American Medical Systems Reports Record $52.3 Million Sales in Third Quarter; Growth Rates Top 30% for Both Men's and Women's Health.MINNEAPOLIS Minneapolis (mĭn'ēăp`əlĭs), city (1990 pop. 368,383), seat of Hennepin co., E Minn., at the head of navigation on the Mississippi River, at St. Anthony Falls; inc. 1856. -- 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 of $52.3 million for the third quarter of 2004, a 32 percent increase over sales of $39.6 million in the comparable quarter of 2003 (with 1 percentage point of the increase coming from currency exchange rate changes). The third quarter revenue includes $4.6 million from the Company's first partial quarter of sales from the acquisition of TherMatrx, Inc. The Company reported a net loss of $13.5 million, or $0.40 per share, after the $22.2 million tax- tax- pref. Variant of taxo-. adjusted effect of an in-process research and development (IPR&D) charge related to the acquisition of TherMatrx. The prior year's third quarter earnings were reported at $6.9 million, or $0.20 per share, including a non-recurring tax benefit of $1.1 million or $0.03 per share. Net income for the quarter, excluding the impact of the IPR&D charge, was a record $8.7 million, or $0.25 per share. Net income for third quarter 2003, adjusted for the non-recurring tax benefit, was $5.8 million, or $0.17 per share. Net income growth, excluding the impact of these non-recurring items for both 2004 and 2003, was 49 percent. A reconciliation of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). earnings to these adjusted results is included in the attached financial tables. Sales for the nine months through September September: see month. 2004 were $148.7 million, up nearly 23 percent from sales of $121.1 million during the comparable period of 2003 (with 2 percentage points of the increase coming from currency exchange rate changes). Net income as reported for the nine month period was $2.9 million, or $0.08 per share, after the IPR&D charge. Reported net income for the first nine months of 2003 was $18.7 million, or $0.55 per share, including the non-recurring tax benefit previously described. Excluding these non-recurring items in both years, net income for the first nine months of 2004 was $25.2 million, or $0.72 per share, up 43 percent from $17.6 million, or $0.52 per share, in the comparable period of 2003. A reconciliation of GAAP earnings to these adjusted year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. results is included in the attached financial tables. 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, Chairman and Chief Executive Officer, commented, "The growth across our entire product portfolio confirms our continued commitment to both men's and 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. . Even without the impact of the TherMatrx acquisition, this quarter's revenue grew 21 percent, reflecting balanced growth across our major product categories. Our 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 business, on the strength of a new product introduction, improved over 9 percent in the quarter. Our 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. business, which provides solutions in the form of both an artificial sphincter sphincter /sphinc·ter/ (sfingk´ter) [L.] a ringlike muscle which closes a natural orifice or passage.sphinc´teralsphincter´ic anal sphincter , sphincter a´ni and a 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 , posted its highest quarterly growth rate of 2004 at over 30 percent. Our expanded 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. business, which provides solutions for 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. , clearly contributed to the quarter as our 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. business reached record levels. Women's health, with a growth rate of nearly 34 percent, again exemplified our leadership in the industry. Both urology urology Medical specialty dealing with the urinary system and male reproductive organs. It traces its origin to medieval lithologists, itinerant healers who specialized in surgical removal of bladder stones. and gynecology gynecology (gīn'əkŏl`əjē), branch of medicine specializing in the disorders of the female reproductive system. Modern gynecology deals with menstrual disorders, menopause, infectious disease and maldevelopment of the customers benefited more than ever from our commitment to treating their patients' debilitating de·bil·i·tat·ing adj. Causing a loss of strength or energy. Debilitating Weakening, or reducing the strength of. Mentioned in: Stress Reduction conditions as nearly 33,000 patients were served by our products and therapies." Outlook The Company has increased its revenue and earnings guidance and now expects full year 2004 revenue to be in the range of $208 to $210 million, generating earnings per share of $0.99 to $1.01 (excluding the third quarter charge for IPR&D). This forecast incorporates a fourth quarter revenue estimate of $59 to $61 million, generating earnings per share in the range of $0.27 to $0.29. Earnings Call Information American Medical Systems will host a conference call today at 5:00 p.m. (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ) to discuss its third quarter 2004 results. Those without internet access See how to access the Internet. may join the call from within the U.S. by dialing 800-572-9815; outside the U.S., dial 706-634-6046. A live webcast of the call will be available through the Company's corporate website at www.AmericanMedicalSystems.com and available for 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 diversified diversified (di·verˑ·s 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, 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. , and other pelvic pelvic /pel·vic/ (pel´vik) pertaining to the pelvis. pel·vic adj. Of, relating to, or near the pelvis. 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 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 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. therapies. The Company's products were used to treat over 120,000 patients in 54 countries during the last year. 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 and sales are forward-looking statements subject to risks and uncertainties including the timing and success of new product introductions; physician acceptance, 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 and adoption of reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. rates; and potential product recalls. These and other risks 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 January January: see month. 3, 2004, and its other SEC filings. Actual results may differ materially from anticipated results. 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 2003 and its other SEC filings.
