Syneron Medical Reports Record Fourth Quarter 2015 Revenue of $78.9 Million

22 Feb, 2016, 07:00 ET from Syneron Medical Ltd.

IRVINE, Calif., Feb. 22, 2016 /PRNewswire/ -- Syneron Medical Ltd. (NASDAQ: ELOS), a leading global aesthetic device company, today announced financial results for the three and twelve month periods ended December 31, 2015.

Fourth Quarter 2015 and Recent Non-GAAP[1] Highlights:

  • Record revenue of $78.9 million, compared to $74.1 million in the fourth quarter 2014, up 7% year-over-year, or 11% in constant currency
  • North American product sales grew 23% year-over-year
  • Total Body Shaping revenue of $9.3 million, including North America UltraShape® revenue of $5.2 million; sold 54 UltraShape® systems in the quarter
  • PicoWay revenue of $7.2 million
  • Non-GAAP gross margin of 56.5%, or 58.1% in constant currency, compared to 55.7% in Q4 2014
  • Non-GAAP net income of $2.4 million, or $0.07 per share, compared to $3.2 million and $0.09 per share in Q4 2014
  • Generated $15.2 million in cash flow from operations
  • Repurchased $6.7 million of common stock during fourth quarter

Full Year 2015 Non-GAAP[2] Highlights:

  • Revenue of $277.9 million, compared to $255.8 million in 2014, up 9% year-over-year, or 13% in constant currency
  • North American product sales grew 27% year-over-year
  • Total Body Shaping revenue of $36.1 million, including North America UltraShape® revenue of $16.2 million
  • PicoWay revenue of $18.7 million
  • Non-GAAP gross margin of 55.2%, or 56.9% in constant currency, compared to 54.8% in 2014
  • Non-GAAP net income of $6.4 million, or $0.18 per share, compared to $7.9 million and $0.22 per share in 2014
  • Repurchased $15.6 million of common stock during 2015, $20 million board approved program completed in February 2016

Amit Meridor, Chief Executive Officer of Syneron Medical, said, "We ended 2015 with record quarterly revenue, driven by positive momentum in our initiatives to penetrate the high growth segments of the aesthetic market. As a result, we achieved our fifth consecutive quarter of double digit product growth in North America, as well as strong growth in the Asia-Pacific region. This was partially offset by weakness in the EMEA region, where market conditions continue to be challenging."

Revenue Highlights for the Fourth Quarter Ended December 31, 2015:

Total revenue in the fourth quarter 2015 was $78.9 million, representing growth of 7% year-over-year, or 11% in constant currency. Fourth quarter 2015 revenue included $1.6 million from a settlement with an OEM customer of the Company's CoolTouch subsidiary related to the discontinuation of their contract following a change in ownership.

During the quarter, North America UltraShape® revenue was $5.2 million, contributing to full-year sales of $16.2 million in 2015, which was the first full year of its launch. Syneron generated $7.2 million of revenue from PicoWay during the quarter, with full-year revenue coming in at $18.7 million in 2015, which was the first full year of its launch. This result was led by the international launch of PicoWay Resolve during the fourth quarter; Resolve expands PicoWay's use to a wider range of skin rejuvenation and facial treatments.

Non-GAAP Financial Highlights for the Fourth Quarter Ended December 31, 2015:

Gross Margin for 2015 fourth quarter was 56.5%, or 58.1% in constant currency, compared to 55.7% in the fourth quarter 2014. The year-over-year improvement in constant currency gross margin reflects mainly the newly introduced high margin UltraShape® in North America and PicoWay products worldwide.

Operating Income for the fourth quarter 2015 was $3.0 million, or $5.0 million in constant currency, compared to $5.2 million in the fourth 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 a dedicated body shaping team.

Net Income and Earnings Per Share in the fourth quarter 2015 was $2.4 million, or $0.07 per share, compared to net income of $3.2 million, or $0.09 per share in the fourth quarter 2014.

Net income and earnings per share for the fourth 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 $1.3 million.
  • Stock-based compensation expense of $1.0 million.
  • Re-measurement of contingent consideration fair value of $(4.2) million
  • Impairment of intangible asset and goodwill of $1.5 million
  • Fair Market Value (FMV) adjustment of $1.0 million
  • Income tax positive adjustment of $0.4 million
  • Other non-recurring expenses of $0.2 million

GAAP Financial Highlights for the Fourth Quarter Ended December 31, 2015:

Gross Margin for the fourth quarter 2015 was 55.0%, compared to 54.4% in the fourth quarter 2014. The year-over-year improvement in gross margin reflects mainly the newly introduced high margin UltraShape® in North America and PicoWay products worldwide.

