WESTFORD, Mass., July 26, 2016 /PRNewswire/ -- Cynosure, Inc.
(NASDAQ: CYNO) today reported second-quarter 2016 net income of
$6.3 million, or $0.27 per diluted share, an increase of 18.3
percent compared with $5.4 million,
or $0.24 per diluted share, for the
same period of 2015. On a non-GAAP basis, excluding non-cash
unrealized foreign exchange measurement gains and losses and
amortization of intangibles, second-quarter net income was
$8.6 million, or $0.36 per diluted share, compared with
$6.7 million, or $0.30 per diluted share, for the prior-year
period. Revenue for the three months ended June 30, 2016 increased 32 percent to a record
$110.3 million, compared with
$83.7 million in the second quarter
of 2015.
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Operating income for the 2016 second quarter was $10.5 million, compared with second-quarter 2015
operating income of $7.6 million. On
a non-GAAP basis, excluding amortization of intangibles, income
from operations for the second quarter of 2016 was $12.6 million, compared with $9.9 million for the prior-year period.
"Our second-quarter performance demonstrates the strong momentum
throughout our direct sales distribution network," said President
and CEO Michael Davin. "Product
revenue in North America increased
46 percent in the second quarter to $59.5
million, reflecting the full U.S. rollout of SculpSure for
non-invasive fat reduction earlier this year, as well as
significant contributions from our MonaLisa Touch®, PicoSure® and
ICON™ products. On the international front, our Asia Pacific subsidiaries saw a 46 percent
increase in product revenue, propelled by the late 2015 regulatory
approvals of PicoSure in China and
SculpSure in Australia. Product
revenue from our direct subsidiaries in Europe was up 6 percent year-over-year.
"We delivered solid operational results, as our gross margin
increased more than 2 percentage points and we generated cash from
operations of $16.3 million, bringing
our cash and investments balance at the end of the quarter to
$210.3 million," Davin said. "At the
same time, we continued to invest in the business, launching a
highly targeted direct-to-consumer marketing campaign for SculpSure
that is attracting new customers and patients to the Cynosure
brand. In the R&D area, through ongoing clinical initiatives,
we are investing to expand our products for new aesthetic
indications and treatment areas."
Second-Quarter 2016 Financial Results
Revenue was $110.3 million for the
second quarter of 2016, an increase of 32 percent from the
prior-year period. Product revenue in North America grew 46 percent year-over-year
to $59.5 million. International
product revenue was $31.1 million, an
increase of 8 percent over the year-earlier period. Parts, service
and disposables revenue increased 47 percent year-over-year to
$19.6 million, primarily reflecting
sales of disposable PAC (Patented Applicator for Contouring) keys
associated with SculpSure.
Gross margin for the second quarter of 2016 was $65.1 million, or 59.0 percent of revenue,
compared with $47.4 million, or 56.6
percent of revenue, for the same period in 2015. On a non-GAAP
basis, excluding non-cash charges related to the amortization of
intangibles, gross margin for the second quarter of 2016 increased
to $66.5 million, or 60.3 percent of
revenue, compared with $48.9 million,
or 58.4 percent of revenue, in the prior-year period.
Total operating expenses for the second quarter of 2016
increased 37.4 percent to $54.6
million from $39.7 million in
the same period in 2015, primarily reflecting the SculpSure launch.
Sales and marketing expenses for the second quarter of 2016 were
$38.6 million, or 35.0 percent of
total revenue, compared with sales and marketing expenses of
$26.4 million, or 31.6 percent of
total revenue, for the second quarter of 2015. The year-over-year
increase reflects the addition of sales, clinical support and
marketing personnel, as well as additional marketing investments
associated with the SculpSure launch.
Recent Highlights
- Cynosure obtained U.S. Food and Drug Administration 510(k)
clearance to market a new Laser Delivery System for PicoSure, the
world's first aesthetic picosecond laser. Together with the FDA
cleared 532 nm and 755 nm wavelengths, Cynosure's new 1064 nm Laser
Delivery System improves the multi-wavelength laser technology for
removing the full color spectrum of tattoo inks in fewer
treatments.
- Cynosure received a medical device license issued by Health
Canada to market SculpSure for non-invasive lipolysis of the
abdomen and flanks. This operational milestone continues to broaden
SculpSure's availability to new geographic regions.
