Syneron Medical Ltd. (NASDAQ: ELOS), the leading global aesthetic
device company, today announced third quarter 2010 financial
results for the three month period ended September 30, 2010. Third
quarter 2010 financial results are for Syneron and Candela as a
combined company. The third quarter 2009 year-over-year comparative
financial results referred to below are pro-forma financial results
assuming the merger with Candela Corporation had occurred on
January 1, 2009.
Third Quarter 2010 Highlights Include:
-- Revenue of $44.4 million, up 10.0% year-over-year
-- International revenue of $29.0 million, up 20.8% year-over-year
-- Non-GAAP gross margin of 52.3%, up from 46.3% in the prior year and
48.9% in Q2 2010
-- Non-GAAP operating loss of $0.5 million, or 1.1% of revenue compared to
$8.8 million, or 21.8% of revenue in the prior year
-- Cash and cash equivalents, including short-term bank deposits and
investments in marketable securities, were $222.6 million at September
30, 2010
Lou Scafuri, Chief Executive Officer of Syneron, commented, "The
third quarter results reflect our continued success in the
marketplace and our ability to deliver products that address the
changing paradigm in the aesthetic industry. In particular, we
benefitted from the international strength of our business to drive
significant growth. We are confident the Company will continue to
execute on cross-selling opportunities that are driving our revenue
growth.
"During the quarter we effectively managed our expenses and
delivered operational efficiencies from the Candela integration,
which led to further improvements in our operating results.
Overall, we are pleased with our third quarter results and expect
to further advance our market leadership based on the strength of
our innovative products and unmatched global channel to market
capabilities."
Revenue: Third quarter 2010 revenue was $44.4 million, an
increase of 10.0% compared to $40.4 million in the third quarter
2009. International revenue was $29.0 million, an increase of 20.8%
compared to $24.0 million in the third quarter 2009. Third quarter
2010 revenue in North America was $15.4 million, compared to $16.4
million in the third quarter 2009.
Non-GAAP Financial Highlights for the Third Quarter Ended
September 30, 2010:
Gross Margin: Third quarter 2010 gross margin was 52.3%,
compared to 48.9% in the second quarter 2010 and 46.3% in the third
quarter 2009.
Operating Loss: Third quarter 2010 operating loss was $0.5
million, compared to an operating loss of $3.3 million in the
second quarter 2010 and $8.8 million in the third quarter 2009.
Third quarter 2010 operating loss represented 1.1% of revenue in
the quarter, compared to 6.9% in the second quarter 2010 and 21.8%
in the third quarter 2009.
Net Loss: Third quarter 2010 loss from continuing operations
before non-controlling interest was $1.5 million, compared to a
loss of $4.1 million in the second quarter 2010 and $8.1 million in
the third quarter 2009.
Loss Per Share: Third quarter 2010 loss per share was $(0.04),
compared to a loss per share of $(0.12) in the second quarter 2010
and $(0.24) in the third quarter 2009.
GAAP Financial Highlights for the Third Quarter Ended September
30, 2010:
Gross Margin: Third quarter 2010 gross margin was 50.8%,
compared to 47.2% in the second quarter 2010 and 45.2% in the third
quarter 2009.
Operating Loss: Third quarter 2010 operating loss was $5.0
million, compared to an operating loss of $6.5 million in the
second quarter 2010 and $11.5 million in the third quarter
2009.
Net Loss: Third quarter 2010 net loss was $5.3 million, compared
to a net loss of $6.2 million in the second quarter 2010. In the
third quarter of 2009 the net loss before non-controlling interest
was $10.1 million.
Loss Per Share: Third quarter 2010 loss per share was $(0.15),
compared to a loss per share of $(0.18) in the second quarter 2010
and $(0.30) in the third quarter 2009.
Cash Position: As of September 30, 2010, cash and cash
equivalents, including short-term bank deposits and investments in
marketable securities, were $222.6 million.
