NEWS RELEASE
for immediate release
Inamed Contacts:
Ilan Reich, President
Michael Doty, CFO
(212) 273-3430
INAMED CORPORATION REPORTS PROFORMA
EPS OF $0.37 FOR THE FOURTH QUARTER OF
1999 AND $1.30 FOR THE FULL YEAR OF 1999
SANTA BARBARA, Calif.--(BUSINESS WIRE)--Feb. 1, 2000--Inamed Corporation
(Nasdaq:IMDC - news) announced today its financial results for the fourth
quarter and twelve months ending December 31, 1999.
Sales for the fourth quarter of 1999 were $66 million, a 106 percent increase
over the $32 million of sales reported in the fourth quarter of 1998. Sales for
all of 1999 were $189 million, a 43 percent increase over the $132 million of
sales reported for all of 1998.
The gross margin for the fourth quarter of 1999 was 68 percent, as compared to
61 percent for the comparable period in 1998. The gross margin for all of 1999
was 70 percent, as compared to 64 percent for all of 1998.
Profit before interest and taxes for the fourth quarter of 1999 was $15.1
million, for a 23 percent PBIT margin, as compared to $4.2 million, for a 13
percent PBIT margin for the comparable period in 1998. For all of 1999, profit
before interest and taxes was $45.4 million, for a PBIT margin of 24 percent, as
compared to $9.2 million, for a 7 percent PBIT margin for all of 1998.
Net income for the fourth quarter of 1999 was $13.7 million, or $0.74 per basic
share and $0.64 per diluted share, as compared to net income of $9.9 million for
the fourth quarter of 1998.
Net income for all of 1999 was $38.8 million, or $2.51 per basic and $2.03 per
diluted share. Net income for all of 1998 was $12.0 million, or $0.92 per
diluted share.
On a proforma basis, using a 33 percent effective tax rate and excluding $4.4
million of interest expense in the fourth quarter arising from the financing
fees associated with the Collagen acquisition, Inamed's net income for the
fourth quarter of 1999 would be $7.8 million, or $0.42 per basic share and $0.37
per diluted share. Excluding six cents per share for amortization of Collagen
goodwill, Inamed's cash EPS for the fourth quarter of 1999 on a proforma basis
would be $0.43 per diluted share.
Inamed's net income for all of 1999 on a proforma basis, using a 33 percent
effective tax rate and excluding $5.2 million of interest expense in 1999
arising from the financing fees associated with the Collagen acquisition, would
be $24.6 million, or $1.59 per basic share and $1.30 per diluted share.
Excluding nine cents per share for amortization of Collagen goodwill in 1999,
Inamed's cash EPS for all of 1999 would be $1.39 per diluted share.
Proforma results are a more meaningful indicator for investors because Inamed's
net income during 1999 included substantial tax benefits arising from the
recognition of a tax asset associated with the losses of 1997 and earlier.
During the fourth quarter of 1999 all such remaining tax assets were recorded
for financial reporting purposes. Another reason for presenting proforma results
is because the $155 million bridge loan associated with the Collagen acquisition
gave rise to substantial non-recurring financing fees. In the past three months
Inamed has arranged to repay all of that debt, thereby normalizing its capital
structure and interest expenses.
During the fourth quarter of 1999 Collagen's business operations, computer
systems and product lines were successfully integrated into Inamed's existing
domestic and international business units. Inamed believes that it has achieved
all of the $16 million in annualized cost savings which were anticipated at the
time the acquisition was announced in August 1999.
In order to pay for the Collagen acquisition, Inamed borrowed $155 million under
a bridge loan and utilized $24 million of its own cash to pay acquisition costs
and to retire $17 million of pre-existing senior debt. In November 1999 Inamed
completed a public offering of 2.95 million primary shares of common stock and
500,000 secondary shares, at $29 per share. Inamed's net proceeds of $78.3
million were used to retire a comparable amount of the bridge loan. Inamed is
currently finalizing a $107.5 million credit facility, consisting of an $82.5
million five-year term loan (which is being used to repay the balance of the
bridge loan) and a $25 million revolver. Bear Steams Corporate Lending Inc. is
the sole arranger and sole book manager, First Union National Bank is the
administrative agent, and GMAC Commercial Credit LLC is the documentation agent.
In the first quarter of 2000 Inamed will have a charge of $2.1 million to
write-off the remaining unamortized financing fees, due to the early retirement
of the bridge loan. Excluding those charges, Inamed's normalized quarterly
interest expense in the first quarter of 2000 will be approximately $2.2
million.
