Thoratec (NASDAQ: THOR) reported its second quarter earnings on Thursday. Shares of the company are down more than 28 percent.
Below are some key highlights:
• Thoratec reported revenues of $118.1 million and non-GAAP earnings per diluted share of $0.43 during the second quarter of 2014.
• We are clearly disappointed with this revenue performance and our guidance provision.
• At the same time, we remain confident in the positive outlook for our core market and the HeartMate franchise.
• Furthermore, the FDA recently approved the addition of information on both the HeartMate II DT post-approval study
• Next, increased surgical preference for less invasive VAD implantation is impacting growth in our business, particularly outside the U.S. as many surgeons in Europe have adopted these approaches.
• In addition to the less invasive trend, our field team in Europe has experienced significant turnover at both the customer facing and leadership levels.
• Outside of Europe, international revenues were also negatively affected by the expected reduction of sales in Japan.
• We did realize approximately $1.5 million of HeartMate revenue in Japan during the quarter, an expected reduction compared with the significant first quarter stocking activity.
• In the longer term, we continue to believe Japan could become one of the largest international VAD markets.
• The third primary factor impacting our outlook is the slowdown in growth among our smaller open heart centers in the U.S.
• In terms of geographic breakdown, we reported revenues of $94.2 million in the U.S., a decline of 5 percent compared with the prior year, while international revenues declined to $23.9 million compared with $31.7 million last year.
• Non-GAAP gross margin for the quarter was 72.4 percent, compared with 70.4 percent in the second quarter of 2013.
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