HAYWARD, Calif., May 1, 2013 /PRNewswire/ -- Solta Medical, Inc.
(NASDAQ: SLTM), a global leader in the medical aesthetics market,
today announced results for the first quarter ended March 31, 2013. Revenue for the first quarter was
$34.5 million, an increase of
$2.1 million, or 6%, as compared to
the first quarter of 2012. The year-over-year revenue increase
consisted primarily of $1.5 million
from sales of VASER systems and $2.1
million from sales of treatment tips and other consumables,
partially offset by a decline in sales of Liposonix systems in
North America.
International revenue for the quarter rose year-over-year by 34%
to $20.7 million with Asia Pacific up 40% and EMEA rising by 20%.
North America revenue declined
year-over-year by 19% to $13.8
million. Revenue from treatment tips and consumables for the
quarter was $18.9 million, a
year-over-year increase of $2.1
million or 13%, which included year-over-year growth both in
North America and international
markets of 10% and 15%, respectively.
"Our first quarter was softer than we had planned due to issues
that have been identified and corrected," said Stephen J. Fanning, Chairman, President and CEO
of Solta. "In North America, our acquisition of Sound
Surgical during the critical last month of the quarter led to some
internal disruption impacting sales. Additionally, a
manufacturing issue with the Liposonix transducer treatment tip
adversely affected customer reorders and our ability to demonstrate
our Liposonix system to potential new customers in North
America. These developments masked the strong revenue growth
generated by our international operations as well as the continued
top line benefit of our recurring business model."
"Over the past month, we have been rebuilding the Liposonix
momentum in North America. At the same time, we are
capitalizing on the synergies we envision from the Sound Surgical
acquisition. As a result, we fully anticipate improved growth
in the second quarter," added Mr. Fanning.
GAAP net loss for the quarter was $2.6
million, or $0.04 per share,
as compared to GAAP net loss of $8.8
million, or $0.14 per share,
reported for the first quarter of 2012. Non-GAAP net loss for the
quarter was $0.8 million, or
$0.01 per share, as compared to a
non-GAAP net loss of $0.8 million, or
$0.01 per share, for same period last
year. Non-GAAP adjusted EBITDA for the quarter was $0.9 million compared to $0.6 million for the same period last year.
The Company's GAAP results for the quarter include $3.7 million of amortization, severance, and
other acquisition related charges, $1.2
million of non-cash stock based compensation charges, and a
$3.1 million credit for the fair
value reassessment of the expected earn out payments associated
with the acquisition of Liposonix and Sound Surgical. The Company
provides non-GAAP financial measures that exclude these charges and
adjustments. A reconciliation of GAAP to non-GAAP results is
provided in the tables included in this release.
"We expect to achieve a higher amount of cost synergies than
originally anticipated from the acquisition of Sound Surgical
during the remainder of 2013. Combined with some operating
expense reductions recently implemented, we believe that despite
the slower than expected first quarter growth rate, we can achieve
our profitability targets for the full year," said Mr. Fanning.
Financial Outlook for 2013
Based on the first quarter results, the Company updated its
financial outlook for 2013 as follows:
- The company revised its revenue outlook for full year 2013 to
approximately $180 million, which
would represent year-over-year revenue growth of approximately
$36 million, or 25%, compared to full
year 2012 revenue of $144.5 million.
The company's previous revenue outlook for 2013 was a range of
$182 million to $191 million.
- The company reiterated its outlook for non-GAAP gross margin.
Non-GAAP gross margin is expected to be in the range of 65% to 68%
for the full year 2013. 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 first quarter 2013 was 67%.
- The company reiterated its outlook for non-GAAP operating
income. Non-GAAP operating income is expected to be in the range of
$13 million to $16 million for the
full year 2013. Non-GAAP operating income for the first six months
of 2013 is expected to be in the range $3
million to $4 million. Non-GAAP operating income excludes
non-cash amortization charges, non-cash stock based compensation
charges, severance costs, and acquisition related adjustments.
Non-GAAP operating income for the first quarter was $59,000.
