WESTFORD, Mass., May 5 /PRNewswire-FirstCall/ -- Cynosure, Inc.
(NASDAQ: CYNO), a leading developer and manufacturer of a broad
array of light-based aesthetic treatment systems, today announced
financial results for the three months ended March 31, 2009. First
Quarter 2009 Financial Results Consistent with Cynosure's April 15
announcement, revenues for the three months ended March 31, 2009
were $14.8 million, reflecting the continued effects of the global
economic recession and the continued restrictive credit environment
in the aesthetic laser industry. Revenues for the comparable period
of 2008 were $36.8 million. Gross margin for the first quarter of
2009 was 60.9% of total revenues, compared with 66.3% for the same
period of 2008. The quarter-over-quarter decline in gross margin
reflected the higher percentage of laser revenue from international
markets, which tend to have a lower sales price through third-party
distributors than sales made through the North American direct
distribution. Cynosure's net loss for the first quarter of 2009 was
$4.0 million, or $0.32 per share, consistent with the anticipated
loss range of $3.8 million to $4.3 million the company announced on
April 15. For the first quarter of 2008, Cynosure recorded net
income of $4.9 million, or $0.38 per diluted share. "Aesthetic
laser capital equipment spending was down significantly in the
first quarter of 2009 compared with the same period of 2008,
affecting all of our product lines and geographies," said Cynosure
President and Chief Executive Officer Michael Davin. "The global
recession has restricted credit for many practitioners, and we
believe it has discouraged those with borrowing capacity from
buying equipment until the economic forecast brightens. The first
two months of the first quarter were very slow; however, we were
pleased that March order volume picked up slightly. We have
continued to reduce expenses in response to our lower revenue
levels." As Cynosure announced last month, in addition to steps it
took in the fourth quarter of 2008 the company implemented a number
of first quarter cost-cutting measures designed to generate an
annualized operating expense savings of between $14 million and $18
million in 2009 compared with 2008 levels. Among these steps,
Cynosure reduced its worldwide headcount to 271 employees from 285
at the end of 2008 and further cut planned spending for various
programs. "Although we have moved aggressively to lower costs, we
also have focused on retaining the people, technology assets and
R&D innovations that we believe are crucial to the long-term
success of our company," Davin said. "Our experienced direct sales
force, outstanding product portfolio and unique
intelligent-delivery systems have helped to establish Cynosure as a
leader in the aesthetic industry, and remain vital to our
organization as we go forward." Recent Highlights -- Physician
researchers at the 2009 American Society for Laser Medicine and
Surgery Annual Conference presented positive efficacy data from
post-marketing studies of Cynosure's Smartlipo MPX(TM) laser
lipolysis workstation. The studies demonstrated the ability of the
Smartlipo MPX to tighten skin and shrink skin tissue more
efficaciously than skin treated with liposuction alone. -- At the
American Academy of Dermatology's 67th Annual Meeting, Cynosure
launched the multi-wavelength Elite MPX workstation for vascular
treatment, hair removal and skin rejuvenation. The company also
introduced two new intelligent delivery systems, SmartSense with
ThermaGuide and ThermaView. As the world's first subcutaneous
temperature device for laser lipolysis, SmartSense with ThermaGuide
enables physicians not only to measure the temperature under the
skin, but to set temperature thresholds, thereby controlling energy
delivery for a safer procedure. ThermaView is a thermal camera
system that provides a heat signature map of temperatures within
the treatment area to provide a homogeneous delivery of thermal
energy. -- The United States District Court for the District of
Massachusetts issued a favorable set of rulings in a Markman
hearing in the company's patent infringement lawsuit against
CoolTouch Inc. The purpose of the hearing was to enable the court
to determine the meaning and scope of the patent claims if the case
proceeds to trial. Business Outlook "Despite a challenging first
quarter, we remain encouraged about the prospects for the laser
aesthetic industry and are committed to taking the steps necessary
to manage the business profitably for the long term," Davin said.
