DATE: April 29, 2004
American Medical Systems
Reports 20 Percent Sales Growth
for First Quarter
Net Income Rises 47 Percent
on Sales & Marketing Leverage
MINNEAPOLIS, April 29 – American Medical Systems Holdings Inc. (NASDAQ: AMMD) reported record sales in the first quarter of 2004 of $47.3 million, a 20 percent increase over sales of $39.3 million in the comparable quarter of 2003 (17 percent without gain from currency exchange rate changes). Net income in the quarter was $8.0 million, or $0.23 per share, up 47 percent from $5.5 million, or $0.16 per share, in the comparable quarter of 2003.
Douglas W. Kohrs, Chairman and CEO, commented, “We are proud of our performance and the progress we are making with our broad range of product offerings. Women’s health revenues led our growth in the quarter at 61 percent above last year’s first quarter. Male continence posted a record quarter, achieving 21 percent growth over the comparable 2003 period. Our business outside the U.S. showed great strength, turning in growth of 34 percent before the favorable impact of currency exchange. We again demonstrated improved operating leverage as evidenced by significant operating margin improvement over the first quarter of 2003.”
Mr. Kohrs added, “Products new to AMS since last year’s first quarter contributed significantly to the current quarter’s growth. Continued development of the six new products for 2004 highlighted during our February conference call were a primary focus of the company during the first quarter. We remain on track to meet our 2004 launch schedules and look forward to providing these innovative products to meet the needs of our rapidly expanding markets.”
Outlook
For the year 2004, the Company continues to expect annual sales to increase 16 to 19 percent over 2003 sales, generating earnings per share of $0.94 to $0.98.
In the second quarter of 2004, AMS expects total revenues to be in the range of $48 to $50 million dollars, and earnings per share of $0.23 to $0.25.
Earnings Call Information
American Medical Systems will host a conference call today at 5:00 p.m. eastern time to discuss its first quarter 2004 results. The call will be webcast through the Company’s corporate website at www.AmericanMedicalSystems.com and available for replay two hours after the completion of the call.
About American Medical Systems
American Medical Systems, headquartered in Minnetonka, Minnesota, is a world leader in medical devices and procedures to treat erectile dysfunction; other men’s health problems, including incontinence, benign prostate hyperplasia, and stricture; and women’s health problems, including menorrhagia, incontinence, and other pelvic floor defects. Although not often life-threatening, 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 life expectancy, higher quality-of-life expectations, and greater awareness of new treatment alternatives. Physicians use American Medical Systems’ products to
American Medical Systems
April 29, 2004
Page 2 of 6
reduce or eliminate the incapacitating effects of these diseases, often through minimally invasive surgery. The company’s products were used to treat over 109,000 patients in 54 countries during the last 12 months. More information about the company and its products may be found at the company’s website: www.AmericanMedicalSystems.com.
Forward-Looking Statements
Statements about the company’s future product availability, sales, and financial results are forward-looking statements subject to risks and uncertainties including the timing and success of new product introductions, continued physician endorsement and use of the company’s products, competitor activities, changes in reimbursement rates, potential product recalls, and the integra- tion of acquired businesses and product lines. These risks and others are more fully described in the company’s Annual Report on Form 10-K for the year ended January 3, 2004, and its other SEC filings. Actual results may differ materially from anticipated results.
| | | |
| Contact: | | Doug Kohrs |
| | Chairman and Chief Executive Officer |
| | 952-930-6118 |
| | Doug.Kohrs@AmericanMedicalSystems.com |
| | | |
| | Carmen Diersen |
| | Executive Vice President |
| | and Chief Financial Officer |
| | 952-930-6495 |
| | Carmen.Diersen@AmericanMedicalSystems.com |
American Medical Systems
April 29, 2004
Page 3 of 6
American Medical Systems Holdings Inc.
Statement of Operations
(In thousands, except per share data)
| | | | | | | | | |
| | | Three months ended March
|
| | | 2004
| | 2003
|
Net sales | | $ | 47,313 | | | $ | 39,347 | |
Cost of sales | | | 8,930 | | | | 6,943 | |
| | | |
| | | |
| |
Gross profit | | | 38,383 | | | | 32,404 | |
Operating expenses | | | | | | | | |
| Marketing and selling | | | 16,493 | | | | 14,797 | |
| Research and development | | | 3,584 | | | | 3,791 | |
| General and administrative | | | 4,876 | | | | 4,070 | |
| Amortization of intangibles | | | 1,061 | | | | 1,065 | |
| | | |
| | | |
| |
| Total operating expenses | | | 26,014 | | | | 23,723 | |
Operating income | | | 12,369 | | | | 8,681 | |
Other income (expense) | | | | | | | | |
| Royalty income | | | 491 | | | | 777 | |
| Interest income (expense), net | | | (63 | ) | | | (596 | ) |
| Other income (expense) | | | (156 | ) | | | 35 | |
| | | |
| | | |
| |
| Total other income (expense) | | | 272 | | | | 216 | |
Income before income taxes | | | 12,641 | | | | 8,897 | |
Provision for income taxes | | | 4,614 | | | | 3,443 | |
| | | |
| | | |
| |
Net income | | $ | 8,027 | | | $ | 5,454 | |
| | | |
| | | |
| |
Net income per share | | | | | | | | |
| Basic | | $ | 0.24 | | | $ | 0.17 | |
| Diluted | | $ | 0.23 | | | $ | 0.16 | |
Weighted average shares used in calculation | | | | | | | | |
| Basic | | | 33,242 | | | | 32,547 | |
| Diluted | | | 34,999 | | | | 34,042 | |
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April 29, 2004
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American Medical Systems Holdings Inc.
