American Medical Systems (AMMD) 8-K American Medical Systems Announces Second Quarter 2010 Financial Results

Exhibit 99.1

DATE: August 3, 2010

FOR IMMEDIATE RELEASE

AMERICAN MEDICAL SYSTEMS ANNOUNCES SECOND QUARTER 2010 FINANCIAL RESULTS

• Second quarter sales of $136 million grows 7.9% over prior year. Excluding the impact of Uterine Health, which was sold in February 2010 results in constant currency growth of 9.1%

• GAAP net income of $20.6 million grows 22% over prior year

MINNEAPOLIS, August 3, 2010 — American Medical Systems Holdings, Inc. (NASDAQ: AMMD) reported sales of $136.4 million for the second quarter of 2010, a 7.9 percent increase over sales of $126.4 million in the comparable quarter of 2009. Adjusting for the negative impact of $1.4 million due to fluctuations in foreign exchange rates since the time the second quarter guidance was issued; revenue would have achieved the upper end of the guidance range. Conversely, compared to the prior year, foreign exchange had a minimal favorable impact, resulting in second quarter constant currency growth of 7.6 percent. Further adjusting revenue for the impact of theHer Option^® product line, which was sold during the first quarter of 2010, results in constant currency growth of 9.1 percent.

The Company reported strong second quarter net income of $20.6 million, a 22.0 percent increase over net income of $16.9 million in the same quarter last year. The resulting second quarter earnings per share of $0.26 compares to $0.23 in the same quarter last year, and non-GAAP adjusted earnings per share of $0.31 compares to $0.29 in the same period last year, finishing at the top of our guidance. Non-GAAP adjusted earnings per share excludes the impact of the amortization of intangible assets and amortization of financing costs, both significant non-cash items affecting comparability to other companies. A reconciliation of reported net income to non-GAAP adjusted net income is provided in the attached schedules.

Men’s Health sales of $61.4 million in the second quarter, represented an increase of 7.7 percent on a reported basis compared to the same quarter last year, and grew 7.5 percent on a constant currency basis, with the erectile restoration and male continence product lines contributing equally to the growth. The BPH therapy business increased 3.9 percent on a reported basis, and grew 3.7 percent on a constant currency basis, to $29.2 million during the quarter. Late in the second quarter, the Company launched the newGreenLight^™ XPS Laser Therapy System, and received 510(k) clearance for the revolutionary MoXy^™ Liquid Cooled Fiber, our newest system for the treatment of BPH. The Women’s Health business, excluding theHer Option^® product line that was sold in the first quarter, increased 15.7 percent on a reported basis and 15.3 percent on a constant currency basis to $44.5 million in the second quarter. Pelvic floor repair has continued its strong performance, driven by the success of bothElevate^® anterior andElevate^® posterior. The female continence product line recorded improving growth rates in the second quarter, approaching mid single digits. Revenue from uterine health of $1.3 million pertains to the product supply agreement with CooperSurgical, Inc., as part of the product line divestiture agreement.

“We had solid second quarter revenue performance and are very excited about the market opportunities related to the launch of the newGreenLight^™ XPS system and the anticipated launch of the MoXy^™ Liquid

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August 3, 2010
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Cooled Fiber later this year. We are equally excited about the third quarter launch of the newMiniArc^® Precise Single-Incision Sling System for the treatment of female stress urinary incontinence (SUI),” noted Tony Bihl, Chief Executive Officer. Mr. Bihl further stated, “Adding to our confidence for the remainder of 2010 was our operational performance in the second quarter, once again achieving very strong gross and operating margins and net income growth of 20 percent plus.”

Outlook

Despite recent pressures on revenue as a result of the strengthened U.S. dollar, the Company reaffirms its full year 2010 revenue guidance of $544 to $560 million. Third quarter revenue guidance is in the range of $128 to $132 million. This guidance assumes foreign currency exchange rates remain constant with current rates.

Consistent with 2009, the Company has two significant non-cash charges in GAAP earnings that create inconsistencies in comparisons to many other companies; amortization of financing costs and amortization of intangible assets. Accordingly, the Company guides to non-GAAP adjusted earnings per share, which the Company defines as GAAP earnings per share excluding the impact of amortization of intangible assets and amortization of financing costs.

