Advanced Medical Optics Announces First-Quarter 2005 Results SANTA
ANA, Calif., April 28 /PRNewswire-FirstCall/ -- Advanced Medical
Optics, Inc. (AMO) (NYSE:AVO), a global leader in ophthalmic
surgical devices and eye care products, today announced financial
results for the first quarter of 2005. (Logo:
http://www.newscom.com/cgi-bin/prnh/20050324/AMOLOGO) Net earnings
for the first quarter were $13.8 million, or $0.35 per fully
diluted share, up 133 percent, compared to the same period last
year. The rise is attributable to increased revenue and margin
expansion. The first-quarter 2005 results also included a $0.01
benefit related to currency derivatives. Net revenue for the first
quarter rose 28.1 percent, including a 3.7 percent increase related
to foreign currency, to $192.5 million, compared to the first
quarter of 2004. The growth in revenue reflected the acquisition of
the Pfizer ophthalmic surgical business in mid 2004 and increased
sales from the company's promoted ophthalmic surgical and eye care
brands. "AMO continues to execute a focused plan for achieving
sustained, profitable growth," said Jim Mazzo, president and chief
executive officer. "In the first quarter, we continued to implement
our strategy to expand our leadership in the ophthalmic medical
device industry. This includes building on the strategic benefits
of the Pfizer ophthalmic surgical acquisition, offering products
based on advanced technologies and continued implementation of a
cost-efficient business model. Looking ahead, we expect to complete
our acquisition of VISX in the second quarter, placing us in the
leadership position of the global refractive surgical marketplace."
AMO announced in November 2004 that it had reached an agreement
with VISX, Incorporated (NYSE:EYE), the global leader in laser
vision correction, to acquire the company for a combination of cash
and stock. Both companies' stockholders will vote on the
transaction at special meetings to be held on May 26, 2005. Pending
a successful outcome, AMO expects to close the transaction within
two business days thereafter. As previously announced, AMO expects
the transaction to be neutral to its 2005 adjusted
earnings-per-share guidance of $1.65 to $1.75, and expects 2006
adjusted earnings per share to be in the range of $2.20 to $2.30.
The company's adjusted earnings-per-share guidance excludes any
charges associated with the VISX acquisition, the impact of option
expensing and the effect of currency derivatives. Ophthalmic
Surgical Ophthalmic surgical revenue grew 51.6 percent in the first
quarter, including a 4.2 percent increase related to foreign
currency, to $118.7 million, compared to $78.3 million in the
year-ago quarter. Total intraocular lens (IOL) sales rose 17.2
percent to $60.5 million, compared to $51.6 million in the first
quarter of 2004. The increase reflects primarily the acquisition of
the Pfizer ophthalmic surgical business and the strength of the
company's promoted IOL technologies, the Tecnis(R) and Sensar(R)
lenses. Sales of viscoelastics rose to $32.6 million, compared to
$4.2 million one year ago. This rise reflected the addition of the
Healon(R) family of viscoelastics, which AMO acquired as part of
the Pfizer transaction, as well as continued growth of AMO's
existing Vitrax(R) brand. Sales of phacoemulsification products
grew 5.2 percent during the quarter to $18.5 million, compared to
$17.6 million one year ago. Growth was led by the company's
Sovereign(R) Compact(TM) system with WhiteStar(TM) technology. Eye
Care Eye care revenue grew 2.5 percent in the first quarter,
including a 3.3 percent increase related to foreign currency, to
$73.8 million, compared to $72.0 million in 2004's first quarter.
The first-quarter performance was primarily impacted by a decline
in sales in Japan. This was due in part to a gradual decline in
hydrogen peroxide sales as a result of the market's movement to
single-bottle systems. While overall eye care sales declined, sales
of multipurpose solutions rose 14 percent in the first quarter to
$37.0 million, compared to $32.5 million one year ago. Sales of the
company's flagship COMPLETE(R) branded product line were up 16.3
percent for the quarter. AMO continues to expect its global eye
care franchise to grow annually at a rate of 1 percent to 3
percent, excluding the impacts of currency. Additional Operating
Results The following are additional operating highlights for the
first quarter of 2005. * Gross profit for the first quarter of 2005
was $122.1 million, compared to $90.6 million for the same period
one year ago. The gross profit margin for the first quarter was
63.4 percent, compared to 60.3 percent one year ago. The rise in
gross profit margin was due to increased revenue, changes in
product mix and continued execution of the company's manufacturing
strategy. * Research and development expense in the first quarter
of 2005 was $12.4 million, compared to $9.0 million in the same
period last year, demonstrating AMO's continued commitment to
investment in new technologies that provide competitive advantages.