Use of Non-GAAP Measures
This press release provides financial measures for gross margin,
net loss, net loss per basic and diluted share, which exclude
one-time expenses relating to the merger with Candela Corporation
and an expense charge related to stock-based compensation and
amortization 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, net loss
and net loss per basic and diluted 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.
Conference call
Syneron management will host its third quarter 2010 earnings
conference call today at 8:30 a.m. ET. Syneron will be broadcasting
live via the Investor Relations section of its website,
www.syneron.com. To access the call, enter the Syneron website,
then click on the Investors Relations Overview and select "Q3 2010
Results Conference Call."
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:
20334812.
About Syneron Medical Ltd.
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 86
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
www.syneron.com.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
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.
Syneron Medical Ltd.
Unaudited Condensed Consolidated Statements of Income (Loss)
(in thousands, except per share data)
For the three-months For the nine-months
ended ended
-------------------- --------------------
September September September September
30, 2010 30, 2009 30, 2010 30, 2009
--------- --------- --------- ---------
Revenue $ 44,442 $ 14,279 $ 136,073 $ 40,323
Cost of sales 21,867 4,705 75,704 14,664
--------- --------- --------- ---------
Gross profit 22,575 9,574 60,369 25,659
Operating expenses:
Sales and marketing 13,821 7,531 49,121 26,287
General and administrative 6,783 4,225 29,490 13,059
Research and development 6,672 3,063 20,423 8,949
Other expenses 348 - 2,774 -
Legal settlement, net - - - (3,975)
--------- --------- --------- ---------
Total operating expenses 27,624 14,819 101,808 44,320
--------- --------- --------- ---------
Loss from operations (5,049) (5,245) (41,439) (18,661)
Other income (expense):
Financial Income, net 480 447 298 1,661
Other expense (14) - (66) -
--------- --------- --------- ---------
Total other income (expense) 466 447 232 1,661
--------- --------- --------- ---------
Loss from continuing operations
before income taxes (4,583) (4,798) (41,207) (17,000)
(Benefit) expense from income
taxes 669 858 (5,537) 2,455
--------- --------- --------- ---------
Loss from continuing operations
before non-controlling
interest (5,252) (5,656) (35,670) (19,455)
Net loss attributable to
non-controlling interest - 107 1,555 213
Income from discontinued
operations, net of income
taxes - - 196 -
--------- --------- --------- ---------
Net Loss attributable to
Syneron shareholders $ (5,252) $ (5,549) $ (33,919) $ (19,242)
========= ========= ========= =========
Loss per share:
Basic and diluted
Loss from continuing
operations before
non-controlling interest $ (0.15) $ (0.21) $ (1.04) $ (0.71)
Net loss attributable to
non-controlling interest - - 0.05 0.01
Income from discontinued
operations - - 0.01 -
--------- --------- --------- ---------
Net Loss attributable to
Syneron shareholders $ (0.15) $ (0.21) $ (0.98) $ (0.70)
--------- --------- --------- ---------
Weighted average shares
outstanding:
Basic and diluted 34,473 27,530 34,314 27,505
--------- --------- --------- ---------
Syneron Medical Ltd.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
September 30, December 31,
2010 2009
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 75,774 $ 24,372
Short-term bank deposits 2,231 1,000
Available-for-sale marketable securities 134,418 169,309
