Syneron Reports Third Quarter 2011 Results
Revenue Increased 28.2% to $57.0 Million PAD(1) Segment Non-GAAP Operating Margin Increased to 9.3%
(firmenpresse) - YOKNEAM, ISRAEL -- (Marketwire) -- 11/10/11 -- Syneron Medical Ltd. (NASDAQ: ELOS), the leading global aesthetic device company, today announced third quarter 2011 financial results for the three month period ended September 30, 2011.
Revenue of $57.0 million, up 28.2%
International revenue of $37.4 million, up 28.7%
North America revenue of $19.6 million, up 26.8%
EBU(1) segment revenue of $5.0 million, up 496.7%
Non-GAAP gross margin of 52.6%, up from 52.3%
PAD segment non-GAAP operating income of $4.8 million, up 515.6%(2)
Non-GAAP net income of $1.0 million and non-GAAP earnings per share of $0.03, compared to a non-GAAP net loss of $1.5 million and loss per share of $0.04 in the third quarter of 2010(3)
Cash and investments portfolio of $177.2 million at September 30, 2011
Louis P. Scafuri, Chief Executive Officer of Syneron, commented, "We achieved strong year-over-year growth in the third quarter while also maintaining our new product development focus, prudent expense management and investing in our Emerging Business Units, or EBU. In October, we launched the eTwo™ platform globally and this week we launched eLase™ with Motif™ in the international market, demonstrating our ability to continuously innovate and bring new, science-based products to the market. The eTwo™ facial skin rejuvenation device combines the unique benefits of Syneron's Sublime™ and Sublative™ technologies, providing a highly effective blend of safe and effective therapeutic energy. eLase™, our next generation laser hair removal system, leverages our proprietary elos technology and features the new mode of operation Motif™ that allows for a high speed, low energy "virtually pain free" hair removal procedure, in addition to the normal mode of operation. The system also provides added versatility with an additional applicator for fractional skin rejuvenation treatments. We also have several new product introductions planned over the next 12 months that will further solidify and expand our leadership position.
"In the EBU we launched the new Tända™ Luxe and Tända™ Clear+ LED devices in October and continue to be well positioned to benefit from our broad portfolio of safe and effective home-use products. Overall, Syneron continues to be the clear leader in the aesthetic device market, with the strongest global channel to market capabilities and the broadest product portfolio."
Mr. Scafuri added, "We were very pleased to have reached a settlement agreement this quarter in the hair removal patent cases brought by Palomar. While we always believed we had an excellent case, these litigations drove significant legal expenses, especially since the acquisition of Candela. This settlement was a significant milestone for the Company, allowing us to move beyond the litigation and spend more resources building our business."
Third quarter 2011 non-GAAP gross margin was 52.6%, compared to 52.3% in third quarter 2010.
Third quarter 2011 non-GAAP operating income was $1.2 million, compared to a non-GAAP operating loss of $0.5 million in third quarter 2010. Third quarter 2011 non-GAAP operating income represented 2.2% of revenue in the quarter, compared to a non-GAAP operating loss of 1.1% of revenue in third quarter 2010.(4)
The increase in non-GAAP operating income (loss) was due to the exclusion of $2.9 million of legal expenses associated with the Palomar litigation in the third quarter 2011, while non-GAAP operating loss in the third quarter 2010 does not exclude $2.0 million of such legal expenses. This was partially offset by an increase in operating expenses associated with the significant increase in EBU segment revenues. The EBU currently incurs higher relative operating expenses compared to the PAD segment due to start-up costs associated with developing and marketing its emerging technologies.
