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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

or

For the transition period from                      to

AMERICAN MEDICAL SYSTEMS HOLDINGS, INC.

952-930-6000

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

     As of May 1, 2003, there were 32,731,615 shares of the registrant’s $.01 par value Common Stock outstanding.

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INDEX

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PART I. FINANCIAL INFORMATION

ITEM. 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS
(In thousands)

The accompanying notes are an integral part of the consolidated financial statements.

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STATEMENTS OF OPERATIONS
(In thousands)

The accompanying notes are an intergral part of the consolidated financal statements.

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STATEMENTS OF CASH FLOWS
(In thousands)

The accompanying notes are an integral part of the consolidated financial statements.

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AMERICAN MEDICAL SYSTEMS HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.     Basis of Presentation

The consolidated financial statements included in this Form 10-Q have been prepared by American Medical Systems Holdings Inc. (the Company), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to these rules and regulations. The year-end balance sheet was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. These unaudited consolidated interim financial statements should be read in conjunction with the Company’s consolidated financial statements and related notes included in its Annual Report on Form 10-K for 2002. All amounts are in thousands, except per share data.

These statements reflect, in management’s opinion, all adjustments (which include only normal, recurring adjustments) necessary for a fair presentation of the financial position and the results of operations and cash flows for the periods presented. The results of operations for any interim period may not be indicative of results for the full year.

2.     Stock-Based Compensation

The Company has one stock-based employee compensation plan. The Company accounts for this plan under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. The exercise price of the Company’s employee stock options generally equals the market price of the underlying stock on the date of grant for all options granted, and thus, under APB 25, no compensation expense is recognized. However, during 2000, the Company recognized deferred compensation of $1.4 million, reflecting the excess of the fair value of the underlying stock on the date of grant over the exercise price. The deferred compensation is being amortized over vesting periods of two to four years.

The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation.

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3.     Earnings per Share

The following table presents information necessary to calculate basic and diluted earnings per common share and common share equivalents for the three months through March, 2002 and 2003.

4.     Inventories

Inventories consist of the following:

5.     Warranties

The Company adopted Financial Accounting Standards Board Interpretation No. 45 “Guarantor’s accounting and disclosure requirements for guarantees, including indirect indebtedness to others” (FIN 45), during the first quarter of 2003. FIN 45 requires disclosures concerning the Company’s obligations under certain guarantees.

Many of the Company’s products are sold with warranty coverage for periods ranging from one year up to the patients lifetime. Replacement product is covered under the terms of the warranty agreement. The amount of the accrued warranty allowance is the estimate of the expected future cost of honoring our warranty obligation. Factors influencing this estimate include historical claim rates, changes in product performance, the frequency of use by the patient, and the patient’s performance expectations. Product reliability is a function of raw material properties, manufacturing processes, and surgical technique. Changes in warranty allowances during the three months ended March 2003 were as follows:

6.     Acquisition

During this quarter the Company completed a merger with Cryogen, Inc. under which Cryogen became a wholly-owned subsidiary of the Company. In conjunction with the merger, the Company paid the former shareholders of Cryogen $36.2 million and in addition, paid $3.8 million in acquisition-related costs of the sellers. In addition to the initial consideration for the CryoGen acquisition, CryoGen’s former shareholders may receive an earnout payment equal to three times our

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sales of CryoGen’s products during any four consecutive company fiscal quarters ending three years after closing, less $40 million. If our net product revenues attributable to sales of Cryogen’s products during any such four-quarter period do not exceed $13.3 million, no earnout payment will be made. The maximum amount of the earnout payment is $110 million. The primary purpose of the merger was to gain access to Cryogen’s products and technology. The consolidated financial statements of the Company for the three-month period ended March 29, 2003, include the financial results of Cryogen from December 30, 2002, the date the purchase transaction was effective, and which represents the date when the Company effectively took control of Cryogen.

Pending completion of a formal valuation study, the Company has recorded goodwill of approximately $39.4 million, including approximately $0.7 million in acquisition costs consisting of legal, accounting, and other various expenses. The allocation of the purchase price for the acquisition and other purchase accounting adjustments is as follows:

7.     Comprehensive Income

Comprehensive income for the Company is net income adjusted for changes in value of derivative financial instruments, unrealized gains and losses on marketable securities, and foreign currency translation. Comprehensive income for the three months through March, 2002, and 2003, was:

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The following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “expect,” “believe,” “anticipate,” or “estimate,” identify such forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially from those expressed in such forward-looking statements. Some of the factors that could cause such material differences are identified in “Certain Important Factors”. We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future events, or otherwise. You are advised, however, to consult any future disclosures we make on related subjects in future filings with the SEC.

