Advanced Neuromodulation Systems Second Quarter Net Income Doubles on 79% Increase in Neuro Product Sales.Business Editors DALLAS--(BUSINESS WIRE)--July 28, 2003 First Half Net Income Increases 143%; Management Increases Guidance for 2003 Advanced Neuromodulation Systems Advanced Neuromodulation System is a subsidiary of St. Jude Medical, Inc based in Plano, Texas. Among the products ANS makes and sells include spinal cord stimulators for intractable pain. , Inc. (ANS (ANS Communications, Inc, Purchase, NY) An ISP, Internet backbone and provider of private data network services, founded in 1990 as Advanced Network & Services, Inc., by IBM, MCI and Merit (consortium of Michigan universities). ) (Nasdaq:ANSI (American National Standards Institute, New York, www.ansi.org) A membership organization founded in 1918 that coordinates the development of U.S. voluntary national standards in both the private and public sectors. It is the U.S. member body to ISO and IEC. ) announced today that revenue for the three months ended June June: see month. 30, 2003, increased 66% to a record $22,324,000. This compares to revenue of $13,423,000 for the second quarter of 2002. Sales of ANS's neuromodulation neuromodulation /neu·ro·mod·u·la·tion/ (-mod?u-la´shun) 1. electrical stimulation of a peripheral nerve, the spinal cord, or the brain for relief of pain. 2. the effect of a neuromodulator on another neuron. products for the treatment of chronic pain increased 79% to a record $19,348,000 from $10,829,000 a year earlier. Net income for the second quarter of 2003 doubled to a record $2,923,000, or $0.14 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, from $1,448,000, or $0.09 per diluted share, for the second quarter of 2002. For the six months ended June 30, 2003, revenue increased 69% to a record $41,995,000 from $24,896,000 for the same period of 2002. Net income increased 143% to a record $5,543,000, or $0.27 per diluted share, compared to $2,285,000, or $0.14 per diluted share, for last year's first half. All per share amounts have been adjusted to reflect the 3-for-2 stock split that was effective on July July: see month. 11, 2003. Second Quarter Operations Review Gross margin rose to 68.4% for this year's second quarter compared to 62.3% a year earlier. Pre-tax margin increased to 20.5% from 16.6%, despite an increase in sales and marketing expenses related to the acquisition of Sun Medical and continued investments in programs designed to improve ANS's market position. "We expect these investments in our sales and marketing capabilities to drive improved results in the future," said President and Chief Executive Officer Chris Chavez. Net margin improved to 13.1% for the 2003 second quarter from 10.8% last year. At June 30, 2003, cash and equivalents and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has totaled approximately $94 million. ANS has no debt. Chavez said that sales of ANS's Genesis(R) and Genesis XP(TM) Totally Implantable Pulse Generator implantable pulse generator Cardiac pacing A pacemaker used for permanent pacing, which is placed inside a pocket under the skin; the leads are positioned in or on the heart (IPG IPG Implantable pulse generator, see there ) Spinal Cord Stimulators Spinal Cord Stimulator (SCS) or Dorsal Column Stimulator (DCS) is an implantable medical device used to treat chronic pain of neurologic origin. An electric impulse generated by the device near the dorsal surface of the spinal cord provides a paresthesia ("tingling") and Renew(R) radio frequency (RF) neurostimulation system continued to gain acceptance from interventional pain physicians in the second quarter. "The integration of the pain management business of our largest distributor, Sun Medical, Inc., which we acquired in March 2003, was substantially completed during the second quarter. This acquisition will continue to positively impact ANS's ability to grow our business profitability. I am very proud of the entire ANS team for their tireless efforts in delivering another great quarter. We also want to thank our growing list of customers for the trust they place in ANS by prescribing our products for their patients." Opportunity for Sustained Growth "In addition to strong top line and bottom line performance, we continue to make important progress on product development pipeline initiatives. Product development is a crucial element of our strategy to strengthen our product offering to address current and emerging neuromodulation applications," Chavez said. "Neuromodulation has quickly developed into a significant market that will soon represent a $1 billion opportunity and is expected to continue to grow rapidly. ANS has grown to become an important participant in this exciting industry. By continuing to build and refine our high-performance organization and expand our product development pipeline, we are working to take full advantage of our opportunity to deliver sustained long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth." Management Increases Guidance for 2003 ANS currently expects revenue for 2003 in the range of $84,000,000 to $87,000,000 and net income in the range of $0.59 to $0.61 per diluted share. Conference Call ANS has scheduled a conference call today at 11:00 AM ET. The simultaneous webcast is available at www.ans-medical.com/investors/index.html. A replay will be available after 1:00 PM ET at this same Internet address There are two kinds of addresses that are widely used on the Internet. One is a person's e-mail address, and the other is the address of a Web site, which is known as a URL. Following is an explanation of Internet e-mail addresses only. For more on URLs, see URL and Internet domain name. . For a telephone replay, dial 800-633-8284, reservation #21154215, after 1:00 PM ET. About Advanced Neuromodulation Systems Advanced Neuromodulation Systems designs, develops, manufactures and markets implantable systems used to manage chronic intractable pain intractable pain Refractory pain Pain medicine Persistent pain which does not respond to at least 3 dosease of parenteral analgesics given over a 12-24 hr period; pain that does not respond to appropriate doses of opioid analgesics. and other disorders of the central nervous system. Forbes magazine recently recognized ANS as one of America's 200 Best Small Companies, and Fortune magazine recently recognized ANS as one of Fortune's Top 100 Fastest-Growing Small Companies in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Frost & Sullivan, an international strategic market research firm, also recently