VISX Net Income Increases 25% on 17% Revenue Growth.SANTA CLARA Santa Clara, city, Cuba Santa Clara (sän`tä klä`rä), city (1994 est. pop. 217,000), capital of Villa Clara prov., central Cuba. , Calif. -- VISX, Incorporated (NYSE NYSE See: New York Stock Exchange :EYE) announced today financial results for the first quarter ended March 31, 2005. Total revenues increased 17 percent to $51,339,000 from $43,805,000 in the first quarter of 2004, reflecting growth in all VISX product areas. Net income increased 25 percent to $14,679,000, or $0.28 per 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, compared with net income of $11,756,000, or $0.23 per diluted share, in the first quarter of 2004. Net income in the first quarter of 2005 was reduced by approximately $650,000 of merger related expenses that negatively impacted earnings per share by approximately $0.01. Highlights of the First Quarter of 2005: --License and other revenues increased 16 percent over the first quarter of last year, reflecting both market growth and continuing strong conversion to CustomVue procedures. --Strong demand for the VISX STAR Laser System drove system revenues growth of 26 percent from Q1 2004. --Operating margins rose to 45 percent of sales compared with 44 percent in the first quarter of 2004. --VISX generated cash from operations of $20,773,000, bringing cash and equivalents at the end of the quarter to $160,437,000. Liz Davila, VISX chairman 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. , stated, "Our 17 percent increase in total revenue follows a strong first quarter last year. In addition to continued growth in both procedures and CustomVue mix, which drives our license revenues higher, we are very pleased to report strong sales of the VISX STAR laser. Laser sales have exceeded our expectations in each of the past two quarters, and we have increased production. Strong demand worldwide for lasers is a healthy sign that doctors are excited about the laser vision correction market opportunity." Davila continued, "Our recent new product introductions, which include Fourier software, CustomVue hyperopia hyperopia (hī'pərō`pēə): see farsightedness. , CustomVue mixed astigmatism mixed astigmatism n. Astigmatism in which one meridian is hyperopic while the one at a right angle to it is myopic. , and Iris Registration, are also driving conversion to CustomVue procedures. We believe these are truly exciting times for VISX and we are looking forward to joining forces with AMO AMO - America's Multimedia Online to expand further our market opportunities and breadth of products for the refractive refractive capacity to refract light. refractive error a difference between the focal length of the cornea and lens, and the length of the eye, resulting in myopia or hyperopia. surgeon." New Product Introductions: VISX introduced two new products in the first quarter 2005: CustomVue mixed astigmatism and Iris Registration. This follows the introduction of Fourier software and CustomVue hyperopia in the latter half of 2004. With the introduction of CustomVue mixed astigmatism, VISX is now the only U.S. provider to offer wavefront Noun 1. wavefront - (physics) an imaginary surface joining all points in space that are reached at the same instant by a wave propagating through a medium wave front driven treatments for all forms of astigmatism astigmatism (əstĭg`mətĭz'əm), type of faulty vision caused by a nonuniform curvature in the refractive surfaces—usually the cornea, less frequently the lens—of the eye. . The Company's new Iris Registration product is the first fully automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. method of aligning a·lign v. a·ligned, a·lign·ing, a·ligns v.tr. 1. To arrange in a line or so as to be parallel: align the tops of a row of pictures; aligned the car with the curb. and registering wavefront corrections for CustomVue treatments. It is designed to replace the current means of registration, which involves manual marking of the eye to assess rotational movement. ASCRS ASCRS American Society of Cataract and Refractive Surgery ASCRS American Society of Colon and Rectal Surgeons Highlights: At the recent 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 Society of Cataract cataract, in medicine, opacity of the lens of the eye, which impairs vision. In the young, cataracts are generally congenital or hereditary; later they are usually the result of degenerative changes brought on by aging or systemic disease (diabetes). and Refractive Surgeons meeting (ASCRS), data were presented by world-recognized ophthalmologists on VISX products and technological advancements. Over 700 ophthalmologists attended the Eye World-supported Refractive Surgery Refractive surgery A surgical procedure that corrects visual defects. Mentioned in: Photorefractive Keratectomy and Laser-Assisted In-Situ Keratomileusis refractive surgery Symposium symposium In ancient Greece, an aristocratic banquet at which men met to discuss philosophical and political issues and recite poetry. It began as a warrior feast. Rooms were designed specifically for the proceedings. (RSS (Really Simple Syndication) A syndication format that was developed by Netscape in 1999 and became very popular for aggregating updates to blogs and the news sites. RSS has also stood for "Rich Site Summary" and "RDF Site Summary. ), an adjunct adjunct (aj´ungkt), n a drug or other substance that serves a supplemental purpose in therapy. adjunct event to the ASCRS. Noted ophthalmologists presented data on the benefits of VISX's latest technology. In one of the presentations, Steven Ste´ven n. 1. Voice; speech; language. Ye have as merry a steven As any angel hath that is in heaven. - Chaucer. 