American Medical Systems Reports 21% Sales Growth for Third Quarter; Women's Health Revenues Grow 79 Percent.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--Oct. 22, 2003 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. (Nasdaq:AMMD AMMD Aerodynamic Mass Median Diameter ) reported sales in the third quarter of 2003 of $39.6 million, a 21 percent increase over sales of $32.8 million in the comparable quarter of 2002 (19 percent without gain from currency exchange rate changes). Net income in the quarter was $6.9 million, or $0.20 per share, up 28 percent from $5.4 million, or $0.16 per share, in the comparable quarter of 2002. Net income in the third quarter of 2003 included a non-recurring tax benefit which increased net income by $1.1 million or $0.03 per share. Without this tax benefit, net income for the quarter would have been $5.8 million or $0.17 per share. Sales in the nine months through September September: see month. 2003 were $121.1 million, up 17 percent from sales of $103.8 million in 2002 (14 percent without gain from currency exchange rate changes). Net income in the nine months was $18.7 million, or $0.55 per share, up 13 percent from $16.6 million, or $0.48 per share in 2002. Net income in the first three quarters of 2002 benefited from a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gain with the company's pension fund termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. , without which 2002 net income would have been $16.1 million, or $0.47 per share. Net income in the first three quarters of 2003 benefited from the third quarter tax benefit of $1.1 million, without which 2003 net income would have been $17.6 million, or $0.52 per share. A summary of the adjustments is attached. 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 proud of our sales performance and the progress we are making with our expanded range of women's health Women's Health Definition Women's health is the effect of gender on disease and health that encompasses a broad range of biological and psychosocial issues. offerings. We have returned the company to a 20 percent growth rate with third quarter revenue increasing in all major categories, led by women's health products growing 79 percent over the comparable period last year." Outlook For the fourth quarter of 2003, AMS AMS - Andrew Message System expects total revenues to be in the range of $45.0 to $47.0 million, a 19 to 24 percent increase over 2002. Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: as a percent of sales for the fourth quarter of 2003 is expected to be better than the first nine months of 2003 and lower than the fourth quarter of 2002. Earnings Call Information American Medical Systems will host a conference call today at 5:00 p.m. eastern time to discuss its third quarter 2003 results. A live web cast of the call is available from the Company's corporate website at www.AmericanMedicalSystems.com and via replay two 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 world leader in medical devices and procedures to treat 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. (ED); other men's health Men's Health Definition Men's health is concerned with identifying, preventing, and treating conditions that are most common or specific to men. problems, (including 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. , BPH BPH abbr. benign prostatic hyperplasia BPH Benign prostatic hypertrophy, a very common noncancerous cause of prostatic enlargement in older men. , and stricture stricture /stric·ture/ (strik´chur) stenosis. stric·ture n. A circumscribed narrowing of a hollow structure. ); and women's health problems, including menorrhagia menorrhagia /men·or·rha·gia/ (men?ah-ra´jah) hypermenorrhea. men·or·rha·gia n. See hypermenorrhea. , incontinence, and other pelvic floor The pelvic floor or pelvic diaphragm is composed of muscle fibers of the levator ani, the coccygeus, and associated connective tissue which span the area underneath the pelvis. defects. Although not often life-threatening Adj. 1. life-threatening - causing fear or anxiety by threatening great harm; "a dangerous operation"; "a grave situation"; "a grave illness"; "grievous bodily harm"; "a serious wound"; "a serious turn of events"; "a severe case of pneumonia"; "a life-threatening , these disorders A
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. Physicians use American Medical Systems' products to 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 90,000 patients in 54 countries during the last 12 months. More information about the company and its products may be found at the company's website: 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 sales and financial results are forward-looking statements subject to risks and uncertainties including the timing and success of new product introductions, continued physician endorsement A signature on a Commercial Paper or document. An endorsement on a negotiable instrument, such as a check or a promissory note, has the effect of transferring all the rights represented by the instrument to another individual. 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, potential product recalls, and the integration of acquired businesses and product lines. 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 December: see month. 28, 2002, and its other SEC filings. Actual results may differ materially from anticipated results.
American Medical Systems Holdings Inc.
Statements of Operations
(In thousands, except per share data)
Three months through Nine months through
September September
-------------------- -------------------
2002 2003 2002 2003
----------- -------- --------- ---------
Sales $32,771 $39,559 $103,816 $121,130
Operating expenses
Cost of goods sold 6,233 7,110 20,485 21,434
Marketing and selling 11,277 15,245 37,195 47,026
Research and development 2,696 3,739 8,727 11,013
General and administrative 3,178 4,110 9,814 12,025
Amortization of intangibles 939 1,150 2,817 3,254
----------- -------- --------- ---------
Total operating expenses 24,323 31,354 79,038 94,752
Operating income 8,448 8,205 24,778 26,378
Other income (expense)
Royalty income 749 711 2,279 2,175
Interest expense, net (129) (128) (852) (1,310)
Other income (expense) (204) 113 962 434
----------- -------- --------- ---------
Total other income 416 696 2,389 1,299
Income before income taxes 8,864 8,901 27,167 27,677
Provision for income taxes 3,456 1,961 10,612 8,946
----------- -------- --------- ---------
Net income $5,408 $6,940 $16,555 $18,731
=========== ======== ========= =========
Net income per share
Basic $0.17 $0.21 $0.51 $0.57
Diluted $0.16 $0.20 $0.48 $0.55
Weighted average shares used in
calculation
Basic 32,321 32,974 32,155 32,773
Diluted 34,205 34,455 34,230 34,193
American Medical Systems Holdings Inc.
