Exhibit 99.1
Inamed Reports Record 2003 Fourth Quarter and
Full Year Sales and Net Income Results
SANTA BARBARA, Calif.--(BUSINESS WIRE)--Feb. 26, 2004--Inamed
Corporation (Nasdaq:IMDC):
-- Total quarterly sales increased 23% to $91.1 million, up from
$73.9 million in the fourth quarter 2002; full year sales grew
21% to $332.6 million, up from $275.7 million in 2002.
-- Diluted quarterly GAAP earnings per share were up 69% to
$0.44, compared to $0.26 in the fourth quarter 2002; full year
GAAP diluted earnings per share were up 51% to $1.51, compared
to $1.00 in 2002.
-- Diluted quarterly cash earnings per share grew 26% to $0.48,
excluding amortization of intangibles and non-cash
compensation, accelerated depreciation, and a previously
announced deferred loan fee charge, from $0.38 in the fourth
quarter 2002; full year diluted cash earnings per share were
up 30% to $1.76, up from $1.35 in 2002.
-- Company reaffirms GAAP guidance for 2004.
Inamed Corporation (Nasdaq:IMDC), a global health care company,
today announced its financial results for the fourth quarter and the
full year ended December 31, 2003.
"2003 was an outstanding year at Inamed, as evidenced by the solid
earnings contributions and consistent sales growth rates in all three
businesses," said Nick Teti, Chairman, President and Chief Executive
Officer. "We made significant strides in 2003 to strategically
position the Company for sustainable growth now and in the future. The
Inamed people, their hard work, and their contributions and the
loyalty of our customers are and will be the key components of our
success."
Diluted GAAP earnings per share grew 69% in the fourth quarter
2003 to $0.44, an increase from $0.26 in the fourth quarter 2002.
Diluted GAAP earnings per share for the full year 2003 increased 51%
to $1.51, up from $1.00 in 2002.
Diluted cash earnings per share for the fourth quarter of 2003,
excluding amortization of intangibles and non-cash compensation,
accelerated depreciation, and a previously announced deferred loan fee
charge, grew 26% to $0.48, compared to $0.38 in the fourth quarter of
2002. Diluted cash earnings per share for the full year 2003 increased
30% to $1.76, compared to $1.35 in 2002.
The Company has also reaffirmed GAAP guidance for 2004.
Inamed Businesses
Total sales for the fourth quarter 2003 increased 23% to $91.1
million, up from $73.9 million in the fourth quarter 2002. Full year
2003 sales were up 21% to $332.6 million, increasing from $275.7
million in 2002. Inamed reported that sales in all three of its
businesses grew at a double-digit rate for the year compared to 2002.
Inamed Health - Obesity Intervention
Worldwide sales of obesity intervention products in the fourth
quarter 2003 increased 57% over the fourth quarter 2002 to $17.7
million. Full year 2003 obesity intervention sales grew 60% over sales
in 2002 to $63.1 million.
Results in the United States led this strong sales growth. Inamed
has continued to expand the utilization of the LAP-BAND(R) System for
the treatment of morbid obesity in the United States by increasing the
number of trained and proctored surgeons and by the growth of
insurance coverage. Performance has also been driven by increased
consumer awareness and acceptance of this product in certain markets
throughout the U.S.
Inamed Aesthetics - Breast
Worldwide breast aesthetics product sales in the fourth quarter
2003 were up 14% over fourth quarter 2002 to $46.8 million. For the
full year 2003, sales increased 14% over sales in 2002 to $177.8
million.
The strong and consistent performance in the Company's global
breast aesthetics business reflects continued growth both domestically
and internationally. Inamed achieved mid double-digit sales growth in
all four quarters of 2003 versus comparable quarters in 2002,
illustrating the Company's successful and ongoing commitment to
develop and increase its value-added relationships with plastic
surgeons in this core strategic business.
Inamed Aesthetics - Facial
Worldwide facial aesthetic product sales in the fourth quarter
2003 increased 29% over sales in the fourth quarter 2002 to $25.6
million. For the full year 2003, sales increased 18% over sales in
2002 to $87.2 million.
