Advanced Medical Optics Announces First-Quarter 2008 Results.* $0.11 in GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ; Combined Net Effect of Restructuring Charges and Non-Operating Gains and Losses Lowered GAAP EPS by Estimated $0.11 * Cataract Sales Up 8.2% on Foreign Currency, Strong Tecnis([R]) IOL IOL Intraocular lens, see there , Phacoemulsification phacoemulsification /phaco·emul·si·fi·ca·tion/ (-e-mul?si-fi-ka´shun) a method of cataract extraction in which the lens is fragmented by ultrasonic vibrations and simultaneously irrigated and aspirated. and Viscoelastics Sales * Pro Forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma Refractive refractive capacity to refract light. refractive error a difference between the focal length of the cornea and lens, and the length of the eye, resulting in myopia or hyperopia. Sales Up 3.1% on International Excimer Procedure and System Sales and Global Femtosecond Penetration * Eye Care Sales Virtually Unchanged Versus Prior Year; Multipurpose Solution Sales Up 26.9% Sequentially SANTA ANA, Calif. -- Advanced Medical Optics Advanced Medical Optics, Inc., (NYSE: EYE) (known as AMO) is a global medical device leader focused on the discovery and delivery of innovative vision technologies that optimize the quality of life for people of all ages. , Inc. (AMO AMO - America's Multimedia Online ) (NYSE NYSE See: New York Stock Exchange :EYE) today announced financial results for the first quarter of 2008. First-quarter net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight rose 20.7% to $303.7 million, including a 6.5% increase related to foreign currency exchange rate effects. On a pro forma basis, AMO's first-quarter sales rose 4.4%, reflecting a comparison that includes the IntraLase performance as if this acquisition had occurred at the beginning of all periods presented. AMO's first-quarter net earnings under Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP) were $6.9 million, or $0.11 per diluted share, compared to $12.1 million, or $0.20 per diluted share in the same period last year. First-quarter 2008 results included the following pre-tax items, which combined to reduce net earnings per diluted share by an estimated $0.11: * $11.9 million in restructuring charges associated with manufacturing relocation, workforce reductions and facility consolidation initiatives; * $3.3 million gain on the sale of an investment; and * $2.1 million unrealized loss Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on derivative instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. . "Our first-quarter results reflect our focus on delivering sustainable, profitable growth and cash flow," said Jim Mazzo, AMO chairman and chief executive officer. "Our global refractive business achieved growth despite a soft domestic LASIK LASIK laser-assisted in-situ keratomileusis. LA·SIK n. Eye surgery in which the surface of the cornea is reshaped using a laser, performed to correct certain refractive disorders such as myopia. market brought on by weak economic conditions. We launched AMO's first-ever artificial tear and prepared to introduce exciting new innovations in our refractive and cataract businesses in future quarters. Our multipurpose solution franchise continued to recover, posting sequential sales and market share gains, and helping to return our eye care business to profitability." First-Quarter Performance by Business Below are sales highlights of first-quarter 2008 results. Growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. reflect comparisons to the same period in 2007 and include foreign currency impacts. Pro forma growth rates reflect comparisons that include IntraLase performance as if this acquisition had occurred at the beginning of all periods presented. The summary below also reflects changes made to the company's sales breakdown by business. Under this new breakdown, refractive IOL sales for the first quarter of 2008 and 2007 appear under the Refractive heading in the "Procedures, implants and related" category to reflect the way the company currently runs its business. For more information, see the Global Sales table accompanying this release. Cataract sales rose 8.2% to $124.3 million. * Total monofocal intraocular lens Intraocular lens Lens made of silicone or plastic placed within the eye; can be corrective. Mentioned in: Cataract Surgery (IOL) sales rose 3.7% to $65.5 million. * Sales of the company's flagship Tecnis([R]) portfolio of monofocal IOLs rose 31.1% and represented 61.3% of total monofocal IOL sales in the quarter. * Viscoelastic/Phacoemulsification sales rose 14.9% to $54.8 million, primarily on increased sales of the company's WhiteStar Signature(TM) and Sovereign([R]) Compact systems, phacoemulsification packs and Healon 5[R] viscoelastic Adj. 1. viscoelastic - having viscous as well as elastic properties natural philosophy, physics - the science of matter and energy and their interactions; "his favorite subject was physics" . Refractive sales rose 55.5% to $120.5 million. Pro forma refractive sales rose 3.1%. * Procedures, implants and related sales rose 46% to $85.4 million, or 3.9% on a pro forma basis as softness in the U.S. excimer and refractive IOL market was offset by increased global penetration of the company's IntraLase technology, and international growth of all its refractive procedures and implants. * AMO's U.S. excimer procedure volumes declined approximately 10% in the first quarter and were virtually unchanged for the trailing 12 months ended March 28, 2008. For the trailing 12 months ended March 28, 2008, the company's U.S. custom mix was 66%; the first-quarter custom mix was 69%, compared to 64% in the year-ago quarter. * AMO's U.S. femtosecond procedure volumes rose approximately 16% in the first quarter and 29.8% for the trailing 12 months ended March 28, 2008, on a pro forma basis. * AMO's international procedure, implant and related sales were $27.8 million, up 200%, or 48.5% on a pro forma basis. * System sales rose 158.1%, or 