Advanced Neuromodulation Systems Inc (351721) SEC Filing 10-Q Quarterly report for the period ending Thursday, September 30, 2004

Exhibit 99.1

Advanced Neuromodulation Systems
Reports Record Third Quarter Sales and Net Income

Neuro Sales Increase 37%

     DALLAS, TEXAS, October 28, 2004 —

Advanced Neuromodulation Systems, Inc. (ANS) (NASDAQ:ANSI) today announced record financial results for the third quarter and first nine months of 2004, highlighted by continued rapid growth in sales of neuromodulation products for the treatment of chronic pain.

Third Quarter Results

     For the three months ended September 30, 2004, revenue increased 34% to a record $31,330,000 from $23,419,000 for the third quarter of 2003. Sales of neuro products increased 37% to a record $28,223,000 from $20,612,000 for the same period last year. Gross margin was approximately 73% for both periods. Net income for this year’s third quarter increased 20% to a record $4,742,000, or $0.23 per diluted share. This compares to net income for the third quarter of 2003 of $3,953,000, or $0.19 per diluted share, which included other income of $969,000 pre-tax, or $0.03 per diluted share after tax, from the reversal of an accrued tax abatement liability.

Nine Month Results

     For the nine months ended September 30, 2004, revenue increased 35% to a record $88,451,000 from $65,414,000 for the first nine months of 2003. Neuro sales increased 42% to a record $80,084,000 from $56,587,000 last year. Gross margin increased to 73% from 69%. Net income increased 37% to a record $13,034,000, or $0.62 per diluted share, from $9,496,000, or $0.46 per diluted share, for the first nine months of 2003.

Operations Review

     Noting that sales of ANS’ Genesis® and GenesisXP^TM implantable spinal cord stimulation (SCS) systems and its Renew® radio frequency (RF) SCS system continued to meet management’s expectations in the third quarter, Chief Executive Officer Chris Chavez said, “The primary mission of the ANS team is to create, manufacture and market neuromodulation products that provide real help to people who suffer from chronic pain and other neurological disorders. Our strong financial performance is one sign that we are on the right track. Another important indicator of our progress is the steady growth in the number of interventional pain practitioners and their patients who put their trust in ANS’ products.”

     Chavez continued, “Our strategy to develop our direct sales team and invest in our corporate infrastructure, technology platforms and product pipeline is delivering the growth we anticipated in what is now close to a billion dollar industry. We see exciting opportunities for continued growth as we pursue the expanding list of clinical applications for implantable neurostimulation devices to address a variety of intractable conditions for which few effective treatments currently are available.”

(More)

ADVANCED NEUROMODULATION SYSTEMS, INC.
6901 PRESTON ROAD / PLANO, TEXAS 75024 /972-309-8000 / FAX: 972-309-8150