The primary factor for these excellent results was the success of
CosmoDerm(TM) and CosmoPlast(TM), Inamed's breakthrough human collagen
products, which the Company launched in March 2003 in the United
States. These products were the first dermal fillers approved by the
U.S. Food and Drug Administration (FDA) that do not require a skin
test prior to treatment. Their widespread acceptance, along with the
active conversion of the Company's Zyderm(R) and Zyplast(R) business,
helped drive the overall growth of the facial aesthetics business in
the U.S. in 2003.
Research and Development Pipeline
Inamed invested $5.3 million in research and development in the
fourth quarter 2003, and $21.5 million for the full year,
approximately 6% of sales. This represents a $7.9 million increase
over full year 2002. Many of the incremental expenditures were in
support of product development in the Company's pipeline, which
continued to progress over the course of the year.
-- Botulinum Toxin Type A
Inamed and its partner Ipsen have completed Phase II of their
botulinum toxin type A clinical development program, which
successfully identified a dose that provides the optimal balance in
terms of efficacy and safety. No serious drug-related adverse events
occurred during the Phase II trial. Phase III clinical trials are
expected to begin shortly.
-- Hylaform(R) Dermal Filler
Inamed and its partner Genzyme had their pre-market approval
application (PMA) to market Hylaform(R), a hyaluronic acid-based
dermal filler, reviewed by an FDA Advisory Panel on November 21, 2003,
and received a positive recommendation for approval. The Hylaform(R)
PMA is in the final stages of review by the FDA and we expect that
approval will happen shortly. The Company believes that Hylaform(R)
will not require a skin test, which is consistent with regulatory
approvals in other markets worldwide.
-- CosmoDerm(TM) and CosmoPlast(TM)
In the first quarter 2003, Inamed received FDA approval to begin
marketing CosmoDerm(TM) and CosmoPlast(TM) in the United States. They
were the first dermal fillers to be approved by the FDA to not require
a skin test. In addition, approval for CosmoDerm(TM) and
CosmoPlast(TM) is being sought in France, Germany, Italy, Spain, the
United Kingdom and Australia.
-- Silicone Gel Breast Implants
Inamed's silicone gel-filled breast implant PMA was reviewed by an
FDA Advisory Panel on October 14 and 15, 2003. Although the Panel
voted that the FDA should approve the PMA with conditions, the Company
received a "Not Approvable" letter from the FDA on January 7, 2004.
The letter outlined the additional information that Inamed needs to
provide to the FDA prior to the agency's further review of its
premarket approval application. The Company has since had several
meetings with the FDA to better understand how to address the request
for additional information and data.
Inamed's Style 410 Cohesive Gel Matrix clinical program is in the
second year of its follow-up phase in the United States. The Company
anticipates submitting a PMA for these important and innovative
Cohesive Gel Matrix products in 2004. These products continue to
experience wide acceptance in a number of international markets.
Inamed announced in January 2004 an agreement for the acquisition
of certain license rights to Juvederm(R), a non-animal-based,
cross-linked hyaluronic acid dermal filler. Under the agreement,
Inamed will have the exclusive rights to develop, market and
distribute the product in the United States, Canada and Australia and
non-exclusive rights in six key European markets. Inamed has begun
recognizing revenue from sales of Juvederm(R) in Canada and in France
under the name Hydrafill(R). The Company expects to file for
regulatory approval of Juvederm(R) in Australia shortly and to begin
its clinical program in the U.S. in the first half of 2004.
Financial Results
During the fourth quarter 2003, Inamed recorded a 23% increase in
sales and continued to achieve solid gross profit margins. These
results, together with sustained expense management, resulted in
growth of 46% in operating profit, 80% in net income and 69% in
diluted GAAP earnings per share for the quarter.
Full year performance in 2003 was also strong, with the Company
posting 21% growth in sales, and a resulting growth of 52% in
operating profit, 61% in net income and 51% in diluted GAAP earnings
per share for the year.
-- Foreign Currency Effect
Foreign exchange favorably impacted revenue by approximately $3.6
million for the fourth quarter and $13.0 million for the full year
2003, principally from the strengthening Euro. This reporting impact
benefited each of Inamed's businesses.
