YOKNEAM, ISRAEL--(Marketwire - February 16, 2011) - Syneron Medical Ltd. (NASDAQ: ELOS), the leading global aesthetic device company, today announced fourth quarter 2010 financial results for the three month period ended December 31, 2010. Fourth quarter 2010 financial results are for Syneron and Candela as a combined company. The fourth 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.
Fourth Quarter 2010 Highlights Include:
-- Revenue of $53.5 million, up 14.7% year-over-year -- International revenue of $35.3 million, up 20% year-over-year -- North America revenue of $18.2 million, up 5.7% year-over-year -- Non-GAAP gross margin of 54.4%, up from 50.0% in the prior year and 52.3% in Q3 2010 -- Non-GAAP net income from continuing operations before non-controlling interest of $3.4 million, or 6.3% of revenue compared to a net loss of $4.1 million in the prior year and $1.5 million in Q3 2010 -- Non-GAAP earnings per share (basic and diluted) of $0.10, compared to a loss per share of $0.12 in the prior year and $0.04 in Q3 2010 -- Net cash and investments portfolio of $215.2 million at December 31, 2010 -- Global launch of CO2RE and elure
Lou Scafuri, Chief Executive Officer of Syneron, commented, “The strength of our fourth quarter results clearly demonstrates the benefits of the Syneron and Candela merger. The combined businesses have an unmatched product portfolio and global sales network, which are supported by strong clinical data and customer relationships. We have successfully executed on the integration plan and leveraged these factors to drive continued revenue growth while also focusing on driving operational efficiencies and investing in new growth opportunities.
“We made significant progress on the new product front during the quarter, including global launches of our CO2RE Fractional CO2 Resurfacing System and elure Advanced Skin Lightening Technology. In addition, we are on schedule to launch the ePrime Energy-Based Dermal Remodeling during the first quarter, followed by several additional anticipated new product launches throughout the year. We have received positive feedback on all of the recently launched products, including at the American Academy of Dermatology annual meeting earlier this month.
“As part of our growth strategy, during the quarter we acquired the Tända line of LED home-use products, giving us an immediate presence in the important aesthetic home-use market. Tända represents a synergistic growth opportunity with our other direct to consumer initiatives and we expect this to become an increasingly important part of our business as we launch these new products.”
Revenue: Fourth quarter 2010 revenue was $53.5 million, an increase of 14.7% compared to $46.6 million in the fourth quarter 2009. International revenue was $35.3 million, an increase of 20% compared to $29.5 million in the fourth quarter 2009. Fourth quarter 2010 revenue in North America was $18.2 million, an increase of 5.7% compared to $17.2 million in the fourth quarter 2009.
Non-GAAP Financial Highlights for the Fourth Quarter Ended December 31, 2010:
Gross Margin: Fourth quarter 2010 gross margin was 54.4%, compared to 50.0% in the fourth quarter 2009 and 52.3% in the third quarter 2010.
Operating Income (loss): Fourth quarter 2010 operating income was $4.0 million, compared to an operating loss of $5.8 million in the fourth quarter 2009 and an operating loss of $0.5 million in the third quarter 2010. Fourth quarter 2010 operating income represented 7.5% of revenue in the quarter, compared to an operating loss of 12.4% of revenue in the fourth quarter 2009 and 1.1% of revenue in the third quarter 2010.
Net Income (loss): Fourth quarter 2010 income from continuing operations before non-controlling interest was $3.4 million, compared to a loss of $4.1 million in the fourth quarter 2009 and a loss of $1.5 million in the third quarter 2010.
Fourth quarter non-GAAP operating income and net income excludes one-time income and expenses as detailed in the Company’s financial tables, with the main item being a one-time income of $8.5 million related to the recognition of a deferred gain related to the Company’s merger with Candela Corporation.
Earnings Per Share: Fourth quarter 2010 earnings per share (basic and diluted) was $0.10, compared to a loss per share of $0.12 in the fourth quarter 2009 and a loss per share of $0.04 in the third quarter 2010.
GAAP Financial Highlights for the Fourth Quarter Ended December 31, 2010:
Gross Margin: Fourth quarter 2010 gross margin was 52.5%, compared to 49.0% in the fourth quarter 2009 and 50.8% in the third quarter 2010.