"Our recent opening of a direct sales office in Korea, the
introduction of new products such as Elite MPX, and investments in
technological enhancements such as SmartSense with ThermaGuide, are
all integral to our long-term growth strategy." Conference Call
Cynosure will host a conference call for investors today at 9:00
a.m. ET. On the call, Michael Davin and Timothy Baker, the
company's Executive Vice President and Chief Financial Officer,
will discuss the company's first quarter 2009 financial results and
provide a business outlook. Those who wish to listen to the
conference call webcast should visit the "Investor Relations"
section of the company's website at http://www.cynosure.com/. The
live call also can 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 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 http://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 reduce expenses and its expectations regarding
future financial performance, 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 economic recession and its
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. Contact: Scott Solomon Vice President Sharon
Merrill Associates, Inc. 617-542-5300 Consolidated Statements of
Income (Unaudited) ------------------------------------------------
(In thousands, except per share data) Three Months Ended March 31,
2009 2008 ---- ---- Revenues $14,816 $36,763 Cost of revenues 5,800
12,371 ----- ------ Gross profit 9,016 24,392 Operating expenses
Selling and marketing 10,530 13,194 Research and development 1,741
1,812 General and administrative 3,880 3,487 ----- ----- Total
operating expenses 16,151 18,493 (Loss) income from operations
(7,135) 5,899 Interest income, net 265 801 Other (expense) income,
net (56) 553 --- --- (Loss) income before income taxes (6,926)
7,253 Income tax (benefit) provision (2,905) 2,383 ------ ----- Net
(loss) income $(4,021) $4,870 ======= ====== Diluted net (loss)
income per share $(0.32) $0.38 ====== ===== Diluted weighted
Average shares outstanding 12,701 12,768 ====== ====== Basic net
(loss) income per share $(0.32) $0.39 ====== ===== Basic weighted
average shares outstanding 12,701 12,471 ====== ====== Condensed
Consolidated Balance Sheet (Unaudited)
------------------------------------------------ (In thousands)
March 31, December 31, 2009 2008 ---- ---- (unaudited) Assets:
Cash, cash equivalents and marketable securities $69,492 $74,369
Accounts receivable, net 17,749 25,156 Amounts due from related
parties 43 40 Inventories 29,751 30,248 Deferred tax asset, current
portion 6,828 6,825 Prepaid expenses and other current assets 6,936
4,331 ----- ----- Total current assets 130,799 140,969 Property and
equipment, net 8,979 8,422 Long-term investments and related
financial instruments 19,258 21,082 Other noncurrent assets 2,709
2,649 ----- ----- Total assets $161,745 $173,122 ======== ========
Liabilities and stockholders' equity: Accounts payable and accrued
expenses $15,313 $20,697 Amounts due to Related parties 3,122 6,083
Deferred revenue 4,547 4,296 Capital lease obligations 368 398 ---
--- Total current liabilities 23,350 31,474 Capital lease
obligations, net of current portion 355 436 Deferred revenue, net
of current portion 324 407 Other long-term liabilities 452 451 ---
--- Total stockholders' equity 137,264 140,354 ------- -------
Total liabilities and stockholders' equity $161,745 $173,122
======== ======== To supplement our consolidated financial
statements presented in accordance with GAAP, Cynosure uses the
following measures defined as non-GAAP financial measures by the
SEC: non-GAAP gross profit, non-GAAP income from operations,
non-GAAP net income and non-GAAP diluted earnings per share. 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. In
addition, the non-GAAP financial measures included in this press
release may be different from, and therefore not comparable to,
similar measures used by other companies. Although certain non-GAAP
financial measures used in his release exclude the accounting
treatment of stock-based compensation, these non-GAAP measures
should not be relied upon independently as they ignore the
contribution to our operating results that is generated by the
incentive and compensation effects of the underlying stock-based
compensation programs. 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 March 31, 2009 2008 ----
---- Gross profit $9,016 $24,392 ------ ------- Non-GAAP
adjustments to gross profit: Stock-based compensation 121 129 ---
--- Total Non-GAAP adjustments to gross profit 121 129 --- ---
Non-GAAP Gross profit $9,137 $24,521 ====== ======= Three Months
Ended March 31, 2009 2008 ---- ---- (Loss) income from operations
$(7,135) $5,899 ------- ------ Non-GAAP adjustments to (loss)
income from operations: Stock-based compensation 1,825 1,687 -----
----- Total Non-GAAP adjustments to (loss) income from operations
1,825 1,687 ----- ----- Non-GAAP (Loss) income from operations
$(5,310) $7,586 ======= ====== Three Months Ended March 31, 2009
2008 ---- ---- Net (loss) income $(4,021) $4,870 ------- ------
Non-GAAP adjustments to net (loss) income: Stock-based compensation
1,825 1,687 Income tax effect of Non-GAAP adjustments (1,068) (843)
------ ---- Total Non-GAAP adjustments to net (loss) income 757 844
--- --- Non-GAAP Net (loss) income $(3,264) $5,714 ======= ======
Three Months Ended March 31, 2009 2008 ---- ---- Diluted net (loss)
income per share $(0.32) $0.38 ------ ----- Stock-based
compensation $0.14 0.13 Income tax effect of Non-GAAP adjustments
$(0.08) (0.07) ------ ----- Total Non-GAAP adjustments to net
(loss) income $0.06 0.06 ----- ---- Non-GAAP Diluted net (loss)
income per share $(0.26) 0.44 ====== ==== Weighted average shares
used to compute diluted net (loss) income per share 12,701 12,768
====== ====== Weighted average shares used to compute Non-GAAP
diluted net (loss) income per share 12,701 12,768 ====== ======
DATASOURCE: Cynosure, Inc. CONTACT: Scott Solomon, Vice President
of Sharon Merrill Associates, Inc. for Cynosure, Inc.,
+1-617-542-5300, Web Site: http://www.cynosure.com/
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