Critical Accounting Policies and Estimates

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Management’s discussion and analysis of financial condition and results of operations are based upon the consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect (1) the reported amounts of assets, liabilities, revenues, and expenses; and (2) the related disclosure of contingent assets and liabilities. At each balance sheet date, we evaluate our estimates, including but not limited to, those related to accounts receivable and sales return obligations, inventories, long-lived assets, warranty, legal contingencies, and income taxes. The critical accounting policies that are most important in fully understanding and evaluating the financial condition and results of operations are discussed in our Form 10-K on file with the SEC.

RESULTS OF OPERATIONS

Overview

We manufacture and market a broad range of proprietary products for erectile restoration; other men’s health, including products for incontinence, stricture, and prostate disease; and women’s health, including products for incontinence, menorrhagia and other pelvic floor disorders. Our product development and acquisition strategy has focused on expanding our product offering and on adding less-invasive medical devices for surgeons and their patients. We estimate that nearly 18 million men and women are potential candidates for treatment with our products, although only a very small share of them ever seek treatment.

Results of Operations

The following is a discussion of the results of our operations and financial condition for the first fiscal quarter of 2003 compared to the first fiscal quarter of 2002.

Net Sales. Our erectile restoration products include several types of inflatable and non-inflatable functioning penile erectile tissue. In April 2003, we expanded our range by purchasing the Dura II line of prostheses from Endocare. For male urinary control we sell our Artificial Urinary Sphincter and the InVance sling system. For urinary stricture and BPH symptoms we sell urethral stents, surgical resection loops, and a chemical ablation system (in clinical trials in the U.S.) Our women’s health products include several products for urinary control (Artifical Urinary Sphincter, InFast, Sparc and Monarc), the Her Option products recently added with the CryoGen acquisition, and a variety of other products for pelvic vault repairs.

The following table compares net sales of our product lines between 2002 and 2003.

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Approximately $0.9 million of the increase from 2002 to 2003 was due to changes in currency exchange rates, mainly the Euro. If these currency exchange rates in 2003 were the same as in 2002 and we had not otherwise raised prices, total sales in the first quarter of 2003 would have been $38.4 million, an increase of $3.7 million, or 10.7 percent.

Erectile restoration sales were up slightly due to price and mix changes. The 13.9 percent increase in male urinary control sales was due to a combination of unit increases, especially in the InVance sling system, and favorable currency exchange rates on sales of products in Europe. The 27.1 percent decrease in sales of other men’s health products was due to lower demand for our urethral stents for BPH. The 48.4 percent increase in sales of women’s health products was primarily due to greater unit sales of SPARC. During the quarter, we introduced our new subfascial hammock system (Monarc) to control stress urinary incontinence in two European countries. We expect to expand availability throughout the year, launching it in the United States mid-year. In 2003, women’s health products included the Her Option system which was acquired with CryoGen at the beginning of the year. Her Option is used to cure excessive uterine bleeding. Sales of these products were $0.7 million, net of allowance for returns in this quarter, and are expected to be more than $7.0 million during the full year 2003.

The following table compares the dollar and percentage change in the Statement of Operations between 2002 and 2003.

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Cost of goods sold. Cost of goods sold declined slightly as a result of supplier and mix changes. Cost of goods sold as a share of sales has benefited from relatively fixed overhead costs being spread over higher manufacturing volumes. In addition, during the first quarter of 2003, sales to outside international distributors, which generally are sold at lower prices, were a smaller percentage of total sales than in the first quarter of 2002. Future costs of goods sold will depend on production levels and product mix.

Marketing and selling. Most of the increase in marketing and selling costs, compared to the first quarter of 2002, were to support marketing and selling of Her Option product, which we have been selling since the acquisition of CryoGen. Other selling and marketing expenses increased by 20 percent of the sales increase from non-CryoGen products. We expect selling and marketing expense to continue to increase at about 20 percent of the sales increase going forward.

General and administrative. Cost increases in 2003 compared to 2002 were due to approximately $0.5 million of additional costs related to the CryoGen acquisition on December 30, 2002, and $0.4 million of costs related to information technology to support the extension of systems to our European offices. We expect spending in general and administrative to increase in 2003 compared to 2002 due to the acquisition of CryoGen.

Research and development. Research and development expense includes costs to develop and improve current and possible future products plus the costs for regulatory and clinical activities for these products. Approximately a third of the increase over 2002 was for Her Option products, and the remainder was to develop and test other products. We expect total spending in research and development to increase in 2003 compared to 2002 and, longer term, to be in the range of 8 to 10 percent of net sales. In addition, costs in this area could vary as a result of spending on purchased technologies as new opportunities are discovered.

