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Volcano Announces It Will End Distribution Agreement with Fukuda; Transition Enhances Company's Direct Selling Program in Japan
Date:9/21/2010

SAN DIEGO, Sept. 21 /PRNewswire-FirstCall/ -- Volcano Corporation (Nasdaq: VOLC), a leading developer and manufacturer of precision intravascular therapy guidance tools designed to enhance the diagnosis and treatment of coronary and peripheral vascular disease, said today it has reached an agreement with Fukuda Desnhi Co., Ltd. to end its distribution agreement in Japan.

This transaction follows the successful transition of its distribution from Goodman to direct in Japan in July 2009. Fukuda, which distributes Volcano IVUS offerings to the cardiology market only, currently serves approximately 180 centers and accounts for approximately 20 percent of Volcano's revenues in Japan—and approximately five percent of the company's total revenues. The transition will take effect on December 1, 2010.

"Over the past 14 months, we have demonstrated the success of our expanded direct sales effort in Japan through growing revenues and increased market share. Upon completion of the Fukuda transition, we will be directly addressing nearly 95 percent of our total revenues in Japan, where we have a direct sales force of more than 50 and a total work force of more than 100," said Scott Huennekens, president and chief executive officer of Volcano.

"As was the case with the Goodman transition, we expect this transaction to benefit us in several ways. We will receive direct pricing, which is currently approximately 30 percent higher than distributor pricing, as well as potentially realize increased gross margin and operating income on these revenues. In addition, we anticipate  additional opportunities to further our market share strategy as we leverage our growing infrastructure in Japan—not only with our IVUS offering, but also distributed products and those in our pipeline that we will begin introducing in Japan next year," he continued.

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SOURCE Volcano Corporation
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