R&D expenses as a percent of sales were 6.4 percent in the
first quarter of 2005, compared to 6.0 percent for the same period
one year ago. * SG&A expense for the first quarter was $83.8
million, or 43.5 percent of sales. In the first quarter of 2004,
the company's SG&A expenses stood at $71.1 million, or 47.3
percent of sales. The decline in SG&A as a percent of sales is
attributable to an increase in revenue and efficiency gains related
to the company's centralized operating model. On a sequential
basis, SG&A declined 9.5 percent from the fourth quarter of
2004. * Operating income for the first quarter was $25.9 million,
compared to $10.5 million in the first quarter of 2004. The
operating profit margin was 13.5 percent in the first quarter of
2005, compared to 7.0 percent for the same period in 2004. * Pretax
income for the first quarter rose to $20.9 million, compared to
$7.4 million in the same period one year ago. The company's
effective tax rate stood at 34 percent in the first quarter. Live
Web Cast & Audio Replay AMO will host a live Web cast to
discuss first quarter results and future expectations today at
10:00 a.m. EDT. To participate, visit the company's Investors site
at http://www.amo-inc.com/. Audio replay will be available at
approximately noon EDT today and will continue through midnight EDT
on Thursday, May 5, at 800-642-1687 (Passcode 5486045) or by
visiting http://www.amo-inc.com/. Use of Non-GAAP Measures Our
guidance for earnings per share for 2005 and 2006 is provided on a
non-GAAP basis. The company's adjusted earnings-per-share guidance
excludes any non-recurring charges associated with the VISX
acquisition and option expensing. The guidance also assumes no
impact of potential unrealized gains or losses on derivative
instruments. The company believes this presentation is useful to
investors to conduct a more meaningful, consistent comparison of
the company's ongoing operating results. This presentation is also
consistent with our internal use of the measure, which we use to
measure the profitability of ongoing operating results against
prior periods and against our internally developed targets. We
believe that our investors also use this measure to analyze the
sustainable profitability of the on-going business operations. The
economic substance related to our use of adjusted earnings per
share is our belief that the appropriate analysis of our
profitability cannot be effectively considered while incorporating
the effect of unusual items and charges that have not been
experienced in prior periods. In order to comply with Regulation
FD, we provide our guidance in public forums, such as this press
release. The company is not able to provide a reconciliation of
projected adjusted earnings per share to expected reported results
due to the unknown effect, timing, and potential significance of
option expensing, the uncertainty associated with the timing of the
closing the VISX transaction, and our inability to forecast
non-recurring costs associated with the VISX transaction at this
time. Earnings before interest, taxes, depreciation and
amortization (EBITDA) has been included because the company
believes it is a useful tool for us and our investors to measure
our ability to meet debt service, capital expenditure and working
capital requirements. EBITDA should be considered a supplement to,
and not as a substitute for, or superior to, income from operations
or cash flows from operating activities determined in accordance
with generally accepted accounting principles. While EBITDA is used
as a measure of operations and the ability to meet debt service,
capital expenditure and working capital requirements, it is not
necessarily comparable to other similarly titled captions of other
companies due to differences in methods of calculations. A
limitation associated with the use of EBITDA is that it does not
reflect the periodic costs of certain capitalized tangible and
intangible assets used in generating revenues in the company's
business operations. The company compensates for this limitation by
evaluating the costs of such tangible and intangible assets through
other financial measures such as capital expenditures. These
non-GAAP financial measures are used in addition to and in
conjunction with results presented in accordance with GAAP. These
non-GAAP financial measures reflect an additional way of viewing
aspects of our operations that, when viewed with our GAAP results
and the accompanying reconciliations to corresponding GAAP
financial measures, provide a more complete understanding of
factors and trends affecting our business. These non-GAAP measures
should be considered as a supplement to, and not as a substitute
for, or superior to, the corresponding measures calculated in
accordance with generally accepted accounting principles. About
Advanced Medical Optics Advanced Medical Optics, Inc. (AMO) is a
global leader in the development, manufacturing and marketing of
ophthalmic surgical and eye care products. The company focuses on
developing a broad suite of innovative technologies and devices to
address a wide range of eye disorders. Products in the ophthalmic
surgical line include intraocular lenses, phacoemulsification
systems, viscoelastics, microkeratomes and related products used in
cataract and refractive surgery. AMO owns or has the rights to such
ophthalmic surgical product brands as Phacoflex(R), Clariflex(R),
Array(R), Sensar(R), CeeOn(R), Tecnis(R) and Verisyse(TM)
intraocular lenses, Sovereign(R) and Sovereign(R) Compact(TM)
phacoemulsification systems with WhiteStar(TM) technology,
Amadeus(TM) and Amadeus(TM) II microkeratomes, Healon(R) and
Vitrax(R) viscoelastics, and the Baerveldt(R) glaucoma shunt.
Products in the contact lens care line include disinfecting
solutions, daily cleaners, enzymatic cleaners and lens rewetting
drops. Among the contact lens care product brands the company
possesses are COMPLETE(R) Moisture PLUS(TM), COMPLETE(R)
Blink-N-Clean(R), Consept(R)F, Consept(R) 1 Step, Oxysept(R) 1
Step, UltraCare(R), Ultrazyme(R), Total Care(R) and blink(TM)
branded products. Amadeus is a licensed product of, and a trademark
of, SIS, Ltd. AMO is based in Santa Ana, California, and employs
approximately 3,000 worldwide. The company has operations in about
20 countries and markets products in approximately 60 countries.
For more information, visit the company's Web site at
http://www.amo-inc.com/. Forward-Looking Statements This press
release contains forward-looking statements and forecasts about AMO
and its businesses, such as management's earnings estimates for
2005 and 2006. Because forecasts are inherently estimates that
cannot be made with precision, the company's performance may at
times differ from its estimates and targets. The company often does
not know what the actual results will be until after a quarter's
end. Therefore, the company will not report or comment on its
progress during the quarter. Any statement made by others with
respect to progress mid-quarter cannot be attributed to the
company. Statements in this press release regarding financial
guidance and the VISX transaction, Mr. Mazzo's statements and any
other statements in this press release that refer to AMO's
estimated or anticipated future results, are forward-looking
statements. All forward-looking statements in this press release
reflect AMO's current analysis of existing trends and information
and represent AMO's judgment only as of the date of this press
release. Actual results may differ from current expectations based
on a number of factors affecting AMO's businesses including but not
limited to uncertainties associated with closing the VISX
transaction within the second quarter of 2005 if at all, risks
associated with the integration and operation of acquired
businesses, and changing competitive, regulatory and market
conditions; the performance of new products and the continued
acceptance of current products; the execution of strategic
initiatives and alliances; AMO's ability to maintain a sufficient
supply of products and successfully transition its manufacturing of
eye care products previously supplied by Allergan; product
liability claims or quality issues; litigation; and the
uncertainties associated with intellectual property protection for
the company's products. In addition, matters generally affecting
the domestic and global economy, such as changes in interest and
currency exchange rates, can affect AMO's results. Therefore, the
reader is cautioned not to rely on these forward-looking
statements. AMO disclaims any intent or obligation to update these
forward-looking statements. Additional information concerning these
and other risk factors may be found in previous financial press
releases issued by AMO. AMO's public periodic filings with the
Securities and Exchange Commission, including the discussion under
the heading "Certain Factors and Trends Affecting AMO and its
Businesses" in AMO's 2004 Form 10-K filed in March 2005 include
information concerning these and other risk factors. Copies of
press releases and additional information about AMO are available
at http://www.amo-inc.com/, or you can contact the AMO Investor
Relations Department by calling 714-247-8348. Investors: Sheree
Aronson (714) 247-8290 Media: Steve Chesterman (714) 247-8711
Advanced Medical Optics, Inc. Condensed Consolidated Statements of
Operations (Unaudited) Three Months Ended (in thousands, except per
share amounts) March 25, March 26, 2005 2004 Net sales: Ophthalmic
surgical $118,672 $78,265 Eye care 73,847 72,042 192,519 150,307
Cost of sales 70,439 59,672 Gross profit 122,080 90,635 Selling,
general and administrative 83,815 71,139 Research and development
12,352 9,017 Operating income 25,913 10,479 Non-operating expense
(income): Interest expense 5,827 3,743 Unrealized gain on
derivative instruments (531) (276) Other, net (331) (405) 4,965
3,062 Earnings before income taxes 20,948 7,417 Provision for
income taxes 7,122 2,670 Net earnings $13,826 $4,747 Net basic
earnings per share $0.37 $0.16 Net diluted earnings per share (A)
$0.35 $0.15 Weighted average number of shares outstanding: Basic
37,119 29,420 Diluted 39,815 37,956 (A) Includes the after-tax
impact of $55 and $889 of interest expense on the 3.5% convertible
notes for the three months ended March 25, 2005 and March 26, 2004,
respectively. Advanced Medical Optics, Inc. Global Sales
(Unaudited) (In thousands) Three Months Ended March 25, March 26,
2005 2004 Geographic sales: Americas $55,623 $45,293
Europe/Africa/Middle East 73,967 54,909 Japan 40,498 36,888 Asia
Pacific 22,431 13,217 $192,519 $150,307 Product sales: Ophthalmic
surgical: Intraocular lenses (A) $60,478 $51,611 Viscoelastics (B)
32,626 4,178 Phacoemulsification products 18,486 17,564 Other (C)
7,082 4,912 Total Ophthalmic surgical 118,672 78,265 Eye care:
Multi-purpose solutions 37,005 32,466 Hydrogen-peroxide solutions
21,291 23,860 Other 15,551 15,716 Total Eye care 73,847 72,042
$192,519 $150,307 (A) Includes acquired Pfizer IOL sales of $9,463
in the three months ended March 25, 2005. (B) Includes Healon sales
of $29,504 in the three months ended March 25, 2005. (C) Includes
Baerveldt shunt sales of $1,259 in the three months ended March 25,
2005. Three Months Ended % % Exchange March 25, March 26, Growth
Impact 2005 2004 Net sales: Ophthalmic surgical $118,672 $78,265
51.6% 4.2% Eye care 73,847 72,042 2.5% 3.3% $192,519 $150,307 28.1%
3.7% Advanced Medical Optics, Inc. Other Financial Information
(Unaudited) (In thousands) March 25, December 31, 2005 2004 Cash
and equivalents $25,858 $49,455 Trade receivables, net 198,311
189,465 Inventories 97,297 85,028 Working capital, excluding cash
160,967 133,447 Long-term debt, aggregate principal amount 552,593
552,593 Three Months Ended March 25, March 26, 2005 2004
Depreciation and amortization $7,960 $3,692 Capital expenditures
10,540 4,881 Three Months Ended March 25, March 26, 2005 2004 Net
earnings $13,826 $4,747 Interest expense 5,827 3,743 Income taxes
7,122 2,670 Depreciation and amortization 7,960 3,692 Earnings
before interest, taxes, depreciation and amortization (EBITDA)
$34,735 $14,852
http://www.newscom.com/cgi-bin/prnh/20050324/AMOLOGO
http://photoarchive.ap.org/ DATASOURCE: Advanced Medical Optics,
Inc. CONTACT: investors, Sheree Aronson, +1-714-247-8290, , or
media, Steve Chesterman, +1-714-247-8711, , both of Advanced
Medical Optics, Inc. Web site: http://www.amo-inc.com/
Copyright
Advanced medical Optics (NYSE:AVO)
Historical Stock Chart
From May 2024 to Jun 2024
Advanced medical Optics (NYSE:AVO)
Historical Stock Chart
From Jun 2023 to Jun 2024