Laserscope Reports Record Revenues and Earnings for 2004 Fourth
Quarter and Full Year Urology Business Drives Significant Top and
Bottom Line Growth SAN JOSE, Calif., March 3 /PRNewswire-FirstCall/
-- Laserscope (NASDAQ:LSCP), a pioneer in the development and
commercialization of medical lasers and advanced fiber-optic
devices, today reported record revenues of $29.4 million for its
fourth quarter ended December 31, 2004, a 65.2% increase from $17.8
million in the fourth quarter of 2003. Revenues also increased
21.8% sequentially, from $24.2 million for the quarter ended
September 30, 2004. The increase in revenues was attributable to
continued growth in sales of the Company's line of GreenLight(TM)
products for Photo-Selective Vaporization of the Prostate (PVP), in
addition to strong aesthetic product sales. Fourth quarter 2004 net
income was a record $5.2 million, or $0.23 per diluted share, a
significant increase from net income of $1.5 million, or $0.07 per
diluted share, in the same quarter last year, and net income of
$4.4 million, or $0.19 per diluted share, for the third quarter of
2004. "The fourth quarter capped another very exciting year for
Laserscope," said Eric Reuter, President and Chief Executive
Officer of Laserscope. "Since launching our urology business in
2002, global adoption of the PVP procedure using the GreenLight(TM)
laser system for treatment for Benign Prostatic Hyperplasia, or
BPH, has been outstanding. As more patients and physicians continue
to recognize the safety and efficacy of the PVP procedure using our
GreenLight(TM) laser system, we've been able to grow procedure
volume. We are regularly hearing now that men, both in the U.S. and
internationally, are choosing PVP over all other major therapy
types, including many men who are choosing to forego or stop their
medical therapy to have a PVP procedure done. Our strong and
consistent financial performance over the last year is the result
of this success coupled with continued solid performance in our
aesthetics business." Gross margin in the fourth quarter of 2004
was approximately 58%, compared with approximately 54% in the
fourth quarter of 2003, and approximately 59% for the third quarter
of 2004. The increase in 2004 fourth quarter gross margin resulted
from product mix changes and manufacturing efficiencies, partially
offset by an approximate $400,000 year-end write-down of inventory.
Selling, general and administrative expenses were $10.1 million, or
34% of revenues, in the fourth quarter of 2004, compared with $6.8
million, or 38% of revenues in the fourth quarter of 2003, and $8.7
million, or 36% of revenues, in the third quarter of 2004.
Increased SG&A spending resulted primarily from higher
commissions paid commensurate with the increase in revenues, higher
marketing and education expenses related to expanding the presence
of the Company's products in both domestic and international
markets, as well as increased costs related to Sarbanes-Oxley
compliance. The Company's financial position remains strong. At
December 31, 2004, Laserscope had no bank borrowings and a cash
position of $15.7 million, up from $7.2 million at December 31,
2003 and $12.7 million at September 30, 2004. Shareholders' equity
increased from $23.2 million at December 31, 2003 and $35.5 million
at September 30, 2004 to $42.9 million at December 31, 2004. 2004
Full Year Results Laserscope reported 2004 revenues of $93.8
million, a 63% increase when compared to $57.4 million in 2003. Net
income in 2004 was $14.7 million, or $0.65 per diluted share, a
486% increase when compared to $2.5 million, or $0.13 per diluted
share, in 2003. Urology Business Update "Our urology business
continued its impressive track record in the fourth quarter, as we
sold 77 GreenLight laser systems and almost 12,500 disposable
fibers worldwide," said Mr. Reuter. "At the end of December 2004,
our worldwide installed base of GreenLight laser systems exceeded
400 systems, and fiber sales since we introduced the PVP procedure
in 2002 have been over 54,000. While our international fiber
revenue was lower in the fourth quarter when compared to the third
quarter of 2004, due primarily to the previously discussed buying
patterns of some of our international customers, we expect strong
growth in PVP procedure volume internationally over the full year
in 2005, although this growth will vary on a sequential basis. "The
world's leading academic medical centers and urologists continue to
prove the effectiveness and safety profile of the PVP procedure
using Laserscope's GreenLight(TM) laser system. As more and more
men are choosing PVP for treatment of their BPH symptoms, the PVP
procedure using the GreenLight laser system is gaining momentum and
displacing other forms of surgical treatment, as well as drug
therapies. Around the globe, we're getting closer to our number one
priority in the urology segment, which is to ensure that
Laserscope's GreenLight laser system for PVP is recognized as the
new worldwide standard for treating BPH. "We are especially proud