The Company reaffirms its full year 2010 non-GAAP adjusted earnings per share guidance of $1.19 to $1.27. Third quarter non-GAAP adjusted earnings per share guidance is in the range of $0.26 to $0.29. Both the full year and third quarter guidance exclude the impact of amortization of intangible assets which is approximately $0.025 and $0.10 for the third quarter and full year 2010, respectively, and amortization of financing costs, which is approximately $0.025 and $0.11 for the third quarter and full year 2010, respectively. Guidance for both periods excludes the impact of any unusual non-recurring items that could occur, such as gain or loss on early debt extinguishments, sale of non-strategic assets or IPRD charges on milestone payments related to prior acquisitions.

Use of Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), management provides non-GAAP adjusted net income, non-GAAP adjusted earnings per share and constant currency revenue growth rates because management believes that in order to properly understand the Company’s short-term and long-term financial trends and for purposes of comparability to other companies, investors may wish to consider the impact of certain adjustments (such as gain on extinguishment of debt, gain on sale of non-strategic assets, IPRD charges, amortization of intangible assets, amortization of financing costs and related income tax adjustments and the impact of foreign currency translation on reported revenue). These adjustments result from facts and circumstances (such as acquisition and business development activities and other non-recurring items) that vary in frequency and impact on the Company’s results of operations, represent significant items, which when excluded provide a useful measure to determine the health of the business and earnings by the business before significant non-cash charges or in the case of foreign currency translation, are highly variable and difficult to predict. Management uses non-GAAP adjusted net income, non-GAAP adjusted earnings per share and constant currency revenue growth rates to forecast and evaluate the operational performance of the Company as well as to compare results of current periods to prior periods on a consistent basis.

A reconciliation of net income and revenue growth rate percentages, the GAAP measures most directly comparable to non-GAAP adjusted earnings per share and constant currency revenue growth rates, respectively, are provided on the attached schedules.

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August 3, 2010
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Non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. Investors should consider non-GAAP measures in addition to, and not as a substitute for, or superior to, financial performance measures prepared in accordance with GAAP.

Earnings Call Information

American Medical Systems will host a conference call on Tuesday, August 3, 2010 at 5:00 p.m. eastern time to discuss its second quarter results and guidance for the third quarter. Those without internet access may join the call from within the U.S. by dialing 888-263-1724; outside the U.S., dial 970-315-0301.

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

About American Medical Systems

American Medical Systems, headquartered in Minnetonka, Minnesota, is a diversified supplier of medical devices and procedures to cure incontinence, erectile dysfunction, benign prostate hyperplasia (BPH), pelvic floor 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 335,000 patients in 2009.

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 or technological obsolescence; healthcare reform legislation in the U.S.; successfully managing debt leverage and related credit facility financial covenants; current worldwide economic conditions and the impact on operations of the disruption in global financial markets; 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; 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; currency and other economic risks inherent in selling our products internationally and other risks and uncertainties described in the Company’s Annual Report on Form 10-K for the year ended January 2, 2010, 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

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August 3, 2010
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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 websitewww.AmericanMedicalSystems.com and in the Company’s Annual Report on Form 10-K for 2009 and its other SEC filings.

Contact: Mark Heggestad
Executive Vice President and Chief Financial Officer
952-930-6495
Mark.Heggestad@AmericanMedicalSystems.com

Anthony Bihl
President and Chief Executive Officer
952-930-6334
Tony.Bihl@AmericanMedicalSystems.com

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August 3, 2010
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American Medical Systems Holdings, Inc.
Statements of Operations
(Unaudited)

(In thousands, except per share data)

	Three Months Ended						Six Months Ended
	July 3, 2010			July 4, 2009			July 3, 2010			July 4, 2009
Net sales	$	136,368		$	126,388		$	271,294		$	250,026
Cost of sales		22,805			21,608			43,832			44,950
Gross profit		113,563			104,780			227,462			205,076
Operating expenses
Marketing and selling		46,114			42,853			94,311			86,201
Research and development		13,837			13,166			27,346			25,977
General and administrative		11,797			11,660			24,487			22,439
Amortization of intangibles		3,030			3,401			6,077			6,666
Total operating expenses		74,778			71,080			152,221			141,283
Operating income		38,785			33,700			75,241			63,793
Other (expense) income
Royalty income		47			874			355			1,807
Interest expense		(3,584	)		(4,966	)		(7,538	)		(10,376	)
Amortization of financing costs		(3,346	)		(3,974	)		(7,039	)		(7,955	)
Gain on extinguishment of debt		—			—			—			4,562
Gain on sale of non-strategic assets		—			—			7,719			—
Other (expense) income		485			767			(31	)		1,422
Total other (expense) income		(6,398	)		(7,299	)		(6,534	)		(10,540	)
Income before income taxes		32,387			26,401			68,707			53,253
Provision for income taxes		11,820			9,536			27,482			19,308
Net income	$	20,567		$	16,865		$	41,225		$	33,945
Net income per share
Basic net income	$	0.27		$	0.23		$	0.55		$	0.46
Diluted net income		0.26			0.23			0.53			0.46
Weighted average common shares used in calculation
Basic		75,612			73,919			75,364			73,778
Diluted		78,185			74,502			77,177			74,258

