SOURCE: Syneron Medical Ltd.

August 14, 2008 05:34 ET

Syneron Reports Record Second Quarter 2008 Revenues of $38.2 Million and Net Profit of $11.0 Million

YOKNEAM, ISRAEL--(Marketwire - August 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 second quarter of 2008.

Revenues for the second quarter of 2008 were $38.2 million, compared to revenues of $37.5 million in the second quarter of 2007. International sales rose 17% over the same period in 2007 to $19.1 million. North American and international sales now each account for 50% of total revenues.

On a GAAP basis, net income for the second quarter of 2008 rose to $11.0 million, from $10.3 million in the second quarter of 2007. The GAAP net income for the second quarter of 2008 includes $2.6 million of stock-based compensation expenses. Syneron reported EPS of $0.40 for the second quarter of 2008 compared to $0.37 for the same period last year. On a non-GAAP basis, excluding the stock-based compensation, net income in the second quarter of 2008 was $13.7 million, or $0.50 per diluted share.

Results for the second quarter of 2008 also include a one-time tax credit of approximately $2 million resulting from a change in the base of reporting to the Israeli tax authority from US dollars to new Israeli shekels.

Syneron's balance sheet and cash position remain strong. Cash flow from operations in the second quarter was $12.3 million. Syneron increased its cash position (including long-term deposits) during the second quarter by $10.2 million to $220.6 million. Shareholders' equity totaled $251.6 million as of June 30, 2008.

Commenting on the second quarter, CEO Doron Gerstel said, "We are pleased to report a record quarter for Syneron's revenues. Syneron continues to grow sales as a result of the superiority of elos technology, as well as our strategic decision to focus marketing and R&D resources on the key growth segments of aesthetic medicine of body shaping and skin rejuvenation."

"The recently launched LipoLite™ has received positive acceptance among the surgical and general medical community," continued Mr. Gerstel. "We started delivering the first units at the end of the second quarter and we expect to start selling significantly during this third quarter. In addition we also started implementing our LipoLite Energy Access Program (LEAP) that was designed with a cost-effective annual subscription fee to enable physicians of all specialties to offer the increasingly popular laser-assisted lipolysis treatment. Doctors who had been considering the introduction of laser-assisted lipolysis view Syneron as a partner who is willing to align itself with them."

Regarding the effects of LEAP and other new products on Syneron's business model, CFO Fabian Tenenbaum said, "With the introduction of LEAP, as well as the introduction of a disposable element to our new Matrix RF, for which FDA approval is pending, management has taken another step towards the goal of achieving diversification of our revenues -- one of the key strategic initiatives we started last year. Syneron's evolving technologies will allow us to diversify our business model in which, alongside equipment sales, we will begin to benefit from a regular annuity element in our revenues."

Conference call

Syneron Management will host a conference call (dial-in numbers below) to discuss the results at 8:30am ET today, August 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): 877-591-4949
International: +1-719-325-4942
Conference ID: 4593969

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, LipoLite 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      Six Months ended
                                    June 30,                June 30,
                               2008         2007        2008        2007
                            (unaudited) (unaudited) (unaudited) (unaudited)
                            ----------  ----------- ----------  -----------
Revenues                        38,237       37,537     72,312       69,867
Cost of Revenues                 8,571        6,463     16,226       12,053
                            ----------  ----------- ----------  -----------
Gross Profit                    29,666       31,074     56,086       57,814

Operating expenses:
Research and development         3,601        3,067      6,987        5,809
Selling and marketing           14,301       15,896     28,289       30,153
General and administrative       4,147        3,169      7,240        5,723
                            ----------  ----------- ----------  -----------
Total operating expenses        22,049       22,132     42,516       41,685

                            ----------  ----------- ----------  -----------
Operating Income                 7,617        8,942     13,570       16,129
Financial income, net            1,125        2,256      2,697        3,985
                            ----------  ----------- ----------  -----------
Income before taxes on
 income                          8,742       11,198     16,267       20,114
Taxes on income                 (2,256)         850     (3,044)       1,250
                            ----------  ----------- ----------  -----------
Net Income                      10,998       10,348     19,311       18,864

Basic net earning per share       0.40         0.37       0.71         0.68
Diluted net earnings per
 share                            0.40         0.37       0.70         0.68
                            ==========  =========== ==========  ===========
Weighted average number
 of shares used in per share
 calculation (in thousands):
Basic                           27,374       27,705     27,372       27,649
Diluted                         27,514       27,962     27,546       27,888
                            ==========  =========== ==========  ===========



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


                                                  June 30,    December 31,
                                                    2008          2007
                                                (unaudited)     (audited)
                                                ------------- -------------
CURRENT ASSETS
Cash and cash equivalents (*)                          39,513        42,624
Available-for-sale marketable securities (*)          123,566       124,941
Trade receivables                                      43,432        40,741
Other accounts receivable and prepaid expenses          2,475         4,485
Inventories                                            11,374         9,465
                                                ------------- -------------
Total Current Assets                                  220,360       222,256

