ILSE Intralase Corp (MM)

Laser Sales Up 31%, Procedure Volumes Up 54% in 2006; 574 Lasers Now Installed Worldwide IRVINE, Calif., March 1 /PRNewswire-FirstCall/ -- IntraLase Corp. (NASDAQ:ILSE) today reported revenues, net income and earnings for the fourth quarter and fiscal year ended December 31, 2006. Revenues for the fourth quarter of 2006 were $37.4 million, a 37% increase over the comparable period in 2005. This growth was led by global sales of the IntraLase(R) FS laser, with the company placing for sale or lease a record 56 lasers in the fourth quarter of 2006 versus 44 lasers in the fourth quarter of 2005. Per procedure sales, inclusive of a disposable patient interface, at 146,000 procedures in the fourth quarter of 2006, increased 54% over the comparable period in 2005. Fourth quarter net income was $12.5 million, including a one-time tax benefit of $11.1 million from the release of the Company's deferred tax valuation allowance. Expenses in the fourth quarter of 2006 included a significant portion of the $9.6 million settlement and acquisition of intellectual property with Escalon Medical Corporation and legal and other expenses incurred in connection with the pending acquisition of the Company by Advanced Medical Optics. Fourth quarter 2006 expenses included $2.1 million in non-cash, stock-based compensation expense, compared to $893,000 in non-cash, stock-based compensation expense in the fourth quarter of 2005. Fourth quarter 2006 gross margin expansion was primarily due to an increase in laser and per procedure sales, inclusive of a disposable patient interface. Net income for the fourth quarter was $12.5 million, compared to $3.8 million in the comparable period in 2005. Fourth quarter earnings per fully diluted share were $0.40, versus earnings per fully diluted share of $0.12 for the fourth quarter of 2005. Revenues for the fiscal year ended December 31, 2006 were $131.9 million, a 40% year-over-year gain. Driving this increase was the sale or lease of a record 204 IntraLase lasers compared to 156 in 2005, an increase of 31%, bringing the worldwide installed base to 574 lasers. Total procedures sold in 2006, each inclusive of a disposable patient interface, were 509,000, an increase of 50% year-over-year. Net income for the 12 month period was $24.3 million, versus net income of $9.5 million for the 12 months ended December 31, 2005. Net income for the twelve months ending December 31, 2006 includes a tax benefit of $10.7 million. Twelve month results include expenses incurred in connection with the Escalon Medical Corporation agreement and $7.0 million in non-cash, stock-based compensation expense. Net income in the 12 months of 2005 included $2.1 million in non-cash, stock-based compensation expense. Earnings per fully diluted share for 2006 were $0.78, versus earnings per fully diluted share of $0.31 in calendar year 2005. 2006 Highlights * Introduced 4th Generation Laser, reducing procedure time to approximately 20 seconds; * Announced three new corporate customers in the U.K.: Optimax, Ultralase and Optical Express; * Further expanded with TLCVision; * Introduced IntraLase Enabled Keratoplasty(TM) (IEK(TM)) for corneal transplants; * Announced over one million procedures using the IntraLase Method(TM) performed as of November 2006; and * Received Defense Logistics Agency contract for up to $45 million over 10 years. "Our strong 2006 financial results are evidence of the continued global acceptance among eye surgeons," stated Robert J. Palmisano, President and CEO of IntraLase Corp. "With an installed base of 574 lasers, it is clear that practitioners around the world are embracing both the clinical and business benefits of the IntraLase Method(TM). This acceptance is also exemplified by the remarkable 50% increase in IntraLase procedure volumes in 2006." Mr. Palmisano continued, "The proposed acquisition of IntraLase by Advanced Medical Optics (AMO) announced on January 8 is a great vote of confidence in the continued potential of IntraLase's business. We believe that AMO will provide a tremendous platform for nurturing our technology and cultivating new opportunities within the ophthalmic industry." Concluding, Mr. Palmisano stated, "I am also pleased that IntraLase was able to resolve its ongoing disputes with Escalon. Under our previously announced settlement, we settled all disputes and acquired ownership of all patents and intellectual property previously licensed for approximately $8.5 million, plus fourth quarter royalties and previously accrued expenses, for a total payment to Escalon of $9.6 million, a significant portion of which was expensed in the fourth quarter." About IntraLase Corp. IntraLase designs, develops, and manufactures an ultra-fast laser that is revolutionizing refractive and corneal surgery by creating safe and more precise corneal incisions. Delivering on the promise of ophthalmic laser technology, the IntraLase FS laser, related software, and disposable devices replace the hand-held microkeratome blade used during LASIK surgery. The unsurpassed accuracy of IntraLase's computer-controlled femtosecond laser has been shown to improve safety profiles and visual outcomes when used during LASIK. Additionally, the IntraLase FS laser creates precision-designed intracorneal incisions that when combined can be used during lamellar and penetrating keratoplasty, and intrastromal ring implantation. IntraLase is presently in the process of commercializing