American Medical Systems Reports Third Quarter Revenue of $109.0 Million.

MINNEAPOLIS -- American Medical Systems Holdings, Inc. (NASDAQ:AMMD) reported revenues of $109.0 million for the third quarter of 2007, a 20 percent increase over sales of $90.5 million in the third quarter of 2006. Year over year revenue comparisons are impacted by the July 2006 acquisition of Laserscope. Excluding Laserscope, 2007 and 2006 third quarter base revenue was $83.0 million and $72.0 million, respectively, representing a 15 percent increase. Adjusted for foreign exchange, the Company's base business growth rate was 14 percent.

The Company reported net income for the quarter of $6.9 million, or $0.09 per share. The prior year's third quarter had a reported net loss of $58.6 million, or $0.84 per share, and included $61.5 million of in-process research and development (IPR&D) charges from the Laserscope acquisition completed during that quarter, along with a loss from discontinued operations of $0.7 million. Net income for the third quarter of 2006, adjusted to exclude the effect of these charges, was $5.2 million, or $0.07 per share. A reconciliation of reported earnings to these adjusted results for the prior year is included in the attached financial tables.

Martin J. Emerson, President and Chief Executive Officer, noted, "Third quarter revenue performance from most of our base businesses was very strong, with our erectile restoration, male continence, female continence and international laser therapy businesses all recording growth rates at the top end of our expectations or higher. We continue to be pleased with market acceptance of both the Advance[TM] Male Sling System for treating mild male incontinence and the new MiniArc[TM] Single Incision Sling System for female incontinence."

Mr. Emerson further stated, "We are behind our full year growth expectations in our BPH business. The most significant variance to our BPH expectations this year has been our laser therapy business, where we have not maintained consistent revenue performance. Third quarter international laser therapy revenues were sequentially higher than in the second quarter, indicating that our focused efforts outside the U.S. are gaining traction. However, our U.S. laser therapy business struggled in the third quarter following a strong first half of 2007. Despite the inconsistencies we have experienced in our laser therapy business in the past few quarters, we remain optimistic for the therapy's market potential, and we have a number of initiatives in place to improve both the performance and predictability of the business."

Credit Facility Amendment

The Company further announced that it has entered into an amendment of senior secured credit facility which modifies certain financial covenants for future quarters. While the Company remains in full compliance with all debt covenants for its third quarter, it has completed an amendment with the support of its lenders lengthening the period of time over which performance ratios must be achieved. Details of the amendment will be shared on the conference call later today and are fully disclosed in a Form 8-K also filed today.

Outlook

For the year 2007, the Company has updated its expected revenue range to $458 to $464 million, from the previous guidance of $470 to $482 million. Revenue projected for the fourth quarter of 2007 ranges from $124 to $130 million.

The Company's projected earnings per share from continuing operations for 2007 is anticipated in the range of $0.40 to $0.45 per share, adjusted from the previous guidance of $0.52 to $0.60. Fourth quarter earnings per share is projected to be $0.15 to $0.20.

Earnings Call Information

American Medical Systems will host a conference call today at 5:00 p.m. eastern time to discuss its third quarter 2007 results. Those without internet access may join the call from within the U.S. by dialing 800-886-7217; outside the U.S., dial 706-679-3821.

A live web cast of the call will be available through the Company's corporate website at www.AmericanMedicalSystems.com and available for replay three hours after the completion of the call.

About American Medical Systems

American Medical Systems, headquartered in Minnetonka, Minnesota and including its 2006 acquisition of Laserscope, is a diversified supplier of medical devices and procedures to cure erectile dysfunction, benign prostatic hyperplasia, incontinence, menorrhagia, prolapse and other pelvic disorders in men and women. These disorders can significantly diminish one's quality of life and profoundly affect social relationships. In recent years, the 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 effects of these diseases, often through minimally invasive therapies. The Company's products were used to treat approximately 240,000 patients in 2006.

Forward-Looking Statements

This press release contains forward-looking statements relating to the market opportunities, future products, sales and financial results of American Medical Systems. These statements and other statements contained in this press release that are not purely historical fact are forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that are based on management's beliefs, certain assumptions and current expectations. These forward-looking statements are subject to risks and uncertainties such as successfully competing against competitors; physician acceptance, endorsement, and use of AMS products; potential product recalls; successful integration of Laserscope into AMS' business; successfully managing increased debt leverage and related credit facility financial covenants; factors impacting the stock market and share price and its impact on the dilution of convertible securities; ability of the Company's manufacturing facilities to meet customer demand; reliance on single or sole-sourced suppliers; successful upgrade of its global software system; loss or impairment of a principal manufacturing facility; clinical and regulatory matters; timing and success of new product introductions; patient acceptance of the Company's products and therapies; changes in and adoption of reimbursement rates; adequate protection of the Company's intellectual property rights; product liability claims; and other risks and uncertainties described in the Company's Annual Report on Form 10-K for the year ended December 30, 2006, and its other SEC filings.

Actual results may differ materially from anticipated results. The forward-looking statements contained in this press release are made as of the date hereof, and AMS undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events.

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 2006 and its other SEC filings.

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