Consolidated Balance Sheets
(In thousands)
December September
28, 2002 27, 2003
----------- ---------
Assets
Current assets
Cash and short-term investments $79,429 $53,949
Accounts receivable, net 27,208 29,823
Inventories 13,475 18,688
Deferred taxes and other current assets 5,697 6,812
----------- ---------
Total current assets 125,809 109,272
Property, plant and equipment, net 21,328 24,505
Goodwill and intangibles, net 96,298 123,283
Deferred taxes and other assets 8,210 16,910
----------- ---------
Total assets $251,645 $273,970
=========== =========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $3,000 $3,966
Accrued liabilities 19,523 21,125
Current portion of notes payable 6,000 6,750
----------- ---------
Total current liabilities 28,523 31,841
Long-term notes payable 18,000 12,886
Other long-term liability 860 0
Stockholders' equity 204,262 229,243
----------- ---------
Total liabilities and stockholders' equity $251,645 $273,970
=========== =========
American Medical Systems Holdings Inc.
Consolidated Statements of Cash Flow
(In thousands)
Nine months
through September
------------------
2002 2003
-------- ---------
Cash flows from operating activities
Net income $16,555 $18,731
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 2,873 4,447
Amortization of intangibles, including deferred
financing costs 3,022 3,457
Income tax benefit related to stock option
plans 1,124 1,227
Non-cash deferred compensation 136 108
Stock-based compensation costs 9 21
Change in net deferred taxes 1,264 822
Changes in operating assets and liabilities (7,498) (6,423)
-------- ---------
Net cash provided by operating activities 17,485 22,390
Cash flows from investing activities
Purchase of property, plant and equipment ($1,195) ($3,202)
Purchases of businesses, net of cash acquired 0 (43,152)
Sales of investments, net of purchases 27,796 0
-------- ---------
Net cash provided by (used for) investing
activities 26,601 (46,354)
Cash flows from financing activities
Issuance of common stock $1,936 $2,064
Payments on long-term debt (3,546) (4,956)
-------- ---------
Net cash used for financing activities (1,610) (2,892)
Effect of exchange rates 570 1,376
-------- ---------
Net increase (decrease) in cash and cash
equivalents $43,046 ($25,480)
======== =========
American Medical Systems Holdings Inc.
Selected Sales Information
(In thousands)
Three months Nine months
through through
September September
----------------- -------------------
2002 2003 2002 2003
-------- -------- --------- ---------
Sales
Product line
Erectile restoration $16,205 $17,059 $51,293 $52,877
Other men's health
Male urinary control 8,294 8,774 26,438 29,784
Other 1,269 1,188 4,584 3,696
-------- -------- --------- ---------
Total 9,563 9,962 31,022 33,480
Women's health 7,003 12,538 21,501 34,773
-------- -------- --------- ---------
Total $32,771 $39,559 $103,816 $121,130
======== ======== ========= =========
Geography
United States $27,376 $33,023 $86,203 $99,289
Outside United States 5,395 6,536 17,613 21,841
-------- -------- --------- ---------
Total $32,771 $39,559 $103,816 $121,130
======== ======== ========= =========
American Medical Systems Holdings Inc.
Adjustments to Operating Income, Net Income,
and Earnings Per Share for Consistent
Presentation from 2002 to 2003
(In thousands, except per share data)
Three months Nine months
through through
September September
--------------- -----------------
2002 2003 2002 2003
------- ------- -------- --------
Adjustments in Operating Income
Reported operating income $8,448 $8,205 $24,778 $26,378
Add back operating loss for CryoGen 0 1,705 0 6,069
------- ------- -------- --------
Adjusted operating income 8,448 9,910 24,778 32,447
======= ======= ======== ========
Adjustments in net income
Reported net income 5,408 6,940 16,555 18,731
Add back after tax loss for CryoGen
Operating loss for CryoGen 0 1,705 0 6,069
Tax impact 0 (648) 0 (2,306)
------- ------- -------- --------
Increase in net income 0 1,057 0 3,763
Adjust for 2002 pension fund termination
Pension accrual reversal 0 0 (716) 0
Tax impact 0 0 272 0
------- ------- -------- --------
Decrease in net income 0 0 (444) 0
Adjust for non-recurring tax
benefit 0 (1,100) 0 (1,100)
------- ------- -------- --------
Total increase (decrease) in net
income 0 (43) (444) 2,663
------- ------- -------- --------
Adjusted net income $5,408 $6,897 $16,111 $21,394
======= ======= ======== ========
Net income per share
Reported
Basic $0.17 $0.21 $0.51 $0.57
Diluted $0.16 $0.20 $0.48 $0.55
Adjusted
Basic $0.17 $0.21 $0.50 $0.65
Diluted $0.16 $0.20 $0.47 $0.63
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