WESTFORD, Mass., Oct. 25, 2011 /PRNewswire/ -- Cynosure, Inc.
(NASDAQ: CYNO) today announced financial results for the three
months ended September 30, 2011.
Financial Results
Third-quarter 2011 revenues increased 48 percent to $28.3 million from $19.1
million for the same period in 2010. The net loss for the
quarter was $0.8 million, or
$0.06 per basic and diluted share,
which includes $0.4 million of
expenses associated with the Company's June acquisition of the
aesthetic laser assets of HOYA ConBio®. The Company broke even from
operations on an adjusted basis, excluding the acquisition
expenses, compared with an operating loss of $1.0 million for the third quarter of 2010. The
improvement in operating performance reflects increased revenues
and improved operating expense leverage.
"We generated our highest quarterly revenue since 2008, which
reflected the combination of key asset acquisitions and our
strongest organic growth in North
America in three years," said Michael Davin, Cynosure's President and Chief
Executive Officer. "Internationally, laser product revenue grew 60
percent from the third quarter of 2010. This result was
attributable primarily to the effect of our ConBio and SmoothShapes
XV acquisitions, which complement our geographic reach and product
offerings. In North America,
third-quarter laser product revenue grew 16 percent organically and
54 percent overall. While the acquisitions contributed to the
overall increase, we also benefitted from solid gains in our core
business, due largely to improvements in the North American lending
environment. While credit availability is still far from
pre-recession levels, our ongoing efforts to bring together
creditworthy aesthetic practitioners and financial institutions
yielded positive results in the quarter."
Gross profit for the three months ended September 30, 2011 was 56.5 percent, compared
with 56.1 percent for the same period of 2010. The improvement in
gross margin reflects slightly higher average selling prices as
well as favorable geographic and product mix.
Total operating expenses for the third quarter of 2011 were
$16.4 million, or 58 percent of
revenues, including $0.4 million of
expenses associated with the acquisition of ConBio™. Operating
expenses totaled $11.7 million, or 61
percent of revenues, for the third quarter of 2010.
Recent Highlights
- Cynosure announced that it has acquired worldwide exclusive
rights to distribute the PinPointe™ FootLaser™, the world's first
FDA cleared light-based device for the treatment of Onychomycosis
(toenail fungus), a condition that affects approximately 36 million
people in the United States and an
estimated 10 percent of the population worldwide.
- Cynosure is continuing the European rollout of its Cellulaze™
workstation, the world's first minimally invasive aesthetic laser
for long-lasting reduction of cellulite in a single treatment. The
Company recorded initial Cellulaze sales in the third quarter, and
is in the process of introducing the product in Australia and Canada. The Company's 510(k) application for
marketing clearance of Cellulaze in the
United States is continuing to undergo review by the U.S.
Food and Drug Administration.
- During the third quarter of 2011, the Company began shipments
of the 'Petite' laser handpiece for the newly acquired SmoothShapes
XV system. The Petite handpiece is 50 percent lighter than the
first-generation device. The system delivers a 50 percent increase
in power density over the prior generation, allowing practitioners
enhanced flexibility to treat smaller cosmetic areas such as the
arms, neck and calves.
"In conjunction with our new minimally invasive Cellulaze
technology, SmoothShapes XV reflects our strategy to provide
aesthetic practitioners and their patients with a turnkey solution
for cellulite reduction," Davin said. "Response to SmoothShapes
XV's new Petite handpiece has been extremely positive. The
workstation is being sold in North
America, South America and
Europe, and we expect the product
to continue to gain traction in the quarters ahead."
Business Outlook
"We enter the final quarter of 2011 in a strong position both
operationally and financially," Davin said. "Revenue through the
first nine months of 2011 is 29 percent ahead of our pace in 2010.
Our newly acquired aesthetic laser products are performing well and
we have been pleased to see the favorable impact our direct
distribution is having on communicating the value of these newly
acquired products to the marketplace. We have begun to realize some
initial synergies from our acquisition of ConBio, and we expect
additional synergies and cost savings from the transaction as we
complete the integration process."
"On the development front, we remain pleased with the progress
of our joint agreement with Unilever to create a laser treatment
system for the home use personal care market. Product
commercialization remains on track for 2012," Davin said.
"Additionally, we are on schedule to launch our next flagship
product for a new aesthetic indication during the latter half of
next year. Our balance sheet remains healthy, with $66 million in cash and securities and no
long-term debt, and we continue to explore potential acquisition
opportunities."
