Advanced Neuromodulation Systems Inc (351721) SEC Filing 10-K Annual report for the fiscal year ending Friday, December 31, 2004

EXHIBIT 99.1

       

Advanced Neuromodulation Systems
Reports Record Fourth Quarter and 2004 Results

2004 Neuro Sales Increased 36%

      DALLAS, TEXAS, February 17, 2005 —

Advanced Neuromodulation Systems, Inc. (ANS) (NASDAQ:ANSI) today announced record revenue and net income for the fourth quarter and 2004, provided updates on its clinical and product development programs, reaffirmed its previous revenue guidance for fiscal 2005, and announced other developments.

Fourth Quarter Results

      For the three months ended December 31, 2004, revenue increased 26% to a record $32,293,000 from $25,668,000 for the fourth quarter of 2003. Sales of neuro products increased 23% to a record $28,782,000 for the fourth quarter of 2004 from $23,413,000 a year earlier, as sales of ANS’ Genesis® and GenesisXP^TM implantable spinal cord stimulation (SCS) systems and its Renew® radio frequency (RF) SCS system for the treatment of chronic pain continued to meet management’s expectations. Gross margin increased to 74.2% from 73.4%. Net income for this year’s fourth quarter increased 38% to a record $5,133,000, or $0.24 per diluted share. This compares to net income for the fourth quarter of 2003 of $3,721,000, or $0.18 per diluted share. Costs associated with a vendor supply issue at its HDI operation in the fourth quarter of 2004, which have now been resolved, reduced net income for the period by approximately $0.01 per diluted share.

Twelve Month Results

      For the twelve months ended December 31, 2004, revenue increased 33% to a record $120,744,000 from $91,082,000 for 2003. Neuro sales increased 36% to a record $108,866,000 for 2004 from $80,001,000 for 2003. Gross margin increased to 73.4% from 70.2%. Net income for 2004 increased 37% to a record $18,167,000, or $0.86 per diluted share. This compares to net income for 2003 of $13,217,000, or $0.64 per diluted share. Net income for 2003 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.

Second Generation Rechargeable Product Update

      ANS recently filed a PMA supplement with the FDA for approval to market and sell its second generation rechargeable SCS systems. “We hope to receive approval for our second generation rechargeable IPGs sometime during the second quarter of 2005,” said Chief Executive Officer Chris Chavez. Noting that ANS received FDA approval to market and sell its first generation rechargeable SCS systems in the fourth quarter of 2004, Chavez added, “Pain practitioners want the flexibility to apply the right system to the right indication — one size does not fit all. ANS is the only company in the world that today offers a full array of spinal cord stimulation devices, including radio-frequency (RF), conventional IPGs, and rechargeable IPGs. We will continue to broaden and strengthen our intellectual property portfolio to support our long-term growth objectives.” ANS currently has 59 issued patents and 111 patents pending.

New Indications Update

      “The neuromodulation market is expected to surpass the billion dollar milestone this year, and promises to become a multi-billion dollar, multi-indication segment of the medical device industry. While we continue to focus on aggressively developing the SCS market for chronic pain, we simultaneously are investing in the creation of platform technologies and organizational capabilities that are readily leverageable into emerging clinical applications for neuromodulation, applications that we believe will

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