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 host a conference call and webcast today,
Wednesday, May 1, 2013, 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 877-941-0844 for domestic participants and
480-629-9835 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 solutions with proven efficacy and
safety backed by over 10 years of clinical study and research. The
company offers aesthetic energy devices for skin resurfacing and
rejuvenation, acne reduction, body contouring and skin tightening,
as well as tools and accessories to optimize the latest liposuction
techniques. The Solta Medical portfolio includes the well-known
brands Thermage®, Fraxel®,
Clear + Brilliant®, Liposonix®,
Isolaz®, CLARO®,
VASERlipo™, VASERshape™,
VASERsmooth™, VentX®,
PowerX®, TouchView®, and
Origins™, which collectively make up a
comprehensive platform to address a range of aesthetic skin and
body issues. More than two and a half million procedures have been
performed with Solta Medical's products around the world. Solta
Medical is headquartered in Hayward,
CA with field teams and regional offices worldwide.
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 the ability to improve
operating leverage, the close of the Sound Surgical acquisition,
and the financial outlook for 2013. 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,
2012, 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
|
|
March
31,
|
|
2013
|
|
2012
|
|
|
|
|
Net
revenue
|
$34,523
|
|
$32,454
|
Cost of
revenue
|
12,844
|
|
12,211
|
|
|
|
|
Gross
margin
|
21,679
|
|
20,243
|
|
|
|
|
Operating
expenses:
|
|
|
|
Sales and
marketing
|
14,207
|
|
13,946
|
Research
and development
|
5,335
|
|
5,305
|
General
and administrative
|
6,977
|
|
4,660
|
Remeasurement of contingent consideration
liability
|
(3,100)
|
|
4,700
|
|
|
|
|
Total
operating expenses
|
23,419
|
|
28,611
|
|
|
|
|
Loss from
operations
|
(1,740)
|
|
(8,368)
|
Interest
income
|
9
|
|
3
|
Interest
expense
|
(692)
|
|
(351)
|
Other
expense, net
|
(95)
|
|
(26)
|
|
|
|
|
Loss
before income taxes
|
(2,518)
|
|
(8,742)
|
Income tax
provision
|
77
|
|
57
|
|
|
|
|
Net
loss
|
($2,595)
|
|
($8,799)
|
|
|
|
|
Net loss
per share:
|
|
|
|
Basic
|
($0.04)
|
|
($0.14)
|
Diluted
|
($0.04)
|
|
($0.14)
|
|
|
|
|
Weighted
average shares outstanding used in calculating net loss
|
|
|
|
per
share:
|
|
|
|
Basic
|
72,113,007
|
|
61,352,524
|
Diluted
|
72,113,007
|
|
61,352,524
|
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
|
|
March
31,
|
|
2013
|
|
2012
|
|
|
|
|
GAAP Gross
margin
|
$21,679
|
|
$20,243
|
GAAP gross
margin as % of sales
|
63%
|
|
62%
|
Non-GAAP
adjustments to gross margin:
|
|
|
|
GAAP Gross
margin
|
$21,679
|
|
$20,243
|
Amortization and other non-cash acquisition related
charges
|
1,438
|
|
1,658
|
Stock-based compensation
|
136
|
|
112
|
Non-GAAP
gross margin
|
$23,253
|
|
$22,013
|
Non-GAAP
gross margin as % of sales
|
67%
|
|
68%
|
|
|
|
|
GAAP loss
from operations
|
($1,740)
|
|
($8,368)
|
Non-GAAP
adjustments to net loss from operations:
|
|
|
|
Amortization and other non-cash acquisition related
charges
|
1,996
|
|
2,017
|
Remeasurement of contingent consideration
liability
|
(3,100)
|
|
4,700
|
Acquisition-related expenses
|
1,394
|
|
93
|
Severance
expenses
|
313
|
|
30
|
Stock-based compensation
|
1,200
|
|
1,140
|
Non-GAAP
income (loss) from operations
|
$63
|
|
($388)
|
Depreciation expenses
|
875
|
|
938
|
Non-GAAP
Adjusted EBITDA
|
$938
|
|
$550
|
|
|
|
|
GAAP net
loss
|
($2,595)
|
|
($8,799)
|
Non-GAAP
adjustments to net loss:
|
|
|
|
Amortization and other non-cash acquisition related
charges
|
1,996
|
|
2,017
|
Remeasurement of contingent consideration
liability
|
(3,100)
|
|
4,700
|
Acquisition-related expenses
|
1,394
|
|
93
|
Severance
expenses
|
313
|
|
30
|
Stock-based compensation
|
1,200
|
|
1,140
|
Non-GAAP
net loss
|
($792)
|
|
($819)
|
|
|
|
|
GAAP basic
net loss per share
|
($0.04)
|
|
($0.14)
|
Non-GAAP
adjustments to basic loss per share:
|
|
|
|
Amortization and other non-cash acquisition related
charges
|
$0.03
|
|
$0.03
|
Remeasurement of contingent consideration
liability
|
($0.04)
|
|
$0.08
|
Acquisition-related expenses
|
$0.02
|
|
$0.00
|
Severance
expenses
|
$0.00
|
|
$0.00
|
Stock-based compensation
|
$0.02
|
|
$0.02
|
Non-GAAP
basic net loss per share
|
($0.01)
|
|
($0.01)
|
|
|
|
|
Non-GAAP
diluted net loss per share
|
($0.01)
|
|
($0.01)
|
|
|
|
|
GAAP
weighted average shares outstanding used in calculating basic net
loss per share
|
72,113,007
|
|
61,352,524
|
|
|
|
|
GAAP
weighted average shares outstanding used in calculating diluted net
loss per share
|
72,113,007
|
|
61,352,524
|
Adjustments for dilutive potential common
stock
|
-
|
|
-
|
Weighted
average shares outstanding used in calculating non-GAAP diluted net
loss per share
|
72,113,007
|
|
61,352,524
|
Solta
Medical, Inc.
|
CONDENSED CONSOLIDATED BALANCE
SHEETS
|
(in
thousands of dollars, except share and per share
data)
|
(unaudited)
|
|
|
|
|
|
March
31,
|
|
December 31,
|
|
2013
|
|
2012
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and
cash equivalents
|
$26,990
|
|
$38,097
|
Accounts
receivable, net
|
21,607
|
|
20,570
|
Inventories
|
21,254
|
|
16,611
|
Prepaid
expenses and other current assets
|
5,952
|
|
8,476
|
|
|
|
|
Total
current assets
|
75,803
|
|
83,754
|
Property
and equipment, net
|
7,694
|
|
6,401
|
Purchased
intangible assets, net
|
61,232
|
|
42,428
|
Goodwill
|
103,998
|
|
96,620
|
Other
assets
|
818
|
|
520
|
|
|
|
|
Total
assets
|
$249,545
|
|
$229,723
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
Liabilities:
|
|
|
|
Accounts
payable
|
$9,393
|
|
$7,283
|
Accrued
liabilities
|
13,980
|
|
17,343
|
Current
portion of contingent consideration liability
|
34,200
|
|
21,400
|
Current
portion of deferred revenue
|
3,712
|
|
3,985
|
Short-term
borrowings
|
9,669
|
|
8,345
|
Customer
deposits
|
662
|
|
637
|
|
|
|
|
Total
current liabilities
|
71,616
|
|
58,993
|
Deferred
revenue, net of current portion
|
656
|
|
683
|
Term loan,
net of current portion
|
15,376
|
|
18,063
|
Non-current tax liabilities
|
2,492
|
|
2,478
|
Contingent
consideration liability
|
29,000
|
|
38,500
|
Other liabilities
|
1,196
|
|
899
|
|
|
|
|
Total
liabilities
|
120,336
|
|
119,616
|
|
|
|
|
Stockholders' equity:
|
|
|
|
Common
stock, $0.001 par value:
|
|
|
|
100,000,000 shares authorized
|
|
|
|
79,337,751
and 68,795,987 shares issued and outstanding at March 31, 2013 and
December 31, 2012
|
79
|
|
69
|
Additional
paid-in capital
|
242,176
|
|
220,489
|
Accumulated deficit
|
(113,046)
|
|
(110,451)
|
|
|
|
|
Total
stockholders' equity
|
129,209
|
|
110,107
|
|
|
|
|
Total
liabilities and stockholders' equity
|
$249,545
|
|
$229,723
|
|
|
|
|
SOURCE Solta Medical, Inc.