Syneron Medical Reports First Quarter 2016 Revenue of $68.7 Million
Emerging Products(1) Total Revenue Increases 34%
Non-GAAP EPS of $0.04
IRVINE, Calif., May 19, 2016 /PRNewswire/ -- Syneron Medical Ltd. (NASDAQ: ELOS), a leading global aesthetic device company, today announced financial results for the three month period ended March 31, 2016.
First Quarter 2016 Non-GAAP2 Highlights:
- Revenue of $68.7 million, up 8.4% year-over-year
- Emerging products, which represent the Company's strategic growth drivers, grew 34%, primarily driven by the Body Shaping portfolio
- Total product revenue grew 9.5% year-over-year
- Non-GAAP net income of $1.3 million, or $0.04 per share, compared to $0.6 million and $0.02 per share in Q1 2015
- Cash position as of March 31, 2016 of $72.1 million with no debt
Amit Meridor, Chief Executive Officer of Syneron Medical, said, "During the first quarter we capitalized on our global presence and improved execution of our growth strategy. We achieved growth in all geographies, with North America revenue up 7.4% year-over-year, or 12% excluding the CoolTouch OEM business that was discontinued. International results included growth of 7.1% in the EMEA region (8.3% in constant currency) and 10.3% in the Asia-Pacific region (11.1% in constant currency). Global revenue growth was driven by our higher margin Emerging Products, which represent our strategic growth drivers that were up 34%, with nearly half of the dollar growth coming from the Body Shaping portfolio. During the quarter we began our international launch of UltraShape in select markets, including China, and were pleased with the customer interest. In total, Emerging Products revenue accounted for 17% of total revenue in the first quarter 2016, up from 14% in the first quarter 2015. Another important focus for the Company is delivering operating leverage, which improved in the first quarter as we benefitted from the growth driven by the Emerging Products and as we began to leverage our prior investments in an expanded North American sales force."
Revenue Highlights for the First Quarter Ended March 31, 2016:
Total revenue in the first quarter 2016 was $68.7 million, representing growth of 8.4% year-over-year (9.2% in constant currency). First quarter 2016 revenue was driven by 34% growth from the Company's Emerging Products, primarily driven by the Body Shaping portfolio. Total product revenue grew 9.5% year-over-year.
Non-GAAP Financial Highlights for the First Quarter Ended March 31, 2016:
Gross Margin was 53.2% for both first quarter 2016 and 2015 primarily resulting from higher gross margin from Emerging Products offset by increased mix of revenue from the international market.
Operating Income for the first quarter 2016 was $1.8 million, compared to $1.1 million in the first quarter 2015. Operating margin for the first quarter 2016 was 2.6% (3.2% in constant currency), compared to 1.8% in the first quarter 2015. This increase reflects growth from the Company's higher margin Emerging Products, expansion in international markets through the Company's existing infrastructure and initial leverage of the Company's investments in an expanded North American sales force.
Net Income and Earnings per Share in the first quarter 2016 was $1.3 million, or $0.04 per share, compared to net income of $0.6 million, or $0.02 per share, in the first quarter 2015. The Company had an average of 35.0 million shares outstanding in the first quarter 2016, compared to an average of 37.3 million shares outstanding in the first quarter 2015.
Net income earnings per share for the first quarter 2016 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 $1.2 million.
- Stock-based compensation expense of $0.9 million.
- Income tax benefit of $0.3 million.
GAAP Financial Highlights for the First Quarter Ended March 31, 2016:
Gross Margin for the first quarter 2016 was 51.8%, compared to 51.6% in the first quarter 2015.
Operating Loss for the first quarter 2016 was $(0.3) million, compared to an operating loss of $(1.4) million in the first quarter 2015.
Net Loss and Loss per Share in the first quarter 2016 was $(0.5) million, or a loss of $(0.01) per share, compared to a net loss of $(1.5) million, or loss of $(0.04) per share, in the first quarter 2015.
