Palomar Medical Reports Financial Results For Third Quarter 2011
October 27 2011 - 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, 2011. Revenues for the quarter ended September
30, 2011 were $46.1 million, which included $29.8 million in
royalty revenues as a result of the patent litigation settlement
with Candela and Syneron. Excluding the patent litigation
settlement, revenues were $16.3 million, a 3 percent increase over
the $15.8 million reported in the third quarter of 2010. Product
revenues increased to $10.4 million, a 12 percent increase over the
$9.3 million reported in the third quarter of 2010. Third quarter
gross margin from product revenues was 59 percent and was
consistent with the percent reported in the third quarter of 2010.
Income before taxes for the third quarter ended September 30, 2011
was $19.1 million, which included $18.7 million of net royalty
revenues, $6.6 million in partial legal reimbursement related to
the patent litigation settlement with Candela and Syneron, $1.3
million in patent litigation expense, $0.8 million in non-cash
stock-based compensation expense, and $0.7 million of net interest
income related to the patent litigation settlement with Candela and
Syneron. Loss before taxes for the third quarter ended September
30, 2010 was $2.0 million, which included $1.5 million in patent
litigation expense and $0.9 million in non-cash stock-based
compensation expense. Net income for the third quarter ended
September 30, 2011 was $15.2 million, or $0.81 per diluted share,
as compared to a net loss for the third quarter ended September 30,
2010 of $2.0 million, or $0.11 per share. The balance sheet
continues to be strong with $110.6 million in cash, cash
equivalents, short-term investments, and marketable securities and
other investments with no borrowings.
Chief Executive Officer Joseph P. Caruso commented, "This
quarter was another growth quarter for us as we continue to make
the investments needed to expand our business. This quarter we
started shipping our newest flagship platform, the Icon Aesthetic
System, to key opinion leaders around the world. This is the
first step in establishing a solid reference base to transition our
customers to the next level of technology. These reference
sites also help promote our technology to expand our customer base
as we begin our rollout plan. This new platform is the next
generation of aesthetic systems with melanin detection technology,
high peak powers, state of the art cooling, built-in calibration,
and an intuitive user interface to provide fast
treatments with excellent outcomes and user
experience. It provides our customer base with an excellent
upgrade path as well as a unique offering for those that are
entering the aesthetic business. We also began to market the
Acleara system for treating acne and the Adivive fat transfer
system outside the United States. We will sell these
new products at attractive price points to expand our customer base
and cross sell our full line of laser and light-based aesthetic
systems. Physician feedback on our new products is very
positive. These new systems provide our sales force with the
right product offerings for the current economic environment.
We are also making significant progress expanding
globally with our new offices in Germany and Spain. Germany is
one of the strongest economies in Europe and once fully
established, should provide a great market for our current and
future products. Spain has been one of the largest aesthetic
markets for many years. Both of these major markets were not
well served by our prior distributors. During the quarter, we
established our key luminaries and completed training of our direct
sales forces. We believe these new offices will be leading
contributors for our future growth."
Mr. Caruso continued, "Our consumer products strategy is moving
forward. The PaloVia Skin Renewing Laser started shipping to
select channels earlier this year. We continue to gain valuable
knowledge of the market and collect feedback from the retail
channel and our consumers. This knowledge base will be
important as we make strategic decisions concerning distribution
and next generation products. This new category of
light-based aesthetic products could provide us with access to a
base of consumers that have never been exposed to our professional
products or technology."
Mr. Caruso further commented, "We are also very pleased with the
settlement of our Candela and Syneron lawsuits. The settlement
of $31.0 million netted Palomar $26.0 million in cash. This
settlement validates the strength of our patent position and
intellectual property strategy."
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) 318-8616 or listen to the webcast in the About
Palomar/Investors section of the Company's website at
palomarmedical.com. A webcast replay will also be available.
About Palomar Medical Technologies Inc: Palomar
designs, produces and sells the most advanced cosmetic lasers and
intense pulsed light (IPL) systems to dramatically improve the
appearance of women's and men's skin. For over 15 years,
Palomar has pioneered the science of using lasers and light to
improve appearances. As the industry's technology leader, Palomar
has invested in creating cosmetic laser and IPL systems that put
real value in the hands of physicians and other professionals to
benefit consumers. Thousands of physicians worldwide trust
and depend on Palomar technology to not only introduce new
aesthetic treatments such as advanced laser hair removal, laser
liposuction, skin resurfacing, acne, laser treatments for scars,
wrinkle treatment, stretch marks (striae), and photofacials for
pigmented and vascular lesions, but to also make them robust,
faster, more powerful, and more comfortable for those being
treated. In June 2009, Palomar became the first company to
receive a 510(k) over-the-counter ("OTC") clearance from the FDA
for a new, patented, home-use, laser device for the treatment of
fine lines and wrinkles around the eyes (periorbital wrinkles).
This OTC clearance allows the PaloVia™ Skin Renewing Laser® to be
marketed and sold directly to consumers without a prescription.
