YOKNEAM, ISRAEL--(Marketwire - February 11, 2010) - Syneron Medical Ltd. (NASDAQ: ELOS)
Syneron: Fourth Quarter 2009 Highlights: -- Revenue of $14.4 million, up 1.6% from the fourth quarter 2008 -- Gross margin of 70.6%, up from 54.7% in the fourth quarter 2008 and 67.0% in the third quarter 2009 -- Achieved break-even cash flow from operating activities -- Year-over-year average days sales outstanding reduced by 154 days to 97 days as of December 31, 2009 Candela: Fiscal Second Quarter 2010 Highlights: -- Revenue of $32.3 million, up 12.2% from 2009 -- Gross margin of 40.4% up from 35.3% in 2009 -- Achieved break-even from operating activities excluding transaction expenses and stock based compensation expenses
Syneron Medical Ltd. (NASDAQ: ELOS), the leading global aesthetic device company, today announced financial results for the fourth quarter and full year ended December 31, 2009. The fourth quarter 2009 financial results are for Syneron Medical solely. The combined financial results with Candela Corporation which was acquired on January 5, 2010 are included in the pro-forma financial results section of the press release assuming the merger with Candela Corporation had occurred on October 1, 2009.
Syneron Fourth Quarter 2009 Financial Results
Revenue for the fourth quarter 2009 was $14.4 million, up 1.6% compared to $14.2 million in the fourth quarter 2008 and $14.3 million in the third quarter 2009.
Gross margin for the fourth quarter 2009 was 70.6 % compared to 54.7% in the same period last year and 67.0% in the third quarter 2009. Gross margin increased for the fourth consecutive quarter, driven by stable selling prices and increased sales from the Company's new higher margin consumable products.
Operating expenses for the fourth quarter 2009 were $15.6 million, down 33.6% from $23.4 million during the fourth quarter of 2008. The year-over-year decrease primarily reflected a planned reduction in general and administrative and sales and marketing expenses. The Company continues to invest in research and development in order to drive new product innovation that supports its customers. Research and development expense was $4.3 million for the fourth quarter of 2009, up from $3.2 million in the fourth quarter 2008. The increase reflected the acquisition and consolidation of financial results for Primaeva, RBT and Fluorinex and the development of an innovative RF aesthetic device for skin tightening.
GAAP net loss for the fourth quarter 2009 was $4.3 million, or $0.16 per basic and diluted share, compared to a net loss of $15.9 million, or $0.58 per basic and diluted share, in the fourth quarter of 2008. The fourth quarter 2009 net loss includes $0.8 million in stock based compensation and a $0.7 million expense related to the merger with Candela Corporation, completed on January 5, 2010. Merger-related expenses are included in the GAAP results in accordance with ASC 805 (originally issued as SFAS 141®) "Business Combinations" which is effective for business combinations occurring after January 1, 2009.
On a non-GAAP basis, excluding stock-based compensation, net loss for the fourth quarter 2009 was $3.5 million, or $0.13 per basic and diluted share, compared to a net loss of $13.7 million, or $0.50 per basic and diluted share, during the fourth quarter 2008.
Cash and cash equivalents, including short-term and long-term bank deposits, were $206.4 million at December 31, 2009. The Company achieved break-even cash flow from operating activities for the fourth quarter of 2009. Trade receivables as of December 31, 2009 were $13.8 million, a decrease of 57.8% compared to $32.6 million as of December 31, 2008. During the fourth quarter 2009, inventories decreased for the fourth consecutive quarter to $8.6 million, representing a 32.1% decrease from the fourth quarter 2008. On December 31, 2009, average days sales outstanding (calculated on a quarterly basis) were 97 compared to 251 in the fourth quarter of 2008 and 115 in the third quarter 2009. Equity at the end of fourth quarter 2009 was $227.3 million.
Lou Scafuri, Chief Executive Officer of Syneron, commented, "Fourth quarter 2009 results from both Syneron and Candela demonstrate our ability to achieve revenue growth in what has been a challenging global economic environment. With two strong franchises, a global distribution and a complementary customer base, we are in excellent position to benefit from an improvement in the aesthetic space and overall economic environment."
Mr. Scafuri continued, "We are particularly pleased with the high demand for Syneron's eMatrix™ product, featuring Sublative Rejuvenation. Fourth quarter 2009 revenues do not fully reflect the sales potential for eMatrix™ as demand for the tip outpaced our manufacturing capacity. We have now reached full capacity in supplying systems featuring the new Sublative rejuvenation tips as momentum in demand and product awareness continue to build. The robust improvement in gross margins and positive cash flow from operations reflects our successful corporate restructuring and cost control initiatives. In addition, our balance sheet continues to strengthen with lower inventory and our fourth consecutive quarter of significant reductions in average days of sales outstanding."