2. An outcry; a loud call; a clamor. To set steven to make an appointment. Schallhorn, M.D., director of cornea cornea: see eye. and refractive surgery, Navy Medical Center, San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. , presented data showing the statistically significant benefits of wavefront driven procedures compared with standard procedures. Julian Julian or Julian the Apostate Latin Julianus Apostata orig. Flavius Claudius Julianus (born AD 331/332, Constantinople—died June 26/27, 363, Ctesiphon, Mesopotamia) Roman emperor (361–363), noted scholar and military leader. Stevens Stevens, family of U.S. inventors. John Stevens, 1749–1838, b. New York City, was graduated from King's College (now Columbia Univ.) in 1768. , M.D., consultant ophthalmologist ophthalmologist /oph·thal·mol·o·gist/ (of?thal-mol´ah-jist) a physician who specializes in ophthalmology. oph·thal·mol·o·gist n. A physician who specializes in ophthalmology. , Moorfields Eye Hospital Moorfields Eye Hospital NHS Foundation Trust is a National Health Service eye hospital in central London. It is in the London Borough of Islington, on City Road, and is close to Old Street station. , London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. , reported further improvements in patient outcomes through the use of Iris Registration. Also at the RSS, Colman Colman may refer to:
PI scientist - a person with advanced knowledge of one or more sciences at the Kraff Eye Institute, and clinical instructor, Northwestern University Northwestern University, mainly at Evanston, Ill.; coeducational; chartered 1851, opened 1855 by Methodists. In 1873 it absorbed Evanston College for Ladies. Medical School, presented data showing positive results for patients treated in our CustomVue presbyopia Presbyopia Definition The term presbyopia means "old eye" and is a vision condition involving the loss of the eye's ability to focus on close objects. U.S. clinical trial. W. Bruce Jackson Bruce Jackson is the President of the Project on Transitional Democracies Professional Positions
VISX and Advanced Medical Optics Advanced Medical Optics, Inc., (NYSE: EYE) (known as AMO) is a global medical device leader focused on the discovery and delivery of innovative vision technologies that optimize the quality of life for people of all ages. Merger Update: On April 25, 2005, VISX and Advanced Medical Optics, Inc. (NYSE:AVO a·vo n. pl. a·vos See Table at currency. [Portuguese, shortened from oitavo, eighth, from Latin oct ) announced that they have selected May 26, 2005, as the date for their special meetings of stockholders concerning their planned merger. (AMO's annual meeting of stockholders will also be held on this date.) The joint proxy statement/prospectus will be mailed to stockholders of AMO and VISX on or about April 27, 2005. Stockholders of record as of the close of business on April 14, 2005, of both companies will be entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to vote at the special meetings. The transaction is expected to close shortly after the May 26, 2005, stockholders' meetings. Additional Information and Where You Can Find It: AMO has filed a Registration Statement on Form S-4 with the SEC that includes a joint proxy statement/prospectus of VISX and AMO and other relevant materials in connection with the proposed transaction. The joint proxy statement/prospectus will be mailed to the stockholders of VISX and AMO. Investors and security holders of VISX and AMO are urged to read the joint proxy statement/prospectus and the other relevant materials when they become available because they will contain important information about VISX, AMO and the proposed transaction. The joint proxy statement/prospectus and other relevant materials (when they become available), and any other documents filed by VISX or AMO with the SEC, may be obtained free of charge at the SEC's web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by VISX by contacting VISX Investor Relations Investor relations The process by which the corporation communicates with its investors. at ir@visx.com or via telephone at 408-773-7600. Investors and security holders may obtain free copies of the documents filed with the SEC by AMO at www.amo-inc.com or via telephone at 714-247-8348. Investors and security holders are urged to read the joint proxy statement/prospectus and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed transaction. AMO and its respective directors and executive officers may be deemed to be participants in the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of proxies from the stockholders of VISX and AMO in favor of upon the side of; favorable to; for the advantage of. See also: favor the proposed transaction. Information about the directors and executive officers of AMO and their respective interests in the proposed transaction will be available in the joint proxy statement/prospectus. VISX and its respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of AMO and VISX in favor of the proposed transaction. Information about the directors and executive officers of VISX and their respective interests in the proposed transaction will be available in the joint proxy statement/prospectus. About CustomVue Laser Vision Correction: CustomVue laser vision correction employs a diagnostic laser system that analyzes the optical errors in the eye. Much like a fingerprint fingerprint, an impression of the underside of the end of a finger or thumb, used for identification because the arrangement of ridges in any