Business Outlook
"Looking ahead, we expect to
successfully execute our growth strategy through targeted
marketing, clinical and regulatory initiatives," Davin said. "We
begin the second half of 2016 with strong momentum, and we are well
positioned to continue to deliver value for all of our
stakeholders."
Second-Quarter 2016 Financial Results Conference Call
In conjunction with the announcement of its second-quarter
financial results, Cynosure will host a conference call for
investors and analysts at 9:00 a.m.
ET today. On the call, Michael
Davin and Timothy Baker, the
Company's Chief Financial Officer, will discuss Cynosure's
financial results and provide a business overview. Those who wish
to listen to the conference call webcast should visit the
"Investors" section of the Company's website at www.cynosure.com.
The live call can also be accessed by dialing (877) 709-8155 or
(201) 689-8881. If you are unable to listen to the live call, the
webcast will be archived for one year on the Company's website.
About Cynosure, Inc.
Cynosure develops, manufactures, and markets aesthetic treatment
systems that enable plastic surgeons, dermatologists and other
medical practitioners to perform non-invasive and minimally
invasive procedures to remove hair, treat vascular and benign
pigmented lesions, remove multi-colored tattoos, revitalize the
skin, reduce fat through non-invasive and minimally invasive laser
lipolysis, reduce cellulite, clear nails infected by toe fungus,
ablate sweat glands and improve gynecological health. Cynosure also
markets radiofrequency energy-sourced medical devices for precision
surgical applications such as facial plastic and general surgery,
gynecology, ear, nose, and throat procedures, ophthalmology, oral
and maxillofacial surgery, podiatry and proctology. Cynosure's
product portfolio is composed of a broad range of energy sources
including Alexandrite, diode, Nd:YAG, picosecond, pulse dye,
Q-switched lasers, intense pulsed light and radiofrequency
technology. Cynosure sells its products globally under the
Cynosure, Palomar, ConBio and Ellman brand names through a direct
sales force in the United States,
Canada, France, Morocco, Germany, Spain, the United
Kingdom, Australia,
China, Japan and Korea, and through international
distributors in approximately 120 other countries. For
corporate or product information, visit Cynosure's website at
www.cynosure.com.
Forward-Looking Statements
Any statements in this press release about future expectations,
plans and prospects for Cynosure, Inc., including Cynosure's
expectations with respect to timing and success of product launches
and expansions, regulatory clearances and international
registrations, as well as other statements containing the words,
"believes," "looks forward," "anticipates," "plans," "expects,"
"will" and similar expressions, constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Actual results may differ materially from those
indicated by such forward-looking statements as a result of various
important factors, including the market price of Cynosure's stock
prevailing from time to time, the nature of other investment
opportunities presented to the Company from time to time, the
Company's cash flow from operations, levels of demand for
procedures performed with Cynosure products and for Cynosure
products themselves, competition in the aesthetic laser industry,
general business and economic conditions, effects of acquisitions
that Cynosure has made or may make, Cynosure's ability to develop
and commercialize new products, including the MonaLisa Touch and
SculpSure products, Cynosure's reliance on sole source suppliers,
the inability to accurately predict the timing or outcome of
regulatory decisions, and economic, market, technological and other
factors described in Item 1A of Part II (Risk Factors) of our
Quarterly Report on Form 10-Q for the three months ended
March 31, 2016. In addition, the
forward-looking statements included in this press release represent
Cynosure's views as of the date of this press release. Cynosure
anticipates that subsequent events and developments will cause its
views to change. However, although Cynosure may elect to update
these forward-looking statements at some point in the future, it
specifically disclaims any obligation to do so. These
forward-looking statements should not be relied upon as
representing Cynosure's views as of any date subsequent to the date
of this press release.
