WESTFORD, Mass., May 4 /PRNewswire-FirstCall/ -- Cynosure, Inc.
(Nasdaq: CYNO) today announced first-quarter financial results for
the three months ended March 31,
2010.
Revenues for the first quarter of 2010 increased 28 percent to
$18.9 million from $14.8 million in the corresponding period of
2009, primarily as a result of increased international sales.
Net loss for the first quarter of 2010 improved to $2.8 million, or $0.22 per basic and diluted share, from a net
loss of $4.0 million, or $0.32 per basic and diluted share, for the same
quarter a year ago. The company's net loss for the first
quarter of 2010 included an income tax provision of $0.2 million, compared with an income tax benefit
of $2.9 million recorded in the first
quarter of 2009. The change from a benefit to a provision in
the 2010 period is a result of the company's establishment of a
valuation allowance in the fourth quarter of 2009 against the
company's net domestic deferred tax assets, and results from
taxable income generated in foreign jurisdictions.
The company's loss from operations narrowed by $4.6 million, or 64 percent, to $2.5 million in the first quarter of 2010 from
$7.1 million for the same quarter a
year ago.
"Stronger year-over-year sales from our European and Asian
subsidiaries as well as our international distributors, along with
continued operating expense savings, contributed to our improved
first quarter results," said Michael
Davin, Cynosure's President and Chief Executive Officer.
"International laser revenue grew 70 percent from the first
quarter of 2009. We believe this increase validates our
strategy of forging distributor relationships in certain countries
and investing in our sales and marketing presence in promising
overseas markets such as China and
Korea."
"In North America, laser revenue in the first quarter was up
four percent from the fourth quarter of 2009 and up slightly from a
year earlier. Though the restrictive lending climate is still
a challenge for many U.S. practitioners, several positive
indicators give us reason for cautious optimism," Davin said.
"Credit is slowly beginning to flow back into the domestic
aesthetic market. The mood of attendees at the AAD (American
Academy of Dermatology) Annual Meeting in February was notably
upbeat – in sharp contrast with the same event in 2009. Our
customers report that the improvement in the economy is translating
into a pickup in demand for aesthetic procedures. In
addition, we are seeing strong interest in our newest aesthetic
workstations, Smartlipo Triplex and Elite MPX, which are just
beginning to be fully rolled out to our customers."
Gross profit for the first quarter of 2010 was $10.8 million, or 57.2 percent of revenue,
compared with $9.0 million, or 60.9
percent of revenue, for the same period in 2009. The lower
gross margin in the 2010 first quarter reflected a higher
percentage of laser revenue from international markets, where sales
prices and margins tend to be lower than in the U.S. and
Canada. Pricing has remained
stable from the fourth quarter of 2009.
Total operating expenses for the first quarter of 2010 decreased
$2.9 million, or 17 percent, to
$13.3 million compared with
$16.2 million for the same period of
2009. "We continue to bring expenses in line with the current
revenue levels, without stalling the momentum of our core research
and development programs," Davin said. "We remain on pace to
achieve annualized operating expense savings in 2010 of
$5 million to $7 million over the
prior year. Our cost-control initiatives enabled us to
maintain a strong balance sheet, as we ended the first quarter with
$92 million in cash and investments
at March 31, essentially unchanged
from our cash and investments balance at the end of 2009."
Clinical Strategy Supports Skin Rejuvenation and Laser
Lipolysis Technologies
At the recent American Society for Laser Medicine and Surgery
Annual Conference in Arizona,
studies using the Smartlipo Triplex, Smartlipo MPX and SmartSkin
CO2 workstations were among six podium presentations highlighting
the safety and efficacy of the company's technology.
Dr. Barry DiBernardo, Medical
Director of New Jersey Plastic Surgery, delivered a presentation to
conference participants showcasing how the high-powered 1440 nm
laser integrated into the Smartlipo Triplex disrupted a larger area
of fat tissue and showed improved tissue tightening effects in an
analysis of abdominal tissue treated with three individual
wavelengths.
Other abstracts discussed the potential utility of the Smartlipo
technology in laser-lipolysis-related applications, including
abdominoplasty and a procedure to highlight the three-dimensional
muscular definition of areas including the arms, legs and abdomen.
Market Outlook
"We are pleased with the performance of our international
business in the first quarter, as well as the sequential upturn of
the North American aesthetic laser market," Davin said. "We
see 2010 as a year of focused investment for Cynosure. Among
our goals this year, we expect to: pursue regulatory approvals in
key international markets; build momentum for our new Smartlipo
Triplex and Elite MPX workstations; maintain the progress of our
home-use aesthetic program with Unilever; and introduce a new
workstation targeting a high-volume application that is not being
adequately addressed by current technology. Access to capital for
many U.S. practitioners remains difficult, but we expect the credit
situation to further improve as the economy continues to
strengthen."
First-Quarter Financial Results Conference Call
Cynosure will host a conference call for investors at
9:00 a.m. ET today. On the
call, Michael Davin and Timothy Baker, the company's Executive Vice
President and Chief Financial Officer, will discuss the company's
financial results and provide a business overview.
Those who wish to listen to the conference call webcast should
visit the "Investor Relations" section of the company's website at
www.cynosure.com. The live call can also be accessed by
dialing (877) 709-8155 or (201) 689-8881. If you are unable
to listen to the live call, the webcast will be archived on the
company's website.
About Cynosure, Inc.