Operating Income (loss): Fourth quarter 2010 operating income was $8.0 million, compared to an operating loss of $8.6 million in the fourth quarter 2009 and an operating loss of $5.0 million in the third quarter 2010.
Net Income (loss) from continuing operations before non-controlling interest: Fourth quarter 2010 net income was $8.1 million, compared to a net loss of $6.2 million in the fourth quarter of 2009 and a loss of $5.3 million in the third quarter 2010.
Earnings Per Share: Fourth quarter 2010 earnings per share basic was $0.25 and diluted was $0.24, compared to a loss per share of $0.18 in the fourth quarter 2009 and a loss per share of $0.15 in the third quarter 2010.
Cash Position: As of December 31, 2010, net cash and cash equivalents, including short-term bank deposits and investments in marketable securities, were $215.2 million.
Asaf Alperovitz, Chief Financial Officer of Syneron, commented, “Beginning this quarter, we are breaking out our financial results between Professional Aesthetic Devices and Emerging Business Units in order to provide increased transparency into our results. We believe this segment reporting will allow investors to better gauge the growth and significant investments we are making as part of our overall growth strategy in our emerging technologies that are primarily targeted at the home-use consumer market. Products in the Emerging Business Units segment include eLure skin whitening, Tända LED systems, MEmyelos hair removal system, Light Instruments’ dental laser devices along with pipeline products that include our strategic home-use device partnership with Procter & Gamble and Fluorinex teeth whitening and fluorination. Segment reporting will also provide a view of the operating results for the traditional Syneron and Candela business, which we have labeled as Professional Aesthetic Devices, or PAD.”
Mr. Alperovitz added, “Our fourth quarter 2010 results in the PAD segment demonstrate a significant improvement in margins that we believe is indicative of the potential leverage we can drive from the combined Syneron and Candela business. Additionally, for the full year 2010 the PAD segment was operationally profitable on a non-GAAP basis. In 2011, we expect further margin improvements for our PAD segment as our mix shifts in favor of higher gross margin products and consumables and we execute on our cross selling opportunities and additional efficiency initiatives that we see in the business.”
Unaudited Non-GAAP segment results for the three months ended December 31, 2010 and 2009 (in thousands):
For the three-months ended ---------------------------------------------- December December 31, % of 31, % of % of 2010 Revenues 2009 Revenues Change ---------- ---------- ---------- ---------- ---------- Revenues Professional Aesthetic Devices $ 52,170 97.4% $ 46,615 99.9% 11.9% Emerging Business Units 1,373 2.6% 60 0.1% 2188.3% ---------- ---------- Total revenues $ 53,543 100.0% $ 46,675 100.0% 14.7% ========== ========== Professional Aesthetic Devices $ 5,948 11.4% $ (3,692) -7.9% -261.1% Emerging Business Units (1,926) -140.3% (2,097) -3495.0% -8.2% ---------- ---------- Total operating income (loss) $ 4,022 7.5% $ (5,789) -12.4% -169.5% ========== ==========
Unaudited Non-GAAP segment results for the twelve months ended December 31, 2010 and 2009 (in thousands):
For the twelve-months ended ---------------------------------------------- December December 31, % of 31, % of % of 2010 Revenues 2009 Revenues Change ---------- ---------- ---------- ---------- ---------- Revenues Professional Aesthetic Devices $ 185,951 97.9% $ 171,473 98.3% 8.4% Emerging Business Units 3,927 2.1% 2,908 1.7% 35.0% ---------- ---------- Total revenues $ 189,878 100.0% $ 174,381 100.0% 8.9% ========== ========== Operating income (loss) Professional Aesthetic Devices $ 302 0.2% $ (22,453) -13.1% -101.3% Emerging Business Units (6,117) -155.8% (3,211) -110.4% 90.5% ---------- ---------- Total operating loss $ (5,815) -3.1% $ (25,664) -14.7% -77.3% ========== ==========
Unaudited GAAP segment results for the three months ended December 31, 2010 and 2009 (in thousands):