-- Gross Profit Margin
The gross profit margin in the fourth quarter 2003 was 73% up from
72% in the fourth quarter 2002. The gross profit margin for the full
year 2003 was 72%, consistent with the full year 2002. Contributing
factors for the quarter and the year were the emergence of a more
balanced product portfolio and improved operational efficiencies.
Included in the fourth quarter and full year 2003 cost of sales were
$0.6 million and $3.4 million, respectively, of accelerated
depreciation expense related to the Company's manufacturing
consolidation program.
-- Sales, General & Administrative
For the fourth quarter 2003, the Company's sales, general and
administrative expense was 45% of sales, or $41.1 million, compared to
41% of sales or $30.2 million for the fourth quarter 2002. The
increase in SG&A in the fourth quarter was primarily a result of
expanded sales and marketing programs that support the growth of all
three of the Company's businesses and an increase in the allowance for
doubtful accounts. A $2.1 million increase in the allowance for
doubtful accounts was related to the Company's Italian facial
aesthetics business which had been operated through a sales agency
arrangement that was terminated subsequent to year-end.
For the full year 2003, SG&A expense was 43% of sales or $141.8
million compared to 46% of sales in 2002 or $126.7 million.
-- Research & Development
The research and development expense in the fourth quarter 2003
was 6% of sales or $5.3 million compared to 5% of sales or $3.9
million in the fourth quarter of 2002. For the full year 2003, R&D
expense was 6% of sales or $21.5 million, up from 5% of sales or $13.6
million in 2002. This investment in R&D was due to the progression of
key clinical development programs and regulatory filings across all
three of the Company's businesses worldwide.
-- Net Interest Expense
Net interest expense in the fourth quarter 2003 was $0.9 million,
down from $3.0 million in the fourth quarter 2002. Associated with the
Company's previously announced retirement of $30.0 million principal
term notes in December 2003, the Company recorded a charge of $0.4
million for unamortized loan fees which were included in the fourth
quarter net interest expense. For the full year 2003, net interest
expense was $9.4 million compared to $10.4 million in 2002. Included
in the full year results were $3.5 million of interest rate swap
charges, resulting from the second quarter 2003 retirement of an "out
of the money" interest rate swap agreement, and a charge of $1.6
million for unamortized loan fees from the early retirement of debt in
the third and fourth quarters 2003.
Earnings per Share
-- GAAP Earnings per Share
Diluted GAAP earnings per share increased 69% to $0.44 for the
fourth quarter 2003, up from $0.26 in the fourth quarter 2002. For the
full year 2003, Inamed's GAAP earnings per share grew 51% to $1.51, an
increase over $1.00 in 2002.
-- Cash Earnings per Share
Diluted cash earnings per share for the fourth quarter of 2003,
excluding amortization of intangibles and non-cash compensation,
accelerated depreciation, and a previously announced deferred loan fee
charge, grew 26% to $0.48, compared to $0.38 in the fourth quarter of
2002. Diluted cash earnings per share for the full year 2003 increased
30% to $1.76, compared to $1.35 in 2002.
Balance Sheet
At December 31, 2003, Inamed's cash balance was approximately $81
million, an increase of $41 million from December 31, 2002,
principally from cash provided by operating activities. The Company
paid down $51 million of debt in 2003.
Conference Call
As previously announced, Inamed will host a conference call today
to discuss its fourth quarter and full year 2003 results, key
strategic market developments and ongoing expansion of research and
development programs at 5:00 p.m. Eastern Standard Time. Live audio of
the conference call will be simultaneously broadcast over the Internet
and will be available to members of the news media, investors and the
general public. The conference call is expected to last one hour. The
event can be accessed via the Internet by going to Inamed's website,
www.inamed.com. The event will be archived and available for replay
for seven days following the conference call.
The conference call may contain forward-looking financial
information and will include a discussion of "non-GAAP financial
measures" as that term is defined in Regulation G. The most directly
comparable GAAP financial measures and information reconciling these
non-GAAP financial measures to the Company's financial results
prepared in accordance with GAAP, as well as the other material
financial and statistical information to be discussed on the
conference call, will be posted on the Company's website at
www.inamed.com.
