EXHIBIT 99.1
LASERSCOPE ANNOUNCES ACQUISITION OF FIBER OPTICS MANUFACTURER
INNOVAQUARTZ, INC.
ACQUISITION EXTENDS MEDICAL DISPOSABLES PRODUCT LINE, IMPROVES GREENLIGHT
PV(R) FIBER OPTIC PROFIT MARGINS, ENHANCES FIBER OPTICS R&D CAPABILITY, AND
EXPANDS MANUFACTURING CAPABILITIES
SAN JOSE, Calif., May 1 /PRNewswire-FirstCall/ -- Laserscope (Nasdaq:
LSCP), a leader in the development and commercialization of minimally-invasive
medical devices, including medical lasers and advanced fiber-optic delivery
devices, today announced that it has acquired InnovaQuartz, Inc. ("IQ") of
Phoenix, Arizona. Founded in 1991, InnovaQuartz, a privately held company, is a
leading developer, vertically integrated manufacturer and commercial supplier of
advanced medical devices for multiple medical procedures including those used in
the treatment of kidney, bladder, and other urinary stones. InnovaQuartz's
medical devices include fiber optics, sterile fiber optic delivery devices,
optical components and optical subassemblies.
Laserscope acquired all of the capital stock of InnovaQuartz for
approximately $7.5 million in cash, the assumption of approximately $1.1 million
in debt and future cash payments contingent on the financial performance of IQ
over approximately three years.
Eric Reuter, President and CEO of Laserscope said, "The acquisition of IQ
is exciting for Laserscope for three important strategic reasons. The first is
that the addition of IQ's newest fiber optic product line provides us an
immediate entry with leading technology into another important urological market
- -- the intracorporeal treatment of kidney, bladder, and other urinary stones
that use holmium laser technology. Entry into this large, growth market is
consistent with our strategy to become a complete player in the field of
urology, and the treatment of stones is one of the highest volume urological
surgical procedures in the U.S. outside of the treatment of benign prostatic
hyperplasia ("BPH"). IQ's new line of stone fibers incorporates patented
technology and know-how which provides for superior flexibility and strength.
Going forward, the IQ products will be sold through our US and international
urology distribution channels for use with Laserscope's own StoneLight(R)
holmium laser as well as for use with many of the substantial worldwide
installed base of other holmium lasers. Additionally, we expect to maintain
certain of IQ's key distribution and OEM relationships. IQ's licensed technology
and vertical manufacturing expertise bolsters Laserscope's leading position in
the design and manufacture of disposable fiber optic delivery devices for high
volume procedures in urology. We expect that IQ fiber optic product line
revenues can be grown substantially over the next several years as the IQ fiber
optic product line gains recognition as the standard for treating stones with
holmium laser technology. We intend to pursue an aggressive marketing and sales
strategy for bringing these products to the large existing installed base of
holmium lasers worldwide.
"The second reason that this acquisition is so important," continued Mr.
Reuter, "is that it serves a key operational objective which is the swift
realization of savings in fiber materials costs for our main fiber optic product
line, the GreenLight PV delivery device. Since 2002, IQ has been a reliable,
high quality supplier of a key component of Laserscope's GreenLight PV fiber
optic delivery device used for the treatment of BPH. We therefore expect the
acquisition will enable us to realize an immediate reduction in the cost of
goods of our single use products and we anticipate that IQ's manufacturing and
design capabilities will contribute further reductions in the costs of our fiber
optic disposable products in the future.
"Thirdly, IQ's R&D expertise and focus in specialty assemblies and
components and rapid proto-typing will support Laserscope's existing R&D efforts
to develop new, technologically superior and lower cost fiber optic medical
devices. The benefits we expect to realize through the addition of
InnovaQuartz's expertise fully support Laserscope's long term fiber optic
strategy to become the world's leading provider of competitively priced and high
quality medical fiber optic technology for high volume medical procedures," said
Mr. Reuter.
The InnovaQuartz acquisition is expected to be accretive beginning in 2007.
IQ will be managed and operated as a wholly owned subsidiary of Laserscope for
the foreseeable future.
The Intracorporeal Stone Market
IQ is one of the few vertically integrated developers, manufacturers, and
commercializers of advanced medical fiber optics in the world. IQ recently
acquired proprietary intellectual property and manufacturing expertise, which it
uses to produce a line of technologically advanced sterile fiber optic delivery
devices available for use in intracorporeal laser lithotripsy, or the endoscopic
treatment of kidney, bladder, and other urinary stones using holmium laser
technology.
In the U.S. alone more than 200,000 intracorporeal stone treatment
procedures are performed each year using various technologies with a larger
number performed internationally. Sources predict that the number of holmium
stone treatment procedures in the United States is expected to grow at
approximately 15% per year through 2008 given the ease of use, speed, and
relative safety of the holmium laser technology relative to other technologies
used for breaking up the hard materials that make up urinary stones. This growth
rate exceeds the approximately 6% compounded procedural growth rate expected
considering the aging population, dietary changes and other dynamics.
According to industry sources, the total market size for holmium laser
capital equipment and disposable and reusable delivery devices for these
procedures exceeds $50 million per year in the U.S. There are several thousand
holmium stone treatment lasers already installed worldwide and over 300 holmium
lasers are expected to be sold and installed in the U.S. each year through 2008.
