American Medical Systems Confirms Fourth Quarter Revenue of $130.0 Million and Reports Solid Operating Results.* Fourth quarter sales of $130.0 million represent a 12.7 percent increase over 2006; * Fourth quarter gross margin percentage expands to 78.7 percent; * Fourth quarter operating results impacted by $7.5 million milestone payment on previous acquisition and $14.3 million charge related to resolution of 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. MINNEAPOLIS -- American Medical Systems Holdings, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : AMMD AMMD Aerodynamic Mass Median Diameter ) reported revenue of $130.0 million for the fourth quarter of 2007, a 12.7 percent increase over revenue of $115.4 million in the comparable quarter of 2006. Highlighting the quarter were very strong performances from the erectile erectile /erec·tile/ (e-rek´til) capable of erection. e·rec·tile adj. 1. Of or relating to tissue capable of filling with blood and becoming rigid. 2. restoration, male incontinence, and female incontinence businesses. The exceptional growth from these businesses was partially offset by the relatively lower growth rate from laser therapy revenues, which were $30.1 million, a 3.3 percent increase over a very strong 2006 fourth quarter. 2007 full year revenue of $463.9 million grew 29.5 percent over 2006 revenue of $358.3 million. Comparisons between years are impacted by the July 2006 acquisition of Laserscope. Laser therapy revenues were $111.4 million in 2007 and $47.6 million in 2006. Excluding laser therapy revenue, AMS AMS - Andrew Message System base 2007 revenue was $352.6 million, a 13.5 percent increase over 2006 AMS base revenue of $310.8 million. Ross Longhini, Interim Chief Executive Officer, noted, "2007 was a year of mixed results for the Company. We continue to be pleased by the strength of our base business, and the robust franchise we have built. Fourth quarter 2007 revenue for our base business grew 15.8 percent over the comparable period last year. However, 2007 also reflects the challenges of our first full year of integrating the Laserscope operations. Although we experienced lower than expected results from this new business, we remain confident in the GreenLight technology and market potential as we move forward into 2008." The Company reported a net loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the fourth quarter of 2007 of $5.0 million, or $0.07 per share, compared to net income from continuing operations in the same period last year of $10.7 million, or $0.15 per share. 2007 fourth quarter net loss from continuing operations includes an in-process research and development (IPRD IPRD Institute for Policy Research & Development IPRD In-Process Research & Development IPRD In-Plant Reliability Data IPRD Integrated Payloads Requirements Document IPRD Instructional Performance Requirements Document (Instructional Design) ) charge of $7.5 million related to a milestone payment to BioControl bi·o·con·trol n. See biological control. biocontrol See biological control. Medical, Ltd., and $14.3 million in litigation related charges. 2006 fourth quarter net income from continuing operations included IPRD charges and certain tax items. Excluding these items in both quarters results in adjusted net income from continuing operations in the fourth quarter of 2007 of $13.1 million, or $0.18 per share, compared to adjusted net income from continuing operations in the fourth quarter of 2006 of $10.8 million, or $0.15 per share. The Company reported net income from continuing operations for 2007 of $13.6 million, or $0.18 per share, compared to a net loss from continuing operations of $43.9 million, or $0.63 per share in 2006. The 2007 net income from continuing operations included the IPRD charge and litigation related costs noted above. The 2006 net loss from continuing operations included several non-recurring charges consisting of IPRD charges, commitment fees for bridge financing Bridge Financing A method of financing, used by companies before their IPO, to obtain necessary cash for the maintenance of operations. Notes: These funds are usually supplied by the investment bank underwriting the new issue. , and certain tax items. Excluding these items results in 2007 adjusted net income from continuing operations of $31.7 million, or $0.43 per share, compared to 2006 adjusted net income from continuing operations of $42.4 million, or $0.59 per share. Comparability between years is also impacted by Laserscope related financing expense and intangible amortization expense, as there was a full year of these expenses in 2007 compared to a partial year in 2006. A reconciliation of reported net income (loss) from continuing operations to non-GAAP adjusted net income from continuing operations is presented below. [TABLE OMITTED] Outlook 2008 revenue guidance is in the range of $500 million to $520 million, and 2008 earnings per share guidance is in the range of $0.57 to $0.72. This guidance excludes the impact of any unusual non-recurring type charges that could occur in 2008, such as IPRD on milestone payments related to prior acquisitions. First quarter 2008 revenue guidance is in the range of $116 million to $122 million, and earnings per share is in the range of $0.08 to $0.10. Given the significant impact of certain items that do not impact current period cash flow, the Company will provide cash earnings per share guidance in 2008. The Company defines cash earnings per share as adjusted net income from continuing operations excluding the impact of significant non-cash items consisting of amortization of intangibles, amortization of financing costs and stock based compensation. Full year 2008 guidance for cash earnings per share is in the range of $0.84 to $0.99. This represents a 17 percent to 38 percent increase over 2007 cash earnings per share of $0.72. Refer to the table attached for a reconciliation of reported net income from continuing operations to non-GAAP cash earnings per share for 2007. A reconciliation of guided net income per share to non-GAAP cash earnings per share is as follows: [TABLE OMITTED] Use of Non-GAAP Financial Measures In addition to financial measures prepared in accordance with 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 GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), management provides adjusted net income from continuing operations and adjusted net income from continuing operations per share because management believes that in order to properly understand the Company's short-term and long-term financial trends, investors may wish to consider the impact of certain adjustments (such as in-process research and development charges, litigation charges, commitment