19.4% on a pro forma basis, to $26.8 million. Unit placements of the VISX([R])Star S4 IR([R]) excimer laser A gas laser in which a very short electrical pulse excites a mixture containing a halogen such as fluorine and a rare gas such as argon or krypton. It produces a brief, intense pulse of ultraviolet light. rose 10.0%. IntraLase([R]) FS laser placements rose 35.4% on a pro forma basis. The increases reflect continued demand for the company's dual platform worldwide. Eye Care sales declined 0.5% to $59.0 million. * Multipurpose solution sales declined 24.6%, reflecting recall-related impacts. On a sequential basis, multipurpose solution sales rose 26.9%, as the company re-entered the global market with its Complete([R]) Multipurpose Solution Easy Rub(TM) formula. * Hydrogen peroxide hydrogen peroxide, chemical compound, H2O2, a colorless, syrupy liquid that is a strong oxidizing agent and, in water solution, a weak acid. It is miscible with cold water and is soluble in alcohol and ether. sales rose 27.1% to $17.6 million, reflecting continued demand for AMO products in international markets. * Other eye care product sales grew 37.0%, due in part to the U.S. launch of blink([R]) Tears, AMO's first-ever over-the-counter dry eye product. Restructuring Update In February 2008, the company announced plans to reduce fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). in order to enhance its global competitiveness, operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. and cash flow. This plan includes a net workforce reduction of approximately 4% and consolidation of certain operations to improve facility utilization. In addition, in December 2007, the company announced plans to consolidate its equipment manufacturing into its Milpitas, California facility and relocate its femtosecond patient interface manufacturing to its existing facility in Puerto Rico. Implementation of these plans proceeded on schedule during the first quarter. As a result of all of these actions, the company expects to incur one-time charges in 2008 of between $36 million and $43 million, the vast majority of which will be in cash. The company incurred $11.9 million of these charges in the first quarter of 2008. In 2008, the company expects these actions to deliver approximately $4 million to $7 million in savings. The company expects these actions, when fully implemented, to deliver between $12 million and $16 million in annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. savings. Additional First-Quarter Highlights [TABLE OMITTED] Financial Guidance AMO affirms its guidance for 2008 of revenues in the range of $1.22 billion to $1.24 billion and adjusted EPS in the range of $1.25 to $1.45. The company's adjusted EPS guidance includes acquisition-related intangible amortization, which is estimated to be approximately $70 million, or about $0.70 per share on an after-tax basis After-tax basis The comparison basis used to analyze the net after-tax returns on a corporate taxable bond and a municipal tax-free bond. . AMO's adjusted EPS guidance excludes the impact of charges and write-offs associated with acquisitions, restructurings, recapitalizations, reorganizations, unrealized gains or losses on derivative instruments and other periodic or one-time charges or gains. For more information, see the "Use of Non-GAAP Measures" section later in this release. Live Web Cast & Audio Replay AMO will host a live web cast to discuss this release today at 10:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . To participate and download accompanying slides, visit www.amo-inc.com. An audio replay will be available at approximately noon EDT today and will continue through midnight EDT on May 15 at 800-642-1687 (Passcode 44003989) or by visiting www.amo-inc.com. About Advanced Medical Optics (AMO) AMO is focused on providing the full range of advanced refractive technologies and support to help eye care professionals deliver optimal vision and lifestyle experiences to patients of all ages. Products in the cataract line include monofocal intraocular lenses (IOLs), phacoemulsification systems, viscoelastics, and related products used in ocular surgery. AMO owns or has the rights to such product brands as Tecnis([R]), Clariflex([R]) and Sensar([R]) IOLs; Sovereign([R]), Sovereign([R]) Compact and WhiteStar Signature([TM]) phacoemulsification systems with WhiteStar([R]) technology; Healon([R]) viscoelastics and the Baerveldt([R])glaucoma glaucoma (glôkō`mə), ocular disorder characterized by pressure within the eyeball caused by an excessive amount of aqueous humor (the fluid substance filling the eyeball). shunt To divert, switch or bypass. . Products in the refractive line include wavefront Noun 1. wavefront - (physics) an imaginary surface joining all points in space that are reached at the same instant by a wave propagating through a medium wave front diagnostic devices, femtosecond lasers and associated patient interface devices; excimer laser vision correction systems and treatment cards, and refractive implants. AMO brands in the refractive business include iDesign[TM], iFS[TM], Star S4 IR([R]), WaveScan Wavefront([R]), Advanced CustomVue([TM]), IntraLase([R]), IntraLasik([R]) and ReZoom([R]), Tecnis([R]) Multifocal multifocal /mul·ti·fo·cal/ (mul?te-fo´k'l) arising from or pertaining to many foci. mul·ti·fo·cal adj. Relating to or arising from many foci. and Verisyse([R])IOLs. Products in the eye care line include disinfecting solutions, enzymatic cleaners, lens rewetting drops and artificial tears artificial tears A solution containing 0.5% carboxymethyl cellulose or 5% polyvinyl alcohol, used to treat dry eye–xerophthalmia, often associated with Sjögren syndrome, which may also be due to sarcoidosis, senile lacrimal gland atrophy, acute or . Among the eye care product brands the company possesses are COMPLETE([R]), COMPLETE([R]) Blink-N-Clean([R]), Consept([R])F, Consept([R]) 1 Step, Oxysept([R]) 1 Step, UltraCare([R]), Ultrazyme([R]), Total Care([TM]) and blink[TM]branded