IRVINE, Calif., May 17, 2017 /PRNewswire/ -- Syneron Medical
Ltd. (NASDAQ: ELOS), a leading global aesthetic device company,
today announced financial results for the three month period ended
March 31, 2017.
First Quarter 2017 Financial Highlights:
- Revenue of $66.9 million, down
2.6% year-over-year
- Product revenue down 4.2% year-over-year
- International product revenue grew 7.7% year-over-year while
North America product revenue
declined 31.7% year-over-year as a result of the sales force
reorganization
- Revenue from emerging products1, which represent the
Company's strategic growth drivers, grew 3.5% year-over-year to
$14.1 million
- GAAP net loss per share of $(0.14), compared to GAAP net loss per share of
$(0.01) in first quarter of 2016
- Non-GAAP net loss per share of $(0.05), compared to Non-GAAP net income per
share of $0.04 in first quarter of
2016
- Cash position as of March 31,
2017 of $78.8 million with no
debt
Amit Meridor, Chief Executive Officer of Syneron Medical, said,
"During the first quarter, our revenue declined due to lower
product revenue in North America,
primarily due to our sales force reorganization in North America, which has caused some
short-term disruption in order to position the business for
long-term growth. This disruption also impacted our emerging
products, with growth slowing to 4% and representing 21% of total
revenue in the quarter. We also had a decline in EMEA product
revenue of 13% due to challenges with some of our subsidiaries in
countries where we sell direct. These headwinds were partially
offset by continued strong double-digit product revenue growth of
18% in the Asia-Pacific region.
Late in the quarter, we received CE Mark for CO2RE Intima, making
it the first in-office laser procedure now CE marked for the
treatment of vaginal atrophy and rejuvenation, and providing a new
growth opportunity in EMEA."
Financial Highlights for the First Quarter Ended
March 31, 2017:
GAAP Gross Margin for the first quarter 2017 was 51.2%,
compared to 51.8% in the first quarter 2016. Non-GAAP gross margin
for the first quarter 2017 was 52.3%, compared to 53.2% in the
first quarter 2016. This reflects lower total revenue, a higher mix
of distributor revenue, and differences in product mix, compared to
the first quarter 2016.
GAAP Operating Loss for the first quarter 2017 was
$(3.9) million, compared to GAAP
operating loss of $(0.3) million in
the first quarter 2016. Non-GAAP operating loss for the first
quarter 2017 was $(0.5) million,
compared to non-GAAP operating income of $1.8 million in the first quarter 2016. GAAP
operating margin for the first quarter 2017 was (5.8)%, compared to
GAAP operating margin of (0.4)% for the first quarter 2016.
Non-GAAP operating margin for the first quarter 2017 was (0.7)%,
compared to Non-GAAP operating margin of 2.6% in the first quarter
2016. This decrease reflects lower total revenue, lower gross
margin, and the reorganization of the Company's North America sales and marketing team,
partially offset by cost efficiencies, and revenue growth from
several of the Company's existing international distribution
channels.
GAAP Net Loss in the first quarter 2017 was $(4.8) million, or $(0.14) per share, compared to GAAP net loss
of $(0.5) million, or $(0.01) per share, in the first quarter 2016.
Non-GAAP net loss in the first quarter 2017 was $(1.6) million, or $(0.05) per share, compared to non-GAAP net
income of $1.3 million, or
$0.04 per share, in the first quarter
2016.
Cash Position As of March 31,
2017, the Company's overall cash position, including cash
and cash equivalents, short-term bank deposits and marketable
securities, was $78.8 million,
compared to $86.4 million as of
December 31, 2016, with no debt.
Subsequent Events
On April 2, 2017, Syneron Candela and Apax Partners,
a leading global private equity advisory firm, entered into a
definitive agreement under which an affiliate of funds advised by
Apax Partners will acquire all of the outstanding shares of Syneron
Candela for $11.00 per share in cash
in a transaction valued at approximately $397 million.
