SOURCE: Syneron Medical Ltd.

Syneron Medical Ltd.

August 13, 2009 06:30 ET

Syneron Reports Second Quarter 2009 Results

YOKNEAM, ISRAEL--(Marketwire - August 13, 2009) - Syneron Medical Ltd. (NASDAQ: ELOS), an innovator in the development, marketing and sales of elos™ combined-energy medical aesthetic devices, today announced financial results for the second quarter ended June 30, 2009.

Revenues for the second quarter of 2009 were $14.2 million. This compares with revenues of $11.9 million in the first quarter of 2009 and $38.2 million in the second quarter of 2008. Syneron's gross margins rose to 64.8% in the second quarter, compared to 58.1% in the first quarter of 2009 and 54.7% in the fourth quarter of 2008.

Syneron recorded a net loss in the second quarter of $5.5 million on a GAAP basis, compared to a net loss of $8.2 million in the first quarter of 2009 and a net profit of $11.0 million in the second quarter of 2008. The GAAP result for the second quarter is equivalent to a loss of $0.20 per basic and diluted share, compared to a loss of $0.30 per basic and diluted share in the first quarter of 2009, and earnings per basic and diluted share of $0.40 in the second quarter of 2008. On a non-GAAP basis, excluding stock-based compensation expenses, net loss in the second quarter was $4.8 million, compared to a net loss of $6.2 million in the first quarter of 2009, and a net profit of $13.6 million in the second quarter of 2008. The non-GAAP result for the second quarter is equivalent to a loss of $0.17 per basic and diluted share, compared to a first quarter 2009 loss of $0.23 per basic and diluted share, and earnings per diluted share of $0.49 in the second quarter of 2008.

Commenting on the results and developments in the second quarter, Syneron CEO Lou Scafuri said, "I am pleased with the steady improvement in our results since the start of 2009, particularly with the improvements in margins which can be attributed directly to the success of the restructuring program in streamlining costs across the company. There were also significant financial improvements in the last quarter toward sharply reducing the level of DSOs and inventory levels and it remains an important objective of the Company to reduce these parameters still further.

"Looking forward," Mr. Scafuri continued, "I am equally pleased with the progress our teams have made in strengthening Syneron's leadership position in body shaping with the introduction of the VelaShape II™, in carving a new segment for skin rejuvenation treatments with our Sublative Rejuvenation™ procedures for our eMatrix™, and in gaining market acceptance of our value-proposition based business model and our new Syneron Advantage Program. With data indicating increased interest among physicians considering purchases of aesthetic devices, I believe that Syneron is now in the strongest market position to address their needs with the best financial and clinical offerings, across the fastest growing market segments."

Syneron's cash position (including long-term deposits) totaled $213.5 million as of June 30, 2009 and Syneron continues to have no debt. Trade receivables decreased to $18.9 million from $32.6 million at the end of 2008. Shareholders' equity at the end of the second quarter of 2009 was $232.7 million.

During the second quarter, Syneron invested an additional $1 million in Fluorinex Active Ltd. With this investment, Syneron gained control in Fluorinex Active Ltd. and began to consolidate Fluorinex's results from the date of control gained. With the consequent implementation of acquisition accounting of Fluorinex Active Ltd., Syneron recorded approximately $3.5 million in goodwill and intangible assets in the Company's second quarter balance sheet as of June 30, 2009.

Conference call

Syneron management will host its second quarter earnings conference call today at 8:30am ET. Syneron will be broadcasting live via the Investor Relations section of its website, www.syneron.com. To access the call, enter the Syneron website, then click on the Investors Relations Overview and select "Q2 2009 Results Conference Call." Participants are encouraged to log on at least 15 minutes prior to the conference call in order to download the applicable audio software. The call can be heard live or with an on-line replay which will follow. Those interested in participating in the call and the question and answer session should dial (toll free): 800-535-1368 in the U.S., and 913-312-6680 from overseas.

