American Medical Systems Holdings Inc. (NSDQ:AMMD) posted fourth-quarter sales of $146 million for the three months ended Jan. 2, up 9 percent compared with $134 million during the same period last year. Net income rose more than 136 percent to $22.3 million, compared with $9.4 million during Q4 2008:

Press Release

American Medical Systems Confirms Fourth Quarter Revenue and Finishes
2009 with Strong Financial Performance

• Fourth quarter non-GAAP adjusted EPS of $0.35 grows 17% over prior
  year; GAAP EPS of $0.30 exceeds prior year by $0.17

• Continued solid cash management results in 2009 debt reduction of
  $131 million

MINNEAPOLIS–(BUSINESS WIRE)–American Medical Systems Holdings, Inc. (NASDAQ: AMMD) confirmed
previously reported revenue of $146.0 million for the fourth quarter of
2009, a 9.0 percent increase from revenue of $134.0 million in the
comparable quarter of 2008. Adjusting for the positive impact of the
weaker U.S. dollar in the fourth quarter of 2009 versus the same quarter
last year results in constant currency growth of 6.1 percent. Full year
2009 revenue of $519.3 million grew 3.5 percent over 2008 revenue of
$501.6 million. Adjusting for the negative impact of foreign currency
fluctuations in 2009 compared to 2008 results in constant currency
growth of 5.2 percent.

Men’s Health sales of $63.5 million in the fourth quarter represented an
increase of 8.2 percent on a reported basis compared to the same quarter
last year and grew 5.2 percent on a constant currency basis. Growth in
this business was led by the Erectile Restoration product line which
continued its strong performance in the fourth quarter, but was
partially offset by muted growth in Male Continence. The BPH therapy
business increased 10.3 percent on a reported basis and grew 6.5 percent
on a constant currency basis to $33.3 million during the quarter, driven
by continued strength in the U.S. combined with notable improvement in
international markets, particularly in Asia Pacific and Latin America.
The Women’s Health business increased 8.9 percent on a reported basis
and 6.9 percent on a constant currency basis to $49.2 million in the
fourth quarter. Pelvic Floor Repair continued twenty percent plus growth
in the fourth quarter, driven by the launch of Elevate® anterior
in mid-2009. This strong growth was partially reduced by soft Female
Continence product sales in the quarter and, as anticipated, sales from
uterine health declined in the quarter although at a lesser pace than
previous quarters.

On a GAAP basis, the Company reported net income for the fourth quarter
of 2009 of $22.3 million, or $0.30 per share, compared to net income in
the same period last year of $9.4 million, or $0.13 per share. Included
in the fourth quarter 2008 net income was a $17.1 million charge for
accelerated amortization of certain intangible assets related to our TherMatrx®
and GreenLight PV ® product lines and a $5.6 million gain
related to early extinguishment of debt purchased at a discount to face
value.

The Company also reported very strong non-GAAP adjusted EPS performance
in the fourth quarter of 2009 of $0.35 per share compared to $0.30 per
share in the comparable period last year. Non-GAAP adjusted EPS excludes
the impact of the amortization of intangible assets and amortization of
financing costs, both significant non-cash items affecting comparability
to other companies. The non-GAAP adjusted EPS for the fourth quarter of
2008 also excludes the $17.1 million charge for accelerated amortization
of certain intangible assets and the $5.6 million gain related to early
extinguishment of debt. A reconciliation of reported net income to
non-GAAP adjusted net income is provided in the attached schedules.

Tony Bihl, Chief Executive Officer, stated, “We capped off a record year
of sales and earnings with strong fourth quarter performance. Our cost
control measures contributed significantly to strong operating margins
and we are particularly pleased with our financial performance in light
of a difficult global economic environment this past year.” Mr. Bihl
further commented, “The strength of our cash management resulted in debt
reductions of $131 million, well ahead of our initial expectations of
$85 million in 2009, and has positioned us well as we move into 2010.”

Outlook

The Company estimates 2010 revenue will be in the range of $540 million
to $560 million and first quarter 2010 revenue in the range of $127
million to $131 million. This guidance assumes foreign currency exchange
rates remain constant with current rates.

Consistent with 2009, the Company has two significant non-cash charges
in GAAP earnings that create inconsistencies in comparisons to many
other companies: amortization of financing costs and amortization of
intangible assets. Accordingly the Company guides to non-GAAP adjusted
earnings per share, which the Company defines as GAAP earnings per share
excluding the impact of amortization of intangible assets and
amortization of financing costs.

The Company estimates 2010 non-GAAP adjusted earnings per share will be
in the range of $1.16 to $1.24 and first quarter 2010 non-GAAP adjusted
earnings per share will be in the range of $0.23 to $0.26. This guidance
excludes the impact of amortization of intangible assets which is
approximately $0.10 and $0.02 per share for the full year 2010 and the
first quarter, respectively, and amortization of financing costs which
is approximately $0.11 and $0.03 per share for the full year 2010 and
the first quarter, respectively. All guidance also excludes the impact
of any other unusual non-recurring items that could occur, such as gain
or loss on early debt extinguishments, sale of non-strategic assets or
in-process research and development charges (IPRD) on milestone payments
related to prior acquisitions.