Exhibit 99.1
Inamed Reports Record 2004 Fourth Quarter and Full Year Sales and Net Income
Results
SANTA BARBARA, Calif.--(BUSINESS WIRE)--Feb. 24, 2005--Inamed Corporation
(Nasdaq:IMDC):
-- Fourth quarter 2004 sales increased 14% to $103.8 million.
-- Full year 2004 sales increased 16% to $384.4 million.
-- Fourth quarter 2004 diluted GAAP earnings per share were up 18% to
$0.52.
-- Full year 2004 diluted GAAP earnings per share were up 16% to $1.75.
-- Full year 2004 diluted Non-GAAP earnings per share were $2.04,
excluding a pretax $17.2 million charge for the Ethicon settlement and
related litigation expenses.
- -- Significant First Quarter 2005 Events:
-- Reached Preliminary Agreement for Reloxin (botulinum toxin type
A) Distribution Rights in Select International Markets
-- Silicone Gel-Filled Breast Implant Advisory Panels Scheduled in
Canada, United States
Inamed Corporation (Nasdaq:IMDC), a global healthcare company, today
announced its financial results for the fourth quarter and the full year ended
December 31, 2004.
"2004 was a dynamic year of growth and development at Inamed," said Nick
Teti, Chairman, President and Chief Executive Officer. "Our record sales and
earnings are a testament to the hard work and commitment of the Inamed
employees. We look forward to the next few months and years with great
excitement and anticipation."
Financial Results
Diluted GAAP earnings per share grew 18% in the fourth quarter 2004 to
$0.52, an increase from $0.44 in the fourth quarter 2003. Diluted GAAP earnings
per share for the full year 2004 increased 16% to $1.75, up from $1.51 in 2003.
Diluted Non-GAAP earnings per share for the full year 2004 were $2.04,
excluding a pretax $17.2 million charge for the Ethicon settlement and related
litigation expenses.
Inamed Businesses
Sales for the fourth quarter were $103.8 million, an increase of 14% over
the fourth quarter 2003, and sales for the full year 2004 were $384.4 million,
an increase of 16% over 2003. The fourth quarter sales represent the first time
in the Company's history that sales exceeded $100 million in a quarter.
Inamed Health - Obesity Intervention
Worldwide sales of obesity intervention products in the fourth quarter 2004
increased 47% over the fourth quarter 2003 to $26.0 million. Full year 2004
obesity intervention sales grew 40% over sales in 2003 to $88.5 million.
Inamed Aesthetics - Breast
Worldwide breast aesthetics product sales in the fourth quarter 2004 were
up 20% over the fourth quarter 2003 to $56.3 million. For the full year 2004,
sales increased 21% over sales in 2003 to $215.8 million.
Inamed Aesthetics - Facial
Worldwide facial aesthetics product sales in the fourth quarter 2004
decreased 20% over sales in the fourth quarter 2003 to $20.6 million. For the
full year 2004, sales decreased 13% over sales in 2003 to $75.6 million.
Foreign Currency Effect
Foreign exchange favorably impacted revenue by approximately $2.3 million
for the fourth quarter 2004 and $11.1 million for the full year 2004,
principally from the strengthening Euro. This favorable impact benefited each of
Inamed's businesses.
Gross Profit Margin
The gross profit margin in the fourth quarter 2004 was 74%, up from 73% in
the fourth quarter 2003. The full year gross profit margin for 2004 was 75%, up
from 72% in 2003. The primary factors for the increase in margins were a
favorable product mix and operational efficiencies. Additionally, in 2003 the
gross profit margin reflected accelerated depreciation expense of $0.6 million
and $3.4 million for the fourth quarter and full year, respectively, caused by
the Company's manufacturing consolidation program.
Selling, General and Administrative
For the fourth quarter 2004, selling, general and administrative expenses
were $42.9 million or 41% of sales, compared to $41.1 million or 45% of sales
for the fourth quarter 2003. The fourth quarter 2003 included a $2.1 million
charge for doubtful accounts in respect of the Company's Italian facial
aesthetics business. The full year 2004 SG&A expenses, which include the pre tax
$17.2 million charge related to the Ethicon settlement and related litigation
expenses, were $179.7 million or 47% of sales compared to $141.8 million or 43%
of sales for the full year 2003. Excluding the charges related to the Ethicon
settlement, SG&A expenses were $162.5 million for the full year 2004 or 42% of
sales.
Research and Development
The research and development expense in the fourth quarter 2004 was 9% of
sales or $9.7 million compared to 6% of sales or $5.3 million in the fourth
quarter of 2003. For the full year 2004, R&D expense was 7.5% of sales or $28.8
million, up from 6.5% of sales or $21.5 million in 2003. This investment in R&D
was due to the progression of key clinical development programs, primarily in
our facial aesthetics franchise.
Balance Sheet
At December 31, 2004, Inamed's cash and short-term investment balance was
$130 million, an increase of $50 million from December 31, 2003, principally
from cash provided by operating activities. Also Inamed's long-term debt as of
December 31, 2004 was $22.5 million reflecting further principal payments during
2004.
