HAYWARD, Calif., Nov. 1, 2012 /PRNewswire/ -- Solta Medical, Inc.
(NASDAQ: SLTM), a global leader in the medical aesthetics market,
today announced results for the third quarter ended September 30, 2012. Revenue for the third quarter
was $35.0 million, an increase of
$7.6 million, or 28%, as compared to
the third quarter of 2011. Revenue from Liposonix, the Company's
non-invasive fat reduction system, was $7.0
million, which was generated from shipments of 81 systems
and associated consumables. Total product revenue from treatment
tips and consumables for the quarter was $16.9 million, representing 48% of total
revenue. Revenue from North
America and international markets rose year-over-year by 27%
and 28%, respectively, and was driven by growth in Liposonix,
Thermage, Fraxel, and Clear + Brilliant brands.
"During the third quarter, we successfully executed our
strategies to launch Liposonix in several key international markets
as well as generate growth from the Thermage, Fraxel, and Clear +
Brilliant product lines," said Stephen J.
Fanning, Chairman, President & CEO. "As a result of our
efforts, we expanded commercialization of Liposonix to several
overseas markets. In total, more than one-half of the Liposonix
systems were shipped to international distributors and their
customers during the quarter. Over the last several months, we have
received important regulatory clearances for Liposonix and
Clear + Brilliant in several significant international markets
and in Asia, we continued to
see strong demand for all our brands as revenue rose year-over-year
in the region by 43%. In addition, we generated double digit
new system sales growth worldwide for our Thermage and Fraxel
brands during the quarter."
GAAP net loss for the quarter was $2.9
million as compared to GAAP net loss of $1.1 million reported for the third quarter of
2011. Non-GAAP net income for the quarter was $2.0 million or $0.03 per diluted share as compared to non-GAAP
net income of $1.5 million, or
$0.02 per diluted share for same
period last year. Non-GAAP adjusted EBITDA for the quarter was
$3.3 million compared to $2.6 million for the same period last year.
GAAP results for the third quarter include a $1.9 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, is $60.4 million, and is shown on the Company's
September 30, 2012 balance sheet as a
short-term liability of $22.3 million
and a long-term liability of $38.1
million. The Company's GAAP results for the quarter
also include $1.7 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 have produced positive non-GAAP adjusted EBITDA for every
quarter over the last three years while investing in organic growth
and strategic acquisitions. During this same time period we also
generated more than $12 million in
cash flow from operations," said Mr. Fanning. "Our extensive
product line offers a breadth of aesthetic solutions and positions
Solta for improved operating leverage and operating cash flow,
which are key areas of focus for management."
Financial Outlook for 2012
The company updated its financial outlook for 2012 as
follows:
- The Company reiterated that revenue for the full year 2012 is
expected to be in the range of $142 million
to $144 million, representing year-over-year revenue growth
of 22% to 24%.*
- Non-GAAP gross margin is now estimated to be in the range of
65% to 67% for the full year 2012 as compared to the Company's
previously issued range of 64% to 67%. 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 nine months ended
September 30, 2012 was 66.6%.
- The outlook for positive non-GAAP adjusted EBITDA for every
quarter and for the full-year 2012 remains unchanged. Non-GAAP
adjusted EBITDA excludes non-cash amortization charges, non-cash
stock based compensation charges, severance costs, and acquisition
related adjustments. Non-GAAP adjusted EBITDA for the nine months
ended September 30, 2012 was
$8.0 million.
* The Company is unable at this time to assess the impact
Hurricane Sandy may have on its ability to generate revenue from
the Northeast region of the U.S. where the Company has historically
derived about 8% of total revenue.
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 adjusted 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, November 1, 2012, at
10:30 a.m. Eastern Time (7:30 a.m. Pacific) to discuss the financial
results and current corporate developments. The dial-in number for
the conference call is 877-941-6009 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(TM), body
contouring and skin tightening with Liposonix® and Thermage® and
acne reduction with Isolaz® and CLARO(TM). 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, the ability to improve operating leverage
and cash flow, and the 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 events.
Solta
Medical, Inc.