Note Regarding Use of Non-GAAP Financial Measures
Certain of the information set forth herein, including diluted
cash EPS, may be considered non-GAAP financial measures. Inamed
believes this information is useful to investors because it provides a
basis for measuring the Company's available capital resources, the
operating performance of the Company's business and the Company's cash
flow, excluding non-recurring items that would normally be included in
the most directly comparable measures calculated and presented in
accordance with generally accepted accounting principles. The
Company's management uses these non-GAAP financial measures along with
the most directly comparable GAAP financial measures in evaluating the
Company's operating performance, capital resources and cash flow.
Non-GAAP financial measures should not be considered in isolation
from, or as a substitute for, financial information presented in
compliance with GAAP, and non-financial measures as reported by the
Company may not be comparable to similarly titled amounts reported by
other companies.
About Inamed Corporation
Inamed (Nasdaq:IMDC) is a global healthcare company with over 25
years of experience developing, manufacturing and marketing
innovative, high-quality, science-based products. Current products
include breast implants for aesthetic augmentation and for
reconstructive surgery; a range of dermal products to treat facial
wrinkles; and minimally invasive devices for obesity intervention,
including the LAP-BAND(R) System for morbid obesity. The Company's
website is www.inamed.com.
Forward-Looking Statements
This press release contains, in addition to historical
information, forward-looking statements. Such statements are based on
management's current estimates and 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. Inamed is providing this information as of February 26,
2004, and expressly disclaims any duty to update information contained
in this press release.
Forward-looking statements in this press release include, without
limitation, express and implied statements regarding Inamed's
anticipated sales, operating results, expenses, cash flows, capital
expenditures, research and development, manufacturing consolidation,
product development and regulatory approval. These forward-looking
statements involve risks and uncertainties which could cause actual
results to differ materially from those expressed or implied here.
Readers are referred to the documents filed by Inamed with the
Securities and Exchange Commission, specifically the most recent
reports which identify important risk factors that could cause actual
results to differ from those contained in the forward-looking
statements, including but not limited to: exposure to product
liability and intellectual property claims; exposure to liabilities
that may not be adequately covered by insurance or for which there is
no insurance; potential negative publicity concerning product safety;
potential fluctuations in quarterly and annual results; the effect of
changing accounting and public reporting rules and regulations;
volatility of Inamed's stock price; changes in the economy and
consumer spending; competition from existing and/or new products;
failure or delay of clinical trials; uncertainty in receiving timely
regulatory approval or market acceptance for new products; dependence
on a single supplier for each of Inamed's silicone raw materials,
bovine and human collagen-based products, hyaluronic acid-based
products, and botulinum toxin A products; failure to protect Inamed's
intellectual property; adverse changes in the regulatory or
legislative environment (both in the U.S. and internationally)
affecting our business; and failure of some or all of our
collaborative partners to perform. The information contained in this
press release is a statement of Inamed's present intention, belief or
expectation and is based upon, among other things, the existing
regulatory environment, industry conditions, market conditions and
prices, the economy in general and Inamed's assumptions. Inamed may
change its intention, belief or expectation, at any time and without
notice, based upon any changes in such factors, in Inamed's
assumptions or otherwise. Inamed undertakes no obligation to review or
confirm analysts' expectations or estimates or to release publicly any
revisions to any forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
By including any information in this press release, Inamed does
not necessarily acknowledge that disclosure of such information is
required by applicable law or that the information is material.
INAMED CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in millions)
December December
31, 31,
2003 2002
-------- --------
Assets
- ---------
Current assets:
Cash and cash equivalents $80.5 $39.3
Trade accounts receivable, net of
allowances of $19.7
and $11.5 in 2003 and 2002, respectively 63.7 45.4
Inventories 47.0 43.0
Prepaid expenses and other current assets 20.9 28.2
-------- --------
Total current assets 212.1 155.9
Property and equipment, net 51.2 48.4
Other assets 237.7 235.1
-------- --------
Total Assets $501.0 $439.4
======== ========
Liabilities and Stockholders' Equity
- ----------------------------------------------------
Current liabilities $80.2 $74.5
Non-current liabilities 69.3 132.2
Stockholders' equity 351.5 232.7
-------- --------
Total Liabilities and Stockholders' Equity $501.0 $439.4
======== ========
Note: Certain items in the prior year consolidated financial
statements have been reclassified to conform with the current
year presentation.