Royalty income. Most of our royalty income is from the license of our stent-delivery technology for medical use outside urology.

Other income. On January 1, 2002, we terminated the AMS Retirement Annuity Plan. In conjunction with this termination, we contributed approximately $5.8 million to the pension trust and recorded a gain on pension plan termination of $0.7 million. Substantially all of the remainder of other income and expense relates to exchange gains and losses resulting from the weakening and strengthening of foreign currencies, mainly the Euro, against the U.S. dollar and relate to translating foreign denominated inter-company receivables to current rates.

Interest income. Interest income was lower in 2003 than in 2002 due to lower levels of investments and returns. Investment levels were reduced by approximately $40.0 million used for the CyroGen acquisition.

Net income. Increases in net income in 2003 resulted from the increase in sales while maintaining control over operating costs, all of which are described above. Net income in 2003 was net of after-tax losses from the newly acquired CyroGen operations, without which net income would have increased 34 percent to $6.7 million, or $.20 per share.

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Liquidity and Capital Resources

Cash and cash equivalents were $42.8 million as of March 29, 2003, compared to $79.4 million as of December 28, 2002. This decrease is due primarily to the cash paid for the CryoGen acquisition, offset somewhat by cash from operations. Each of these are described below.

Cash flows from operating activities. Cash flow provided by operating activities totaled $4.5 million in the first quarter of fiscal 2003. Net income plus the non-cash expenses of depreciation and amortization totaled $7.9 million. Changes in operating assets and liabilities were a use of cash totaling approximately $3.6 million

Cash flows from investing activities. On December 30, 2002, we acquired CryoGen, Inc. for cash payments totaling approximately $36.2 million paid to CryoGen shareholders and $3.8 million paid to CryoGen creditors. In addition, we incurred approximately $0.7 million of capitalized acquisition expenses. During the first quarter of 2003, we purchased equipment for $0.7 million and we expect capital expenditures to continue in the range of $2.0 to $3.0 million annually.

Cash flows from financing activities. We have a senior credit facility, which consists of term debt and a $15 million revolving line of credit. The senior credit facility expires in March 2006. This facility is secured by substantially all of our assets, and contains restrictions concerning the payment of dividends, incurrence of additional debt, and capital expenditures. In addition, we are subject to, and in compliance with, certain financial covenants including ratios related to fixed charges coverage and leverage. During the first quarter of 2003, we made a regular principal payment of $1.4 million bringing the quarter-end balance to $22.6 million. In addition to the above senior credit facility payment made during the first quarter of 2003, we paid $0.6 million of debt acquired as part CryoGen on December 30, 2002.

The following table sets forth the future payment obligations under our senior credit facility:

During the first quarter of 2003, we received $0.6 million from issuing common stock related to our Employee Stock Purchase Plan and exercises of options under our Equity Incentive Plan.

Cash Commitments

In addition to the initial consideration for the CryoGen acquisition, CryoGen’s former shareholders may receive an earnout payment equal to three times our sales of CryoGen’s products during any four consecutive company fiscal quarters ending three years after closing, less $40 million. If our net product revenues attributable to sales of Cryogen’s products during any such four-quarter period do not exceed $13.3 million, no earnout payment will be made. The maximum amount of the earnout payment is $110 million. This transaction is more fully described in our form 8-K filed with the SEC on January 6, 2003.

On April 7, 2003 shortly after the close of our first quarter, we acquired the Dura II line of erectile restoration products from Endocare, Inc. for $2.0 million. The transaction includes all related intellectual property, production equipment, and current Dura II inventory. See Exhibit 10.2 as filed with this document.

We believe that funds generated from operations, together with our balances in cash and cash equivalents and funds available under our senior credit facility, will be sufficient to finance current operations and planned capital expenditure requirements for at least the next 12 months.

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Certain Important Factors

There are several important factors that could cause our actual results to differ materially from our anticipated results. These factors, and their impact on the success of our operations and our ability to achieve our goals, include the following:

Continued Physician Use and Endorsement of our Products

In order for us to sell our products, physicians must recommend and endorse them. We may not obtain the necessary recommendations or endorsements from physicians. Many of the products we acquired or are developing are based on new treatment methods. Acceptance of our products is dependent on educating the medical community as to the distinctive characteristics, perceived benefits, clinical efficacy and cost-effectiveness of our products compared to competitive products, and on training physicians in the proper application of our products. In particular, at the end of 2002, we introduced the Monarc sub-fascial hammock for urinary incontinence, and with the acquisition of CryoGen Inc., the Her Option therapy for excessive uterine bleeding. We believe both of these products address major market opportunities, and we have committed significant marketing and selling resources to making this therapy available to physicians and their patients. If we are unsuccessful in marketing either of them, our sales and earnings may be below expectations.

