American Medical Systems Doubles Net Income With 26 Percent Sales Growth; Earnings Per Share Increase 105 Percent to $0.16.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--April 24, 2002 American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Medical Systems Holdings, Inc. (AMS AMS - Andrew Message System ) (Nasdaq:AMMD AMMD Aerodynamic Mass Median Diameter ) reported 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 for the first quarter of 2002 of $34.7 million, a 26 percent increase over sales of $27.5 million in the comparable quarter of 2001. Net income in the first quarter of 2002 was $5.4 million, or $0.16 per fully 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, a 134 percent increase from 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 net income of $2.3 million, or $0.08 per fully diluted share in the first quarter of 2001. First-quarter operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: increased to 22.3 percent of sales from 14.0 percent of sales in 2001. Pro forma results for 2001 include the FAS-142 required add back of certain intangible amortizations, increasing 2001 reported operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. by $1.2 million, and net income by $0.9 million. Douglas Douglas, city, Isle of Man Douglas, city (1991 pop. 19,950), capital of the Isle of Man, Great Britain. It is a popular resort, connected by rail to Ramsey and Port Erin, on the Irish Sea. Tourism is the chief industry. W. Kohrs, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , commented, "We are extremely pleased with our outstanding first-quarter performance, now our sixth consecutive quarter of sequential growth in sales and operating earnings--every quarter since our initial public offering. Revenues from all product lines continued to show strong growth, with incontinence incontinence Inability to control excretion. Starting and stopping urination relies on normal function in pelvic and abdominal muscles, diaphragm, and control nerves. Babies' nervous systems are too immature for urinary control. Later incontinence may reflect disorders (e.g. revenue growing 27 percent, 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. revenue growing 28 percent, and revenue from prostate prostate /pros·tate/ (pros´tat) a gland surrounding the bladder neck and urethra in the male; it contributes a secretion to the semen.prostat´ic pros·tate n. The prostate gland. adj. disease products growing 4 percent. Just as important as the revenue growth was our operating discipline, which allowed 43 percent of the increase in sales to flow through to net income." M. James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. Call, the company's executive vice president and chief financial officer, noted that without the after-tax income of the previously announced pension fund termination, net income for the first quarter of 2002 would have been $5.0 million, or $0.15 per share on a fully diluted basis; and excluding the after-tax income from a 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. settlement in February of 2001, pro forma net income for the first quarter of 2001 would have been $2.1 million, or $.07 per fully-diluted share. Mr. Call also noted that reported cash flows from operating activities during the quarter were $9.5 million, before the $5.8 million paid out to cover the company's unfunded pension liabilities Pension liabilities Future liabilities resulting from pension commitments made by a corporation. Accounting for pension liabilities varies widely by country. . Outlook For the rest of 2002, Mr. Kohrs said AMS expects full year sales to grow 17 to 20 percent with continuing improvement in operating margins, pending introduction of new products. "In addition to taking advantage of favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. and life-style expectations, our growth is and will be driven by new products. These new products are accepted by physicians and their patients because they offer better solutions than alternative therapies. Everyone in the company is focused on delivering more cures to more people; and every one of our employees deserves credit for our success in delivering these cures, and in exceeding our sales and profit goals." 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 world leader in medical devices and procedures to treat three major diseases: incontinence, erectile dysfunction (ED) and urinary urinary /uri·nary/ (u´ri-nar?e) pertaining to, containing, or secreting urine. u·ri·nar·y adj. 1. Relating to urine and its production, function, or excretion. 2. obstructions caused primarily by enlarged prostate Enlarged Prostate Definition A non-cancerous condition that affects many men past 50 years of age, enlarged prostate makes urinating more difficult by narrowing the urethra, a tube running from the bladder through the prostate gland. (benign prostate hyperplasia Benign prostate hyperplasia (BPH) Enlargement of the prostate gland. Mentioned in: Paruresis , or BPH BPH abbr. benign prostatic hyperplasia BPH Benign prostatic hypertrophy, a very common noncancerous cause of prostatic enlargement in older men. ). Although not life-threatening, 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 life expectancy Life Expectancy 1. The age until which a person is expected to live. 2. The remaining number of years an individual is expected to live, based on IRS issued life expectancy tables. , 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 surgery minimally invasive surgery Laparoscopic surgery, see there. See Laparoscopic cholecystectomy. . The company believes its products were used to treat more than 50,000 patients in 54 countries during 2001. More information about the company and its products may be found at: www.americanmedicalsystems.com. 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. Statements about the company's future products, sales, and financial results are forward-looking statements subject to risks and uncertainties including the timing and success of new pro-duct introductions, continued physician endorsement and use of the company's products, competitor activities, changes in reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. rates, and potential product recalls. These risks and uncertainties are more fully 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 29, 2001. Actual results may differ materially from anticipated results.