INAMED CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(millions, except per share data)
Three Months Three Months
Ended Ended
December 31, December 31,
2003 2002
------------- ----------
Net sales $91.1 $73.9
Cost of goods sold 24.4 20.6
------------- ----------
Gross profit 66.7 53.3
------------- ----------
Operating expenses:
Selling, general and administrative 41.1 30.2
Research and development 5.3 3.9
Restructuring charges - 5.1
Amortization of intangible assets and
non-cash compensation 1.0 0.9
------------- ----------
Total operating expenses 47.4 40.1
Operating income 19.3 13.2
Other income (expense):
Net interest expense and debt costs (0.9) (3.0)
Foreign currency transaction losses (0.6) (0.2)
Royalty income and other 1.0 0.2
------------- ----------
Total other expense, net (0.5) (3.0)
Income before income tax expense 18.8 10.2
Income tax expense 3.1 1.5
------------- ----------
Net income $15.7 $8.7
============= ==========
Net income per share of common stock:
Basic EPS $0.45 $0.26
Diluted EPS $0.44 $0.26
Weighted average shares outstanding:
Basic 35.1 32.8
Diluted 35.6 33.4
Note: Certain items in the prior year consolidated financial
statements have been reclassified to conform with the
current year presentation
INAMED CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(millions, except per share data)
Twelve Months Twelve Months
Ended Ended
December 31, December 31,
2003 2002
--------------- -------------
Net sales $332.6 $275.7
Cost of goods sold 92.8 77.6
--------------- -------------
Gross profit 239.8 198.1
--------------- -------------
Operating expenses:
Selling, general and
administrative 141.8 126.7
Research and development 21.5 13.6
Restructuring charges - 5.1
Amortization of intangible assets
and non-cash compensation 4.0 4.9
--------------- -------------
Total operating
expenses 167.3 150.3
Operating income 72.5 47.8
Other income (expense):
Net interest expense and debt
costs (9.4) (10.4)
Foreign currency transaction
losses (0.1) 0.3
Royalty income and other 4.2 4.5
--------------- -------------
Total other expense,
net (5.3) (5.6)
Income before income tax expense 67.2 42.2
Income tax expense 14.2 9.3
--------------- -------------
Net income $53.0 $32.9
=============== =============
Net income per share of common stock:
Basic EPS $1.54 $1.04
Diluted EPS $1.51 $1.00
Weighted average shares outstanding:
Basic 34.5 31.5
Diluted 35.2 32.9
Note: Certain items in the prior year consolidated financial
statements have been reclassified to conform with the
current year presentation
INAMED CORPORATION AND SUBSIDIARIES
EARNINGS PER SHARE RECONCILIATION
(unaudited)
(millions, except per share data)
Three Months Three Months
Ended Ended
December 31, December 31,
2003 2002
--------------- -------------
Earnings for per share calculations
Net income $15.7 $8.7
Deductible amortization and non-cash
compensation 1.1 0.9
Tax effect (0.4) (0.4)
Restructuring charges - 5.1
Tax effect - (2.0)
Accelerated depreciation (a) 0.6 0.6
Tax effect (0.2) (0.3)
Special charges (b) 0.4 0.1
Tax effect (0.2) -
--------------- -------------
Cash earnings excluding special
charges 17.0 12.7
=============== =============
Earnings per share
Diluted EPS $0.44 $0.26
Amortization and non-cash
compensation, net of tax 0.02 0.02
Restructuring charges, net of tax - 0.09
Accelerated depreciation, net of tax 0.01 0.01
Special charges, net of tax 0.01 -
--------------- -------------
Cash EPS excluding special charges $0.48 $0.38
=============== =============
NOTE: Tax effects in 2003 and 2002 were computed at 40%.
(a) Accelerated depreciation is related to the manufacturing
consolidation and is recorded in cost of goods sold.
