ADV. MED OPTICS REPORTS NET INCOME OF $8.8 MILLION FOR 4TH QTR.

Advanced Medical Optics, Inc. (NYSE:AVO), Santa Ana, Calif., a global leader in ophthalmic surgical devices and eye care products, has announced its financial results for the quarter and the year ending December 31, 2002. For the year ending December 31, 2002, AMO reported net sales of $538.1 million, net income of $25.9 million, and diluted earnings per share of $0.89. The company's pro forma diluted earnings per share were $0.58. The financial results announced are in line with the preliminary guidance AMO provided on January 30, 2003.

Jim Mazzo, AMO's president and CEO, stated, "2002 marked AMO's successful debut and I am quite proud of our team's accomplishments. It was a little over a year ago that we first announced the spin off from Allergan and established some very ambitious goals. I am pleased to report that in looking back today, we have more than met these goals. We have exceeded our financial goals, improved our capital structure, launched innovative products, entered into strategic alliances, and reallocated expenditures in our research and development portfolio to accelerate certain projects. More importantly, we accomplished all this with no interruption to the customer. I firmly believe we are well positioned to continue to expand our current businesses and take advantage of strategic opportunities."

In an effort to more clearly present its financial performance, AMO is providing its 2001 and 2002 results in two formats. The first format presents reported, or GAAP, results for the fourth quarters of 2001 and 2002, and the fiscal years 2001 and 2002. The second format presents pro forma, or comparable, results for the fourth quarter of 2001 and fiscal years 2001 and 2002. The pro forma results reflect adjusted financial statements that include the incremental costs associated with operating an independent company and exclude the non-recurring costs related to AMO's spin-off from Allergan, Inc. in June 2002. The attached statements reflect these two formats and include footnotes that provide more detail of the aforementioned adjustments. The company expects to present its financial information in this format until the year-over-year results no longer include pre-spin periods.

For 2002, net sales were $538.1 million compared to net sales of $543.1 million in 2001, a decrease of 0.9 percent. The net sales decrease was primarily attributable to AMO's decision to exit the lower-margin private label business in the United States. Excluding the U.S. private label business, 2002 net sales were $532.6 million compared to $527.6 million in 2001, a 1.0 percent increase over 2001. For the year, the impact of foreign currency increased sales by 0.9 percent. For 2002, sales for the ophthalmic surgical business were $270.4 million compared to $253.1 million during 2001, an increase of 6.8 percent. For 2002, eye care business sales were $267.7 million compared to sales of $290.0 million in 2001, a decrease of 7.7 percent.

Reported net income for 2002 was $25.9 million versus reported net income of $55.0 million for 2001. On a pro forma basis, net income for 2002 was $16.9 million versus net income of $14.8 million for 2001. AMO reported 2002 diluted earnings per share of $0.89 versus reported 2001 diluted earnings per share of $1.90. On a pro forma basis, AMO's diluted earnings per share were $0.58 for 2002 versus diluted earnings per share of $0.51 for 2001.

In the fourth quarter of 2002, net sales were $147.1 million compared to net sales of $146.3 million in the fourth quarter of 2001, an increase of 0.6 percent. The increase in net sales was attributable to the continued strong performance of AMO's surgical business. In the fourth quarter of 2002, the impact of foreign currency increased sales by 4.1 percent. For the fourth quarter of 2002, sales for the ophthalmic surgical business were $75.3 million compared to $70.7 million in the fourth quarter of 2001, an increase of 6.4 percent. Sales for the eye care business were $71.8 million compared to sales of $75.6 million for the fourth quarter of 2001, a 4.9 percent decrease.

Reported net income in the fourth quarter of 2002 was $8.8 million versus reported net income of $23.2 million in the fourth quarter of 2001. On a pro forma basis, net income for the fourth quarter of 2001 was $11.7 million. Diluted earnings per share for the fourth quarter of 2002 were $0.30 versus diluted earnings per share of $0.80 reported for the fourth quarter of 2001. On a pro forma basis, AMO's diluted earnings per share were $0.40 for the fourth quarter of 2001.

During the fourth quarter of 2002, the company recorded an unrealized loss on derivative instruments relating to foreign currency option contracts expiring in 2003 and entered into prior to year-end 2002. In accordance with SFAS No. 133, the company records mark-to-market adjustments on these instruments during the life of the contracts. While AMO amortizes the cost of these contracts, fluctuations in currency levels at the end of each period require AMO to adjust the value of each derivative to market, with such gain or loss reflected on the income statement. The impact of the 2003 foreign currency option contracts on the company's reported EPS for the fourth quarter of 2002 was an unrealized loss of $0.02.

In 2002, AMO's phacoemulsification product line sales increased 10.1 percent when compared to 2001. On a global basis, AMO's SOVEREIGN(R) with WHITESTAR(TM) technology, the technologically advanced phacoemulsification system, continued to exhibit positive market acceptance through new placements.

Additionally, AMO restructured and expanded its U.S. sales force in the third quarter of 2002. These efforts were designed to enhance the company's ability to address customers' needs and thus far, have been enthusiastically received by practitioners.

2003 Guidance

The company is updating its guidance for the full year 2003 by increasing its estimated ranges. AMO currently anticipates revenues to be in the range of $550-$560 million, diluted earnings per share in the range of $0.66 - $0.68 and EBITDA in the range of $76 - $78 million.

For the first quarter of 2003, AMO is providing the following guidance: revenues in the range of $117 - $122 million, and a loss per share in the range of $(0.02) - $(0.03). In addition, AMO's current and future EPS guidance excludes the impact of any gain or loss associated with derivatives (SFAS 133) due to the inherent volatility of currency and the unpredictability of interest rates.

About Advanced Medical Optics

Advanced Medical Optics, Inc. (AMO) is a global leader in the development, manufacturing and marketing of ophthalmic surgical and contact lens care products.

Advanced Medical Optics, Inc. is based in Santa Ana, California, and employs approximately 2,000 worldwide. The company has operations in about 20 countries and markets products in approximately 60 countries.

For more information, visit http://www.amo-inc.com or call 714/247-8344.