Cash Position: As of March 31, 2016, the Company's overall cash position, including cash, short-term bank deposits and marketable securities, amounted to $72.1 million. During the first quarter 2016 the Company repurchased 563,642 shares of Syneron common stock at an average price of $6.96 per share for $3.9 million, completing the Company's previously authorized $20.0 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, 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, and exclude the impact of non-recurring, unusual terms or trends that are not considered core influences on the results of operations, financial position or cash flows. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information prepared and presented in accordance with GAAP. Management uses non-GAAP measures to make operational and investment decisions and to evaluate the Company's performance and, therefore, believes it is important to make these non-GAAP adjustments available to investors. 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. Management excluded the translation differences because it considers the like-for-like basis of constant currency financial measures more appropriately reflects changes due to operating performance. A reconciliation of each GAAP to non-GAAP financial measure discussed in this press release is contained in the accompanying financial tables.
Conference Call
Syneron management will host its first quarter 2016 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 "Q1 2016 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 877-280-2296 in the U.S., and 1-646-254-3367 from outside of the U.S. The conference pass code is: 7925493.
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 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 |
|||||||
| March 31, |
March 31, |
||||||
| 2016 |
2015 |
||||||
| Revenues |
$ 68,696 |
$ 63,399 |
|||||
| Cost of revenues |
33,081 |
30,714 |
|||||
| Gross profit |
35,615 |
32,685 |
|||||
| Operating expenses: |
|||||||
| Sales and marketing |
22,698 |
21,390 |
|||||
| General and administrative |
7,498 |
6,935 |
|||||
| Research and development |
5,714 |
5,658 |
|||||
| Other income expenses, net |
- |
56 |
|||||
| Total operating expenses |
35,910 |
34,039 |
|||||
| Operating loss |
(295) |
(1,354) |
|||||
| Financial income (expenses), net |
85 |
(243) |
|||||
| Loss before tax on income (tax benefit) |
(210) |
(1,597) |
|||||
| Taxes on income (tax benefit) |
272 |
(128) |
|||||
| Net loss |
$ (482) |
$ (1,469) |
|||||
| Loss per share: |
|||||||
| Basic and diluted |
|||||||
| Net loss per share |
$ (0.01) |
$ (0.04) |
|||||
| Weighted average shares outstanding: |
|||||||
| Basic and diluted |
34,842 |
36,722 |
|||||
| Syneron Medical Ltd. |
|||||
| Unaudited Condensed Consolidated Balance Sheets |
|||||
| (in thousands) |
|||||
| March 31, |
December 31, |
||||
| 2016 |
2015 (*) |
||||
| Assets |
|||||
| Current assets: |
|||||
| Cash and cash equivalents |
$ 48,794 |
$ 56,330 |
|||
| Short-term bank deposits |
342 |
357 |
|||
| Available-for-sale marketable securities |
19,172 |
14,274 |
|||
| Trade receivable, net |
58,742 |
53,423 |
|||
| Other accounts receivables and prepaid expenses |
11,294 |
12,438 |
|||
| Inventories |
50,997 |
49,352 |
|||
| Total current assets |
189,341 |
186,174 |
|||
| Long-term assets: |
|||||
| Severance pay fund |
535 |
509 |
|||
| Long-term deposits and others |
283 |
292 |
|||
| Long-term available-for-sale marketable securities |
3,806 |
15,695 |
|||