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August 3, 2010
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American Medical Systems Holdings, Inc.
Condensed Balance Sheets

(In thousands)

	July 3, 2010		January 2, 2010
	(Unaudited)
Assets
Current assets
Cash and short-term investments	$	68,070	$	50,538
Accounts receivable, net		89,689		102,590
Inventories, net		33,457		30,276
Other current assets		21,510		20,937
Total current assets		212,726		204,341
Property, plant and equipment, net		42,578		44,120
Goodwill and intangibles, net		778,406		792,467
Other long-term assets		5,615		6,223
Total assets	$	1,039,325	$	1,047,151
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	9,790	$	9,114
Accrued liabilities and taxes		51,699		62,151
Total current liabilities		61,489		71,265
Debt and other long term liabilities		370,165		430,527
Total liabilities		431,654		501,792
Stockholders’ equity		607,671		545,359
Total liabilities and stockholders’ equity	$	1,039,325	$	1,047,151

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August 3, 2010
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American Medical Systems Holdings, Inc.
Condensed Statements of Cash Flows
(Unaudited)

(In thousands)

	Six Months Ended
	July 3, 2010			July 4, 2009
Cash flows from operating activities
Net income	$	41,225		$	33,945
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization, including deferred financing costs		18,075			19,488
Gain on extinguishment of debt		—			(4,562	)
Gain on sale of non-strategic assets		(7,719	)		—
Stock-based compensation		4,130			4,476
Other adjustments, including changes in operating assets and liabilities		(5,830	)		6,501
Net cash provided by operating activities		49,881			59,848
Cash flows from investing activities
Purchase of property, plant and equipment		(3,546	)		(2,462	)
Purchase of other intangibles		(1,657	)		(5,000	)
(Purchase) sale of short term investments, net		(24,608	)		11,816
Sale of non-strategic assets, net		19,070			—
Other cash flows from investing activities		1,277			(51	)
Net cash provided by (used in) investing activities		(9,464	)		4,303
Cash flows from financing activities
Payments on senior secured credit facility		(65,874	)		(29,111	)
Repurchase of convertible senior subordinated notes		—			(21,125	)
Other cash flows from financing activities		18,031			4,218
Net cash used in financing activities		(47,843	)		(46,018	)
Effect of currency exchange rates on cash		360			(156	)
Net (decrease) increase in cash and cash equivalents		(7,066	)		17,977
Cash and cash equivalents at beginning of period		30,670			11,642
Cash and cash equivalents at end of period	$	23,604		$	29,619

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August 3, 2010
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American Medical Systems Holdings, Inc.
Selected Sales Information and Constant Currency Growth Reconciliation
(Unaudited)

(In thousands)

	Three Months Ended						Constant Currency Growth Reconciliation (a)
	July 3, 2010			July 4, 2009			Percent Growth			Currency Impact		Percent Growth at
												Constant Currency
Sales
Men’s health	$	61,361		$	56,967			7.7	%	$	137		7.5	%
BPH therapy		29,176			28,084			3.9	%		42		3.7	%
Women’s health		44,491			38,467			15.7	%		136		15.3	%
Sub-total		135,028			123,518			9.3	%		315		9.1	%
Uterine health (b)		1,340			2,870			-53.3	%		—		-53.3	%
Total	$	136,368		$	126,388			7.9	%	$	315		7.6	%
Geography
United States	$	95,530		$	86,535			10.4	%	$	—		10.4	%
International		39,498			36,983			6.8	%		315		5.9	%
Sub-total		135,028			123,518			9.3	%		315		9.1	%
United States-Uterine health (b)		1,340			2,870			-53.3	%		—		-53.3	%
Total	$	136,368		$	126,388			7.9	%	$	315		7.6	%
Percent of total sales
Men’s health		45	%		45	%
BPH therapy		21	%		22	%
Women’s health		33	%		30	%
Sub-total		99	%		98	%
Uterine health (b)		1	%		2	%
Total		100	%		100	%
Geography
United States		71	%		71	%
International		29	%		29	%
Total		100	%		100	%

(a)	To calculate the currency impact on revenue growth rates, the Company compares each period’s sales, assuming no fluctuation in foreign currency exchange rates between periods. The generally accepted accounting principle (GAAP) measure most comparable to this non-GAAP measure is growth rate percentages based on GAAP revenue.
(b)	The uterine health product line,Her Option®was sold in February, 2010. Revenues in the second quarter of 2010 include revenue earned as part of the product supply agreement, which was part of the divestiture agreement with CooperSurgical, Inc.

