Exhibit 99.1
INAMED Reports Strong Financial Results with Double Digit Sales and Earnings
Growth for Third Quarter 2004
SANTA BARBARA, Calif.--(BUSINESS WIRE)--Oct. 27, 2004--INAMED
Corporation (Nasdaq:IMDC):
-- Diluted GAAP earnings per share were $0.47, up 34% over the
third quarter 2003.
-- Sales increased 12% to $90.0 million, up from $80.1 million in
the third quarter 2003.
-- Gross profit margin was 75%.
-- Hylaform(R) Plus approved by FDA on October 13, 2004.
INAMED Corporation (Nasdaq:IMDC), a global health care company,
announced today its financial results for the third quarter ended
September 30, 2004.
"We are pleased to report strong operating performance led by
double digit sales growth that reflects the breadth and diversity of
our global businesses," said Nick Teti, Chairman, President and Chief
Executive Officer. "We will continue to seek ways to expand each of
our businesses and we are excited about our product development
program. We have significant products either already under review with
the FDA, about to be filed or in Phase 3 clinical studies."
Teti added, "The recent approval of Hylaform Plus, the first and
only large particle size hyaluronic acid-based dermal filler in the
U.S., is the latest example of our ability to bring a competitive
product from pipeline to market."
Sales for the third quarter 2004 increased by 12% to $90.0
million, up from $80.1 million for the third quarter 2003. Diluted
GAAP earnings per share were $0.47, an increase of 34% from the third
quarter 2003.
-- Gross Profit Margin
The gross profit margin in the third quarter 2004 was 75%, up from
72% in the third quarter 2003.
-- Selling, General and Administrative
For the third quarter 2004, selling, general and administrative
expenses were $38.8 million or 43% of sales, compared to $33.7 million
or 42% of sales for the third quarter 2003. The percentage increase in
SG&A to sales in the third quarter was primarily due to the previously
announced ongoing royalty that the Company is paying to Ethicon
Endo-Surgery related to a patent case that settled in the second
quarter 2004.
-- Research and Development
The Company invested $7.2 million for research and development for
the quarter compared to $5.4 million in the third quarter 2003. As
previously announced, due primarily to ongoing clinical programs in
its facial aesthetics franchise, the Company increased its level of
R&D expenses in the third quarter and anticipates increasing R&D
spending in the fourth quarter as well.
-- Net Interest Income
Net interest income in the third quarter 2004 was $0.1 million
compared to net interest expense of $1.6 million in the third quarter
2003. The decrease in net interest expense reflects lower debt levels
and a related lower interest rate and increased cash balances.
-- Foreign Currency Effect
Foreign exchange favorably impacted sales during the third quarter
2004 by approximately $1.9 million.
Sales
INAMED Health -- Obesity Intervention
Worldwide sales of obesity intervention products in the third
quarter 2004 increased 37% over the third quarter 2003 to $22.2
million. Strong U.S. sales of the LAP-BAND(R) System were the primary
contributor to these results.
INAMED Aesthetics -- Breast
Worldwide breast aesthetics product sales in the third quarter
2004 were up 20% over third quarter 2003 to $49.3 million. The
continued strong performance in the Company's breast aesthetics
franchise reflects growing acceptance of the expanded Inamed product
portfolio in both domestic and international markets.
INAMED Aesthetics -- Facial
Worldwide facial aesthetics product sales in the third quarter
2004 were $17.1 million, down by 21% compared to sales in the third
quarter 2003. Facial aesthetics sales for the first three quarters
ending September 30, 2004, were down 11% compared to the same period
in 2003. These declines were primarily due to the adverse impact in
the U.S. on sales of collagen-based products resulting from the
introduction of a competing hyaluronic acid-based dermal filler.
Recently, the U.S. Food and Drug Administration (FDA) approved the
Company's Hylaform(R) Plus, the first large particle size hyaluronic
acid-based gel for mid to deep wrinkle correction. The Company expects
that this product will strengthen its existing dermal filler portfolio
in the United States.
