Vascular Solutions, Inc. (Nasdaq: VASC) today reported financial results for the first quarter ended March 31, 2011. Net revenue for the first quarter was $21.3 million, at the high end of the guidance previously provided by the company and an increase of 17% from the first quarter of 2010. U.S. net revenue increased by 15% while international net revenue increased by 27% from the first quarter of 2010.
Net earnings for the first quarter was $1.7 million ($0.10 per diluted share), also at the high end of the company’s guidance, compared to net earnings for the first quarter of 2010 of $3.5 million ($0.21 per diluted share). In the first quarter of 2010 the company recorded a $3.5 million litigation gain ($0.13 per diluted share) as the result of payment received in its litigation with Marine Polymer Technologies, Inc. Excluding the litigation gain, net earnings in the first quarter of 2011 increased by 35% over the first quarter of 2010.
Gross margin across all product lines was 65.7% in the first quarter of 2011, down from 66.7% in the first quarter of 2010 but essentially equivalent to the fourth quarter of 2010. Gross margin fluctuates based on variations in the sales mix in the company’s products and markets each quarter, with higher international sales through the company’s independent distributor network in the first quarter the primary reason for the decline in gross margin compared to the prior year. Operating margin increased to 13% in the first quarter compared to 11% in the first quarter of 2010 (excluding the litigation gain), demonstrating a further leveraging of the company’s expenses as sales increase.
Commenting on the results, Vascular Solutions’ Chief Executive Officer Howard Root stated: “The first quarter provided continued validation of the success of Vascular Solutions’ business plan and focused execution in driving growth on both the top and the bottom line. With these first quarter results and a full pipeline of internally-generated new products in development, as well as further acquisition and distribution opportunities available to us, we believe that our business strategy will continue to deliver similar or better results for the foreseeable future without any market restrictions or growth ceilings.”