American Medical Systems Holdings, Inc.
Statements of Operations
(In thousands, except per share data)
Three Months Ended Nine Months Ended
------------------- -------------------
Oct. 2, Sept. 27, Oct. 2, Sept. 27,
2004 2003 2004 2003
--------- --------- --------- ---------
Net sales $52,326 $39,559 $148,732 $121,130
Cost of sales 9,508 7,110 27,485 21,434
--------- --------- --------- ---------
Gross profit 42,818 32,449 121,247 99,696
Operating expenses
Marketing and selling 18,349 15,245 52,092 47,026
Research and development 4,305 3,739 11,466 11,013
In process research and
development 35,000 - 35,000 -
General and administrative 5,120 4,110 15,206 12,025
Amortization of intangibles 1,850 1,150 3,969 3,254
--------- --------- --------- ---------
Total operating expenses 64,624 24,244 117,733 73,318
Operating income (loss) (21,806) 8,205 3,514 26,378
Other income (expense)
Royalty income 627 711 1,548 2,175
Interest income 231 107 541 349
Interest expense (357) (235) (806) (1,659)
Other income (expense) 3 113 (184) 434
--------- --------- --------- ---------
Total other income (expense) 504 696 1,099 1,299
Income (loss) before income
taxes (21,302) 8,901 4,613 27,677
Provision for income taxes (7,775) 1,961 1,684 8,946
--------- --------- --------- ---------
Net income (loss) ($13,527) $6,940 $2,929 $18,731
========= ========= ========= =========
Net income (loss) per share
Basic ($0.40) $0.21 $0.09 $0.57
Diluted ($0.40) $0.20 $0.08 $0.55
Weighted average common shares
used in calculation
Basic 33,669 32,974 33,429 32,773
Diluted 33,669 34,455 35,088 34,193
American Medical Systems Holdings, Inc.
Condensed Balance Sheets
(In thousands)
October 2, 2004 January 3, 2004
--------------- ---------------
Assets
Current assets
Cash and short-term investments $36,405 $58,953
Accounts receivable, net 40,340 33,507
Inventories 21,113 18,402
Deferred taxes and other current
assets 10,803 8,533
--------------- ---------------
Total current assets 108,661 119,395
Property, plant and equipment, net 22,124 25,489
Goodwill and intangibles, net 145,584 116,455
Deferred taxes and other assets 7,854 17,988
--------------- ---------------
Total assets $284,223 $279,327
=============== ===============
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $4,264 $4,621
Accrued liabilities and taxes 30,437 17,996
Current portion of notes payable 0 7,159
--------------- ---------------
Total current liabilities 34,701 29,776
Long-term notes payable 0 9,205
Stockholders' equity 249,522 240,346
--------------- ---------------
Total liabilities and stockholders'
equity $284,223 $279,327
=============== ===============
American Medical Systems Holdings, Inc.