of the progress we're making overseas, where we believe the
ultimate market for the PVP procedure is approximately four to five
times that of the United States. Recently, Kings College Hospital
in the United Kingdom won an award for clinical excellence based on
their use of our BPH treatment technology. We continue to believe
that the visibility we're receiving from recognition like this,
along with current and up-and-coming academic papers that will
continue to demonstrate not only the effectiveness and safety of
the procedure using our product, but the reduction in costs to the
healthcare system, will help us penetrate other two-tiered medical
systems around the world. "We recently announced a new, exclusive
distribution agreement for the sale of our GreenLight laser system
into Latin American and Caribbean markets, previously untapped for
Laserscope. We are also currently in the process of preparing a
submission to the Ministry of Health in Japan for our GreenLight
laser system. The market for BPH treatments in Japan is among the
largest in the developed world outside the United States, and
although we do not expect to be able to market and sell GreenLight
products in Japan until late 2006 at the earliest, we remain very
optimistic that this market represents a very exciting future
untapped opportunity for Laserscope." Aesthetics Business Update
"Our Aesthetics business continues to produce good results, as
we're taking advantage of the growing demand around the world for
cosmetic treatments," continued Mr. Reuter. "Last month, we
enhanced our aesthetic product offering with the introduction of
our new Solis(TM) treatment system at the American Academy of
Dermatology Annual Meeting. The Solis is targeted to address the
increasing trend toward very fast light-based cosmetic procedures
in the U.S. and abroad. We believe the Solis, which is ideal for
treating large areas of the body, offers some of the fastest
treatment speeds among all similar devices, making it a great
choice for physicians who are considering adding cosmetic
procedures to their suite of services. We believe the Solis will
appeal to physicians who want to replace older, less effective
systems that are no longer competitive in the current environment
with one of the fastest treatments systems available. We expect to
begin shipping the Solis in the late summer. "We think we've built
a great franchise in both the urology and aesthetic markets. Growth
in the PVP procedure using our GreenLight(TM) laser system
continues to surpass expectations, while we're strengthening our
aesthetics portfolio to capture growing market opportunities," said
Mr. Reuter. "We look forward to 2005 with enthusiasm and
excitement, as the entire Laserscope team continues to execute on
our business plan." Full Year 2005 Guidance The management of
Laserscope has updated full year 2005 guidance as follows: * 2005
full year revenues are expected to be in the range of $125 million
to $130 million. * Reported pre-tax earnings are expected to be in
the range of $28 million to $31 million. * During 2004, the Company
did not release the reserve for its deferred tax asset. Should it
not release the reserve during 2005, the Company's effective tax
rate is expected to be in the range of 14% to 17%, and net income
would be expected to be in the range of $1.00 to $1.10 per fully
diluted share. Should the reserve be released during 2005, we would
expect net income to be between $0.75 and $0.80 per fully diluted
share, on a fully taxed basis of approximately 38%, without
consideration given to the benefit of the release of the reserve. *
As was the case in 2003 and 2004, we expect the sequential growth
in revenue and earnings in 2005 to be more heavily weighted to the
second half of the year. Management Conference Call Management of
Laserscope will hold a conference call on Thursday, March 3, 2005
at 8:00 am PT / 11:00 am ET to discuss results for the quarter and
full year. To participate in the call, please dial 800-218-8862
(303-262-2142 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/ or at
http://www.fulldisclosure.com/. Investors should go to either
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 March 10, 2005 by dialing
800-405-2236 (303-590-3000 for international callers), passcode
11024579. A replay of the webcast will also be available at
Laserscope's website. About Laserscope Laserscope designs,
manufactures, sells and services on a worldwide basis an advanced
line of 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 the Company's web
site at http://www.laserscope.com/. 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 Laserscope's future profitability and
operating results, competition, expected continued momentum of
Laserscope's business and growth including new product offerings,
worldwide adoption rates of the PVP procedure using our
GreenLight(TM) laser system and market penetration opportunities in
international markets such as Japan and Latin America among others.
These statements are subject to a number of risks and
uncertainties, including: uncertainties regarding introduction of
new technologies competitive to our products, the degree to which
our current and new products are accepted by customers, which could
affect the level of demand for our products; our dependence on sole
source providers for key components and products; 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 hold may be challenged, invalidated or
circumvented or that we may become the subject of intellectual
property litigation; 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/. 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 Dennis LaLumandiere, CFO (617) 520-7064 (408) 943-0636
Laurie Berman, General Information (310) 854-8315 Laserscope
GreenLight PV(TM) Fiber Sales (Units) 2004 Q1 Q2 Q3 Q4 Year United
States 5,018 6,908 7,024 10,211 29,161 International 1,385 1,582
2,967 2,269 8,203 Total 6,403 8,490 9,991 12,480 37,364 2003 Q1 Q2
Q3 Q4 Year United States 1,241 2,260 2,585 3,848 9,934
International 165 815 829 1,516 3,325 Total 1,406 3,075 3,414 5,364
13,259 LASERSCOPE FINANCIAL SUMMARY (Unaudited) Condensed
Consolidated Statements of Income Three months ended Twelve months
ended (thousands except December 31, December 31, per share
amounts) 2004 2003 2004 2003 Net revenues $29,430 $17,816 $93,770
$57,427 Cost of sales 12,296 8,251 39,483 27,639 Gross margin
17,134 9,565 54,287 29,788 Operating expenses: Research and
development 1,490 1,143 5,217 4,443 Selling, general and
administrative 10,073 6,802 33,655 22,638 11,563 7,945 38,872
27,081 Operating income 5,571 1,620 15,415 2,707 Interest income
(expense) and other, net (57) 35 264 12 Net income before income
taxes 5,514 1,655 15,679 2,719 Provision for income taxes 330 154
940 202 Net income $5,184 $1,501 $14,739 $2,517 Basic net income
per share $0.24 $0.08 $0.70 $0.13 Diluted net income per share
$0.23 $0.07 $0.65 $0.13 Shares used in basic per share calculations
21,672 17,946 21,075 17,452 Shares used in diluted per share
calculations 22,905 22,412 22,808 21,838 Condensed Consolidated
Balance Sheets December 31, December 31, (thousands) 2004 2003
Assets Current assets: Cash & cash equivalents $15,724 $7,158
Accounts receivable, net 20,572 12,711 Inventories 19,446 13,368
Prepayments and other current assets 1,471 1,315 Total current
assets 57,213 34,552 Property and equipment, net 3,457 1,645 Other
assets 919 831 Total assets $61,589 $37,028 Liabilities and
Shareholders' Equity Current liabilities $18,647 $13,830 Capital
leases 31 -- Shareholders' equity 42,911 23,198 Total liabilities
and shareholders' equity $61,589 $37,028 DATASOURCE: Laserscope
CONTACT: Eric Reuter, President & CEO, or Dennis LaLumandiere,
CFO, both of Laserscope, +1-408-943-0636; or Analyst/Investors,
Tricia Ross, +1-617-520-7064, or General Information, Laurie
Berman, +1-310-854-8315, both of Financial Relations Board, for
Laserscope Web site: http://www.fulldisclosure.com/ Web site:
http://www.laserscope.com/
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