Research and Development Pipeline
Inamed continued to make progress with its R&D pipeline during the
third quarter:
-- Reloxin(R)
Phase 3 trials for the Company's botulinum toxin Type A product
continue to progress. During the quarter, the Company selected the
brand name Reloxin for this product.
-- Juvederm(R)
The clinical trial for Juvederm, the next generation of hyaluronic
acid-based dermal fillers, is underway and patient enrollment is
expected to be completed shortly. The data gathered from this pivotal
study will be used to support the Company's Premarket Approval
Application (PMA), which will include several advanced formulations of
the Juvederm product line.
-- CosmoDerm(R) and CosmoPlast(R)
The Company commenced the marketing and sales of CosmoDerm and
CosmoPlast in Spain and Italy in the third quarter and expects to
introduce these products in France in the fourth quarter. Additional
approvals are being sought for these products in other international
markets.
-- Silicone Gel-Filled Breast Implants
In August, Inamed filed an amendment to its PMA for the Company's
Silicone Gel-Filled breast implants. The amendment was in response to
the January 2004 letter received by the Company from the FDA. Since
this filing, the Company has been engaged in active dialogue with the
FDA.
The Company's BioDIMENSIONAL(TM) Cohesive Gel Matrix(TM) clinical
development program is in the third year of follow-up in the United
States. The Company anticipates submitting the PMA for these important
and innovative products during the fourth quarter of 2004.
Conference Call
As previously announced, Inamed will host a conference call today
to discuss its third quarter 2004 results, guidance on anticipated
results for fiscal year 2004, key strategic market developments and
ongoing expansion of research and development programs at 5:00 p.m.
Eastern 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 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.
Note Regarding Use of Non-GAAP Financial Measures
Certain of the information set forth herein, including diluted
non-GAAP earnings per share, 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 correct facial
wrinkles and facial contours; 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 October 27,
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, 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 Type 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.
Hylaform(R)Plus and Hylaform(R) are registered trademarks of
Genzyme Corporation. Juvederm(R) is a registered trademark of
Corneal-Industrie S.A.S. Reloxin(R), CosmoDerm(R), CosmoPlast(R),
LAP-BAND(R) System, and BioDIMENSIONAL(R) are registered trademarks
and Cohesive Gel Matrix(TM) is a trademark of Inamed Corporation. All
rights reserved.
INAMED CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(millions, except per share data)
Three Months Three Months
Ended Ended
September 30, September 30,
2004 2003
---------------- ----------------
Net sales $90.0 $80.1
Cost of goods sold 22.6 22.8
---------------- ----------------
Gross profit 67.4 57.3
---------------- ----------------
Operating expenses:
Selling, general and administrative 38.8 33.7
Research and development 7.2 5.4
Amortization of intangible assets 1.3 1.1
---------------- ----------------
Total operating expenses 47.3 40.2
Operating income 20.1 17.1
Other income/(expense):
Net interest income/(expense) and
debt costs 0.1 (1.6)
Foreign currency transaction gains 0.2 -
Royalty income and other 1.2 1.0
---------------- ----------------
Total other income/(expense), net 1.5 (0.6)
Income before income tax expense 21.6 16.5
Income tax expense 4.8 4.0
---------------- ----------------
Net income $16.8 $12.5
================ ================
Net income per share of common
stock:
Basic EPS $0.47 $0.36
Diluted EPS $0.47 $0.35
Weighted average shares outstanding:
Basic 35.7 34.5
Diluted 36.0 35.2
INAMED CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(millions, except per share data)
Nine Months Nine Months
Ended Ended
September 30, September 30,
2004 2003
---------------- ----------------
Net sales $280.6 $241.4
Cost of goods sold 71.1 68.4
---------------- ----------------
Gross profit 209.5 173.0
---------------- ----------------
Operating expenses:
Selling, general and administrative
(Note 1) 136.8 100.7
Research and development 19.1 16.2
Amortization of intangible assets 3.7 3.0
---------------- ----------------
Total operating expenses 159.6 119.9
Operating income 49.9 53.1
Other income/(expense):
Net interest income/(expense) and
debt costs 0.4 (8.5)
Foreign currency transaction gains - 0.5
Royalty income and other 3.5 3.3
---------------- ----------------
Total other income/(expense), net 3.9 (4.7)
Income before income tax expense 53.8 48.4
Income tax expense 9.6 11.1
---------------- ----------------
Net income $44.2 $37.3
================ ================
Net income per share of common
stock:
Basic EPS $1.25 $1.10
Diluted EPS $1.23 $1.08
Weighted average shares outstanding:
Basic 35.5 33.8
Diluted 35.9 34.6
Note 1: Included in selling, general and administrative expenses
for the nine months ended September 30, 2004, was a
US$17.2 million charge related to the Ethicon settlement
payment and related second quarter litigation costs and
expenses.