products. AMO is based in Santa Ana, California Santa Ana is the most populous city in Orange County, California and is the county seat. It lies approximately 10 miles inland from the Pacific Ocean, on the largely seasonal Santa Ana River. , and employs approximately 4,000 worldwide. The company has operations in 24 countries and markets products in approximately 60 countries. For more information, visit the company's Website at www.amo-inc.com. Use of Non-GAAP Measures Our EPS guidance for 2008 is provided on a non-GAAP basis. The company's adjusted EPS guidance excludes any charges associated with acquisitions, restructurings, reorganizations and recapitalizations and other one-time charges or gains. The guidance also assumes no impact of potential unrealized gains or losses on derivative instruments. The company believes this presentation is useful to investors to conduct a more meaningful, consistent comparison of the company's on-going operating results. This presentation is also consistent with our internal use of the measure, which we use to measure the profitability of on-going operating results against prior periods and against our internally developed targets. We believe that our investors also use this measure to analyze the sustainable profitability of the on-going business operations. The economic substance related to our use of adjusted per-share guidance is our belief that the appropriate analysis of our profitability cannot be effectively considered while incorporating the effect of unusual items and charges that have not been experienced in prior periods. The company is not able to provide a reconciliation of projected adjusted per-share guidance to expected reported results due to the unknown effect, timing and potential significance of special charges or gains, and our inability to forecast charges associated with future transactions and initiatives. These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. These non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. These non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with generally accepted accounting principles. Status of Guidance During the quarter, AMO management may reiterate guidance in press releases or as part of web cast conference presentations. From the close of business on June 13, 2008 until publication of its second-quarter earnings release, AMO will observe a "Quiet Period" during which the company will not discuss its guidance. In addition, guidance disclosed in the company's press releases, presentations and filings with the SEC should be considered historical, as of prior to the Quiet Period only and not subject to update by the company. Forward-Looking Statements This press release contains forecasts about AMO and its businesses, such as management's total revenue and adjusted earnings per-share outlook and forecasts included in the section entitled "Financial Guidance" and the company's plan to reduce fixed costs in the section entitled "Restructuring Update." Because forecasts are inherently estimates that cannot be made with precision, the company's performance may at times differ from its estimates and targets. Statements in this press release regarding financial guidance, statements by Mr. Mazzo and any other statements in this press release that refer to AMO's estimated or anticipated future results, are forward-looking statements. All forward-looking statements in this press release reflect AMO's current analysis of existing trends and information and represent AMO's judgment only as of the date of this press release. Actual results may differ from current expectations based on a number of factors affecting AMO's businesses including but not limited to unexpected delays or costs associated with restructuring activities; uncertainties associated with successful re-entry RE-ENTRY, estates. The resuming or retaking possession of land which the party lately had. 2. Ground rent deeds and leases frequently contain a clause authorizing the landlord to reenter on the non-payment of rent, or the breach of some covenant, when the into the multi-purpose solution segment and impacts of our previous eye care recalls; unexpected changes in competitive, regulatory and market conditions; the potential for delays in the launching of new products; the performance of new products and the continued acceptance of current products; the execution of strategic initiatives and alliances; successful integration of prior acquisitions; AMO's ability to maintain a sufficient supply of products and unexpected supply delays as it consolidates operations, product liability claims or new quality issues; litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. related to our recall or otherwise; and the uncertainties associated with intellectual property protection for the company's products and exposure to claims of intellectual property infringement by others. In addition, matters generally affecting the domestic and global economy, such as changes in interest and currency exchange rates or consumer confidence indices, can affect AMO's results. Therefore, the reader is cautioned not to rely on these forward-looking statements. AMO disclaims any intent or obligation to update these forward-looking statements. Additional information concerning these and other risk factors may be found in previous financial press releases issued by AMO. AMO's public periodic filings with the Securities and Exchange Commission, including the discussion under the heading "Risk Factors" in AMO's 2007 Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed in March 2008 that includes information concerning these and other risk factors. Copies of press releases and additional information about AMO are available at www.amo-inc.com, or by contacting AMO's Investor Relations Investor relations The process by which the corporation communicates with its investors. Department by calling 714-247-8455. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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