applications of its technology in the treatment of corneal diseases that require corneal transplant surgery. The company's proprietary laser and disposable patient interfaces are presently marketed throughout the United States and 33 other countries. IntraLase is headquartered and manufactures its products in Irvine, California. For additional information, visit the company's web site: http://www.intralase.com/. On January 8, 2007 Advanced Medical Optics and IntraLase announced that they have entered into a definitive agreement for AMO to acquire IntraLase for approximately $808 million, or $25.00 per share, in cash. Forward Looking Statements Statements contained in this press release that are not historical information are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," "project," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected or implied. Those risks and uncertainties include, but are not limited to: the degree of continued acceptance of LASIK surgery; potential complications revealed by long-term follow up; the extent of adoption of our product offering by LASIK surgeons; general economic conditions; changes in federal tax laws governing the ability of potential LASIK patients to use pre-tax dollars to pay for LASIK surgery; the scope of government regulation applicable to our products; patients' willingness to pay for LASIK surgery; our ability to compete against our competitors; the effectiveness of our measures to ensure full payment of procedure fees; the occurrence and outcome of product liability suits against us; our ability to adequately protect our intellectual property; whether we become subject to claims of infringement or misappropriation of the intellectual property rights of others; the continued availability of supplies from single-source suppliers and manufacturers of our key laser components; the ability of our managers, operations, and facilities to manage our growth; the success of our expansion into markets outside the United States; whether we lose any of our key executives or fail to attract qualified personnel; or if our new products or applications fail to become commercially viable. Certain of these risks and uncertainties, in addition to other risks, are more fully described in the company's quarterly report on Form 10-Q for the period ending September 30, 2006, as filed with the Securities and Exchange Commission on October 31, 2006. These forward-looking statements are made only as of the date of this press release, and the company assumes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events, or otherwise. IntraLase Corp. Condensed Consolidated Statement of Operations Three Months Ended Twelve Months Ended December 31, December 31, December 31, December 31, 2006 2005 2006 2005 Revenues - product revenues (1) $37,399,870 $27,361,099 $131,926,734 $94,432,835 Costs of goods sold (2) 16,454,648 12,744,925 59,000,395 44,237,314 Gross Margin 20,945,222 14,616,174 72,926,339 50,195,521 Operating expenses: Research and development (2) 8,853,159 3,261,485 20,569,157 11,652,675 Selling, general and adminis- trative (2) 11,846,035 8,200,621 43,164,305 31,611,517 Total operating expenses 20,699,194 11,462,106 63,733,462 43,264,192 Income from operations 246,028 3,154,068 9,192,877 6,931,329 Interest and other income, net 1,194,057 830,060 4,391,228 2,933,292 Income before provision for income taxes 1,440,085 3,984,128 13,584,105 9,864,621 Income tax provision (benefit) (11,100,597) 155,572 (10,699,844) 340,163 Net income $12,540,682 $3,828,556 $24,283,949 $9,524,458 Net income per share - basic $0.44 $0.14 $0.85 $0.35 Net income per share applicable - diluted $0.40 $0.12 $0.78 $0.31 Weighted average shares outstanding - basic 28,807,658 27,947,962 28,539,206 27,405,499 Weighted average shares outstanding - diluted 31,416,285 31,068,833 31,212,634 31,136,538 (1). Revenues from product sales are as follows: Laser revenues $17,417,235 $14,275,623 $61,454,247 $46,812,834 Per procedure disposable patient interface revenues 16,713,662 11,036,408 59,545,682 39,908,016 Maintenance revenues 3,268,973 2,049,068 10,926,805 7,711,985 $37,399,870 $27,361,099 $131,926,734 $94,432,835 (2). Amounts include stock-based compensation, as follows: Costs of goods sold $170,334 $18,290 $613,780 $104,516 Research and development 512,317 509,273 1,771,339 702,688 Selling, general and administrative 1,382,889 365,044 4,589,314 1,290,873 $2,065,540 $892,607 $6,974,433 $2,098,077 IntraLase Corp. Condensed Consolidated Balance Sheet December 31, December 31, 2006 2005 Assets: Cash, cash equivalents and marketable securities $81,597,242 $46,198,665 Accounts receivable, Net 26,879,021 13,575,776 Inventories, Net 14,685,136 13,471,961 Other current assets 9,826,095 3,190,412 Total current assets 132,987,494 76,436,814 Marketable securities 22,000,000 44,000,000 Other long-term assets 32,676,612 19,190,743 Total long-term assets 54,676,612 63,190,743 Total $187,664,106 $139,627,557 Liabilities and Stockholders' Deficit: Total current liabilities $29,105,041 $16,510,633 Total long-term liabilities 4,559,126 5,144,360 Total liabilities 33,664,167 21,654,993 Stockholders' equity 153,999,939 117,972,564 Total $187,664,106 $139,627,557 DATASOURCE: IntraLase Corp. CONTACT: Krista Mallory, Director, Investor Relations and Corporate Communications of IntraLase Corp., +1-949-859-5230, ext. 260, Web site: http://www.intralase.com/

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