Operating Income for the fourth quarter 2015 was $2.2 million, compared to an operating loss of $(0.2) million in the fourth quarter 2014. This reflects mainly the company's positive re-measurement of its contingent consideration fair value, net of $1.5 million impairment of the company's goodwill and intangibles asset, $1 million fair market value negative adjustment of the company's investment in a joint venture and net of investments in the Company's North America sales force, including the establishment of the Body Shaping team.

Net Income and Earnings Per Share in the fourth quarter 2015 was $2.0 million, or $0.05 per share, compared to a net loss of ($1.4) million, or loss of $0.04 per share in the fourth quarter 2014. This reflects mainly the company's positive re-measurement of its contingent consideration fair value, net of $1.5 million impairment of the company's goodwill and intangibles asset, $1 million fair market value negative adjustment of the company's investment in a joint venture and net of investments in the Company's North America sales force, including the establishment of the Body Shaping team.

Cash Position: As of December 31, 2015, the Company's overall cash position, including cash, short-term bank deposits and marketable securities, amounted to $86.7 million, compared to $79.5 million as of September 30, 2015. During the fourth quarter 2015 the Company repurchased 915,983 shares of Syneron common stock at an average price of $7.46 per share for $6.7 million under the Company's previously authorized $20 million share repurchase program. From December 2014 through year-end 2015, the Company repurchased a total of 1,810,654 shares at an average price of $9.00 per share for an aggregate of $16.1 million under this program. In January and February 2016, the Company completed its previously authorized $20 million share repurchase program.

Use of Non-GAAP Measures This press release provides financial measures for gross margin, operating income (loss), net income (loss) and earnings (loss) per share, which exclude expenses related to amortization of acquired intangible assets, stock-based compensation expense, re-measurement of contingent consideration fair value, impairment of intangible assets and goodwill, Fair Market Value (FMV) adjustment, tax benefit, changes in foreign currency exchange rates and non-recurring expenses, 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 ongoing operational results, operating income (loss), net income (loss) and earnings (loss) per 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 non-GAAP measures when evaluating the business internally and, therefore, believes 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. Constant currency results assume foreign revenues, gross profit and operating income (loss) are translated from foreign currencies to the U.S. dollar, at rates consistent with those in the prior year.

Conference Call Syneron management will host its fourth quarter 2015 earnings conference call today at 8:30 a.m. ET. Syneron will be broadcasting live via the Investor Relations section of its website, www.investors.syneron.com. To access the call, enter the Syneron Investor Relations website, then click on the webcast link "Q4 2015 Results Webcast."

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 877-280-2342 in the U.S., and 1-212-444-0895 from outside of the U.S. The conference pass code is: 8495560.

About Syneron Candela: Syneron Candela is a leading global aesthetic device company with a comprehensive product portfolio and a global distribution footprint. The Company's technology enables physicians to provide advanced solutions for a broad range of medical-aesthetic applications including body contouring, hair removal, wrinkle reduction, tattoo removal, improving the skin's appearance through the treatment of superficial benign vascular and pigmented lesions, and the treatment of acne, leg veins and cellulite. The Company sells its products under three distinct brands, Syneron, Candela and CoolTouch, and has a wide portfolio of trusted, leading products including UltraShape, VelaShape, GentleLase, VBeam Perfecta, PicoWay, Profound and elos Plus.

Founded in 2000, the corporate, R&D, and manufacturing headquarters for Syneron Candela are located in Israel. Syneron Candela also has R&D and manufacturing operations in the U.S. The company markets, services and supports its products in 86 countries. It has offices in North America, France, Germany, Italy, Portugal, Spain, UK, Australia, China, Japan, and Hong Kong and distributors worldwide.

For additional information, please visit http://www.syneron-candela.com.

Syneron, the Syneron logo, UltraShape, eMatrix and elos are trademarks of Syneron Medical Ltd. and may be registered in certain jurisdictions. The elos (Electro-Optical Synergy) technology is a proprietary technology of Syneron Medical Ltd. All other names are the property of their respective owners.

Syneron Medical Ltd.