Third quarter 2011 non-GAAP net income was $1.0 million, compared to non-GAAP net loss of $1.5 million in the third quarter of 2010.(4)
Third quarter 2011 non-GAAP earnings per share was $0.03, compared to loss per share of $0.04 in third quarter 2010.(4)
Non-GAAP net income and earnings per share for third quarter 2011 are adjusted to exclude the following one-time expenses, which are detailed in the Company's financial tables:
One-time legal settlement costs of $33.9 million comprised of a settlement payment to Palomar Medical Technologies of $31.0 million plus legal expenses associated with the Palomar Litigation of $2.9 million
Write-down of a deferred tax asset related to Candela's net operating tax losses of $2.8 million
Amortization of acquired intangible assets of $2.0 million
Write-down of investment in an affiliated company of $1.0 million
Stock-based compensation of $0.9 million
Other one-time charges and non-recurring costs of $0.4 million
Third quarter 2011 gross margin was 50.6%, compared to 50.8% in third quarter 2010.
Third quarter 2011 operating loss was $37.0 million, compared to an operating loss of $5.0 million in third quarter 2010.
The significant increase in operating loss was primarily driven by the one-time payment of $31.0 million to Palomar in settlement of the litigations against Syneron and Candela and by the increase in legal expenses associated with the Palomar settlement. The remaining increase was primarily due to the increased operating expenses associated with the significant increase in EBU segment revenues. The EBU currently incurs higher relative operating expenses compared to the PAD segment due to start-up costs associated with developing and marketing its emerging technologies.
Third quarter 2011 net loss was $40.1 million, compared to a net loss of $5.3 million in third quarter of 2010.
Third quarter 2011 loss per share was $1.14, compared to a loss per share of $0.15 in third quarter 2010.
As of September 30, 2011, cash and cash equivalents, including short-term and long-term bank deposits and investments in marketable securities, were $177.2 million compared to $212.2 million as of June 30, 2011. This reduction was primarily driven by the one-time payment of $31.0 million to Palomar in settlement of the litigations against Syneron and Candela.
Asaf Alperovitz, Chief Financial Officer of Syneron, commented, "We used $31 million in cash for our settlement agreement with Palomar and ended the quarter with more than $177 million in cash. The settlement positions Syneron for increased profitability as we benefit from significantly reduced legal costs, while the substantial cash balance will allow us to maintain the strongest balance sheet in the industry and continue investing in our business and potential acquisition opportunities.
"During the quarter we continued to balance our efforts to drive increased profitability in the PAD segment with our investments in the EBU. While the EBU operating loss is currently impacting our consolidated results, we believe it is a strategically important segment of the market that will be accretive as we continue to build our brands and drive adoption of new products. The growth of EBU also further diversifies our revenue with more high-margin, recurring revenue opportunities that are complementary to our professional device revenue streams."
This press release provides financial measures for gross margin, operating income (loss), net income (loss), earnings (loss) per share, which exclude one-time expenses relating to the mergers with Candela Corporation and Primaeva Medical Inc, both an expense charge related to stock-based compensation and amortization, one-time severance and other one-time charges and non-recurring costs, and are therefore not calculated in accordance with generally accepted accounting principles (GAAP). Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance because it reflects our operational results and enhances management's and investors' ability to evaluate the Company's gross margin, operating income (loss), net income (loss) and earnings (loss) per share. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management uses both GAAP and non-GAAP measures when evaluating the business internally and, therefore, felt it important to make these non-GAAP adjustments available to investors. A reconciliation of each GAAP to non-GAAP financial measure discussed in this press release is contained in the accompanying financial tables.
Syneron management will host its third quarter 2011 earnings conference call today at 8:30 a.m. ET. Syneron will be broadcasting live via the Investor Relations section of its website, . To access the call, enter the Syneron website, then click on the Investor Relations -- Overview and select "Q3 2011 Results Webcast."
Participants are encouraged to log on at least 15 minutes prior to the conference call in order to download the applicable audio software. The call can be heard live or with an on-line replay which will follow. Those interested in participating in the call and the question and answer session should dial 877-844-6886 in the U.S., and 970-315-0315 from overseas. The conference pass code is: 21373962.