Over 50,000 holmium laser fiber optic delivery devices are sold each year in the
U.S. typically at prices ranging between $300 and $500/fiber. IQ's new fiber
optic product line can be used on many if not most of the worldwide installed
base of holmium laser systems. Given the technological superiority and
competitive price of these products over other methods of performing
intracorporeal lithotripsy, this translates to an immediate market opportunity.
"InnovaQuartz's disposable and reusable stone fiber revenue has grown at a
tremendous rate over the past two years. Given the favorable market dynamics and
strong OEM relationships that InnovaQuartz has established, coupled with
Laserscope's growing urology distribution expertise, we expect strong,
consistent revenue growth from this new product line for the foreseeable
future," Mr. Reuter concluded.
Special Investor Relations Forum Announced
Laserscope will be holding a special Investor Relations Forum coinciding
with the 2006 American Urological Association Meeting on May 22nd, 2006. At this
meeting, Laserscope will be discussing current and future R&D and business
development initiatives for our urology and aesthetic product lines as well as
unveiling the latest new additions to the Laserscope urology product line.
Investors are invited to attend in-person or via a web-cast which will be
announced prior to the event. Those planning to attend in person should contact
Laserscope's IR representatives as attendance will be limited.
Management Conference Call
Management of Laserscope will hold a conference call today, Monday, May 1,
2006 at 8:00am PT / 11:00am ET to discuss results for the 2006 first quarter. To
participate in the call, please dial 800-218-0204 (303-262-2050 for
international callers) at least five minutes prior to the start time. Investors
will also have the opportunity to listen to the conference call live on the
Internet through Laserscope's website at http://www.laserscope.com . Investors
should go to the website a few minutes early, as it may be necessary to download
audio software to access the conference call. A replay of the conference call
will be available through Monday, May 8, 2006, by dialing 800-405-2236
(303-590-3000 for international callers), and entering passcode 11059316. An
archive will also be available at Laserscope's website.
About Laserscope
Laserscope designs, manufactures, sells and services on a worldwide basis
an advanced line of minimally-invasive medical products including medical laser
systems and related energy delivery devices for the office, outpatient surgical
center, and hospital markets. More information about Laserscope can be found on
its web site at http://www.laserscope.com .
Safe Harbor Statement
This press release contains forward-looking information within the meaning
of Section 21E of the Securities Exchange Act of 1934, and is subject to the
safe harbor created by this section. These forward-looking statements include:
statements about the expected future benefits resulting from the acquisition of
InnovaQuartz, such as increased sales of the IQ stone fiber line and other IQ
products, manufacturing and engineering improvements in our existing products
designed to reduce the cost of goods sold, enhanced fiber optic R&D and
manufacturing capabilities; statements about Laserscope's future profitability
and operating results, expected continued momentum of Laserscope's business and
growth including new product offerings, such as the InnovaQuartz products,
worldwide adoption rates of the treatment of stones, especially intracorporeal
lithotripsy, our ability to compete with similar product offerings and other
therapies for the treatment of stones, market penetration opportunities in
advanced fiber optics. These statements are subject to a number of risks and
uncertainties, including: the risk that the InnovaQuartz acquisition may not
provide us the expected benefits and could disrupt our business and harm our
financial condition, results of operations and cash flows; uncertainties
regarding introduction of new technologies competitive to Laserscope's products
and the degree to which our current and new products are accepted by customers,
which could affect the level of demand for our products, including the IQ
products; uncertainties regarding the impact that competitive products and
therapies as well as private and public payer reimbursement levels for stone
procedures could have on the competitiveness of our current pricing programs,
which could adversely impact our financial results; risk of reductions in
government and private insurance reimbursement of hospitals and physicians for
health care costs, which may negatively impact hospitals and physicians
decisions to purchase our products reducing adoption rates and sales growth;
risks that patents and licenses that we or InnovaQuartz hold may be challenged,
invalidated or circumvented or that we may become the subject of intellectual
property litigation; the risk that we may be unable to maintain favorable
relationships with InnovaQuartz's current customers, uncertainties regarding our
ability to compete with companies that have significantly greater financial,
technical, research and development, manufacturing and marketing resources than
we have; and uncertainties that new products will receive regulatory approval in
applicable jurisdictions. Actual results may differ materially due to these and
other factors. The matters discussed in this press release also involve risks
and uncertainties described from time to time in Laserscope's filings with the
Securities and Exchange Commission. In particular, see the Risk Factors
described in Laserscope's most recent Quarterly Report on Form 10-Q and Annual
Report on Form 10-K. Copies of Laserscope's public disclosure filings with the
SEC, including the most recent Annual Report on Form 10-K and the most recent
forms 10-Q are available upon request from its Investor Relations Department at
its website at http://www.laserscope.com and at the SEC's
website: http://www.sec.gov . Laserscope assumes no obligation to update the
forward-looking information contained in this press release.
At Laserscope: At Financial Relations Board:
Eric Reuter, President & CEO Tricia Ross Analyst/Investor Contact
Derek Bertocci, CFO (617) 520-7064
(408) 943-0636
SOURCE Laserscope
-0- 05/01/2006
/CONTACT: Eric Reuter, President & CEO, or Derek Bertocci, CFO, both of
Laserscope, +1-408-943-0636; or Tricia Ross, Analyst/Investor Contact,
Financial Relations Board, +1-617-520-7064/
/Web site: http://www.laserscope.com /
(LSCP)