YOKNEAM, ISRAEL--(Marketwire - May 13, 2010) - Syneron Medical Ltd. (NASDAQ: ELOS), the leading global aesthetic device company, today announced first quarter 2010 financial results for the three month period ended March 31, 2010. First quarter 2010 financial results are for Syneron and Candela as a combined company. The first 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.
Revenue for the first quarter 2010 was $43.0 million, compared to $41.7 million in the first quarter 2009. GAAP net loss for the first quarter 2010 was $22.5 million, or $0.66 per basic and diluted share, compared to a net loss of $9.9 million, or $0.29 per basic and diluted share, in the first quarter of 2009. On a non-GAAP basis, excluding stock-based compensation, amortization and one-time expenses, net loss before non-controlling interests for the first quarter 2010 was $6.2 million, or $0.18 per basic and diluted share, compared to a net loss before non-controlling interests of $6.5 million, or $0.19 per basic and diluted share, during the first quarter 2009.
First quarter 2010 revenue in North America was $14.6 million compared to $16.7 million in the first quarter of 2009. International revenue was $28.4 million compared to $25.0 million in the first quarter of 2009. Product and service revenue for the first quarter 2010 were $31.0 million and $12 million, respectively.
Lou Scafuri, Chief Executive Officer of Syneron, commented, "Syneron had a milestone quarter, beginning with the closing of our merger with Candela in January 2010 and consolidation is continuing as planned. The transaction strongly positions Syneron as the leading global aesthetic device company with new channels to market across a broad range of product areas. Today we are pleased to present financial results for this combination for the first time."
Gross margin for the first quarter 2010 was 34.5% or 47.4% on a non-GAAP basis, excluding stock-based compensation, amortization and one-time expenses compared to 44.6% or 45.3% on a non-GAAP basis in the same period last year. First quarter 2010 gross margin was impacted by a $5.6 million one-time expense related to the merger with Candela Corporation that was completed on January 5, 2010 and a mix of increased international geographic sales versus North America.
Operating expenses for the first quarter 2010 were $44.7 million, compared to $29.4 million during the first quarter of 2009. First quarter 2010 operating expenses include a $17.5 million one-time expense related to the merger with Candela Corporation and $0.8 million in stock based compensation.
Cash and cash equivalents, including short-term and long-term bank deposits and investments in marketable securities, were $229.5 million at March 31, 2010. The Company achieved break-even cash flow during the first three months of 2010 and received one-time $9.0 million tax refund related to the merger with Candela.
Mr. Scafuri concluded, "We are encouraged by our top-line performance, particularly in international markets, as the aesthetic industry stabilizes and the overall economic environment improves. The successful merger with Candela has been very well received by our physician customer base and positions Syneron as the clear market leader in the global aesthetic industry. We believe we have achieved a sustainable competitive advantage built on a global distribution platform, a broad and deep product portfolio and significant cross selling opportunities. As the global aesthetic device market grows, we look to continue to lead industry change, broaden customer relationships and continue to deliver innovative, best in class solutions."
Use of Non-GAAP Measures
This press release provides financial measures for net loss, gross margin, 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 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 first quarter 2010 earnings conference call today at 5:00 p.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 "Q1 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 passcode is: 71774468
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 enable 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 ended
--------------------------
March 31, March 31,
2010 2009
------------ ------------
Revenue $ 43,002 $ 11,889
Cost of sales 28,169 4,980
------------ ------------
Gross profit 14,833 6,909
Operating expenses:
Sales and marketing 20,823 10,075
General and administrative 14,758 6,016
Research and development 7,030 2,948
Other expenses 2,092 -
Legal settlement, net - (3,975)
------------ ------------
Total operating expenses 44,703 15,064
------------ ------------
Loss from operations (29,870) (8,155)
Other income (expense):
Interest income 163 741
Other expense (309) -
------------ ------------
