American Medical Systems Revenue Exceeds $62 Million in First Quarter of 2005; Earnings Growth of 40% Yields Record Income Level.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 NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :AMMD AMMD Aerodynamic Mass Median Diameter ) reported record sales of $62.1 million for the first quarter of 2005, a 31.3 percent increase over sales of $47.3 million in the comparable quarter of 2004 (with 1.5 percentage points of the increase coming from currency exchange rate changes). Net income in the quarter was a record $11.2 million, or $0.16 per share, up 40.1 percent from $8.0 million or $0.12 per share, in the comparable quarter of 2004. Martin J. Emerson, President and Chief Executive Officer, commented, "We are pleased with the significant first quarter growth realized worldwide across our broad product portfolio. New products contributed significantly to our fast start in 2005. We are also proud of the operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. delivered in the quarter as operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. grew to more than 27 percent of sales. Record cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses of $17.8 million resulted in a quarter ending balance in cash and short term investments of $70.5 million." Mr. Emerson added, "First quarter growth of 32 percent in our men's pelvic pelvic /pel·vic/ (pel´vik) pertaining to the pelvis. pel·vic adj. Of, relating to, or near the pelvis. health business reflected significant contribution from both internally developed and acquired products. Our continued focus on delivering improvements to the field of 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 generated record sales in that core business. Increases in our 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. treatment revenues were driven by our TherMatrx in-office BPH BPH abbr. benign prostatic hyperplasia BPH Benign prostatic hypertrophy, a very common noncancerous cause of prostatic enlargement in older men. therapy that continues to reach more patients through an increasing physician base." "Continued focus on physician training for our women's pelvic health products resulted in 31 percent growth in that business for the quarter," said Emerson. "Our long term commitment to delivering innovative surgical solutions to both the 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 prolapse prolapse Protrusion of an internal organ out of its normal place, usually of the rectum or uterus outside the body when supporting muscles weaken. The membrane lining the rectum can push out through the anus, most often in old people with constipation who strain during markets attracted over 600 physicians to our female pelvic health training courses in the quarter. Through 2005, our portfolio of prolapse products will broaden as we continue to pioneer surgical options for the treatment of this complex medical condition." Outlook For the year 2005, the Company expects annual revenue growth in the range of 25 to 27 percent, or revenue of $260 to $265 million. The Company has increased its estimated earnings per share on these revenues to the range of $0.64 to $0.67. In the second quarter of 2005, AMS AMS - Andrew Message System expects revenues to be in the range of $63 to $65 million, representing a 28 to 32 percent increase versus the second quarter of 2004, with earnings per share of $0.16 to $0.17. Earnings Call Information American Medical Systems will host a conference call today at 5:00 p.m. eastern time to discuss its first quarter results for 2005. Those without internet access See how to access the Internet. may join the call from within the U.S. by dialing 800-886-7217; outside the U.S., dial 706-679-3821. A live webcast 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 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 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. , incontinence, menorrhagia menorrhagia /men·or·rha·gia/ (men?ah-ra´jah) hypermenorrhea. men·or·rha·gia n. See hypermenorrhea. , prolapse and other pelvic 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 132,000 patients in 54 countries during 2004. 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 market opportunities, future products, sales and financial results are forward-looking statements subject to risks and uncertainties such as 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; regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. matters; competitor activities; changes in and adoption of reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. rates; potential product recalls and other risks and uncertainties 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. 1, 2005 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 2004 and its other SEC filings.
American Medical Systems Holdings, Inc.
Statements of Operations
(In thousands, except per share data)
Three Months Ended
----------------------------
April 2, 2005 April 3, 2004
-------------- -------------
Net sales $62,145 $47,313
Cost of sales 11,020 8,930
-------------- -------------
Gross profit 51,125 38,383
Operating expenses
Marketing and selling 21,656 16,493
Research and development 4,638 3,584
General and administrative 5,789 4,876
Amortization of intangibles 1,790 1,061
-------------- -------------
Total operating expenses 33,873 26,014
Operating income (loss) 17,252 12,369
Other income (expense)
Royalty income 478 491
Interest income 274 138
Interest expense (55) (201)
Other income (expense) (463) (156)
-------------- -------------
Total other income (expense) 234 272
Income (loss) before income taxes 17,486 12,641
Provision for income taxes 6,243 4,614
-------------- -------------
Net income (loss) $11,243 $8,027
============== =============
Net income (loss) per share
Basic $0.16 $0.12
Diluted $0.16 $0.12
Weighted average common shares used in
calculation
Basic 68,552 66,484 (A)
Diluted 71,250 69,998 (A)
Note
(A) April 3, 2004 average common shares reflect the effect of the
stock split effective March 21, 2005.
