SOURCE: Syneron Medical Ltd.

May 14, 2008 06:45 ET

Syneron Reports First Quarter 2008 Revenues of $34.1 Million and Net Profit of $8.3 Million

YOKNEAM, ISRAEL--(Marketwire - May 14, 2008) - Syneron Medical Ltd. (NASDAQ: ELOS), an innovator in the development, marketing and sales of elos™ combined-energy medical aesthetic devices, today announced its financial results for the first quarter of 2008.

Revenues for the first quarter of 2008 were $34.1 million, an increase of 5.4% over revenues of $32.3 million in the first quarter of 2007. International sales rose 14% over the same period in 2007, increasing the contribution of international sales to 47% of total revenues, with North America sales accounting for 53% of revenues.

On a GAAP basis, the company reported a first quarter 2008 net income of $8.3 million, or $0.30 per diluted share, which includes a $1.5 million reversal of tax expenses as a result of final tax assessment for the period of 2003-2005 and $1.9 million of stock-based compensation expenses. On a non-GAAP basis, excluding the stock-based compensation, net income in the first quarter was $10.2 million, or $0.37 per diluted share.

Syneron's balance sheet and cash position remain strong. Cash flow from operations in the first quarter was $8.6 million. Syneron increased its cash position (including long-term deposits) during the first quarter by $6.6 million to $210.4 million. Shareholders' equity totaled $239.4 million as of March 31, 2008.

Commenting on the first quarter, CEO Doron Gerstel said, "The increase in sales in the first quarter can be attributed largely to the implementation of a more diversified business model. We have introduced new products and new marketing strategies to address the specific demands of different segments and distribution channels in both the medical and the aesthetic professional markets."

Mr. Gerstel continued, "We believe that the most exciting growth opportunities in the US and internationally will continue to come from the body shaping market. We are pleased to report strong sales of the Vela platform of products, as well as receipt of FDA clearance for the LipoLite™, our new minimally invasive lipolysis device. Syneron sees the body shaping market as a strategic growth driver and one in which we will strive to continue to introduce new innovative products to maintain our leadership position."

Conference call

Syneron Management will host a conference call (dial-in numbers below) to discuss the results at 8:30am ET today, May 14th, 2008. Investors and other interested parties may access a live web cast through Syneron's website at www.syneron.com. Please login at least 10 minutes prior to the conference call in order to download the applicable audio software. Following the conclusion of the call, a replay of the webcast will be available within 24 hours at the Company's website.

Dial-in numbers for conference call:
US (toll free): 877-545-1491
International: +1 719-325-4907

Use of Non-GAAP Measures

This press release provides financial measures for net profit and net profit per diluted share, that exclude an expense charge related to stock-based compensation and are therefore not calculated in accordance with generally accepted accounting principals (GAAP). Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance because it reflects our operational results and enhances management's and investors' ability to evaluate the Company's net profit and net profit per diluted share. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management uses both GAAP and non-GAAP measures when evaluating the business internally and, therefore, felt it important to make these non-GAAP adjustments available to investors. A reconciliation of each GAAP to non-GAAP financial measure discussed in this press release is contained in the accompanying financial tables.

About Syneron

Syneron Medical Ltd. (NASDAQ: ELOS) manufactures and distributes medical aesthetic devices that are powered by the proprietary, patented elos combined-energy technology of Bi-Polar Radio Frequency and Light. The Company's innovative elos technology provides the foundation for highly effective, safe and cost-effective systems that enable physicians to provide advanced solutions for a broad range of medical-aesthetic applications including hair removal, wrinkle reduction, rejuvenating the skin's appearance through the treatment of superficial benign vascular and pigmented lesions, and the treatment of acne, leg veins and cellulite. Founded in 2000, the corporate, R&D, and manufacturing headquarters for Syneron Medical Ltd. is located in Israel. Syneron has offices and distributors throughout the world, including North American Headquarters in Canada, North American Logistics Support Center in Irvine, CA, European Headquarters in Germany, and Asia-Pacific Headquarters in Hong Kong, which provide sales, service and support. Additional information can be found at www.syneron.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 relating to future events or our future performance, including statements with respect to our expectations regarding, but not limited to, financial forecast for 2008, new product launches, and maintaining a leadership position in core markets. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in those forward-looking statements, including, but not limited to the risk associated with our ability to commercialize new products and identify new markets for our technology; ability to manage our growth, competition and pricing pressure, risks associated with our international operations, risks associated with regulatory qualifications or approvals, and risks related to our intellectual property. These risks and other factors are summarized under the heading "Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2007, filed with the Securities and Exchange Commission on May 7, 2008. These factors are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. We do not assume any obligation to update the forward-looking information contained in this press release.

Syneron, the Syneron logo, elos, VelaShape, Matrix IR, and Matrix RF are trademarks of Syneron Medical Ltd. and may be registered in certain jurisdictions. elos (Electro-Optical Synergy) is a proprietary technology of Syneron Medical Ltd. All other names are the property of their respective owners.

