Revenue Up Sequentially 9% to $27.4 Million Positive Cash Flow from
Operations of $2.4 Million for the Quarter HAYWARD, Calif., July 30
/PRNewswire-FirstCall/ -- Solta Medical, Inc. (NASDAQ:SLTM), a
global leader in the medical aesthetics market, today announced
results for the second quarter ended June 30, 2009. Revenue for the
quarter was $27.4 million, an increase of approximately $9.5
million, or 53%, as compared to the second quarter 2008 reflecting
increased revenue as a result of the acquisition of Reliant
Technologies, Inc. on December 23, 2008. The company generated $2.4
million in cash flow from operations during the quarter and
achieved profitability. Solta Medical's reported results for the
second quarter of 2009 include non-cash purchase price related
charges of $1.4 million and non-cash stock based compensation
charges of $0.9 million. The GAAP net income for the quarter
including these charges was $0.1 million, or $0.00 per share as
compared to a net income of $2.0 million, or $0.08 per share
reported for the second quarter of 2008. The non-GAAP net income
for the quarter excluding these charges was $2.3 million, or $0.05
per share as compared to a non-GAAP net income of $3.0 million, or
$0.12 per share reported for the second quarter of 2008. "Our
second quarter performance further reflects the successful
integration of our Reliant acquisition. Our revenue rose
sequentially from the previous quarter by $2.2 million, or 9%,
while our operating expenses declined from the previous quarter by
$2.3 million, or 12%," said Stephen J. Fanning, Chairman of the
Board, President and CEO of Solta Medical. "As with the first
quarter, international markets accounted for 57% of total revenue.
U.S. and international revenues grew sequentially from the first
quarter by 10% and 8%, respectively. We also drove sequential
revenue growth in the range of 7% to 10% from all major product
segments with tips and other consumables accounting for 49% of
total revenue." "In addition, our working capital has grown by $2.4
million, or 17%, from year-end 2008. We demonstrated solid
management of our inventory levels which have declined by nearly $7
million, or 38%, from year-end 2008. At the end of the quarter we
had cash and investments of $19.1 million," Mr. Fanning concluded.
Financial Goals for 2009 The Company updated its financial goals
for 2009 as follows: -- Realize up to $25 million in cost synergies
as a result of the acquisition of Reliant Technologies, Inc. --
Generate positive EBITDA for the full year 2009 -- Generate
positive cash flow from operations for the second half of 2009 --
Achieve a non-GAAP gross margin in the range of 64% to 66% for the
full year 2009 excluding non-cash amortization charges and non-cash
purchase price related adjustments. The gross margin has been
decreased from the previous goal of 70% due to a higher proportion
of revenue derived from both international distributors and system
upgrades. 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 purchase price related adjustments, severance costs, merger
related costs, and stock-based compensation expenses, all net of
income taxes. 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
management's internal use of the measures, which it 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 Solta Medical will host a conference call and webcast
today, Thursday, July 30, 2009, 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 877-941-1848 for domestic participants and 480-629-9722 for
international participants. A taped replay of the conference call
will also be available beginning approximately one hour after the
call's conclusion and will remain accessible for seven days. This
replay can be accessed by dialing 800-406-7325 for domestic callers
and 303-590-3030 for international callers. Both callers will need
to use the Passcode 4093352#. To access the live webcast of the
call, go to Solta Medical's website at http://www.solta.com/ and
click on Investor Relations. An archived webcast will also be