Cynosure, Inc. develops and markets aesthetic treatment systems
that are used by physicians and other practitioners to perform
non-invasive and minimally invasive procedures to remove hair,
treat vascular and pigmented lesions, rejuvenate the skin, liquefy
and remove unwanted fat through laser lipolysis and temporarily
reduce the appearance of cellulite. Cynosure’s products
include a broad range of laser and other light-based energy
sources, including Alexandrite, pulsed dye, Nd:YAG and diode
lasers, as well as intense pulsed light. Cynosure was founded in
1991. For corporate or product information, contact Cynosure
at 800-886-2966, or visit www.cynosure.com.
Forward-Looking Statements
Any statements in this press release about future expectations,
plans and prospects for Cynosure, Inc., including statements about
the company's ability to achieve targeted operating expense
savings, and expectations for increased industry demand, as well as
other statements containing the words "believes," "anticipates,"
"plans," "expects," "will" and similar expressions, constitute
forward-looking statements within the meaning of The Private
Securities Litigation Reform Act of 1995. Actual results may
differ materially from those indicated by such forward-looking
statements as a result of various important factors, including the
global economy and lending environment and their effects on the
aesthetic laser industry, Cynosure's history of operating losses,
its reliance on sole source suppliers, the inability to accurately
predict the timing or outcome of regulatory decisions, changes in
consumer preferences, competition in the aesthetic laser industry,
economic, market, technological and other factors discussed in
Cynosure's most recent Annual Report on Form 10-K and Quarterly
Report on Form 10-Q, which are filed with the Securities and
Exchange Commission. In addition, the forward-looking
statements included in this press release represent Cynosure's
views as of the date of this press release. Cynosure
anticipates that subsequent events and developments will cause its
views to change. However, while Cynosure may elect to update
these forward-looking statements at some point in the future, it
specifically disclaims any obligation to do so. These
forward-looking statements should not be relied upon as
representing Cynosure's views as of any date subsequent to the date
of this press release.
Cynosure, Inc.
Consolidated Statements of Income
(Unaudited)
|
|
(In thousands, except per share
data)
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
2010
|
2009
|
|
|
|
|
|
|
|
Revenues
|
$
18,893
|
$
14,816
|
|
Cost of revenues
|
8,093
|
5,800
|
|
Gross profit
|
10,800
|
9,016
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
Selling and marketing
|
8,402
|
10,530
|
|
|
Research and development
|
1,707
|
1,741
|
|
|
General and administrative
|
3,233
|
3,880
|
|
|
|
|
|
|
|
Total operating
expenses
|
13,342
|
16,151
|
|
|
|
|
|
|
|
Loss from operations
|
(2,542)
|
(7,135)
|
|
|
|
|
|
|
|
|
Interest income, net
|
53
|
265
|
|
|
Other (expense) income, net
|
(151)
|
(56)
|
|
|
|
|
|
|
|
Loss before income
taxes
|
(2,640)
|
(6,926)
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
172
|
(2,905)
|
|
|
|
|
|
|
|
Net loss
|
$
(2,812)
|
$
(4,021)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net loss per share
|
$
(0.22)
|
$
(0.32)
|
|
Diluted weighted average shares
outstanding
|
12,711
|
12,701
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net loss per share
|
$
(0.22)
|
$
(0.32)
|
|
Basic weighted average shares
outstanding
|
12,711
|
12,701
|
|
|
|
|
|
|
Cynosure, Inc.
Condensed Consolidated
Balance Sheet (Unaudited)
|
|
(In thousands)
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
2010
|
|
2009
|
|
|
|
(unaudited)
|
|
Assets:
|
|
|
|
|
|
Cash, cash equivalents and short-term
marketable securities
|
$
74,123
|
|
$
68,505
|
|
|
Short-term investments and related
financial instruments
|
14,599
|
|
18,454
|
|
|
Accounts receivable, net
|
11,236
|
|
11,773
|
|
|
Inventories
|
20,637
|
|
21,815
|
|
|
Prepaid expenses and other current
assets
|
6,384
|
|
6,441
|
|
|
Deferred tax asset, current
portion
|
368
|
|
160
|
|
Total current assets
|
127,347
|
|
127,148
|
|
|
Property and equipment, net
|
10,010
|
|
10,567
|
|
|
Long-term marketable
securities
|
3,013
|
|
5,008
|
|
|
Other noncurrent assets
|
2,285
|
|
2,510
|
|
Total assets
|
$
142,655
|
|
$
145,233
|
|
|
|
|
|
|
|
Liabilities and stockholders’
equity:
|
|
|
|
|
|
Accounts payable and accrued
expenses
|
$
13,793
|
|
$
14,357
|
|
|
Amounts due to related
parties
|
1,931
|
|
1,350
|
|
|
Deferred revenue
|
4,096
|
|
4,269
|
|
|
Capital lease obligations
|
233
|
|
264
|
|
Total current liabilities
|
20,053
|
|
20,240
|
|
|
|
|
|
|
|
Capital lease obligations, net of
current portion
|
122
|
|
171
|
|
Deferred revenue, net of current
portion
|
595
|
|
620
|
|
Other long-term liabilities
|
349
|
|
372
|
|
Total stockholders’ equity
|
121,536
|
|
123,830
|
|
Total liabilities and stockholders’
equity
|
$
142,655
|
|
$
145,233
|
|
|
|
|
|
|
Contact: Scott Solomon
|
|
Vice President
|
|
Sharon Merrill Associates, Inc.
|
|
Phone: (617) 542-5300
|
|
CYNO@investorrelations.com
|
|
|
SOURCE Cynosure, Inc.