American Medical Systems Reports Another Record Sales Quarter; Women's Health Revenues Grow 48%.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--April 23, 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 record sales in the first quarter of 2003 of $39.3 million, a 13 percent increase over sales of $34.7 million in the comparable quarter of 2002 (11 percent before gain from foreign currency changes). Net income in the quarter was $5.5 million, or $0.16 per share, up slightly from $5.4 million, or $0.16 per share, in the comparable quarter of 2002. Net income in 2002 benefited from the company's pension fund termination, without which 2002 net income would have been $5.0 million, or $.15 per share; net income in 2003 was net of after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. losses from the newly acquired CyroGen operations, without which net income would have increased 34 percent to $6.7 million, or $.20 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 first-quarter performance and the early progress we have made with the CryoGen cry·o·gen n. A liquid, such as liquid nitrogen, that boils at a temperature below about 110 Kelvin (-160°C) and is used to obtain very low temperatures; a refrigerant. acquisition. Revenues from our major product groups continue to show strong growth, with revenue from 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. products leading the way at 48 percent growth over the first quarter of 2002. Included in this record growth in women's health were net revenues from the sale of CryoGen's Her Option disposables of $0.7 million, in line with our expectations for the quarter. Male continence continence /con·ti·nence/ (kon´tin-ens) the ability to control natural impulses.con´tinent con·ti·nence n. 1. Self-restraint; moderation. 2. revenues grew 14 percent for the quarter and 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 revenues grew 3 percent. We again demonstrated strong expense controls, resulting in operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the non-CryoGen business expanding to 27 percent of sales from 22 percent of sales in 2002." Commenting further on the sales growth, Mr. Kohrs noted, "We are very pleased with the growth from women's health products, including both the SPARC (Scalable Performance ARChitecture) A family of RISC CPUs from Sun that runs mostly under Sun's Solaris, but also under Linux and BSD operating systems. After development began in the mid-1980s by David Patterson of the University of California at Berkeley and Bill and the Monarc sling sling (sling) a bandage or suspensory for supporting a part. mandibular sling a structure suspending the mandible, formed by the medial pterygoid and masseter muscles and aiding in systems for stress urinary incontinence stress urinary incontinence n. See stress incontinence. . As we said in our April 14 Monarc announcement, this new subfascial subfascial /sub·fas·cial/ (sub-fash´ul) beneath a fascia. subfascial beneath a fascia. hammock hammock, suspended bed, usually of netting, canvas, or leather. The hammock and its name were introduced to Europeans by Christopher Columbus, who learned of them from Native Americans. system was released in several European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. countries during the first quarter, and we are looking forward to having U.S. availability in the second half of 2003. The company also reached a significant milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. in the first quarter as total company continence revenues exceeded erectile restoration revenues for the first time in our 30 year history." Outlook Looking forward, Mr. Kohrs said AMS AMS - Andrew Message System still expects full year sales to increase 17 to 22 percent over 2002 sales, including the increase from the sales of Her Option products and full-year operating margin for 2003 to show improvement over the full year 2002 operation margin. Operating margins in the first half of 2003 are expected to be adversely affected by significant start-up Start-up The earliest stage of a new business venture. expenses of the CyroGen acquisition. In the second quarter of 2003, AMS expects total revenues to be in the range of $41 to $43 million dollars. Operating margin as a percent of sales for the second quarter of 2003 is expected to be slightly better than the first quarter of 2003 and slightly lower than the second 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 first 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 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. 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 over 70,000 patients in 54 countries during the last 12 months. 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 product availability, 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 filings. Actual results may differ materially from anticipated results. AMS 700, Her Option, InhibiZone, Monarc, and SPARC are AMS trademarks.
American Medical Systems Holdings Inc.
Statements Of Operations
(In thousands, except per share data)
Three months
through March
-----------------
2002 2003
-------- --------
Net sales $34,715 $39,347
Operating expenses
Cost of goods sold 7,132 6,943
Marketing and selling 12,810 14,797
General and administrative 3,279 4,070
Research and development 2,834 3,791
Amortization of intangibles 939 1,065
-------- --------
Total operating expenses 26,994 30,666
-------- --------
Operating income 7,721 8,681
Other income (expense)
Royalty income 783 777
Other income 721 35
Interest expense, net (330) (596)
-------- --------
Total other income (expense) 1,174 216
-------- --------
Income before income taxes 8,895 8,897
Provision for income taxes
Income tax expense 3,478 3,443
-------- --------
Net income $5,417 $5,454
======== ========
Net income per share
Basic $0.17 $0.17
Diluted $0.16 $0.16
Weighted average shares used in calculation
Basic 32,005 32,547
Diluted 34,221 34,042
American Medical Systems Holdings Inc.
