Cynosure, Inc. today announced financial results for the three months and year ended December 31, 2010.
Revenues for the fourth quarter of 2010 increased 16 percent to $22.3 million from $19.3 million in the same period of 2009. Net loss for the fourth quarter of 2010 was $0.8 million, or $0.06 per basic and diluted share, compared with a net loss of $14.5 million, or $1.14 per basic and diluted share, or the comparable period of 2009. Financial results for the fourth quarter of 2009 included a non-cash tax charge of $10.4 million to establish a valuation allowance against the company's U.S. deferred tax assets, and a $2.1 million non-cash charge related to an inventory write-down of an earlier-generation product.
The company reduced its loss from operations in the fourth quarter of 2010 to $0.6 million, which included stock-based compensation of approximately $0.6 million. This compares with a loss from operations in the fourth quarter of 2009 of $5.7 million, which included stock-based compensation of $1.1 million.
"Higher product demand from North America and overseas drove our revenue growth in the fourth quarter," said Cynosure President and Chief Executive Officer Michael Davin. "In North America, laser product sales were up 17 percent from the same period in 2009. Although financing remains difficult for many aesthetic practitioners, the relationships we have established with certain financial institutions and third-party financing sources are gradually beginning to improve access to credit for our customers. International laser product sales rose 18 percent from the fourth quarter of 2009, paced by solid gains in our Asian direct distribution network."
Gross profit for the fourth quarter of 2010 was 55.9 percent of total revenues, compared with 43.9 percent for the same period of 2009, which included the inventory write-down. The improvement in gross margin in the 2010 period reflected the effects of the inventory write-down as well as a higher percentage of sales from direct distribution channels, which carry higher margins than products sold through third-party distributors.
Total operating expenses for the fourth quarter of 2010 decreased $1.1 million, or 8 percent, to $13.1 million from $14.2 million for the same period of 2009. For full-year 2010, total operating expenses decreased $8.9 million, or 15 percent, to $51.4 million from $60.3 million for 2009.
"We generated positive cash flow from operations for the seventh consecutive quarter in Q4, reflecting the success of our cost-reduction initiatives," Davin said. "With our $8.9 million decrease in operating expenses for the year, we exceeded our goal of lowering annualized operating expenses in the range of $5 million to $7 million from 2009, and also exceeded our objective to be cash-flow breakeven for 2010. Our cash, marketable securities and investments totaled $96.8 million at year-end, an increase of approximately $4.9 million from the end of 2009. We also purchased $1.4 million of stock under our previously announced stock buyback plan in 2010."
FY 2010 Financial Results: Year-over-Year Revenue Growth of 12 Percent
Revenues for the 12 months ended December 31, 2010 increased 12 percent to $81.8 million from $72.8 million for the full year of 2009. Gross profit for 2010 was 56.7 percent of total revenues, compared with 54.9 percent for 2009, which included the inventory write-down. Net loss for 2010 was $5.5 million, or $0.44 per basic and diluted share, compared with a net loss for full-year 2009 of $22.8 million, or $1.79 per basic and diluted share. Financial results for 2009 included the non-cash tax charge of $10.4 million to establish a valuation allowance against the company's U.S. deferred tax assets, and the $2.1 million non-cash charge related to an inventory write-down of an earlier-generation product.
- World's First Minimally Invasive Laser for Long-term Cellulite Reduction: Cynosure recently introduced the Cellulaze™ Cellulite Laser Workstation, the world's first minimally invasive surgical device specifically designed for the long-term reduction of cellulite. Cellulaze uses laser energy to restore the normal structure of the skin and underlying connective tissue, increasing skin elasticity and thickness. The product, which recently received CE Mark certification, was unveiled this month at the American Academy of Dermatology's 69th Annual Meeting in New Orleans. It will be available for sale to physicians in the European Union in the second quarter of 2011.
- Non-Invasive SmoothShapes XV for Temporary Reduction of Cellulite: Cynosure acquired substantially all of the assets of Eleme Medical, including the company's non-invasive SmoothShapes® XV system for the temporary reduction in the appearance of cellulite. The SmoothShapes XV system treats cellulite through a proprietary process known as Photomology®, which combines laser and light energy with mechanical manipulation (vacuum and massage) to produce tighter, smoother-looking skin. The system is FDA cleared for marketing in the United States and CE marked for sale in the European Union.
"Product innovation is the engine that continues to drive growth at Cynosure, and we believe that our new cellulite workstations will play an integral role in the company's long-term success," Davin said. "In Cellulaze and SmoothShapes XV, we are building a broad technology platform designed to serve practitioners and their patients who are seeking a solution for either long-lasting or temporary cellulite reduction. We are excited about the future potential of these products to treat what we believe is a significantly underserved aesthetic indication that affects 85 percent of women over the age of 20."
"Our strong balance sheet and aggressive cost-reduction initiatives put us on solid financial footing for the coming year, as we focus on building momentum across our direct and third-party distributor sales," Davin said. "Near-term, we plan to begin rolling out Cellulaze in key European territories, complete the clinical steps necessary for regulatory review of our Cellulaze 510(k) application in the United States and launch our SmoothShapes XV workstation in domestic and international markets. We are optimistic about the prospects for our business in 2011."