Palomar Medical Reports Financial Results for Third Quarter 2010
October 28 2010 - 8:00AM
Palomar Medical Technologies, Inc. (Nasdaq:PMTI), a leading
researcher and developer of light-based systems for cosmetic
treatments, today announced financial results for the third quarter
ended September 30, 2010. Revenues for the quarter ended September
30, 2010 increased to $15.8 million, as compared to $14.5 million
reported in the third quarter of 2009. Product and service revenues
increased to $13.0 million, a 16 percent increase over the $11.2
million reported in the third quarter of 2009. Third quarter
gross margin from product and service revenues was 60 percent, an
increase over the 57 percent reported in the third quarter of
2009. Loss before income taxes for the third quarter ended
September 30, 2010 was $2.0 million, which included a $1.5 million
patent litigation expense and a $0.9 million non-cash stock-based
compensation expense. Loss before income taxes for the third
quarter ended September 30, 2009 was $0.2 million, which included a
$100,000 patent litigation expense and a $1.0 million non-cash
stock-based compensation expense. The Company reported net
loss of $2.0 million, or $0.11 per share for the third quarter of
2010 and $0.3 million for the third quarter of 2009. The
balance sheet continues to be strong with $102.8 million in cash,
cash equivalents, short-term investments and marketable securities
with no borrowings.
Chief Executive Officer Joseph P. Caruso commented, "Given the
current economic climate, we are happy with the progress we are
making, especially the trends experienced in the last few
quarters. Our 23% increase in product revenues this quarter as
compared to the same quarter last year is gratifying as this is the
fourth consecutive quarter of growth and the largest percentage
growth year over year in the last three years. Prices are
stable and gross margins remain strong throughout the
world. Our gross margin this quarter was a big improvement
over the same time last year. Our efforts over the past two
years to increase our international distribution are also paying
off with 48% of total product and service revenues coming from
outside North America. Our product portfolio and platform
approach gives us the flexibility to adjust our business to meet
the challenges in today's economy. Our sales and distribution
network configure technology solutions to fit physicians' sites
throughout the world in response to the particular economic
pressure they are experiencing. We have also had great success with
shifting our business model from principally one-time capital
equipment sales to include recurring sources. This quarter,
41% of our revenue was generated from recurring sources."
Mr. Caruso continued, "We continue to invest in our consumer
products initiative. Our branding and packaging are complete
and we are building inventory to support a planned launch early
next year. This is a new and exciting challenge for us
representing a great opportunity to grow the business in the
future."
Conference Call: As previously announced,
Palomar will conduct a conference call and webcast today at 11:30
AM Eastern Time. Management will discuss financial results and
strategic matters. If you would like to participate, please call
(866) 800-8651 or listen to the webcast in the About
Palomar/Investors section of the Company's website at
www.palomarmedical.com. A webcast replay will also be
available.
About Palomar Medical Technologies Inc: Palomar
is a leading researcher and developer of light-based systems for
cosmetic treatments. Palomar pioneered the optical hair removal
field, when, in 1997, it introduced the first high-powered laser
hair removal system. Since then, many of the major advances in
light-based cosmetic treatments have been based on Palomar
technology. In December 2006, Palomar became the first company to
receive a 510(k) over-the-counter (OTC) clearance from the United
States Food and Drug Administration (FDA) for a new, patented,
home-use, light-based hair removal device. In June 2009, Palomar
became the first company to receive a 510(k) OTC clearance from the
FDA for a new, patented, home-use, laser device for the treatment
of periorbital wrinkles. OTC clearance allows the product to be
marketed and sold directly to consumers without a prescription.
There are now millions of light-based cosmetic procedures performed
around the world every year in physician offices, clinics, spas and
salons. Palomar is testing many new and exciting applications to
further advance the hair removal market and other cosmetic
applications. Palomar is focused on developing proprietary
light-based technology for introduction to the mass markets.
For more information on Palomar and its products, visit
Palomar's website at www.palomarmedical.com. To continue receiving
the most up-to-date information and latest news on Palomar as it
happens, sign up to receive automatic e-mail alerts by going to the
About Palomar/Investors section of the website.