INAMED CORPORATION AND SUBSIDIARIES
SALES BY PRODUCT LINE
(unaudited)
(millions)
Three Months Three Months
Ended Ended Growth
September 30, 2004 September 30, 2003 Rates
------------------ ------------------ -------
Sales by product line
Breast aesthetics $49.3 $41.1 20 %
Facial aesthetics 17.1 21.6 (21)%
Health 22.2 16.2 37 %
Other(a) 1.4 1.2 17 %
------------------ ------------------ -------
Total $90.0 $80.1 12 %
================== ================== =======
- -------
(a) Other includes ongoing sales to other medical manufacturers
(principally sales of Contigen(R)).
INAMED CORPORATION AND SUBSIDIARIES
SALES BY PRODUCT LINE
(unaudited)
(millions)
Nine Months Nine Months
Ended Ended Growth
September 30, 2004 September 30, 2003 Rates
------------------ ------------------ -------
Sales by product line
Breast aesthetics $159.5 $131.0 22 %
Facial aesthetics 55.0 61.6 (11)%
Health 62.6 45.3 38 %
Other(a) 3.5 3.5 -
------------------ ------------------ -------
Total $280.6 $241.4 16 %
================== ================== =======
- -------
(a) Other includes ongoing sales to other medical manufacturers
(principally sales of Contigen(R)).
INAMED CORPORATION AND SUBSIDIARIES
NON GAAP EARNINGS PER SHARE RECONCILIATION
(unaudited)
(millions, except per share data)
Nine Months
Ended
September 30, 2004
---------------------------
Earnings for per share calculations
GAAP Net income $44.2
Ethicon settlement charge and related Q2
expenses (included in selling, general
and administrative expenses) 17.2
Tax effect (6.9)
---------------------------
Non GAAP Net income $54.5
===========================
Earnings per share
GAAP Diluted EPS $1.23
Ethicon settlement charge and related Q2
expenses, net of tax 0.29
---------------------------
Non GAAP Diluted EPS $1.52
===========================
NOTE: Tax effect of settlement was computed at 40%.
INAMED CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in millions)
September 30, December 31,
2004 2003
--------------- ---------------
Assets
- ------
Current assets:
Cash and cash equivalents $93.6 $80.5
Short-term investments 14.7 -
Trade accounts receivable, net
of allowances of $20.1
and $19.7 in 2004 and 2003,
respectively 62.3 63.7
Inventories 55.5 47.0
Prepaid expenses and other
current assets 20.4 20.9
--------------- ---------------
Total current assets 246.5 212.1
Property and equipment, net 59.2 51.2
Other assets 237.2 237.7
--------------- ---------------
Total Assets $542.9 $501.0
=============== ===============
Liabilities and Stockholders' Equity
- ------------------------------------
Current liabilities $81.2 $80.2
Non-current liabilities 49.5 69.3
Stockholders' equity 412.2 351.5
--------------- ---------------
Total Liabilities and
Stockholders' Equity $542.9 $501.0
=============== ===============
CONTACT: INAMED Corporation
Charlie Huiner, 805-692-5425 (Investors)
Dan Cohen, 202-638-4179 (Media)