Accounts receivable, net 42,401 13,758
Other current assets 11,722 2,753
Inventories, net 23,558 8,592
------------- -------------
Total current assets 290,104 219,784
------------- -------------
Non-current assets:
Severance pay fund 297 246
Long-term deposits and others 1,419 221
Long-term available-for-sale marketable
securities 10,187 11,449
Investments in affiliated company 1,050 1,050
Property and equipment, net 3,891 2,885
Goodwill and Intangible assets, net 52,667 34,632
Deferred taxes 10,014 -
------------- -------------
Total non-current assets 79,525 50,483
------------- -------------
Total assets $ 369,629 $ 270,267
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 15,891 $ 3,735
Other accounts payable and accrued expenses 56,469 30,153
------------- -------------
Total current liabilities 72,360 33,888
------------- -------------
Non-current liabilities:
Contingent consideration 17,294 7,331
Deferred Revenues 4,407 902
Warranty Accruals 572 558
Accrued severance pay 526 330
Deferred taxes 5,550 -
------------- -------------
Total non-current liabilities 28,349 9,121
------------- -------------
Stockholders' equity: 268,920 227,258
------------- -------------
Total liabilities and stockholders' equity $ 369,629 $ 270,267
============= =============
Syneron Medical Ltd.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
For the nine months ended:
----------------------------
September 30, September 30,
2010 2009
------------- -------------
Cash flows from operating activities:
Net loss before non-controlling interest $ (35,474) $ (19,455)
Adjustments to reconcile net loss to
net cash used by operating activities:
Non-cash items reported in discontinued
operations (232) -
Share-based compensation expense 2,504 3,427
Depreciation and amortization 6,911 1,509
Impairments of available-for-sale
marketable securities and other
intangible assets 1,608 208
Realized loss, changes in accrued
interest, and amortization of premium
on marketable securities 689 1,322
Revaluation of contingent liability 1,262 -
Other non-cash items (45) -
Changes in operating assets and
liabilities
Accounts receivable 2,488 15,878
Inventories 11,813 3,161
Other current assets (1,245) 831
Other assets (10) -
Accounts payable 7,173 (5,160)
Accrued payroll and related expenses (3,407) 13
Deferred revenue (4,244) (3,189)
Accrued warranty costs (426) 28
Income taxes payable and deferred 3,172 1,366
Other accrued liabilities 702 (842)
------------- -------------
Net cash used by operating activities (6,761) (903)
------------- -------------
Cash flows from investing activities:
Purchases of property and equipment (482) (396)
Maturities of held-to-maturity marketable
securities 460 -
Proceeds from the sale of
available-for-sale marketable securities 167,548 211,565
Purchase of available-for-sale marketable
securities (131,784) (247,368)
Net cash received from acquisition of
subsidiary 22,533 (41)
Other investing activities (1,276) (3,135)
------------- -------------
Net cash provided by (used by) investing
activities 56,999 (39,375)
------------- -------------
Cash flows from financing activities:
Proceeds from the issuance of common
stock 631 194
------------- -------------
Net cash provided by financing activities 631 194
------------- -------------
Effect of exchange rates on cash and cash
equivalents 533 -
------------- -------------
Net increase (decrease) in cash and cash
equivalents 51,402 (40,084)
Cash and cash equivalents at beginning of
period 24,372 72,366
------------- -------------
Cash and cash equivalents at end of period $ 75,774 $ 32,282
============= =============
Syneron Medical Ltd.