fees on acquisition financing, and income tax adjustments). These adjustments result from facts and circumstances (such as acquisition and business development activities, settlements and other developments relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc litigation and resolution of audits by tax authorities or other non-recurring items) that vary in frequency and impact on the Company's results of operations. Management uses adjusted net income from continuing operations and adjusted net income from continuing operations per share to forecast and evaluate the operational performance of the Company as well as to compare results of current periods to prior periods on a consistent basis. Cash earnings per share is a non-GAAP measure that management believes provides useful supplemental information for management and investors, because it reports the adjusted net income from continuing operations excluding the impact of significant non-cash items consisting of amortization of intangibles, amortization of financing costs and stock based compensation. Management believes cash earnings per share provides a useful measure to determine the health of the business and earnings generated by the business before significant non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. . A reconciliation of net income (loss) from continuing operations, the GAAP measure most directly comparable to cash earnings per share, is provided on the attached schedule. Non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. Investors should consider non-GAAP measures in addition to, and not as a substitute for, or superior to, financial performance measures prepared in accordance with GAAP. Earnings Call Information American Medical Systems will host a conference call on Thursday, February 14, 2008 at 5:00 p.m. eastern time to discuss its fourth quarter and full year results for 2007. The Company will provide additional guidance for 2008 on this call. Those without internet access See how to access the Internet. may join the call from within the U.S. by dialing 877-425-3024; outside the U.S., dial 706-758-0293. A live web cast of the call will be available through the Company's corporate website at www.AmericanMedicalSystems.com and will be available for replay three hours after the completion of the call. About American Medical Systems American Medical Systems, headquartered in Minnetonka, Minnesota For other uses, see Minnetonka (disambiguation). Minnetonka is a suburban community located eight miles west of Minneapolis in Hennepin County. Its 2000 population of 51,480 makes it the fourteenth largest city in Minnesota. , is a diversified supplier of medical devices and procedures to cure erectile dysfunction Erectile Dysfunction Definition Erectile dysfunction (ED), formerly known as impotence, is the inability to achieve or maintain an erection long enough to engage in sexual intercourse. , benign prostatic hyperplasia benign prostatic hyperplasia n. Abbr. BPH A nonmalignant enlargement of the prostate gland commonly occurring in men after the age of 50, and sometimes leading to compression of the urethra and obstruction of the flow of urine. , incontinence, menorrhagia menorrhagia /men·or·rha·gia/ (men?ah-ra´jah) hypermenorrhea. men·or·rha·gia n. See hypermenorrhea. , prolapse prolapse Protrusion of an internal organ out of its normal place, usually of the rectum or uterus outside the body when supporting muscles weaken. The membrane lining the rectum can push out through the anus, most often in old people with constipation who strain during and other pelvic pelvic /pel·vic/ (pel´vik) pertaining to the pelvis. pel·vic adj. Of, relating to, or near the pelvis. disorders in men and women. These disorders can significantly diminish one's quality of life and profoundly affect social relationships. In recent years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time number of people seeking treatment has increased markedly as a result of longer lives, higher quality-of-life expectations and greater awareness of new treatment alternatives. American Medical Systems' products reduce or eliminate the incapacitating in·ca·pac·i·tate tr.v. in·ca·pac·i·tat·ed, in·ca·pac·i·tat·ing, in·ca·pac·i·tates 1. To deprive of strength or ability; disable. 2. To make legally ineligible; disqualify. effects of these diseases, often through minimally invasive therapies. The Company's products were used to treat approximately 310,000 patients in 2007. 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. This press release contains forward-looking statements relating to the market opportunities, future products, sales and financial results of American Medical Systems. These statements and other statements contained in this press release that are not purely historical fact are forward-looking statements, within the meaning of 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, that are based on management's beliefs, certain assumptions and current expectations. These forward-looking statements are subject to risks and uncertainties such as successfully competing against competitors; physician acceptance, endorsement, and use of AMS products; potential product recalls; successful integration of Laserscope into AMS' business; successfully managing increased debt leverage and related credit facility financial covenants; factors impacting the stock market and share price and its impact on the dilution of convertible securities; ability of the Company's manufacturing facilities to meet customer demand; reliance on single or sole-sourced suppliers; successful upgrade of its global software system; loss or impairment of a principal manufacturing facility; clinical and regulatory matters; timing and success of new product introductions; patient acceptance of the Company's products and therapies; changes in and adoption of reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. rates; adequate protection of the Company's intellectual property rights; product liability claims; and other risks and uncertainties described in the Company's Annual Report on 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. for the year ended December 30, 2006, and its other SEC filings. Actual results may differ materially from anticipated results. The forward-looking statements contained in this press release are made as of the date hereof, and AMS undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events. More information about the Company and its products can be found at its website www.AmericanMedicalSystems.com and in the Company's Annual Report on Form 10-K for 2006 and its other SEC filings. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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