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Syneron Reports Record Second Quarter 2008 Revenues of $38.2 Million and Net Profit of $11.0 Million YOKNEAM, ISRAEL--(MARKET WIRE)--Aug 14, 2008 -- Syneron Medical Ltd. (ELOS - News), an
innovator in the development, marketing and sales of elos(TM)
combined-energy medical aesthetic devices, today announced
its financial
results for the second quarter of 2008.
Revenues for the second quarter of 2008 were $38.2 million, compared to revenues of $37.5 million in the second quarter of 2007. International sales rose 17% over the same period in 2007 to $19.1 million. North American and international sales now each account for 50% of total revenues. On a GAAP basis, net income for the second quarter of 2008 rose to $11.0 million, from $10.3 million in the second quarter of 2007. The GAAP net income for the second quarter of 2008 includes $2.6 million of stock-based compensation expenses. Syneron reported EPS of $0.40 for the second quarter of 2008 compared to $0.37 for the same period last year. On a non-GAAP basis, excluding the stock-based compensation, net income in the second quarter of 2008 was $13.7 million, or $0.50 per diluted share. Results for the second quarter of 2008 also include a one-time tax credit of approximately $2 million resulting from a change in the base of reporting to the Israeli tax authority from US dollars to new Israeli shekels. Syneron's balance sheet and cash position remain strong. Cash flow from operations in the second quarter was $12.3 million. Syneron increased its cash position (including long-term deposits) during the second quarter by $10.2 million to $220.6 million. Shareholders' equity totaled $251.6 million as of June 30, 2008. Commenting on the second quarter, CEO Doron Gerstel said, "We are pleased to report a record quarter for Syneron's revenues. Syneron continues to grow sales as a result of the superiority of elos technology, as well as our strategic decision to focus marketing and R&D resources on the key growth segments of aesthetic medicine of body shaping and skin rejuvenation." "The recently launched LipoLite(TM) has received positive acceptance among the surgical and general medical community," continued Mr. Gerstel. "We started delivering the first units at the end of the second quarter and we expect to start selling significantly during this third quarter. In addition we also started implementing our LipoLite Energy Access Program (LEAP) that was designed with a cost-effective annual subscription fee to enable physicians of all specialties to offer the increasingly popular laser-assisted lipolysis treatment. Doctors who had been considering the introduction of laser-assisted lipolysis view Syneron as a partner who is willing to align itself with them." Regarding the effects of LEAP and other new products on Syneron's business model, CFO Fabian Tenenbaum said, "With the introduction of LEAP, as well as the introduction of a disposable element to our new Matrix RF, for which FDA approval is pending, management has taken another step towards the goal of achieving diversification of our revenues -- one of the key strategic initiatives we started last year. Syneron's evolving technologies will allow us to diversify our business model in which, alongside equipment sales, we will begin to benefit from a regular annuity element in our revenues." Conference call Syneron Management will host a conference call (dial-in numbers below) to discuss the results at 8:30am ET today, August 14th, 2008. Investors and other interested parties may access a live web cast through Syneron's website at www.syneron.com. Please login at least 10 minutes prior to the conference call in order to download the applicable audio software. Following the conclusion of the call, a replay of the webcast will be available within 24 hours at the Company's website. Dial-in numbers for conference call: US (toll free): 877-591-4949 International: +1-719-325-4942 Conference ID: 4593969 Use of Non-GAAP Measures This press release provides financial measures for net profit and net profit per diluted share, that exclude an expense charge related to stock-based compensation and are therefore not calculated in accordance with generally accepted accounting principals (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 profit and net profit per 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 Syneron