Note Regarding Use of Non-GAAP Financial Measures
Certain of the information set forth herein, including diluted Non-GAAP
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 24, 2005, 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
approvals. 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
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(millions, except per share data)
Three Months Three Months
Ended Ended
December 31, December 31,
2004 2003
------------ ------------
Net sales $ 103.8 $ 91.1
Cost of goods sold 26.8 24.4
------------ ------------
Gross profit 77.0 66.7
------------ ------------
Operating expenses:
Selling, general and administrative 42.9 41.1
Research and development 9.7 5.3
Amortization of intangible assets 1.3 1.0
------------ ------------
Total operating expenses 53.9 47.4
Operating income 23.1 19.3
Other income/(expense):
Net interest income/(expense) and debt
costs 0.1 (0.9)
Foreign currency transaction
gains/(losses) 0.1 (0.6)
Royalty income and other 1.2 1.0
------------ ------------
Total other income/(expense), net 1.4 (0.5)
Income before income tax expense 24.5 18.8
Income tax expense 5.6 3.1
------------ ------------
Net income $ 18.9 $ 15.7
============ ============
Net income per share of common stock:
Basic EPS $ 0.53 $ 0.45
Diluted EPS $ 0.52 $ 0.44
Weighted average shares outstanding:
Basic 35.9 35.1
Diluted 36.2 35.6
INAMED CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(millions, except per share data)
Twelve Twelve
Months Months
Ended Ended
December 31, December 31,
2004 2003
------------ ------------
Net sales $ 384.4 $ 332.6
Cost of goods sold 97.9 92.8
------------ ------------
Gross profit 286.5 239.8
------------ ------------
Operating expenses:
Selling, general and administrative
Note 1 179.7 141.8
Research and development 28.8 21.5
Amortization of intangible assets 5.0 4.0
------------ ------------
Total operating expenses 213.5 167.3
Operating income 73.0 72.5
Other income/(expense):
Net interest income/(expense) and debt
costs 0.5 (9.4)
Foreign currency transaction
gains/(losses) 0.1 (0.1)
Royalty income and other 4.7 4.2
------------ ------------
Total other income/(expense), net 5.3 (5.3)
Income before income tax expense 78.3 67.2
Income tax expense 15.2 14.2
------------ ------------
Net income $ 63.1 $ 53.0
============ ============
Net income per share of common stock:
Basic EPS $ 1.77 $ 1.54
Diluted EPS $ 1.75 $ 1.51
Weighted average shares outstanding:
Basic 35.6 34.5
Diluted 36.0 35.2
Note 1: Included in selling, general and administrative expenses
for the twelve months ended December 31, 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
December 31, 2004 December 31, 2003 Rates
----------------- ------------------ ----------
Sales by product line
Breast aesthetics $ 56.3 $ 46.9 20 %
Health 26.0 17.7 47 %
Facial aesthetics 20.6 25.6 (20)%
Other (a) 0.9 0.9 -
----------------- ------------------ ----------
Total $ 103.8 $ 91.1 14 %
================= ================== ==========
- --------
(a) Other includes ongoing sales to other medical manufacturers
(principally sales of Contigen(R))
INAMED CORPORATION AND SUBSIDIARIES
SALES BY PRODUCT LINE
(unaudited)
(millions)
Twelve Months Twelve Months
Ended Ended Growth
December 31, 2004 December 31, 2003 Rates
----------------- ------------------ ----------
Sales by product line
Breast aesthetics $ 215.8 $ 177.8 21 %
Health 88.5 63.1 40 %
Facial aesthetics 75.6 87.2 (13)%
Other (a) 4.5 4.5 -
----------------- ------------------ ----------
Total $ 384.4 $ 332.6 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)
Twelve Months
Ended
December 31, 2004
-----------------
Earnings for per share calculations
GAAP Net income $ 63.1
Ethicon settlement charge and related Q2 expenses
(included in selling, general and administrative
expenses) 17.2
Tax effect (6.9)
-----------------
Non-GAAP Net income $ 73.4
=================
Earnings per share
GAAP Diluted EPS $ 1.75
Ethicon settlement charge and related Q2
expenses, net of tax 0.29
----------------
Non-GAAP Diluted EPS $ 2.04
=================
NOTE: Tax effect of settlement was computed at 40%.
INAMED CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in millions)
December 31, December 31,
2004 2003
------------ ------------
Assets
- ------
Current assets:
Cash and cash equivalents $ 107.2 $ 80.5
Short-term investments 23.1 -
Trade accounts receivable, net of
allowances of $18.7 and $19.7 in 2004
and 2003, respectively 69.2 63.7
Inventories, net 56.0 47.0
Prepaid expenses and other current
assets 16.4 20.9
------------ ------------
Total current assets 271.9 212.1
Property and equipment, net 62.5 51.2
Other assets 235.7 237.7
------------ ------------
Total Assets $ 570.1 $ 501.0
============ ============
Liabilities and Stockholders' Equity
- ---------------------------------------------
Current liabilities $ 81.0 $ 80.2
Non-current liabilities 42.8 69.3
Stockholders' equity 446.3 351.5
------------ ------------
Total Liabilities and
Stockholders' Equity $ 570.1 $ 501.0
============ ============
CONTACT: Inamed Corporation
Dan Cohen, Vice President Global
Corporate and Government Affairs
202-638-4179
202-329-1825 (cell)