HAYWARD, Calif., Jan. 29, 2013 /PRNewswire/ -- Solta Medical,
Inc. (NASDAQ: SLTM), a global leader in the medical aesthetics
market, today announced it has entered into a definitive agreement
to acquire privately-held Sound Surgical Technologies LLC. Under
the terms of the agreement, Solta will acquire Louisville, Colorado-based Sound Surgical for
$25.5 million in Solta common stock
and $5.0 million in cash. Excluding
acquisition and integration related charges, the transaction is
expected to be accretive to Solta Medical's quarterly earnings
within twelve months.
In addition to the payments due at closing, Sound Surgical unit
holders are entitled to receive up to $9.5
million of contingent payments that would be paid in Solta
common stock based on revenue from Sound Surgical products in 2013.
The proposed transaction becomes increasingly accretive to Solta
Medical as Sound Surgical achieves the higher end of the revenue
range. Approximately three-quarters of Sound Surgical unit holders
have entered into staggered lock-up agreements ranging up to 270
days. Solta Medical expects to close the transaction during the
first quarter of 2013.
Sound Surgical's unaudited revenue for the year ended
December 31, 2012 rose over 40% from
2011 to approximately $23 million and
the company generated EBITDA of over $2
million for the year. Sound Surgical markets leading
surgical and non-invasive body shaping products utilizing
ultrasound technology. Sound Surgical's VASER Lipo® system uses
ultrasound waves to selectively emulsify fatty tissue prior to
extraction from the body. By emulsifying targeted fat cells, VASER
technology allows physicians to perform fat extraction with less
tearing of the surrounding tissues, thus reducing blood loss, pain
and bruising. Studies comparing VASER Lipo with traditional
tumescent liposuction procedures show reduced post-operative pain
and improved patient recovery. The VASER Lipo system received
initial FDA clearance in 2002. Additional Sound Surgical product
lines used in surgical body shaping applications include
VASERsmooth™, PowerX®, and Origins™. Sound Surgical's
non-invasive VASER® Shape system targets cellulite by heating fatty
tissue in conjunction with lymphatic massage.
"Sound Surgical provides Solta with a complementary, diversified
product portfolio targeting the over $500
million body contouring market segment and the transaction
meets our key acquisition criteria," said Stephen J. Fanning, Chairman, President and
CEO. "In combination with our rapidly growing Liposonix
product line, the acquisition presents significant cross-selling
opportunities to plastic surgeons and dermatologists, as well as
expanded international sales potential. Sound Surgical
generated over 40% revenue growth during 2012 and we believe there
is room to build on their market momentum this year while
generating a bottom line contribution to Solta. We welcome
the Sound Surgical team to Solta and look forward to the
contributions of David Holthe,
Manager and Chairman of the Management Committee of Sound Surgical,
as he will join our Board of Directors on closing of the
transaction."
"Solta has demonstrated a unique ability within our industry to
build brands, create cross-selling opportunities and foster
international adoption," said Daniel S.
Goldberger, CEO of Sound Surgical. "We believe that by
combining our sales organization with Solta's, we will enhance
market penetration of our highly differentiated technologies with
plastic surgeons and dermatologists. Our team looks forward
to becoming part of Solta Medical."
"We are pleased that Dan
Goldberger has agreed to stay on as a consultant for a
period of six months upon close of the transaction to help ensure a
smooth integration process," said Mr. Fanning.
Solta Medical also provided the following information on
unaudited preliminary financial results for the fourth quarter and
the twelve months ended December 31,
2012:
- Revenue for the fourth quarter in the range of $39.5 million to $40.0 million. Revenue for the
twelve months ended December 31, 2012
in the range of $144.2 million to $144.7
million which exceeds the company's previously issued
guidance of $142 million to $144
million.
- GAAP and non-GAAP gross margin for the fourth quarter in the
range of 60% to 61% and 64% to 65%, respectively.
- GAAP and non-GAAP operating income for the fourth quarter to be
in the range of $0.6 million to $0.9
million and $3.0 million to $3.3
million, respectively.
- Cash as of December 31, 2012 was
$38.1 million and the company had
additional cash resources available through an $8 million revolving credit facility with Silicon
Valley Bank. The company recently agreed to an amendment with
Silicon Valley Bank to expand this credit facility to $12 million.
The company provides non-GAAP financial measures that exclude
amortization and other acquisition related charges, non-cash stock
based compensation charges, and charges for the fair value
reassessment of acquisition related contingent liabilities.
Solta Medical expects to report fourth quarter and full year
2012 financial results on February 19,
2013.
Raymond James & Associates,
Inc. served as exclusive financial advisor to Solta Medical and
William Blair & Company, LLC
served as exclusive financial advisor to Sound Surgical in this
transaction.
Conference Call Information
The company will also
host a conference call and webcast today, Tuesday, January 29, 2013, at 6:00 p.m. Eastern Time (3:00 p.m. Pacific) to discuss the acquisition and
current corporate developments. The dial-in number for the
conference call is 800-762-8779 for domestic participants and
480-629-9645 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. A slide
presentation will accompany the call and webcast. It too can be
found on the investor relations page of the company's website at
solta.com. An archived webcast will also be available at
www.solta.com.
Non-GAAP Presentation
To supplement the condensed
consolidated financial information presented on a GAAP basis,
management has provided non-GAAP gross margin and non-GAAP
operating income measures that exclude amortization and other
acquisition related charges, non-cash stock based compensation
charges, and charges for the fair value reassessment of acquisition
related contingent liabilities. 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.
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.
About Sound Surgical Technologies
Sound Surgical
Technologies designs, develops, manufactures and distributes market
leading surgical and non-invasive body shaping products that are
backed by strong science and clinical efficacy, including the VASER
Lipo®, VASER® Shape, PowerX®, TouchView®, Origins™ and VASERsmooth™
product lines. The company has been a well-respected and trusted
manufacturer of ultrasound-assisted liposuction technology since
1998 and has spent the past two years building out a complete suite
of body shaping products designed to serve the aesthetic market.
Sound Surgical Technologies designs and builds its products in
Louisville, CO and sells the
equipment through a direct sales channel in the USA, Canada,
United Kingdom, and Ireland and through distributor partners
worldwide. For more information on Sound Surgical Technologies and
all of the company's product lines, please visit
www.SoundSurgical.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. 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. 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. Forward looking statements include the expectations of
the Sound Surgical acquisition being accretive to the company in
future periods, the ability to successfully cross-sell products and
the anticipated closing date of the transaction, as well as Solta
Medical's expected results for the fourth quarter and full year
2012. 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.
SOURCE Solta Medical, Inc.