HAYWARD, Calif., July 26, 2012 /PRNewswire/ -- Solta Medical, Inc.
(NASDAQ: SLTM), a global leader in the medical aesthetics market,
today announced results for the second quarter ended June 30, 2012. Revenue for the second quarter was
$37.3 million, an increase of
$8.3 million, or 29%, as compared to
the second quarter of 2011. Revenue from Liposonix, the Company's
non-invasive fat reduction system, was $9.4
million, which was generated from shipments of 98 systems
and associated consumables. Total revenue from treatment tips and
consumables for the quarter was $18.2
million, representing 49% of total revenue. Revenue
from the Asia Pacific region grew
32% year-over-year driven primarily from sales of the Company's
Thermage® and Clear + Brilliant® brands.
"Liposonix continues to gain traction in the market place and in
order to meet demand, we ramped production of Liposonix systems by
40% during the quarter and doubled the production of transducer
treatment tips. We expect to increase production over the balance
of the year to meet the anticipated demand," said Stephen J. Fanning, Chairman, President &
CEO. "Approximately three-quarters of the available Liposonix
product was shipped to customers in North
America in Q2. We look forward to expanding our Liposonix
commercialization efforts in markets outside of North America over the remainder of the
year."
GAAP net loss for the quarter was $26.3
million as compared to GAAP net loss of $0.2 million reported for the second quarter of
2011. Non-GAAP net income for the quarter was $2.7 million, or $0.04 per diluted share as compared to non-GAAP
net income of $1.4 million, or
$0.02 per diluted share for same
period last year.
Solta Medical's GAAP results for the second quarter include a
$26.0 million charge for a fair value
reassessment of the expected earn out payments associated with the
acquisition of Liposonix. The total contingent consideration, which
includes expected payments over the next seven years, has been
increased by $26.0 million to
$58.5 million, and is shown on the
Company's June 30, 2012 balance sheet
as a short-term liability of $22.2
million and a long-term liability of $36.3 million. The Company's GAAP results
for the quarter also include $1.8
million of non-cash amortization and other acquisition
related charges, and $1.2 million of
non-cash stock based compensation charges. The Company provides
non-GAAP financial measures that exclude these charges and
expenses. A reconciliation of GAAP to non-GAAP results is provided
in the tables included in this release.
"We produced our eleventh consecutive quarter of positive
non-GAAP EBITDA and generated $4.0
million in cash flow from operations," said Mr. Fanning. "In
addition, non-GAAP operating income of $3.2
million for the second quarter more than doubled from
$1.5 million in the prior year,
demonstrating our ability to leverage our operating
infrastructure."
Also today the Company announced that it has signed a Commitment
Letter from Silicon Valley Bank for a new $10 million term loan. Upon closing and
funding, this term loan will provide the Company with additional
capital to continue to drive growth and to address future
obligations related to the Liposonix acquisition.
"We believe the additional $10
million term loan provides us with sufficient liquidity to
support our operations through the next 12 months, including the
2013 contingent payments related to the acquisition of
Liposonix. Nonetheless, we will continue to evaluate
opportunities to strengthen our balance sheet," Mr. Fanning
concluded.
Financial Outlook for 2012
The company updated its financial outlook for 2012 as
follows:
- Revenue for the full year 2012 is now expected to be in the
range of $142 million to $144
million, representing year-over-year revenue growth of 22%
to 24%, driven by sales of the second generation Liposonix system.
The Company previously provided a revenue outlook for full year
2012 in the range of $140 million to $143
million.
- Non-GAAP gross margin is now estimated to be in the range of
64% to 67% for the full year 2012 as compared to the Company's
previously issued range of 63% to 66%. Non-GAAP gross margin
excludes non-cash amortization charges, non-cash stock based
compensation charges, severance costs, and acquisition related
adjustments. Non-GAAP gross margin for the six months ended
June 30, 2012 was 67.5%.
- The outlook for positive non-GAAP EBITDA for every quarter and
for the full-year 2012 remains unchanged. Non-GAAP EBITDA excludes
non-cash amortization charges, non-cash stock based compensation
charges, severance costs, and acquisition related adjustments.
Non-GAAP EBITDA for the six months ended June 30, 2012 was $4.7
million.
Non-GAAP Presentation
To supplement the condensed consolidated financial information
presented on a GAAP basis, management has provided non-GAAP gross
margin, non-GAAP operating income (loss), non-GAAP EBITDA, non-GAAP
net income (loss) and non-GAAP earnings (loss) per share measures
that exclude the impact of acquisition related adjustments,
severance costs, acquisition related costs, and stock-based
compensation expenses. The Company believes that these
non-GAAP financial measures provide investors with insight into
what is used by management to conduct a more meaningful and
consistent comparison of the Company's ongoing operating results
and trends, compared with historical results. This
presentation is also consistent with the measures management uses
to measure the performance of ongoing operating results against
prior periods and against our internally developed targets.
