Advanced Medical Optics, Inc. (AMO) (NYSE:EYE), a global leader in
ophthalmic surgical devices and eye care products, today announced
financial guidance for 2007 and 2008 that reflects the estimated impact
of the company's May 2007 global recall of its
MoisturePlusTM multipurpose solution.
For 2007, the company expects sales in the range of $1,050 million to
$1,070 million and an adjusted loss per share in the range of $0.95 to
$1.15. The company's adjusted per-share
guidance excludes the impact of charges and write-offs associated with
acquisitions, recapitalizations and unrealized gains or losses on
derivative instruments and other one-time charges. Previous 2007
guidance was $1,150 million to $1,175 million in sales and $1.40 to
$1.55 in adjusted EPS. The revised guidance includes:
-
An estimated reduction of approximately $100 million to $120 million
in net sales.
-
Estimated costs to conduct the recall and introduce a different
branded multipurpose solution in late 2007.
-
Higher expected incremental interest expense because the company does
not expect to reduce its debt levels as quickly as previously forecast.
-
Adverse tax impacts created by the shift in the geographic mix of
sales and income as a result of the removal of MoisturePlusTM
from the market.
Based on its expectation for 2007, the company's
guidance for 2008 sales is a range of $1,230 million to $1,250 million,
and a range of $1.55 to $1.75 for 2008 adjusted earnings per share.
Previous 2008 guidance was $1,350 million to $1,370 million in sales,
and $2.25 to $2.40 adjusted EPS.
?Since initiating the recall one month ago, we
have been fully focused on addressing the needs of patients, eye care
professionals and customers while working closely with regulatory
agencies around the world to ensure a swift, thorough and coordinated
effort,? said Jim Mazzo, AMO chairman,
president and chief executive officer. ?While
the near-term financial implications of the recall are significant, I am
confident that we have taken the appropriate steps and are now well
positioned to turn our attention to re-entering the multipurpose market
before the end of the year.?
Plan to Re-Enter the Multipurpose Market
AMO is planning to launch a multipurpose product using an existing
proprietary formulation approved by various regulatory agencies across
the globe, including the Food & Drug Administration (FDA). The company
expects the solution to be marketed and sold globally under the company's
flagship Complete® brand name and to
reinforce a rub-and-rinse regimen for effective contact lens
disinfection and comfort. AMO has stepped up production at both of its
eye care manufacturing facilities and anticipates having the Complete®
multipurpose solution on retail shelves by the end of the third quarter.
This Complete® multipurpose solution will
complement AMO's other existing eye care
products, including its rewetting drops and hydrogen peroxide systems.
Many optometric and ophthalmic professional organizations around the
world include a rub-and-rinse step in their contact lens handling
guidelines. For example, in a recent news release, the American
Optometric Association, which represents more than 34,000 doctors of
optometry, optometry students and paraoptometric assistants and
technicians, stated that ?most solutions are
approved for use without rubbing; however, optometrists are recommending
at this time that patients rub their lenses to enhance cleaning for
additional safety.?
Recall Background
AMO initiated a global recall of its MoisturePlusTM
multipurpose solution on May 25, 2007, after the U.S. Centers for
Disease Control and Prevention (CDC) identified through the preliminary
results of a study a potential link between the product and Acanthamoeba
keratitis (AK), a rare but serious infection of the cornea caused by a
naturally occurring water-borne organism. AMO immediately halted product
shipments, recalled product from the marketplace and encouraged
consumers to discontinue use through news announcements, Internet
postings, notifications to eye care practitioners and their professional
organizations and other means. The company continues to work closely
with the CDC and FDA to assess the data the agencies are collecting.
Live Web Cast & Audio Replay
AMO will host a conference call at 8:30 a.m. EDT today to discuss this
press release with analysts and investors. To listen, visit www.amo-inc.com.
An audio replay will also be available at approximately noon EDT today,
continuing through midnight EDT on Friday, June 29, 2007, at
800-642-1687 (conference ID# 4755611).
About Advanced Medical Optics (AMO)
AMO develops advanced, life-improving vision technologies for people of
all ages. Products in the cataract/implant line include intraocular
lenses (IOLs), phacoemulsification systems, viscoelastics, and related
products used in ocular surgery. AMO owns or has the rights to such
product brands as ReZoom®,
Tecnis®, Clariflex®,
Sensar®, and Verisyse®
IOLs, Sovereign®,
Sovereign® Compact
and WhiteStar Signature?
phacoemulsification systems with WhiteStar®
technology, Healon®
viscoelastics, and the Baerveldt®
glaucoma shunt. Products in the laser vision correction line
include wavefront diagnostic devices, femtosecond lasers and associated
patient interface devices, and excimer laser vision correction systems
and treatment cards. AMO brands in the laser vision correction business
include Star S4 IR®,
WaveScan Wavefront®,
CustomVue®,
IntraLase®
FS, IntraLase Method?
and IntraLasik®.
Products in the contact lens care line include disinfecting solutions,
enzymatic cleaners and lens rewetting drops. Among the eye care product
brands the company possesses are COMPLETE®,
COMPLETE®
Blink-N-Clean®,
Consept®F, Consept®
1 Step, Oxysept® 1
Step, UltraCare®,
Ultrazyme®, Total
Care? and blink?
branded products. AMO is based in Santa Ana, California, and
employs approximately 4,200 worldwide. The company has operations in 24
countries and markets products in approximately 60 countries. For more
information, visit the company's Website at www.amo-inc.com.
Use of Non-GAAP Measures
Our per-share guidance for 2007 and 2008 is provided on a non-GAAP
basis. The company's adjusted EPS guidance
excludes any charges associated with acquisitions, reorganizations and
recapitalizations and other one-time charges. The guidance also assumes
no impact of potential unrealized gains or losses on derivative
instruments. The company believes this presentation is useful to
investors to conduct a more meaningful, consistent comparison of the
company's ongoing operating results. This
presentation is also consistent with our internal use of the measure and
prior guidance structure, which we use to measure the profitability of
ongoing operating results against prior periods and against our
internally developed targets. We believe that our investors also use
this measure to analyze the sustainable profitability of the on-going
business operations. The economic substance related to our use of
adjusted per-share guidance is our belief that the appropriate analysis
of our profitability cannot be effectively considered while
incorporating the effect of unusual items and charges that have not been
experienced in prior periods. The company is not able to provide a
reconciliation of projected adjusted per-share guidance to expected
reported results due to the unknown effect, timing and potential
significance of special charges, and our inability to forecast charges
associated with future transactions and initiatives.
These non-GAAP financial measures are used in addition to and in
conjunction with results presented in accordance with GAAP. These
non-GAAP financial measures reflect an additional way of viewing aspects
of our operations that, when viewed with our GAAP results, provide a
more complete understanding of factors and trends affecting our
business. These non-GAAP measures should be considered as a supplement
to, and not as a substitute for, or superior to, the corresponding
measures calculated in accordance with generally accepted accounting
principles.
Forward-Looking Statements
This press release contains forecasts about AMO and its businesses, such
as management's total revenue and adjusted
per-share outlook. Because forecasts are inherently estimates that
cannot be made with precision, the company's
performance may at times differ from its estimates and targets.
Statements in this press release regarding financial guidance,
statements of Mr. Mazzo, statements regarding plans to re-enter the
multipurpose segment, and any other statements in this press release
that refer to AMO's estimated or anticipated
future results, are forward-looking statements. All forward-looking
statements in this press release reflect AMO's
current analysis of existing trends and information and represent AMO's
judgment only as of the date of this press release. Actual results may
differ from current expectations based on a number of factors affecting
AMO's businesses including, but not limited
to, uncertainties associated with successful and timely execution of our
recalls, unexpected changes in competitive, regulatory and market
conditions; the performance of new products and the continued acceptance
of current products; the execution of strategic initiatives and
alliances; AMO's ability to maintain a
sufficient supply of products; consumer spending and confidence; product
liability claims or new quality issues; litigation related to our recall
or otherwise; and the uncertainties associated with intellectual
property protection for the company's
products. In addition, matters generally affecting the domestic and
global economy, such as changes in interest and currency exchange rates
or consumer confidence indices, can affect AMO's
results. Therefore, the reader is cautioned not to rely on these
forward-looking statements. AMO disclaims any intent or obligation to
update these forward-looking statements.
Additional information concerning these and other risk factors may be
found in previous financial press releases issued by AMO. AMO's
public periodic filings with the Securities and Exchange Commission,
including the discussion under the heading ?Risk
Factors? in AMO's
2006 Form 10-K filed in March 2007 and Form 10-Q filed in May 2007 that
include information concerning these and other risk factors. Copies of
press releases and additional information about AMO are available at www.amo-inc.com,
or by contacting AMO's Investor Relations
Department by calling 714-247-8455.
Advanced Medical Optics, Inc.
Investors:
Sheree Aronson,
714-247-8290
sheree.aronson@amo-inc.com
or
Mark
Levin, 714-247-8465
mark.levin@amo-inc.com
or
Media:
Steve
Chesterman, 714-247-8711
steve.chesterman@amo-inc.com
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