Consolidated
Statements of Income (Unaudited)
|
|
|
|
|
(In thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2016
|
2015
|
|
2016
|
2015
|
|
|
|
|
|
|
|
Revenues
|
$
110,343
|
$
83,694
|
|
$
205,007
|
$
158,606
|
Cost of
revenues
|
45,286
|
36,338
|
|
84,530
|
68,477
|
Gross
profit
|
65,057
|
47,356
|
|
120,477
|
90,129
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
Selling and
marketing
|
38,574
|
26,426
|
|
74,165
|
52,122
|
|
Research and
development
|
6,965
|
5,251
|
|
14,078
|
11,209
|
|
Amortization of
intangible assets acquired
|
684
|
736
|
|
1,373
|
1,472
|
|
General and
administrative
|
8,334
|
7,302
|
|
15,910
|
15,632
|
|
|
|
|
|
|
|
Total operating
expenses
|
54,557
|
39,715
|
|
105,526
|
80,435
|
|
|
|
|
|
|
|
Income from
operations
|
10,500
|
7,641
|
|
14,951
|
9,694
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(392)
|
(430)
|
|
(804)
|
(832)
|
|
Other (expense)
income, net
|
(277)
|
484
|
|
383
|
(1,179)
|
|
|
|
|
|
|
|
Income before
income taxes
|
9,831
|
7,695
|
|
14,530
|
7,683
|
|
|
|
|
|
|
|
|
Income tax
provision
|
3,491
|
2,337
|
|
5,343
|
2,333
|
|
|
|
|
|
|
|
Net
income
|
$
6,340
|
$
5,358
|
|
$
9,187
|
$
5,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
per share
|
$
0.27
|
$
0.24
|
|
$
0.39
|
$
0.24
|
Diluted weighted
average shares outstanding
|
23,721
|
22,615
|
|
23,437
|
22,369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
share
|
$
0.27
|
$
0.24
|
|
$
0.40
|
$
0.24
|
Basic weighted
average shares outstanding
|
23,310
|
22,246
|
|
23,023
|
21,957
|
Condensed
Consolidated Balance Sheet
|
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
(Unaudited)
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and marketable securities
|
$
126,276
|
|
$
108,587
|
|
Short-term
investments and related financial instruments
|
44,136
|
|
35,412
|
|
Accounts receivable,
net
|
|
|
40,591
|
|
42,012
|
|
Inventories
|
|
|
|
83,567
|
|
79,768
|
|
Prepaid expenses and
other current assets
|
|
22,883
|
|
21,356
|
Total current
assets
|
|
|
|
317,453
|
|
287,135
|
|
Property and
equipment, net
|
|
|
45,285
|
|
39,706
|
|
Long-term marketable
securities
|
|
|
39,882
|
|
38,761
|
|
Goodwill and
intangibles, net
|
|
|
145,842
|
|
150,124
|
|
Deferred tax asset,
noncurrent
|
|
|
15,778
|
|
17,882
|
|
Other noncurrent
assets
|
|
|
1,084
|
|
1,002
|
Total
assets
|
|
|
|
|
$
565,324
|
|
$
534,610
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity:
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
$
72,597
|
|
$
79,501
|
|
Deferred
revenue
|
|
|
|
26,473
|
|
24,803
|
|
Capital lease
obligations
|
|
|
960
|
|
741
|
Total current
liabilities
|
|
|
|
100,030
|
|
105,045
|
|
|
|
|
|
|
|
|
|
Capital lease
obligations, net of current portion
|
|
17,145
|
|
17,372
|
Deferred revenue, net
of current portion
|
|
1,343
|
|
903
|
Other long-term
liabilities
|
|
|
|
6,504
|
|
6,888
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
440,302
|
|
404,402
|
Total liabilities
and stockholders' equity
|
|
$
565,324
|
|
$
534,610
|
To supplement our
consolidated financial statements presented in accordance with
GAAP, Cynosure uses non-GAAP gross profit, non-GAAP income from
operations, non-GAAP net income and non-GAAP diluted net income per
share. The presentation of this 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. The non-GAAP financial measures included in this press
release exclude costs associated with the acquisitions and
amortization of intangible assets acquired, as well as unrealized
foreign exchange gains or losses for the three and six months ended
June 30, 2016 and 2015. This exclusion may be different from,
and therefore not comparable to, similar measures used by other
companies.
|
|
Cynosure's management
believes that the non-GAAP financial measures provide meaningful
supplemental information regarding our performance by excluding the
acquisition-related costs, amortization and foreign exchange costs
that may not be indicative of our core business operating results.
