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Syneron Reports Fourth Quarter 2007 Revenues of $38.1 Million, the Company's Strongest Quarter Ever
Sales for the Full-Year of 2007 Were $141 Million Representing Year-Over-Year Growth of 21%
YOKNEAM, ISRAEL --
(MARKET WIRE)
-- 02/12/2008 --
Syneron Medical Ltd. ( Revenues for the fourth quarter of 2007 grew to an all-time quarterly high of $38.1 million. North American sales accounted for 63% of total revenues with international sales accounting for the remainder. In the fourth quarter, Syneron incurred a non-operating impairment charge of $5.8 million on its investment portfolio due to uncertainties in the capital markets regarding auction-rate securities. As a result, on a GAAP basis, which also includes $413,000 of stock-based compensation expenses, the company reported a fourth quarter 2007 net profit of $4.4 million, or $0.16 per diluted share. On a non-GAAP basis, without these specified items, net profit in the fourth quarter was $10.6 million, or $0.38 per diluted share. For the full year 2007, revenues grew 21% to $141 million. Net profit on a GAAP basis was $31.2 million, equivalent to $1.12 per diluted share, accounting for the impairment charge and stock-based compensation expense. On a non-GAAP basis, excluding these specified items, net profit for the year was $44.8 million, or $1.61 per diluted share. Syneron's balance sheet and cash position remain strong. Cash flow from operations in the fourth quarter was $21.4 million. Syneron increased its cash position (including long-term deposits) by $7.6 million during the fourth quarter to $203.8 million. This follows the start of Syneron's share repurchase program in November 2007 in which Syneron spent $7.2 million to repurchase 466,000 shares. This also includes the impairment charge. Shareholders' equity totaled $230.8 million. Trade receivables were $40.7 million on December 31, 2007, representing a 12% decline during the fourth quarter. As a consequence, days of sales outstanding, on an average quarterly basis, fell from 122 days in the third quarter of 2007 to 105 days in the fourth quarter of 2007. Corporate highlights of 2007 included:
-- Signing with Proctor & Gamble of an exclusive ten-year joint
development and supply agreement for the marketing and distribution of
Syneron's home use device to improve skin appearance;
-- Introduction of Syneron's first fractional skin treatment product, the
Matrix IR™;
-- Receipt of first FDA clearance of a non-invasive medical device for
reduction in circumferential measurement;
-- Launch of high-powered VelaShape™ body contouring device;
-- Expansion of unique customer care program;
-- Smooth transition of the senior management.
Commenting on the year's achievements, CEO Doron Gerstel said, "I am very pleased with Syneron's performance in 2007, a year in which we reached new record levels of sales in all our markets. Our achievements in 2007 were based both on the superiority of the elos™ technology and the success of unique sales, marketing and customer care programs introduced during the year. "Looking ahead, I believe 2008 will be another year of significant new product introductions at Syneron, aimed at the fast-growing body shaping and skin rejuvenation segments. Last week, we showcased two new products at the American Academy of Dermatology meetings, a laser-assisted liposuction device and the Matrix RF™, an innovative fractional technology for ablative skin rejuvenation. These products are currently scheduled for launch in the second half of 2008. Both products include a recurring revenue stream which will enable Syneron to diversify its revenue base." Commenting on the impairment charge, Syneron CFO Fabian Tenenbaum explained, "Syneron has a consistent history of investing excess cash in highly rated investment-grade securities, with preservation of capital and liquidity as primary objectives. The impaired investments, representing approximately 3% of the portfolio, were held in CDO auction-rate securities that were highly rated (AA and AAA) at the time of purchase and continue to be current on all obligations. However, the liquidity and fair value of these securities has been impacted by the uncertainty in the credit markets and, as a result, the company believes it is prudent to record a permanent impairment charge of $5.8 million. The permanent impairment charge is recorded as a non-operating loss which impacts GAAP fully diluted earnings by $0.21 per share." Regarding revenue guidance for 2008, Mr. Tenenbaum continued, "For 2008, we are taking a prudent approach to the present economic conditions in our planning process. However, given the strength of our new products introduced in 2007 and the new products scheduled to be launched in 2008, we believe that we will continue to see good growth in our sales, with revenues for the full year 2008 expected to increase by approximately 10%." Conference call Syneron Management will host a conference call (dial-in numbers below) to discuss the results at 8:30am ET today, February 12th, 2008. Investors and other interested parties may access a live web cast through Syneron's website at www.syneron.com. Please login at least 10 minutes prior to the conference call in order to download the applicable audio software. Following the conclusion of the call, a replay of the webcast will be available within 24 hours at the Company's website.