Syneron Candela will hold a Special General Meeting of its
shareholders to vote on the adoption and approval of the merger
proposal. The Special General Meeting will take place on
Thursday, June 15, 2017 at
3:00 p.m. (Israel time), at the Company's executive
offices located at Industrial Zone, Tavor Building, P.O.B. 550,
Yokneam Illit 20692, Israel. The
acquisition is expected to be completed during the third quarter of
2017, subject to Syneron Candela shareholder approval and the
satisfaction of other customary closing conditions.
Syneron Candela will not be hosting a first quarter 2017
conference call due to the definitive agreement to be acquired by
an affiliate of funds advised by Apax Partners.
Important Additional Information about This Transaction and
Where to find it
In connection with the proposed
transaction, Syneron Candela filed a definitive proxy statement on
Form 6-K with the SEC on May 15, 2017
and mailed the definitive proxy statement and proxy
card to its shareholders on or about the same date. Shareholders of
Syneron Candela are urged to read the definitive proxy statement,
including any document incorporated therein by reference and the
attachments thereto, because they contain important information
about Syneron Candela, Apax Partners, the proposed transaction and
related matters. Shareholders are urged to carefully read the
definitive proxy statement and other relevant materials before
making any voting or investment decision with respect to the
proposed transaction. The definitive proxy statement may be
obtained for free at the SEC's website at www.sec.gov. In
addition, the definitive proxy statement is available, without
charge, at Syneron Candela's website
at http://www.syneron-candela.com.
Use of Non-GAAP Measures:
This press release
provides financial measures for gross margin, operating income
(loss), operating margin, net income (loss) and net income (loss)
per share, which exclude expenses related to stock-based
compensation expense, amortization of acquired intangible assets,
Apax Partner's deal related costs, and tax benefit, 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 net income (loss)
per share, and exclude the impact of items 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
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 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, women's intimate wellness treatments, 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, CO2RE, CO2RE Intima,
Profound and elōs Plus.
Founded in 2000, 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.
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.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
This
news release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 that
involve risks and uncertainties, including the statement about the
anticipated closing of the proposed acquisition of the Company
by an affiliate of funds advised
by Apax Partners. Such "forward looking statements"
involve known and unknown risks, uncertainties and other factors
that may cause actual results or performance to differ materially
from those projected. Achievement of these results by the
Company may be affected by many factors, including, but not limited
to, risks and uncertainties regarding the ability to close the
proposed transaction on the proposed terms and within the
anticipated time period, or at all, which is dependent on the
parties' ability to satisfy certain closing conditions, including
shareholder and regulatory approvals; the risk that the benefits of
the potential transaction may not be fully realized or may take
longer to realize than expected; disruption from the transaction
making it more difficult to maintain relationships with customers,
employees or suppliers; the risk that the Company's business may
not perform as expected; as well as general economic
conditions. Additional information regarding these and other
factors is contained in the Company's filings with the SEC,
including those described in the Company's most recent Annual
Report on Form 20-F. The statements made by the Company are based
upon management's current expectations and the Company
undertake no obligation to publicly update or revise any
forward-looking statements to reflect events or circumstances that
may arise after the date of this release except as required by
law.
1 Emerging Products, which represent the Company's
strategic growth drivers, include product and consumable revenue
from UltraShape, VelaShape, PicoWay, Profound and CO2RE
Intima
Syneron Medical
Ltd.
|
Unaudited Condensed
Consolidated Statements of Operations
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
For the
three-months ended
|
|
|
|
March
31,
|
|
March
31,
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
66,880
|
|
$
68,696
|
Cost of
revenues
|
|
32,661
|
|
33,081
|
|
|
|
|
|
|
Gross
profit
|
|
34,219
|
|
35,615
|
Operating
expenses:
|
|
|
|
|
|
Sales and
marketing
|
|
24,020
|
|
22,698
|
|
General and
administrative
|
|
6,080
|
|
7,498
|
|
Research and
development
|
|
6,205
|
|
5,714
|
|
Other expenses,
net
|
|
1,765
|
|
-
|
|
|
|
|
|
|
Total operating
expenses
|
|
38,070
|
|
35,910
|
|
|
|
|
|
|
Operating
loss
|
|
(3,851)
|
|
(295)
|
|
|
|
|
|
|
|
Financial income
(expenses), net
|
|
(742)
|
|
85
|
|
|
|
|
|
|
Net loss before taxes
on income
|
|
(4,593)
|
|
(210)
|
|
|
|
|
|
|
Taxes on
income
|
|
236
|
|
272
|
|
|
|
|
|
|
Net loss
|
|
$
(4,829)
|
|
$
(482)
|
|
|
|
|
|
|
Net loss per
share:
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
|
|
|
Net loss per
share
|
|
$
(0.14)
|
|
$
(0.01)
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
Basic and
diluted
|
|
34,899
|
|
34,842
|
|
|
|
|
|
|
Syneron Medical
Ltd.
