##### 



EXHIBIT 99.1 UNAUDITED PRO FORMA FINANCIAL INFORMATION The following unaudited pro forma condensed combined financial statements are
presented for illustrative purposes only and are not necessarily indicative of
the combined financial position or results of operations for future periods or
the financial position or results of operations that actually would have been
realized had American Medical Systems Holdings, Inc. and TherMatrx, Inc. been a
combined company during the specified periods. The unaudited pro forma
condensed combined financial statements, including the related notes, are
qualified in their entirety by reference to, and should be read in conjunction
with, the historical financial statements and related notes of American Medical
Systems Holdings, Inc., included in its Annual Report on Form 10-K and
Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission
on March 18, 2004, and August 12, 2004, respectively, and the historical
audited financial statements and related notes of TherMatrx, Inc., included in
the Form 8-K/A filed September 28, 2004, and as amended in the Form 8-K/A filed
October 8, 2004. The following unaudited pro forma condensed financial statements are accounted
for in accordance with Statement of Financial Accounting Standards No. 141,
Business Combinations. The pro forma adjustments are based upon preliminary
estimates and available information. Final purchase accounting adjustments may
differ from the pro forma adjustments presented. The pro forma condensed
combined financial statements are based on the respective historical financial
statements of American Medical Systems Holdings, Inc. and TherMatrx, Inc. and
assume the acquisition took place on January 4, 2004, and December 29, 2002,
for the statements of operations, and July 3, 2004, for the balance sheet. The
pro forma adjustments are based on the estimates and assumptions set forth in
the notes to such pro forma financial statements.




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##### 



American Medical Systems Holdings, Inc.
Pro Forma Condensed Balance Sheet
Unaudited AMS
    
    TherMatrx
    
    Pro Forma
    
    
    
    
    
    Pro FormaJuly 3, 2004
    
    June 30, 2004
    
    Adjustments
    
    
    
    
    
    CombinedAssetsCurrent assetsCash and cash equivalents
    
    $
    65,891
    
    
    $
    273
    
    
    $
    (42,676
    )
    
    
    (1
    )
    
    $
    23,488Short term investments
    
    
    11,349
    
    
    
    3,761
    
    
    
    
    
    
    
    
    
    
    
    15,110Accounts receivable, net
    
    
    36,922
    
    
    
    3,092
    
    
    
    
    
    
    
    
    
    
    
    40,014Inventories, net
    
    
    17,600
    
    
    
    2,542
    
    
    
    31
    
    
    
    (2
    )
    
    
    20,173Deferred income taxes
    
    
    6,126
    
    
    
    
    
    
    
    78
    
    
    
    (8
    )
    
    
    6,204Other current assets
    
    
    1,904
    
    
    
    174
    
    
    
    (25
    )
    
    
    (2
    )
    
    
    2,053Total current assets
    
    
    139,792
    
    
    
    9,842
    
    
    
    (42,592
    )
    
    
    
    
    
    
    107,042Property, plant and equipment, net
    
    
    23,471
    
    
    
    222
    
    
    
    (29
    )
    
    
    (2
    )
    
    
    23,664Goodwill, net
    
    
    98,989
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    98,989Intangibles, net
    
    
    15,215
    
    
    
    1,850
    
    
    
    29,150
    
    
    
    (3
    )
    
    
    46,215Deferred income taxes
    
    
    12,783
    
    
    
    
    
    
    
    (7,242
    )
    
    
    (8
    )
    
    
    5,541Investment in technology and other assets
    
    
    5,260
    
    
    
    18
    
    
    
    
    
    
    
    
    
    
    
    5,278Total assets
    
    $
    295,510
    
    
    $
    11,932
    
    
    $
    (20,713
    )
    
    
    
    
    
    $
    286,729Liabilities and Stockholders EquityCurrent liabilitiesAccounts payable
    
    $
    3,648
    
    
    $
    247
    
    
    $
    
    
    
    
    
    
    
    $
    3,895Accrued compensation expenses
    
    
    10,290
    
    
    
    916
    
    
    
    
    
    
    
    
    
    
    
    11,206Accrued warranty expense
    
    
    1,319
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,319Other accrued expenses
    
    
    5,459
    
    
    
    1,127
    
    
    
    
    
    
    
    
    
    
    
    6,586Current portion of notes payable
    
    
    7,363
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,363Total current liabilities
    
    
    28,079
    
    
    
    2,290
    
    
    
    
    
    
    
    
    
    
    
    30,369Long-term notes payable
    
    
    5,523
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,523Contingent liability on acquisition
    
    
    
    
    
    
    
    
    
    
    23,930
    
    
    
    (5
    )(8)
    
