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Syneron Reports Fourth Quarter and Full Year 2008 Results
Syneron announced today financial results for the fourth quarter and the full year ended December 31st, 2008.
YOKNEAM, ISRAEL -- (MARKET WIRE) - 02/11/2009 - 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 fourth quarter and the full year ended December 31st, 2008. Revenues for the fourth quarter of 2008 were $14.2 million, reflecting the direct impact on the aesthetic sector of the global economic recession and further credit tightening. This compares with revenues of $38.1 million for the fourth quarter of 2007. Syneron's gross margins fell to 55% in the fourth quarter. Gross margins were heavily impacted mainly by a $2 million charge for obsolete and excess inventory, the effect of fixed overhead costs allocated over lower sales, and the weakening of the euro. Syneron recorded a net loss in the fourth quarter of $15.9 million on a GAAP basis. The net loss includes approximately $2 million in costs associated with the workforce reductions and closure of offices; approximately $2 million in provisions for excess and obsolete inventory; $3.1 million in accruals for bad debt; and $2.2 million in stock-based compensation expenses. The GAAP result for the fourth quarter is equivalent to a loss of $0.58 per basic and diluted share. On a non-GAAP basis, excluding stock-based compensation expenses, net loss in the fourth quarter was $13.7 million, a loss of $0.50 per basic and diluted share. For the full year 2008, revenues were $115.0 million, compared to $141.0 million for the full year in 2007. Net profit on a GAAP basis was $5.6 million, equivalent to $0.20 per diluted share. GAAP net profit in 2007 was $31.2 million, equivalent to $1.12 per diluted share. On a non-GAAP basis, excluding stock-based compensation, net profit for 2008 was $13.2 million, or $0.47 per diluted share, compared to $39.0 million (EPS of $1.40) in 2007. Syneron's balance sheet and cash position remain strong. Syneron's cash position (including long-term deposits) totaled $217.1 million as of December 31, 2008 and Syneron continues to have no debt. Trade receivables fell to $32.6 million from $44.8 million in the third quarter of 2008. Shareholders' equity was $242.6 million. Reflecting on the past year, Syneron's Chairman, Shimon Eckhouse, said, 2008 was the most challenging year in Syneron's 8-year history, particularly in the fourth quarter when the aesthetic sector was impacted by an acute drop in both doctors' confidence and credit availability. Facing these changing conditions we have been focused on significant reduction in our expenses and changing our business model, as well as strengthening our management team. Our unique technology and products, and strong balance sheet, will play a key role in turning these challenges into an opportunity for Syneron's growth. Commenting on the financial programs to restore growth, CFO Fabian Tenenbaum said, in the fourth quarter we implemented an aggressive two-pronged strategy to address the fall in sales and margins, and to build a solid base for future growth. First, to make expenses more responsive to volatile sales levels, we made major adjustments to our cost structure, foremost of which was a 20% workforce reduction and the completion of office closures in Canada, Europe and Chicago. The restructuring program is expected to achieve 20% operational costs savings in 2009 compared to 2008. "Second, to enable physicians to overcome current credit limitations," continued Mr. Tenenbaum, we are expanding the scope of the new business model introduced with the eMatrix in December. In the new business model, doctors pay a significantly lower cost of entry for a new device and, instead, pay monthly fees and consumable costs. Not only does this model benefit Syneron with a recurring revenue flow, but it also provides an avenue of continued access to new customers who might otherwise not consider a purchase during this period. Looking forward, Syneron's newly appointed CEO, Louis Scafuri, remarked, Clearly we have significant economic and business challenges to surmount in 2009. I am very excited that as the new CEO of Syneron, I have the opportunity to build upon the changes which were initiated in the past quarter to support higher future growth. My foremost task in 2009 will be to direct Syneron management, sales and marketing, and R&D teams to use this year constructively and efficiently to develop new products and new marketing and sales tools aimed at confronting the tests of this economic cycle, as well as renewing the unique profitability of this extraordinary medical device company. Corporate highlights of 2008 included: Launch of LipoLite laser-assisted lipolysis device and
introduction of LipoLite Energy Access Program (LEAP) -first physician
subscription program
Launch of Matrix RF fractional ablative applicator and eMatrix
portable skin resurfacing system
Establishment of Syneron China
Acquisition of Inlight Corp, a laser technology development and
research firm
Investment in Rakuto Bio Technologies Ltd. (RBT) developer of advanced whole skin complexion whitening treatment
FDA clearance of the advanced tooth whitening technology developed by Fluorinex in which Syneron made a strategic investment in 2007
Continued collaboration with Procter and Gamble Inc. in developing
home use products for the enhancement of skin appearance.Conference call Syneron management will host its fourth 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 "Q4 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 877-340-7913 in the US, and 719-325-4845 from overseas. The conference passcode is: 3159004. 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/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.
Related Topics: Syneron | VelaShape | ReFirme | LipoLite
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