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share data)

For the three-months ended

For the twelve-months ended

December 31,

December 31,

December 31,

December 31,

2015

2014

2015

2014

Revenues

$ 78,889

$ 74,062

$ 277,849

$ 255,750

Cost of revenues

35,507

33,755

128,884

119,771

Gross profit

43,382

40,307

148,965

135,979

Operating expenses:

Sales and marketing

27,121

23,136

97,163

80,741

General and administrative

8,286

7,915

30,061

28,368

Research and development

7,906

6,478

25,270

24,619

Other (income) expenses, net

(2,109)

2,945

2,930

4,468

Total operating expenses

41,204

40,474

155,424

138,196

Operating income (loss)

2,178

(167)

(6,459)

(2,217)

Financial Income (loss), net

-

(316)

167

(688)

Income (Loss) before tax on income (tax benefit)

2,178

(483)

(6,292)

(2,905)

Taxes on income

203

886

48

2,295

Net income (loss)

$ 1,975

$ (1,369)

$ (6,340)

$ (5,200)

Income (Loss) per share:

Basic

Net income (loss) per share

$ 0.06

$ (0.04)

$ (0.17)

$ (0.14)

Diluted

Net income (loss) attributable to Syneron shareholders

$ 0.05

$ (0.04)

$ (0.17)

$ (0.14)

Weighted average shares outstanding:

Basic

35,870

36,770

36,416

36,703

Diluted

36,041

36,770

36,416

36,703

Syneron Medical Ltd.

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

December 31,

December 31,

2015

2014 (*)

Assets

Current assets:

Cash and cash equivalents

$ 56,330

$ 57,189

Short-term bank deposits

357

6,414

Available-for-sale marketable securities

14,274

30,055

Trade receivable, net

53,423

55,899

Other accounts receivables and prepaid expenses

15,386

15,168

Inventories

49,352

36,894

Total current assets

189,122

201,619

Long-term assets:

Severance pay fund

509

514

Long-term deposits and others

292

267

Long-term available-for-sale marketable securities

15,695

16,785

Investment in affiliated company

19,800

20,130

Property and equipment, net

9,823

7,011

Intangible assets, net

12,694

21,698

Goodwill

21,442

25,285

Deferred taxes

17,262

13,525

Total long-term assets

97,517

105,215

Total assets

$ 286,639

$ 306,834

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$ 23,045

$ 21,948

Deferred revenues

12,481

14,054

Other accounts payable and accrued expenses

36,163

32,595

Total current liabilities

71,689

68,597

Long-term liabilities:

Contingent consideration liability

878

4,983

Deferred revenues

3,395

3,782

Warranty accruals

861

860

Accrued severance pay

603

507

Deferred taxes

-

140

Total long-term liabilities

5,737

10,272

Stockholders' equity:

209,213

227,965

Total liabilities and stockholders' equity

$ 286,639

$ 306,834

(*)

Derived from audited financial statements

Syneron Medical Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)

For the twelve-months ended

December 31,

December 31,

2015

2014

Cash flows from operating activities:

Net loss

$ (6,340)

$ (5,200)

Adjustments to reconcile net loss to net cash

Non-cash items reported in discontinued operations

Share-based compensation

3,775

3,700

Depreciation and amortization

8,625

8,283

Impairments of intangible assets

7,132

2,890

Realized loss, changes in accrued interest and amortization of premium (discount) on marketable securities

1,770

757

Adjustment to fair value of investment in JV

330

4,590

Revaluation of contingent liability

(4,105)

(3,012)

Changes in operating assets and liabilities:

Trade receivable, net

(778)

(2,817)

Inventories

(14,520)

(3,503)

Other accounts receivables

(191)

183

Deferred taxes

(3,909)

(976)

Accounts payable

1,171

3,994

Deferred revenue

1,197

1,910

Accrued warranty accruals

103

675

Other accrued liabilities

2,912

4,639

Net cash provided by (used in) operating activities

(2,828)

16,113

Cash flows from investing activities:

Purchases of property and equipment

(4,870)

(2,151)

Purchases of Intangible asset

-

(600)

Proceeds from the sale or maturity of marketable securities

38,815

37,811

Purchase of marketable securities

(23,747)

(30,945)

Proceeds from short-term bank deposits, net

6,051

11,099

Acquisition of a subsidiary

-

(11,016)

Other investing activities

(25)

(9)

Net cash provided by investing activities

16,224

4,189

Cash flows from financing activities:

Repurchase of shares from shareholders

(15,590)

(485)

Proceeds from exercise of stock options

2,125

1,525

Net cash provided by (used in) financing activities

(13,465)

1,040

Effect of exchange rates on cash and cash equivalents

(790)

(1,736)

Net increase (decrease) in cash and cash equivalents

(859)

19,606

Cash and cash equivalents at beginning of period

57,189

37,583

Cash and cash equivalents at end of period

$ 56,330

$ 57,189

Syneron Medical Ltd.