As of December 31, 1999 Inamed's capitalization consisted of $77 million of
senior debt and shareholders' equity of $134 million. Also as of that date, the
company had $17 million of cash and cash equivalents. Under the treasury method,
the company had a weighted average of approximately 21.3 million diluted shares
in the fourth quarter of 1999 and 19.1 million for all of 1999, as compared to
approximately 12.9 million diluted shares in the fourth quarter of 1998 and 14.2
million for all of 1998.
Richard G. Babbitt, Inamed's Chairman and CEO, stated: "This quarter caps a year
of superb achievements by the entire Inamed team. Every aspect of our business
turned in an outstanding performance, as demonstrated by the excellent financial
results for the fourth quarter and the full year.
Babbitt continued, "We look forward in 2000 to a number of exciting
opportunities, including being able to offer the plastic surgery, reconstruction
and aesthetic medicine communities the broadest portfolio of products and
services in the industry."
Ilan Reich, Inamed's President, stated: "Our financial performance throughout
1999 reflects the strong franchise position we hold in each of our market areas
- -- aesthetic medicine, plastic and reconstructive surgery, and obesity products
- -- both in the United States and internationally."
Reich also said: "During the fourth quarter, we benefited from strong sales
growth in each of these market areas, with every one of our major product
segments showing at least 20 percent growth over the prior year. We are
particularly pleased with the growth of the collagen facial implant products,
which grew by more than 30 percent."
A conference call will be held at 4:00 pm today, Eastern time, to discuss the
company's financial results and other recent developments and to answer
questions from shareholders and analysts. To participate from the U.S., dial
800-230-1085; international callers, dial 612-338-1040, then ask to be
connected to the Inamed Investor Call.
In addition, you may listen to the conference call over the Internet through
Investor Broadcast Network's Vcall website, located at http://www.vcall.com. To
listen, go to the website at least 15 minutes early to register and download and
install any necessary audio software. For those who cannot listen to the live
broadcast, a replay will be available through Vcall's website for 90 days after
the call.
Inamed is a global surgical and medical device company engaged in the
development, manufacturing and marketing of products for the plastic and
reconstructive surgery, aesthetic medicine and obesity markets.
Inamed sells a variety of lifestyle products used to make people look younger
and more attractive, including breast implants for cosmetic augmentation and
collagen-based facial implants to correct facial wrinkles and to improve lip
definition. Inamed also sells products which address women's health issues,
including breast implants for reconstructive surgery following radical
mastectomies, and devices which treat severe obesity and urinary incontinence.
This release contains, in addition to historical information, forward-looking
statements. Such statements are based on management's current expectations and
are subject to a number of uncertainties and risks that could cause actual
results to differ materially from those described in the forward-looking
statements. Factors that may cause such a difference include, but are not
limited to, those described in the Company's annual report on Form 10-K for the
year ended December 31, 1998 and the Form S-3 dated November 17, 1999.
Earnings Recap
(in thousands, except per share data)
UNAUDITED
For the fourth quarter ended
December 31,
1999 1998
NET SALES $65,573 $32,457
COSTS AND EXPENSES
Cost of sales 20,956 12,735
Selling, general and administrative 27,731 14,379
Research and development 3,453 2,313
TOTAL 52,140 29,457
OPERATING INCOME 13,433 3,030
Other income 1,664 1,213
INCOME before interest and taxes 15,097 4,243
Net interest and other financing expense 7,893 1,066
INCOME BEFORE INCOME TAXES 7,204 3,177
Income tax benefit 6,460 8,569
Extraordinary charges -- (1,800)
NET INCOME 13,664 9,946
Basic earnings per share 0.74 0.87
Diluted earnings per share 0.64 0.78
Shares used in computation of:
Basic earnings per share 18,499,581 11,428,135
Diluted earnings per share 21,252,105 12,862,703
Earnings Recap
(in thousands, except per share data)
UNAUDITED
For the twelve months ended
December 31,
1999 1998
NET SALES $189,295 $131,566
COSTS AND EXPENSES
Cost of sales 57,553 47,954
Selling, general and administrative 77,671 65,779
Research and development 10,324 9,366
TOTAL 145,548 123,099
OPERATING INCOME 43,747 8,467
Other income 1,626 686
INCOME before interest and taxes 45,373 9,153
Net interest and other
financing expense 13,079 3,812
INCOME BEFORE INCOME TAXES 32,294 5,341
Income tax benefit 6,460 8,432
Extraordinary charges (1,800)
NET INCOME $38,754 $ 11,973
Basic earnings per share 2.51 1.15
Diluted earnings per share 2.03 0.92
Shares used in computation of:
Basic earnings per share 15,466,232 10,387,163
Diluted earnings per share 19,058,287 14,185,244
Contact:
Inamed Corporation
Ilan Reich/Michael Doty, 212/273-3430