WESTFORD, Mass., July 26, 2011 /PRNewswire/ -- Cynosure, Inc.
(NASDAQ: CYNO) today announced financial results for the three
months ended June 30, 2011.
Financial Highlights
Second-quarter 2011 revenues increased 23 percent to
$26.3 million from $21.5 million for the same period in 2010. The
net loss for the quarter was $1.3
million, or $0.10 per basic
and diluted share, which included $1.2
million of expenses associated with the acquisition of the
aesthetic laser business of HOYA ConBio®. On an adjusted basis,
excluding the acquisition expenses, the Company's net loss narrowed
to $151,000, or $0.01 per basic and diluted share, compared with
a net loss of $1.5 million, or
$0.12 per basic and diluted share,
for the second quarter of 2010.
"Laser product sales grew more than $4
million in the second quarter of 2011 as compared to the
second quarter of 2010, fueled by a 42% increase in our
international business," said Michael
Davin, Cynosure's President and Chief Executive Officer.
"Our international distributors and European subsidiaries, in
particular, saw robust revenue gains in the quarter, reflecting our
investments in these regions. Pricing in both domestic and overseas
markets was stable. North American laser sales grew 9%
year-over-year, despite the economic uncertainty and challenging
credit environment that continue to hamper the U.S. aesthetic laser
market."
Gross profit for the three months ended June 30, 2011 was 57.2 percent, compared with
57.8 percent for the same period of 2010. The change in gross
margin reflects a larger revenue contribution from international
markets, particularly the Company's third-party distributors, which
carry lower average selling prices and margins than products sold
through direct distribution channels.
Total operating expenses for the second quarter of 2011 were
$16.3 million, or 62 percent of
revenues, which included $1.2 million
of expenses associated with the acquisition of HOYA ConBio's
aesthetic laser business, which has been rebranded as ConBio™, a
Cynosure Company. Operating expenses totaled $13.3 million, or 62 percent of revenues, for the
second quarter of 2010.
Launch of New Cellulite Reduction Technology
"During the quarter, we launched our new platform of
non-invasive and minimally invasive products to treat the
appearance of cellulite," Davin said. "We began global revenue
shipments of SmoothShapes XV, the non-invasive cellulite and
body-shaping solution acquired this year as part of our asset
purchase from Eleme Medical. SmoothShapes XV has received a
positive response from customers and physician luminaries. We
expect to begin shipments in the third quarter of a new 'Petite'
laser handpiece that will enable practitioners to use the
SmoothShapes XV to treat smaller areas including the arms, neck and
calves."
The second quarter also marked the European rollout of the
Company's Cellulaze™ workstation, the world's first minimally
invasive aesthetic laser for long-lasting reduction of cellulite in
a single treatment. The product, which includes Cynosure's
proprietary SideLight 3D™ side-firing technology, is marketed
through the Company's direct sales offices in Europe. In the second half of 2011, Cynosure
is expanding Cellulaze to include third-party distributors in
Europe as well as in Australia, where the product recently received
regulatory clearance.
The Canadian regulatory agency Health Canada issued a Medical
Device License in July 2011
authorizing the sale of Cellulaze in that country. "Canadian
regulatory approval is another key milestone in our strategy to
broaden the global reach of our new cellulite reduction platform,"
Davin said. SmoothShapes XV also was approved for marketing
in Canada earlier this year.
The Company's 510(k) application for marketing clearance of
Cellulaze in the United States is
currently undergoing review by the U.S. Food and Drug
Administration.
ConBio™ Acquisition
"The ConBio integration is moving ahead smoothly, and we expect
the initial phase of the integration process to be completed in the
third quarter," Davin said. "We see significant revenue
potential in ConBio's current products, as well as cross-selling
and marketing opportunities. ConBio currently has an installed base
of more than 3,200 systems, strong brand equity, excellent
physician relationships, and an outstanding sales organization that
spans more than 30 countries."
