Syneron Medical Ltd. Reports Second Quarter 2016 Revenue Of $75.0 Million And Non-GAAP EPS Of $0.09
IRVINE, Calif., Aug. 4, 2016 /PRNewswire/ -- Syneron Medical Ltd. (NASDAQ: ELOS), a leading global aesthetic device company, today announced financial results for the three month period ended June 30, 2016.
Second Quarter 2016 Non-GAAP2 Financial Highlights:
- Revenue of $75.0 million, up 2.0% year-over-year, with 11.5% international growth and a 14% decline in North America
- Emerging products revenue, which represent the Company's strategic growth drivers, grew 46% year-over-year, primarily driven by the Body Shaping portfolio
- Total Body Shaping revenue of $17.3 million grew 66% year-over-year
- Non-GAAP net income of $3.2 million, or $0.09 per share, compared to $2.5 million and $0.07 per share in Q2 2015
- Cash position as of June 30, 2016 of $76.7 million with no debt; generated $5.6 million in cash flow from operations
Amit Meridor, Chief Executive Officer of Syneron Medical, said "We had a challenging quarter in North America, results were lower than anticipated, and we took immediate action to improve performance in this region. We eliminated the North America CEO position to simplify the management structure and ensure efficient support of the sales team. I have taken leadership in North America, with the Aesthetic and Body Shaping divisions reporting directly to me. Additional steps we took in North America include streamlining of the aesthetic and body sales forces and better support of the sales force across all functions."
Amit Meridor continued, "On the positive side we delivered on several key initiatives in the second quarter, headlined by our Emerging Products growing 46% year-over-year and expanding to 30% of total revenue, increasing our installed base of systems driving high margin recurring revenue. This was primarily driven by record results from our Body Shaping products and specifically the ongoing international launch of UltraShape and the recent launch of UltraShape Power in select international markets. This contributed to overall international growth of 11.5%, which represents 68% of our total revenue. We maintained prudent expense management and delivered improved operating margin in the second quarter, demonstrating our commitment to this key element of our strategy. We are also focused on important initiatives such as the U.S. launches of UltraShape Power and the new 785nm wavelength for PicoWay, providing positive growth catalysts in the second half of the year. We are particularly excited to introduce UltraShape Power to customers in the U.S. and build on the record UltraShape worldwide results delivered in the second quarter."
Revenue Highlights for the Second Quarter Ended June 30, 2016:
Second quarter 2016 revenue was driven by 46% growth from the Company's Emerging Products, which represent the Company's strategic growth drivers including UltraShape, VelaShape, PicoWay, Profound and CO2RE Intima. Second quarter Emerging Products growth was primarily driven by the Body Shaping portfolio, which delivered revenue of $17.3 million, up 66% year-over-year. This included the significant milestone of more than $10 million of UltraShape revenue, driven by the ongoing international launch of UltraShape and the launch of UltraShape Power in select international markets. The Company is launching UltraShape Power in the United States in the third quarter 2016.
In May, the Company sold its Dental laser subsidiary. The divestiture of this non-core asset is aligned with the Company's strategy to focus on driving growth and improving profitability with its Emerging Products. Second quarter 2016 revenue included only $0.2 million in sales from the Dental laser subsidiary, reflecting only the sale at the end of May. This compares to $0.7 million in sales for the Dental laser subsidiary in the second quarter 2015.
Non-GAAP Financial Highlights for the Second Quarter Ended June 30, 2016:
Gross Margin for the second quarter 2016 was 52.8%, compared to 53.9% in the second quarter 2015. This decrease reflects an increased mix of international distributor revenue, partially offset by sales of the Company's higher margin Emerging Products.
Operating Income for the second quarter 2016 was $4.4 million, compared to $2.9 million in the second quarter 2015. Operating margin for the second quarter 2016 was 5.8%, compared to 4.0% in the second quarter 2015. This increase reflects growth from the Company's higher margin Emerging Products, cost efficiency initiatives and lower spending, and expansion in international markets starting to leverage the Company's existing infrastructure.
Net Income and Earnings per Share in the second quarter 2016 was $3.2 million, or $0.09 per share, compared to net income of $2.5 million, or $0.07 per share, in the second quarter 2015. The Company had an average of 35.3 million shares outstanding in the second quarter 2016, compared to an average of 36.5 million shares outstanding in the second quarter 2015.
The non-GAAP financial information for the second quarter 2016 is adjusted to exclude the following items, which are detailed in the Company's financial tables presented at the end of this press release:
- Stock-based compensation expense of $0.8 million, compared to $0.9 million in the second quarter 2015.
- Amortization of acquired intangible assets of $1.2 million, compared to $1.5 million in the second quarter 2015.
- Fair Value adjustment to investment in Illuminage Beauty JV of $2.0 million, compared to $(0.6) million in the second quarter 2015.
- Gain from sale of Light Instruments (dental laser subsidiary) of $1.5 million.
- Legal settlements and related fees of $0.0, compared to $1.4 million in the second quarter 2015.
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