Unaudited Non-GAAP Financial Measures and Reconciliation

(in thousands, except per share data)

For the three-months ended

For the twelve-months ended

December 31,

December 31,

December 31,

December 31,

2015

2014

2015

2014

GAAP gross profit

$ 43,382

$ 40,307

$ 148,965

$ 135,979

Stock-based compensation

48

(65)

196

159

Amortization of intangible assets

1,010

1,010

4,040

4,020

Other non-recurring items

128

-

128

Non-GAAP gross profit

$ 44,568

$ 41,252

$ 153,329

$ 140,158

GAAP operating income (loss)

$ 2,178

$ (167)

$ (6,459)

$ (2,217)

Stock-based compensation

964

684

3,774

3,700

Amortization of intangible assets

1,295

1,510

5,711

5,821

FMV adjustment to investment in JV

960

-

330

-

Remeasurement of contingent consideration

(4,161)

(3,613)

(4,105)

(3,613)

Impairment of intangible assets

1,519

-

7,132

-

Other non-recurring items

223

6,788

1,879

9,184

Non-GAAP operating income

$ 2,978

$ 5,202

$ 8,262

$ 12,875

0.00

GAAP net income (loss)

$ 1,975

$ (1,369)

$ (6,340)

$ (5,200)

Stock-based compensation

964

684

3,774

3,700

Amortization of intangible assets

1,295

1,510

5,711

5,821

FMV adjustment to investment in JV

960

-

330

-

Remeasurement of contingent consideration

(4,161)

(3,613)

(4,105)

(3,613)

Impairment of intangible assets

1,519

-

7,132

-

Other non-recurring items

223

6,788

1,879

9,184

Tax benefit

(356)

(810)

(1,992)

(1,948)

Non-GAAP net income before non-controlling interest

$ 2,419

$ 3,190

$ 6,389

$ 7,944

Income (Loss) per share:

Basic

GAAP net income (loss) per share before non-controlling interest

$ 0.06

$ (0.04)

$ (0.17)

$ (0.14)

Stock-based compensation

0.03

0.02

0.11

0.10

Amortization of intangible assets

0.04

0.04

0.16

0.16

FMV adjustment to investment in JV

0.03

-

0.01

-

Remeasurement of contingent consideration

(0.12)

(0.09)

(0.11)

(0.10)

Impairment of intangible assets

0.04

-

0.20

-

Other non-recurring items

0.01

0.18

0.05

0.25

Tax benefit

(0.01)

(0.02)

(0.06)

(0.05)

Non-GAAP net income per share operations before non-controlling interest

$ 0.08

$ 0.09

$ 0.19

$ 0.22

Diluted

GAAP net income (loss) per share before non-controlling interest

$ 0.05

$ (0.04)

$ (0.17)

$ (0.14)

Stock-based compensation

0.03

0.02

0.10

0.10

Amortization of intangible assets

0.04

0.04

0.16

0.16

FMV adjustment to investment in JV

0.03

-

0.01

-

Remeasurement of contingent consideration

(0.12)

(0.09)

(0.11)

(0.10)

Impairment of intangible assets

0.04

-

0.20

-

Other non-recurring items

0.01

0.18

0.05

0.25

Tax benefit

(0.01)

(0.02)

(0.06)

(0.05)

Non-GAAP net income per share operations before non-controlling interest

$ 0.07

$ 0.09

$ 0.18

$ 0.22

Weighted average shares outstanding:

Basic

35,870

36,770

36,416

36,703

Diluted

36,051

37,128

36,739

37,160

Syneron Medical Ltd.

Unaudited Non-GAAP Financial Measures and Reconciliation

(in thousands, except per share data)

For the three-months ended

For the twelve-months ended

December 31,

December 31,

2015

2015

GAAP Revenue

$ 78,889

$ 277,849

Exclude foreign exchange impact

3,036

12,038

Non-GAAP Revenue

$ 81,925

$ 289,887

GAAP gross profit

$ 43,382

$ 148,965

Stock-based compensation

48

196

Amortization of intangible assets

1,010

4,040

Other non-recurring items

128

128

Exclude foreign exchange impact

3,036

11,682

Non-GAAP gross profit

$ 47,604

$ 165,011

GAAP operating income

$ 2,178

$ (6,459)

Stock-based compensation

964

3,774

Amortization of intangible assets

1,295

5,711

FMV adjustment to investment in JV

960

330

Remeasurement of contingent consideration

(4,161)

(4,105)

Impairment of intangible assets

1,519

7,132

Other non-recurring items

223

1,879

Exclude foreign exchange impact

2,011

5,409

Non-GAAP operating income

$ 4,989

$ 13,671

[1] The fourth quarter 2015 year-over-year comparisons are on a non-GAAP basis, excluding items set forth in the section titled "Non-GAAP Financial Highlights for the Fourth Quarter Ended December 31, 2015." [2] The full year 2015 year-over-year comparisons are on a non-GAAP basis, excluding items set forth in the section titled "Non-GAAP Financial Highlights for the Full Year Ended December 31, 2015"

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SOURCE Syneron Medical Ltd.



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http://www.syneron-candela.com