Solta Medical, Inc. (Nasdaq: SLTM), a global leader in the medical aesthetics market, today announced results for the second quarter ended June 30, 2010. The results for the quarter were highlighted by year-over-over revenue growth of 10%, generation of $7.7 million in cash flow from operations, and complete integration of the Aesthera acquisition into Solta operations.
Revenue for the second quarter was $30.1 million, an increase of approximately $2.7 million, or 10%, as compared to the second quarter 2009 revenue of $27.4 million. Results for the quarter were driven by year-over-year double-digit revenue growth in North America, Asia Pacific, and Latin America.
Solta Medical's GAAP reported results for the second quarter of 2010 include non-cash amortization and other charges of $1.4 million related to the acquisitions of Reliant Technologies and Aesthera Corporation, non-cash stock based compensation charges of $0.6 million, and cash expenses of $0.2 million related to the acquisition of Aesthera Corporation. The Company provides additional non-GAAP financial measures that exclude these charges and expenses.
The GAAP gross profit for the quarter was $18.7 million, or 62% of net revenue. Non-GAAP gross profit for the quarter was $19.9 million, or 66% of net revenue. GAAP net income for the quarter was $1.5 million, or $0.02 per share on a diluted basis, as compared to GAAP net income of $0.1 million, or breakeven earnings per share on a diluted basis, reported for the second quarter of 2009. Non-GAAP net income for the quarter was $3.8 million, or $0.06 per share on a diluted basis, as compared to non-GAAP net income of $2.3 million, or $0.05 per share on a diluted basis, reported for the second quarter of 2009. Non-GAAP EBITDA for the second quarter was $5.0 million compared to $3.1 million in the prior year period. Cash flow from operations for the quarter was a record $7.7 million compared to cash used in operating activities of $2.8 million in the second quarter of 2009. The results for the quarter also include the previously reported patent litigation settlement with Alma Lasers under which Solta received a one-time payment of $2.25 million.
"We continue to be successful in expanding our customer base, as well as building relationships with our existing customers," said Stephen J. Fanning, Chairman, President & CEO. "Year-over-year we generated double digit revenue increases in new system sales for both Thermage® and Fraxel® brands. In addition, we are gaining traction in the marketplace with the Isolaz® brand through our recent acquisition of Aesthera. We also completed the integration of Aesthera into Solta's operations in the second quarter. Finally, our record cash flow generated from operations of $7.7 million reflects the operating benefits of having three premier brands in the aesthetic device industry, a strong IP position, and efficient management of inventories and accounts receivable."
Financial Goals for 2010
The company provided the following financial goals for 2010 :
- Revenue for the full year 2010 of approximately $115 million which represents an increase of approximately $16 million, or 16%, from revenue for the full year 2009 of $98.8 million.
- Positive non-GAAP EBITDA for every quarter of 2010.
- Non-GAAP gross margin in the range of 66% to 69% for the full year 2010 excluding non-cash amortization charges and non-cash acquisition related adjustments.
Non-GAAP Presentation
To supplement the condensed consolidated financial information presented on a GAAP basis, management has provided non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP EBITDA, non-GAAP net income (loss) and non-GAAP earnings (loss) per share measures that exclude the impact of acquisition related adjustments, severance costs, acquisition related costs, and stock-based compensation expenses, all net of income taxes. The Company believes that these non-GAAP financial measures provide investors with insight into what is used by management to conduct a more meaningful and consistent comparison of the Company's ongoing operating results and trends, compared with historical results. This presentation is also consistent with management's internal use of the measures, which it uses to measure the performance of ongoing operating results, against prior periods and against our internally developed targets. There are limitations in using these non-GAAP financial measures because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. These non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP financial measures. Investors and potential investors should consider non-GAAP financial measures only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP and the reconciliation of non-GAAP financial measures attached to this release.