Syneron Fourth Quarter 2009 Pro Forma Financial Results
For the combined companies, the following financials assume the merger with Candela Corporation had occurred on October 1, 2009.
Pro forma revenue for the fourth quarter 2009 was $46.7 million and gross margin was 48.5%.
Pro-forma operating expenses were $31.5 million in the fourth quarter 2009.
Pro forma net loss for the fourth quarter 2009 was $7.7 million, or $0.22 per basic and diluted share on a GAAP basis, and $4.6 million, or $0.13 per basic and diluted share, on a non-GAAP basis excluding stock based compensation expenses and $1.8 million in non-recurring transaction expenses related to the merger with Candela.
Mr. Scafuri concluded, "The acquisition of Candela represents a major aggressive step to advantageously position Syneron in an industry of change. We enter 2010 as the global aesthetic device market leader in terms of size, breadth and depth of offering, with a balanced revenue mix across market segments and geographies and significant recurring revenues. We will continue to prioritize customer support and product innovation that brings the most attractive and comprehensive product portfolio to all of our customers. With the largest and most comprehensive worldwide distribution and sales network, best in class products and solid financial profile, we believe there is tremendous opportunity to drive growth and clear market leadership over the next several years."
Conference call
Syneron management will host its fourth quarter and full year 2009 earnings conference call today at 8:30am 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 2009 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 888-300-2335 in the U.S., and 719-325-2109 from overseas. The conference passcode is: 8041636
Use of Non-GAAP Measures
This press release provides financial measures for net loss, net loss per basic and diluted share, which exclude 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 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.
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 Registration Statement on Form F-4, 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.
CONSOLIDATED STATEMENTS OF INCOME
U.S. dollars in thousands, except per share data
Three Months ended Twelve Months ended
December 31, December 31,
2009 2008 2009 2008
(unaudited) (unaudited) (unaudited) (audited)
----------- ----------- ----------- -----------
Revenues 14,403 14,174 54,726 114,979
Cost of Revenues 4,239 6,418 18,903 29,670
----------- ----------- ----------- -----------
Gross Profit 10,164 7,756 35,823 85,309
Operating expenses:
Research and development 4,271 3,150 13,220 13,783
Selling and marketing 7,869 12,516 34,156 54,064
General and
administrative 3,419 7,782 16,478 17,706
Legal settelement, net
of legal cost - - (3,975) -
----------- ----------- ----------- -----------
Total operating
expenses 15,559 23,448 59,879 85,553
----------- ----------- ----------- -----------
Operating Loss (5,395) (15,692) (24,056) (244)
Financial Income, net 436 636 2,097 3,862
Other Income 562 - 562 -
----------- ----------- ----------- -----------
Income (Loss) before
taxes on income (4,397) (15,056) (21,397) 3,618
Taxes on income 785 816 3,240 (2,009)
----------- ----------- ----------- -----------
Income (Loss) before
non controlling
interest (5,182) (15,872) (24,637) 5,627
Net loss attributable
to non controlling
interest 837 - 1,050 -
----------- ----------- ----------- -----------
Net (Loss) income
attributable to
Syneron shareholders (4,345) (15,872) (23,587) 5,627
Basic net (Loss) Income
per share (0.16) (0.58) (0.86) 0.21
Diluted net (Loss)
Income per share (0.16) (0.58) (0.86) 0.20
=========== =========== =========== ===========
Weighted average number
of shares used in per
share calculation
(in thousands):
Basic 27,591 27,460 27,526 27,410
Diluted 27,591 27,460 27,526 27,521
=========== =========== =========== ===========
Syneron Medical Ltd.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December 31, December 31,
2009 2008
(unaudited) (audited)
------------ ------------
CURRENT ASSETS
Cash and cash equivalents (*) 24,372 72,366
Short term bank deposit (*) 1,000 -
Available-for-sale marketable securities (*) 165,919 117,342
Trade receivables, net 13,758 32,637
Other accounts receivables and
prepaid expenses 2,753 4,249
Inventories 8,592 12,660
------------ ------------
Total Current Assets 216,394 239,254
LONG-TERM ASSETS
Severance pay fund 246 107
Long-term deposits and others (*) 221 180
Long-term available-for-sale
marketable securities (*) 14,839 27,214
Investments in affiliated companies 1,050 4,225
Property and equipment, net 2,885 3,656
Goodwill and Intangible assets, net 34,632 6,650
------------ ------------
Total Long-Term Assets 53,873 42,032
------------ ------------
Total Assets 270,267 281,286