LONG-TERM ASSETS
Severance pay fund                                        237           225
Long-term deposits and others (*)                         143         1,130
Long-term available-for-sale marketable
 securities (*)                                        57,383        35,122
Investments in affiliated companies                     3,152         2,572
Property and equipment, net                             3,452         3,111
Goodwill                                                2,266         2,266
Intangible assets, net                                  2,313         2,594
                                                ------------- -------------
Total Long-Term Assets                                 68,946        47,020
Total Assets                                          289,306       269,276
                                                ============= =============

CURRENT LIABILITIES
Trade Payables                                          8,191         7,734
Other accounts payable and accrued expenses            23,738        24,738
                                                ------------- -------------
Total Current Liabilities                              31,929        32,472

LONG-TERM LIABILITIES
Deferred Revenues                                       4,736         4,991
Warranty Accruals                                         712           730
Accrued severance pay                                     301           248
                                                ------------- -------------
Total Long-Term Liabilities                             5,749         5,969

SHAREHOLDERS' EQUITY                                  251,628       230,835
                                                ------------- -------------
Total Liabilities and Shareholders' Equity            289,306       269,276
                                                ============= =============

(*) Total Cash and Liquid Investments                 220,605       203,817



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


                              Three Months ended       Six Months ended
                                   June 30,                June 30,
                               2008        2007        2008        2007
                            (unaudited) (unaudited) (unaudited) (unaudited)
                            ----------  ----------  ----------  ----------
CASH FLOWS FROM OPERATING
 ACTIVITIES
Net income                      10,998      10,348      19,311      18,864
Adjustments to reconcile
 net income to net cash
 provided by
 operating activities:
Depreciation and
 amortization                      430         231         797         449
Increase in accrued
 severance pay, net                 29           3          41          18
Increase in trade
 receivables                      (466)     (1,390)     (2,691)     (3,168)
Decrease (increase) in
 other accounts receivable
 and prepaid expenses              (56)        831       2,010         897
Increase in inventories           (897)       (509)     (2,254)     (2,321)
Increase (decrease) in
 trade payables                    835         114         457      (1,753)
Increase (decrease) in
 other accounts payables and
 accrued expenses                 (557)      1,543      (1,831)        152
Impairments of
 available-for-sale
 marketable securities             117           -         117           -
Gain on available-for-sale
 marketable securities             (47)       (711)        (88)        (51)
Equity based compensation        2,600       2,339       4,505       4,902
Increase (decrease) in
 deferred revenues and
 warranty accruals                (666)        995         558       1,125
                            ----------  ----------  ----------  ----------

Net cash provided by
 operating activities           12,320      13,794      20,932      19,114
                            ----------  ----------  ----------  ----------

CASH FLOWS FROM INVESTING
 ACTIVITIES

Maturity of long-term
 deposits                        1,000       5,030       1,000       5,000
Purchase of
 available-for-sale
 marketable securities         (93,067)    (41,618)   (147,314)    (69,631)
Proceeds from sale and
 redemption of
 available-for-sale
 marketable securities          65,656      28,650     125,300      47,000
Payments for investments in
 Affiliated Companies             (300)       (521)       (580)       (521)
Investment in long-term
 deposits and others                 3          14         (13)        (16)
Purchase of property and
 equipment                        (350)       (452)       (512)       (743)
                            ----------  ----------  ----------  ----------

Net cash used in investing
 activities                    (27,058)     (8,897)    (22,119)    (18,911)
                            ----------  ----------  ----------  ----------

CASH FLOWS FROM FINANCING
 ACTIVITIES

Repurchase of ordinary
 shares from shareholders
 at cost                             -           -      (1,927)          -
Exercise of stock options
 and RSUs                            3         696           3       3,356
                            ----------  ----------  ----------  ----------
Net cash provided by (used
 in) financing activities            3         696      (1,924)      3,356
                            ----------  ----------  ----------  ----------

Increase (decrease) in cash
 and cash equivalents          (14,735)      5,593      (3,111)      3,559
Cash and cash equivalents
 at the beginning of the
 period                         54,248      14,002      42,624      16,036
                            ----------  ----------  ----------  ----------
Cash and cash equivalents
 at the end of the period       39,513      19,595      39,513      19,595
                            ==========  ==========  ==========  ==========



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

                                               Three Months     Six Months
                                                  ended           ended
                                               June 30, 2008  June 30, 2008
                                                (unaudited)    (unaudited)
                                               -------------  -------------
Operating Income (GAAP)                                7,617         13,570
    Non-GAAP adjustment:
      Stock based compensation                         2,600          4,505
                                               -------------  -------------
  Non-GAAP operating income                           10,217         18,075

Net Income (GAAP)                                     10,998         19,311
    Non-GAAP adjustment:
      Stock based compensation                         2,600          4,505
      Impairment of investment                           117            117
                                               -------------  -------------
  Non-GAAP Net Income                                 13,715         23,933

  Non-GAAP net earnings per share:
Basic net earnings per share                            0.50           0.87
Diluted net earnings per share                          0.50           0.87
                                               =============  =============
Weighted average number
 of shares used in per share
 calculation (in thousands):
Basic                                                 27,374         27,372
Diluted                                               27,514         27,546
                                               =============  =============

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