American Medical Systems Reports Record Sales and Income Growth for Fourth Quarter and Full Year.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--Jan. 28, 2001 Over 50,000 Patients Benefit from AMS AMS - Andrew Message System Products in 2001 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) (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 fourth quarter of 2001 of $33.3 million, a 25 percent increase over sales of $26.7 million in the same quarter of 2000. Net income in the fourth quarter of 2001 was $1.6 million, or $0.05 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 66 percent increase from net income in the fourth quarter of 2000. Excluding the 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. effect of the previously announced $3.4 million Collagenesis Corporation write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. , net income would have been $3.7 million, or $0.11 per share on a fully diluted basis. Fourth-quarter operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: increased from 8.1 percent of sales in 2000 to 18.9 percent of sales in 2001. Net sales for the full year 2001 were $117.9 million, an 18 percent increase over sales of $100.3 million in 2000. Net income for the full year 2001 was $6.5 million, or $0.20 per fully diluted share, compared to $0.1 million in 2000. Excluding the Collagenesis write-off, net income would have been $8.6 million, or $0.27 per share. Operating margin for the full year increased from 5.4 percent of sales in 2000 to 13.1 percent of sales in 2001. 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 fourth-quarter performance, which is now our fifth consecutive quarter of growing sales and operating earnings--every quarter since our initial public offering. For the full year, 37 percent of our increased sales flowed through to net income. We have demonstrated we can deliver on the bottom line, and are very optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the future. As previously reported, revenues from all product lines showed 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. products growing 27 percent and 22 percent from last year's fourth quarter and full year, 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. products growing 24 percent and 15 percent, and 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 17 percent and 8 percent." 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, reported the adoption of FAS 142 in 2002 for the accounting of goodwill and other intangibles is expected to reduce 2002 amortization expense by $6.0 million, and increase 2002 net income by $4.7 million, or $0.14 per share. If these rules had been applied in 2001, they would have reduced amortization expense by $5.6 million and increased net income by $4.2 million, or $0.13 per share. He also explained that this required change in accounting would have lowered the company's effective tax rate to 41 percent in 2001, from the 47 percent actually reported for the year. Mr. Call also noted that net cash from operating activities during 2001 was $25.2 million, a significant increase from 2000, and operating cash was $0.79 per share for the year. Outlook For 2002, Mr. Kohrs said AMS expects full year sales to grow 15 to 18 percent, with the full-year operating margin greater than the full-year operating margin in 2001. "The new products we introduced in the second half of 2001 are gaining traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. in the market place and will continue to support our strong growth trends." Mr. Kohrs added, "We intend to use a portion of these higher sales to develop and launch even better products for our patients and their physicians." The company introduced significant improvements in its implant implant /im·plant/ (im-plant´) to insert or to graft (tissue, or inert or radioactive material) into intact tissues or a body cavity. products in March and July July: see month. of 2001, and a minimally-invasive surgical solution for curing female stress urinary incontinence stress urinary incontinence n. See stress incontinence. in August of last year. "We believe the overwhelming support for our new products will carry forward, and the number of people who could benefit from our products is growing every day. We have other exciting products in our pipeline, which will be available to our customers as soon as we and the appropriate regulatory bodies approve their marketing." 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 medical technology company with approximately 500 employees worldwide. It is a world leader in medical devices and procedures that cure 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 benign prostate hyperplasia Benign prostate hyperplasia (BPH) Enlargement of the prostate gland. Mentioned in: Paruresis (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 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. The company believes approximately 60 million people in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. alone suffer from one or more of these disorders. About 11 million of these people have a disorder severe enough to be candidates for treatment with the company's products. 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 provide a cure or reduce 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 sells to physicians in more than 60 countries. More information about American Medical Systems may be found at the company's website: http://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 such as the timing of new product introductions, competitor activities, changes in reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. rates, and others described in the company's Registration Statement on Form S-1 dated June June: see month. 26, 2001, and its 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. 31, 2000. Actual results may differ materially from anticipated results.
AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.
STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three months ended Twelve months ended
----------------------- ----------------------
Dec. 31, Dec. 29, Dec. 31, Dec. 29,
2000 2001 2000 2001
----------- ----------- ---------- -----------
(unaudited) (unaudited) (unaudited)
Net sales $26,699 $33,315 $100,317 $117,938
Cost of sales 5,465 6,518 21,891 23,140
--------- --------- --------- ---------
Gross profit 21,234 26,797 78,426 94,798
Operating expenses:
Marketing and sales 10,335 11,579 39,277 44,931
General and
administrative 3,394 3,707 12,128 12,156
Research and
development 3,211 2,772 12,225 11,899
Transition and
reorganization -- -- 1,000 1,000
Amortization of
intangibles 2,125 2,457 8,360 9,374
--------- --------- --------- ---------
Total operating
expenses 19,065 20,515 72,990 79,360
--------- --------- --------- ---------
Operating income 2,169 6,282 5,436 15,438
Operating margin 8.1% 18.9% 5.4% 13.1%
Royalty and other
income 700 759 2,928 3,301
Collagenesis impairment -- (3,405) -- (3,405)
Interest expense, net (1,039) (520) (6,943) (2,932)
--------- --------- --------- ---------
Income before income
taxes 1,830 3,116 1,421 12,402
Income tax expense (874) (1,531) (1,369) (5,872)
--------- --------- --------- ---------
Net income $956 $1,585 $52 $6,530
========= ========= ========= =========
Net income per share -
basic $0.03 $0.05 $0.00 $0.22
diluted (see note
below) $0.03 $0.05 $0.00 $0.20
Weighted average shares
used in computation -
basic 27,754 31,899 10,478 29,792
diluted 30,070 34,051 12,809 32,068
NOTE Diluted earnings per share before the write-off of Collagenesis
was $0.11 for the quarter ended December 29, 2001 and $0.27 for
the year ended December 29, 2001.
AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
Assets Dec. 31, Dec. 29,
2000 2001
--------- -----------
Current assets: (unaudited)
Cash and cash equivalents $12,165 $28,755
Short term investments -- 9,013
Accounts receivable, net 23,616 25,306
Inventories 9,674 13,991
Deferred taxes and other current assets 9,375 9,023
-------- --------
Total current assets 54,830 86,088
Property, plant and equipment, net 24,773 23,604
Intangibles, net 97,731 99,483
Investments -- 18,783
Deferred taxes and other assets 3,928 7,193
-------- --------
Total assets $181,262 $235,151
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $2,431 $2,678
Accrued liabilities and taxes 24,295 27,593
Current portion of notes payable 6,033 4,909
-------- --------
Total current liabilities 32,759 35,180
Long-term notes payable 38,459 24,000
Minority interest 521 --
Other long-term liability -- 1,884
Stockholders' equity 109,523 174,087
-------- --------
Total liabilities and stockholders' equity $181,262 $235,151
======== ========
AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands, except share data)
For the twelve months ended
----------------------------
December 31, December 29,
2000 2001
------------ ------------
Cash flows from operating activities: (unaudited)
Net income $52 $6,530
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 3,723 3,867
Amortization of intangibles, including
deferred financing costs 8,575 9,644
Noncash deferred compensation 435 446
Noncash transition and reorganization - 747
Noncash impairment of investment in
technology - 3,000
Income tax benefit related to stock
option plans 96 240
Other noncash expenses - 19
Change in net deferred taxes 1,093 3,876
Changes in operating assets and
liabilities (6,667) (3,137)
------------ ------------
Net cash provided by operating
activities 7,307 25,232
------------ ------------
Cash flows from investing activities:
Purchase of property, plant and equipment (1,675) (2,698)
Purchase of businesses, net of cash
acquired (3,744) (14,733)
Purchase of investments in technology - (4,500)
Purchase of other intangibles (2,611) (1,500)
Purchase of investments, net of sales - (27,796)
------------ ------------
Net cash used in investing activities (8,030) (51,227)
------------ ------------
Cash flows from financing activities:
Issuance of common stock 63,343 58,319
Net borrowings on long-term debt (56,808) (15,583)
------------ ------------
Net cash provided by financing
activities 6,535 42,736
------------ ------------
Effect of exchange rates (587) (151)
------------ ------------
Net increase in cash and cash equivalents $5,225 $16,590
============ ============
AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.
SELECTED SALES INFORMATION
(In thousands, except per share data)
(unaudited)
Three months ended Twelve months ended
------------------------- -------------------------
December 31, December 29, December 31, December 29,
2000 2001 2000 2001
------------ ------------ ------------ ------------
Erectile Dysfunction $13,413 $16,642 $51,288 $59,165
Male Incontinence 7,081 8,737 26,564 31,190
Female Incontinence 4,498 5,942 15,880 20,483
Prostate Disease 1,707 1,994 6,585 7,100
------------ ------------ ------------ ------------
Total $26,699 $33,315 $100,317 $117,938
============ ============ ============ ============
Domestic Sales $21,777 $26,910 $81,670 $97,069
International Sales 4,922 6,405 18,647 20,869
------------ ------------ ------------ ------------
Total $26,699 $33,315 $100,317 $117,938
============ ============ ============ ============
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