Medical Ltd. (ELOS - News) manufactures and distributes medical aesthetic devices that are powered by the proprietary, patented elos combined-energy technology of Bi-Polar Radio Frequency and Light. The Company's innovative elos technology provides the foundation for highly effective, safe and cost-effective systems that enable physicians to provide advanced solutions for a broad range of medical-aesthetic applications including hair removal, wrinkle reduction, rejuvenating the skin's appearance through the treatment of superficial benign vascular and pigmented lesions, and the treatment of acne, leg veins and cellulite. Founded in 2000, the corporate, R&D, and manufacturing headquarters for Syneron Medical Ltd. is located in Israel. Syneron has offices and distributors throughout the world, including North American Headquarters in Canada, North American Logistics Support Center in Irvine, CA, European Headquarters in Germany, and Asia-Pacific Headquarters in Hong Kong, which provide sales, service and support. Additional information can be found at www.syneron.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 relating to future events or our future performance, including statements with respect to our expectations regarding, but not limited to, financial forecast for 2008, new product launches, and maintaining a leadership position in core markets. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in those forward-looking statements, including, but not limited to the risk associated with our ability to commercialize new products and identify new markets for our technology; ability to manage our growth, competition and pricing pressure, risks associated with our international operations, risks associated with regulatory qualifications or approvals, and risks related to our intellectual property. These risks and other factors are summarized under the heading "Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2007, filed with the Securities and Exchange Commission on May 7, 2008. These factors are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. We do not assume any obligation to update the forward-looking information contained in this press release. Syneron, the Syneron logo, elos, LipoLite and Matrix RF are trademarks of Syneron Medical Ltd. and may be registered in certain jurisdictions. elos (Electro-Optical Synergy) 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 Six Months ended
June 30, June 30,
2008 2007 2008 2007
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ----------- ---------- -----------
Revenues 38,237 37,537 72,312 69,867
Cost of Revenues 8,571 6,463 16,226 12,053
---------- ----------- ---------- -----------
Gross Profit 29,666 31,074 56,086 57,814
Operating expenses:
Research and development 3,601 3,067 6,987 5,809
Selling and marketing 14,301 15,896 28,289 30,153
General and administrative 4,147 3,169 7,240 5,723
---------- ----------- ---------- -----------
Total operating expenses 22,049 22,132 42,516 41,685
---------- ----------- ---------- -----------
Operating Income 7,617 8,942 13,570 16,129
Financial income, net 1,125 2,256 2,697 3,985
---------- ----------- ---------- -----------
Income before taxes on
income 8,742 11,198 16,267 20,114
Taxes on income (2,256) 850 (3,044) 1,250
---------- ----------- ---------- -----------
Net Income 10,998 10,348 19,311 18,864
Basic net earning per share 0.40 0.37 0.71 0.68
Diluted net earnings per
share 0.40 0.37 0.70 0.68
========== =========== ========== ===========
Weighted average number
of shares used in per share
calculation (in thousands):
Basic 27,374 27,705 27,372 27,649
Diluted 27,514 27,962 27,546 27,888
========== =========== ========== ===========
Syneron Medical Ltd.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
June 30, December 31,
2008 2007
(unaudited) (audited)
------------- -------------
CURRENT ASSETS
Cash and cash equivalents (*) 39,513 42,624
Available-for-sale marketable securities (*) 123,566 124,941
Trade receivables 43,432 40,741
Other accounts receivable and prepaid expenses 2,475 4,485
Inventories 11,374 9,465
------------- -------------
Total Current Assets 220,360 222,256
LONG-TERM ASSETS
Severance pay fund 237 225
Long-term deposits and others (*) 143 1,130
Long-term available-for-sale marketable
securities (*) 57,383 35,122
Investments in affiliated companies 3,152 2,572
Property and equipment, net 3,452 3,111
Goodwill 2,266 2,266