Business Outlook
"We begin the second half of 2011 encouraged about the prospects
for our business," Davin said. "While the North American
environment remains challenging, total revenues through the first
two quarters of the year are up 19% over 2010. Looking ahead, our
goal is to ensure that we optimize the newly acquired Eleme and
ConBio assets, successfully complete the ConBio integration and
further expand the geographic penetration of our cellulite
reduction platform. While we would expect to see the
traditional seasonal pullback in business in the third quarter, we
believe that Cynosure remains well-positioned in the marketplace
with numerous long-term growth opportunities."
Second-Quarter Financial Results Conference Call
In conjunction with its second-quarter 2011 financial results,
Cynosure will host a conference call for investors and analysts 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 Cynosure'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) 407-5790
or (201) 689-8328. 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 reduce the
appearance of cellulite. Cynosure's products include a broad
range of laser and other light-based energy sources, including
Alexandrite, pulse dye, Q-switched, 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 anticipated financial results, 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, which is 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.
Consolidated Statements of
Income (Unaudited)
|
|
(In thousands, except per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
|
|
|
2011
|
2010
|
|
2011
|
2010
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$ 26,339
|
$ 21,489
|
|
$ 48,223
|
$ 40,382
|
|
Cost of revenues
|
|
11,273
|
9,069
|
|
21,076
|
17,162
|
|
Gross profit
|
|
15,066
|
12,420
|
|
27,147
|
23,220
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Selling and marketing
|
|
9,656
|
8,645
|
|
18,412
|
17,047
|
|
|
Research and development
|
|
2,431
|
1,848
|
|
4,671
|
3,555
|
|
|
General and
administrative
|
|
4,175
|
2,830
|
|
7,126
|
6,063
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
|
16,262
|
13,323
|
|
30,209
|
26,665
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(1,196)
|
(903)
|
|
(3,062)
|
(3,445)
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, net
|
|
46
|
45
|
|
100
|
98
|
|
|
Other (expense) income,
net
|
|
(1)
|
(550)
|
|
213
|
(701)
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
(1,151)
|
(1,408)
|
|
(2,749)
|
(4,048)
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
|
149
|
69
|
|
445
|
241
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$ (1,300)
|
$ (1,477)
|
|
$ (3,194)
|
$ (4,289)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net loss per
share
|
|
$ (0.10)
|
$ (0.12)
|
|
$ (0.25)
|
$ (0.34)
|
|
Diluted weighted average shares
outstanding
|
|
12,599
|
12,710
|
|
12,588
|
12,711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net loss per
share
|
|
$ (0.10)
|
$ (0.12)
|
|
$ (0.25)
|
$ (0.34)
|
|
Basic weighted average shares
outstanding
|
|
12,599
|
12,710
|
|
12,588
|
12,711
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated
Balance Sheet
|
|
(In thousands)
|
|
|
|
Jun.
30,
|
|
Dec.
31,
|
|
|
|
2011
|
|
2010
|
|
|
|
(unaudited)
|
|
Assets:
|
|
|
|
|
|
Cash, cash equivalents and
short-term marketable securities
|
$ 62,243
|
|
$ 86,836
|
|
|
Accounts receivable,
net
|
15,454
|
|
10,621
|
|
|
Inventories
|
27,019
|
|
18,684
|
|
|
Prepaid expenses and other
current assets
|
4,306
|
|
3,902
|
|
|
Deferred tax asset, current
portion
|
510
|
|
489
|
|
Total current assets
|
109,532
|
|
120,532
|
|
|
Property and equipment,
net
|
8,589
|
|
8,892
|
|
|
Long-term marketable
securities
|
6,530
|
|
9,990
|
|
|
Other noncurrent
assets
|
25,310
|
|
2,398
|
|
Total assets
|
$ 149,961
|
|
$ 141,812
|
|
|
|
|
|
|
|
Liabilities and stockholders’
equity:
|
|
|
|
|
|
Accounts payable and accrued
expenses
|
$ 22,666
|
|
$ 15,267
|
|
|
Amounts due to related
parties
|
3,012
|
|
1,785
|
|
|
Deferred revenue
|
3,973
|
|
3,660
|
|
|
Capital lease
obligations
|
73
|
|
133
|
|
Total current
liabilities
|
29,724
|
|
20,845
|
|
|
|
|
|
|
|
Capital lease obligations, net
of current portion
|
72
|
|
40
|
|
Deferred revenue, net of current
portion
|
532
|
|
348
|
|
Other long-term
liabilities
|
199
|
|
279
|
|
|
|
|
|
|
|
Total stockholders’
equity
|
119,434
|
|
120,300
|
|
Total liabilities and
stockholders’ equity
|
$ 149,961
|
|
$ 141,812
|
|
|
|
|
|
|
To supplement our consolidated financial statements presented in
accordance with GAAP, Cynosure uses non-GAAP measures. The
presentation of this 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. The
non-GAAP financial measure included in this press release excludes
the $1.2 million acquisition related
costs. This exclusion may be different from, and therefore not
comparable to, similar measures used by other companies.
