Exhibit 99.1
VISX Operating Profit Up 89 Percent
SANTA CLARA, Calif.--(BUSINESS WIRE)--Oct. 21, 2004--VISX, Incorporated
(NYSE:EYE) today announced financial results for the third quarter and nine
months ended September 30, 2004.
Third quarter revenues were $38.7 million compared with $39.3 million for
the comparable period of 2003. Operating income increased 89 percent, due to a
favorable product mix shift to higher margin license revenue in the quarter. Net
income rose to $0.22 per diluted share from $0.10 in last year's third quarter,
reflecting higher operating income as well as an effective tax rate of 24.5
percent.
License revenue, which generated a 97 percent gross margin, grew 16 percent
from the comparable period of 2003. This increase resulted from 4 percent growth
in U.S. procedure volume compared to the third quarter of last year, as well as
higher CustomVue procedure sales in both domestic and international markets.
"Our highly profitable license revenue drove operating profit sharply
higher this quarter," stated Liz Davila, VISX chairman and CEO. "In the eastern
United States, in particular in the southeast where business was repeatedly
disrupted by the impacts of the hurricanes, we experienced weaker than
anticipated procedure volume. However, in the rest of the country, we saw
healthy procedure volume growth of 8 percent. In the international market,
CustomVue procedures were three times last year's level."
Davila continued, "In the U.S., we are awaiting approval of our CustomVue
hyperopia procedure which will expand our market opportunity for CustomVue. Our
total CustomVue conversion in the quarter was just over 35 percent. More than
200 U.S. accounts are now at 50% or greater conversion to CustomVue. We are
expanding our marketing and training programs to target the low volume accounts
that are lagging behind the average."
VISX results for the third quarter of 2004 included tax-related items that
increased earnings per diluted share by approximately $0.04.
VISX cash and equivalents at the end of the third quarter were $121.0
million. Cash flow from operations was $6.2 million reflecting higher net income
offset by increased inventory for anticipated laser and new product shipments
and higher receivables.
Revenues for the nine months ended September 30, 2004, increased to $125.5
million compared with $105.7 million for the comparable period of the prior
year. Net income more than doubled to $32.6 million, or $0.64 per diluted share,
in the first nine months of 2004 compared with net income of $14.4 million, or
$0.28 per diluted share, in the first nine months of 2003.
Financial Outlook:
VISX believes that fourth quarter revenues will be in the range of $39 to
$42 million. EPS is expected to be in the range of $0.17 to $0.20 for the
quarter. The tax rate in the fourth quarter is anticipated to be 40 percent.
For 2004, the Company expects revenue growth of 14 percent to 16 percent
compared to 2003 and earnings per diluted share of $0.81 to $0.84, an increase
of over 75 percent compared with last year's earnings per diluted share.
VISX is targeting 25 percent to 30 percent operating profit growth in 2005.
New Product Introductions:
CustomVue Presbyopia
In the third quarter, VISX launched internationally its CustomVue
presbyopia treatment for far sighted individuals that require reading glasses.
This is the first commercially available laser treatment of presbyopia that
corrects the eye for simultaneous near and distance vision.
Fourier Wavefront Upgrade
During the quarter, VISX introduced worldwide its Fourier Wavefront
Upgrade, a new software that fully utilizes the wavefront data to assess visual
error. This provides a new level of precision and unprecedented resolution for
individualized CustomVue treatments.
Iris Registration
In international markets, VISX introduced its Iris registration product. It
is the first fully automated method of adjusting for the differences between the
eye's position when sitting for a WaveScan measurement versus lying down for the
laser treatment.
About CustomVue Laser Vision Correction:
CustomVue laser vision correction employs a diagnostic laser system that
analyzes the optical errors in the eye. Much like a fingerprint, each person's
visual error is unique and can now be captured through the use of the VISX
WaveScan System. The information is digitally recorded, transferred to the VISX
STAR Laser System and the CustomVue laser vision correction procedure is
customized based on the specific refractive errors of the individual. With the
new CustomVue product, ophthalmologists can correct aberrations, or
imperfections, of the eye that previously were not measured. This means that
custom technology has the potential to improve vision beyond correction with
contacts and glasses.
Conference Call:
VISX management will discuss its third quarter financial results on a
conference call at 4:30 p.m. eastern time on October 21, 2004. The call will be
Webcast live at www.visx.com and will be available for a period of one week
following the call. A telephone rebroadcast of the call will also be available
for one week following the conclusion of the call. To access the rebroadcast via
telephone, call 888-286-8010. International callers should call 617-801-6888.
Enter reservation number 30387865.
About VISX:
VISX is a worldwide market leader in the design, manufacture, and sale of
laser vision correction systems. Ophthalmologists have performed over 6 million
procedures using VISX Systems, reducing or eliminating completely the need for
contacts or glasses. Additional information on VISX can be found on the
worldwide web at www.VISX.com.