There are limitations in using these non-GAAP financial measures
because they are not prepared in accordance with GAAP and may be
different from non-GAAP financial measures used by other
companies. These non-GAAP financial measures should not be
considered in isolation or as a substitute for GAAP financial
measures. Investors and potential investors should consider
non-GAAP financial measures only in conjunction with the Company's
consolidated financial statements prepared in accordance with GAAP
and the reconciliation of non-GAAP financial measures attached to
this release.
Conference Call Information
The Company will also host a conference call and webcast today,
Thursday, July 26, 2012, at
4:30 p.m. Eastern Time (1:30 p.m. Pacific) to discuss the financial
results and current corporate developments. The dial-in
number for the conference call is 877-941-9205 for domestic
participants and 480-629-9819 for international participants.
To access the live webcast of the call, go to Solta Medical's
website at www.solta.com and click on Investor Relations. An
archived webcast will also be available at www.solta.com.
About Solta Medical, Inc.
Solta Medical, Inc. is a global leader in the medical aesthetics
market providing innovative, safe, and effective solutions for
patients that enhance and expand the practice of medical aesthetics
for physicians. The company offers six aesthetic energy devices to
address a range of issues, including skin resurfacing and
rejuvenation with Fraxel® and Clear + Brilliant™, body
contouring and skin tightening with Liposonix® and Thermage® and
acne reduction with Isolaz® and CLARO™. As the
innovator and leader in fractional laser technology, Fraxel
delivers minimally invasive clinical solutions to resurface aging
and sun damaged skin. Using similar fractional laser technology,
Clear + Brilliant is a unique, cost-effective treatment to prevent
and improve the early signs of photoaging. For body contouring,
Liposonix is a non-surgical treatment to reduce waist circumference
with advanced high-intensity focused ultrasound (HIFU) technology
to permanently destroy targeted fat beneath the skin. Thermage is
an innovative, non-invasive radiofrequency procedure for tightening
and contouring skin. Isolaz was the first laser or light based
system indicated for the treatment of inflammatory acne, comedonal
acne, pustular acne, and mild-to-moderate inflammatory acne. CLARO
is a personal care acne system that is the first FDA cleared
over-the-counter IPL device that uses a powerful combination of
both heat and light to clear skin quickly and naturally. More than
two million procedures have been performed with Solta Medical's
portfolio of products around the world. For more information about
Solta Medical, call 1-877-782-2286 or log on to www.Solta.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995, including statements regarding expected continued market
acceptance of Liposonix, plans to increase future Liposonix
production, the adequacy of our cash resources, and our financial
outlook for 2012. Forward-looking statements are based on
management's current, preliminary expectations and are subject to
risks and uncertainties, which may cause Solta Medical's actual
results to differ materially from the statements contained herein.
Factors that might cause such a difference include the risk that
physician adoption of our systems does not grow, the risk that
customers do not continue to purchase treatment tips, the
possibility that the market for the sale of new products does not
develop as expected, and the risks relating to Solta Medical's
ability to achieve its stated financial goals as a result of, among
other things, economic conditions and consumer and physician
confidence causing changes in consumer and physician spending
habits that affect demand for our products and treatments. Further
information on potential risk factors that could affect Solta
Medical's business and its financial results are detailed in its
Form 10-K for the year ended December 31,
2011, and other reports as filed from time to time with the
Securities and Exchange Commission. Undue reliance should not be
placed on forward-looking statements, especially guidance on future
financial performance, which speaks only as of the date they are
made. Solta Medical undertakes no obligation to update publicly any
forward-looking statements to reflect new information, events or
circumstances after the date they were made, or to reflect the
occurrence of unanticipated event.
Web Site: http://www.Solta.com
Solta
Medical, Inc.