Intangible assets, net 2,313 2,594
------------- -------------
Total Long-Term Assets 68,946 47,020
Total Assets 289,306 269,276
============= =============
CURRENT LIABILITIES
Trade Payables 8,191 7,734
Other accounts payable and accrued expenses 23,738 24,738
------------- -------------
Total Current Liabilities 31,929 32,472
LONG-TERM LIABILITIES
Deferred Revenues 4,736 4,991
Warranty Accruals 712 730
Accrued severance pay 301 248
------------- -------------
Total Long-Term Liabilities 5,749 5,969
SHAREHOLDERS' EQUITY 251,628 230,835
------------- -------------
Total Liabilities and Shareholders' Equity 289,306 269,276
============= =============
(*) Total Cash and Liquid Investments 220,605 203,817
Syneron Medical Ltd.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Three Months ended Six Months ended
June 30, June 30,
2008 2007 2008 2007
(unaudited) (unaudited) (unaudited) (unaudited)
---------- ---------- ---------- ----------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income 10,998 10,348 19,311 18,864
Adjustments to reconcile
net income to net cash
provided by
operating activities:
Depreciation and
amortization 430 231 797 449
Increase in accrued
severance pay, net 29 3 41 18
Increase in trade
receivables (466) (1,390) (2,691) (3,168)
Decrease (increase) in
other accounts receivable
and prepaid expenses (56) 831 2,010 897
Increase in inventories (897) (509) (2,254) (2,321)
Increase (decrease) in
trade payables 835 114 457 (1,753)
Increase (decrease) in
other accounts payables and
accrued expenses (557) 1,543 (1,831) 152
Impairments of
available-for-sale
marketable securities 117 - 117 -
Gain on available-for-sale
marketable securities (47) (711) (88) (51)
Equity based compensation 2,600 2,339 4,505 4,902
Increase (decrease) in
deferred revenues and
warranty accruals (666) 995 558 1,125
---------- ---------- ---------- ----------
Net cash provided by
operating activities 12,320 13,794 20,932 19,114
---------- ---------- ---------- ----------
CASH FLOWS FROM INVESTING
ACTIVITIES
Maturity of long-term
deposits 1,000 5,030 1,000 5,000
Purchase of
available-for-sale
marketable securities (93,067) (41,618) (147,314) (69,631)
Proceeds from sale and
redemption of
available-for-sale
marketable securities 65,656 28,650 125,300 47,000
Payments for investments in
Affiliated Companies (300) (521) (580) (521)
Investment in long-term
deposits and others 3 14 (13) (16)
Purchase of property and
equipment (350) (452) (512) (743)
---------- ---------- ---------- ----------
Net cash used in investing
activities (27,058) (8,897) (22,119) (18,911)
---------- ---------- ---------- ----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Repurchase of ordinary
shares from shareholders
at cost - - (1,927) -
Exercise of stock options
and RSUs 3 696 3 3,356
---------- ---------- ---------- ----------
Net cash provided by (used
in) financing activities 3 696 (1,924) 3,356
---------- ---------- ---------- ----------
Increase (decrease) in cash
and cash equivalents (14,735) 5,593 (3,111) 3,559
Cash and cash equivalents
at the beginning of the
period 54,248 14,002 42,624 16,036
---------- ---------- ---------- ----------
Cash and cash equivalents
at the end of the period 39,513 19,595 39,513 19,595
========== ========== ========== ==========
Syneron Medical Ltd.
Reconciliation Between GAAP To Non-GAAP Consolidated Statements Of Income
U.S. dollars in thousands, except per share data
Three Months Six Months
ended ended
June 30, 2008 June 30, 2008
(unaudited) (unaudited)
------------- -------------
Operating Income (GAAP) 7,617 13,570
Non-GAAP adjustment:
Stock based compensation 2,600 4,505
------------- -------------
Non-GAAP operating income 10,217 18,075
Net Income (GAAP) 10,998 19,311
Non-GAAP adjustment:
Stock based compensation 2,600 4,505
Impairment of investment 117 117
------------- -------------
Non-GAAP Net Income 13,715 23,933
Non-GAAP net earnings per share:
Basic net earnings per share 0.50 0.87
Diluted net earnings per share 0.50 0.87
============= =============
Weighted average number
of shares used in per share
calculation (in thousands):
Basic 27,374 27,372
Diluted 27,514 27,546
============= =============Contact: For more information, please contact:
Fabian Tenenbaum
CFO
+972 73 244 2329
email: Email Contact
Judith Kleinman
VP Investor Relations
+972 54 646 1688
email: Email Contact
Source: Syneron Medical Ltd.
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