-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E7ARLxqqqKLV4Y0W/SOzbuaESTVSvuoxRjI+Au8AKUvN4IpyVfXRp59bKEkV50oT xP8y3ANimDtR4dyvXx/PTQ== 0001275287-06-002347.txt : 20060501 0001275287-06-002347.hdr.sgml : 20060501 20060501073709 ACCESSION NUMBER: 0001275287-06-002347 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060501 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060501 DATE AS OF CHANGE: 20060501 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LASERSCOPE CENTRAL INDEX KEY: 0000851737 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 770049527 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-18053 FILM NUMBER: 06792303 BUSINESS ADDRESS: STREET 1: 3052 ORCHARD DR CITY: SAN JOSE STATE: CA ZIP: 95134 BUSINESS PHONE: 4089430636 8-K 1 ls5625.txt FORM 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 8-K ---------- Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) May 1, 2006 Commission File Number: 000-18053 LASERSCOPE (Exact name of Registrant as specified in its charter) CALIFORNIA 77-0049527 (State or other jurisdiction of (I.R.S. Employer Identification No.) Incorporation or organization) 3070 ORCHARD DRIVE SAN JOSE, CA 95134-2011 (Address of principal executive offices) (408) 943-0636 (Registrant's telephone number, including area code) NOT APPLICABLE (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS. On April 30, 2006, Laserscope, a California corporation, acquired all of the capital stock of InnovaQuartz, Inc. a privately held company located in Phoenix, Arizona pursuant to a Stock Purchase Agreement between Laserscope, InnovaQuartz, Inc., The Griffin Family Revocable Trust, Steve Griffin, and Brian Barr for approximately $7.5 million in cash, the assumption of approximately $1.1 million in debt and future cash payments contingent on the financial performance of InnovaQuartz over approximately three years. InnovaQuartz is a developer, vertically integrated manufacturer and commercial supplier of advanced medical devices for multiple medical procedures including those used in the treatment of kidney, bladder, and other urinary stones. Since 2002, InnovaQuartz has supplied a key component of Laserscope's GreenLight PV(R) fiber optic delivery device used for the treatment of Benign Prostatic Hyperplasia. The acquisition is described more completely in the press release which is attached as Exhibit 99.1 and incorporated by reference herein. ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On May 1, 2006, Laserscope, a California corporation (the "Company") issued a press release announcing its financial results for the quarter ended March 31, 2006. A copy of the release is attached as Exhibit 99.2 and incorporated by reference herein. The information in this Form 8-K and the Exhibit attached hereto is being furnished pursuant to Item 2.02, Results of Operations and Financial Condition. It shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended or the Exchange Act, regardless of any general incorporation language in such filing. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (d) Exhibits 99.1 Press Release of Laserscope dated May 1, 2006 regarding its acquisition of InnovaQuartz, Inc. 99.2 Press Release of Laserscope dated May 1, 2006 announcing its financial results for the quarter ended March 31, 2006 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. LASERSCOPE (Registrant) Date: May 1, 2006 By: /s/ Derek Bertocci ---------------------------- Derek Bertocci Vice President, Finance, and Chief Financial Officer EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ----------- ------------------------------------------------------------------ 99.1 Press Release of Laserscope dated May 1, 2006 regarding its acquisition of InnovaQuartz, Inc. 99.2 Press Release of Laserscope dated May 1, 2006 announcing its financial results for the quarter ended March 31, 2006 EX-99.1 2 ls5625ex991.txt EXHIBIT 99.1 EXHIBIT 99.1 LASERSCOPE ANNOUNCES ACQUISITION OF FIBER OPTICS MANUFACTURER INNOVAQUARTZ, INC. ACQUISITION EXTENDS MEDICAL DISPOSABLES PRODUCT LINE, IMPROVES GREENLIGHT PV(R) FIBER OPTIC PROFIT MARGINS, ENHANCES FIBER OPTICS R&D CAPABILITY, AND EXPANDS MANUFACTURING CAPABILITIES SAN JOSE, Calif., May 1 /PRNewswire-FirstCall/ -- Laserscope (Nasdaq: LSCP), a leader in the development and commercialization of minimally-invasive medical devices, including medical lasers and advanced fiber-optic delivery devices, today announced that it has acquired InnovaQuartz, Inc. ("IQ") of Phoenix, Arizona. Founded in 1991, InnovaQuartz, a privately held company, is a leading developer, vertically integrated manufacturer and commercial supplier of advanced medical devices for multiple medical procedures including those used