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(in
thousands of dollars, except share and per share
data)
|
(unaudited)
|
|
|
|
|
|
Three
Months Ended
|
|
Six
Months Ended
|
|
June
30,
|
|
June
30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
Net
revenue
|
$37,262
|
|
$28,954
|
|
$69,716
|
|
$55,405
|
Cost of
revenue
|
13,714
|
|
10,391
|
|
25,925
|
|
18,781
|
|
|
|
|
|
|
|
|
Gross
margin
|
23,548
|
|
18,563
|
|
43,791
|
|
36,624
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Sales and
marketing
|
13,673
|
|
11,915
|
|
27,619
|
|
23,733
|
Research
and development
|
5,013
|
|
3,648
|
|
10,318
|
|
7,213
|
General
and administrative
|
4,615
|
|
3,608
|
|
9,275
|
|
7,334
|
Remeasurement of contingent consideration
liability
|
26,000
|
|
(484)
|
|
30,700
|
|
(484)
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
49,301
|
|
18,687
|
|
77,912
|
|
37,796
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(25,753)
|
|
(124)
|
|
(34,121)
|
|
(1,172)
|
Interest
income
|
2
|
|
19
|
|
5
|
|
33
|
Interest
expense
|
(350)
|
|
(21)
|
|
(701)
|
|
(74)
|
Other
income and expense, net
|
(121)
|
|
(9)
|
|
(147)
|
|
118
|
|
|
|
|
|
|
|
|
Loss
before income taxes
|
(26,222)
|
|
(135)
|
|
(34,964)
|
|
(1,095)
|
Provision
for income taxes
|
64
|
|
71
|
|
121
|
|
136
|
|
|
|
|
|
|
|
|
Net
loss
|
($26,286)
|
|
($206)
|
|
($35,085)
|
|
($1,231)
|
|
|
|
|
|
|
|
|
Net loss
per share — basic and diluted
|
($0.43)
|
|
($0.00)
|
|
($0.57)
|
|
($0.02)
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding used in calculating net loss
|
|
|
|
|
|
|
|
per
share:
|
|
|
|
|
|
|
|
Basic and
diluted
|
61,719,575
|
|
60,634,849
|
|
61,536,050
|
|
60,269,804
|
Solta
Medical, Inc.
|
NON-GAAP
RECONCILIATION OF GROSS MARGIN, OPERATING INCOME (LOSS), EBITDA,
NET INCOME (LOSS) AND NET INCOME (LOSS) PER SHARE
|
(in thousands, except share and per
share data)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Six
Months Ended
|
|
June
30,
|
|
June
30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
GAAP Gross
margin
|
$23,548
|
|
$18,563
|
|
$43,791
|
|
$36,624
|
GAAP gross
margin as % of sales
|
63%
|
|
64%
|
|
63%
|
|
66%
|
Non-GAAP
adjustments to gross margin:
|
|
|
|
|
|
|
|
GAAP Gross
margin
|
$23,548
|
|
$18,563
|
|
$43,791
|
|
$36,624
|
Amortization and other non-cash acquisition related
charges
|
1,375
|
|
844
|
|
3,033
|
|
1,689
|
Stock-based compensation
|
127
|
|
95
|
|
239
|
|
164
|
Non-GAAP
gross margin
|
$25,050
|
|
$19,502
|
|
$47,063
|
|
$38,477
|
Non-GAAP
gross margin as % of sales
|
67%
|
|
67%
|
|
68%
|
|
69%
|
|
|
|
|
|
|
|
|
GAAP loss
from operations
|
($25,753)
|
|
($124)
|
|
($34,121)
|
|
($1,172)
|
Non-GAAP
adjustments to net income (loss) from operations:
|
|
|
|
|
|
|
|
Amortization and other non-cash acquisition related
charges
|
1,729
|
|
1,128
|
|
3,746
|
|
2,202
|
Remeasurement of contingent consideration
liability
|
26,000
|
|
(484)
|
|
30,700
|
|
(484)
|
Acquisition-related expenses
|
58
|
|
120
|
|
151
|
|
120
|
Severance
expenses (credits)
|
(11)
|
|
—
|
|
19
|
|
—
|
Stock-based compensation
|
1,209
|
|
812
|
|
2,349
|
|
1,481
|
Non-GAAP
income from operations
|
$3,232
|
|
$1,452
|
|
$2,844
|
|
$2,147
|
Depreciation expenses
|
937
|
|
763
|
|
1,875
|
|
1,545
|
Non-GAAP
EBITDA
|
$4,169
|
|
$2,215
|
|
$4,719
|
|
$3,692
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
($26,286)
|
|
($206)
|
|
($35,085)
|
|
($1,231)
|
Non-GAAP
adjustments to net loss:
|
|
|
|
|
|
|
|
Amortization and other non-cash acquisition related
charges
|
1,729
|
|
1,128
|
|
3,746
|
|
2,202
|
