Advanced Medical Optics (EYE)

Six-Month Financial Results

Net sales for the first six months of 2007 rose 3.6 percent to $513.1 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 estimated recall-related lost sales and returns.

The company reported a GAAP net loss for the first six months of 2007 of $154.7 million, or a loss of $2.59 per share. The per-share loss was increased by $2.02 due to an $87.0 million charge for in-process R&D, approximately $22.2 million in transaction-related charges, a $1.3 million deferred financing cost write-off, a $300,000 loss on derivative instruments and a $9.7 million unfavorable tax impact associated primarily with acquisition-related items. For the first six months of 2006, the company reported a GAAP net loss of $0.1 million, or break even on a per share basis. Pre-tax net charges of $87.9 million reduced after-tax earnings per share by $0.87 and included $66.8 million in charges related primarily to rationalization and repositioning initiatives, $18.2 million related to note repurchases and a $2.9 million unrealized loss on derivative instruments.

Six-Month Financial Results

Net sales for the first six months of 2006 rose to $495.3 million from $419.6 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 2.5 percent decrease related to foreign currency.

The company reported a GAAP net loss for the first six months of 2006 of $0.1 million, or break even on a per share basis. Pre-tax net charges of $87.9 million recorded during the period reduced after-tax earnings per share by $0.87. Charges included $47.0 million related to business repositioning initiatives, $19.8 million for inventory provisions, manufacturing and distribution charges related to discontinued products and other charges, $18.2 million related to note repurchases, and $2.9 million in an unrealized loss on derivative instruments. For the first six months of 2005, the company reported a GAAP net loss of $424.3 million, or a loss of $10.17 per share. These results included after-tax charges of $455.7 million related primarily to acquisitions that had the effect of reducing earnings per share by $10.88.

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