Laserscope Reports Record Revenues and Earnings for 2004 Third Quarter
Performance Led by Record GreenLight(TM) System and Fiber Sales
Third Quarter Highlights (compared to the prior-year quarter):
* GreenLight PVP(TM) fiber volumes increased approximately 193%
* Revenue grew nearly 69%
* Earnings per share grew 850%
SAN JOSE, Calif., Oct. 27 /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
$24.2 million for its third quarter ended September 30, 2004, a 69% increase
from $14.3 million in the year-ago quarter. Revenues increased 13% from
$21.4 million for the quarter ended June 30, 2004. Third quarter 2004 net
income was a record $4.4 million, or $0.19 per diluted share, a significant
increase from net income of $533,000, or $0.02 per diluted share, in the same
quarter last year, and net income of $3.0 million, or $0.13 per diluted share,
for the second quarter of 2004.
"We had an excellent quarter both domestically and internationally," said
Eric Reuter, President and Chief Executive Officer of Laserscope. "Our strong
and improving financial performance is being driven by significant success in
our urology business and continued solid performance in our aesthetics
business. Based on recently published industry reports, we believe the
current size of the market for Trans-Urethral Resection of the Prostate
(TURP), the current 'standard of care' for Benign Prostatic Hyperplasia (BPH),
or enlarged prostate, is more than 1 million procedures per year. This,
coupled with an aging world population, is creating a growing worldwide market
for more efficacious and cost-effective treatments for enlarged prostate and
is providing significant future growth opportunities for the Company."
Gross margin in the third quarter of 2004 was approximately 59%, compared
with approximately 52% in the third quarter of 2003, and approximately 57% for
the second quarter of 2004. Gross margin improvements were driven primarily
by a recent U.S. fiber price increase that became effective on July 1, 2004,
product mix and manufacturing efficiencies.
Selling, general and administrative expenses were $8.7 million, or 36% of
revenues, in the third quarter of 2004, compared with $8.2 million, or 38% of
revenues in the second quarter of 2004, and $5.8 million, or 40% of revenues,
in the year-ago quarter. Increased SG&A spending on an absolute basis
resulted primarily from higher sales and marketing expenses relating to the
Company's GreenLight PVP and aesthetic products, as well as higher expenses
relating to Sarbanes-Oxley compliance.
The Company's financial position remains strong. At September 30, 2004,
Laserscope had no short-term bank borrowings and a cash position of $12.7
million, up from $7.2 million at the end of 2003 and $10.4 million at the end
of June 2004.
Nine-Month Results
For the nine months ended September 30, 2004, Laserscope reported revenues
of $64.3 million and net income of $9.6 million, or $0.42 per diluted share,
compared with revenues of $39.6 million and net income of $1.0 million, or
$0.05 per diluted share, for the same period in 2003.
Urology Business Update
"We had an active and productive third quarter in our worldwide urology
business, selling a record 63 GreenLight laser systems and nearly 10,000
fibers," said Mr. Reuter. "Our international business team had an especially
outstanding quarter, selling 22 GreenLight systems and nearly 3,000 fibers.
We reached record levels in U.S. system and fiber shipments as well. These
results are extremely encouraging given a delay in PVP procedures in the
Southeast as a result of the hurricanes that occurred there during most of
September, as well as the previously announced fiber pre-buying that some U.S.
customers initiated in advance of our July 1st price increase. Absent this
pre-buying, fiber sales would have likely been 600-700 units higher in the
third quarter. We expect continued strong growth in U.S. fiber shipments
during the fourth quarter and beyond.
"Our number one goal is to ensure that Laserscope's GreenLight PVP(TM), or
Photo-Selective Vaporization of the Prostate, is recognized as the new
worldwide standard of care for treating BPH. We believe our treatment for BPH
will increasingly become the definitive procedure of choice for men who must
have surgery, as well as a viable option for men who are contemplating drug
therapy or other less efficacious surgical procedures. Our continued strong
growth in GreenLight systems and recurring fiber sales domestically and
internationally is indicative of our continued progress toward reaching this
goal.
"Peer reviewed and published results from world-renowned academic medical
centers continue to show PVP as a less invasive and safer alternative to TURP,
as well as substantially more efficacious than any other known therapy for
BPH. Additionally, recent data presented at the American Urological
Association (AUA) meeting has indicated that PVP may have substantial cost
savings benefits for the health care system as well."
Aesthetics Business Update
"Our aesthetic business continues to be solid, with new Gemini platform
sales increasing over 50% over the second quarter 2004 and accounting for over
40% of our total worldwide aesthetic revenues in only the second full quarter
after its launch," continued Mr. Reuter. "We are positioning the Gemini as
the premier multi-application, high-end aesthetic laser system and the
feedback we have received from our physician users has been very positive thus
far. We currently have a number of clinical evaluations underway, which we
believe will demonstrate the Gemini's advantages in clinical efficacy and
speed for a number of cosmetic treatments. As with our urology business, we
believe that demonstrating clinical excellence, customer service, and
cost-effective business solutions to our customers are the primary keys to our
success.