============ ============
CURRENT LIABILITIES
Trade Payables 3,735 8,675
Other accounts payable and accrued expenses 37,484 25,587
------------ ------------
Total Current Liabilities 41,219 34,262
LONG-TERM LIABILITIES
Deferred Revenues 902 3,140
Warranty Accruals 558 1,117
Accrued severance pay 330 171
------------ ------------
Total Long-Term Liabilities 1,790 4,428
EQUITY 227,258 242,596
------------ ------------
Total Liabilities and Equity 270,267 281,286
============ ============
(*) Total Cash and Liquid Investments 206,351 217,102
Syneron Medical Ltd.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Three Months ended Twelve Months ended
December 31, December 31,
2009 2008 2009 2008
(unaudited) (unaudited) (unaudited) (audited)
----------- ----------- ----------- ---------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net (loss) income before
non controlling interest (5,182) (15,872) (24,637) 5,627
Adjustments to reconcile
net (loss) income to net
cash provided by (used in)
operating activities:
Depreciation and
amortization 418 887 1,927 2,137
Deferred taxes, net 184 - 1,550 (1,812)
Increase (decrease) in
accrued severance pay, net (22) 2 (9) 41
Decrease in trade
receivables 3,001 12,132 18,879 8,104
Decrease (increase) in
other accounts
receivables and prepaid
expenses (767) (1,611) 64 2,048
Decrease (increase) in
inventories 1,159 (1,032) 4,320 (3,691)
Increase (decrease) in
trade payables 121 1,920 (5,039) 941
Increase (decrease) in
other account payables
and accrued expenses 1,009 665 167 (552)
Impairments of
available-for-sale
marketable securities (47) 760 126 1,553
Realized loss, changes in
accrued interest and
amortization of premium
on marketable securities 266 (57) 1,617 (192)
Gain on revaluation of
investments in
affiliated companies (562) - (562) -
Equity based compensation 837 2,192 4,264 7,592
Decrease in deferred
revenues and warranty
accruals (451) (885) (3,612) (1,379)
----------- ----------- ----------- ---------
Net cash provided by
(used in) operating
activities (36) (899) (945) 20,417
----------- ----------- ----------- ---------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of short-term
deposit - - (1,000) -
Purchase of
available-for-sale
marketable securities (45,059) (2,664) (294,345) (183,103)
Proceeds from sale and
redemption of
available-for-sale
marketable securities 45,169 56,132 256,735 196,988
Payments for investments
in Affiliated Companies - (350) (750) (1,653)
Net cash paid in conjunction
with acquisition of a
subsidiary (7,235) (500) (7,276) (500)
Acquisition of minority
shares in a subsidiary (13) (516) (453) (775)
Investment in long-term
deposits and others - - (22) 950
Purchase of property and
equipment (91) (417) (487) (1,247)
----------- ----------- ----------- ---------
Net cash provided by
(used in) investing
activities (7,229) 51,685 (47,598) 10,660
----------- ----------- ----------- ---------
CASH FLOWS FROM FINANCING
ACTIVITIES
Repurchase of ordinary
shares from shareholders
at cost - - - (1,927)
Reimbursement of share
issuance expenses - 588 - 588
Issuance of shares as a
result of exercise of
options and RSU's 355 - 549 4
----------- ----------- ----------- ---------
Net cash provided by
(used in) financing
activities 355 588 549 (1,335)
----------- ----------- ----------- ---------
Increase (decrease) in
cash and cash
equivalents (6,910) 51,374 (47,994) 29,742
Cash and cash equivalents
at the beginning of the
period 31,282 20,992 72,366 42,624
----------- ----------- ----------- ---------
Cash and cash equivalents
at the end of the period 24,372 72,366 24,372 72,366
=========== =========== =========== =========
Syneron Medical Ltd.
Reconciliation Between GAAP To Non-GAAP Consolidated Statement Of Income
U.S. dollars in thousands, except per share data
Three Months ended Twelve Months ended
December 31, December 31,
2009 2008 2009 2008
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Operating Loss (GAAP) (5,395) (15,692) (24,056) (244)
Non-GAAP adjustment:
Stock based
compensation 837 2,192 4,264 7,592
----------- ----------- ----------- -----------
Non-GAAP operating
(Loss) Income (4,558) (13,500) (19,792) 7,348
Net (Loss) Income
(GAAP) attributable to
Syneron shareholders (4,345) (15,872) (23,587) 5,627
Non-GAAP adjustment:
Stock based
compensation 837 2,192 4,264 7,592
----------- ----------- ----------- -----------
Non-GAAP Net (Loss)
Income attributable to
Syneron shareholders (3,508) (13,680) (19,323) 13,219
Non-GAAP net (Loss)
Income per share:
Basic net (Loss) Income
per share (0.13) (0.50) (0.70) 0.48
Diluted net (Loss) Income
per share (0.13) (0.50) (0.70) 0.48
Weighted average number
of shares used in per
share calculation (in
thousands):
Basic 27,591 27,460 27,526 27,410
Diluted 27,591 27,460 27,526 27,521
=========== =========== =========== ===========
Syneron Medical Ltd.
