Yesterday, medical-device maker FoxHollow Technologies (NASDAQ:FOXH) reported its fourth-quarter and full-year financial performance. Results were mixed, although the stock was trading down 4% after hours on Thursday. The Redwood City-based company announced a 6% revenue increase from the year-ago quarter, and an increase in gross margins on product revenue from 70% to 74%.

FoxHollow's product revenue was ultimately unable to overcome a combination of charges relating to stock-based compensation, lease terminations, and other SG&A expenses. All those factors drove the company to report a net loss of $0.18 per share, versus a net loss of $0.01 in the prior-year quarter.

Despite several positive recent developments, FoxHollow still has a long road ahead. Management's 2007 guidance for EPS in the range of $0.00-$0.20, and revenues in the range of $205 million-$215 million, lags analysts' expectations for EPS of $0.48 on $213 million in revenue.

Last month, FoxHollow entered into a collaborative agreement with eV3 (NASDAQ:EVVV) to seek approval for specialized devices used in the treatment of peripheral artery disease (PAD). The agreement will give FoxHollow exclusive rights to market the devices in the United States. The company also has announced plans to conduct a new clinical trial that will compare the efficacy and safety of its SilverHawk catheter system against another mainstream therapy for PAD. The company expects to have the trial design completed by the end of the first quarter.

Aside from an accumulated deficit, FoxHollow maintains a very strong balance sheet, with no long-term debt and an ample amount of cash. Product revenues increased by more than 50% for the company's full-year results, and FoxHollow predicts another year of double-digit sales growth. FoxHollow's SilverHawk is immensely profitable, targeting a large PAD market; the condition is estimated to afflict approximately 12 million people nationwide. Even megacap pharmaceutical Sanofi-Aventis (NYSE:SNY) is looking to cash in on this market, with a treatment option currently in phase 2 studies. Shareholders are hoping that such promise will ultimately translate into capital gains in the quarters ahead.

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Fool contributor Billy Fisher does not own shares of any of the companies mentioned.