Condensed Statements of Cash Flows
(In thousands)
Nine Months Ended
-------------------
Oct. 2, Sept. 27,
2004 2003
--------- ---------
Cash flows from operating activities
Net income $2,929 $18,731
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 5,338 4,447
Loss on asset disposals 16 -
Amortization of intangibles, including
deferred financing costs 4,301 3,457
Non-cash in-process research and development
charge 35,000 -
Non-cash deferred compensation 53 129
Income tax benefit related to stock option
plans 1,477 1,227
Change in net deferred taxes (10,804) 822
Changes in operating assets and liabilities (4,912) (6,423)
--------- ---------
Net cash provided by operating activities 33,398 22,390
Cash flows from investing activities
Purchase of property, plant and equipment ($1,804) ($3,202)
Purchase of license agreement (2,500) -
Purchase of businesses, net of cash acquired (40,075) (43,152)
--------- ---------
Net cash used in investing activities (44,379) (46,354)
Cash flows from financing activities
Issuance of common stock $5,326 $2,064
Payments on long-term debt (16,364) (4,956)
--------- ---------
Net cash used in financing activities (11,038) (2,892)
Effect of exchange rates (529) 1,376
--------- ---------
Net decrease in cash and cash equivalents ($22,548) ($25,480)
========= =========
American Medical Systems Holdings, Inc.
Selected Sales Information
(In thousands)
Three Months Ended Nine Months Ended
------------------ -------------------
Oct. 2, Sept. 27, Oct. 2, Sept. 27,
2004 2003 2004 2003
-------- --------- --------- ---------
Sales
Product line
Men's health
Erectile restoration $18,620 $17,058 $54,004 $52,876
Continence 11,143 8,561 35,575 29,064
Prostate treatment 5,514 1,188 7,769 3,699
-------- --------- --------- ---------
Total men's health 35,277 26,807 97,348 85,639
Women's health 17,049 12,752 51,384 35,491
-------- --------- --------- ---------
Total $52,326 $39,559 $148,732 $121,130
======== ========= ========= =========
Geography
United States $43,271 $33,023 $117,512 $99,289
Outside United States 9,055 6,536 31,220 21,841
-------- --------- --------- ---------
Total $52,326 $39,559 $148,732 $121,130
======== ========= ========= =========
Percent of total sales
Product line
Men's health
Erectile restoration 36% 43% 36% 44%
Continence 21% 22% 24% 24%
Prostate treatment 11% 3% 5% 3%
-------- --------- --------- ---------
Total men's health 67% 68% 65% 71%
Women's health 33% 32% 35% 29%
-------- --------- --------- ---------
Total 100% 100% 100% 100%
======== ========= ========= =========
Geography
United States 83% 83% 79% 82%
Outside United States 17% 17% 21% 18%
-------- --------- --------- ---------
Total 100% 100% 100% 100%
======== ========= ========= =========
American Medical Systems Holdings, Inc.
Adjustments to Operating Income, Net Income and Earnings per Share for
Consistent Presentation
(In thousands, except per share data)
Three Months Ended Nine Months Ended
------------------- ------------------
Oct. 2, Sept. 27, Oct. 2, Sept. 27,
2004 2003 2004 2003
--------- --------- -------- ---------
Reported (GAAP) operating
income (loss) ($21,806) $8,205 $3,514 $26,378
Adjust for in-process
research and development
charge 35,000 - 35,000 -
--------- --------- -------- ---------
Adjusted operating income $13,194 $8,205 $38,514 $26,378
Reported (GAAP) net income
(loss) ($13,527) $6,940 $2,929 $18,731
Adjust for in-process
research & development, net
of tax 22,225 - 22,225 -
Adjust for non-recurring tax
benefit charge - (1,100) - (1,100)
--------- --------- -------- ---------
Adjusted net income $8,698 5,840 25,154 17,631
========= ========= ======== =========
Adjusted net income per share
Basic $0.26 $0.18 $0.75 $0.54
Diluted $0.25 $0.17 $0.72 $0.52
Weighted average common shares
used in calculation
Basic 33,669 32,974 33,429 32,773
Diluted 35,285 34,455 35,088 34,193
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion