EXHIBIT 99.4
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial statements are
presented for illustrative purposes only and are not necessarily indicative of
the combined financial position or results of operations for future periods or
the financial position or results of operations that actually would have been
realized had American Medical Systems Holdings, Inc. and Cryogen, Inc. been a
combined company during the specified periods. The unaudited pro forma condensed
combined financial statements, including the related notes, are qualified in
their entirety by reference to, and should be read in conjunction with, the
historical financial statements and related notes of American Medical Systems
Holdings, Inc., included in its Annual Report on Form 10-K and Quarterly Report
on Form 10-Q filed with the Securities and Exchange Commission on March 29, 2002
and October 28, 2002, respectively, and the historical audited financial
statements and related notes of Cryogen, Inc., included elsewhere in this Form
8-K/A.
The following unaudited pro forma condensed combined financial statements are
accounted for in accordance with Statement of Financial Accounting Standards No.
141, Business Combinations. The pro forma adjustments are based upon preliminary
estimates and available information. Final purchase accounting adjustments may
differ from the pro forma adjustments presented. The pro forma condensed
combined financial statements are based on the respective historical financial
statements of American Medical Systems Holdings, Inc. and Cryogen, Inc. and
assumes the acquisition took place on January 1, 2001, for the statements of
operations, and September 29, 2002, for the balance sheet. The pro forma
adjustments are based on the estimates and assumptions set forth in the notes to
such statements.
AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF SEPTEMBER 29, 2002
(THOUSANDS)
<Table>
<Caption>
AMERICAN
MEDICAL PRO FORMA
SYSTEMS CRYOGEN ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 71,801 $ 1,803 $ (40,000)(a) $ 32,411
(1,193)(c)
Accounts receivable, net 25,244 693 -- 25,937
Inventories 13,533 2,382 -- 15,915
Deferred taxes 6,912 -- -- 6,912
Other current assets 2,431 164 -- 2,595
------------ ------------ ------------ ------------
Total current assets 119,921 5,042 (41,193) 83,770
Property, plant and equipment, net 21,926 1,410 23,336
Goodwill, net 82,365 -- 35,698(a) 118,063
Intangibles, net 14,096 411 14,507
Deferred income taxes 2,230 -- -- 2,230
Investments in technology and other assets 4,756 56 -- 4,812
------------ ------------ ------------ ------------
Total assets $ 245,294 $ 6,919 $ (5,495) $ 246,718
============ ============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,298 $ 471 -- $ 2,769
Accrued liabilities 21,200 1,687 (7,085)(b) 15,802
Bank loans -- 360 -- 360
Current portion of notes payable 5,454 29 -- 5,483
------------ ------------ ------------ ------------
Total current liabilities 28,952 2,547 (7,085) 24,414
Long-term notes payable 19,909 70 -- 19,979
Other long-term liabilities 1,241 -- -- 1,241
Redeemable convertible preferred stock -- 47,564 (47,564)(a) --
Stockholders' equity:
Convertible preferred stock -- 13,501 (13,501)(a) --
Common stock 324 436 (436)(a) 324
Additional paid-in capital 197,622 -- 197,622
Deferred compensation (239) -- (239)
Accumulated other comprehensive loss (1,465) -- (1,465)
Accumulated deficit (1,050) (57,199) 57,199(a) 4,842
7,085(b)
(1,193)(c)
------------ ------------ ------------ ------------
Total stockholders' equity 195,192 (43,262) 49,154 201,084
------------ ------------ ------------ ------------
Total liabilities and stockholders' equity $ 245,294 $ 6,919 $ (5,495) $ 246,718
============ ============ ============ ============
</Table>
The accompanying notes are an integral part of the
consolidated financial statements.
AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 29, 2001
(THOUSANDS, EXCEPT PER SHARE DATA)
<Table>
<Caption>
AMERICAN
MEDICAL PRO FORMA
SYSTEMS CRYOGEN ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------
Net sales $ 117,938 $ 1,950 -- 119,888
Operating expenses:
Cost of sales 23,140 3,880 -- 27,020
Marketing and sales 44,931 7,208 -- 52,139
General and administrative 12,156 2,618 -- 14,774
Research and development 11,899 1,814 -- 13,713
Transition and reorganization 1,000 -- -- 1,000
Amortization of intangibles 9,374 -- -- 9,374
------------ ------------ ------------ ------------
Total operating costs 102,500 15,520 -- 118,020
Operating income (loss) 15,438 (13,570) -- 1,868
Royalty income 2,926 -- -- 2,926
Other income (expense) (3,030) -- -- (3,030)
Interest expense, net (2,932) (60) (1,100)(c) 4,092
------------ ------------ ------------ ------------
Income (loss) before income taxes 12,402 (13,630) (1,100) (2,328)
Income tax expense (5,872) -- 5,179(b) (275)
418(c)
------------ ------------ ------------ ------------
Net income (loss) $ 6,530 $ (13,630) $ 4,497 $ (2,603)
============ ============ ============ ============
Earnings per share:
Basic $ 0.22 $ (0.08)
Diluted $ 0.20 (0.08)
Weighted average common shares:
Basic 29,792 29,792
Diluted 32,068 29,792
</Table>
The accompanying notes are an integral part of the
consolidated financial statements
AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE NINE-MONTHS ENDED SEPTEMBER 29, 2002
(THOUSANDS, EXCEPT PER SHARE DATA)
<Table>
<Caption>
AMERICAN
MEDICAL PRO FORMA
SYSTEMS CRYOGEN ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------
Net sales $ 103,816 $ 2,048 -- $ 105,864
Operating expenses:
Cost of sales 20,485 442 -- 20,927
Marketing and sales 37,195 3,498 -- 40,693
General and administrative 9,816 2,209 -- 12,025
Research and development 8,727 958 -- 9,685
Transition and reorganization -- -- -- --
Amortization of intangibles 2,817 -- -- 2,817
------------ ------------ ------------ ------------
Total operating expenses 79,040 7,107 -- 86,147
Operating income (loss) 24,776 (5,059) -- 19,717
Royalty income 2,279 -- -- 2,279
Other income (expense) 964 -- -- 964
Interest expense, net (852) 44 (825)(c) (1,633)
------------ ------------ ------------ ------------
Income (loss)before income taxes 27,167 (5,015) (825) 21,327
Income tax benefit (expense) (10,612) -- 1,906(b) (8,392)
314(c)
------------ ------------ ------------ ------------
Net income (loss) $ 16,555 $ (5,015) $ 1,395 $ 12,935
============ ============ ============ ============
Earnings per share:
Basic $ 0.51 $ 0.40
Diluted $ 0.48 $ 0.38
Weighted average common shares:
Basic 32,155 32,155
Diluted 34,230 34,230
</Table>
The accompanying notes are an integral part of the
consolidated financial statements.
AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
1. ALLOCATION OF PURCHASE PRICE
For this presentation, the Company allocated the December 30, 2002 estimated
purchase price of Cryogen, Inc. as follows:
<Table>
<Caption>
(amounts in thousands) Amount
- ---------------------- ------------
Goodwill $ 35,698
Assets acquired, net of liabilities assumed 4,302
------------
$ 40,000
============
</Table>
The purchase price allocation to the assets and liabilities assumed was based on
a preliminary estimate to determine their respective values. The Company
believes that the preliminary allocations set forth herein are reasonable, but
are subject to revision upon completion of a planned independent valuation
study.
2. KEY TO PRO FORMA ADJUSTMENTS
The unaudited pro forma condensed combined balance sheet and statements of
operations include the adjustments necessary to give effect to the purchase and
to reflect the allocation of the purchase price to the fair value of the assets
acquired as noted above, including the elimination of Cryogen, Inc.'s equity
accounts. Summarized below are the pro forma adjustments necessary to reflect
the acquisition of Cryogen, Inc. based upon the purchase method of accounting in
accordance with SFAS 141, Business Combinations.
(a) Record the consideration paid for Cryogen, elimination of Cryogen equity
accounts, and reflect the excess of the purchase price over the assets
acquired.
(b) Record the tax benefit from the net losses recorded by CryoGen.
(c) To adjust net interest expense due to lower investment income from lower
cash balances.