Total other income (expense) (146) 741
------------ ------------
Loss from continuing operations before income
taxes (30,016) (7,414)
(Benefit) expense from income taxes (6,203) 745
------------ ------------
Loss from continuing operations before
non-controlling interest (23,813) (8,159)
Net loss attributable to non-controlling
interest 1,126 -
Income from discontinued operations, net of
income taxes 196 -
------------ ------------
Net Loss attributable to Syneron shareholders $ (22,491) $ (8,159)
============ ============
Loss per share:
Basic and diluted
Loss from continuing operations before
non-controlling interest $ (0.70) $ (0.30)
Net loss attributable to non-controlling
interest 0.03 -
Income from discontinued operations 0.01 -
------------ ------------
Net Loss attributable to Syneron shareholders $ (0.66) $ (0.30)
------------ ------------
Weighted average shares outstanding:
Basic and diluted 34,023 27,480
------------ ------------
Syneron Medical Ltd.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
March 31, December 31,
2010 2009
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 60,779 $ 24,372
Short-term bank deposits 3,018 1,000
Available-for-sale marketable securities 153,640 169,309
Accounts receivable, net 40,961 13,758
Other current assets 12,946 2,753
Inventories, net 21,240 8,592
------------- -------------
Total current assets 292,584 219,784
------------- -------------
Non-current assets:
Severance pay fund 264 246
Long-term deposits and others (*) 1,446 221
Long-term available-for-sale marketable
securities (*) 12,100 11,449
Investments in affiliated companies 1,050 1,050
Property and equipment, net 4,703 2,885
Goodwill and Intangible assets, net 55,820 34,632
Deferred taxes 9,132 -
------------- -------------
Total non-current assets 84,515 50,483
------------- -------------
Total assets $ 377,099 $ 270,267
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 13,595 $ 3,735
Other accounts payable and accrued expenses 67,071 30,153
------------- -------------
Total current liabilities 80,666 33,888
------------- -------------
Non-current liabilities:
Contingent consideration 7,911 7,331
Deferred Revenues 4,969 902
Warranty Accruals 757 558
Accrued severance pay 358 330
Deferred taxes 5,654 -
------------- -------------
Total non-current liabilities 19,649 9,121
------------- -------------
Stockholders' equity: 276,784 227,258
------------- -------------
Total liabilities and stockholders' equity $ 377,099 $ 270,267
============= =============
Syneron Medical Ltd.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
For the three months
--------------------------
March 31, March 31,
2010 2009
------------ ------------
Cash flows from operating activities:
Net loss before non-controlling interest $ (22,536) $ (8,159)
Adjustments to reconcile net loss to net
cash used by operating activities:
Non-cash items reported in discontinued
operations (232) -
Share-based compensation expense 782 1,919
Depreciation and amortization 2,218 584
Provision for bad debts 4,532 -
Impairments of available-for-sale
marketable securities and other intangible
assets 1,608 157
Realized loss, changes in accrued interest,
and amortization of premium on marketable
securities 329 -
Revaluation of contingent liability 580 -
Other non-cash items (60) -
Changes in operating assets and liabilities
Accounts receivable 1,007 10,586
Inventories 11,966 737
Other current assets (765) 737
Other assets (9) -
Accounts payable (341) (4,597)
Accrued payroll and related expenses 549 5
Deferred revenue (2,148) (1,015)
Accrued warranty costs (659) (8)
Income taxes payable and deferred 3,683 365
Other accrued liabilities (584) (2,108)
------------ ------------
Net cash used by operating activities (80) (797)
------------ ------------
Cash flows from investing activities:
Purchases of property and equipment (693) (136)
Proceeds from the sale of
available-for-sale marketable securities 54,967 40,509
Purchase of available-for-sale marketable
securities (40,286) (68,183)
Net cash received from acquisition of
subsidiary 22,288 -
Other investing activities 220 (294)
------------ ------------
Net cash provided by (used by) investing
activities 36,496 (28,104)
------------ ------------
Cash flows from financing activities:
Proceeds from the issuance of common stock 354 -
------------ ------------
Net cash provided by financing activities 354 -
------------ ------------
Effect of exchange rates on cash and cash
equivalents (363) -
------------ ------------
Net increase (decrease) in cash and cash
equivalents 36,407 (28,901)
Cash and cash equivalents at beginning of
period 24,372 72,366
------------ ------------
Cash and cash equivalents at end of period $ 60,779 $ 43,465
============ ============
Syneron Medical Ltd.