    
    23,930Stockholders equityCommon stock
    
    
    336
    
    
    
    6,553
    
    
    
    (6,553
    )
    
    
    (4
    )
    
    
    336Preferred stock
    
    
    
    
    
    
    6,500
    
    
    
    (6,500
    )
    
    
    (4
    )
    
    
    Additional paid-in capital
    
    
    208,201
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    208,201Accumulated other comprehensive income
    
    
    584
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    584Retained earnings (accumulated deficit)
    
    
    52,787
    
    
    
    (3,411
    )
    
    
    (31,590
    )
    
    
    (4
    )(8)
    
    
    17,786Total stockholders equity
    
    
    261,908
    
    
    
    9,642
    
    
    
    (44,643
    )
    
    
    
    
    
    
    226,907Total
liabilities and stockholders equity
    
    $
    295,510
    
    
    $
    11,932
    
    
    $
    (20,713
    )
    
    
    
    
    
    $
    286,729
 See accompanying notes to unaudited pro forma combined financial statements.




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##### 



American Medical Systems Holdings, Inc.
Pro Forma Condensed Statement of Operations
Unaudited AMS
    
    TherMatrxSix Months Ended
    
    Pro Forma
    
    
    
    
    
    Pro FormaJuly 3, 2004
    
    June 30, 2004
    
    Adjustments
    
    
    
    
    
    CombinedNet sales
    
    $
    96,406
    
    
    $
    9,706
    
    
    $
    
    
    
    
    
    
    
    $
    106,112Operating expensesCost of goods sold
    
    
    17,977
    
    
    
    2,160
    
    
    
    
    
    
    
    
    
    
    
    20,137Marketing and selling
    
    
    33,743
    
    
    
    3,501
    
    
    
    
    
    
    
    
    
    
    
    37,244Research and development
    
    
    7,161
    
    
    
    290
    
    
    
    
    
    
    
    
    
    
    
    7,451General and administrative
    
    
    10,086
    
    
    
    1,426
    
    
    
    
    
    
    
    
    
    
    
    11,512Amortization of intangibles
    
    
    2,119
    
    
    
    
    
    
    
    1,550
    
    
    
    (6
    )
    
    
    3,669Total operating expenses
    
    
    71,086
    
    
    
    7,377
    
    
    
    1,550
    
    
    
    
    
    
    
    80,013Operating income
    
    
    25,320
    
    
    
    2,329
    
    
    
    (1,550
    )
    
    
    
    
    
    
    26,099Other income (expense)Royalty income
    
    
    921
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    921Interest income
    
    
    310
    
    
    
    9
    
    
    
    (424
    )
    
    
    (7
    )
    
    
    (105
    )Interest expense
    
    
    (449
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (449
    )Other income (expense)
    
    
    (187
    )
    
    
    360
    
    
    
    
    
    
    
    
    
    
    
    173Total other income (expense)
    
    
    595
    
    
    
    369
    
    
    
    (424
    )
    
    
    
    
    
    
    540Income before income taxes
    
    
    25,915
    
    
    
    2,698
    
    
    
    (1,974
    )
    
    
    
    
    
    
    26,639Provision for income taxes
    
    
    9,459
    
    
    
    
    
    
    
    (720
    )
    
    
    (8
    )
    
    
    8,739Net income
    
    $
    16,456
    
    
    $
    2,698
    
    
    $
    (1,254
    )
    
    
    
    
    
    $
    17,900Net income per shareBasic
    
    $
    0.49
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    $
    0.54Diluted
    
    $
    0.47
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    $
    0.51Weighted average common sharesBasic
    
    
    33,313
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,313Diluted
    
    
    35,004
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,004
 See accompanying notes to unaudited pro forma combined financial statements.




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##### 



American medical Systems Holdings, Inc.
Pro Forma Condensed Statement of Operations
Unaudited AMS
    
    TherMatrxYear Ended
    
    Pro Forma
    
    Pro FormaJanuary 3, 2004
    
    December 31, 2003
    
    Adjustments
    
    CombinedNet sales
    
    $
    168,283
    
    
    $
    12,982
    
    
    $
    
    
    
    $
    181,265Operating expensesCost of goods sold
    
    
    27,353
    
    
    
    3,432
    
    
    
    
    
    
    
    30,785Marketing and selling
    
    
    63,324
    
    
    
    5,526
    
    
    
    
    
    
    
    68,850Research and development
    
    
    14,924
    
    
    
    821
    
    
    
    
    
    
    
    15,745General and administrative
    
    
    16,882
    
    
    
    2,415
    
    
    
    
    
    
    
    19,297Amortization of intangibles
    
    
    4,160
    
    
    