Syneron Medical Ltd. (NASDAQ: ELOS) is the leading global aesthetic device company with a comprehensive product portfolio and a global distribution footprint. The Company's technology enables physicians to provide advanced solutions for a broad range of medical-aesthetic applications including body contouring, hair removal, wrinkle reduction, rejuvenation of the skin's appearance through the treatment of superficial benign vascular and pigmented lesions, and the treatment of acne, leg veins and cellulite. The Company sells its products under two distinct brands, Syneron and Candela. Founded in 2000, the corporate, R&D, and manufacturing headquarters for Syneron Medical Ltd. are located in Israel. Syneron also has R&D and manufacturing operations in the US. The Company markets and services and supports its products in 90 countries. It has offices in North America, France, Germany, Italy, Portugal, Spain, UK, Australia, China, Japan, and Hong Kong and distributors worldwide. Additional information can be found at .
Any statements contained in this document regarding future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Further, any statements that are not statements of historical fact (including statements containing "believes," "anticipates," "plans," "expects," "may," "will," "would," "intends," "estimates" and similar expressions) should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including the risk that the businesses of Syneron and Candela may not be integrated successfully; the risk that the merger transaction with Candela may involve unexpected costs or unexpected liabilities; the risk that synergies from the merger transaction may not be fully realized or may take longer to realize than expected; the risk that disruptions from the merger transaction make it more difficult to maintain relationships with customers, employees, or suppliers; as well as the risks set forth in Syneron Medical Ltd.'s most recent Annual Report on Form 20-F, and the other factors described in the filings that Syneron Medical Ltd. makes with the SEC from time to time. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, Syneron Medical Ltd.'s actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements.
In addition, the statements in this document reflect the expectations and beliefs of Syneron Medical Ltd. as of the date of this document. Syneron Medical Ltd. anticipates that subsequent events and developments will cause its expectations and beliefs to change. However, while Syneron Medical Ltd. may elect to update these forward-looking statements publicly in the future, it specifically disclaims any obligation to do so. The forward-looking statements of Syneron Medical Ltd. do not reflect the potential impact of any future dispositions or strategic transactions that may be undertaken. These forward-looking statements should not be relied upon as representing Syneron Medical Ltd.'s views as of any date after the date of this document.
Syneron, the Syneron logo, eMatrix and elos are trademarks of Syneron Medical Ltd. and may be registered in certain jurisdictions. The elos (Electro-Optical Synergy) technology is a proprietary technology of Syneron Medical Ltd. All other names are the property of their respective owners.
(1)PAD: Professional Aesthetic Device segment, which includes the results of the Syneron and Candela device businesses.
(2)EBU: Emerging Business Units. Products in the EBU include m? home-use hair removal system, elure Advanced Skin Lightening products, Tända LED systems, Light Instruments' dental laser devices along with pipeline products that include the Company's strategic home-use device partnership with Procter & Gamble and Fluorinex teeth whitening and fluorination.
(3)Non-GAAP operating income, Non-GAAP net income and Non-GAAP earnings per share for the third quarter 2011 exclude legal expenses associated with the Palomar litigation of $2.9 million, while Non-GAAP operating loss, Non-GAAP net loss and Non-GAAP loss per share for the comparable period in 2010 do not exclude $2.0 million of legal expenses associated with Palomar litigation.
(4)Non-GAAP operating income, Non-GAAP net income and Non-GAAP earnings per share for the third quarter 2011 exclude legal expenses associated with the Palomar litigation of $2.9 million, while Non-GAAP operating loss, Non-GAAP net loss and Non-GAAP loss per share for the comparable period in 2010 do not exclude $2.0 million of legal expenses associated with Palomar litigation.
Asaf Alperovitz
Chief Financial Officer
+ 972 73 244 2283
Email:
Zack Kubow
The Ruth Group
646-536-7020
Email:
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Datum: 10.11.2011 - 12:30 Uhr
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