Health-care products company Inamed (NASDAQ:IMDC) reported a very solid second quarter on Tuesday after the close, posting $0.56 per share, which tops the $0.51 estimate. Revenues were slightly ahead of estimates at $99.7 million. Revenue growth was 16% over the second quarter last year, with gross margins increasing year over year to 75% from 72%. The company gave guidance for the rest of the year of earnings from $1.96 to $2.01, which is in line with estimates.

Inamed received a lot of attention last fall when it seemingly won Food and Drug Administration approval to sell silicone gel breast implants in the United States. Then the FDA took it back in January. Inamed does sell silicone breast implants in Europe and saline implants in the U.S., and the firm is still waiting for the silicone issue to be resolved.

While the company, which is a Motley Fool Hidden Gems watch list stock, sells a lot of implants (the segment is expected to grow in percentages in the mid-teens), that is not the product that is driving growth. The biggest grower is something called a LAP-Band system. LAP-Bands are used in a type of stomach surgery for obese patients that is less invasive and less damaging than gastric bypass surgery. Growth for this segment is expected to be greater than 30% this year over last year.

Inamed shines compared with other medical device companies such as C.R. Bard (NYSE:BCR) and Mentor (NYSE:MNT). Revenues are expected to grow by 15% from 2004 to 2005. Its forward price-to-earnings ratio, at 24, is high, but the 1.3 PEG is very low thanks to the better-than-average growth. Operating margins are 22%, which is also high for the group.

All in all, the numbers are solid. Should the FDA ruling on silicone go the company's way, we could see things improve dramatically. Silicone accounts for 70% of breast implants done outside the U.S. As the obesity numbers in the U.S. continue to get worse, sales of the LAP-Band are likely to get better.

The biggest risk I see is the stock getting caught in a general health sector downturn. The stock is down in sympathy with the group over the last few weeks, but it could simply be a case of the right company in the wrong sector. The other, and I think smaller, risk is that Inamed does not get FDA approval for silicone breast implants.

Fool contributor Roger Nusbaum is an investment manager and wildland firefighter in Prescott, Ariz. At press time neither he nor his clients owned any of the stocks mentioned.