    
    
    
    
    3,100
    (6)
    
    
    7,260Total operating expenses
    
    
    126,643
    
    
    
    12,194
    
    
    
    3,100
    
    
    
    141,937Operating income
    
    
    41,640
    
    
    
    788
    
    
    
    (3,100
    )
    
    
    39,328Other income (expense)Royalty income
    
    
    2,797
    
    
    
    
    
    
    
    
    
    
    
    2,797Interest income
    
    
    476
    
    
    
    867
    
    
    
    (881
    )(7)
    
    
    462Interest expense
    
    
    (1,828
    )
    
    
    
    
    
    
    
    
    
    
    (1,828
    )Other income (expense)
    
    
    1,004
    
    
    
    (44
    )
    
    
    
    
    
    
    960Total other income (expense)
    
    
    2,449
    
    
    
    823
    
    
    
    (881
    )
    
    
    2,391Income before income taxes
    
    
    44,089
    
    
    
    1,611
    
    
    
    (3,981
    )
    
    
    41,719Provision for income taxes
    
    
    15,039
    
    
    
    
    
    
    
    (1,453
    )(8)
    
    
    13,586Net income
    
    $
    29,050
    
    
    $
    1,611
    
    
    $
    (2,528
    )
    
    $
    28,133Net income per shareBasic
    
    $
    0.88
    
    
    $
    
    
    
    $
    
    
    
    $
    0.86Diluted
    
    $
    0.85
    
    
    $
    
    
    
    $
    
    
    
    $
    0.82Weighted average common sharesBasic
    
    
    32,854
    
    
    
    
    
    
    
    
    
    
    
    32,854Diluted
    
    
    34,313
    
    
    
    
    
    
    
    
    
    
    
    34,313
 See accompanying notes to unaudited pro forma combined financial statements.




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##### 



American Medical Systems Holdings, Inc.Notes to Unaudited Pro Forma Combined Financial Statements  1.
    
    Allocation of purchase priceFor this presentation, the Company allocated the July 3, 2004 estimated
purchase price of TherMatrx, Inc. as follows: (Amounts in thousands)
    
    AmountTangible assets acquired, net of liabilities assumed
    
    $
    606In-process research and development
    
    
    35,000Developed technology, customer relationships and other intangible assets
    
    
    31,000Contingent liability on acquisition
    
    
    (23,930
    )Initial purchase price and acquisition costs
    
    $
    42,676
  The Company will make future cash payments to former Thermatrx, Inc.
shareholders, based on the combined entitys future sales of TherMatrx
products. These payments are expected to be four times projected revenues
during the earn-out period ending December 2005. The estimated value of
future payments is $125.0 million.The purchase price allocation to developed technology, customer
relationships and other intangible assets and in-process research and
development assumed was based on an independent valuation study to determine
the respective fair values. Tangible assets acquired, net of liabilities
assumed were stated at fair market value at the date of acquisition, based
on managements assessment. In accordance with purchase accounting rules,
the acquired in-process research and development of $35.0 million will be
expensed. As previously described, this amended Exhibit 99.1 has correctly
reported this charge with no related income tax benefit.2.
    
    Key to Pro Forma AdjustmentsThe unaudited pro forma condensed combined balance sheet and statements of
operations include the adjustments necessary to give effect to the purchase
and to reflect the allocation of the purchase price to the fair value of the
assets acquired as noted above, including the elimination of Thermatrx,
Inc.s equity accounts. Summarized below are the pro forma adjustments
necessary to reflect the acquisition of Thermatrx, Inc. based upon the
purchase method of accounting in accordance with SFAS 141, Business
Combinations.  (1)
    
    To record cash used to consummate the acquisition (including
estimated closing costs of $2.2 million).(2)
    
    To adjust tangible assets to fair value at date of
acquisition.(3)
    
    To record the value assigned to developed technology,
customer relationships and other intangible assets.(4)
    
    To eliminate the equity accounts of TherMatrx, Inc. and to
reflect a $35.0 million expense that would be recorded by the
Company for acquired in-process research and development.(5)
    
    To record the excess of the estimated fair value of net
assets acquired, over the initial purchase price.(6)
    
    To record amortization expense relating to value assigned to
developed technology, customer relationships and other intangible
assets to be amortized over 10 years.(7)
    
    To reflect decreased interest income resulting from a
decrease in cash, for consideration paid.(8)
    
    To record tax effect of pro forma income statement
adjustments.  3.
    
    Other InformationA non-recurring credit of $538,000 was realized by TherMatrx, Inc. in the
quarter ended June 30, 2004 as part of a patent license fee related to its
medical device product.