Advanced Medical Optics (EYE)

Nine-Month Financial Results

Net sales for the first nine months of 2007 rose 4.3 percent to $786.3 million, including a 2.1 percent increase related to foreign currency fluctuations. The rise reflects the addition of the IntraLase and WaveFront Sciences acquisitions and organic growth, which were largely offset by declines in eye care sales primarily related to the recall.

The company reported a GAAP net loss for the first nine months of 2007 of $180.6 million, or a loss of $3.02 per share. The per-share loss was increased by $2.09 due to an $87.0 million charge for in-process R&D in the second quarter, approximately $27.6 million in transaction-related charges, a $1.3 million deferred financing cost write-off in the second quarter, a $2.7 million loss on derivative instruments and an estimated $6.6 million tax effect related to the items mentioned above. For the first nine months of 2006, the company reported GAAP net income of $87.1 million, or $1.30 per diluted share. A pre-tax gain on settlement of legal matters of $96.9 million increased after-tax earnings by $0.85 per diluted share. This was offset by pre-tax net charges of $87.5 million, which reduced after-tax earnings by $0.91 per diluted share. Items included in these charges were primarily due to business repositioning initiatives, inventory provisions, manufacturing and distribution charges related to discontinued products, note repurchases, and an unrealized loss on derivative instruments.

Nine-Month Financial Results

Net sales for the first nine months of 2006 rose 12.9 percent to $753.9 million from $667.8 million in the same period last year.  The rise reflects the May 2005 VISX acquisition and increased sales of technologically advanced products, offset by planned sales declines related to the rationalization of non-strategic products and a 1.3 percent decline related to foreign currency.

The company reported GAAP net income of $87.1 million for the first nine months of 2006, or $1.30 per diluted share.  A pre-tax gain on settlement of legal matters of $96.9 million increased

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after-tax earnings by $0.85 per diluted share.  This was offset by pre-tax net charges of $87.5 million, which reduced after-tax earnings by $0.91 per diluted share.  Charges included $46.4 million related to business repositioning initiatives, $18.3 million for inventory provisions, manufacturing and distribution charges related to discontinued products and other charges, $22.1 million related to note repurchases, and $0.7 million in an unrealized loss on derivative instruments.  For the nine months of 2005, the company reported a GAAP net loss of $455.5 million, or a loss of $9.01 per share.  These results included after-tax charges of $511.1 million related primarily to acquisitions that had the effect of reducing earnings per share by $10.05.