The company’s revenue increased by 16% compared with the first quarter of 2008 on a constant currency basis. It also reported vascular intervention revenue rose 11% to $15.3 million, lead management revenue increased 29% to $8.2 million, laser revenue declined 12% to $1.5 million, and service and other revenue increased 14% to $2.4 million, all compared with the first quarter of 2008. Vascular intervention sales include three product lines atherectomy, which decreased 12%; crossing solutions, which increased 35%; and thrombectomy, which totaled $1.4 million of sales of QuickCat and ThromCat products acquired from Kensey Nash Corporation on May 31, 2008.

On a geographic basis, revenue in the US was $23.5 million during the quarter ended March 31, 2009 and increased 11% from the prior year first quarter. International revenue totaled $3.8 million, which represented an increase of 47% from the first quarter of last year.

The worldwide installed base of lasers increased to 867 as of March 31, 2009 (683 in the United States), which included net laser placements of 17 units in the first quarter of 2009, compared with 24 net placements in the first quarter of 2008.

“Our first quarter results demonstrate the strength of our business and the increasing importance of product and geographical diversification. I am pleased that we experienced revenue growth in vascular intervention and lead management in the United States and internationally,” said Emile J. Geisenheimer, chairman, president and chief executive officer. “We are on track with our financial objectives and strategic initiatives for 2009 and look forward to continued progress driven by new product introductions and improving sales organization productivity later this year.”

The pre-tax loss for the first quarter of 2009 was $2.9 million, compared with a pre-tax loss of $685,000 for the first quarter of 2008. The pre-tax loss during the first quarter of 2009 includes legal and related costs of approximately $1.4 million associated with the federal investigation announced on September 4, 2008. Given the company’s significant historical net operating losses that are available to offset future taxable income, any income tax expense or benefit is a non-cash item. As a result, management believes that pre-tax income or loss is the most appropriate measure of its operating performance.

2009 Outlook

The company continues to expect revenue growth during 2009 in both the vascular intervention and lead management business units. The year-over-year percentage growth rate in vascular intervention revenue is anticipated to be in the single digit range through at least the first half of 2009. Spectranetics is targeting increased vascular intervention revenue growth in the second half of 2009, which will depend primarily on new product introductions, most notably the next-generation TURBO-Booster. Lead management revenue growth in 2009 on a year-over-year percentage basis is anticipated to be in the mid-teens, driven by continuing favorable market dynamics and our expanded sales organization. As the company continues to focus on increasing revenue in existing accounts, net laser placements are anticipated to decline from 2008 levels.

Gross margin is expected to decrease during 2009 as compared with the 72% gross margin in 2008. The extent of the decrease depends primarily on product mix and the potential for unabsorbed manufacturing costs associated with reduced laser system unit volumes.

Costs associated with the federal investigation cannot be reliably estimated; therefore, specific guidance will not be provided in this area. Management expects to incur a pre-tax loss for the full year.

Spectranetics’ 2009 initiatives are aimed at further enhancing the company’s sales and marketing footprint, expanding its product offering, and improving sales productivity. In particular, the company intends to:

Add up to 15 individuals to the US field sales organization during 2009, increasing the total headcount in the field sales organization to nearly 130.

Additionally, Spectranetics anticipates adding personnel to both vascular intervention and lead management marketing to support physician training, new product launches and other marketing programs;

During the quarter ended March 31, 2009, a total of nine individuals were hired into our U.S. field sales organization, which now totals 121 sales professionals, and includes 83 in vascular intervention and 38 in lead management;

Continue sales growth internationally by extending our geographic market reach from 34 countries currently to 40 by the end of 2009. Additionally, Spectranetics expects to add up to 10 individuals to the international sales and marketing organization, primarily to support the company’s direct markets in Western Europe;

Increase investment in research and development to accelerate new product innovation in 2009 and beyond;

Focus on improving sales organization productivity, as measured by increasing sales per person and sales per account;

Further enhance compliance programs and resources, reflecting the company’s commitment to high standards of regulatory compliance. Spectranetics incurred $0.6 million of costs in this area during the quarter ended March 31, 2009, which are included within selling, general and administrative expenses. Although the company anticipated these costs would be front-end loaded, it is possible that these costs exceed the previously announced estimate of $1.0 million related to this initiative for the year ended December 31, 2009.