                           Syneron Medical Ltd.
                     CONSOLIDATED STATEMENTS OF INCOME
             U.S. dollars in thousands, except per share data


                                                    Three Months ended
                                                         March 31,
                                                    2008           2007
                                                (unaudited)    (unaudited)
                                                ------------  -------------
Revenues                                              34,075         32,331
Cost of Revenues                                       7,655          5,590
                                                ------------  -------------
Gross Profit                                          26,420         26,741

Operating expenses:
Research and development                               3,386          2,741
Selling and marketing                                 13,988         14,258
General and administrative                             3,093          2,554
                                                ------------  -------------
Total operating expenses                              20,467         19,553

                                                ------------  -------------
Operating Income                                       5,953          7,188
Financial income, net                                  1,572          1,728
                                                ------------  -------------
Income before taxes on income                          7,525          8,916
Taxes on income                                         (788)           400
                                                ------------  -------------
Net Income                                             8,313          8,516

Basic net earning per share                             0.30           0.31
Diluted net earnings per share                          0.30           0.31
                                                ============  =============
Weighted average number of shares used in per
 share calculation (in thousand):
Basic                                                 27,370         27,593
Diluted                                               27,565         27,891
                                                ============  =============




                            Syneron Medical Ltd.
                        CONSOLIDATED BALANCE SHEETS
                         U.S. dollars in thousands


                                                  March 31,    December 31,
                                                    2008          2007
                                                (unaudited)     (audited)
                                                ------------- -------------
CURRENT ASSETS
Cash and cash equivalents (*)                          54,248        42,624
Available-for-sale marketable securities (*)          134,314       124,941
Trade receivables                                      42,966        40,741
Other accounts receivables and prepaid expenses         2,419         4,485
Inventories                                            10,822         9,465
                                                ------------- -------------
Total Current Assets                                  244,769       222,256

LONG-TERM ASSETS
Severance pay fund                                        202           225
Long-term deposits and others (*)                       1,146         1,130
Long-term available-for-sale marketable
 securities (*)                                        20,712        35,122
Investments in affiliated companies                     2,852         2,572
Property and equipment, net                             3,032         3,111
Goodwill                                                2,266         2,266
Intangible assets, net                                  2,468         2,594
                                                ------------- -------------
Total Long-Term Assets                                 32,678        47,020
                                                ------------- -------------
Total Assets                                          277,447       269,276
                                                ============= =============

CURRENT LIABILITIES
Trade Payables                                          7,356         7,734
Other accounts payable and accrued expenses            24,251        24,738
                                                ------------- -------------
Total Current Liabilities                              31,607        32,472

LONG-TERM LIABILITIES
Deferred Revenues                                       5,268         4,991
Warranty Accruals                                         890           730
Accrued severance pay                                     237           248
                                                ------------- -------------
Total Long-Term Liabilities                             6,395         5,969

SHAREHOLDERS' EQUITY                                  239,445       230,835
                                                ------------- -------------
Total Liabilities and Shareholders' Equity            277,447       269,276
                                                ============= =============

(*) Total Cash and Liquid Investments                 210,420       203,817




                           Syneron Medical Ltd.
                   CONSOLIDATED STATEMENTS OF CASH FLOWS
                        U.S. dollars in thousands


                                                    Three Months ended
                                                         March 31,
                                                    2008          2007
                                                (unaudited)   (unaudited)
                                                ------------  ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                             8,313         8,516
Adjustments to reconcile net income to net cash
 provided by operating activities:
Depreciation and amortization                            367           218
Accrued severance pay, net                                12            15
Increase in trade receivables                         (2,225)       (2,155)
Decrease in other accounts receivables and
 prepaid expenses                                      2,066           443
Increase in inventories                               (1,357)       (1,812)
Decrease in trade payables                              (378)       (1,866)
Decrease in other current liabilities                 (1,274)       (1,391)
Loss (gain) on available-for-sale securities             (41)          660
Equity based compensation                              1,905         2,593
Increase in deferred revenues and warranty
 accruals                                              1,224           129
                                                ------------  ------------

Net cash provided by operating activities              8,612         5,350
                                                ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES
Investment in short-term deposits, net                     -           (30)
Purchase of available-for-sale marketable
 securities                                          (54,247)      (28,013)
Proceeds from sale and redemption of
 available-for-sale marketable securities             59,644        18,350
Payment for investment in affiliated company            (280)            -
Payments for acquisition of long-term loans and
 others                                                    -           (30)
Investment in long-term deposits and others              (16)            -
Purchase of property and equipment                      (162)         (291)
                                                ------------  ------------

Net cash provided by (used in) investing
 activities                                            4,939       (10,014)
                                                ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase of ordinary shares from shareholders
 at cost                                              (1,927)            -
Exercise of stock options and RSU's                        -         2,630
                                                ------------  ------------
Net cash provided by (used in) financing
 activities                                           (1,927)        2,630
                                                ------------  ------------

Increase (decrease) in cash and cash
 equivalents                                          11,624        (2,034)
Cash and cash equivalents at the beginning of
 the period                                           42,624        16,036
                                                ------------  ------------
Cash and cash equivalents at the end of the
 period                                               54,248        14,002
                                                ============  ============




                           Syneron Medical Ltd.
 Reconciliation Between GAAP To Non-GAAP Consolidated Statement Of Income
             U.S. dollars in thousands, except per share data


                                                               Three Months
                                                                  ended
                                                                 March 31,
                                                                   2008
                                                               (unaudited)
                                                               ------------
Operating Income (GAAP)                                               5,953
Non-GAAP adjustment:stock based compensation                          1,905
                                                               ------------
Non-GAAP operating income                                             7,858

Net Income (GAAP)                                                     8,313
Non-GAAP adjustment:stock based compensation                          1,905
                                                               ------------
Non-GAAP Net Income                                                  10,218

Non-GAAP net earnings per share:
   Basic net earning per share                                         0.37
   Diluted net earnings per share                                      0.37
                                                               ============
Weighted average number of shares used in per share
 calculation (in thousand):
   Basic                                                             27,370
   Diluted                                                           27,565
                                                               ============

Contact Information

  • For more information, please contact:

    Fabian Tenenbaum
    CFO
    +972 73 244 2329
    email: Email Contact

    Judith Kleinman
    VP Investor Relations
    +972 54 646 1688
    email: Email Contact