EXHIBIT 99.1
FOR IMMEDIATE RELEASE |
Investor Contact: Neil Berkman Associates (310) 277-5162 info@BerkmanAssociates.com | Company Contact: Chris Chavez, President & CEO (972) 309-8000 www.ANS-medical.com |
Advanced Neuromodulation Systems
Reports Third Quarter Results
Reports Third Quarter Results
DALLAS, TEXAS, October 27, 2005 —Advanced Neuromodulation Systems, Inc. (ANS) (NASDAQ:ANSI)today announced operating results for the third quarter and first nine months of 2005.
Third Quarter Results
For the three months ended September 30, 2005, revenue increased 25.6% to a record $39,337,000 from $31,330,000 for the third quarter of 2004. Sales of neuro products increased 28.3% to a record $36,199,000 for this year’s third quarter compared to $28,223,000 for last year’s third quarter, reflecting higher sales of ANS’ EonTM, GenesisTM, and GenesisXPTM implantable spinal cord stimulation (SCS) systems for the treatment of chronic pain. Gross margin for this year’s third quarter was 74.6% compared to 73.1% for the third quarter of 2004.
Net income for the third quarter of 2005 increased 12.9% to $5,353,000, or $0.26 per diluted share, from $4,742,000, or $0.23 per diluted share, for the third quarter of 2004.
At September 30, 2005, ANS had total cash and marketable securities of approximately $158.9 million. ANS has no debt.
Nine Month Results
For the nine months ended September 30, 2005, revenue increased 24.8% to a record $110,366,000 from $88,451,000 for the first nine months of 2004. Neuro sales increased 24.6% to a record $99,771,000 compared to $80,084,000 for the same period last year. Net income for the first nine months of 2005 was a record $69,007,000, or $3.31 per diluted share. This compares to net income for the first nine months of 2004 of $13,034,000, or $0.62 per diluted share. Net income for this year’s first nine months included a pre-tax gain of $85,244,000 from the sale of Cyberonics, Inc. common stock acquired in August 2004.
St. Jude Medical Tender Offer
On October 16, 2005, St. Jude Medical, Inc. and ANS announced that the Boards of Directors of both companies have unanimously approved a definitive agreement whereby St. Jude Medical will acquire ANS for $61.25 per ANS share in cash, for a total of approximately $1.3 billion. St. Jude Medical has commenced a tender offer for all of the outstanding shares of ANS common stock. The transaction is subject to customary closing conditions and regulatory approvals, as well as the valid tender of a majority of the outstanding shares of ANS common stock, on a fully-diluted basis. The transaction is expected to close by the end of the year.
Advanced Neuromodulation Systems Reports Third Quarter Results
October 27, 2005
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October 27, 2005
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About Advanced Neuromodulation Systems
ANS (www.ANS-medical.com) designs, develops, manufactures and markets implantable systems used to manage chronic intractable pain and other disorders of the central nervous system.
Forward-Looking Statements
Any statements made regarding the proposed transaction between St. Jude Medical, Inc. and Advanced Neuromodulation Systems, Inc. are forward-looking statements, which are subject to risks and uncertainties, such as those described under or incorporated by reference in Item 8.01 of St. Jude Medical’s Current Report on Form 8-K filed on October 17, 2005, and in Item 8.01 of ANS’ Current Report on Form 8-K filed on October 17, 2005, and in the Outlook and Uncertainties section in ANS’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 (see page 25) and ANS’ Annual Report on Form 10-K for the year ended December 31, 2004 (see page 26). Actual results may differ materially from anticipated results.
Additional Information
This press release constitutes neither an offer to purchase nor a solicitation of an offer to sell shares of ANS. St. Jude Medical has filed a tender offer statement with the Securities and Exchange Commission (SEC) and ANS has filed a solicitation/recommendation statement with respect to the offer. ANS shareholders are advised to read the tender offer statement regarding the acquisition of ANS referenced in this news release, and the related solicitation/recommendation statement. The tender offer statement and the solicitation/recommendation statement contain important information that should be read carefully before any decision is made with respect to the offer. These documents are available to all shareholders of ANS at no expense to them. These documents are also available at no charge on the SEC’s web site atwww.sec.gov. Shareholders may also obtain copies of these documents without charge by requesting them from ANS in writing at 6901 Preston Road, Plano, Texas 75024, or by phone at 972-309-8000.