Use of Non-GAAP Measures

This press release provides financial measures for net loss, net loss per diluted share, net profit and net profit per diluted share, which exclude an expense charge related to stock-based compensation and are therefore not calculated in accordance with generally accepted accounting principles (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 and Logistics Support in Irvine, CA, 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 our profitability 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, 2008, filed with the Securities and Exchange Commission on March 24, 2009. 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 II, and eMatrix 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,
                               2009        2008        2009        2008
                            (unaudited) (unaudited) (unaudited) (unaudited)
                            ----------  ----------  ----------  ----------
Revenues                        14,155      38,237      26,044      72,312
Cost of Revenues                 4,979       8,571       9,959      16,226
                            ----------  ----------  ----------  ----------
Gross Profit                     9,176      29,666      16,085      56,086

Operating expenses:
Research and development         2,938       3,601       5,886       6,987
Selling and marketing            8,681      14,301      18,756      28,289
General and administrative       2,818       4,147       8,834       7,240
Settlement, net of legal
 cost                                -           -      (3,975)          -
                            ----------  ----------  ----------  ----------
Total operating expenses        14,437      22,049      29,501      42,516

                            ----------  ----------  ----------  ----------
Operating (Loss) Income         (5,261)      7,617     (13,416)     13,570
Financial Income, net              473       1,125       1,214       2,697
                            ----------  ----------  ----------  ----------
Income (Loss) before taxes
 on income                      (4,788)      8,742     (12,202)     16,267
Taxes on income                    852      (2,256)      1,597      (3,044)
                            ----------  ----------  ----------  ----------
Income (Loss) before non
 controlling interest           (5,640)     10,998     (13,799)     19,311
Net loss attributable to
 non controlling interest          106           -         106           -
                            ----------  ----------  ----------  ----------
Net (Loss) Income               (5,534)     10,998     (13,693)     19,311

Basic net (Loss) Income per
 share                           (0.20)       0.40       (0.50)       0.71
Diluted net (Loss) Income
 per share                       (0.20)       0.40       (0.50)       0.70
                            ==========  ==========  ==========  ==========
Weighted average number
 of shares used in per
 share calculation (in
 thousands):
Basic                           27,504      27,374      27,492      27,372
Diluted                         27,504      27,514      27,492      27,546
                            ==========  ==========  ==========  ==========




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


                                                   June 30,    December 31,
                                                     2009          2008
                                                 (unaudited)    (audited)
                                                 ------------  ------------
CURRENT ASSETS
Cash and cash equivalents (*)                          42,923        72,366
Short term bank deposit (*)                             1,793             -
Available-for-sale marketable securities (*)          141,263       117,342
Trade receivables                                      18,857        32,637
Other accounts receivables and prepaid expenses         2,623         4,249
Inventories                                            10,469        12,660
                                                 ------------  ------------
Total Current Assets                                  217,928       239,254

LONG-TERM ASSETS
Severance pay fund                                        183           107
Long-term deposits and others (*)                         174           180
Long-term available-for-sale marketable
 securities (*)                                        27,366        27,214
Investments in affiliated companies                     2,950         4,225
Property and equipment, net                             3,063         3,656
Goodwill and intangible assets, net                     9,723         6,650
                                                 ------------  ------------
Total Long-Term Assets                                 43,459        42,032

                                                 ------------  ------------
Total Assets                                          261,387       281,286
                                                 ============  ============

CURRENT LIABILITIES
Trade Payables                                          2,771         8,675
Other accounts payable and accrued expenses            22,064        25,587
                                                 ------------  ------------
Total Current Liabilities                              24,835        34,262

LONG-TERM LIABILITIES
Deferred Revenues                                       2,473         3,140
Warranty Accruals                                       1,117         1,117
Accrued severance pay                                     277           171
                                                 ------------  ------------
Total Long-Term Liabilities                             3,867         4,428

EQUITY                                                232,685       242,596
                                                 ------------  ------------
Total Liabilities and Equity                          261,387       281,286
                                                 ============  ============