Dial-in numbers for conference call: US (toll free): 1-866-966-5335 International: +44-20-3023-4470 Use of Non-GAAP Measures This press release provides financial measures for net profit and net profit per diluted share, that exclude an impairment charge related to the Company's investments in auction-rate securities and a charge related to stock-based compensation and are therefore not calculated in accordance with generally accepted accounting principals (GAAP). Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance because it reflects our operational results and enhances management's and investors' ability to evaluate the Company's net profit and net profit per diluted 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 both GAAP and non-GAAP measures when evaluating the business internally and, therefore, felt 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. About Syneron
Syneron Medical Ltd. ( Forward-Looking Statements This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 relating to future events or our future performance, including statements with respect to our expectations regarding, but not limited to, financial forecast for 2008, new product launches, and maintaining a leadership position in core markets. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in those forward-looking statements, including, but not limited to the risk associated with our ability to commercialize new products and identify new markets for our technology; ability to manage our growth, competition and pricing pressure, risks associated with our international operations, risks associated with regulatory qualifications or approvals, and risks related to our intellectual property. These risks and other factors are summarized under the heading "Risk Factors" in our Annual Report on Form 20-F for the year ended December 31, 2006, filed with the Securities and Exchange Commission on June 15, 2007. These factors are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. We do not assume any obligation to update the forward-looking information contained in this press release. Syneron, the Syneron logo, elos, VelaShape, Matrix IR, and Matrix RF are trademarks of Syneron Medical Ltd. and may be registered in certain jurisdictions. elos (Electro-Optical Synergy) is a proprietary technology of Syneron Medical Ltd. All other names are the property of their respective owners.
Syneron Medical Ltd.
CONSOLIDATED STATEMENT OF INCOME
U.S. dollars in thousands except per share data
Three Months ended Twelve Months ended
December 31, December 31,
2007 2006 2007 2006
(unaudited) (unaudited) (unaudited) (audited)
---------- ----------- ----------- -----------
Revenues 38,066 35,035 140,996 116,976
Cost of Revenues 8,182 5,366 26,995 17,921
---------- ----------- ----------- -----------
Gross Profit 29,884 29,669 114,001 99,055
Operating expenses
Research and development 3,377 2,251 12,511 8,515
Selling and marketing 14,414 14,594 58,605 46,434
General and administrative 3,272 3,036 11,860 9,455
---------- ----------- ----------- -----------
Total operating expenses 21,063 19,881 82,976 64,404
---------- ----------- ----------- -----------
Operating Income 8,821 9,788 31,025 34,651
Financial income
(expenses), net (3,160) 2,396 3,254 6,492
---------- ----------- ----------- -----------
Income before taxes 5,661 12,184 34,279 41,143
Taxes on income 1,235 630 3,035 1,489
---------- ----------- ----------- -----------
Net Income 4,426 11,554 31,244 39,654
Basic net earning per share 0.16 0.42 1.13 1.46
Diluted net earnings per
share 0.16 0.42 1.12 1.44
========== =========== =========== ===========
Weighted average number
of shares used in per
share calculation (in
thousand):
Basic 27,699 27,490 27,690 27,202
Diluted 27,802 27,632 27,880 27,601
========== =========== =========== ===========
Syneron Medical Ltd.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
December 31, December 31,
2007 2006
(unaudited) (audited)
------------- -------------
CURRENT ASSETS
Cash and cash equivalents (1) 42,624 16,036
Short term deposits (1) - 5,000
Marketable securities (1) 124,941 81,493
Trade receivables 40,741 38,478
Other receivables and prepaid expenses 4,385 4,890
Inventories 9,465 7,084
------------- -------------
Total current assets 222,156 152,981
LONG TERM ASSETS
Severance pay fund 225 368
Long-term deposits and other (1) 1,130 1,105
Long-term available for sale marketable
securities (1) 35,122 68,147
Investments in affiliated companies 2,925 -
Property and equipment, net 3,111 1,513
Intangible assets, net 4,860 1,127
------------- -------------
Long Term Assets 47,373 72,260
------------- -------------
Total Assets 269,529 225,241
============= =============
CURRENT LIABILITIES
Trade Payables 7,734 6,452
Other current liabilities 24,991 19,270
------------- -------------
Total current liabilities 32,725 25,722
LONG TERM LIABILITIES
Deferred Revenues 4,991 4,205
Warranty Accruals 730 512
Accrued severance pay 248 405
------------- -------------
Total long-term liabilities 5,969 5,122
SHAREHOLDERS' EQUITY: 230,835 194,397
------------- -------------
Total liabilities and shareholders' equity 269,529 225,241
============= =============
(1) Total Cash and Liquid Investments 203,817 171,781
Syneron Medical Ltd.