American Medical Systems Holdings, Inc.
Condensed Balance Sheets
(In thousands)
April 2, 2005 January 1, 2005
---------------- ----------------
Assets
Current assets
Cash and short-term investments $70,484 $51,168
Accounts receivable, net 46,566 46,984
Inventories 21,088 21,719
Deferred taxes and other current
assets 7,932 7,956
---------------- ----------------
Total current assets 146,070 127,827
Property, plant and equipment, net 21,921 22,065
Goodwill and intangibles, net 146,934 147,157
Deferred taxes and other assets 2,545 3,501
---------------- ----------------
Total assets $317,470 $300,550
================ ================
Liabilities and stockholders' equity
Current liabilities
Accounts payable $5,236 $4,237
Accrued liabilities and taxes 43,452 44,015
---------------- ----------------
Total current liabilities 48,688 48,252
Other long term liabilities 3,126 3,126
---------------- ----------------
Total liabilities 51,814 51,378
Stockholders' equity 265,656 249,172
---------------- ----------------
Total liabilities and stockholders'
equity $317,470 $300,550
================ ================
American Medical Systems Holdings, Inc.
Condensed Statements of Cash Flows
(In thousands)
Three Months Ended
---------------------------
April 2, 2005 April 3, 2004
------------- -------------
Cash flows from operating activities
Net income $11,243 $8,027
Adjustments to reconcile net income to
net cash provided
by operating activities:
Depreciation 1,515 1,678
Loss on asset disposals 25 10
Amortization of intangibles, including
deferred financing costs 1,790 1,105
Non-cash deferred compensation 9 8
Income tax benefit related to stock
option plans 2,355 763
Change in net deferred taxes 1,089 (290)
Changes in operating assets and
liabilities (235) 2,261
------------- -------------
Net cash provided by operating activities 17,791 13,562
Cash flows from investing activities
Purchase of property, plant and equipment (1,421) (165)
Purchase of business, net of cash
acquired (684) -
Purchase of investments in technology (750) -
Purchase of short-term investments (2,600) -
Sale of short-term investments 5,728 -
------------- -------------
Net cash used in investing activities 273 (165)
Cash flows from financing activities
Issuance of common stock 3,822 1,674
Payments on long-term debt - (1,637)
------------- -------------
Net cash used in financing activities 3,822 37
Effect of exchange rates 558 (17)
------------- -------------
Net increase (decrease) in cash and cash
equivalents $22,444 $13,417
============= =============
Cash and cash equivalents at beginning of
period $35,689 $58,953
------------- -------------
Cash and cash equivalents at end of period $58,133 $72,370
============= =============
American Medical Systems Holdings, Inc.
Selected Sales Information
(In thousands)
Three Months Ended
----------------------------
April 2, 2005 April 3, 2004
-------------- -------------
Sales
Product line
Men's health
Erectile restoration $20,694 $17,465
Male continence 13,248 12,166
Prostate treatments 6,647 1,166
-------------- -------------
Total men's health 40,589 30,797
Women's health 21,556 16,516
-------------- -------------
Total $62,145 $47,313
============== =============
Geography
United States $48,333 $36,598
International 13,812 10,715
-------------- -------------
Total $62,145 $47,313
============== =============
Percent of total sales
Product line
Men's health
Erectile restoration 33% 37%
Male continence 21% 26%
Prostate treatments 11% 2%
-------------- -------------
Total men's health 65% 65%
Women's health 35% 35%
-------------- -------------
Total 100% 100%
============== =============
Geography
United States 78% 77%
International 22% 23%
-------------- -------------
Total 100% 100%
============== =============
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