Third-Quarter Financial Results Conference Call
In conjunction with its third-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, reduce the
appearance of cellulite and treat Onychomycosis. 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 Sept. 30,
|
|
Nine Months
Ended Sept. 30,
|
|
|
|
2011
|
2010
|
|
2011
|
2010
|
|
|
|
|
|
|
|
|
|
Revenues
|
$ 28,277
|
$ 19,051
|
|
$ 76,500
|
$ 59,433
|
|
Cost of revenues
|
12,303
|
8,367
|
|
33,379
|
25,529
|
|
Gross profit
|
15,974
|
10,684
|
|
43,121
|
33,904
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Selling and marketing
|
9,838
|
7,069
|
|
28,250
|
24,116
|
|
|
Research and development
|
2,571
|
1,899
|
|
7,242
|
5,454
|
|
|
Amortization on intangible
assets acquired
|
415
|
-
|
|
439
|
-
|
|
|
General and
administrative
|
3,537
|
2,688
|
|
10,639
|
8,751
|
|
|
|
|
|
|
|
|
|
Total operating
expenses
|
16,361
|
11,656
|
|
46,570
|
38,321
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(387)
|
(972)
|
|
(3,449)
|
(4,417)
|
|
|
|
|
|
|
|
|
|
|
Interest income, net
|
17
|
41
|
|
117
|
139
|
|
|
Other (expense) income,
net
|
(260)
|
504
|
|
(47)
|
(197)
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
(630)
|
(427)
|
|
(3,379)
|
(4,475)
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
|
162
|
33
|
|
608
|
274
|
|
|
|
|
|
|
|
|
|
Net loss
|
$ (792)
|
$ (460)
|
|
$ (3,987)
|
$ (4,749)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net loss per
share
|
$ (0.06)
|
$ (0.04)
|
|
$ (0.32)
|
$ (0.37)
|
|
Diluted weighted average shares
outstanding
|
12,596
|
12,653
|
|
12,591
|
12,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net loss per
share
|
$ (0.06)
|
$ (0.04)
|
|
$ (0.32)
|
$ (0.37)
|
|
Basic weighted average shares
outstanding
|
12,596
|
12,653
|
|
12,591
|
12,691
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance
Sheet
|
|
(In thousands)
|
|
|
|
Sept.
30,
|
|
Dec.
31,
|
|
|
|
2011
|
|
2010
|
|
|
|
(unaudited)
|
|
Assets:
|
|
|
|
|
|
Cash, cash equivalents and
short-term marketable securities
|
$ 63,196
|
|
$ 86,836
|
|
|
Accounts receivable,
net
|
14,980
|
|
10,621
|
|
|
Inventories
|
29,669
|
|
18,684
|
|
|
Prepaid expenses and other
current assets
|
3,853
|
|
3,902
|
|
|
Deferred tax asset, current
portion
|
485
|
|
489
|
|
Total current assets
|
112,183
|
|
120,532
|
|
|
Property and equipment,
net
|
7,828
|
|
8,892
|
|
|
Long-term marketable
securities
|
2,598
|
|
9,990
|
|
|
Goodwill and intangibles,
net
|
24,159
|
|
1,666
|
|
|
Other noncurrent
assets
|
647
|
|
732
|
|
Total assets
|
$ 147,415
|
|
$ 141,812
|
|
|
|
|
|
|
|
Liabilities and stockholders’
equity:
|
|
|
|
|
|
Accounts payable and accrued
expenses
|
$ 21,163
|
|
$ 15,267
|
|
|
Amounts due to related
parties
|
1,873
|
|
1,785
|
|
|
Deferred revenue
|
5,280
|
|
3,660
|
|
|
Capital lease
obligations
|
136
|
|
133
|
|
Total current
liabilities
|
28,452
|
|
20,845
|
|
|
|
|
|
|
|
Capital lease obligations, net
of current portion
|
279
|
|
40
|
|
Deferred revenue, net of current
portion
|
405
|
|
348
|
|
Other long-term
liabilities
|
99
|
|
279
|
|
|
|
|
|
|
|
Total stockholders’
equity
|
118,180
|
|
120,300
|
|
Total liabilities and
stockholders’ equity
|
$ 147,415
|
|
$ 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 $0.4 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended Sept. 30,
|
|
Nine Months
Ended Sept. 30,
|
|
|
|
2011
|
2010
|
|
2011
|
2010
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
$ (387)
|
$ (972)
|
|
$ (3,449)
|
$ (4,417)
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments to loss
from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition related
costs
|
418
|
-
|
|
1,666
|
-
|
|
|
|
|
|
|
|
|
|
|
Total Non-GAAP adjustments to
loss from operations
|
418
|
-
|
|
1,666
|
-
|
|
|
|
|
|
|
|
|
|
Non-GAAP income (loss) from
operations
|
$
31
|
$ (972)
|
|
$ (1,783)
|
$ (4,417)
|
|
|
|
|
|
|
|
|
|
|
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.