available at http://www.solta.com/. About Solta Medical, Inc. Solta
Medical, Inc. is a global leader in the medical aesthetics market
providing innovative, safe, and effective anti-aging solutions for
patients which enhance and expand the practice of medical
aesthetics for physicians. The company offers products to address
aging skin under the industry's two premier brands: Thermage(R) and
Fraxel(R). Thermage is an innovative, non-invasive radiofrequency
procedure for tightening and contouring skin. As the leader in
fractional laser technology, Fraxel delivers minimally invasive
clinical solutions to resurface aging and sun damaged skin. Since
2002, over one million Thermage and Fraxel procedures have been
performed worldwide. Thermage and Fraxel are the perfect complement
for any aesthetic practice. Our products are available in over 100
countries. For more information about Solta Medical, call
877-782-2286 or log on to http://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 our financial goals for
2009. 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 possibility that the
development and release of new products and initiatives do not
proceed as anticipated, the market for the sale of these new
products and initiatives does not develop as expected, the
remaining risks and uncertainties with the integration process, the
risks related to our future liquidity if we fail to achieve
adequate levels of revenue or sustained profitability, if
unanticipated expenses or other uses of cash arise or if we are not
able to maintain compliance with borrowing facility covenants 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-Q for the quarter
ended March 31, 2009, 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. 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,
2009 2008 2009 2008 ---------- ---------- ---------- ---------- Net
revenue $27,417 $17,881 $52,662 $34,112 Cost of revenue 10,777
4,095 22,284 8,453 ---------- ---------- ---------- ----------
Gross margin 16,640 13,786 30,378 25,659 ---------- ----------
---------- ---------- Operating expenses: Sales and marketing 9,038
6,993 19,513 14,415 Research and development 3,949 2,173 7,865
4,904 General and administrative 3,452 3,046 7,770 7,598 ----------
---------- ---------- ---------- Total operating expenses 16,439
12,212 35,148 26,917 ---------- ---------- ---------- ----------
Income (loss) from operations 201 1,574 (4,770) (1,258) Interest
and other income 41 543 302 1,146 Interest and other expense (104)
- (151) - ---------- ---------- ---------- ---------- Income (loss)
before income taxes 138 2,117 (4,619) (112) Provision for income
taxes (53) (78) (71) (86) ---------- ---------- ----------
---------- Net income (loss) $85 $2,039 $(4,690) $(198) ==========
========== ========== ========== Net income (loss) per share -
basic $0.00 $0.09 $(0.10) $(0.01) ========== ========== ==========
========== Net income (loss) per share - diluted $0.00 $0.08
$(0.10) $(0.01) ========== ========== ========== ==========
Weighted average shares outstanding used in calculating net income
(loss) per share: Basic 47,806,228 23,855,246 47,782,656 23,743,043
========== ========== ========== ========== Diluted 47,920,161
24,418,630 47,782,656 23,743,043 ========== ========== ==========
========== Solta Medical, Inc. NON-GAAP RECONCILIATION OF GROSS
MARGIN, OPERATING INCOME (L0SS), 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, 2009 2008 2009 2008 ---------- ---------- ---------- ----------
GAAP Gross margin $16,640 $13,786 $30,378 $25,659 Non-GAAP
adjustments to gross margin: Purchase price related adjustments
1,048 - 4,024 - Stock-based compensation 61 53 114 96 ----------
---------- ---------- ---------- Non-GAAP gross margin $17,749
$13,839 $34,516 $25,755 ========== ========== ========== ==========
Non-GAAP gross margin as % of sales 65% 77% 66% 76% ==========
========== ========== ========== GAAP income (loss) from operations
$201 $1,574 $(4,770) $(1,258) Non-GAAP adjustments to income (loss)
from operations: Purchase price related adjustments 1,383 - 4,675 -
