings before income tax                                 2,888     3,129
Income tax expense                                         (763)     (1,220)
Net earnings                                               $2,125    $1,909
Net earnings per common share - basic                      $0.13     $0.12
Shares used in computing basic net earnings per common     16,043    16,004
Net earnings per common share - diluted                    $0.13     $0.12
Shares used in computing diluted net earnings per common   16,720    16,349

(In thousands)
                                                     March 31,   December 31,
                                                     2013        2012
                                                     (unaudited) (note)
Current assets:                                                  
Cash and cash equivalents                             $14,053     $11,554
Accounts receivable, net                             14,465      13,780
Inventories                                           13,374      13,737
Prepaid expenses and other                            2,637       2,670
Current portion of deferred tax assets                6,800       6,800
Total current assets                                  51,329      48,541
Property, plant and equipment, net                    15,978      14,756
Goodwill                                              10,313      10,387
Intangible assets, net                                11,913      12,325
Deferred tax assets, net of current portion and       2,340       1,993
Total assets                                          $91,873     $88,002
LIABILITIES AND SHAREHOLDERS' EQUITY                             
Current liabilities:                                             
Total current liabilities                             $12,039     $10,525
Long-term deferred revenue and contingent             559         610
consideration, net of current portion
Shareholders' equity:                                            
Total shareholders' equity                            79,275    76,867
Total liabilities and shareholders' equity            $91,873     $88,002
Note: Derived from the audited financial statements              
at that date.

VASCULAR SOLUTIONS, INC.                                                   
(Unaudited, in thousands except per-share data and percentages)            
                     Three Months       Guardian                       
                     March 31, 2013     Recall (a)           Non-GAAP    
                                       Adjustments          Adjusted    
Revenue               $26,064            $350           (b)    $26,414     
Cost of goods sold    8,697              (425)          (c)    8,272       
Gross profit          17,367             775                  18,142      
Operating earnings    2,904              775                  3,679       
Gross margin          66.6%                                  68.7%       
Operating margin      11.1%                                  13.9%       
EPS - current period  $0.13              $0.03          (d)    $0.16       
EPS - full year       $0.62 to $0.66     $0.04          (e)    $0.66 to    
guidance                                                       $0.70
(a)On February 28, 2013, Vascular Solutions Zerusa Ltd., a subsidiary of
Vascular Solutions, Inc., initiated a recall of its Guardian hemostasis
valves.The Company expects to resume shipping Guardian hemostasis valves in
June 2013.The Company estimates reduced Guardian product revenue of $350,000
for the first quarter of 2013 and $850,000 for the full year as a result of
the product being off the market between those dates. The Company recorded
costs of approximately $550,000 related to scrap, product returns, and freight
associated with recalling the product, all of which was included as additional
cost of goods sold in the first quarter of 2013.
(b) Estimated revenue lost due to                                       
Guardian product recall
(c) $550,000 of Guardian product recall costs less estimated
cost of goods sold reduction of $125,000 due to the lost                  
(d) Reflecting $350,000 of lost revenue and $550,000 of
Guardian product recall costs, after tax at an assumed rate of            
(e)Reflecting $850,000 of lost revenue and $550,000 of
Guardian product recall costs, after tax at an assumed rate of            

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 VNUS Medical
Technologies, Inc.

Safe Harbor for Forward-Looking Statements

The information in this press release contains forward-looking statements that
involve risks and uncertainties. Those statements include expectation about
our future revenues, gross margin, operating margin, Guardian products recall
costs, lost Guardian products revenue, legal expenses, non-cash stock-based
compensation expense, amortization of intangibles, U.S. medical device excise
tax, income tax rate and earnings per share; expectations about resumption of
Guardian products shipments and the re-launch of the Venture catheter;
expected growth in our overall hemostat products category; and expectations
about growth in our ClosureFAST reprocessing service and sales of ancillary
products to our vein clinic customer base. 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, the mix of our revenues between products we manufacture
and sell in the United States, products we sell internationally, service
reviews and sales of purchased finished goods, and actions by the FDA.

Use of Non-GAAP Financial Information

In addition to reporting financial results in accordance with generally
accepted accounting principles, or GAAP, we are reporting non-GAAP financial
results including revenues, gross margin, operating margin and earnings per
share adjusted for the effects of the Guardian product recall. We believe that
these non-GAAP measures provide meaningful insight to investors by adjusting
for unusual and unpredictable events and allowing investors to evaluate our
financial performance without the effects of such events.We use these
non-GAAP measures to assess our operating performance and to compare results
between periods. The method we use to produce non-GAAP results is not in
accordance with GAAP and may differ from the methods used by other companies.
Non-GAAP results should not be regarded as a substitute for corresponding GAAP
measures but instead should be utilized as a supplemental measure of operating
performance in evaluating our business. Non-GAAP measures do have limitations
in that they do not reflect certain items that may have a material impact upon
our reported financial results. As such, these non-GAAP measures presented
should be viewed in conjunction with both our financial statements prepared in
accordance with GAAP and the reconciliation of the supplemental non-GAAP
financial measures to the comparable GAAP results provided for the specific
period presented, which is attached to this release.

For further information, connect to

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