(*) Total Cash and Liquid Investments                 213,519       217,102




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


                              Three Months ended       Six Months ended
                                   June 30,                June 30,
                               2009        2008        2009        2008
                            (unaudited) (unaudited) (unaudited) (unaudited)
                            ----------  ----------  ----------  ----------
CASH FLOWS FROM OPERATING
 ACTIVITIES
Net income (loss)               (5,534)     10,998     (13,693)     19,311
Adjustments to reconcile
 net income to net cash
 provided by operating
 activities:
Depreciation and
 amortization                      572         430       1,155         797
Deferred taxes, net                451           -         816           -
Increase in accrued
 severance pay, net                  4          29           9          41
Decrease (increase) in
 trade receivables               3,194        (466)     13,780      (2,691)
Decrease (increase) in
 other accounts receivables
 and prepaid expenses               85         (56)        822       2,010
Decrease (increase) in
 inventories                     1,601        (897)      2,338      (2,254)
Increase (decrease) in
 trade payables                 (1,374)        835      (5,971)        457
Increase (decrease) in
 other account payables and
 accrued expenses                  309        (557)     (1,799)     (1,831)
Impairments of
 available-for-sale
 marketable securities              16         117         172         117
Gain on available-for-sale
 marketable securities               -         (47)          -         (88)
Decrease in non controlling
 interest                         (106)          -        (106)          -
Equity based compensation          770       2,600       2,689       4,505
Increase (decrease) in
 deferred revenues and
 warranty accruals              (1,443)       (666)     (2,466)        558
                            ----------  ----------  ----------  ----------

Net cash provided by (used
 in) operating activities       (1,455)     12,320      (2,254)     20,932
                            ----------  ----------  ----------  ----------

CASH FLOWS FROM INVESTING
 ACTIVITIES

Maturity of (investment in)
 short-term deposits, net         (119)      1,000      (1,793)      1,000
Purchase of
 available-for-sale
 marketable securities         (79,990)    (93,067)   (146,498)   (147,314)
Proceeds from sale and
 redemption of
 available-for-sale
 marketable securities          81,665      65,656     122,174     125,300
Payments for investments in
 Affiliated Companies             (400)       (300)       (400)       (580)
Net cash paid in
 conjunction with
 acquisition of a
 subsidiary                        (41)          -         (41)          -
Acquisition of minority
 shares in a subsidiary           (124)          -        (424)          -
Proceeds from (investment
 in) long-term deposits and
 others                              7           3          13         (13)
Purchase of property and
 equipment                         (85)       (350)       (221)       (512)
                            ----------  ----------  ----------  ----------

Net cash provided by (used
 in) investing activities          913     (27,058)    (27,190)    (22,119)
                            ----------  ----------  ----------  ----------

CASH FLOWS FROM FINANCING
 ACTIVITIES

Repurchase of ordinary
 shares from shareholders
 at cost                             -           -           -      (1,927)
Proceeds from exercise of
 stock options and RSUs              -           3           1           3
                            ----------  ----------  ----------  ----------

Net cash provided by (used
 in) financing activities            -           3           1      (1,924)
                            ----------  ----------  ----------  ----------

Decrease in cash and cash
 equivalents                      (542)    (14,735)    (29,443)     (3,111)
Cash and cash equivalents
 at the beginning of the
 period                         43,465      54,248      72,366      42,624
                            ----------  ----------  ----------  ----------

Cash and cash equivalents
 at the end of the period       42,923      39,513      42,923      39,513
                            ==========  ==========  ==========  ==========




                           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       Six Months ended
                                   June 30,                June 30,
                               2009        2008        2009        2008
                            (unaudited) (unaudited) (unaudited) (unaudited)
                            ----------  ----------  ----------  ----------
Operating (Loss) Income
 (GAAP)                         (5,261)      7,617     (13,416)     13,570
  Non-GAAP adjustment:
    Stock based
     compensation                  770       2,600       2,689       4,505
                            ----------  ----------  ----------  ----------
  Non-GAAP operating
   (Loss) Income                (4,491)     10,217     (10,727)     18,075

Net (Loss) Income (GAAP)        (5,534)     10,998     (13,693)     19,311
  Non-GAAP adjustment:
    Stock based
     compensation                  770       2,600       2,689       4,505
                            ----------  ----------  ----------  ----------
  Non-GAAP Net (Loss)
   Income                       (4,764)     13,598     (11,004)     23,816

  Non-GAAP net (Loss)
   Income per share :
Basic net (Loss) Income per
 share                           (0.17)       0.50       (0.40)       0.87
Diluted net (Loss) Income
 per share                       (0.17)       0.49       (0.40)       0.86

Weighted average number
 of shares used in per
 share calculation
 (in thousands):
Basic                           27,504      27,374      27,492      27,372
Diluted                         27,504      27,514      27,492      27,546
                            ==========  ==========  ==========  ==========

Contact Information

  • For more information, please contact:

    Fabian Tenenbaum
    CFO
    +972 73 244 2283
    email: Email Contact

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