in the treatment of kidney, bladder, and other urinary stones. InnovaQuartz's medical devices include fiber optics, sterile fiber optic delivery devices, optical components and optical subassemblies. Laserscope acquired all of the capital stock of InnovaQuartz for approximately $7.5 million in cash, the assumption of approximately $1.1 million in debt and future cash payments contingent on the financial performance of IQ over approximately three years. Eric Reuter, President and CEO of Laserscope said, "The acquisition of IQ is exciting for Laserscope for three important strategic reasons. The first is that the addition of IQ's newest fiber optic product line provides us an immediate entry with leading technology into another important urological market - -- the intracorporeal treatment of kidney, bladder, and other urinary stones that use holmium laser technology. Entry into this large, growth market is consistent with our strategy to become a complete player in the field of urology, and the treatment of stones is one of the highest volume urological surgical procedures in the U.S. outside of the treatment of benign prostatic hyperplasia ("BPH"). IQ's new line of stone fibers incorporates patented technology and know-how which provides for superior flexibility and strength. Going forward, the IQ products will be sold through our US and international urology distribution channels for use with Laserscope's own StoneLight(R) holmium laser as well as for use with many of the substantial worldwide installed base of other holmium lasers. Additionally, we expect to maintain certain of IQ's key distribution and OEM relationships. IQ's licensed technology and vertical manufacturing expertise bolsters Laserscope's leading position in the design and manufacture of disposable fiber optic delivery devices for high volume procedures in urology. We expect that IQ fiber optic product line revenues can be grown substantially over the next several years as the IQ fiber optic product line gains recognition as the standard for treating stones with holmium laser technology. We intend to pursue an aggressive marketing and sales strategy for bringing these products to the large existing installed base of holmium lasers worldwide. "The second reason that this acquisition is so important," continued Mr. Reuter, "is that it serves a key operational objective which is the swift realization of savings in fiber materials costs for our main fiber optic product line, the GreenLight PV delivery device. Since 2002, IQ has been a reliable, high quality supplier of a key component of Laserscope's GreenLight PV fiber optic delivery device used for the treatment of BPH. We therefore expect the acquisition will enable us to realize an immediate reduction in the cost of goods of our single use products and we anticipate that IQ's manufacturing and design capabilities will contribute further reductions in the costs of our fiber optic disposable products in the future. "Thirdly, IQ's R&D expertise and focus in specialty assemblies and components and rapid proto-typing will support Laserscope's existing R&D efforts to develop new, technologically superior and lower cost fiber optic medical devices. The benefits we expect to realize through the addition of InnovaQuartz's expertise fully support Laserscope's long term fiber optic strategy to become the world's leading provider of competitively priced and high quality medical fiber optic technology for high volume medical procedures," said Mr. Reuter. The InnovaQuartz acquisition is expected to be accretive beginning in 2007. IQ will be managed and operated as a wholly owned subsidiary of Laserscope for the foreseeable future. The Intracorporeal Stone Market IQ is one of the few vertically integrated developers, manufacturers, and commercializers of advanced medical fiber optics in the world. IQ recently acquired proprietary intellectual property and manufacturing expertise, which it uses to produce a line of technologically advanced sterile fiber optic delivery devices available for use in intracorporeal laser lithotripsy, or the endoscopic treatment of kidney, bladder, and other urinary stones using holmium laser technology. In the U.S. alone more than 200,000 intracorporeal stone treatment procedures are performed each year using various technologies with a larger number performed internationally. Sources predict that the number of holmium stone treatment procedures in the United States is expected to grow at approximately 15% per year through 2008 given the ease of use, speed, and relative safety of the holmium laser technology relative to other technologies used for breaking up the hard materials that make up urinary stones. This growth rate exceeds