Cynosure’s management believes that these non-GAAP financial
measures provide meaningful supplemental information regarding our
performance by excluding certain expenses and expenditures that may
not be indicative of our core business operating results. Cynosure
believes that both management and investors benefit from referring
to these non-GAAP financial measures in assessing Cynosure’s
performance and when planning, forecasting and analyzing future
periods. These non-GAAP financial measures also facilitate
management’s internal comparisons to Cynosure’s historical
performance and our competitors’ operating results. Cynosure
believes that these non-GAAP measures are useful to investors in
allowing for greater transparency with respect to supplemental
information used by management in its financial and operational
decision making.
Reconciliation of GAAP Income
Statement Measures to Non-GAAP Income Statement Measures
(Unaudited)
|
|
(In thousands, except per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
|
|
|
2011
|
2010
|
|
2011
|
2010
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
$ (1,196)
|
$ (903)
|
|
$ (3,062)
|
$ (3,445)
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments to loss
from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition related
costs
|
|
1,158
|
-
|
|
1,158
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-GAAP adjustments to
loss from operations
|
|
1,158
|
-
|
|
1,158
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Loss from
operations
|
|
$
(38)
|
$ (903)
|
|
$ (1,904)
|
$ (3,445)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
|
|
|
2011
|
2010
|
|
2011
|
2010
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$ (1,300)
|
$ (1,477)
|
|
$ (3,194)
|
$ (4,289)
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments to net
loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition related
costs
|
|
1,158
|
-
|
|
1,158
|
-
|
|
|
Income tax effect of Non-GAAP
adjustments
|
|
(9)
|
-
|
|
(9)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-GAAP adjustments to
net loss
|
1,149
|
-
|
|
1,149
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Net loss
|
|
$ (151)
|
$ (1,477)
|
|
$ (2,045)
|
$ (4,289)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
|
|
|
|
2011
|
2010
|
|
2011
|
2010
|
|
|
|
|
|
|
|
|
|
|
Diluted net loss per
share
|
|
$ (0.10)
|
$ (0.12)
|
|
$ (0.25)
|
$ (0.34)
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition related
costs
|
|
0.09
|
-
|
|
0.09
|
-
|
|
|
Income tax effect of Non-GAAP
adjustments
|
|
(0.00)
|
-
|
|
(0.00)
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-GAAP adjustments to
net loss
|
0.09
|
-
|
|
0.09
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Diluted net loss per
share
|
|
$ (0.01)
|
$ (0.12)
|
|
$ (0.16)
|
$ (0.34)
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used to
compute
|
|
|
|
|
|
|
|
|
diluted net loss per
share
|
|
12,599
|
12,710
|
|
12,588
|
12,711
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used to
compute
|
|
|
|
|
|
|
|
|
Non-GAAP diluted net loss per
share
|
|
12,599
|
12,710
|
|
12,588
|
12,711
|
|
|
|
|
|
|
|
|
|
|
|
Timothy Baker
|
|
Scott Solomon
|
|
Executive VP, Treasurer and
CFO
|
|
Vice President
|
|
Cynosure, Inc.
|
|
Sharon Merrill
|
|
978.256.4200
|
|
617.542.5300
|
|
TBaker@cynosure.com
|
|
CYNO@investorrelations.com
|
|
|
|
|
|
|
SOURCE Cynosure, Inc.