American Medical Systems Holdings Inc.
Statements of Operations
(Unaudited, in thousands except per share data)
Three months through
------------------------------------
March 31, 2001
-----------------------
As reported Pro forma March 30,
2002
----------- --------- ---------
Net sales $ 27,548 $ 27,548 $ 34,715
Cost of sales 5,397 5,397 7,132
-------- -------- --------
Gross profit 22,151 22,151 27,583
Operating expenses:
Marketing and sales 11,409 11,409 12,810
Research and development 3,190 3,190 2,834
General and administrative 2,726 2,726 3,274
Amortization of intangibles 2,200 958 939
-------- -------- --------
Total operating expenses 19,525 18,283 19,857
-------- -------- --------
Operating income 2,626 3,868 7,726
Other income (expense)
Royalty and other income 1,075 1,075 1,499
Interest expense, net (1,027) (1,027) (330)
-------- -------- --------
Total other income 48 48 1,169
-------- -------- --------
Income before income taxes 2,674 3,916 8,895
Income tax expense 1,270 1,605 3,478
-------- -------- --------
Net income $ 1,404 $ 2,311 $ 5,417
======== ======== ========
Weighted average shares outstanding
Basic 27,813 27,813 32,005
Diluted 29,892 29,892 34,221
Net income per share
Basic $ 0.05 $ 0.08 $ 0.17
Diluted $ 0.05 $ 0.08 $ 0.16
Note: The March 31, 2001, pro forma column presents results of
operations as if Financial Accounting Standard No. 142, "Goodwill
and Other Intangible Assets," had been effective in fiscal year
2001. Both columns for 2001 include other income of $375,000 from
a legal settlement with Boston Scientific Corporation; the March
30, 2002, column includes other income of $716,000 from reversing
an accrued pension liability after a one-time payment of $5.8
million as part of the pension plan termination.
American Medical Systems Holdings Inc.
Condensed Consolidated Balance Sheets
(In thousands)
December 29, 2001 March 30, 2002
----------------- --------------
(Unaudited)
Assets
Current assets:
Cash and equivalents $ 28,755 $ 24,062
Short-term investments 9,013 19,220
Accounts receivable, net 25,306 26,577
Inventories 13,991 13,005
Deferred taxes and other current assets 9,023 6,792
-------- --------
Total current assets 86,088 89,656
Property, plant and equipment, net 23,604 23,094
Goodwill and intangibles, net 99,483 98,473
Long-term investments 18,783 14,588
Deferred taxes and other assets 7,193 8,421
-------- --------
Total assets $235,151 $234,232
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,678 $ 1,914
Accrued liabilities and taxes 27,593 23,733
Current portion of notes payable 4,909 5,454
-------- --------
Total current liabilities 35,180 31,101
Long-term notes payable 24,000 21,273
Other long-term liability 1,884 1,428
Stockholder's equity 174,087 180,430
-------- --------
Total liabilities and stockholders' equity $235,151 $234,232
======== ========
American Medical Systems Holdings Inc.
Condensed Statements of Cash Flows
(Unaudited, in thousands)
March 31, March 30,
2001 2002
--------- ---------
Cash flows from operating activities:
Net income $ 1,404 $ 5,417
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 947 950
Amortization of intangibles, including
deferred financing costs 2,268 1,010
Stock-based compensation costs -- 10
Income tax benefit related to stock option
plan 179 279
Non-cash deferred compensation 118 49
Change in net deferred taxes 1,577 108
Changes in operating assets and liabilities (1,682) (4,145)
------- -------
Net cash provided by operating activities 4,811 3,678
------- -------
Cash flows from investing activities:
Purchase of property, plant and equipment (316) (440)
Purchase of businesses, net of cash acquired (3,041)
Purchase of investments in technology (4,500)
Purchase of marketable securities, net of sales -- (6,123)
------- -------
Net cash used in investing activities (7,857) (6,563)
------- -------
Cash flows from financing activities:
Issuance of common stock 343 430
Net borrowings on long-term debt (1,508) (2,182)
------- -------
Net cash used in financing activities (1,165) (1,752)
------- -------
Effect of exchange rates 642 (56)
------- -------
Net decrease in cash and cash equivalents ($3,569) ($4,693)
======= =======
American Medical Systems Holdings Inc.
Selected Sales Information
(Unaudited, in thousands)
Three months through
---------------------------------
March 31, 2001 March 30, 2002
-------------- --------------
Erectile Dysfunction $13,542 $17,293
Incontinence
Male Incontinence 7,649 8,731
Female Incontinence 4,778 7,045
------- -------
Total 12,427 15,776
Prostate Disease 1,579 1,646
------- -------
Total $27,548 $34,715
======= =======
Domestic Sales $22,429 $29,142
International Sales 5,119 5,573
------- -------
Total $27,548 $34,715
======= =======
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