Remeasurement of contingent consideration
liability
|
26,000
|
|
(484)
|
|
30,700
|
|
(484)
|
Acquisition-related expenses
|
58
|
|
120
|
|
151
|
|
120
|
Severance
expenses (credits)
|
(11)
|
|
—
|
|
19
|
|
—
|
Stock-based compensation
|
1,209
|
|
812
|
|
2,349
|
|
1,481
|
Non-GAAP
net income
|
$2,699
|
|
$1,370
|
|
$1,880
|
|
$2,088
|
|
|
|
|
|
|
|
|
GAAP basic
net loss per share
|
($0.43)
|
|
($0.00)
|
|
($0.57)
|
|
($0.02)
|
Non-GAAP
adjustments to basic loss per share:
|
|
|
|
|
|
|
|
Amortization and other non-cash acquisition related
charges
|
$0.03
|
|
$0.02
|
|
$0.06
|
|
$0.04
|
Remeasurement of contingent consideration
liability
|
$0.42
|
|
($0.01)
|
|
$0.50
|
|
($0.01)
|
Acquisition-related expenses
|
$0.00
|
|
$0.00
|
|
$0.00
|
|
$0.00
|
Severance
expenses (credits)
|
($0.00)
|
|
$0.00
|
|
$0.00
|
|
$0.00
|
Stock-based compensation
|
$0.02
|
|
$0.01
|
|
$0.04
|
|
$0.02
|
Non-GAAP
basic net income per share
|
$0.04
|
|
$0.02
|
|
$0.03
|
|
$0.03
|
|
|
|
|
|
|
|
|
Non-GAAP
diluted net income per share
|
$0.04
|
|
$0.02
|
|
$0.03
|
|
$0.03
|
|
|
|
|
|
|
|
|
GAAP
weighted average shares outstanding used in calculating basic net
loss per share
|
61,719,575
|
|
60,634,849
|
|
61,536,050
|
|
60,269,804
|
|
|
|
|
|
|
|
|
GAAP
weighted average shares outstanding used in calculating diluted net
loss per share
|
61,719,575
|
|
60,634,849
|
|
61,536,050
|
|
60,269,804
|
Adjustments for dilutive potential common
stock
|
5,245,087
|
|
4,795,261
|
|
5,053,439
|
|
4,497,589
|
Weighted
average shares outstanding used in calculating non-GAAP diluted net
income per share
|
66,964,662
|
|
65,430,110
|
|
66,589,489
|
|
64,767,393
|
|
|
|
|
|
|
|
|
Solta
Medical, Inc.
|
CONDENSED CONSOLIDATED BALANCE
SHEETS
|
(in
thousands of dollars, except share and per share
data)
|
(unaudited)
|
|
|
|
|
|
June
30,
|
|
December 31,
|
|
2012
|
|
2011
|
|
|
|
|
ASSETS
|
Current
assets:
|
|
|
|
Cash and
cash equivalents
|
$15,550
|
|
$17,417
|
Accounts
receivable
|
14,995
|
|
13,282
|
Inventories
|
16,452
|
|
16,524
|
Prepaid
expenses and other current assets
|
7,883
|
|
8,626
|
|
|
|
|
Total
current assets
|
54,880
|
|
55,849
|
Property
and equipment, net
|
6,449
|
|
6,818
|
Purchased
intangible assets, net
|
45,887
|
|
49,352
|
Goodwill
|
96,620
|
|
96,620
|
Other
assets
|
646
|
|
659
|
|
|
|
|
Total
assets
|
$204,482
|
|
$209,298
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
Liabilities:
|
|
|
|
Accounts
payable
|
$5,606
|
|
$5,767
|
Accrued
liabilities
|
16,465
|
|
16,126
|
Current
portion of contingent consideration liability
|
22,200
|
|
—
|
Current
portion of deferred revenue
|
4,186
|
|
4,521
|
Short-term
borrowings
|
7,623
|
|
7,441
|
Customer
deposits
|
880
|
|
610
|
|
|
|
|
Total
current liabilities
|
56,960
|
|
34,465
|
Deferred
revenue, net of current portion
|
642
|
|
824
|
Term loan,
net of current portion
|
13,973
|
|
16,959
|
Non-current tax liabilities
|
2,999
|
|
2,975
|
Contingent
consideration liability
|
36,300
|
|
27,800
|
Other liabilities
|
110
|
|
92
|
|
|
|
|
Total
liabilities
|
110,984
|
|
83,115
|
|
|
|
|
Stockholders' equity:
|
|
|
|
Common
stock, $0.001 par value:
|
|
|
|
100,000,000 shares authorized
|
|
|
|
61,921,292, and 61,130,740 shares issued and
outstanding at June 30, 2012 and December 31, 2011
|
62
|
|
61
|
Additional
paid-in capital
|
200,964
|
|
198,565
|
Accumulated deficit
|
(107,528)
|
|
(72,443)
|
|
|
|
|
Total
stockholders' equity
|
93,498
|
|
126,183
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$204,482
|
|
$209,298
|
|
|
|
|
|
|
|
|
SOURCE Solta Medical, Inc.