the approximately 6% compounded procedural growth rate expected considering the aging population, dietary changes and other dynamics. According to industry sources, the total market size for holmium laser capital equipment and disposable and reusable delivery devices for these procedures exceeds $50 million per year in the U.S. There are several thousand holmium stone treatment lasers already installed worldwide and over 300 holmium lasers are expected to be sold and installed in the U.S. each year through 2008. Over 50,000 holmium laser fiber optic delivery devices are sold each year in the U.S. typically at prices ranging between $300 and $500/fiber. IQ's new fiber optic product line can be used on many if not most of the worldwide installed base of holmium laser systems. Given the technological superiority and competitive price of these products over other methods of performing intracorporeal lithotripsy, this translates to an immediate market opportunity. "InnovaQuartz's disposable and reusable stone fiber revenue has grown at a tremendous rate over the past two years. Given the favorable market dynamics and strong OEM relationships that InnovaQuartz has established, coupled with Laserscope's growing urology distribution expertise, we expect strong, consistent revenue growth from this new product line for the foreseeable future," Mr. Reuter concluded. Special Investor Relations Forum Announced Laserscope will be holding a special Investor Relations Forum coinciding with the 2006 American Urological Association Meeting on May 22nd, 2006. At this meeting, Laserscope will be discussing current and future R&D and business development initiatives for our urology and aesthetic product lines as well as unveiling the latest new additions to the Laserscope urology product line. Investors are invited to attend in-person or via a web-cast which will be announced prior to the event. Those planning to attend in person should contact Laserscope's IR representatives as attendance will be limited. Management Conference Call Management of Laserscope will hold a conference call today, Monday, May 1, 2006 at 8:00am PT / 11:00am ET to discuss results for the 2006 first quarter. To participate in the call, please dial 800-218-0204 (303-262-2050 for international callers) at least five minutes prior to the start time. Investors will also have the opportunity to listen to the conference call live on the Internet through Laserscope's website at http://www.laserscope.com . Investors should go to the website a few minutes early, as it may be necessary to download audio software to access the conference call. A replay of the conference call will be available through Monday, May 8, 2006, by dialing 800-405-2236 (303-590-3000 for international callers), and entering passcode 11059316. An archive will also be available at Laserscope's website. About Laserscope Laserscope designs, manufactures, sells and services on a worldwide basis an advanced line of minimally-invasive medical products including medical laser systems and related energy delivery devices for the office, outpatient surgical center, and hospital markets. More information about Laserscope can be found on its web site at http://www.laserscope.com . Safe Harbor Statement This press release contains forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by this section. These forward-looking statements include: statements about the expected future benefits resulting from the acquisition of InnovaQuartz, such as increased sales of the IQ stone fiber line and other IQ products, manufacturing and engineering improvements in our existing products designed to reduce the cost of goods sold, enhanced fiber optic R&D and manufacturing capabilities; statements about Laserscope's future profitability and operating results, expected continued momentum of Laserscope's business and growth including new product offerings, such as the InnovaQuartz products, worldwide adoption rates of the treatment of stones, especially intracorporeal lithotripsy, our ability to compete with similar product offerings and other therapies for the treatment of stones, market penetration opportunities in advanced fiber optics. These statements are subject to a number of risks and uncertainties, including: the risk that the InnovaQuartz acquisition may not provide us the expected benefits and could disrupt our business and harm our financial condition, results of operations and cash flows; uncertainties regarding introduction of new technologies competitive to Laserscope's products and the degree to which our current and new products are accepted by customers, which could affect the level of demand for our products, including the IQ products; uncertainties