Solta Medical, Inc. Reports Fourth Quarter and Full Year 2010 Results

HAYWARD, Calif., Feb. 22, 2011 /PRNewswire/ -- Solta Medical, Inc. (Nasdaq: SLTM), a global leader in the medical aesthetics market, today announced results for the fourth quarter and full year ended December 31, 2010. Revenue for the fourth quarter was $30.1 million, an increase of $1.7 million, or 6%, as compared to the fourth quarter of 2009. The improved results for the quarter were driven primarily by a 19% year-over-year increase in sales of treatment tips and consumables.

GAAP net loss for the quarter was $0.2 million as compared to GAAP net loss of $0.3 million reported for the fourth quarter of 2009. Non-GAAP net income was $1.7 million, or $0.03 per diluted share, for both the current quarter and for same period last year. Cash flow generated from operations for the quarter was $3.4 million.

Revenue for the twelve months ended December 31, 2010 grew 12% to $110.9 million, as compared to revenue of $98.8 million for the full year 2009.

The GAAP net loss for the year was $2.0 million, or a loss of $0.03 per share, as compared to a net loss of $11.2 million, or a loss of $0.23 per share reported for the full year 2009. Non-GAAP net income for the full year was $6.8 million, or $0.11 per diluted share as compared to a non-GAAP net loss of $0.8 million, or a loss of $0.02 per share reported for the full year 2009. Cash flow generated from operations for the full year was $10.2 million.

Solta Medical’s GAAP results for the fourth quarter and full year 2010 include non-cash amortization and other acquisition related charges of $1.3 million and $6.3 million, respectively, and non-cash stock based compensation charges of $0.6 million and $2.5 million, respectively. The Company provides additional non-GAAP financial measures that exclude these charges and expenses. A reconciliation of GAAP to non-GAAP results is provided in the tables included in this release.

“Solta accomplished key operational milestones in 2010 under challenging economic conditions. We grew top-line revenue by 12%, expanded our gross margin by more than three percentage points to 63%, produced positive non-GAAP EBITDA every quarter, and generated record cash flow from operations of $10.2 million,” said Stephen J. Fanning, Chairman, President & CEO. “Earlier this month, we received positive response to the introduction of our two new products at the American Academy of Dermatology meeting, Clear+Brillant and the Fraxel 1927. In 2011, we will continue to pursue strategic initiatives that address the needs of physicians, clinicians, and consumers with technologies that provide superior aesthetic and therapeutic benefits delivered in a simple, elegant, and cost effective manner. “

Financial Outlook for 2011

The company provided a preliminary financial outlook for 2011 as follows:

• Revenue for the full year 2011 in the range of $118 million to $123 million, representing an increase 6% to 11% from 2010 revenue. The company expects year-over-year revenue growth of high single digits for the first six months of 2011 to be followed by year-over-year revenue growth in the range of 10% to 15% for the last half of 2011. The higher rate of revenue growth in the second half of the year is projected to be driven by the introduction and expanded distribution of products.
• Non-GAAP gross margin in the range of 66% to 68% for the full year 2011. Non-GAAP gross margin excludes non-cash amortization charges, non-cash stock based compensation charges, and acquisition related adjustments. For 2010, the company’s non-GAAP gross margin was 66%.
• Positive non-GAAP EBITDA for every quarter and for the full-year 2011. Non-GAAP EBITDA excludes non-cash amortization charges, non-cash stock based compensation charges, and acquisition related adjustments. For 2010 non-GAAP EBITDA totaled $9.9 million which included a one-time legal settlement gain of $2.2 million.

Non-GAAP Presentation

To supplement the condensed consolidated financial information presented on a GAAP basis, management has provided non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP EBITDA, non-GAAP net income (loss) and non-GAAP earnings (loss) per share measures that exclude the impact of acquisition related adjustments, severance costs, acquisition related costs, and stock-based compensation expenses. The Company believes that these non-GAAP financial measures provide investors with insight into what is used by management to conduct a more meaningful and consistent comparison of the Company’s ongoing operating results and trends, compared with historical results. This presentation is also consistent with the measures management uses to measure the performance of ongoing operating results against prior periods and against our internally developed targets. There are limitations in using these non-GAAP financial measures because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. These non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP financial measures. Investors and potential investors should consider non-GAAP financial measures only in conjunction with the Company’s consolidated financial statements prepared in accordance with GAAP and the reconciliation of non-GAAP financial measures attached to this release.

Conference Call Information

The Company will also host a conference call and webcast today, Tuesday, February 22, 2010, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific) to discuss the financial results and current corporate developments. The dial-in number for the conference call is 866-225-8754 for domestic participants and 480-629-9692 for international participants.

A taped replay of the conference call will also be available beginning approximately one hour after the call’s conclusion and will remain accessible for seven days. This replay can be accessed by dialing 800-406-7325 for domestic callers and 303-590-3030 for international callers. Callers will need to use the Passcode 4405060#. To access the live webcast of the call, go to Solta Medical’s website at www.solta.com and click on Investor Relations. An archived webcast will also be available at www.solta.com.

About Solta Medical, Inc.

Solta Medical, Inc. is a global leader in the medical aesthetics market providing innovative, safe, and effective solutions for patients that enhance and expand the practice of medical aesthetics for physicians. The company offers products to address a range of skin issues under the industry’s four premier brands: Thermage®, Fraxel®, Isolaz®, and CLARO®. Thermage is an innovative, non-invasive radiofrequency procedure for tightening and contouring skin. As the leader in fractional laser technology, Fraxel delivers minimally invasive clinical solutions to resurface aging and sun damaged skin. Isolaz is the only laser or light based system indicated for the treatment of inflammatory acne, comedonal acne, pustular acne, and mild-to-moderate inflammatory acne. CLARO is a personal care acne system that is the only FDA cleared over-the-counter IPL device that uses a powerful combination of both heat and light to clear skin quickly and naturally. Since 2002, over one million Thermage, Fraxel and Isolaz procedures have been performed in over 100 countries. For more information about Solta Medical, call 1-877-782-2286 or log on to www.Solta.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding our financial goals for 2011. Forward-looking statements are based on management’s current, preliminary expectations and are subject to risks and uncertainties, which may cause Solta Medical’s actual results to differ materially from the statements contained herein. Factors that might cause such a difference include the risk that physician adoption of our systems does not grow, the risk that customers do not continue to purchase treatment tips, the possibility that the market for the sale of new products does not develop as expected, and the risks relating to Solta Medical’s ability to achieve its stated financial goals as a result of, among other things, economic conditions and consumer and physician confidence causing changes in consumer and physician spending habits that affect demand for our products and treatments. Further information on potential risk factors that could affect Solta Medical’s business and its financial results are detailed in its Form 10-Q for the quarter ended September 30, 2010, and other reports as filed from time to time with the Securities and Exchange Commission. Undue reliance should not be placed on forward-looking statements, especially guidance on future financial performance, which speaks only as of the date they are made. Solta Medical undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date they were made, or to reflect the occurrence of unanticipated events.