This press release contains certain forward-looking statements based on
current expectations, forecasts, and assumptions of VISX that involve risks and
uncertainties. Forward-looking statements in this release, including statements
that our CustomVue hyperopia procedure will expand our market opportunity for
CustomVue, that we plan to expand our marketing and training programs to target
the low volume accounts that are lagging behind the average in CustomVue
conversion, that fourth quarter revenues will be in the range of $39 million to
$42 million, that EPS is expected to be in the range of $0.17 to $0.20 for the
fourth quarter, that the tax rate in the fourth quarter is anticipated to be 40
percent, and that for 2004, revenue will grow 14 percent to 16 percent compared
with 2003 and 2004 EPS is expected to increase over 75% to $0.81 to $0.84 per
diluted share in 2004 compared with 2003, and that VISX is targeting operating
profit growth in 2005 of 25 percent to 30 percent, are based on information
available to the Company as of the date hereof. The Company's actual results
could differ materially from those stated or implied in such forward-looking
statements, due to risks and uncertainties associated with the Company's
business, which include the fact that market acceptance of our products, and
particularly of CustomVue, is uncertain and depends on broad acceptance by
physicians and patients, that intense competition in the laser vision correction
industry could result in the loss of customers, an inability to attract new
customers, or a decrease in prices for our products, that we face risks due to
our reliance on sales in international markets, that we are subject to extensive
governmental regulation, which increases our costs and could prevent us from
selling our products, that the possibility of long-term side effects and adverse
publicity regarding laser correction surgery could seriously harm our business,
that we have and may become subject to product liability claims, that adverse
economic conditions may cause our revenues to decline, and that expenses are
relatively fixed in the short term and declines in revenue would have an
immediate impact on earnings per share. Further information on risk factors is
contained in the Company's most recent filings with the Securities and Exchange
Commission, including VISX's Annual Report on Form 10K for the year ended
December 31, 2003 and VISX Form 10-Q for the quarter ended June 30, 2004. The
Company assumes no obligation to update the information included in this press
release, whether as a result of new information, future events, or otherwise.
Editors' Note: VISX, VISX STAR, VISX WaveScan, WaveScan, and CustomVue are
trademarks of VISX, Incorporated.
VISX, Incorporated
Condensed Consolidated Statement of Operations
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
----------------------- -----------------------
9/30/2004 9/30/2003 9/30/2004 9/30/2003
----------- ----------- ----------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
License and other
revenues $27,169 $23,494 $89,887 $63,235
System revenues 6,480 11,136 19,859 28,743
Service and parts
revenues 5,022 4,638 15,706 13,709
----------- ----------- ----------- -----------
Total revenues 38,671 39,268 125,452 105,687
----------- ----------- ----------- -----------
Cost of revenues 9,281 16,335 30,856 40,549
Selling, general and
administrative 9,268 10,538 29,500 30,846
Research, development
and regulatory 5,766 4,814 16,261 13,649
----------- ----------- ----------- -----------
Total costs and
expenses 24,315 31,687 76,617 85,044
----------- ----------- ----------- -----------
Income from
operations 14,356 7,581 48,835 20,643
Interest and other
income, net 607 369 1,393 3,130
----------- ----------- ----------- -----------
Income before
provision for
income taxes 14,963 7,950 50,228 23,773
Provision for income
taxes 3,671 3,085 17,636 9,334
----------- ----------- ----------- -----------
Net Income $11,292 $4,865 $32,592 $14,439
=========== =========== =========== ===========
Earnings per share
Basic $0.23 $0.10 $0.66 $0.29
=========== =========== =========== ===========
Diluted $0.22 $0.10 $0.64 $0.28
=========== =========== =========== ===========
Shares used for
earnings per share
Basic 49,525 48,065 49,066 49,816
=========== =========== =========== ===========
Diluted 50,971 50,132 50,739 50,995
=========== =========== =========== ===========
Condensed Consolidated Balance Sheet
(In thousands)
9/30/2004 12/31/2003
----------- -----------
(unaudited) (unaudited)
Cash, cash equivalents and short-term
investments $121,046 $86,076
Accounts receivable, net 28,985 27,432
Inventories 17,149 11,219
Other current assets 25,895 20,477
----------- -----------
Current assets 193,075 145,204
Property and equipment, net 4,078 3,851
Long-term deferred tax and other assets 13,168 14,908
----------- -----------
Total assets $210,321 $163,963
=========== ===========
Accounts payable $4,957 $3,442
Accrued liabilities 38,583 34,722
----------- -----------
Current liabilities 43,540 38,164
Stockholders' equity 166,781 125,799
----------- -----------
Total liabilities and stockholders'
equity $210,321 $163,963
=========== ===========
CONTACT: VISX, Incorporated
Jackie Cossmon, 408-773-7600
ir@visx.com