Consolidated Balance Sheet
(In thousands)
December 28, March 29,
2002 2003
------------ ---------
Assets
Current assets
Cash and short-term investments $79,429 $42,767
Accounts receivable, net 27,208 27,905
Inventories 13,475 15,451
Deferred taxes and other current assets 5,697 5,775
------------ ---------
Total current assets 125,809 91,898
Property, plant and equipment, net 21,328 23,294
Goodwill and intangibles, net 96,298 135,056
Deferred taxes and other assets 8,210 7,748
------------ ---------
Total assets $251,645 $257,996
============ =========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $3,000 $3,483
Accrued liabilities and taxes 19,523 20,195
Current portion of notes payable 6,000 6,000
------------ ---------
Total current liabilities 28,523 29,678
Long-term notes payable 18,000 16,636
Other long-term liability 860 444
Stockholders' equity 204,262 211,238
------------ ---------
Total liabilities and stockholders' equity $251,645 $257,996
============ =========
Note: The Cryogen purchase price has been allocated to goodwill
pending completion of the acquisition valuation study.
American Medical Systems Holdings Inc.
Condensed Statements Of Cash Flows
(In thousands)
Three months
through March
------------------
2002 2003
-------- ---------
Cash flows from operating activities
Net income $5,417 $5,454
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 950 1,383
Amortization of intangibles, including
deferred financing costs 1,010 1,136
Non-cash deferred compensation 59 46
Income tax benefit related to stock option
plans 279 170
Change in net deferred taxes 108 (83)
Changes in operating assets and liabilities (4,145) (7,345)
-------- ---------
Net cash provided by operating activities 3,678 761
Cash flows from investing activities
Purchase of property, plant and equipment (440) (707)
Purchase of businesses, net of cash acquired 0 (36,940)
Purchase of investments, net of sales (6,123) 0
-------- ---------
Net cash used in investing activities (6,563) (37,647)
Cash flows from financing activities
Issuance of common stock 430 570
Payments on long-term debt (2,182) (1,956)
-------- ---------
Net cash provided by financing activities (1,752) (1,386)
Effect of exchange rates (56) 1,610
-------- ---------
Net decrease in cash and cash equivalents ($4,693) ($36,662)
======== =========
Note: Changes in operating assets and liabilities include
approximately 3.8 million in CryoGen accrued acquisition liabilities
American Medical Systems Holdings Inc.
Selected Sales Information
(In Thousands)
Three months
through March
-----------------
2002 2003
-------- --------
Sales
Product line
Erectile restoration $17,295 $17,854
Other men's health
Male continence 9,028 10,283
Prostate treatments 1,645 1,199
-------- --------
Total 10,673 11,482
Women's health 6,747 10,011
-------- --------
Total $34,715 $39,347
======== ========
Geography
United States $29,159 $32,347
Outside United States 5,556 7,000
-------- --------
Total $34,715 $39,347
======== ========
Share of total sales
Product line
Erectile restoration 50% 45%
Other men's health
Male continence 26% 26%
Prostate treatments 5% 3%
-------- --------
Total 31% 29%
Women's health 19% 25%
-------- --------
Total 100% 100%
Geography
United States 84% 82%
Outside United States 16% 18%
-------- --------
Total 100% 100%
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
through March
----------------
2002 2003
------- --------
Adjustments to operating income
Reported operating income $7,721 $8,681
Add back operating loss for Cryogen 0 1,971
------- --------
Adjusted operating income $7,721 $10,652
======= ========
Adjustments to net income
Reported net income $5,417 $5,454
Adjust for 2002 pension fund termination
Pension accrual reversal (716) 0
Tax impact 272 0
------- --------
Decrease in net income (444) 0
------- --------
Add back after tax loss for CryoGen
Operating loss for Cryogen 0 1,971
Tax impact 0 (749)
------- --------
Increase in net income 0 1,222
Adjusted net income $4,973 $6,676
======= ========
Net income per share
Reported
Basic $0.17 $0.17
Diluted $0.16 $0.16
Adjusted
Basic $0.16 $0.21
Diluted $0.15 $0.20
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