Advanced Neuromodulation Systems Second Quarter Revenue Increases 46% to $13.4 Million; Net Income Per Diluted Share Increases 225% to $0.13

antiquity · 07-25-2002, 01:15 PM

Advanced Neuromodulation Systems Second Quarter Revenue Increases 46% to $13.4 Million; Net Income Per Diluted Share Increases 225% to $0.13

DALLAS--(BUSINESS WIRE)--July 25, 2002--

Second Quarter Neuro Revenue Increases 65% to $10.8 Million

Advanced Neuromodulation Systems, Inc. (ANS) (NASDAQ:ANSI) announced today that revenue for the second quarter of 2002 increased 46% to $13,423,000. Net income nearly quadrupled to $1,448,000, or $0.13 per diluted share. For the second quarter of 2001, net income was $369,000, or $0.04 per diluted share, on revenue of $9,205,000.

For the first half of 2002, revenue increased 42% to $24,899,000 from $17,545,000 for the same period last year. Net income increased to $2,285,000, or $0.21 per diluted share, from $362,000, or $0.04 per diluted share, for the first half of 2001.

Second Quarter Operations Review

Sales of ANS' neuromodulation systems for the treatment of chronic intractable pain increased to $10,830,000 for the 2002 second quarter, 65% ahead of neuro sales for the second quarter of 2001. As anticipated, second quarter revenue for the Company's HDI subsidiary was essentially unchanged compared to the prior year at approximately $2,600,000. HDI, a contract developer and original equipment manufacturer (OEM) of electro-mechanical devices, was acquired in January 2001 as part of ANS' vertical integration strategy to gain stronger control of IPG development and manufacturing.

Gross margin rose to 62% for this year's second quarter from 57% a year ago. Income from operations as a percentage of revenue (operating margin) increased to 15.5% for this year's second quarter from 5.8% a year earlier, while pre-tax income as a percentage of revenue (pre-tax margin) increased to 16.6% from 7.4% last year. Net income as a percentage of revenue (net margin) increased to 10.8% from 4.0%. Because goodwill expense reported for last year's second quarter was not deductible for tax purposes, the tax rate declined to 35% for this year's second quarter from 45.6% a year earlier.

At June 30, 2002, cash and equivalents totaled $96,114,000 compared to $11,937,000 at December 31, 2001. In June, ANS announced the completion of its public offering of 2,875,000 shares of common stock for net proceeds of approximately $83.2 million. ANS intends to use the proceeds from the offering for general corporate purposes, including expanding its worldwide sales and marketing resources, funding product development, pursuing regulatory approvals and pursuing strategic acquisitions of products, technologies and businesses.

"ANS' new Genesis(TM) Totally Implantable Pulse Generator (IPG) Spinal Cord Stimulator continues to be well-received by our growing base of implanters and their patients," said President and Chief Executive Officer Chris Chavez. ANS' Genesis system received premarket approval (PMA) from the FDA in November 2001. ANS completed the training of its sales organization in December 2001 and formally launched the Genesis IPG in the U.S. in January 2002. "We also were pleased by modest revenue growth related to our Renew(R) RF neuromodulation system during the second quarter," Mr. Chavez said.

"The launch of our Genesis IPG dramatically increased our addressable market. ANS estimates the 2002 SCS market, which includes both RF and IPG systems, is approximately $294 million and growing at 20%. The broader neuromodulation market itself is also growing rapidly: industry analysts expect sales of neuromodulation products to increase from approximately $704 million in 2002 to $1.1 billion by 2005. ANS' market potential should continue to expand as additional neuromodulation products currently in our development pipeline gain regulatory approval. So we are confident that ANS has the opportunity to continue to grow substantially in the years ahead. With the investments we have made to establish ANS as a leader in neuromodulation technology and to refine our operating platform, we also believe that there is room for further margin improvement as sales increase," Chavez said.

Revenue and Earnings Guidance Increased

Reflecting these positive trends, Chavez said that the Company is increasing its guidance for revenue and earnings for 2002. He said that ANS currently expects revenue for 2002 in the range of $52,000,000 to $54,000,000 and net income in the range of $0.48 to $0.52 per diluted share. For 2001, ANS reported revenue of $37,916,000 and net income of $0.15 per diluted share.

Impact of FASB 142

Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, Accounting for Goodwill and Other Intangible Assets. The new FASB standard eliminates the amortization of goodwill and requires an annual review for impairment. Had the standard been implemented at the beginning of 2001, net income for the second quarter of 2001 would have been $508,000, or $0.05 per diluted share, and net income for the first half of 2001 would have been $641,000, or $0.07 per diluted share.

Conference Call

ANS has scheduled a conference call for today, Thursday, July 25, 2002 at 11:00 AM EDT. A simultaneous WebCast of the conference call may be accessed online at www.CompanyBoardroom.com or at www.ANSmedical.com. A replay will be available after 1:00 PM EDT at these same Internet addresses. For a telephone replay, dial 800/633-8284, reservation #20724515, after 1:00 PM EDT.

About Advanced Neuromodulation Systems

Advanced Neuromodulation Systems designs, develops, manufactures and markets implantable systems used to manage chronic intractable pain and other disorders of the central nervous system. Additional information is available at www.ANSmedical.com.

