BEAM...earnings...
Wednesday July 28, 3:08 pm Eastern Time
Company Press Release
Summit Technology Announces Second Quarter
Financial Results Led by Record Procedure Volume
Growth
Procedure Volume Up 100% Over Second Quarter 1998
WALTHAM, Mass.--(BUSINESS WIRE)--July 28, 1999--Summit Technology, Inc. (NASDAQ:BEAM - news) said today
that its revenues for the three months ended June 30, 1999 increased 14% to $27.4 million from $24.1 million for the three
months ended June 30, 1998. The second quarter 1999 results include the effects of operations of Autonomous Technologies
Corporation from the date of acquisition which was April 29, 1999. In connection with the acquisition, Summit recorded
one-time charges of $19.8 million for acquired in-process research and development and $2.8 million to write-down inventory
to its net realizable value. Excluding one-time charges, the net loss for the second quarter of 1999 was $1.3 million, or $.03 per
diluted share. The net loss for the second quarter of 1999, including one-time charges was $23.9 million, or $.61 per diluted
share, compared to net income of $31.2 million, or $1.00 per diluted share, for the second quarter of 1998. In the second
quarter of 1998, Summit received a $29.9 million litigation settlement, net of taxes and related expenses.
Revenues for the six months ended June 30, 1999 were $53.1 million, an increase of 15% over revenues of $46.1 million for
the six months ended June 30, 1998. The net loss for the first half of 1999, including the one-time charges described above,
was $21.5 million, or $.61 per diluted share, compared to net income of $21.5 million, or $0.69 per diluted share for the first
half of 1998. The 1998 first half results also include a one-time non-cash charge of $10.1 million, or $0.32 per share,
representing the cumulative effect of adopting a new accounting principle as of January 1, 1998.
Second quarter 1999 procedure volume in the US, measured by the Company's sale of OmniCards, increased 100% over the
second quarter of 1998 and 14% over the first quarter of 1999.
Last week the FDA Ophthalmic Advisory Panel recommended approval of the Company's PMA application for treatment of
high myopia and high astigmatism with LASIK using the Summit Apex Plus Excimer Laser Workstation. When approved by
the FDA, this would give Summit the broadest indication in the US marketplace for the treatment of myopia with or without
astigmatism. The FDA also granted Summit an IDE to initiate studies for customized ablations using its patented
CustomCornea® measurement device and its LADARVision system. Summit is the only manufacturer to offer a choice of two
FDA-approved excimer laser systems.
''We are pleased with the increase in procedure volume we experienced this quarter,'' stated Robert J. Palmisano, Chief
Executive Officer of Summit. ''We recently announced a public offering to sell 4,000,000 shares of our common stock, and
with the proceeds we will continue to execute our business plan to grow our market share and regain leadership in this
industry,'' commented Palmisano. ''We believe that with Summit's leading technology, customer focus and a broadening of
FDA approvals, procedures performed on our systems will continue to grow,'' he concluded.
Founded in 1985, Summit Technology is a leading developer, manufacturer and marketer of ophthalmic laser systems and
related products designed to correct common vision disorders such as nearsightedness, farsightedness and astigmatism. In
1995, Summit was the first excimer laser company to receive FDA approval for its excimer laser system for the correction of
mild to moderate myopia in the U.S. Autonomous, a wholly owned subsidiary, is engaged in the design and development of
next-generation excimer laser instruments for laser refractive surgery. The Company's LADARVision System combines laser
radar eye tracking with narrow beam shaping technology. In addition, through its wholly owned subsidiary, Lens Express,
Summit sells contact lenses and related products.
Cautionary Statement under ''Safe harbor'' Provisions of the Private Securities Litigation Reform Act of 1995: Statements
made in this news release contain information about the Company's future business prospects. These statements may be
considered ''forward looking''. These statements are subject to risks and uncertainties that could cause actual results to differ
materially from those set forth in or implied by such forward looking statements. Among these risks and uncertainties are:
competition from other manufacturers and vision correction technologies, delays in obtaining regulatory approvals, challenges to
patents owned and licensed by the Company affecting per procedure revenues, adverse litigation results, difficulties in
commercializing the LADARVision system and dependence on sole source suppliers. For additional information and risks
associated with the Company's business prospects and future operating results, please refer to Summit's public filings with the
Securities and Exchange Commission.
