SOURCE: Syneron Medical Ltd.

November 11, 2008 06:30 ET

Syneron Reports Third Quarter 2008 Revenues of $28.5 Million

YOKNEAM, ISRAEL--(Marketwire - November 11, 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 third quarter of 2008.

Revenues for the third quarter of 2008 were $28.5 million, compared to revenues of $33.1 million in the third quarter of 2007. The geographical distribution of sales was 53% to North America and 47% to international markets.

On a GAAP basis, net income for the third quarter of 2008 was $2.2 million, compared to $8.0 million in the third quarter of 2007. The GAAP net income for the third quarter of 2008 includes $0.9 million of stock-based compensation expenses. Syneron reported fully diluted EPS of $0.08 for the third quarter of 2008 compared to EPS of $0.28 per diluted share for the same period last year. On a non-GAAP basis, excluding the stock-based compensation, net income in the third quarter of 2008 was $3.1 million, or $0.11 per diluted share.

Syneron's balance sheet and cash position remain strong. Syneron's cash position (including long-term deposits) for the third quarter totaled $219 million and shareholders' equity was $254 million.

"Comparing third quarter revenues for 2008 with the same quarter in 2007, we see the effect of the current economic slowdown in US and European markets," stated Syneron CEO, Doron Gerstel. "Doctors are postponing decisions to make new capital equipment purchases and credit terms have tightened significantly."

"We are pleased that despite the current economic environment, Syneron continues to be profitable, maintaining strong gross profit margins and good financial strength with positive operating cash flow, a strong balance sheet and no debt," said Mr. Gerstel. "Our financial strength gives us the leverage to introduce innovative business models and to invest in R&D to bring new products rapidly to the market."

"Yet, recognizing the potentially protracted nature of the current economic slowdown," Mr. Gerstel continued, "we are taking significant steps, including rationalizing our North American and European operations, which will better optimize our cost structure and ensure that Syneron remains the most competitive firm in our sector."

Conference call

Syneron management will host its third 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 "Q3 2008 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 877-874-1565 in the US, and 719-325-4839 from overseas. The conference passcode is: 5598467.

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 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/A for the year ended December 31, 2007, filed with the Securities and Exchange Commission on August 31, 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     Nine Months ended
                                    September 30,         September 30,
                                  2008       2007       2008       2007
                               (unaudited)(unaudited)(unaudited)(unaudited)
                                ---------- ---------- ---------  ----------
Revenues                            28,493     33,063   100,805     102,930
Cost of Revenues                     7,026      6,760    23,252      18,813
                                ---------- ---------- ---------  ----------
Gross Profit                        21,467     26,303    77,553      84,117

Operating expenses:
Research and development             3,646      3,325    10,633       9,134
Selling and marketing               13,259     14,038    41,548      44,191
General and administrative           2,684      2,865     9,924       8,588
                                ---------- ---------- ---------  ----------
Total operating expenses            19,589     20,228    62,105      61,913

                                ---------- ---------- ---------  ----------
Operating Income                     1,878      6,075    15,448      22,204
Financial income, net                  529      2,429     3,226       6,414
                                ---------- ---------- ---------  ----------
Income before taxes on income        2,407      8,504    18,674      28,618
Taxes on income                        219        550    (2,825)      1,800
                                ---------- ---------- ---------  ----------
Net Income                           2,188      7,954    21,499      26,818

Basic net earning per share           0.08       0.29      0.78        0.97
Diluted net earnings per share        0.08       0.28      0.78        0.96
                                 =========  ========= =========  ==========
Weighted average number of
 shares used in per share
 calculation (in thousands):
Basic                               27,436     27,760    27,394      27,687
Diluted                             27,503     27,955    27,518      27,908
                                 =========  ========= =========  ==========





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


                                                September 30, December 31,
                                                    2008          2007
                                                (unaudited)     (audited)
                                                ------------- -------------
CURRENT ASSETS
Cash and cash equivalents (*)                          20,992        42,624
Available-for-sale marketable securities (*)           99,057       124,941
Trade receivables                                      44,769        40,741
Other accounts receivables and prepaid expenses         2,638         4,485
Inventories                                            11,678         9,465
                                                ------------- -------------
Total Current Assets                                  179,134       222,256

LONG-TERM ASSETS
Severance pay fund                                        122           225
Long-term deposits and others (*)                         180         1,130
Long-term available-for-sale marketable
 securities (*)                                        98,491        35,122
Investments in affiliated companies                     3,875         2,572
Property and equipment, net                             3,920         3,111
Goodwill                                                2,306         2,266
Intangible assets, net                                  2,158         2,594
                                                ------------- -------------
Total Long-Term Assets                                111,052        47,020
                                                ------------- -------------
Total Assets                                          290,186       269,276
                                                ============= =============

CURRENT LIABILITIES
Trade Payables                                          6,755         7,734
Other accounts payable and accrued expenses            22,884        24,738
                                                ------------- -------------
Total Current Liabilities                              29,639        32,472