fingerprint is thought to be unique and permanent with each person (no two persons having the same prints have ever been , each person's visual error is unique and can now be captured through the use of the VISX WaveScan system. The information is digitally recorded, transferred to the VISX STAR Laser System and the CustomVue laser vision correction procedure is customized based on the specific refractive errors refractive error Ametropia, myopic shift Ophthalmology The inability of images to focus properly on the retina, often corrected by glasses contact lenses, or refractive surgery. See Astigmatism, Farsightedness, Myopia, Presbyopia. of the individual. With the new CustomVue product, ophthalmologists can correct aberrations, or imperfections, of the eye that previously were not measured. This means that custom technology has the potential to improve vision beyond correction with contacts and glasses. About VISX: VISX is a worldwide market leader in the design, manufacture, and sale of laser vision correction systems. The Company was founded in 1988 and received FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. approval for its first laser vision correction product in 1996. VISX holds over 200 patents worldwide and has licensed its technology to Alcon, Bausch & Lomb, LaserSight, Nidek, Schwind, Zeiss-Meditec, and WaveLight Technologies. The VISX CustomVue procedure is a significant advancement in laser vision correction that enables customized corrections based on a comprehensive diagnostic measurement of the optical errors in the eye. Clinical trial results show that the CustomVue(TM) procedure has the potential to improve vision beyond the correction possible with contacts and glasses. 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 there are 50 to 60 million eligible laser vision correction candidates who experience some form of nearsightedness nearsightedness or myopia, defect of vision in which far objects appear blurred but near objects are seen clearly. Because the eyeball is too long or the refractive power of the eye's lens is too strong, the image is focused in front of the , farsightedness farsightedness or hyperopia, condition in which far objects can be seen easily but there is difficulty in near vision. It is caused by a defect of refraction in which the image is focused behind the retina of the eye rather than upon it, either , or astigmatism. VISX has a current effort underway to treat presbyopia, the condition that requires reading glasses with age, due to loss of accommodation for close work. Additional information on VISX can be found on the worldwide web at www.visx.com. This press release contains certain 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. based on current expectations, forecasts, and assumptions of VISX that involve risks and uncertainties. Forward-looking statements in this release, including statements that joining forces with AMO will expand further our market opportunities and breadth of products for the refractive surgeon, that the VISX and AMO merger transaction is expected to close shortly after the special meeting date of May 26, 2005, that CustomVue offers the potential to improve vision beyond correction with contacts and glasses, that we anticipate launching CustomVue high myopia myopia: see nearsightedness. in the fall of 2005, that increased shipments of lasers will lead to higher license revenue which is a major source of profit for VISX, and that we expect to begin U.S. shipments of Iris Registration late in Q2, are based on information available to the Company as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . The Company's actual results could differ materially from those stated or implied in such forward-looking statements, due to risks and uncertainties associated with the Company's business, which include the fact that market acceptance of our products, and particularly of CustomVue, is uncertain and depends on broad acceptance by physicians and patients, that intense competition in the laser vision correction industry could result in the loss of customers, an inability to attract new customers, or a decrease in prices for our products, that we face risks due to our reliance on sales in international markets, that we are subject to extensive governmental regulation, which increases our costs and could prevent us from selling our products, that the possibility of long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. side effects Side effects Effects of a proposed project on other parts of the firm. and adverse publicity regarding laser correction surgery could seriously harm our business, that we have and may become subject to product liability claims, that adverse economic conditions may cause our revenues to decline, that expenses are relatively fixed in the short term and declines in revenue would have an immediate impact on earnings per share, and that there is uncertainty as to whether the transaction to merge with AMO will be completed. Further information on risk factors is contained in VISX's most recent filings with the Securities and Exchange Commission, including VISX'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 31, 2004, and the Registration Statement filed by AMO on Form S-4 with the SEC that includes a joint proxy statement/prospectus of VISX and AMO. The Company assumes no obligation to update the information included in this press release, whether as a result of new information, future events, or otherwise. Editors' Note: VISX, VISX STAR Laser System, VISX STAR, VISX WaveScan, WaveScan, and CustomVue are trademarks of VISX, Incorporated.
