1Q Visicu revenue nearly doubles

$314,000 earnings posted for quarter

May 02, 2006|By M. WILLIAM SALGANIK | M. WILLIAM SALGANIK,SUN REPORTER

Filing its first financial report as a public company, Visicu Inc. reported yesterday that its revenue nearly doubled in the three months that ended March 31, giving the company a positive bottom line.

The Baltimore company, which develops remote monitoring systems for hospital intensive care units, posted earnings of $314,000, or a penny per diluted share, for the quarter. That compared with a loss of $1 million in the year-ago quarter, which would have been equivalent to about 40 cents a share.

Visicu went public last month, raising $100 million on the sale of 6 million shares at $16 a share.

Company filings tied to the offering showed that it was starting to move into the black with its first small net profits in the third and fourth quarters of 2005.

Shares, which shot up 55 percent in the first day of trading April 5, closed yesterday at $24.24, up 44 cents. The earnings report came after the market's close yesterday.

Revenue, which Visicu gets from initial licensing fees and service fees over the life of a three-year contract, vaulted 91 percent to $6.7 million, from $3.5 million, as the company brought more hospital clients on line.

For the year, the company said it expected revenue 53 percent to 56 percent above last year's $18.4 million.

That would mean revenue of $28.1 to $28.6 million for this year.

Visicu's revenue was just $5.5 million in 2004 and $2.2 million in 2003. From a single customer in 2003, it has grown to 35 clients which now use or have contracted for systems to cover more than 4,000 beds in 300 ICUs.

"The market awareness and momentum are building as we are expanding our customer base," Frank Sample, chairman and chief executive officer, told analysts on a conference call yesterday.

In the call, company officials said a good way to gauge Visicu's results is not just from net income, which reflects the cost of stock compensation and other non-cash items, but by operating income. Viewed without the non-cash items, operating income was $1 million for the quarter, compared with an operating loss of $935,000 in the first quarter of 2005.

Visicu, started in 1998 by two Johns Hopkins intensive care specialists, creates systems that allow one doctor to monitor several intensive care units, and up to 100 patients, at once. Most of the company's clients use the system at night to supplement the direct presence of an "intensivist" during the day. On the conference call, Dr. Brian Rosenfeld, one of the founders who is executive vice president and chief medical officer, said, "We're seeing mortality reductions all across our facilities."

Sample told analysts that the company wasn't in a hurry to spend the $100 million generated by its initial public offering. Potential clients, he said, want assurance that Visicu will be around to support the system, and solid cash reserves help do that. He also said the company would consider opportunities for "small technological acquisitions" and possibly expanding its products.

Already, company officials said, some hospitals are trying the units to monitor other types of patients, such as those recovering from anesthesia. However, Sample told the analysts, in health technology, "a lot of companies get in and start expanding more rapidly than they're ready," and Visicu wanted to be sure it didn't lose focus by adding product lines too rapidly.

bill.salganik@baltsun.com

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