presented ANS with its Product Innovation Award, recognizing ANS as the technology innovation leader in the neurostimulation market and ANS's Genesis(R) Implantable Pulse Generator system as the most advanced fully implantable spinal cord stimulator on the market. Additional information is available at www.ans-medical.com. "Safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: Statements contained in this document that are not based on historical facts are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. ." Terms such as "plan," "should," "would," "anticipate," "believe," "intend," "estimate," "expect," "predict," "scheduled," "new market," "potential market applications" and similar expressions are intended to identify forward-looking statements. Such statements are by nature subject to uncertainties and risks, including but not limited to: continued market acceptance of the Genesis(R) IPG and Genesis XP(TM) IPG; competition from Medtronic Medtronic Cardiology A major manufacturer of pacemakers, defibrillators, and other cardiac devices , Inc. and future competitors; continued market acceptance of our Renew(R) system following the launches of the Genesis IPG and Genesis XP IPG; patient or physician selection of less invasive invasive /in·va·sive/ (-siv) 1. having the quality of invasiveness. 2. involving puncture of the skin or insertion of an instrument or foreign material into the body; said of diagnostic techniques. or less expensive alternatives; adverse changes in coverage or reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. amounts by Medicare Medicare, national health insurance program in the United States for persons aged 65 and over and the disabled. It was established in 1965 with passage of the Social Security Amendments and is now run by the Centers for Medicare and Medicaid Services. , Medicaid Medicaid, national health insurance program in the United States for low-income persons; established in 1965 with passage of the Social Security Amendments and now run by the Centers for Medicare and Medicaid Services. , private insurers, managed care organizations or workers' comp comp See comparison. programs; intellectual property protection and potential infringement The encroachment, breach, or violation of a right, law, regulation, or contract. The term is most frequently used in reference to the invasion of rights secured by Copyright, patent, or trademark. issues; obtaining necessary government approvals for new products or applications and maintaining compliance with FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. product and manufacturing requirements; product liability; reliance on single suppliers for certain components; reliance on key distributors; completion of research and development projects in an efficient and timely manner; the satisfactory completion of clinical trials and/or market tests prior to the introduction of new products; successful integration of acquired businesses, products and technologies; international trade risks; and other risks detailed from time to time in the Company's SEC filings. Consequently, if such management assumptions prove to be incorrect or such risks or uncertainties materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. , anticipated results could differ materially from those forecast in forward-looking statements. Such forward-looking statements speak only as of the date on which they are made and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of this release.
ADVANCED NEUROMODULATION SYSTEMS, INC. and SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended
June 30,
2003 2002
Net revenue $ 22,324,461 $ 13,423,371
Cost of revenue 7,051,279 5,063,427
Gross profit 15,273,182 8,359,944
Operating expenses:
Research and development 2,352,468 1,375,520
Sales and marketing 6,330,144 3,392,474
Amortization of intangibles 450,338 228,834
General and administrative 1,866,333 1,278,437
10,999,283 6,275,265
Income from operations 4,273,899 2,084,679
Other income (expenses):
Interest expense --- (3,939)
Interest and other income 294,472 147,188
294,472 143,249
Income before income taxes 4,568,371 2,227,928
Income taxes 1,645,256 779,487
Net income $ 2,923,115 $ 1,448,441
Basic income per share:
Net income $ 0.15 $ 0.10
Number of basic shares 19,118,414 15,245,627
Diluted income per share:
Net income $ 0.14 $ 0.09
Number of diluted shares 20,471,865 16,933,533
Six Months Ended
June 30,
2003 2002
Net revenue $ 41,995,052 $ 24,896,017
Cost of revenue 13,932,970 9,577,587
Gross profit 28,062,082 15,318,430
Operating expenses:
Research and development 4,044,899 2,668,223
Sales and marketing 11,490,052 6,288,364
Amortization of intangibles 805,272 456,630
General and administrative 3,632,251 2,581,309
19,972,474 11,994,526
Income from operations 8,089,608 3,323,904
Other income (expenses):
Interest expense --- (8,245)
Interest and other income 576,127 220,694
576,127 212,449
Income before income taxes 8,665,735 3,536,353
Income taxes 3,122,806 1,250,936
Net income $ 5,542,929 $ 2,285,417
Basic income per share:
Net income $ 0.29 $ 0.16
Number of basic shares 18,868,663 14,453,802
Diluted income per share:
Net income $ 0.27 $ 0.14
Number of diluted shares 20,232,006 16,186,478
ADVANCED NEUROMODULATION SYSTEMS, INC. and SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
June 30, December 31,
2003 2002
Assets
Current assets:
Cash, certificates of deposit and short-
term investments $ 94,358,236 $ 96,769,918
Receivable, trade net 15,575,968 10,847,237
Receivable, other 297,589 189,017
Inventories 17,821,126 13,722,946
Deferred income taxes 2,820,810 1,122,617
Prepaid expenses and other current assets 837,052 1,032,883
Total current assets 131,710,781 123,684,618
Net property, plant and equipment 12,605,813 10,607,991
Patents, trademarks, purchased technology
& other assets, net 30,025,255 24,051,518
Total assets $ 174,341,849 $ 158,344,127
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 3,032,220 $ 2,392,579
Accrued salary and employee benefit costs 2,014,879 3,077,603
Deferred revenue 1,762,617 646,577
Commissions payable 1,132,802 794,521
Accrued tax abatement liability 969,204 969,204
Income taxes payable --- 822,228
Warranty reserve 365,159 402,259
Other accrued expenses 623,593 299,905
Total current liabilities 9,900,474 9,404,876
Deferred income taxes 4,214,657 3,731,939
Non-current deferred revenue 15,623 162,504
Total stockholders' equity 160,211,095 145,044,808
Total liabilities and stockholders'
equity $ 174,341,849 $ 158,344,127
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion