FOR IMMEDIATE RELEASE
AMERICAN MEDICAL SYSTEMS ANNOUNCES THIRD QUARTER 2010 FINANCIAL RESULTS
||Third quarter sales of $124.0 million grows 0.6%; up 2.9% excluding impact of currency
and previously divested Uterine Health product line
||Non-GAAP adjusted EPS of $0.29 grows 7.4% over prior year
MINNEAPOLIS, November 3, 2010 American Medical Systems Holdings, Inc. (NASDAQ: AMMD)
reported sales of $124.0 million for the third quarter of 2010, a 0.6 percent increase over sales
of $123.2 million in the comparable quarter of 2009. The strengthening of the U.S. dollar compared
to the third quarter of 2009 negatively affected revenue comparisons for the quarter by $1.4
million. Adjusting for the impact of foreign currency results in third quarter revenue growth of
1.8 percent over the same quarter last year. Further adjusting revenue for the impact of the Her
Option® uterine health product line, which was sold during the first quarter of 2010, results in
constant currency growth of 2.9 percent.
The Company reported third quarter net income of $18.6 million, or $0.24 per share. This compares
to net income and earnings per share in the same quarter last year of $28.6 million, or $0.38,
which included a $17.4 million gain on the sale of the Ovion technology and a $5.6 million gain on
the exchange of convertible notes. Non-GAAP adjusted earnings per share of $0.29 compares to $0.27
in the same quarter last year, a growth of 7.4%, and finishing at the top of guidance despite
softer revenue than planned. Non-GAAP adjusted earnings per share excludes the gains noted above,
as well as the impact of the amortization of intangible assets and amortization of financing costs,
both significant non-cash items affecting comparability to other companies. A reconciliation of
reported net income to non-GAAP adjusted net income is provided in the attached schedules.
Softness in the U.S. market was a significant driver in revenue falling short of earlier
expectations, resulting in U.S. revenue growth of 2.1 percent compared to the same quarter last
year. This compares to revenue growth of 10.6 percent in the U.S. in the first half of 2010.
Mens Health sales of $55.2 million in the third quarter represented an increase of 0.9 percent on
a reported basis compared to the same quarter last year and 2.4 percent on a constant currency
basis, with the Male Continence product line growing in mid-single digits and the Erectile
Restoration product line experiencing relatively flat growth. The BPH Therapy business declined
2.9 percent on a reported basis and 1.7 percent on a constant currency basis, to $26.9 million
during the quarter. Sales were negatively impacted as customers awaited the launch of the MoXy
Liquid Cooled Fiber which did not occur until late in the last week of the third quarter. The
Womens Health business, excluding the Her Option® product line that was sold in the first quarter,
increased 6.0 percent on a reported basis and 6.8 percent on a constant currency basis to $41.2
million in the third quarter. The Pelvic floor repair product line, which continued its strong
performance driven by the success of both the Elevate® anterior and posterior systems was partially
offset by flat sales in the Female Continence product line.
We were impacted more significantly than anticipated in the third quarter by softness in U.S.
procedure volume. In addition, we experienced a longer than expected validation process to