Unaudited Non-GAAP Financial Measures and Reconciliation
(in thousands, except per share data)
For the three-months For the nine-months
ended ended
-------------------- --------------------
September September September September
30, 2010 30, 2009 30, 2010 30, 2009
--------- --------- --------- ---------
GAAP operating loss $ (5,049) $ (5,245) $ (41,439) $ (18,661)
Stock-based compensation 925 738 2,504 3,427
Amortization of acquired
intangible assets 1,602 68 4,649 204
Merger, restructuring and
other non-recurring costs 2,031 - 24,449 -
--------- --------- --------- ---------
Non-GAAP operating loss $ (491) $ (4,439) $ (9,837) $ (15,030)
========= ========= ========= =========
GAAP loss from continuing
operations before
non-controlling interest $ (5,252) $ (5,656) $ (35,670) $ (19,455)
Stock-based compensation 925 738 2,504 3,427
Amortization of acquired
intangible assets 1,602 68 4,649 204
Merger, restructuring and
other non-recurring costs 2,031 - 24,449 -
Income tax adjustments (781) - (8,223) -
--------- --------- --------- ---------
Non-GAAP loss from continuing
Operations before
non-controlling interest $ (1,475) $ (4,850) $ (12,291) $ (15,824)
========= ========= ========= =========
GAAP loss per share from
continuing operations
before non-controlling
interest $ (0.15) $ (0.21) $ (1.04) $ (0.71)
Stock-based compensation 0.03 0.03 0.07 0.12
Amortization of acquired
intangible assets 0.04 - 0.14 0.01
Merger, restructuring and
other non-recurring costs 0.06 - 0.71 -
Income tax adjustments (0.02) - (0.24) -
--------- --------- --------- ---------
Non-GAAP loss per share from
continuing operations
before non-controlling
interest $ (0.04) $ (0.18) $ (0.36) $ (0.58)
========= ========= ========= =========
Weighted average shares
outstanding:
Basic and diluted 34,473 27,530 34,314 27,505
--------- --------- --------- ---------
Syneron Medical Ltd.
Unaudited Pro Forma Condensed Consolidated Statements of Income (Loss)
(in thousands, except per share data)
For the three months ended September 30, 2009
--------------------------------------------------
Syneron Candela Pro Forma Pro Forma
Medical Corporation Adjustments Combined
----------- ----------- ----------- -----------
Revenue $ 14,279 $ 26,224 $ (87) $ 40,416
Cost of sales 4,705 17,175 268 22,148
----------- ----------- ----------- -----------
Gross profit 9,574 9,049 (355) 18,268
Operating expenses:
Sales and marketing 7,531 6,778 966 15,275
General and
administrative 4,225 5,345 74 9,644
Research and
development 3,063 1,789 - 4,852
Legal settlement, net - - - -
----------- ----------- ----------- -----------
Total operating
expenses 14,819 13,912 1,040 29,771
----------- ----------- ----------- -----------
Loss from operations (5,245) (4,863) (1,395) (11,503)
Other income:
Financial Income, net 447 219 - 666
Other income - - - -
----------- ----------- ----------- -----------
Total other income 447 219 - 666
----------- ----------- ----------- -----------
Loss from continuing
operations before
income taxes (4,798) (4,644) (1,395) (10,837)
Expense (benefit) from
income taxes 858 (1,060) (507) (709)
----------- ----------- ----------- -----------
Loss from continuing
operations before
non-controlling
interest (5,656) (3,584) (888) (10,128)
=========== =========== =========== ===========
Loss per share:
Basic and diluted
Loss from continuing
operations before
non-controlling
interest $ (0.30)
===========
Weighted average shares
outstanding:
Basic and diluted 34,200
-----------
Syneron Medical Ltd.
Unaudited Pro Forma Condensed Consolidated Statements of Income (Loss)
(in thousands, except per share data)
For the nine months ended September 30, 2009
--------------------------------------------------
Syneron Candela Pro Forma Pro Forma
Medical Corporation Adjustments Combined
----------- ----------- ----------- -----------
Revenue $ 40,323 $ 87,383 $ (262) $ 127,444
Cost of sales 14,664 54,404 1,095 70,163
----------- ----------- ----------- -----------
Gross profit 25,659 32,979 (1,357) 57,281
Operating expenses:
Sales and marketing 26,287 21,957 2,904 51,148
General and
administrative 13,059 11,307 300 24,666
Research and
development 8,949 6,423 - 15,372
Legal settlement, net (3,975) - - (3,975)
----------- ----------- ----------- -----------
Total operating
expenses 44,320 39,687 3,204 87,211
----------- ----------- ----------- -----------
Loss from operations (18,661) (6,708) (4,561) (29,930)
Other income:
Financial Income, net 1,661 565 - 2,226
Other income - 9 - 9
----------- ----------- ----------- -----------
Total other income 1,661 574 - 2,235
----------- ----------- ----------- -----------
Loss from continuing
operations before
income taxes (17,000) (6,134) (4,561) (27,695)
Expense (benefit) from
income taxes 2,455 (2,035) (1,659) (1,239)
----------- ----------- ----------- -----------
Loss from continuing
operations before
non-controlling
interest (19,455) (4,099) (2,902) (26,456)
=========== =========== =========== ===========
Loss per share:
Basic and diluted
Loss from continuing
operations before
non-controlling
interest $ (0.77)
===========
Weighted average shares
outstanding:
Basic and diluted 34,175
-----------
Syneron Medical Ltd.