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Summit Technology, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statement of Operations
(in thousands, except per share amounts)
Three Months Six Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
Revenues:
Systems $ 4,394 $ 5,395 $ 7,729 $ 8,683
License fees,
service and other 11,300 7,459 21,485 14,294
Contact lens and
related products 11,707 11,246 23,871 23,163
Total revenues 27,401 24,100 53,085 46,140
Cost of revenues:
Cost of revenues 14,716 14,155 28,094 27,463
Inventory write-down 2,800 -- 2,800 --
Total cost of revenues 17,516 14,155 30,894 27,463
Gross profit 9,885 9,945 22,191 18,677
Operating expenses:
Selling, general
and administrative 10,512 7,242 19,137 14,417
Research, development
and regulatory 3,844 1,761 5,930 3,599
Acquired in-process
research and development 19,800 -- 19,800 --
Total operating expenses 34,156 9,003 44,867 18,016
Operating income (loss) (24,271) 942 (22,676) 661
Litigation settlement,
net of related expenses -- 34,386 -- 34,386
Interest income 626 938 1,712 1,866
Interest expense (82) (208) (196) (448)
Other income (expense) (116) 46 (232) 40
Income (loss) before
provision for
income taxes (23,843) 36,104 (21,392) 36,505
Provision for
income taxes 92 4,896 157 4,920
Income (loss) before
cumulative effect
of accounting
principle change (23,935) 31,208 (21,549) 31,585
Cumulative effect of
accounting principle
change, net of tax -- -- -- (10,103)
Net income (loss) $(23,935) $ 31,208 $(21,549) $ 21,482
Basic and diluted earnings (loss) per share:
Income (loss) before
cumulative effect
of accounting
principle change $ (0.61) $ 1.00 $ (0.61) $ 1.01
Cumulative effect of
accounting principle
change, net of tax -- -- -- (0.32)
Net income (loss)
per share $ (0.61) $ 1.00 $ (0.61) $ 0.69
Weighted average number of common shares:
Basic 39,362 31,277 35,219 31,288
Effect of dilutive
options outstanding -- 50 -- 31
Diluted 39,362 31,327 35,219 31,319
Summit Technology, Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
June 30, December 31,
1999 1998
ASSETS
Current assets:
Cash and cash equivalents $ 11,845 $ 31,314
Short-term investments 15,548 33,295
Receivables, net of allowances 16,421 12,764
Inventories 20,581 17,403
Other current assets 3,341 5,965
Total current assets 67,736 100,741
Long-term investments 66,139 25,253
Property and equipment, net 13,634 8,802
Patents and other intangibles, net 10,321 7,497
Purchased technologies, net 27,788 --
Goodwill, net 54,966 --
Other assets 3,773 2,632
Total assets $ 244,357 $ 144,925
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,226 $ 4,132
Accrued expenses 8,580 5,081
Current maturities of long-term debt 2,720 6,431
Deferred revenue 6,212 6,144
Total current liabilities 25,738 21,788
Deferred revenue - noncurrent 4,033 3,653
Deferred tax liabilities 17,630 --
Long-term debt, less current maturities 202 150
Total liabilities 47,603 25,591
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value
Authorized 5,000,000 shares,
none issued -- --
Common stock, $.01 par value
Authorized 100,000,000 shares;
issued 42,719,730 shares in 1999
and 31,322,880 shares in 1998;
outstanding 42,555,015 shares
in 1999 and 31,153,765 in 1998 427 314
Additional paid-in capital 209,570 149,482
Accumulated deficit (41,768) (20,219)
Accumulated other comprehensive income (loss) 29,333 (9,411)
Treasury stock, at cost, 164,715 shares
in 1999 and 169,115 shares in 1998 (808) (832)
Total stockholders' equity 196,754 119,334
Total liabilities and stockholders' equity $ 244,357 $ 144,925
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