Oct 27 2009
Cynosure, Inc. (Nasdaq: CYNO), a leading developer and manufacturer of a broad array of light-based aesthetic treatment systems, today announced financial results for the three and nine months ended September 30, 2009.
Third Quarter 2009 Financial Results
Revenues for the three months ended September 30, 2009 were $17.9 million, compared with $38.2 million for the same period of 2008 and $20.8 million for the second quarter of 2009. The decrease in revenues from the third quarter of 2008 reflected the downturn in global economic conditions and the effects of a highly restrictive credit environment in North America. The decrease in sequential revenue reflected the typical seasonality of the third quarter.
Gross margin for the third quarter of 2009 was 58.4% of total revenues, compared with 64.9% for the same period of 2008 and 58.0% for the second quarter of 2009. The lower gross margin from the year-ago period reflects a higher percentage of laser revenue from international markets, where sales prices tend to be lower than in North America. The 40-basis-point increase in gross margin from the second quarter of 2009 resulted from a higher percentage of laser revenue from North America, as well as stable average selling prices across Cynosure's distribution network.
Total operating expenses decreased 31% to $13.8 million for the third quarter of 2009 from $19.9 million for the same period of 2008, as the company maintained its focus on reducing costs in response to the current economic climate. On a sequential basis, the company reduced operating expenses by 15% from $16.2 million for the second quarter of 2009.
Net loss for the third quarter of 2009 was $1.9 million, or $0.15 per basic and diluted share, compared with net income of $3.2 million, or $0.25 per diluted share, for the third quarter of 2008 and a net loss of $2.3 million, or $0.18 per basic and diluted share, for the second quarter of 2009.
"While consumer demand for aesthetic procedures appears to be regaining momentum and participation in our training programs is strong, limited access to credit remains a key hurdle for practitioners across the industry," said President and Chief Executive Officer Michael Davin. "Many physicians continue to encounter a restrictive lending environment and a lengthy credit approval process. We are continuing to work directly with the lending community to assist our customers -- the majority of whom are physicians -- with securing financing. The positive news we take from the current environment is that, as credit begins to ease, we believe the underlying demand is there to support the industry's return to growth. Despite the challenges of the economic climate, margins increased slightly on a sequential basis, which underscores the stability of our ASPs."
"In what traditionally has been the weakest quarter for the aesthetic industry, we were encouraged by the continued progress during the third quarter of 2009 of our international business, particularly in the Asia Pacific region," Davin said. "The initiatives we have taken to establish and grow our direct distribution in countries such as Korea and China, and to introduce new products there, are yielding positive results. International revenue accounted for 45% of total laser revenue in the quarter, compared with 29% for the third quarter of 2008 and 53% for the second quarter of this year."
"On the product development front, our funded development agreement with Unilever Ltd. to develop light-based devices for the home use personal care market moved forward in the quarter and we are pleased with our achievements to date," Davin continued. "Our development partnership is a project we believe will take two to three years to bring to commercialization. In Unilever we have an outstanding partner with the consumer marketing and distribution expertise to make this initiative a success."
Recent Highlights
- At the Plastic Surgery 2009 meeting, Cynosure introduced the Smartlipo Triplex(TM), the world's first laser lipolysis workstation featuring three wavelengths that combine to deliver high-powered fat absorption and tissue tightening through tissue coagulation. Smartlipo Triplex adds a 1440 nm wavelength to the MPX generation of the product, and employs Cynosure's patented MultiPlex technology to combine the benefits of multiple wavelengths in a single laser output.
- Cynosure announced two key regulatory approvals in the Asia Pacific region. The company received approval to market its Smartlipo MPX(TM) LaserBodySculpting(SM) Workstation in Korea and its Affirm(TM) Anti-Aging Workstation in the People's Republic of China.
- The company named Paul B. Cardarelli to the new position of Vice President of Business Development. Cardarelli is responsible for day-to-day management of Cynosure's funded development agreement with Unilever Ltd.
SOURCE Cynosure, Inc.