Unaudited Pro Forma Non-GAAP Financial Measures and Reconciliation
(in thousands, except per share data)
For the three months ended
September 30, 2009
-------------------------------------
Syneron Candela Pro Forma
Medical Corporation Combined
----------- ----------- -----------
GAAP operating loss $ (5,245) $ (6,258) $ (11,503)
Stock-based compensation 738 477 1,215
Amortization of acquired
intangible assets 68 1,291 1,359
Merger, restructuring and other
non-recurring costs - 105 105
----------- ----------- -----------
Non-GAAP operating loss $ (4,439) $ (4,385) $ (8,824)
=========== =========== ===========
GAAP loss from continuing operations $ (5,656) $ (4,472) $ (10,128)
Stock-based compensation 738 477 1,215
Amortization of acquired
intangible assets 68 1,291 1,359
Merger, restructuring and other
non-recurring costs - 105 105
Income tax adjustments - (681) (681)
----------- ----------- -----------
Non-GAAP loss from continuing
operations $ (4,850) $ (3,280) $ (8,130)
=========== =========== ===========
GAAP loss per share from continuing
operations $ (0.30)
Stock-based compensation 0.04
Amortization of acquired
intangible assets 0.04
Merger, restructuring and other
non-recurring costs -
Income tax adjustments (0.02)
-----------
Non-GAAP loss per share from
continuing operations $ (0.24)
===========
Weighted average shares outstanding:
Basic and diluted 34,200
-----------
Syneron Medical Ltd.
Unaudited Pro Forma Non-GAAP Financial Measures and Reconciliation
(in thousands, except per share data)
For the nine months ended
September 30, 2009
-------------------------------------
Syneron Candela Pro Forma
Medical Corporation Combined
----------- ----------- -----------
GAAP operating loss $ (18,661) $ (11,269) $ (29,930)
Stock-based compensation 3,427 1,863 5,290
Amortization of acquired
intangible assets 204 3,959 4,163
Merger, restructuring and other
non-recurring costs - 602 602
----------- ----------- -----------
Non-GAAP operating loss $ (15,030) $ (4,845) $ (19,875)
=========== =========== ===========
GAAP loss from continuing operations $ (19,455) $ (7,001) $ (26,456)
Stock-based compensation 3,427 1,863 5,290
Amortization of acquired
intangible assets 204 3,959 4,163
Merger, restructuring and other
non-recurring costs - 602 602
Income tax adjustments - (2,336) (2,336)
----------- ----------- -----------
Non-GAAP loss from continuing
operations $ (15,824) $ (2,913) $ (18,737)
=========== =========== ===========
GAAP loss per share from continuing
operations $ (0.77)
Stock-based compensation 0.15
Amortization of acquired
intangible assets 0.12
Merger, restructuring and other
non-recurring costs 0.02
Income tax adjustments (0.07)
-----------
Non-GAAP loss per share from
continuing operations $ (0.55)
===========
Weighted average shares outstanding:
Basic and diluted 34,175
-----------
Syneron Contacts: Asaf Alperovitz Chief Financial Officer + 972
73 244 2283 Email: Email Contact Nick Laudico/Zack Kubow The Ruth
Group 646-536-7030/7020 Email: Email Contact / Email Contact
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