With the exception of the historical information contained in
this release, the matters described herein contain forward-looking
statements, including, but not limited to, statements relating to
new markets, future royalty amounts due from third parties,
development and introduction of new products, and financial and
operating projections. These forward-looking statements are neither
promises nor guarantees, but involve risk and uncertainties that
may individually or mutually impact the matters herein, and cause
actual results, events and performance to differ materially from
such forward-looking statements. These risk factors include, but
are not limited to, results of future operations, technological
difficulties in developing or introducing new products, the results
of future research, lack of product demand and market acceptance
for current and future products, the effect of economic conditions,
challenges in managing joint ventures and research with third
parties and government contracts, the impact of competitive
products and pricing, governmental regulations with respect to
medical devices, including whether FDA clearance will be obtained
for future products and additional applications, the results of
litigation, difficulties in collecting royalties, potential
infringement of third-party intellectual property rights, factors
affecting the Company's future income and resulting ability to
utilize its NOLs, and/or other factors, which are detailed from
time to time in the Company's SEC reports, including the report on
Form 10-K for the year ended December 31, 2009 and the Company's
quarterly reports on Form 10-Q. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date hereof. The Company undertakes no obligation to
release publicly the result of any revisions to these
forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
Palomar Financial Summary: |
Consolidated Statements
of Operations (Unaudited) |
|
|
|
|
|
|
Three Months Ended September
30, |
Nine Months Ended September
30, |
|
2010 |
2009 |
2010 |
2009 |
Revenues: |
|
|
|
|
Product revenues |
$9,273,158 |
$7,528,645 |
$27,655,391 |
$23,939,493 |
Service revenues |
3,749,164 |
3,700,511 |
11,512,299 |
10,884,073 |
Royalty revenues |
1,499,182 |
1,264,022 |
4,444,327 |
4,032,039 |
Funded product development revenues |
-- |
806,482 |
-- |
1,636,082 |
Other revenues |
1,250,000 |
1,250,000 |
3,750,000 |
3,750,000 |
Total revenues |
15,771,504 |
14,549,660 |
47,362,017 |
44,241,687 |
|
|
|
|
|
Costs and expenses: |
|
|
|
|
Cost of product revenues |
3,781,473 |
2,873,956 |
10,583,241 |
9,849,383 |
Cost of service revenues |
1,367,316 |
1,901,303 |
4,320,439 |
5,417,280 |
Cost of royalty revenues |
599,673 |
505,609 |
1,777,731 |
1,612,816 |
Research and development |
3,545,622 |
3,305,311 |
11,320,691 |
10,125,279 |
Selling and marketing |
4,663,632 |
4,062,930 |
14,408,442 |
13,464,732 |
General and administrative |
4,267,535 |
2,451,496 |
11,579,566 |
7,566,053 |
Total costs and
expenses |
18,225,251 |
15,100,605 |
53,990,110 |
48,035,543 |
|
|
|
|
|
Loss from
operations |
(2,453,747) |
(550,945) |
(6,628,093) |
(3,793,856) |
|
|
|
|
|
Interest income |
108,630 |
218,169 |
309,747 |
551,817 |
Other income |
390,784 |
156,941 |
212,922 |
506,761 |
|
|
|
|
|
Loss before income
taxes |
(1,954,333) |
(175,835) |
(6,105,424) |
(2,735,278) |
|
|
|
|
|
Provision for (benefit from)
income taxes |
69,454 |
120,752 |
117,456 |
(780,319) |
|
|
|
|
|
Net loss |
$(2,023,787) |
$(296,587) |
$(6,222,880) |
$(1,954,959) |
|
|
|
|
|
Net loss per share: |
|
|
|
|
Basic |
$(0.11) |
$(0.02) |
$(0.34) |
$(0.11) |
Diluted |
$(0.11) |
$(0.02) |
$(0.34) |
$(0.11) |
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
Basic |
18,561,877 |
18,065,655 |
18,539,847 |
18,058,246 |
Diluted |
18,561,877 |
18,065,655 |
18,539,847 |
18,058,246 |
|
|
|
|
|
|
Consolidated Balance Sheets
(Unaudited) |
|
|
|
|
|
|
September 30, 2010 |
December 31, 2009 |
Assets |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$76,623,685 |
$81,948,482 |
Short-term investments |
1,999,675 |
25,000,000 |
Total cash, cash equivalents and
short-term investments |
78,623,360 |
106,948,482 |
Accounts receivable, net |
5,035,232 |
4,436,219 |
Inventories |
12,218,475 |
11,126,352 |
Other current assets |
1,783,674 |
2,179,233 |
Total current assets |
97,660,741 |
124,690,286 |
|
|
|
Marketable securities, at estimated
fair value |
24,129,348 |
4,024,313 |
|
|
|
Property and equipment,
net |
37,271,766 |
34,629,410 |
|
|
|
Other assets |
218,716 |
126,087 |
|
|
|
Total assets |
$159,280,571 |
$163,470,096 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
|
|
|
Current Liabilities: |
|
|
Accounts payable |
$3,326,847 |
$2,696,217 |
Accrued liabilities |
9,245,816 |
8,959,679 |
Deferred revenue |
3,793,124 |
5,221,924 |
Total current liabilities |
16,365,787 |
16,877,820 |
|
|
|
Accrued income taxes |
2,788,802 |
2,965,077 |
|
|
|
Total liabilities |
$19,154,589 |
$19,842,897 |
|
|
|
Stockholders'
equity: |
|
|
Preferred stock, $.01 par value-- |
|
|
Authorized - 1,500,000
shares |
|
|
Issued -- none |
-- |
-- |
Common stock, $.01 par value-- |
|
|
Authorized - 45,000,000
shares |
|
|
Issued – 18,573,262 and
18,521,045 shares, respectively |
185,733 |
185,211 |
Additional paid-in capital |
209,629,876 |
206,740,492 |
Accumulated other comprehensive loss |
(460,540) |
(292,297) |
Accumulated deficit |
(69,229,087) |
(63,006,207) |
Total stockholders'
equity |
$140,125,982 |
$143,627,199 |
|
|
|
Total liabilities and stockholders'
equity |
$159,280,571 |
$163,470,096 |
CONTACT: Palomar Medical Technologies, Inc.
Kerry McAnistan, Investor Relations Assistant
781-993-2411
ir@palomarmedical.com
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