LONG-TERM LIABILITIES
Deferred Revenues                                       5,280         4,991
Warranty Accruals                                         712           730
Accrued severance pay                                     184           248
                                                ------------- -------------
Total Long-Term Liabilities                             6,176         5,969

SHAREHOLDERS' EQUITY                                  254,371       230,835
                                                ------------- -------------
Total Liabilities and Shareholders' Equity            290,186       269,276
                                                ============= =============

(*) Total Cash and Liquid Investments                 218,720       203,817




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


                              Three Months ended      Nine Months ended
                                September 30,           September 30,
                               2008        2007        2008        2007
                            (unaudited)(unaudited) (unaudited) (unaudited)
                            ----------  ----------  ----------  ----------
CASH FLOWS FROM OPERATING
 ACTIVITIES
Net income                       2,188       7,954      21,499      26,818
Adjustments to reconcile
 net income to net cash
 provided by
 operating activities:
Depreciation and
 amortization                      453         252       1,250         701
Increase (decrease) in
 accrued severance pay, net         (2)        (19)         39          (1)
Increase in trade
 receivables                    (1,337)     (4,402)     (4,028)     (7,570)
Decrease (increase) in
 other accounts receivables
 and prepaid expenses             (163)     (1,180)      1,847        (283)
Increase in inventories           (405)       (116)     (2,659)     (2,437)
Decrease in trade payables      (1,436)       (734)       (979)     (2,487)
Increase (decrease) in
 other account payables and
 accrued expenses                  395       2,290      (1,436)      2,442
Impairments of
 available-for-sale
 marketable securities             350           -         467           -
Loss on available-for-sale
 marketable securities             279         251         191         200
Equity based compensation          895       2,464       5,400       7,366
Increase (decrease) in
 deferred revenues and
 warranty accruals              (1,052)        442        (494)      1,567
                            ----------  ----------  ----------  ----------

Net cash provided by
 operating activities              165       7,202      21,097      26,316
                            ----------  ----------  ----------  ----------

CASH FLOWS FROM INVESTING
 ACTIVITIES

Maturity of long-term
 deposits                            -           -       1,000       5,000
Purchase of
 available-for-sale
 marketable securities         (33,125)    (50,221)   (180,439)   (119,852)
Proceeds from sale and
 redemption of
 available-for-sale
 marketable securities          15,556      46,373     140,856      93,373
Payments for investments in
 of Affiliated Companies          (723)       (500)     (1,303)     (1,022)
Purchase of Intangible
 Assets                            (40)          -         (40)          -
Acquisition of minority
 shares in a subsidiary              -      (3,510)          -      (3,510)
Investment in long-term
 deposits and others               (37)         (5)        (50)        (20)
Purchase of property and
 equipment                        (318)       (741)       (830)     (1,484)
                            ----------  ----------  ----------  ----------

Net cash used in investing
 activities                    (18,687)     (8,604)    (40,806)    (27,515)
                            ----------  ----------  ----------  ----------

CASH FLOWS FROM FINANCING
 ACTIVITIES

Repurchase of ordinary
 shares from shareholders
 at cost                             -           -      (1,927)          -
Exercise of stock options
 and RSU's                           1          75           4       3,431
                            ----------  ----------  ----------  ----------
Net cash provided by (used
 in) financing activities            1          75      (1,923)      3,431
                            ----------  ----------  ----------  ----------

Increase (decrease) in cash
 and cash equivalents          (18,521)     (1,327)    (21,632)      2,232
Cash and cash equivalents
 at the beginning of the
 period                         39,513      19,595      42,624      16,036
                            ----------  ----------  ----------  ----------
Cash and cash equivalents
 at the end of the period       20,992      18,268      20,992      18,268
                            ----------  ----------  ----------  ----------




                           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      Nine Months ended
                                September 30,           September 30,
                               2008        2007        2008        2007
                            (unaudited) (unaudited) (unaudited) (unaudited)
                            ----------- ----------- ----------- -----------
Operating Income (GAAP)           1,878       6,075      15,448      22,204
  Non-GAAP adjustment:
   Stock based compensation         895       2,464       5,400       7,366
                            ----------- ----------- ----------- -----------
  Non-GAAP operating income       2,773       8,539      20,848      29,570

Net Income (GAAP)                 2,188       7,954      21,499      26,818
  Non-GAAP adjustment:
   Stock based compensation         895       2,464       5,400       7,366
                            ----------- ----------- ----------- -----------
  Non-GAAP Net Income             3,083      10,418      26,899      34,184

  Non-GAAP net earnings per
   share:
Basic net earning per share        0.11        0.38        0.98        1.23
Diluted net earnings per
 share                             0.11        0.37        0.97        1.22

Weighted average number of
 shares used in per share
 calculation (in thousands):
Basic                            27,436      27,760      27,394      27,687
Diluted                          27,695      27,955      27,751      27,908
                            =========== =========== =========== ===========


Contact Information

  • For more information, please contact:

    Fabian Tenenbaum
    CFO
    +972 73 244 2329
    Email Contact

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