For the three-months ended ---------------------------------------------- December December 31, % of 31, % of % of 2010 Revenues 2009 Revenues Change ---------- ---------- ---------- ---------- ---------- Revenues Professional Aesthetic Devices $ 52,083 97.4% $ 46,528 99.9% 11.9% Emerging Business Units 1,373 2.6% 60 0.1% 2188.3% ---------- ---------- Total revenues $ 53,456 100.0% $ 46,588 100.0% 14.7% ========== ========== Operating income (loss) Professional Aesthetic Devices $ 9,963 19.1% $ (6,502) -14.0% -253.2% Emerging Business Units (1,926) -140.3% (2,097) -3495.0% -8.2% ---------- ---------- Total operating income (loss) $ 8,037 15.0% $ (8,599) -18.5% -193.5% ========== ==========
Unaudited GAAP segment results for the twelve months ended December 31, 2010 and 2009 (in thousands):
For the twelve-months ended ---------------------------------------------- December December 31, % of 31, % of % of 2010 Revenues 2009 Revenues Change ---------- ---------- ---------- ---------- ---------- Revenues Professional Aesthetic Devices $ 185,601 97.9% $ 171,124 98.3% 8.5% Emerging Business Units 3,927 2.1% 2,908 1.7% 35.0% ---------- ---------- Total revenues $ 189,528 100.0% $ 174,032 100.0% 8.9% ========== ========== Operating income (loss) Professional Aesthetic Devices $ (27,285) -14.7% $ (35,318) -20.6% -22.7% Emerging Business Units (6,117) -155.8% (3,211) -110.4% 90.5% ---------- ---------- Total operating loss $ (33,402) -17.6% $ (38,529) -22.1% -13.3% ========== ==========
Use of Non-GAAP Measures
This press release provides financial measures for gross margin, net income (loss), net income ( loss) per basic and diluted share, which exclude one-time expenses relating to the mergers with Candela Corporation and Primeva Medical Inc, one-time income due to reversal of a deferred gain related 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 fourth 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 “Q4 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: 31269957.
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 For the three-months ended twelve-months ended ------------------- ------------------- December December December December 31, 31, 31, 31, 2010 2009 2010 2009 --------- --------- --------- --------- Revenue $ 53,456 $ 14,403 $ 189,528 $ 54,726 Cost of sales 25,395 4,239 101,099 18,903 --------- --------- --------- --------- Gross profit 28,061 10,164 88,429 35,823 Operating expenses: Sales and marketing 14,310 7,869 63,429 34,156 General and administrative 6,612 3,419 36,103 16,478 Research and development 6,414 4,271 26,837 13,220 Other income, net (7,312) - (4,538) - Legal settlement, net - - - (3,975) --------- --------- --------- --------- Total operating expenses 20,024 15,559 121,831 59,879 --------- --------- --------- --------- Income (loss) from operations 8,037 (5,395) (33,402) (24,056) Other income: Financial Income, net 419 436 717 2,097 Other income 110 562 44 562 --------- --------- --------- --------- Total other income 529 998 761 2,659 --------- --------- --------- --------- Income (loss) from continuing operations before income taxes 8,566 (4,397) (32,641) (21,397) (Benefit) expense from income taxes 427 785 (5,110) 3,240 --------- --------- --------- --------- Income (loss) from continuing operations before non-controlling interest 8,139 (5,182) (27,531) (24,637) Net loss attributable to non-controlling interest 244 837 1,799 1,050 Income from discontinued operations, net of income taxes - - 196 - --------- --------- --------- --------- Net income (loss) attributable to Syneron shareholders $ 8,383 $ (4,345) $ (25,536) $ (23,587) ========= ========= ========= ========= Income (loss) per share: Basic Income (loss) from continuing operations before non-controlling interest $ 0.24 $ (0.19) $ (0.80) $ (0.90) Net loss attributable to non-controlling interest 0.01 0.03 0.05 0.04 Income from discontinued operations - - 0.01 - --------- --------- --------- --------- Net Income (loss) attributable to Syneron shareholders $ 0.25 $ (0.16) $ (0.74) $ (0.86) --------- --------- --------- --------- Diluted Income (loss) from continuing operations before non-controlling interest $ 0.23 $ (0.19) $ (0.80) $ (0.90) Net loss attributable to non-controlling interest 0.01 0.03 0.05 0.04 Income from discontinued operations - - 0.01 - --------- --------- --------- --------- Net Income (loss) attributable to Syneron shareholders $ 0.24 $ (0.16) $ (0.74) $ (0.86) --------- --------- --------- --------- Weighted average shares outstanding: Basic 34,533 27,591 34,369 27,526 --------- --------- --------- --------- Diluted 34,998 27,591 34,369 27,526 --------- --------- --------- --------- Syneron Medical Ltd. Condensed Consolidated Balance Sheets (in thousands) December December 31, 31, 2010 2009 ----------- ----------- (unaudited) (audited) Assets Current assets: Cash and cash equivalents $ 63,821 $ 24,372 Short-term bank deposits 1,590 1,000 Available-for-sale marketable securities 114,799 169,309 Accounts receivable, net 42,440 13,758 Other current assets 13,868 2,753 Inventories, net 22,720 8,592 ----------- ----------- Total current assets 259,238 219,784 ----------- ----------- Non-current assets: Severance pay fund 334 246 Long-term deposits and others 2,346 221 Long-term available-for-sale marketable securities 37,721 11,449 Investments in affiliated companies 9,369 1,050 Property and equipment, net 4,029 2,885 Goodwill and Intangible assets, net 56,818 34,632 Deferred taxes 6,854 - ----------- ----------- Total non-current assets 117,471 50,483 ----------- ----------- Total assets $ 376,709 $ 270,267 =========== =========== Liabilities and Stockholders’ Equity Current liabilities: Bank indebtedness $ 2,737 $ - Accounts payable 16,644 3,735 Other accounts payable and accrued expenses 55,056 30,153 ----------- ----------- Total current liabilities 74,437 33,888 ----------- ----------- Non-current liabilities: Contingent consideration 11,365 7,331 Deferred Revenues 4,528 902 Warranty Accruals 1,074 558 Accrued severance pay 554 330 Deferred taxes 6,215 - ----------- ----------- Total non-current liabilities 23,736 9,121 ----------- ----------- Stockholders’ equity: 278,536 227,258 ----------- ----------- Total liabilities and stockholders’ equity $ 376,709 $ 270,267 =========== =========== Syneron Medical Ltd. Unaudited Condensed Consolidated Statements of Cash Flows (in thousands) For the twelve months ended: ---------------------- December December 31, 31, 2010 2009 ---------- ---------- Cash flows from operating activities: Net loss before non-controlling interest $ (27,335) $ (24,637) Adjustments to reconcile net loss to net cash used by operating activities: Share-based compensation expense 3,196 4,264 Depreciation and amortization 9,186 1,927 Impairments of available-for-sale marketable securities and other intangible assets 1,378 173 Impairment of investment in an affiliated company 850 - Realized loss, changes in accrued interest, and amortization of premium on marketable securities 970 1,578 Deferred gain related to acquisition of Subsidiary and revaluation of contingent liability (6,900) - Gain on investments in affiliated companies as a result of a business combination - (562) Changes in operating assets and liabilities Accounts receivable 450 18,879 Inventories 13,180 4,320 Other current assets (4,506) 64 Deferred taxes 7,105 1,549 Accrued severance pay, net 136 (9) Accounts payable 4,201 (5,039) Deferred revenue (3,885) (3,608) Accrued warranty costs 315 (4) Other accrued liabilities (4,732) 160 ---------- ---------- Net cash used by operating activities (6,391) (945) ---------- ---------- Cash flows from investing activities: Purchases of property and equipment (887) (487) Maturities of held-to-maturity marketable securities 460 - Proceeds from the sale of available-for-sale marketable securities 210,228 256,735 Purchase of available-for-sale marketable securities (182,961) (294,345) Cash paid for investments in affiliated companies (5,000) (750) Net cash (paid in) received from acquisition of subsidiary 21,602 (7,729) Other investing activities (360) (1,022) ---------- ---------- Net cash provided by (used by) investing activities 43,082 (47,598) ---------- ---------- Cash flows from financing activities: Proceeds from exercise of stock options 1,932 549 ---------- ---------- Net cash provided by financing activities 1,932 549 ---------- ---------- Effect of exchange rates on cash and cash equivalents 826 - ---------- ---------- Net increase (decrease) in cash and cash equivalents 39,449 (47,994) Cash and cash equivalents at beginning of period 24,372 72,366 ---------- ---------- Cash and cash equivalents at end of period $ 63,821 $ 24,372 ========== ========== Syneron Medical Ltd. Unaudited Non-GAAP Financial Measures and Reconciliation (in thousands, except per share data) For the For the three-months ended twelve-months ended