-- Tables and Questions and Answers to Follow --
VISX, Incorporated
Condensed Consolidated Statement of Operations
(In thousands, except per share amounts)
Three Months Ended
-----------------------
3/31/2005 3/31/2004
----------- -----------
(unaudited) (unaudited)
Revenues:
License and other revenues $ 37,647 $ 32,487
System revenues 7,668 6,076
Service and parts revenues 6,024 5,242
----------- -----------
Total revenues 51,339 43,805
----------- -----------
Costs and Expenses:
Cost of license and other revenues 1,123 980
Cost of system revenues 7,154 5,291
Cost of service and parts revenues 4,262 3,598
Selling, general and administrative 10,510 9,757
Research, development and regulatory 5,172 5,044
----------- -----------
Total costs and expenses 28,221 24,670
----------- -----------
Income from operations 23,118 19,135
Interest and other income, net 890 328
----------- -----------
Income before provision for income taxes 24,008 19,463
Provision for income taxes 9,329 7,707
----------- -----------
Net income $ 14,679 $ 11,756
=========== ===========
Earnings per share
Basic $ 0.29 $ 0.24
----------- -----------
Diluted $ 0.28 $ 0.23
=========== ===========
Shares used for earnings per share
Basic 50,007 48,672
----------- -----------
Diluted 51,749 50,433
=========== ===========
VISX, Incorporated
Condensed Consolidated Balance Sheets
(In thousands)
3/31/2005 12/31/2004
----------- -----------
(unaudited) (unaudited)
Cash, cash equivalents and short-term
investments $ 160,437 $ 138,408
Accounts receivable, net 34,965 31,584
Inventories 13,211 14,255
Other current assets 21,568 22,219
----------- -----------
Current assets 230,181 206,466
Property and equipment, net 3,784 3,990
Long-term deferred tax and other assets 11,733 12,367
----------- -----------
Total assets $ 245,698 $ 222,823
=========== ===========
Accounts payable $ 6,537 $ 3,588
Accrued liabilities 44,277 40,579
----------- -----------
Current liabilities 50,814 44,167
Stockholders' equity 194,884 178,656
----------- -----------
Total liabilities and stockholders'
equity $ 245,698 $ 222,823
=========== ===========
VISX, Incorporated
Consolidated Statements of Cash Flows
(In thousands)
Three Months Ended
-----------------------
3/31/2005 3/31/2004
----------- -----------
Cash flows from operating activities: (unaudited) (unaudited)
Net income $ 14,679 $ 11,756
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 4,033 2,186
Provision for doubtful accounts receivable 234 85
Increase (decrease) in cash flows from
changes in operating assets and
liabilities:
Accounts receivable (3,620) (293)
Inventories (1,575) (1,319)
Deferred tax assets and prepaid expenses (111) 4,272
Long-term deferred tax and other assets 493 985
Accounts payable 2,949 162
Accrued liabilities and other current
liabilities 3,691 2,945
----------- -----------
Net cash provided by operating activities 20,773 20,779
----------- -----------
Cash flows from investing activities:
Capital expenditures (313) (540)
Purchases of available for sale securities (24,650) (18,094)
Proceeds from maturities of available for
sale securities 5,181 2,705
Net cash used in investing activities (19,782) (15,929)
----------- -----------
Cash flows from financing activities:
Proceeds from issuance of common stock 1,843 2,476
Repurchases of common stock - (8,118)
----------- -----------
Net cash provided by (used in) financing
activities 1,843 (5,642)
----------- -----------
Effect of exchange rate changes on cash and
cash equivalents (17) 8
----------- -----------
Net increase (decrease) in cash and cash
equivalents 2,817 (784)
Cash and cash equivalents, beginning of period 14,536 24,895
Cash and cash equivalents, end of period $ 17,353 $ 24,111
=========== ===========
Supplemental Cash Flow Information:
Cash paid for income taxes $ 1,637 $ 959
=========== ===========
Non-cash investing activities:
Inventory transferred to deferred costs
under operating leases $ 2,612 $ 1,203
=========== ===========
-- Questions and Answers to Follow --
VISX Q1 2005 Financial Results Press Release
Questions and Answers
1) Q: What is the penetration of Fourier software installations in the
U.S.?