Severance expenses - - 118 - Merger-related costs - - - 969
Stock-based compensation 864 923 1,653 1,902 ---------- ----------
---------- ---------- Non-GAAP income from operations 2,448 2,497
1,676 1,613 Depreciation expenses 670 335 1,395 666 ----------
---------- ---------- ---------- Non-GAAP EBITDA $3,118 $2,832
$3,071 $2,279 ========== ========== ========== ========== GAAP net
income (loss) $85 $2,039 $(4,690) $(198) Non-GAAP adjustments to
net income (loss): Purchase price related adjustments 1,383 - 4,675
- Severance expenses - - 118 - Merger-related costs - - - 969
Stock-based compensation 864 923 1,653 1,902 ---------- ----------
---------- ---------- Non-GAAP net income $2,332 $2,962 $1,756
$2,673 ========== ========== ========== ========== GAAP basic net
income (loss) per share $0.00 $0.09 $(0.10) $(0.01) Non-GAAP
adjustments to basic income (loss) per share: Purchase price
related adjustments 0.03 - 0.10 - Severance expenses - - 0.00 -
Merger-related costs - - - 0.04 Stock-based compensation 0.02 $0.03
0.04 0.08 ---------- ---------- ---------- ---------- Non-GAAP
basic net income per share $0.05 $0.12 $0.04 $0.11 ==========
========== ========== ========== Non-GAAP diluted net income per
share $0.05 $0.12 $0.04 $0.11 ========== ========== ==========
========== GAAP weighted average shares outstanding used in
calculating basic net income (loss) per share 47,806,228 23,855,246
47,782,656 23,743,043 ========== ========== ========== ==========
GAAP weighted average shares outstanding used in calculating
diluted net income (loss) per share 47,920,161 24,418,630
47,782,656 23,743,043 Adjustments for dilutive potential common
stock 447,282 313,718 400,552 1,105,538 ---------- ----------
---------- ---------- Weighted average shares outstanding used in
calculating non-GAAP diluted net income (loss) per share 48,367,443
24,732,348 48,183,208 24,848,581 ========== ========== ==========
========== Solta Medical, Inc. CONDENSED CONSOLIDATED BALANCE
SHEETS (in thousands of dollars, except share and per share data)
(Unaudited) June 30, December 31, 2009 2008 ---------- ----------
ASSETS Current assets: Cash and cash equivalents $14,615 $7,556
Marketable investments 4,519 17,870 Accounts receivable, net 13,337
5,119 Inventories, net 11,365 18,304 Prepaid expenses and other
current assets 4,047 4,074 ---------- ---------- Total current
assets 47,883 52,923 Property and equipment, net 6,197 6,841
Purchased intangible assets, net 38,899 40,999 Goodwill 48,348
48,158 Other assets 266 247 ---------- ---------- Total assets
$141,593 $149,168 ========== ========== LIABILITIES AND
STOCKHOLDERS' EQUITY Liabilities: Accounts payable $4,963 $8,080
Accrued liabilities 11,685 11,085 Accrued restructuring 596 3,549
Current portion of deferred revenue 4,134 3,658 Short-term margin
account borrowings 3,329 12,399 Line of credit obligation 5,225 -
Current portion of term loan 1,389 - Customer deposits 346 288
---------- ---------- Total current liabilities 31,667 39,059
Deferred revenue, net of current portion 689 688 Term loan, net of
current portion 2,359 - Non-current tax liabilities 1,520 1,464
Other liabilities 314 133 ---------- ---------- Total liabilities
36,549 41,344 ---------- ---------- Stockholders' equity: Common
stock, $0.001 par value: 100,000,000 shares authorized 47,852,445
and 47,758,823 shares issued and outstanding at June 30, 2009 and
December 31, 2008 48 48 Additional paid-in capital 167,427 165,680
Deferred stock-based compensation - (2) Accumulated other
comprehensive loss 161 - Accumulated deficit (62,592) (57,902)
---------- ---------- Total stockholders' equity 105,044 107,824
---------- ---------- Total liabilities and stockholders' equity
$141,593 $149,168 ========== ========== DATASOURCE: Solta Medical,
Inc. CONTACT: Jack Glenn, Chief Financial Officer of Solta Medical,
Inc., +1-510-786-6890; or investors, Doug Sherk, or Jenifer
Kirtland, , both of EVC Group, +1-415-896-6820, for Solta Medical,
Inc. Web Site: http://www.solta.com/
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