regarding the impact that competitive products and therapies as well as private and public payer reimbursement levels for stone procedures could have on the competitiveness of our current pricing programs, which could adversely impact our financial results; risk of reductions in government and private insurance reimbursement of hospitals and physicians for health care costs, which may negatively impact hospitals and physicians decisions to purchase our products reducing adoption rates and sales growth; risks that patents and licenses that we or InnovaQuartz hold may be challenged, invalidated or circumvented or that we may become the subject of intellectual property litigation; the risk that we may be unable to maintain favorable relationships with InnovaQuartz's current customers, uncertainties regarding our ability to compete with companies that have significantly greater financial, technical, research and development, manufacturing and marketing resources than we have; and uncertainties that new products will receive regulatory approval in applicable jurisdictions. Actual results may differ materially due to these and other factors. The matters discussed in this press release also involve risks and uncertainties described from time to time in Laserscope's filings with the Securities and Exchange Commission. In particular, see the Risk Factors described in Laserscope's most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K. Copies of Laserscope's public disclosure filings with the SEC, including the most recent Annual Report on Form 10-K and the most recent forms 10-Q are available upon request from its Investor Relations Department at its website at http://www.laserscope.com and at the SEC's website: http://www.sec.gov . Laserscope assumes no obligation to update the forward-looking information contained in this press release. At Laserscope: At Financial Relations Board: Eric Reuter, President & CEO Tricia Ross Analyst/Investor Contact Derek Bertocci, CFO (617) 520-7064 (408) 943-0636 SOURCE Laserscope -0- 05/01/2006 /CONTACT: Eric Reuter, President & CEO, or Derek Bertocci, CFO, both of Laserscope, +1-408-943-0636; or Tricia Ross, Analyst/Investor Contact, Financial Relations Board, +1-617-520-7064/ /Web site: http://www.laserscope.com / (LSCP) EX-99.2 3 ls5625ex992.txt EXHIBIT 99.2 EXHIBIT 99.2 LASERSCOPE REPORTS FIRST QUARTER 2006 RESULTS FIRST QUARTER RESULTS DRIVEN BY RECORD WORLDWIDE GREENLIGHT(TM) DELIVERY DEVICES AND LASER SYSTEM SHIPMENTS AND SOLID AESTHETIC SALES SAN JOSE, Calif., May 1 /PRNewswire-FirstCall/ -- Laserscope (Nasdaq: LSCP), a leader in the development and commercialization of minimally-invasive medical devices, including medical lasers and advanced fiber-optic delivery devices, today reported its financial results for the first quarter ended March 31, 2006. 2006 First Quarter Highlights (compared to the prior-year quarter): - GreenLight PV(R) fiber optic delivery devices shipped worldwide for PVP increased 29% to 21,006 units from 16,255 units - GreenLight PV worldwide laser system installed base grew 71% to 868 units - Total revenues grew 14% to $32.0 million - R&D spending increased 86% to $2.9M - Aesthetic sales increased 23% to $7.6 million - Pre-tax income $4.9 million (includes $0.6 million of stock based compensation expense), down from $6.2 million in Q1 2005 - Income tax rate of 43%, up from 20% in Q1 2005 - Diluted EPS of $0.12 (includes expense of $0.6 million pre-tax or $0.02 per share for stock based compensation expense) First Quarter 2006 Operating Results U.S. sales of GreenLight PV delivery devices were 14,782 units in the first quarter of 2006 compared with 15,221 units in the fourth quarter of 2005 and 11,792 units in the first quarter of 2005. International sales of GreenLight PV delivery devices were 6,224 units compared with 5,461 units in the fourth quarter of 2005 and 4,463 units during the first quarter of the prior year. Sales of aesthetic products totaled $7.6 million in the first quarter of 2006 compared with $6.2 million in the first quarter of 2005. Gross margin was 61% in the first quarter of 2006, compared with 62% for the first quarter of 2005 and 59% for the fourth quarter of 2005. Higher average unit prices for aesthetics relative to Q1 of 2005 were offset by higher international urology fiber and system sales as a percentage of total revenues. International sales typically have lower margins than US sales. Research and development ("R&D") expenses increased 86% in the first quarter to $2.9 million, or 9% of revenues, from $1.6 million, or 6% of revenues, in the first quarter of 2005. The increase in R&D expense resulted from accelerated new product development and clinical activities focused on