| Investment in affiliated company |
19,800 |
19,800 |
|||
| Property and equipment, net |
10,027 |
9,823 |
|||
| Intangible assets, net |
11,672 |
12,694 |
|||
| Goodwill |
21,442 |
21,442 |
|||
| Deferred tax assets |
20,551 |
20,363 |
|||
| Total long-term assets |
88,116 |
100,618 |
|||
| Total assets |
$ 277,457 |
$ 286,792 |
|||
| Liabilities and Stockholders' Equity |
|||||
| Current liabilities: |
|||||
| Trade payable |
$ 23,165 |
$ 23,045 |
|||
| Deferred revenues |
13,171 |
12,481 |
|||
| Other accounts payable and accrued expenses |
30,848 |
36,316 |
|||
| Total current liabilities |
67,184 |
71,842 |
|||
| Long-term liabilities: |
|||||
| Contingent consideration |
878 |
878 |
|||
| Deferred revenues |
3,264 |
3,395 |
|||
| Warranty accruals |
945 |
861 |
|||
| Accrued severance pay |
639 |
603 |
|||
| Deferred tax liabilities |
- |
- |
|||
| Total long-term liabilities |
5,726 |
5,737 |
|||
| Stockholders' equity: |
204,547 |
209,213 |
|||
| Total liabilities and stockholders' equity |
$ 277,457 |
$ 286,792 |
|||
| (*) |
Derived from audited financial statements |
||||
| Syneron Medical Ltd. |
||||||||||||
| Unaudited Condensed Consolidated Statements of Cash Flows |
||||||||||||
| (in thousands) |
||||||||||||
| For the three-months ended |
||||||||||||
| March 31, |
March 31, |
|||||||||||
| 2016 |
2015 |
|||||||||||
| Cash flows from operating activities: |
||||||||||||
| Net loss |
$ (482) |
$ (1,469) |
||||||||||
| Adjustments to reconcile net loss to net cash |
||||||||||||
| Share-based compensation |
933 |
929 |
||||||||||
| Depreciation and amortization |
2,003 |
2,226 |
||||||||||
| Realized loss, changes in accrued interest and amortization of premium (discount) on marketable securities |
334 |
175 |
||||||||||
| Revaluation of contingent liability |
- |
56 |
||||||||||
| Changes in operating assets and liabilities: |
||||||||||||
| Trade receivable, net |
(4,914) |
(564) |
||||||||||
| Inventories |
(1,001) |
(1,938) |
||||||||||
| Other accounts receivables |
928 |
1,615 |
||||||||||
| Deferred taxes |
(125) |
(403) |
||||||||||
| Trade payable |
(414) |
(852) |
||||||||||
| Deferred revenue |
377 |
2,473 |
||||||||||
| Accrued warranty accruals |
(542) |
(2,468) |
||||||||||
| Other accrued liabilities |
(5,026) |
(5,426) |
||||||||||
| Net cash used in operating activities |
(7,929) |
(5,646) |
||||||||||
| Cash flows from investing activities: |
||||||||||||
| Purchases of property and equipment |
(994) |
(1,136) |
||||||||||
| Purchases of Intangible asset |
(150) |
- |
||||||||||
| Proceeds from the sale or maturity of marketable securities |
13,279 |
7,700 |
||||||||||
| Purchase of marketable securities |
(6,531) |
(5,853) |
||||||||||
| Proceeds from short-term bank deposits, net |
15 |
1,060 |
||||||||||
| Acquisition of shares held by non-controlling shareholders |
(1,088) |
- |
||||||||||
| Other investing activities |
9 |
(45) |
||||||||||
| Net cash provided by investing activities |
4,540 |
1,726 |
||||||||||
| Cash flows from financing activities: |
||||||||||||
| Repurchase of shares from shareholders |
(3,925) |
(3,918) |
||||||||||
| Proceeds from exercise of stock options |
- |
915 |
||||||||||
| Net cash used in financing activities |
(3,925) |
(3,003) |
||||||||||
| Effect of exchange rates on cash and cash equivalents |
(222) |
(752) |
||||||||||
| Net decrease in cash and cash equivalents |
(7,536) |
(7,675) |
||||||||||
| Cash and cash equivalents at beginning of period |
56,330 |
57,189 |
||||||||||