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(in
thousands of dollars, except share and per share
data)
|
(unaudited)
|
|
|
|
|
|
Three
Months Ended
|
|
Nine
Months Ended
|
|
September 30,
|
|
September 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
Net
revenue
|
$35,028
|
|
$27,411
|
|
$104,744
|
|
$82,816
|
Cost of
revenue
|
13,813
|
|
9,519
|
|
39,738
|
|
28,300
|
|
|
|
|
|
|
|
|
Gross
margin
|
21,215
|
|
17,892
|
|
65,006
|
|
54,516
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Sales and
marketing
|
12,403
|
|
10,784
|
|
40,022
|
|
34,517
|
Research
and development
|
4,849
|
|
3,665
|
|
15,167
|
|
10,878
|
General
and administrative
|
4,557
|
|
4,669
|
|
13,832
|
|
12,003
|
Remeasurement of contingent consideration
liability
|
1,900
|
|
(394)
|
|
32,600
|
|
(878)
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
23,709
|
|
18,724
|
|
101,621
|
|
56,520
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(2,494)
|
|
(832)
|
|
(36,615)
|
|
(2,004)
|
Interest
income
|
3
|
|
19
|
|
8
|
|
52
|
Interest
expense
|
(377)
|
|
(16)
|
|
(1,078)
|
|
(90)
|
Other
income and expense, net
|
46
|
|
(306)
|
|
(101)
|
|
(188)
|
|
|
|
|
|
|
|
|
Loss
before income taxes
|
(2,822)
|
|
(1,135)
|
|
(37,786)
|
|
(2,230)
|
Provision
for income taxes
|
56
|
|
10
|
|
177
|
|
146
|
|
|
|
|
|
|
|
|
Net
loss
|
($2,878)
|
|
($1,145)
|
|
($37,963)
|
|
($2,376)
|
|
|
|
|
|
|
|
|
Net loss
per share — basic and diluted
|
($0.04)
|
|
($0.02)
|
|
($0.60)
|
|
($0.04)
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding used in calculating net loss per
share:
|
|
|
|
|
|
|
|
Basic and
diluted
|
65,947,361
|
|
60,785,015
|
|
63,017,220
|
|
60,443,429
|
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
|
|
Nine
Months Ended
|
|
September 30,
|
|
September 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
GAAP Gross
margin
|
$21,215
|
|
$17,892
|
|
$65,006
|
|
$54,516
|
GAAP gross
margin as % of sales
|
61%
|
|
65%
|
|
62%
|
|
66%
|
Non-GAAP
adjustments to gross margin:
|
|
|
|
|
|
|
|
GAAP Gross
margin
|
$21,215
|
|
$17,892
|
|
$65,006
|
|
$54,516
|
Amortization and other non-cash acquisition related
charges
|
1,374
|
|
844
|
|
4,407
|
|
2,533
|
Stock-based compensation
|
127
|
|
105
|
|
366
|
|
269
|
Non-GAAP
gross margin
|
$22,716
|
|
$18,841
|
|
$69,779
|
|
$57,318
|
Non-GAAP
gross margin as % of sales
|
65%
|
|
69%
|
|
67%
|
|
69%
|
|
|
|
|
|
|
|
|
GAAP loss
from operations
|
($2,494)
|
|
($832)
|
|
($36,615)
|
|
($2,004)
|
Non-GAAP
adjustments to net income (loss) from operations:
|
|
|
|
|
|
|
|
Amortization and other non-cash acquisition related
charges
|
1,729
|
|
1,128
|
|
5,475
|
|
3,330
|
Remeasurement of contingent consideration
liability
|
1,900
|
|
(394)
|
|
32,600
|
|
(878)
|
Acquisition-related expenses
|
16
|
|
1,115
|
|
167
|
|
1,235
|
Severance
expenses (credits)
|
(18)
|
|
—
|
|
1
|
|
—
|
Stock-based compensation
|
1,204
|
|
800
|
|
3,553
|
|
2,281
|
Non-GAAP
income from operations
|
$2,337
|
|
$1,817
|
|
$5,181
|
|
$3,964
|
Depreciation expenses
|
943
|
|
733
|
|
2,818
|
|
2,278
|
Non-GAAP
Adjusted EBITDA
|
$3,280
|
|
$2,550
|
|
$7,999
|
|
$6,242
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
($2,878)
|
|
($1,145)
|
|
($37,963)
|
|
($2,376)
|
Non-GAAP
adjustments to net loss:
|
|
|
|
|
|
|
|
Amortization and other non-cash acquisition related
charges
|
1,729
|
|
1,128
|
|
5,475
|
|
3,330
|
Remeasurement of contingent consideration
liability
|
1,900
|
|
(394)
|
|
32,600
|