Unaudited Non-GAAP Financial Measures and Reconciliation
(in thousands, except per share data)
For the three-months ended
--------------------------
March 31, March 31,
2010 2009
------------ ------------
GAAP operating loss $ (29,870) $ (8,155)
Stock-based compensation 782 1,919
Amortization of acquired intangible assets 1,498 68
Merger, restructuring and other non-recurring
costs 21,587 -
------------ ------------
Non-GAAP operating loss $ (6,003) $ (6,168)
============ ============
GAAP loss from continuing operations
before non-controlling interest $ (23,813) $ (8,159)
Stock-based compensation 782 1,919
Amortization of acquired intangible assets 1,498 68
Merger, restructuring and other non-recurring
costs 21,587 -
Income tax adjustments (6,246) -
------------ ------------
Non-GAAP loss from continuing operations
before non-controlling interest $ (6,192) $ (6,172)
============ ============
GAAP loss per share from continuing operations
before non-controlling interest $ (0.70) $ (0.30)
Stock-based compensation 0.02 0.07
Amortization of acquired intangible assets 0.04 0.00
Merger, restructuring and other non-recurring
costs 0.63 -
Income tax adjustments (0.18) -
------------ ------------
Non-GAAP loss per share from continuing
operations before non-controlling interest $ (0.18) $ (0.23)
============ ============
Weighted average shares outstanding:
Basic and diluted 34,023 27,480
------------ ------------
Syneron Medical Ltd.
Unaudited Condensed Consolidated Statements of Income (Loss)
(in thousands, except per share data)
Three months ended March 31, 2009
----------------------------------------------
Syneron Candela Pro Forma Pro Forma
Medical Corporation Adjustments Combined
---------- ---------- ---------- ----------
Revenue $ 11,889 $ 29,766 $ - $ 41,655
Cost of sales 4,980 17,833 252 23,065
---------- ---------- ---------- ----------
Gross profit 6,909 11,933 (252) 18,590
Operating expenses:
Sales and marketing 10,075 7,551 969 18,595
General and administrative 6,016 3,246 113 9,375
Research and development 2,948 2,488 - 5,436
Legal settlement, net (3,975) - - (3,975)
---------- ---------- ---------- ----------
Total operating expenses 15,064 13,285 1,082 29,431
---------- ---------- ---------- ----------
Loss from operations (8,155) (1,352) (1,334) (10,841)
Other income (expense):
Interest income 741 8 - 749
Other income (expense) - (16) - (16)
---------- ---------- ---------- ----------
Total other income
(expense) 741 (8) - 733
---------- ---------- ---------- ----------
Loss from continuing
operations before income
taxes (7,414) (1,360) (1,334) (10,108)
(Benefit) expense from
income taxes 745 (465) (485) (205)
---------- ---------- ---------- ----------
Loss from continuing
operations (8,159) (895) (849) (9,903)
========== ========== ========== ==========
Loss per share:
Basic and diluted
Loss from continuing
operations $ (0.30) $ (0.04) $ (0.29)
========== ========== ==========
Weighted average shares
outstanding:
Basic and diluted 27,480 22,725 34,156
---------- ---------- ----------
Syneron Medical Ltd.
Unaudited Pro Forma Non-GAAP Financial Measures and Reconciliation
(in thousands, except per share data)
Three months ended March 31, 2009
-------------------------------------
Syneron Candela Pro Forma
Medical Corporation Combined
----------- ----------- -----------
GAAP operating loss $ (8,155) $ (2,686) $ (10,841)
Stock-based compensation 1,919 834 2,753
Amortization of acquired intangible
assets 68 1,334 1,402
----------- ----------- -----------
Non-GAAP operating loss $ (6,168) $ (518) $ (6,686)
=========== =========== ===========
GAAP loss from continuing operations
before non-controlling interests $ (8,159) $ (1,744) $ (9,903)
Stock-based compensation 1,919 834 2,753
Amortization of acquired intangible
assets 68 1,334 1,402
Income tax adjustments - (788) (788)
----------- ----------- -----------
Non-GAAP loss from continuing
operations before non-controlling
interests $ (6,172) $ (364) $ (6,536)
=========== =========== ===========
GAAP loss per share from continuing
operations before non-controlling interests $ (0.29)
Stock-based compensation 0.08
Amortization of acquired intangible
assets 0.04
Income tax adjustments (0.02)
-----------
Non-GAAP loss per share from
continuing operations before
non-controlling interests $ (0.19)
===========
Weighted average shares outstanding:
Basic and diluted 34,156
-----------
Syneron Contacts:
Fabian Tenenbaum
Chief Financial Officer
+ 972 73 244 2283
Email: Email Contact
Nick Laudico/R.J. Pellegrino
The Ruth Group
646-536-7030/7009
Email: Email Contact/Email Contact