|
Unaudited Condensed
Consolidated Balance Sheets
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
2017
|
|
2016
(*)
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
44,373
|
|
$
56,756
|
|
Short-term bank
deposits
|
|
331
|
|
326
|
|
Available-for-sale
marketable securities
|
|
8,543
|
|
10,817
|
|
Trade receivable,
net
|
|
55,105
|
|
57,337
|
|
Other accounts
receivables and prepaid expenses
|
|
14,213
|
|
12,587
|
|
Inventories
|
|
55,388
|
|
47,376
|
|
|
|
|
|
|
Total current
assets
|
|
177,953
|
|
185,199
|
|
|
|
|
|
|
Long-term
assets:
|
|
|
|
|
|
Severance pay
fund
|
|
446
|
|
479
|
|
Long-term deposits
and others
|
|
296
|
|
312
|
|
Long-term
available-for-sale marketable securities
|
|
25,518
|
|
18,522
|
|
Investment in
affiliated company
|
|
16,709
|
|
15,730
|
|
Property and
equipment, net
|
|
12,835
|
|
12,529
|
|
Deferred tax assets,
net
|
|
17,868
|
|
17,640
|
|
Intangible assets,
net
|
|
7,655
|
|
8,516
|
|
Goodwill
|
|
18,258
|
|
18,258
|
|
|
|
|
|
|
Total long-term
assets
|
|
99,585
|
|
91,986
|
|
|
|
|
|
|
Total
assets
|
|
$
277,538
|
|
$
277,185
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Trade
payable
|
|
$
22,445
|
|
$
22,659
|
|
Deferred
revenues
|
|
13,789
|
|
12,838
|
|
Other accounts
payable and accrued expenses
|
|
30,209
|
|
28,976
|
|
|
|
|
|
|
Total current
liabilities
|
|
66,443
|
|
64,473
|
|
|
|
|
|
|
Long-term
liabilities:
|
|
|
|
|
|
Deferred
revenues
|
|
2,730
|
|
2,939
|
|
Warranty
accruals
|
|
1,810
|
|
1,794
|
|
Accrued severance
pay
|
|
496
|
|
559
|
|
|
|
|
|
|
Total long-term
liabilities
|
|
5,036
|
|
5,292
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
206,059
|
|
207,420
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
277,538
|
|
$
277,185
|
|
|
|
|
|
|
(*)
|
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,
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net loss
|
|
|
$
(4,829)
|
|
$
(482)
|
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
Share-based
compensation
|
|
|
757
|
|
933
|
|
|
Depreciation and
amortization
|
|
|
2,305
|
|
2,003
|
|
|
Realized loss,
changes in accrued interest and amortization
of premium on marketable securities
|
|
73
|
|
334
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Trade receivable,
net
|
|
|
2,856
|
|
(4,914)
|
|
|
|
Inventories
|
|
|
(7,758)
|
|
(1,001)
|
|
|
|
Other accounts
receivables and prepaid expenses
|
|
(1,246)
|
|
928
|
|
|
|
Deferred
taxes
|
|
|
(171)
|
|
(125)
|
|
|
|
Trade
payable
|
|
|
(921)
|
|
(414)
|
|
|
|
Deferred
revenues
|
|
|
569
|
|
377
|
|
|
|
Accrued warranty
accruals
|
|
|
(361)
|
|
(542)
|
|
|
|
Other accounts
payable and accrued expenses
|
|
1,390
|
|
(5,026)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
|
|
(7,336)
|
|
(7,929)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(1,027)
|
|
(994)
|
|
|
Purchases of
Intangible asset
|
|
|
-
|
|
(150)
|
|
|
Proceeds from the
sale or maturity of marketable securities
|
|
5,702
|
|
13,279
|
|
|
Purchase of
marketable securities
|
|
|
(10,504)
|
|
(6,531)
|
|
|
Proceeds from
short-term bank deposits, net
|
|
|
(5)
|
|
15
|
|
|
Investment in
affiliated company
|
|
|
(980)
|
|
(1,088)
|
|
|
Other investing
activities
|
|
|
16
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided
by (used in) investing activities
|
|
|
(6,798)
|
|
4,540
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Repurchase of shares
from shareholders
|
|
|
-
|
|
(3,925)
|
|
|
Proceeds from
exercise of stock options
|
|
|
1,755
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided
by (used in) financing activities
|
|
|
1,755
|
|
(3,925)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rates on cash and cash equivalents
|
|
|
(4)
|
|
(222)
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in
cash and cash equivalents
|
|
|
(12,383)
|
|
(7,536)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
|
|
56,756
|
|
56,330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents at end of period
|
|
|
$
44,373
|
|
$
48,794
|
Syneron Medical
Ltd.
