Piper Jaffray Comments On Volcano Corp. Following Japan Disruption

Japan has been an important piece of the growth story at Volcano Corporation VOLC over the past couple years. In fall of 2009 VOLC took over direct sales from its largest distributor in Japan and then in the fall of 2010 it converted its next largest Japanese distributor to direct. VOLC ended 2010 with ~60 direct sales reps in Japan and roughly 95% of its Japan revenues coming through these direct reps.

VOLC announced on Friday that its employees/families and operations were safe, and not directly impacted by the earthquake. Tokyo was open for business on Monday, by all reports that were received; unknown on other large cities.

With 26-28% of revenues derived from Japan, it seems reasonable to assume there will be some disruption. How much is uncertain right now, but Piper Jaffray is leaning toward minimal. This seems Katrina-like in Piper's opinion—disaster, aftermath, lots of media attention; but in the long run it was essentially just Louisiana, and the other 49 states were "fine".

Piper Jaffray has an Overweight rating on VOLC

VOLC closed Monday at $25.96