07-25-2002, 01:15 PM	#1
antiquity Moderator Join Date: Jul 2001 Posts: 14,540	Advanced Neuromodulation Systems Second Quarter Revenue Increases 46% to $13.4 Million; Net Income Per Diluted Share Increases 225% to $0.13 Advanced Neuromodulation Systems Second Quarter Revenue Increases 46% to $13.4 Million; Net Income Per Diluted Share Increases 225% to $0.13 DALLAS--(BUSINESS WIRE)--July 25, 2002-- Second Quarter Neuro Revenue Increases 65% to $10.8 Million Advanced Neuromodulation Systems, Inc. (ANS) (NASDAQ:ANSI) announced today that revenue for the second quarter of 2002 increased 46% to $13,423,000. Net income nearly quadrupled to $1,448,000, or $0.13 per diluted share. For the second quarter of 2001, net income was $369,000, or $0.04 per diluted share, on revenue of $9,205,000. For the first half of 2002, revenue increased 42% to $24,899,000 from $17,545,000 for the same period last year. Net income increased to $2,285,000, or $0.21 per diluted share, from $362,000, or $0.04 per diluted share, for the first half of 2001. Second Quarter Operations Review Sales of ANS' neuromodulation systems for the treatment of chronic intractable pain increased to $10,830,000 for the 2002 second quarter, 65% ahead of neuro sales for the second quarter of 2001. As anticipated, second quarter revenue for the Company's HDI subsidiary was essentially unchanged compared to the prior year at approximately $2,600,000. HDI, a contract developer and original equipment manufacturer (OEM) of electro-mechanical devices, was acquired in January 2001 as part of ANS' vertical integration strategy to gain stronger control of IPG development and manufacturing. Gross margin rose to 62% for this year's second quarter from 57% a year ago. Income from operations as a percentage of revenue (operating margin) increased to 15.5% for this year's second quarter from 5.8% a year earlier, while pre-tax income as a percentage of revenue (pre-tax margin) increased to 16.6% from 7.4% last year. Net income as a percentage of revenue (net margin) increased to 10.8% from 4.0%. Because goodwill expense reported for last year's second quarter was not deductible for tax purposes, the tax rate declined to 35% for this year's second quarter from 45.6% a year earlier. At June 30, 2002, cash and equivalents totaled $96,114,000 compared to $11,937,000 at December 31, 2001. In June, ANS announced the completion of its public offering of 2,875,000 shares of common stock for net proceeds of approximately $83.2 million. ANS intends to use the proceeds from the offering for general corporate purposes, including expanding its worldwide sales and marketing resources, funding product development, pursuing regulatory approvals and pursuing strategic acquisitions of products, technologies and businesses. "ANS' new Genesis(TM) Totally Implantable Pulse Generator (IPG) Spinal Cord Stimulator continues to be well-received by our growing base of implanters and their patients," said President and Chief Executive Officer Chris Chavez. ANS' Genesis system received premarket approval (PMA) from the FDA in November 2001. ANS completed the training of its sales organization in December 2001 and formally launched the Genesis IPG in the U.S. in January 2002. "We also were pleased by modest revenue growth related to our Renew(R) RF neuromodulation system during the second quarter," Mr. Chavez said. "The launch of our Genesis IPG dramatically increased our addressable market. ANS estimates the 2002 SCS market, which includes both RF and IPG systems, is approximately $294 million and growing at 20%. The broader neuromodulation market itself is also growing rapidly: industry analysts expect sales of neuromodulation products to increase from approximately $704 million in 2002 to $1.1 billion by 2005. ANS' market potential should continue to expand as additional neuromodulation products currently in our development pipeline gain regulatory approval. So we are confident that ANS has the opportunity to continue to grow substantially in the years ahead. With the investments we have made to establish ANS as a leader in neuromodulation technology and to refine our operating platform, we also believe that there is room for further margin improvement as sales increase," Chavez said. Revenue and Earnings Guidance Increased Reflecting these positive trends, Chavez said that the Company is increasing its guidance for revenue and earnings for 2002. He said that ANS currently expects revenue for 2002 in the range of $52,000,000 to $54,000,000 and net income in the range of $0.48 to $0.52 per diluted share. For 2001, ANS reported revenue of $37,916,000 and net income of $0.15 per diluted share. Impact of FASB 142 Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, Accounting for Goodwill and Other Intangible Assets. The new FASB standard eliminates the amortization of goodwill and requires an annual review for impairment. Had the standard been implemented at the beginning of 2001, net income for the second quarter of 2001 would have been $508,000, or $0.05 per diluted share, and net income for the first half of 2001 would have been $641,000, or $0.07 per diluted share. Conference Call ANS has scheduled a conference call for today, Thursday, July 25, 2002 at 11:00 AM EDT. A simultaneous WebCast of the conference call may be accessed online at www.CompanyBoardroom.com or at www.ANSmedical.com. A replay will be available after 1:00 PM EDT at these same Internet addresses. For a telephone replay, dial 800/633-8284, reservation #20724515, after 1:00 PM EDT. About Advanced Neuromodulation Systems Advanced Neuromodulation Systems designs, develops, manufactures and markets implantable systems used to manage chronic intractable pain and other disorders of the central nervous system. Additional information is available at www.ANSmedical.com.

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