A: Over 95 percent of our U.S. customers now have the Fourier
product installed.
2) Q: What is the level of interest for the Iris Registration product?
A: Iris Registration has been very well received by
ophthalmologists. Orders have been strong, especially following
the ASCRS where international ophthalmologists presented data on
the benefits of Iris Registration as seen in their practices.
We expect to begin U.S. shipments of Iris Registration late in
Q2.
3) Q: When do you anticipate the U.S. launch of CustomVue high myopia?
A: We are awaiting FDA approval to market and sell this product in
the U.S. We currently estimate that we will launch CustomVue
high myopia in the fall of 2005. We believe that approximately
10% of people having laser vision correction are in the high
myopia range.
4) Q: What portion of laser shipments were operating leases?
A: A little over half of the laser shipments in the quarter were
sold under operating leases. From a cash flow perspective, this
resulted in an outflow of approximately $2.6 million from
inventory into long-term and short-term prepaid assets. The
revenue and costs associated with these leases are recognized
over the terms of the individual leases.
5) Q: What contributed to the increase in service and parts revenues?
A: Service and parts revenues increased 15 percent over the first
quarter last year. Service revenue fluctuates with procedure
volume because the majority of our service revenues are based on
a per procedure billing for laser service. In quarters when
procedure volume is higher, which typically occurs in our first
quarter, service and parts revenues are also likely to be
higher. The increase in this quarter is also related to
additional service contracts from WaveScan systems coming off
warranty coverage.
6) Q: Why did overall gross margin decline from Q1 2004?
A: The first quarter of 2005 had a relatively higher proportion of
system revenues, on which we earn a low gross profit margin. As
such, overall gross margins were at 76% compared with 77% in the
first quarter of last year. We believe the increased shipments
of lasers will lead to higher license revenue which is a major
source of profit for VISX.
Our gross margins for the first quarter by product line were as
follows:
Product Area Q1 2005 Q1 2004
License and other revenues gross margins 97 percent 97 percent
System revenues gross margins 7 percent 13 percent
Service and parts revenues gross margins 29 percent 31 percent
7) Q: Why was your tax rate lower than last year's first quarter?
A: In the first quarter of 2005, two special circumstances impacted
our tax rate.
On the positive side, certain tax matters were concluded that
enabled us to ensure that previously estimated tax reserves were
no longer required. This served to reduce the effective tax rate
in the quarter. On the negative side, no tax benefit was
recorded for the $650,000 in merger-related expenses. This
yielded a net tax rate of 38.9 percent which was slightly lower
than our expected rate of approximately 40 percent.
8) Q: What was the impact of merger-related expenses on EPS?
A: Merger-related expenses in Q1 2005 were approximately $650,000.
No tax benefits were recorded on this expense. With 51,749,000
diluted shares outstanding, the $650,000 expense negatively
impacted earnings by $0.01.
9) Q: What were days sales outstanding (DSO) for the quarter?
A: Days sales outstanding were 61 days at the end of Q1 2005 versus
72 days at the end of Q4 2004 and 57 days at the end of Q1 2004.
10) Q: Why did depreciation and amortization increase from Q1 2004?
A: The cost of equipment sold under operating leases is amortized
to cost of sales over the term of the underlying leases. Sales
of equipment under operating leases have increased over the
past year, increasing the amount amortized to cost of sales.
11) Q: Why have accounts payable increased?
A: The increased demand for lasers has resulted in increased
orders for manufacturing materials. This has led to higher
accounts payable balances which we believe are a normal result
of increased demand for our products.
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion