This excerpt taken from the EYE 8-K filed Oct 26, 2006.
THIRD-QUARTER 2006 RESULTS AND REVISED GUIDANCE
(SANTA ANA, CA), October 26, 2006 Advanced Medical Optics, Inc. (AMO) [NYSE: EYE], a global leader in ophthalmic surgical devices and eye care products, today announced financial results for the third quarter of 2006 and revised guidance for 2006 and 2007.
The company reported net sales of $258.6 million, a 4.2 percent increase compared to the same quarter last year. The rise reflects improved branded multipurpose solution sales, increased demand for the companys premium refractive and aspheric monofocal intraocular lenses (IOLs), continued international expansion of the companys laser vision correction business and a 0.6 percent increase related to foreign currency. Third-quarter net sales growth was unfavorably impacted by the planned loss of $6.6 million in sales related to product rationalizations.
AMO reported income under Generally Accepted Accounting Principles (GAAP) of $87.2 million, or $1.42 per diluted share. A pre-tax net gain of $102.9 million related to the settlement of legal matters increased after-tax earnings per share by $0.99. The third-quarter results also included pre-tax net charges of $4.0 million associated with recently completed business rationalization and repositioning initiatives, $3.9 million associated with note repurchases and $2.3 million in an unrealized gain on derivative instruments, all of which decreased after-tax earnings per share by $0.07. The third-quarter results also included a $0.05 per share impact associated with stock-based compensation expense.
In the third quarter of 2005, the company reported a GAAP net loss of $31.2 million, or a loss of $0.47 per share. These results included $55.4 million in after-tax charges related primarily to the May 2005 acquisition of VISX, Incorporated, termination of a distributor contract and other acquisitions and integrations related charges. This third quarter loss per share excluded the $0.02 effect of dilutive instruments that, when combined with the charges, had an effect of reducing earnings per share by $0.82.
Our third-quarter results demonstrate meaningful progress in terms of sales growth, market penetration of branded technologies, operating expense management and cash flow from operations, said Jim Mazzo, AMO chairman, president and chief executive officer. While these favorable trends bode well for the strength of AMOs strategy, market conditions in certain high-margin segments and challenging pricing environments for some of our cataract products have caused us to adopt a more conservative outlook for the balance of 2006 and 2007. We believe the AMO strategy has and will continue to deliver significant revenue growth and margin expansion in the future.