Successful Introduction of New Products and Product Improvements

As part of our growth strategy, we intend to introduce a number of new products and product improvements. If we do not timely introduce these new products and product improvements, or they are not well-accepted by the market, our growth will suffer.

Continued Use of Non-Invasive Treatment Alternatives

We predominantly sell devices and kits for invasive or minimally invasive surgical procedures. If patients do not accept our products, our sales may decline. Patient acceptance of our products depends on a number of factors, including the failure of non-invasive therapies, the degree of invasiveness involved in the procedures using our products, the rate and severity of complications from the procedures using our products and other adverse side effects from the procedures using our products. Patients are more likely first to consider non-invasive alternatives to treat their urological disorders. The introduction of new oral medications or other less-invasive therapies may cause our sales to decline.

Actions Related to Reimbursement for our Products

Our revenues depend largely on U.S. and O.U.S. government health care programs and private health insurers reimbursing patients’ medical expenses. Physicians, hospitals, and other health care providers may not purchase our products if they do not receive satisfactory reimbursement from these third-party payors for the cost of procedures using our products. Effective January 1, 2003, the Centers for Medicare and Medicaid Services again reduced the hospital payment rates for certain procedures in which our products are used. We do not believe these reductions will have a material adverse effect on our sales or earnings in 2003, but we cannot assure you that hospitals which treat Medicare and Medicaid patients will not prohibit physicians from performing procedures which use our products. If any hospital were to prohibit these procedures, sales of our products would decline unless physicians who had been performing these procedures in that hospital were able to obtain surgical privileges in other hospitals which did allow these procedures. Further, changes in the relative reimbursement rates for different products may cause hospitals to encourage physicians to use lower cost products from our product lines, thereby having a material adverse effect on our sales and earnings.

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Costs of Physician Malpractice Insurance

Most of our products are used by physicians who are required to maintain certain levels of medical malpractice insurance to maintain their hospital privileges. As the cost of this insurance increases, certain physicians who have used our products to treat their patients may stop performing surgeries. Unless these patients who would have been treated by these physicians are referred to other physicians, sales of our products will decline.

Potential Product Recalls

In the event that any of our products prove to be defective, we could voluntarily recall, or the FDA could require us to redesign or implement a recall of, any defective product. There is a possibility that we may recall products in the future and that future recalls could result in significant costs to us and in significant negative publicity which could harm our ability to market our products in the future.

Increased Supply of Sling Material

In the past we have provided human cadaveric dermis as a service in conjunction with the sale of our sling procedure kits for urinary incontinence. Currently, the supply of human tissue is not sufficient to meet demand. We are supplying porcine dermis that can be used with our sling procedure kits and are developing new sources of supply for human dermis, but we cannot assure you that these supplies will be sufficient to meet our customers’ demands and sales of certain sling procedure kits may continue to decline.

Product Liability Lawsuits

The manufacture and sale of medical devices exposes us to significant risk of product liability claims. In the past, we have had a number of product liability claims relating to our products. In the future, we may be subject to additional product liability claims, some of which may have a negative impact on our business. Additionally, we could experience a material design or manufacturing failure in our products, a quality system failure, other safety issues, or heightened regulatory scrutiny that would warrant a recall of some of our products. Our existing product liability insurance coverage may be inadequate to protect us from any liabilities we might incur. If a product liability claim or series of claims is brought against us for uninsured liabilities or in excess of our insurance coverage, our business could suffer. In addition, a recall of some of our products, whether or not the result of a product liability claim, could result in significant costs to us.

Acquisition Integration

On December 30, 2002, we acquired CryoGen Inc., which we are maintaining as a San Diego-based subsidiary with full responsibility for product development and manufacturing of all components and final assembly and testing of all of the components for the Her Option system for endometrial ablation, including product enhancements and new products based on CryoGen technologies. Failure to retain and develop the CryoGen workforce, or establish and maintain appropriate communications, performance expectations, regulatory compliance procedures, accounting controls, and reporting procedures could adversely affect our future sales and earnings.

Seasonality

Our business is seasonal, with the third quarter of each year typically having the lowest sales and earnings, and fourth quarter of each year typically having the highest sales and earnings. There can be no assurance that future seasonal fluctuations will not vary from this pattern or that these or other variations will not adversely affect our business and results of operations.