CONSOLIDATED STATEMENT OF CASH FLOW
U.S. dollars in thousands
Three Months ended Twelve Months ended
December 31, December 31,
2007 2006 2007 2006
(unaudited) (unaudited) (unaudited) (audited)
---------- ---------- ---------- ----------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income 4,426 11,554 31,244 39,654
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization 562 195 1,263 720
Accrued severance pay, net (13) (21) (14) 4
Decrease (increase) in
trade receivables 5,307 (5,301) (2,263) (17,091)
Decrease in other accounts
receivables and prepaid
expenses 788 1,885 505 3,795
Decrease (increase) in
inventories 56 (1,984) (2,381) (3,650)
Increase in trade payables 3,769 2,571 1,282 4,340
Increase (decrease) in
other current liabilities 1,422 1,106 3,864 (403)
Impairments of investments
in marketable securities 5,776 - 5,776 -
Loss (gain) on available
for sale securities (1,259) (500) (1,059) 52
Equity based compensation 443 2,152 7,809 8,256
Loss on sales of property
and equipment 8 - 8 -
Increase in deferred
revenues and warranty
accruals 155 178 1,722 1,667
---------- ---------- ---------- ----------
Net cash provided by
operating activities 21,440 11,835 47,756 37,344
---------- ---------- ---------- ----------
CASH FLOWS FROM
INVESTING ACTIVITIES
Maturity of (investment in)
short-term deposits, net - - 5,000 (1,500)
Purchase of
available-for-sale
marketable securities (32,716) (53,539) (152,568) (82,207)
Proceeds from sale of
available-for-sale
marketable securities 45,169 43,807 138,542 49,996
Payments for acquisition of
Affiliated Companies,
long-term loans and others (1,550) (19) (2,572) -
Investment in long-term
deposits and other (5) - (25) (2)
Proceeds from sale of
property and equipment 10 - 10 -
Purchase of property and
equipment (788) (252) (2,272) (747)
Purchase of other assets (44) (250) (3,554) (250)
---------- ---------- ---------- ----------
Net cash provided by (used
in) investing activities 10,076 (10,253) (17,439) (34,710)
---------- ---------- ---------- ----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Repurchase of shares from
shareholders (7,199) - (7,199) -
Exercise of stock options
and RSU's 39 18 3,470 332
---------- ---------- ---------- ----------
Net cash provided by (used
in) financing activities (7,160) 18 (3,729) 332
---------- ---------- ---------- ----------
Increase in cash and cash
equivalents 24,356 1,600 26,588 2,966
Cash and cash equivalents
at the beginning of the
period 18,268 14,436 16,036 13,070
---------- ---------- ---------- ----------
Cash and cash equivalents
at the end of the period 42,624 16,036 42,624 16,036
---------- ---------- ---------- ----------
Syneron Medical Ltd.
Reconciliation Between GAAP To Non-GAAP Consolidated Statement Of Income
U.S. dollars in thousands except per share data
Three Months ended Twelve Months ended
December 31, December 31,
For more information, please contact: Fabian Tenenbaum CFO +972 73 244 2329 email: Email Contact Judith Kleinman VP Investor Relations +972 54 646 1688 email: Email Contact |