the near- and medium-term development of multiple new products and clinical applications in urology and aesthetics. As previously announced, the Company anticipates that full year 2006 R&D spending will increase 50% to 60% over 2005 levels. On May 22nd, 2006, Laserscope will hold a special Investor Forum to discuss these R&D and clinical programs and new product announcements at the American Urological Association Meeting in Atlanta, Georgia. Selling, general and administrative ("SG&A") expenses grew approximately 20% to $11.8 million, or 37% of revenues in the first quarter of 2006, compared to $9.9 million, or 35% of revenues in the first quarter of 2005. The increase in SG&A expenses resulted primarily from higher sales, marketing, business development and administrative expenses to support the Company's current and future growth initiatives domestically and internationally. First quarter operating income was $4.7 million, compared with $6.1 million in the first quarter of 2005. First quarter 2006 net income was $2.8 million, or $0.12 per diluted share, compared with net income of $5.0 million, or $0.22 per diluted share, in the same quarter last year, and $5.9 million or $0.26 per fully diluted share for the fourth quarter of 2005. As a result of net operating loss and tax credit carryforwards, the Company's effective tax rate for 2005 was 7.5%. Valuation allowances for these deferred tax assets were released in 2005. Accordingly, the Company anticipates an income tax rate of approximately 43% in 2006. Net income for the first quarter of 2006 includes the impact from the adoption of SFAS No. 123 (revised 2004), "Share- Based Payment" ("SFAS 123(R)") by which the Company recognized pre-tax equity- based compensation expense of $596,000 or $0.02 per diluted share. The Company's effective income tax rate was 43% in the first quarter of 2006. Commenting on the first quarter results, Eric Reuter, CEO and President of Laserscope said, "Our international progress exceeded expectations as we continued to make strides in all major international markets, a strong indication that we are indeed making important progress in replacing the Trans Urethral Resection of the Prostate (TURP) procedure with Photoselective Vaporization of the Prostate (PVP) as the worldwide standard of care for Benign Prostaic Hyperplasia (BPH). International market penetration remains an important part of our long-term strategic growth plan. We are on track to begin our clinical studies in Japan, the second largest TURP market outside the US, beginning in the third quarter of 2006 and we continue to expect strong urology revenue growth in the major international markets in 2006 and beyond. Although our domestic urology revenue was more modest than we had expected this quarter, direct accounts showed a strong increase in delivery device usage sequentially with large mobilizing partnerships showing flat to slightly down sequentially. Additionally, some capital equipment purchase processes were delayed as these customers chose to wait for the upcoming American Urological Association meeting before making purchase decisions. As indicated previously, we expect year-over-year revenue and earnings growth to be heavily weighted toward the second half of the year as revenues from our new products pipeline, expanded sales network, recent acquisition, and product cost reduction initiatives take effect." "We are continuing to make significant investments in R&D and sales and marketing as part of our commitment to remaining at the forefront of the new technology and product development curve. We are also aggressively pursuing selective strategic acquisitions to augment our existing product and technology portfolio, increase our manufacturing efficiencies, and drive continued revenue and earnings growth. To that end, we are very excited about our acquisition of Innovaquartz Inc., which we announced today and we will discuss in more detail today at our first quarter earnings conference call." "We have also continued our efforts to revitalize our aesthetics product line. Although very competitive, this is still a growth market. We continue to work closely with our U.S. distribution partner, Henry Schein, to drive sales in this large and growing market in the US as well as internationally. Our goal is to return this business to market growth rates by the fourth quarter of 2006 by increasing our distribution network of direct sales representatives both domestically and internationally and releasing a series of new products and marketing programs during the balance of 2006 and in 2007. We look forward to giving an overview of our aesthetics product development pipeline at our Investor Forum in May." Balance Sheet