|
Reconciliation of
unaudited GAAP to Non GAAP financial measures
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
For the
three-months ended
|
|
|
|
March
31,
|
|
|
March
31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP gross
profit
|
|
$
34,219
|
|
|
$
35,615
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
67
|
|
|
47
|
|
Amortization of
intangible assets
|
|
724
|
|
|
900
|
|
|
|
|
|
|
|
Non-GAAP gross
profit
|
|
$
35,010
|
|
|
$
36,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
loss
|
|
$
(3,851)
|
|
|
$
(295)
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
757
|
|
|
933
|
|
Amortization of
intangible assets
|
|
866
|
|
|
1,173
|
|
APAX's deal related
costs
|
|
1,765
|
|
|
-
|
|
|
|
|
|
|
|
Non-GAAP operating
income (loss)
|
|
$
(463)
|
|
|
$
1,811
|
|
|
|
|
|
|
|
before non-controlling interest
|
|
|
|
|
|
GAAP net
loss
|
|
$
(4,829)
|
|
|
$
(482)
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
757
|
|
|
933
|
|
Amortization of
intangible assets
|
|
866
|
|
|
1,173
|
|
APAX's deal related
costs
|
|
1,765
|
|
|
-
|
|
Tax
benefit
|
|
(170)
|
|
|
(298)
|
|
|
|
|
|
|
|
Non-GAAP net income
(loss)
|
|
$
(1,611)
|
|
|
$
1,326
|
|
|
|
|
|
|
|
Net income (Loss) per
share:
|
|
|
|
|
|
Basic
|
|
|
|
|
|
GAAP net loss per
share
|
|
$
(0.14)
|
|
|
$
(0.01)
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
0.02
|
|
|
0.03
|
|
Amortization of
intangible assets
|
|
0.03
|
|
|
0.03
|
|
APAX's deal related
costs
|
|
0.05
|
|
|
-
|
|
Tax
benefit
|
|
(0.01)
|
|
|
(0.01)
|
|
|
|
|
|
|
|
Non-GAAP net income
(loss) per share
|
|
$
(0.05)
|
|
|
$
0.04
|
|
|
|
|
|
|
|
Diluted
|
|
|
|
|
|
GAAP net loss per
share
|
|
$
(0.14)
|
|
|
$
(0.01)
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
0.02
|
|
|
0.03
|
|
Amortization of
intangible assets
|
|
0.03
|
|
|
0.03
|
|
APAX's deal related
costs
|
|
0.05
|
|
|
-
|
|
Tax
benefit
|
|
(0.01)
|
|
|
(0.01)
|
|
|
|
|
|
|
|
Non-GAAP net income
(loss) per share
|
|
$
(0.05)
|
|
|
$
0.04
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
34,899
|
|
|
34,842
|
|
|
|
|
|
|
|
|
Diluted
|
|
34,899
|
|
|
35,021
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/syneron-medical-reports-first-quarter-2017-revenue-of-669-million-300459611.html
SOURCE Syneron Medical Ltd.