Consolidated Balance Sheet
(In thousands)
| | | | | | | | | |
| | | April 3, 2004
| | January 3, 2004
|
Assets | | | | | | | | |
| Current assets | | | | | | | | |
| Cash and short-term investments | | $ | 72,370 | | | $ | 58,953 | |
| Accounts receivable, net | | | 35,226 | | | | 33,507 | |
| Inventories | | | 17,888 | | | | 18,402 | |
| Deferred taxes and other current assets | | | 8,545 | | | | 8,533 | |
| | | |
| | | |
| |
| Total current assets | | | 134,029 | | | | 119,395 | |
| Property, plant and equipment, net | | | 23,966 | | | | 25,489 | |
| Goodwill and intangibles, net | | | 115,337 | | | | 116,455 | |
| Deferred taxes and other assets | | | 17,577 | | | | 17,988 | |
| | | |
| | | |
| |
| Total assets | | $ | 290,909 | | | $ | 279,327 | |
| | | |
| | | |
| |
Liabilities and Stockholders’ Equity | | | | | | | | |
| Current liabilities | | | | | | | | |
| Accounts payable | | $ | 3,636 | | | $ | 4,621 | |
| Accrued liabilities and taxes | | | 22,148 | | | | 17,996 | |
| Current portion of notes payable | | | 7,364 | | | | 7,159 | |
| | | |
| | | |
| |
| Total current liabilities | | | 33,148 | | | | 29,776 | |
| Long-term notes payable | | | 7,363 | | | | 9,205 | |
| Stockholders’ equity | | | 250,398 | | | | 240,346 | |
| | | |
| | | |
| |
| Total liabilities and stockholders’ equity | | $ | 290,909 | | | $ | 279,327 | |
| | | |
| | | |
| |
American Medical Systems
April 29, 2004
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American Medical Systems Holdings Inc.
Condensed Statements of Cash Flows
(In thousands)
| | | | | | | | | |
| | | Three months ended March
|
| | | 2004
| | 2003
|
Cash flows from operating activities | | | | | | | | |
| Net income | | $ | 8,027 | | | $ | 5,454 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
| Depreciation | | | 1,688 | | | | 1,383 | |
| Amortization of intangibles, including deferred financing costs | | | 1,105 | | | | 1,136 | |
| Non-cash deferred compensation | | | 8 | | | | 46 | |
| Income tax benefit related to stock option plans | | | 763 | | | | 170 | |
| Change in net deferred taxes | | | (290 | ) | | | (83 | ) |
| Changes in operating assets and liabilities | | | 2,261 | | | | (2,194 | ) |
| | | |
| | | |
| |
| Net cash provided by operating activities | | | 13,562 | | | | 5,912 | |
Cash flows from investing activities | | | | | | | | |
| Purchase of property, plant and equipment | | $ | (165 | ) | | $ | (707 | ) |
| Purchase of businesses, net of cash acquired | | | — | | | | (40,698 | ) |
| | | |
| | | |
| |
| Net cash used in investing activities | | | (165 | ) | | | (41,405 | ) |
Cash flows from financing activities | | | | | | | | |
| Issuance of common stock | | $ | 1,674 | | | $ | 570 | |
| Payments on long-term debt | | | (1,637 | ) | | | (1,956 | ) |
| | | |
| | | |
| |
| Net cash provided by (used in) financing activities | | | 37 | | | | (1,386 | ) |
Effect of exchange rates | | | (17 | ) | | | 217 | |
| | | |
| | | |
| |
Net increase (decrease) in cash and cash equivalents | | $ | 13,417 | | | | ($36,662 | ) |
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American Medical Systems
April 29, 2004
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American Medical Systems Holdings Inc.
Selected Sales Information
(In thousands)
| | | | | | | | | |
| | | Three months ended March
|
| | | 2004
| | 2003
|
Sales | | | | | | | | |
| Product line | | | | | | | | |
| Men’s health | | | | | | | | |
| Erectile restoration | | $ | 17,465 | | | $ | 17,852 | |
| Continence | | | 12,166 | | | | 10,032 | |
| Prostate treatment | | | 1,166 | | | | 1,199 | |
| | | |
| | | |
| |
| Total men’s health | | | 30,797 | | | | 29,083 | |
| Women’s health | | | 16,516 | | | | 10,264 | |
| | | |
| | | |
| |
| Total | | $ | 47,313 | | | $ | 39,347 | |
| | | |
| | | |
| |
| Geography | | | | | | | | |
| United States | | $ | 36,598 | | | $ | 32,347 | |
| Outside United States | | | 10,715 | | | | 7,000 | |
| | | |
| | | |
| |
| Total | | $ | 47,313 | | | $ | 39,347 | |
| | | |
| | | |
| |
Percent of total sales | | | | | | | | |
| Product line | | | | | | | | |
| Men’s health | | | | | | | | |
| Erectile restoration | | | 37 | % | | | 45 | % |
| Continence | | | 26 | % | | | 26 | % |
| Prostate treatment | | | 2 | % | | | 3 | % |
| | | |
| | | |
| |
| Total men’s health | | | 65 | % | | | 74 | % |
| Women’s health | | | 35 | % | | | 26 | % |
| | | |
| | | |
| |
| Total | | | 100 | % | | | 100 | % |
| | | |
| | | |
| |
| Geography | | | | | | | | |
| United States | | | 77 | % | | | 82 | % |
| Outside United States | | | 23 | % | | | 18 | % |
| | | |
| | | |
| |
| Total | | | 100 | % | | | 100 | % |
| | | |
| | | |
| |