| Cash and cash equivalents at end of period |
$ 48,794 |
$ 49,514 |
||||||||||
| Syneron Medical Ltd. |
||||||
| Unaudited Non-GAAP Financial Measures and Reconciliation |
||||||
| (in thousands, except per share data) |
||||||
| For the three-months ended |
||||||
| March 31, |
March 31, |
|||||
| 2016 |
2015 |
|||||
| GAAP gross profit |
$ 35,615 |
$ 32,685 |
||||
| Stock-based compensation |
47 |
50 |
||||
| Amortization of intangible assets |
900 |
1,010 |
||||
| Non-GAAP gross profit |
$ 36,562 |
$ 33,745 |
||||
| GAAP operating loss |
$ (295) |
$ (1,354) |
||||
| Stock-based compensation |
933 |
929 |
||||
| Amortization of intangible assets |
1,173 |
1,485 |
||||
| Remeasurement of contingent consideration |
- |
56 |
||||
| Other non-recurring items |
- |
(5) |
||||
| Non-GAAP operating income |
$ 1,811 |
$ 1,111 |
||||
| GAAP net loss |
$ (482) |
$ (1,469) |
||||
| Stock-based compensation |
933 |
929 |
||||
| Amortization of intangible assets |
1,173 |
1,485 |
||||
| Remeasurement of contingent consideration |
- |
56 |
||||
| Other non-recurring items |
- |
(5) |
||||
| Tax benefit |
(298) |
(390) |
||||
| Non-GAAP net income |
$ 1,326 |
$ 606 |
||||
| Income (loss) per share: |
||||||
| Basic |
||||||
| GAAP net income (loss) per share |
$ (0.01) |
$ (0.04) |
||||
| Stock-based compensation |
0.03 |
0.03 |
||||
| Amortization of intangible assets |
0.03 |
0.04 |
||||
| Remeasurement of contingent consideration |
- |
- |
||||
| Other non-recurring items |
- |
- |
||||
| Tax benefit |
(0.01) |
(0.01) |
||||
| Non-GAAP net income per share |
$ 0.04 |
$ 0.02 |
||||
| Diluted |
||||||
| GAAP net loss per share |
$ (0.01) |
$ (0.04) |
||||
| Stock-based compensation |
0.03 |
0.03 |
||||
| Amortization of intangible assets |
0.03 |
0.04 |
||||
| Remeasurement of contingent consideration |
- |
- |
||||
| Other non-recurring items |
- |
- |
||||
| Tax benefit |
(0.01) |
(0.01) |
||||
| Non-GAAP net income per share |
$ 0.04 |
$ 0.02 |
||||
| Weighted average shares outstanding: |
||||||
| Basic |
34,842 |
36,722 |
||||
| Diluted |
35,021 |
37,328 |
||||
| Syneron Medical Ltd. |
||||
| Unaudited Non-GAAP Financial Measures and Reconciliation |
||||
| (in thousands, except per share data) |
||||
| For the three-months ended |
||||
| March 31, |
||||
| 2016 |
||||
| GAAP revenue |
$ 68,696 |
|||
| Exclude foreign exchange impact |
540 |
|||
| Non-GAAP revenue |
$ 69,236 |
|||
| GAAP gross profit |
$ 35,615 |
|||
| Stock-based compensation |
47 |
|||
| Amortization of intangible assets |
900 |
|||
| Exclude foreign exchange impact |
540 |
|||
| Non-GAAP gross profit |
$ 37,102 |
|||
| GAAP operating loss |
$ (295) |
|||
| Stock-based compensation |
933 |
|||
| Amortization of intangible assets |
1,173 |
|||
| Exclude foreign exchange impact |
396 |
|||
| Non-GAAP operating income |
$ 2,207 |
|||
(a) Foreign exchange impact represents the difference between actual first quarter 2016 revenue and first quarter 2016 revenue calculated using exchange rates for the comparable period in 2015.
1 Emerging Products, which represent the Company's strategic growth drivers, include UltraShape, VelaShape, PicoWay, Profound and CO2RE Intima
2 The first quarter 2016 year-over-year comparisons are on a non-GAAP basis, excluding items set forth in the section titled "Non-GAAP Financial Highlights for the First Quarter Ended March 31, 2016."
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SOURCE Syneron Medical Ltd.
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