"We also plan to launch a significant new aesthetic product at the
upcoming American Academy of Dermatology meeting in February 2005. This
treatment system, called the Solis(TM), will address a growing need in the
aesthetic treatment market by substantially improving end-user productivity
and patient comfort over existing systems. The Solis will be positioned to
strongly complement our existing aesthetic product lines and will help provide
Laserscope with one of the widest ranges of clinical solutions for aesthetic
applications in the industry.
"Our momentum continues to accelerate across our business, and our
worldwide team is executing well on our major strategic initiatives," said Mr.
Reuter. "We expect a strong finish this year, and as we move into the new
year, we're very excited about our future prospects for substantial growth on
the top and bottom line."
Guidance
As the result of its continued strong performance, Laserscope has raised
guidance for the full year 2004 in both revenues and earnings as follows:
* 2004 full year revenues are expected to be in the range of $90 million
to $92 million, with reported pre-tax earnings to be in the range of
$15 million to $16 million. Net income is expected to be between
$0.62 and $0.65 per fully diluted share, assuming a tax rate of 6%
which reflects a full tax valuation allowance.
* The timing of the release of the tax valuation allowance depends on
the Company's historical earnings and expectations for the future.
When management determines that it is "more likely than not" that the
loss carry forward will be utilized, the tax valuation allowance will
be released.
Additionally, Laserscope has provided initial guidance for 2005 as
follows:
* Revenues for 2005 are expected to be between $125 million and $130
million.
* Gross margin, as a percentage of 2005 revenues, is expected to be in
the range of 64% to 68% for the full year.
* Reported pre-tax earnings are expected to be in the range of $28
million to $31 million.
* Net income for the full year 2005 is expected to be between $0.75 and
$0.80 per fully diluted share, on a fully taxed basis of 38%. If the
Company releases its tax valuation allowance in 2004, then the tax
rate for 2005 is expected to be 37% to 39%.
Management Conference Call
Management of Laserscope will hold a conference call on Wednesday, October
27, 2004 at 8:00 am PT / 11:00am ET to discuss results for the quarter. To
participate in the call, please dial 800-257-2101 (303-262-2194 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 www.laserscope.com or at
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 November 3, 2004
by dialing 800-405-2236 (303-590-3000 for international callers), passcode
11011986. A replay of the webcast will also be available at Laserscope's
website.
Additional information on Laserscope, including an archive of corporate
press releases, is also available on the Company'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
www.laserscope.com.
Except for historical information presented, the matters discussed in this
announcement may contain forward-looking statements that are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those projected. These risks are detailed from time to time
in the Company's public disclosure filings with the U.S. Securities and
Exchange Commission (SEC). 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.
For further information, please 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.
Laserscope
GreenLight PV(TM) Fiber Sales
(Units)
2004 Q1 Q2 Q3
U.S. Hospitals & Clinics 1,599 2,003 2,007
U.S. Mobile Service Providers 3,419 4,905 5,017
International Customers 1,385 1,582 2,967
Total 6,403 8,490 9,991
2003 Q1 Q2 Q3 Q4 Year
U.S. Hospitals & Clinics 466 589 931 1,333 3,319
U.S. Mobile Service Providers 775 1,671 1,654 2,515 6,615
International Customers 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 Nine months ended
(thousands except Sept 30, Sept 30,
per share amounts) 2004 2003 2004 2003
Net revenues $24,156 $14,293 $64,340 $39,611
Cost of sales 9,846 6,790 27,187 19,388
Gross margin 14,310 7,503 37,153 20,223
Operating expenses:
Research and development 1,143 1,195 3,727 3,300
Selling, general and
administrative 8,666 5,778 23,582 15,836
9,809 6,973 27,309 19,136
Operating income 4,501 530 9,844 1,087
Interest income (expense)
and other, net (52) 7 321 (23)
Net income before
income taxes 4,449 537 10,165 1,064
Provision for income taxes 96 4 610 48
Net income $4,353 $533 $9,555 $1,016
Basic net income per share $0.20 $0.03 $0.46 $0.05
Diluted net income per share $0.19 $0.02 $0.42 $0.05
Shares used in basic
per share calculations 21,317 17,705 20,860 17,440
Shares used in diluted
per share calculations 22,731 20,057 22,764 19,671
Condensed Consolidated Balance Sheets
September 30, December 31,
(thousands) 2004 2003
Assets
Current assets:
Cash & cash equivalents $12,670 $7,158
Accounts receivable, net 19,149 12,711
Inventories 18,817 13,368
Prepayments and other current assets 1,347 1,315
Total current assets 51,983 34,552
Property and equipment, net 3,031 1,645
Other assets 893 831
Total assets $55,907 $37,028
Liabilities and Shareholders' Equity
Current liabilities $20,367 $13,830
Capital leases 34 --
Shareholders' equity 35,506 23,198
Total liabilities and
shareholders' equity $55,907 $37,028
SOURCE Laserscope
-0- 10/27/2004
/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.laserscope.com /
(LSCP)
CO: Laserscope
ST: California
IN: HEA MTC BIO
SU: ERN ERP CCA
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