(b) Special charges includes the
following:
Litigation settlement (included in
SG&A) - (0.6)
Sales tax refund (included in SG&A) - (0.6)
Gain on sale of investment (included
in other income/expense) - (0.5)
Interest rate swap charges (included
in net interest expense) - 1.3
Unamortized loan fees (included in net
interest expense) 0.4 0.5
--------------- -------------
$0.4 $0.1
=============== =============
INAMED CORPORATION AND SUBSIDIARIES
EARNINGS PER SHARE RECONCILIATION
(unaudited)
(millions, except per share data)
Twelve Months Twelve Months
Ended Ended
December 31, December 31,
2003 2002
-------------- -------------
Earnings for per share calculations
Net income $53.0 $32.9
Deductible amortization and non-cash
compensation 4.1 4.9
Tax effect (1.6) (2.0)
Restructuring charges - 5.1
Tax effect - (2.0)
Accelerated depreciation (a) 3.4 0.6
Tax effect (1.4) (0.3)
Special charges (b) 7.2 8.5
Tax effect (2.9) (3.2)
-------------- -------------
Cash earnings excluding special
charges 61.8 44.5
============== =============
Earnings per share
Diluted EPS $1.51 $1.00
Amortization and non-cash
compensation, net of tax 0.07 0.09
Restructuring charges, net of tax - 0.09
Accelerated depreciation, net of tax 0.06 0.01
Special charges, net of tax (c) 0.12 0.16
-------------- -------------
Cash EPS excluding special charges $1.76 $1.35
============== =============
NOTE: Tax effects in 2003 and 2002 were computed at 40%.
(a) Accelerated depreciation is related to the manufacturing
consolidation and is recorded in cost of goods sold.
(b) Special charges includes the
following:
Litigation settlement (included in
SG&A) $2.1 $0.5
Interest rate swap charges (included
in net interest expense) 3.5 1.3
Investment impairments (included in
SG&A) - 5.7
Inventory impairment (included in
SG&A) - 0.3
Sales tax liability (included in SG&A) - 1.3
Unamortized loan fees (included in net
interest expense) 1.6 0.5
Sales tax refund (included in SG&A) - (0.6)
Gain on sale of investment (included
in other income/expense) - (0.5)
-------------- -------------
$7.2 $8.5
============== =============
(c) Earnings per share impact of special
charges
Litigation settlement (included in
SG&A) $0.03 $0.01
Interest rate swap charges (included
in net interest expense) 0.06 0.02
Investment impairment (included in
SG&A) - 0.11
Inventory impairment (included in
SG&A) - 0.01
Sales tax liability (included in SG&A) - 0.02
Unamortized loan fees (included in net
interest expense) 0.03 0.01
Sales tax refund (included in SG&A) - (0.01)
Gain on sale of investment (included
in other income/expense) - (0.01)
-------------- -------------
$0.12 $0.16
============== =============
INAMED CORPORATION AND SUBSIDIARIES
SALES BY PRODUCT LINE
(unaudited)
(millions)
Three Months Three Months
Ended Ended Growth
December 31, December 31, Rates
2003 2002
--------------------- ------------- ------
Sales by product line
Breast aesthetics $46.8 $41.0 14 %
Facial aesthetics 25.6 19.9 29 %
Health 17.7 11.3 57 %
Other (a) 1.0 1.7 (41)%
--------------------- ------------- ------
Total $91.1 $73.9 23 %
===================== ============= ======
- ------------
(a) Other includes ongoing sales to other medical manufacturers
(principally sales of Contigen(R))
INAMED CORPORATION AND SUBSIDIARIES
SALES BY PRODUCT LINE
(millions)
Twelve Months Twelve Months
Ended Ended Growth
December 31, December 31, Rates
2003 2002
--------------------- ------------- ------
Sales by product line
Breast aesthetics $177.8 $156.3 14 %
Facial aesthetics 87.2 73.8 18 %
Health 63.1 39.4 60 %
Other (a) 4.5 6.2 (27)%
--------------------- ------------- ------
Total $332.6 $275.7 21 %
===================== ============= ======
- ------------
(a) Other includes ongoing sales to other medical manufacturers
(principally sales of Contigen(R))
CONTACT: Inamed Corporation
Charlie Huiner, (805) 692-5425 (Investors)
Dan Cohen, (202) 508-0185 (Media)