Summary Laserscope's balance sheet remains strong. At March 31, 2006, the Company had no bank borrowings and a cash position of $33.2 million, up from $30.7 million at December 31, 2005. At quarter-end, net accounts receivable was $24.0 million. Days sales outstanding (DSOs) were 67, up slightly from 66 in the fourth quarter of 2005. Outlook The company continues to expect full year 2006 revenue and fully taxed earnings to increase by 20% to 25% over 2005 levels to $0.72 - $0.75 per share, assuming a 43% tax rate is applied to both 2006 and 2005 pre-tax earnings, and excluding the impact of FAS 123(R) stock compensation expenses in 2006. The Company anticipates that revenue and fully taxed earnings will be larger in the second half of 2006 (approximately 55% to 60% of the full year's total) due to new products we will bring to market as a result of internal R&D and strategic activities. Adoption of SFAS 123R The results for the first quarter of 2006 include the impact from adoption in 2006 of SFAS 123R that requires expensing of stock options and other share- based payments. The company included in its cost of revenues and operating expenses total share-based compensation expenses of approximately $596,000 ($472,000 net of income tax or $0.02 per diluted share). Special Investor Relations Forum Announced Laserscope will be holding a special Investor Relations Forum coinciding with the 2006 American Urological Association Meeting on May 22, 2006. At this meeting, Laserscope will be discussing current and future R&D and business development initiatives for our urology and aesthetic product lines as well as unveiling the latest new additions to the Laserscope urology product line. Investors are invited to attend in-person or via a web-cast which will be announced prior to the event. Those planning to attend in person should contact Laserscope's IR representatives as attendance will be limited. Management Conference Call Management of Laserscope will hold a conference call today, Monday, May 1, 2006 at 8:00am PT / 11:00am ET to discuss results for the 2006 first quarter. To participate in the call, please dial 800-218-0204 (303-262-2050 for international callers) at least five minutes prior to the start time. Investors will also have the opportunity to listen to the conference call live on the Internet through Laserscope's website at http://www.laserscope.com. Investors should go to the website a few minutes early, as it may be necessary to download audio software to access the conference call. A replay of the conference call will be available through Monday, May 8, 2006, by dialing 800- 405-2236 (303-590-3000 for international callers), and entering passcode 11059316. An archive will also be available at Laserscope's website. About Laserscope Laserscope designs, manufactures, sells and services on a worldwide basis an advanced line of minimally-invasive medical products including medical laser systems and related energy delivery devices for the office, outpatient surgical center, and hospital markets. More information about Laserscope can be found on its web site at http://www.laserscope.com. Safe Harbor Statement This press release contains forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934, and is subject to the safe harbor created by this section. These forward-looking statements include: statements about Laserscope's future profitability and operating results, competition, manufacturing and engineering improvements in our existing products designed to reduce the cost of goods sold, expected benefits resulting from the acquisition of Innovaquartz, Inc., expected continued momentum of Laserscope's business and growth including new product offerings, worldwide adoption rates of the PVP procedure using the GreenLight PV(R) laser system, our ability to compete with similar product offerings and other therapies for the treatment of BPH, market penetration opportunities in international markets such as in Europe and the Asia Pacific region, including Japan, and the relationship with our distribution partner for aesthetic products, Henry Schein, Inc. These statements are subject to a number of risks and uncertainties, including: uncertainties regarding introduction of new technologies competitive to Laserscope's products and the degree to which our current and new products are accepted by customers, which could affect the level of demand for our products; any acquisitions we make, including the acquisition of InnovaQuartz, Inc., may not provide us the expected benefits and could disrupt our business and harm our financial condition, results of operations and cash flows, uncertainties regarding the impact that competitive products and therapies as well as private