Syneron Medical Ltd. (NASDAQ: ELOS), a leading global aesthetic device company, today announced financial results for the three month period ended June 30, 2015.
Second Quarter 2015 and Recent Non-GAAP Highlights:
- Revenue of $73.5 million, up 14% year-over-year, or 19% in constant currency.
- North American product sales grew 45% year-over-year.
- International sales grew 8% year-over-year, or 15% in constant currency, including 14% product growth in the EMEA region and 25% product growth in the Asia-Pacific region.
- Non-GAAP gross margin of 53.9%, or 55.6% in constant currency, compared to 54.2% in Q2 2014.
- Non-GAAP net income of $2.5 million, or $0.07 per share.
- Ended quarter with $92.3 million overall cash position, and no debt.
North America Body Shaping Division Highlights:
- Sold 63 UltraShape™ systems.
- Generated strong double-digit sequential growth of per procedure Focal Treatment Zones (FTZ).
- Strong acceptance of Syneron's unique combination treatment with VelaShape and UltraShape contributes to VelaShape III sales and generates superior body shaping clinical outcome.
- Advanced clinical trial activity in support of expanding UltraShape's FDA cleared indications for use.
Amit Meridor, Chief Executive Officer of Syneron, said, "We achieved another solid quarter in our North America Body Shaping Division, driven by the expansion of our sales team and marketing initiatives. We remain on track with our UltraShape revenue plan for the year. We are also investing in clinical trials to expand our FDA UltraShape clinical indications for additional body areas."
North America Aesthetic Division Highlights:
- Generated strong PicoWay™ sales.
- PicoWay received FDA clearance in the U.S. for treatment of pigmented lesions.
- Launched Profound™ RF micro-needle technology for minimally invasive sub-mental and face lift treatments, generating positive initial traction.
Mr. Meridor added, "Growth in the North America Aesthetic Division was driven by the ongoing launch of PicoWay, good results from the Gentle Pro family of dual wavelength laser systems, and launch of the Profound minimally invasive micro-needle RF system. FDA clearance of PicoWay for treatment of pigmented lesions further expands its market opportunity and strengthens our confidence in its growth potential. PicoWay also has strong potential growth trajectory outside of North America. We were pleased to receive regulatory clearance in the important Korean market in late July."
Revenue: Second quarter 2015 revenue was $73.5 million, up 14%, compared to $64.6 million in the second quarter 2014. Second quarter 2015 constant currency revenue growth was 19%, when excluding the negative impact of $3.1 million related to the change in foreign currency exchange rates as compared to the second quarter 2014.
Mr. Meridor said, "We achieved three consecutive quarters of double-digit revenue growth, demonstrating strong momentum in our global business. This includes another quarter of robust product growth in the EMEA and Asia-Pacific regions driven by our global sales infrastructure and broad product portfolio. Looking forward, we see significant growth potential with the re-launch of UltraShape in international markets and the launch of three new facial and body shaping products in 2016 based on our Candela and ELOS™ proprietary technologies."
Shimon Eckhouse, Active Chairman of Syneron, said, "Our development team is focused on bringing highly innovative products to our aesthetic doctor customers. The Profound launched in the second quarter offers a revolutionary single treatment - 30-minute face and neck procedure based on our proprietary RF micro needle technology. In recently published clinical studies, the Profound demonstrated clinical results equivalent to 50% of face lift surgery in face and neck treatments. In 2016 we also plan to launch two additional products for facial aesthetic applications based on Candela's pulsed dye laser and solid state laser technologies combined with Syneron's proprietary ELOS™ technology. Additional product launches planned for 2016 include significant enhancements to our body shaping portfolio."
Non-GAAP Financial Highlights for the Second Quarter Ended June 30, 2015:
Gross Margin for the second quarter 2015 was 53.9%, or 55.6% in constant currency, compared to 54.2% in the second quarter 2014. The year-over-year improvement in constant currency gross margin reflects favorable geographic mix and strong product growth, particularly in North America, including the newly introduced high margin UltraShape and PicoWay products.
Operating Income for the second quarter 2015 was $2.9 million, or $4.4 million in constant currency, compared to $3.2 million in the second quarter 2014. This reflects the Company's investments in sales and marketing expenses related to the significant expansion of the Company's North American sales force, including the establishment of the dedicated body shaping team. It also includes a negative impact of $1.5 million due to changes in foreign currency exchange rates.
Net Income and Earnings Per Share for both the second quarter 2015 and second quarter 2014 was $2.5 million, or $0.07 per share.
Net income and earnings per share for the second quarter 2015 are adjusted to exclude the following items, which are detailed in the Company's financial tables presented at the end of this press release:
- Amortization of acquired intangible assets of $1.5 million.
- Stock-based compensation of $0.9 million.
- Fair Market Value (FMV) income adjustment of $0.6 million.
- Non recurring legal fees of $1.4 million.
- Income tax benefit of $0.4 million.
GAAP Financial Highlights for the Second Quarter Ended June 30, 2015:
Gross Margin for the second quarter 2015 was 52.4%, compared to 52.6% in the second quarter 2014. The year-over-year flat gross margin reflects favorable geographic mix and strong product growth, particularly in North America, including the newly introduced high margin UltraShape and PicoWay products.
Operating loss for the second quarter 2015 was $0.2 million, compared to $0.1 million in the second quarter 2014. This reflects the Company's investments in sales and marketing infrastructure related to the significant expansion of the Company's North American sales force, including the establishment of the dedicated body shaping team. It also includes non-recurring legal fees of $0.8 million and a negative impact of $1.5 million due to changes in foreign currency exchange rates.
Net Loss and Loss Per Share in the second quarter 2015 was $0.3 million, or $0.01 per share, compared to $0.4 million, or $0.01 per share in the first quarter 2014.
Cash Position: As of June 30, 2015, the Company's overall cash position, including cash, short-term bank deposits and marketable securities, amounted to $92.3 million, compared to $99.8 million as of March 31, 2015. Cash use in the second quarter 2015 included investments in inventory to support anticipated growth in 2015 and increased working capital related to the Company's strong performance. The reduction in cash position also included the repurchase of 55,025 shares of Syneron stock during the second quarter 2015 at an average price of $10.94 for $0.6 million under the Company's previously authorized $20 million share repurchase program. Since December 2014, the Company has repurchased a total of 431,677 shares at an average price of $11.10 for $5.0 million under this program.