Cynosure believes that both management and investors benefit from
referring to the non-GAAP financial measures in assessing
Cynosure's performance and when planning, forecasting and analyzing
future periods. The non-GAAP financial measures also
facilitate management's internal comparisons to Cynosure's
historical performance and our competitors' operating
results. Cynosure believes that the non-GAAP measures are
useful to investors in allowing for greater transparency with
respect to supplemental information used by management in our
financial and operational decision making.
|
Reconciliation of
GAAP Income Statement Measures to Non-GAAP Income Statement
Measures (Unaudited)
|
|
(In thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
|
2016
|
2015
|
|
2016
|
2015
|
|
|
|
|
|
|
|
Gross
profit
|
|
$
65,057
|
$
47,356
|
|
$
120,477
|
$
90,129
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments
to gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs associated with
amortization
|
|
1,451
|
1,554
|
|
2,913
|
3,107
|
|
|
|
|
|
|
|
|
|
|
Total Non-GAAP
adjustments to gross profit
|
|
1,451
|
1,554
|
|
2,913
|
3,107
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross
profit dollars
|
|
$
66,508
|
$
48,910
|
|
$
123,390
|
$
93,236
|
Non-GAAP Gross
profit percentage
|
|
60.3%
|
58.4%
|
|
60.2%
|
58.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
|
2016
|
2015
|
|
2016
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
$
10,500
|
$
7,641
|
|
$
14,951
|
$
9,694
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments
to income from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs associated with
acquisitions and amortization
|
|
2,134
|
2,290
|
|
4,286
|
5,336
|
|
|
|
|
|
|
|
|
|
|
Total Non-GAAP
adjustments to income from operations
|
|
2,134
|
2,290
|
|
4,286
|
5,336
|
|
|
|
|
|
|
|
|
|
Non-GAAP Income
from operations
|
|
$
12,634
|
$
9,931
|
|
$
19,237
|
$
15,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
|
2016
|
2015
|
|
2016
|
2015
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
6,340
|
$
5,358
|
|
$
9,187
|
$
5,350
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments
to net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs associated with
acquisitions and amortization
|
|
2,134
|
2,290
|
|
4,286
|
5,336
|
|
Unrealized foreign
exchange loss (gain)
|
|
287
|
(429)
|
|
(433)
|
1,246
|
|
Income tax effect of
Non-GAAP adjustments
|
|
(185)
|
(530)
|
|
(172)
|
(1,946)
|
|
|
|
|
|
|
|
|
|
|
Total Non-GAAP
adjustments to net income
|
|
2,236
|
1,331
|
|
3,681
|
4,636
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income
|
|
$
8,576
|
$
6,689
|
|
$
12,868
|
$
9,986
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
|
2016
|
2015
|
|
2016
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income
per share
|
|
$
0.27
|
$
0.24
|
|
$
0.39
|
$
0.24
|
|
|
|
|
|
|
|
|
|
|
Costs associated with
acquisitions and amortization
|
|
0.09
|
0.10
|
|
0.18
|
0.24
|
|
Unrealized foreign
exchange loss (gain)
|
|
0.01
|
(0.02)
|
|
(0.02)
|
0.06
|
|
Income tax effect of
Non-GAAP adjustments
|
|
(0.01)
|
(0.02)
|
|
0.00
|
(0.09)
|
|
|
|
|
|
|
|
|
|
|
Total Non-GAAP
adjustments to net income
|
|
0.09
|
0.06
|
|
0.16
|
0.21
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted
net income per share
|
|
$
0.36
|
$
0.30
|
|
$
0.55
|
$
0.45
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used to compute
|
|
|
|
|
|
|
|
GAAP diluted net
income per share
|
|
23,721
|
22,615
|
|
23,437
|
22,369
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used to compute
|
|
|
|
|
|
|
|
Non-GAAP diluted net
income per share
|
|
23,721
|
22,615
|
|
23,437
|
22,369
|
Contact:
|
|
|
|
Timothy Baker
|
Scott
Solomon
|
Chief Financial
Officer
|
Senior Vice
President
|
Cynosure, Inc.
|
Sharon Merrill
Associates
|
(978)
256-4200
|
(617) 542-5300
|
tbaker@cynosure.com
|
CYNO@investorrelations.com
|
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SOURCE Cynosure, Inc.