and public payer reimbursement levels for the PVP procedure could have on the competitiveness of our current pricing programs, which could adversely impact our financial results; our dependence on sole source providers for key components and products; risk of reductions in government and private insurance reimbursement of hospitals and physicians for health care costs, which may negatively impact hospitals and physicians decisions to purchase our products reducing adoption rates and sales growth; risks that we may be unable to protect adequately the integrity, safety and proper use of our disposable fiber optic delivery device with the GreenLight PV(R) laser system, which could result in negative patient outcomes and reduce our disposable delivery device recurring revenue stream; risks that patents and licenses that we hold may be challenged, invalidated or circumvented or that we may become the subject of intellectual property litigation; uncertainties regarding our ability to compete with companies that have significantly greater financial, technical, research and development, manufacturing and marketing resources than we have; and uncertainties that new products will receive regulatory approval in applicable jurisdictions. Actual results may differ materially due to these and other factors. The matters discussed in this press release also involve risks and uncertainties described from time to time in Laserscope's filings with the Securities and Exchange Commission. In particular, see the Risk Factors described in Laserscope's most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K. Copies of Laserscope's public disclosure filings with the SEC, including the most recent Annual Report on Form 10-K and the most recent forms 10-Q are available upon request from its Investor Relations Department at its website at http://www.laserscope.com and at the SEC's website: www.sec.gov. Laserscope assumes no obligation to update the forward-looking information contained in this press release. GreenLight(TM) Delivery Device Sales (Units) 2006 Q1 ------------- ------- United States 14,782 International 6,224 Total 21,006
2005 Q1 Q2 Q3 Q4 Year -------------------- --------- --------- --------- --------- --------- United States 11,792 14,379 12,654 15,221 54,046 International 4,463 4,712 4,985 5,461 19,621 Total 16,255 19,091 17,639 20,682 73,667
LASERSCOPE FINANCIAL SUMMARY (Unaudited) Condensed Consolidated Statements of Income Three months ended March 31, --------------------- (thousands except per share amounts) 2006 2005 --------------------------------------------- --------- --------- Net revenues $ 32,009 $ 28,177 Cost of sales (1) 12,499 10,577 Gross margin 19,510 17,600 Operating expenses: R&D, clinical and regulatory (1) 2,949 1,585 Selling, general and administrative (1) 11,835 9,878 14,784 11,463 Operating income 4,726 6,137 Interest income (expense) and other, net 144 79 Net income before income taxes 4,870 6,216 Provision for income taxes (1) 2,079 1,253 Net income (1) $ 2,791 $ 4,963 Basic net income per share (1) $ 0.13 $ 0.23 Diluted net income per share (1) $ 0.12 $ 0.22 Shares used in basic per share calculations 22,327 22,009 Shares used in diluted per share calculations 22,823 22,986 (1)Includes the following amounts for stock based compensation. Cost of sales $ 100 $ -- R&D, clinical and regulatory 110 -- Selling, general and administrative 386 -- Total 596 -- Provision for income taxes (124) -- Net income $ 472 $ -- Basic net income per share $ 0.02 $ -- Diluted net earnings per share $ 0.02 $ -- LASERSCOPE FINANCIAL SUMMARY (Unaudited) Condensed Consolidated Balance Sheets March 31, December 31, ($ in thousands) 2006 2005 --------------------------------------------- --------- ------------ Assets Current assets: Cash & cash equivalents $ 33,234 $ 30,653 Accounts receivable, net 23,972 25,138 Inventories 27,595 27,058 Prepayments and other current assets 18,461 19,171 Total current assets 103,262 102,020 Property and equipment, net 10,919 8,663 Other assets 1,060 1,087 Total assets $ 115,241 $ 111,770 Liabilities and Shareholders' Equity Current liabilities $ 26,203 $ 26,973 Capital leases 4 9 Shareholders' equity 89,034 84,788 Total liabilities and shareholders' equity $ 115,241 $ 111,770 At Laserscope: At Financial Relations Board: Eric Reuter, President & CEO Tricia Ross Analyst/Investor Contact Derek Bertocci, CFO (617) 520-7064 (408) 943-0636 SOURCE Laserscope -0- 05/01/2006 /CONTACT: Eric Reuter, President & CEO, or Derek Bertocci, CFO, +1-408-943-0636 both of Laserscope; or At Financial Relations Board: Analyst/Investor Contact, Tricia Ross, +1-617-520-7064 / /Web site: http://www.laserscope.com / (LSCP) -----END PRIVACY-ENHANCED MESSAGE-----