For more information on Palomar and its products, visit
Palomar's website at palomarmedical.com for professional products
or palovia.com for consumer products. 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, difficulties or
delays in developing or introducing new products and keeping them
on the market, the results of future research, lack of product
demand and market acceptance for current and future products,
adverse events, product changes, 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, 2010 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, |
|
2011 |
2010 |
2011 |
2010 |
Revenues: |
|
|
|
|
Product revenues |
$ 10,413,952 |
$ 9,273,158 |
$ 31,014,467 |
$ 27,655,391 |
Service revenues |
3,446,226 |
3,749,164 |
11,188,725 |
11,512,299 |
Royalty revenues |
31,637,966 |
1,499,182 |
36,604,815 |
4,444,327 |
Other revenues |
555,557 |
1,250,000 |
1,666,669 |
3,750,000 |
Total revenues |
46,053,701 |
15,771,504 |
80,474,676 |
47,362,017 |
|
|
|
|
|
Costs and expenses: |
|
|
|
|
Cost of product revenues |
4,309,178 |
3,781,473 |
12,582,995 |
10,583,241 |
Cost of service revenues |
1,626,984 |
1,367,316 |
5,221,445 |
4,320,439 |
Cost of royalty revenues |
11,835,934 |
599,673 |
13,822,673 |
1,777,731 |
Research and development |
4,271,366 |
3,545,622 |
11,799,590 |
11,320,691 |
Selling and marketing |
6,616,494 |
4,663,632 |
18,425,200 |
14,408,442 |
General and administrative |
(1,116,714) |
4,267,535 |
6,150,891 |
11,579,566 |
Total costs and
expenses |
27,543,242 |
18,225,251 |
68,002,794 |
53,990,110 |
|
|
|
|
|
Income (loss) from
operations |
18,510,459 |
(2,453,747) |
12,471,882 |
(6,628,093) |
|
|
|
|
|
Interest income |
811,904 |
108,630 |
1,013,976 |
309,747 |
Other (loss) income |
(212,212) |
390,784 |
(172,894) |
212,922 |
|
|
|
|
|
Income (loss) before income
taxes |
19,110,151 |
(1,954,333) |
13,312,964 |
(6,105,424) |
|
|
|
|
|
Provision for income
taxes |
3,861,251 |
69,454 |
3,956,977 |
117,456 |
|
|
|
|
|
Net income (loss) |
$15,248,900 |
$(2,023,787) |
$9,355,987 |
$(6,222,880) |
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
Basic |
$ 0.82 |
$ (0.11) |
$ 0.50 |
$ (0.34) |
Diluted |
$ 0.81 |
$ (0.11) |
$ 0.49 |
$ (0.34) |
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
Basic |
18,700,253 |
18,561,877 |
18,688,202 |
18,539,847 |
Diluted |
18,816,407 |
18,561,877 |
18,980,957 |
18,539,847 |
|
Consolidated Balance
Sheets (Unaudited) |
|
|
|
|
September 30, 2011 |
December 31, 2010 |
Assets |
|
|
Current assets: |
|
|
Cash, cash equivalents and short-term
investments |
$ 100,183,329 |
$ 89,116,325 |
Accounts receivable, net |
8,127,732 |
5,349,835 |
Inventories |
21,901,469 |
13,021,272 |
Other current assets |
1,066,171 |
855,014 |
Total current assets |
131,278,701 |
108,342,446 |
|
|
|
Marketable securities and other
investments |
10,398,516 |
13,850,197 |
|
|
|
Property and equipment,
net |
37,046,179 |
37,165,306 |
|
|
|
Other assets |
243,430 |
219,554 |
|
|
|
Total assets |
$ 178,966,826 |
$ 159,577,503 |
|
|
|
Liabilities and Stockholders'
Equity |
|
|
|
|
|
Current Liabilities: |
|
|
Accounts payable |
$ 2,577,017 |
$ 2,293,096 |
Accrued liabilities |
11,474,714 |
10,742,581 |
Deferred revenue |
7,229,709 |
4,394,081 |
Total current liabilities |
21,281,440 |
17,429,758 |
|
|
|
Accrued income taxes |
3,085,331 |
2,854,077 |
|
|
|
Total liabilities |
$ 24,366,771 |
$ 20,283,835 |
|
|
|
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 and Outstanding-- 19,030,503 and
18,925,549 shares, respectively |
190,305 |
189,256 |
Additional paid-in capital |
217,216,443 |
211,376,381 |
Accumulated other comprehensive loss |
(381,517) |
(490,806) |
Accumulated deficit |
(62,425,176) |
(71,781,163) |
Total stockholders' equity |
$ 154,600,055 |
$ 139,293,668 |
|
|
|
Total liabilities and stockholders'
equity |
$ 178,966,826 |
$ 159,577,503 |
CONTACT: Kerry McAnistan
Investor Relations Assistant
Palomar Medical Technologies, Inc.
781-993-2411
ir@palomarmedical.com
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