|
(878)
|
Acquisition-related expenses
|
16
|
|
1,115
|
|
167
|
|
1,235
|
Severance
expenses (credits)
|
(18)
|
|
—
|
|
1
|
|
—
|
Stock-based compensation
|
1,204
|
|
800
|
|
3,553
|
|
2,281
|
Non-GAAP
net income
|
$1,953
|
|
$1,504
|
|
$3,833
|
|
$3,592
|
|
|
|
|
|
|
|
|
GAAP basic
net loss per share
|
($0.04)
|
|
($0.02)
|
|
($0.60)
|
|
($0.04)
|
Non-GAAP
adjustments to basic loss per share:
|
|
|
|
|
|
|
|
Amortization and other non-cash acquisition related
charges
|
$0.03
|
|
$0.02
|
|
$0.09
|
|
$0.06
|
Remeasurement of contingent consideration
liability
|
$0.02
|
|
($0.01)
|
|
$0.51
|
|
($0.02)
|
Acquisition-related expenses
|
$0.00
|
|
$0.02
|
|
$0.00
|
|
$0.02
|
Severance
expenses (credits)
|
($0.00)
|
|
$0.00
|
|
$0.00
|
|
$0.00
|
Stock-based compensation
|
$0.02
|
|
$0.01
|
|
$0.06
|
|
$0.04
|
Non-GAAP
basic net income per share
|
$0.03
|
|
$0.02
|
|
$0.06
|
|
$0.06
|
|
|
|
|
|
|
|
|
Non-GAAP
diluted net income per share
|
$0.03
|
|
$0.02
|
|
$0.06
|
|
$0.06
|
|
|
|
|
|
|
|
|
GAAP
weighted average shares outstanding used in calculating basic net
loss per share
|
65,947,361
|
|
60,785,015
|
|
63,017,220
|
|
60,443,429
|
|
|
|
|
|
|
|
|
GAAP
weighted average shares outstanding used in calculating diluted net
loss per share
|
65,947,361
|
|
60,785,015
|
|
63,017,220
|
|
60,443,429
|
Adjustments for dilutive potential common
stock
|
5,636,830
|
|
2,389,684
|
|
5,258,069
|
|
3,669,537
|
Weighted
average shares outstanding used in calculating non-GAAP diluted net
income per share
|
71,584,191
|
|
63,174,699
|
|
68,275,289
|
|
64,112,966
|
Solta
Medical, Inc.
|
CONDENSED CONSOLIDATED BALANCE
SHEETS
|
(in
thousands of dollars, except share and per share
data)
|
(unaudited)
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
2012
|
|
2011
|
|
|
|
|
ASSETS
|
Current
assets:
|
|
|
|
Cash and
cash equivalents
|
$38,547
|
|
$17,417
|
Accounts
receivable
|
16,665
|
|
13,282
|
Inventories
|
16,446
|
|
16,524
|
Prepaid
expenses and other current assets
|
7,856
|
|
8,626
|
|
|
|
|
Total
current assets
|
79,514
|
|
55,849
|
Property
and equipment, net
|
6,353
|
|
6,818
|
Purchased
intangible assets, net
|
44,158
|
|
49,352
|
Goodwill
|
96,620
|
|
96,620
|
Other
assets
|
684
|
|
659
|
|
|
|
|
Total
assets
|
$227,329
|
|
$209,298
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
Liabilities:
|
|
|
|
Accounts
payable
|
$6,134
|
|
$5,767
|
Accrued
liabilities
|
15,829
|
|
16,126
|
Current
portion of contingent consideration liability
|
22,300
|
|
—
|
Current
portion of deferred revenue
|
3,965
|
|
4,521
|
Short-term
borrowings
|
7,054
|
|
7,441
|
Customer
deposits
|
849
|
|
610
|
|
|
|
|
Total
current liabilities
|
56,131
|
|
34,465
|
Deferred
revenue, net of current portion
|
557
|
|
824
|
Term loan,
net of current portion
|
20,698
|
|
16,959
|
Non-current tax liabilities
|
3,010
|
|
2,975
|
Contingent
consideration liability
|
38,100
|
|
27,800
|
Other liabilities
|
107
|
|
92
|
|
|
|
|
Total
liabilities
|
118,603
|
|
83,115
|
|
|
|
|
Stockholders' equity:
|
|
|
|
Common
stock, $0.001 par value:
|
|
|
|
100,000,000 shares authorized
|
|
|
|
68,543,122, and 61,130,740 shares issued and
outstanding at September 30, 2012 and December 31, 2011
|
69
|
|
61
|
Additional
paid-in capital
|
219,063
|
|
198,565
|
Accumulated deficit
|
(110,406)
|
|
(72,443)
|
|
|
|
|
Total
stockholders' equity
|
108,726
|
|
126,183
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$227,329
|
|
$209,298
|
SOURCE Solta Medical, Inc.