(tables attached)
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ADVANCED NEUROMODULATION SYSTEMS, INC. and SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
Condensed Consolidated Statements of Income (Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Net revenue | $ | 39,337,376 | $ | 31,330,408 | $ | 110,366,066 | $ | 88,451,122 | ||||||||
Cost of revenue | 10,003,026 | 8,414,174 | 28,925,278 | 23,751,017 | ||||||||||||
Gross profit | 29,334,350 | 22,916,234 | 81,440,788 | 64,700,105 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing | 12,411,385 | 9,791,838 | 34,553,480 | 27,810,611 | ||||||||||||
Research and development | 4,524,520 | 2,911,698 | 12,314,218 | 8,096,308 | ||||||||||||
General and administrative | 4,258,188 | 2,974,620 | 11,609,568 | 7,998,316 | ||||||||||||
Amortization of other intangibles | 662,773 | 626,191 | 1,960,300 | 1,824,838 | ||||||||||||
21,856,866 | 16,304,347 | 60,437,566 | 45,730,073 | |||||||||||||
Income from operations | 7,477,484 | 6,611,887 | 21,003,222 | 18,970,032 | ||||||||||||
Other income (expense): | ||||||||||||||||
Gain on sale of investment in common stock of Cyberonics, Inc. | — | — | 85,244,301 | — | ||||||||||||
Foreign currency transaction gain (loss) | (5,793 | ) | 81,009 | (170,608 | ) | 26,156 | ||||||||||
Investment income | 957,473 | 482,850 | 2,595,591 | 964,021 | ||||||||||||
951,680 | 563,859 | 87,669,284 | 990,177 | |||||||||||||
Income before income taxes | 8,429,164 | 7,175,746 | 108,672,506 | 19,960,209 | ||||||||||||
Income taxes | 3,076,645 | 2,433,791 | 39,665,465 | 6,926,251 | ||||||||||||
Net income | $ | 5,352,519 | $ | 4,741,955 | $ | 69,007,041 | $ | 13,033,958 | ||||||||
Basic income per share: | ||||||||||||||||
Net income | $ | 0.27 | $ | 0.23 | $ | 3.46 | $ | 0.65 | ||||||||
Number of basic shares | 19,800,456 | 20,189,242 | 19,948,489 | 20,075,233 | ||||||||||||
Diluted income per share: | ||||||||||||||||
Net income | $ | 0.26 | $ | 0.23 | $ | 3.31 | $ | 0.62 | ||||||||
Number of diluted shares | 20,938,453 | 21,032,695 | 20,857,866 | 21,116,735 | ||||||||||||
ADVANCED NEUROMODULATION SYSTEMS, INC. and SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited)
September 30, | December 31, | |||||||
2005 | 2004 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and marketable securities | $ | 158,882,578 | $ | 124,016,064 | ||||
Receivable, trade net | 29,791,124 | 25,322,813 | ||||||
Receivable, investment income and other | 1,722,025 | 638,987 | ||||||
Inventories | 25,362,383 | 23,923,851 | ||||||
Deferred income taxes | 2,072,228 | 2,029,091 | ||||||
Prepaid expenses and other current assets | 1,967,525 | 1,888,957 | ||||||
Total current assets | 219,797,863 | 177,819,763 | ||||||
Net property, equipment and fixtures | 35,149,222 | 33,175,329 | ||||||
Minority equity investments in preferred stock | 1,104,000 | 1,104,000 | ||||||
Goodwill, patents, tradenames, purchased technology & other assets, net | 34,709,388 | 35,388,049 | ||||||
Total assets | $ | 290,760,473 | $ | 247,487,141 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 3,237,598 | $ | 3,206,516 | ||||
Accrued salary and employee benefit costs | 3,732,694 | 2,390,721 | ||||||
Accrued commissions | 3,060,412 | 2,656,112 | ||||||
Income taxes payable | 8,299,711 | 708,412 | ||||||
Deferred revenue | 107,028 | 165,861 | ||||||
Other accrued expenses | 1,043,682 | 342,075 | ||||||
Total current liabilities | 19,481,125 | 9,469,697 | ||||||
Deferred income taxes | 6,055,263 | 14,734,487 | ||||||
Non-current deferred revenue | 616,849 | 718,820 | ||||||
Total stockholders’ equity | 264,607,236 | 222,564,137 | ||||||
Total liabilities and stockholders’ equity | $ | 290,760,473 | $ | 247,487,141 | ||||