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ADDITIONAL INFORMATION ON AMS

We are currently subject to the informational requirements of the Securities Exchange Act of 1934, as amended. As a result, we are required to file periodic reports and other information with the SEC, such as annual, quarterly, and current reports, and proxy and information statements. You are advised to read this Form 10-Q in conjunction with the other reports, proxy statements, and other documents we file from time to time with the SEC. If you would like more information regarding AMS, you may read and copy the reports, proxy and information statements and other documents we file with the SEC, at prescribed rates, at the SEC’s public reference room at 450 Fifth Street, NW, Washington, DC 20549. You may obtain information regarding the operation of the SEC’s public reference rooms by calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to the public free of charge at the SEC’s website. The address of this website is http://www.sec.gov.

We also make all of our SEC filings, such as our annual, quarterly and current reports and proxy statements, available to the public free from charge on our website www.AmericanMedicalSystems.com. Our website is not intended to be, and is not, a part of this Quarterly Report on Form 10-Q. We place our SEC filings on our website on the same day as we file such material with the SEC. In addition, we will provide electronic or paper copies of our SEC filings (excluding exhibits) to any AMS stockholder free of charge upon receipt of a written request for any such filing. All requests for our SEC filings should be sent to the attention of Investor Relations at American Medical Systems, Inc., 10700 Bren Road West, Minnetonka, Minnesota 55343.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Hedging. We hedged a portion of our original $65.0 million variable rate term note, as required by our senior credit facility, by entering into an interest rate swap agreement in which we agreed to exchange, at specified intervals, the calculated difference between the fixed interest rate of the swap and the variable interest rate on a portion of our debt. This interest rate swap agreement expires June 30, 2003. We expect that pre-tax costs totaling approximately $0.4 million, which are recorded in accumulated other comprehensive income at March 29, 2003, and represent the difference between the fixed rate of the swap agreement and variable interest of the term note, will be recognized within the next twelve months as part of interest expense. At March 29, 2003, the fair value of the interest rate swap, based upon quoted market prices for contracts with similar maturities, was approximately $0.4 million.

Currency fluctuations. Our operations outside of the United States are maintained in their local currency. All assets and liabilities of our international subsidiaries are translated to U.S. dollars at quarter-end exchange rates. Translation adjustments arising from the use of differing exchange rates are included in accumulated other comprehensive income in stockholders’ equity.

Inflation. We do not believe that inflation has had a material effect on our results of operations in recent years and periods. There can be no assurance, however, that our business will not be adversely affected by inflation in the future.

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PART II. OTHER INFORMATION

ITEM 4. CONTROLS AND PROCEDURES

a)		Evaluation of disclosure controls and procedures. Our chief executive officer and chief financial officer, after evaluating the effectiveness of the Company’s “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15-d-14(c)) as of a date (the “Evaluation Date”) within 90 days before the filing date of this quarterly report on Form 10-Q, have concluded that, as of the Evaluation Date, our disclosure controls and procedures were adequate and designed to ensure that material information relating to us and our consolidated subsidiaries would be made known to them by others within those entities.
b)		Changes in internal controls. There were no significant changes in our internal controls or, to our knowledge, in other factors that could significantly affect our disclosure controls and procedures subsequent to the Evaluation Date.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a) Exhibits

b) Reports on Form 8-K

			On January 6, 2003, we filed a Current Report on Form 8-K reporting that we had completed our acquisition of CryoGen, Inc.
			On March 17, 2003, we filed a Current Report on Form 8-K with the pro forma financial statements relating to our acquisition of CryoGen, Inc.
			On April 28, 2003, we filed a Current Report on Form 8-K furnishing our press release dated April 23, 2003, announcing results of operations for the quarter ended March 29, 2003.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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CERTIFICATIONS

Certification by Chief Executive Officer

     I, Douglas W. Kohrs, certify that:

     1.     I have reviewed this quarterly report on Form 10-Q of American Medical Systems Holdings, Inc.;

     2.     Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

     3.     Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operation and cash flows of the registrant as of, and for, the periods presented in this annual report;

     4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

	a)		Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
	b)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
	c)		Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

     5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

	a)		All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

     6.     The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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Certification by Chief Financial Officer

I, M. James Call, certify that:

     1.     I have reviewed this quarterly report on Form 10-Q of American Medical Systems Holdings, Inc.;

     2.     Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

     3.     Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operation and cash flows of the registrant as of, and for, the periods presented in this annual report;

     4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

	a)		Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
	b)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
	c)		Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

     5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

	a)		All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

     6.     The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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