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME
U.S. dollars in thousands, except per share data
Three Months ended December 31, 2009
(unaudited)
----------------------------------------------
Syneron Pro Forma Pro Forma
Medical Candela Adjustments Combined
--------- --------- ----------- ---------
Revenues 14,403 32,272 46,675
Cost of Revenues 4,239 19,227 575 24,041
--------- --------- ----------- ---------
Gross Profit 10,164 13,045 (575) 22,634
Operating expenses:
Research and development 4,271 2,547 6,818
Selling and marketing 7,869 8,245 976 17,090
General and administrative 3,419 4,027 118 7,564
--------- --------- ----------- ---------
Total operating expenses 15,559 14,819 1,094 31,472
--------- --------- ----------- ---------
Operating Loss (5,395) (1,774) (1,669) (8,838)
Financial Income, net 436 33 - 469
Other Income, net 562 534 - 1,096
--------- --------- ----------- ---------
Loss before taxes on income (4,397) (1,207) (1,669) (7,273)
Taxes on income 785 (1,118) 1,602 1,269
--------- --------- ----------- ---------
Net Loss from continuing
operations (5,182) (89) (3,271) (8,542)
Net loss attributable to
non controlling interest 837 - - 837
--------- --------- ----------- ---------
Net Loss attributable to
Syneron and Candela
shareholders (4,345) (89) (3,271) (7,705)
Basic net Loss per share (0.16) - (0.22)
Diluted net Loss per share (0.16) - (0.22)
========= ========= =========
Weighted average number of
shares used in per share
calculation (in thousands):
Basic 27,591 22,757 34,267
Diluted 27,591 22,757 34,267
========= ========= =========
Syneron Medical Ltd.
PRO FORMA CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December 31, 2009
(unaudited)
----------------------------------------------
Syneron Pro Forma Pro Forma
Medical Candela Adjustments Combined
--------- --------- ----------- ---------
CURRENT ASSETS
Cash and cash
equivalents (*) 24,372 25,787 - 50,159
Short term bank deposit (*) 1,000 - - 1,000
Available-for-sale marketable
securities (*) 165,919 653 - 166,572
Trade receivables, net 13,758 34,322 - 48,080
Other accounts receivables
and prepaid expenses 2,753 553 (600) 2,706
Inventories 8,592 25,400 1,324 35,316
Other current assets - 7,053 2,270 9,323
--------- --------- ----------- ---------
Total Current Assets 216,394 93,768 2,994 313,156
LONG-TERM ASSETS
Severance pay fund 246 - - 246
Long-term deposits and
others (*) 221 - - 221
Long-term available-for-sale
marketable securities (*) 14,839 - - 14,839
Deferred tax assets - 23,466 - 23,466
Investment in affiliated
company 1,050 - - 1,050
Property and equipment, net 2,885 3,116 - 6,001
Goodwill and Intangible
assets, net 34,632 172 23,822 58,626
Other assets - 1,342 - 1,342
--------- --------- ----------- ---------
Total Long-Term Assets 53,873 28,096 23,822 105,791
--------- --------- ----------- ---------
Total Assets 270,267 121,864 26,816 418,947
========= ========= =========== =========
CURRENT LIABILITIES
Trade Payables 3,735 9,851 - 13,586
Other accounts payable
and accrued expenses 37,484 30,809 6,204 74,497
Deferred gain - - 13,553 13,553
Current liabilities of
discontinued operations - 451 - 451
--------- --------- ----------- ---------
Total Current Liabilities 41,219 41,111 19,757 102,087
LONG-TERM LIABILITIES
Deferred Revenues 902 4,640 - 5,542
Warranty Accruals 558 382 - 940
Accrued severance pay 330 - - 330
Deferred tax liability - - 9,529 9,529
--------- --------- ----------- ---------
Total Long-Term Liabilities 1,790 5,022 9,529 16,341
EQUITY
Ordinary shares 65 262 (244) 83
Additional paid-in capital 102,937 77,075 (3,832) 176,180
Treasury shares (9,587) (24,855) 24,855 (9,587)
Accumulated other
comprehensive income (loss) (9) 3,659 (3,659) (9)