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August 3, 2010
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American Medical Systems Holdings, Inc.
Selected Sales Information and Constant Currency Growth Reconciliation
(Unaudited)

(In thousands)

	Six Months Ended						Constant Currency Growth Reconciliation (a)
	July 3, 2010			July 4, 2009			Percent Growth			Currency Impact		Percent Growth at
												Constant Currency
Sales
Men’s health	$	125,841		$	116,424			8.1	%	$	1,467		6.8	%
BPH therapy		55,087			53,473			3.0	%		555		2.0	%
Women’s health		87,239			74,769			16.7	%		844		15.5	%
Sub-total		268,167			244,666			9.6	%		2,866		8.4	%
Uterine health (b)		3,127			5,360			-41.7	%		—		-41.7	%
Total	$	271,294		$	250,026			8.5	%	$	2,866		7.4	%
Geography
United States	$	192,053		$	173,715			10.6	%	$	—		10.6	%
International		76,114			70,951			7.3	%		2,866		3.2	%
Sub-total		268,167			244,666			9.6	%		2,866		8.4	%
United States-Uterine health (b)		3,127			5,360			-41.7	%		—		-41.7	%
Total	$	271,294		$	250,026			8.5	%	$	2,866		7.4	%
Percent of total sales
Men’s health		46	%		47	%
BPH therapy		20	%		21	%
Women’s health		32	%		30	%
Sub-total		99	%		98	%
Uterine health (b)		1	%		2	%
Total		100	%		100	%
Geography
United States		72	%		72	%
International		28	%		28	%
Total		100	%		100	%

(a)	To calculate the currency impact on revenue growth rates, the Company compares each period’s sales, assuming no fluctuation in foreign currency exchange rates between periods. The generally accepted accounting principle (GAAP) measure most comparable to this non-GAAP measure is growth rate percentages based on GAAP revenue.
(b)	The uterine health product line,Her Option®was sold in February, 2010. Revenues in the first six months of 2010 consist of end-customer revenue earned prior to the date of sale, in addition to revenue earned as part of the product supply agreement, which was part of the divestiture agreement with CooperSurgical, Inc.

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August 3, 2010
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American Medical Systems Holdings, Inc.
Reconciliation of Reported Net Income to Non-GAAP Adjusted Net Income
(Adjustments are presented on a pre-tax basis)

(Unaudited)

(In thousands, except per share data)

	Three Months Ended						Six Months Ended
	July 3, 2010			July 4, 2009			July 3, 2010			July 4, 2009
Net income, as reported	$	20,567		$	16,865		$	41,225		$	33,945
Adjustments to net income:
Amortization of intangibles (a)		3,030			3,401			6,077			6,666
Amortization of financing costs (b)		3,346			3,974			7,039			7,955
Gain on extinguishment of debt (c)		—			—			—			(4,562	)
Gain on sale of non-strategic assets (d)		—			—			(7,719	)		—
Tax effect of adjustments to net income (e)		(2,404	)		(2,662	)		129			(3,651	)
Non-GAAP adjusted net income	$	24,539		$	21,578		$	46,751		$	40,353
Net income per share, as reported
Basic	$	0.27		$	0.23		$	0.55		$	0.46
Diluted	$	0.26		$	0.23		$	0.53		$	0.46
Non-GAAP adjusted earnings per share
Basic	$	0.32		$	0.29		$	0.62		$	0.55
Diluted	$	0.31		$	0.29		$	0.61		$	0.54
Weighted average common shares used in calculation:
Basic		75,612			73,919			75,364			73,778
Diluted		78,185			74,502			77,177			74,258

(a)	Consists of amortization of intangible assets, primarily developed and core technology.
(b)	Consists of amortization of financing costs on our convertible senior subordinated notes and senior secured credit facility.
(c)	Relates to the gain on retiring approximately $27 million of convertible senior subordinated notes.
(d)	Relates to the gain on the sale of theHer Option® Global Endometrial Ablation product line.
(e)	Includes the tax effect of each of the above items in each of the periods.