WESTFORD, Mass., May 3, 2011 /PRNewswire/ -- Cynosure, Inc. (NASDAQ: CYNO) today announced financial results for the three months ended March 31, 2011.
Revenues for the first quarter of 2011 increased 16 percent to $21.9 million from $18.9 million in the same period of 2010. Net loss for the first quarter of 2011 was $1.9 million, or $0.15 per basic and diluted share, compared with a net loss of $2.8 million, or $0.22 per basic and diluted share, for the comparable period of 2010.
Gross profit for the three months ended March 31, 2011 was 55.2 percent of total revenues, compared with 57.2 percent for the same period of 2010. Results for the first quarter of 2011 included a one-time purchase accounting adjustment for the company's acquisition of the assets of Eleme Medical earlier this year. The purchase accounting adjustment, which related to the write-up of Eleme Medical's finished goods inventory sold during the quarter, had the effect of reducing Cynosure's 2011 first quarter gross profit by approximately 100 basis points.
Total operating expenses increased 5 percent to $13.9 million, or 64 percent of revenues, in the first quarter of 2011 from $13.3 million, or 71 percent of revenues, for the same period of 2010. Higher operating expenses in the 2011 period reflected higher research and development and sales and marketing costs associated with the company's new cellulite reduction platform, comprised of the new Cellulaze™ Cellulite Laser Workstation and SmoothShapes® XV.
"Laser product revenue increased 17 percent in the first quarter, as our North American direct sales force, European subsidiaries and international distributors all generated strong year-over-year results," said Cynosure President and Chief Executive Officer Michael Davin. "While we were pleased with our revenue performance, our gross profit was below our expectation for the quarter, primarily related to the purchase accounting adjustment."
"We continue to maintain a strong balance sheet, concluding the 2011 first quarter with cash, marketable securities and investments of $95.6 million, even with our $2.5 million cash acquisition of the Eleme Medical assets," Davin continued. "In addition, we generated positive cash flow from operations of $1.8 million, underscoring our focus on effectively managing operating expenses as we invested in product development initiatives related to our new cellulite reduction platform."During the first quarter, Cynosure launched the non-invasive SmoothShapes XV system, which the company acquired as part of the asset purchase of Eleme Medical. SmoothShapes XV was introduced through Cynosure's direct sales force in North America, and its international distribution channel, including its direct subsidiaries in the European Union. In addition, Cynosure launched the Cellulaze™ Cellulite Laser Workstation in the European Community and established three Cellulaze clinical sites led by physician luminaries in the EU to train plastic surgeons and dermatologists on the use of the minimally invasive procedure. In the United States, the company's 510(k) application for marketing clearance of Cellulaze is undergoing review by the U.S. Food and Drug Administration.
Business OutlookDavin concluded, "Our financial position remains strong, and we are encouraged to see continuing top-line momentum. We are optimistic about the prospects for our business as we begin our European launch of Cellulaze and introduce SmoothShapes XV across our direct distribution channel. As our markets continue to slowly recover from the lingering effects of the recession, we believe Cynosure is well-positioned with a strong brand and broad suite of innovative products that deliver excellent outcomes for aesthetic patients."
First-Quarter Financial Results Conference CallIn conjunction with its first-quarter 2011 financial results, Cynosure will host a conference call for investors and analysts at 9:00 a.m. ET today. On the call, Michael Davin and Timothy Baker, the company's Executive Vice President and Chief Financial Officer, will discuss the company's financial results and provide a business overview. Those who wish to listen to the conference call webcast should visit the "Investor Relations" section of the company's website at www.cynosure.com. The live call can also be accessed by dialing (877) 407-5790 or (201) 689-8328. If you are unable to listen to the live call, the webcast will be archived on the company's website.
About Cynosure, Inc. Cynosure, Inc. develops and markets aesthetic treatment systems that are used by physicians and other practitioners to perform non-invasive and minimally invasive procedures to remove hair, treat vascular and pigmented lesions, rejuvenate the skin, liquefy and remove unwanted fat through laser lipolysis and reduce the appearance of cellulite. Cynosure's products include a broad range of laser and other light-based energy sources, including Alexandrite, pulse dye, Nd:YAG and diode lasers, as well as intense pulsed light. Cynosure was founded in 1991. For corporate or product information, contact Cynosure at 800-886-2966, or visit www.cynosure.com.
Forward-Looking Statements Any statements in this press release about future expectations, plans and prospects for Cynosure, Inc., including statements about the company's anticipated financial results, as well as other statements containing the words "believes," "anticipates," "plans," "expects," "will" and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the global economy and lending environment and their effects on the aesthetic laser industry, Cynosure's history of operating losses, its reliance on sole source suppliers, the inability to accurately predict the timing or outcome of regulatory decisions, changes in consumer preferences, competition in the aesthetic laser industry, economic, market, technological and other factors discussed in Cynosure's most recent Annual Report on Form 10-K, which is filed with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent Cynosure's views as of the date of this press release. Cynosure anticipates that subsequent events and developments will cause its views to change. However, while Cynosure may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Cynosure's views as of any date subsequent to the date of this press release.
Sharon Merrill Associates, Inc.
Phone: (617) 542-5300
CYNO@investorrelations.comConsolidated Statements of Income (Unaudited)(In thousands, except per share data)Three Months Ended Mar. 31,20112010Revenues$
8,893Cost of revenues 9,803
10,800Operating expensesSelling and marketing
8,402Research and development
1,707General and administrative
3,233Total operating expenses13,947
13,342Loss from operations(1,866)
(2,542)Interest income, net
53Other income (expense), net
(151)Loss before income taxes(1,598)
(2,640)Income tax provision
(2,812)Diluted net loss per share
(0.22)Diluted weighted average shares outstanding
12,711Basic net loss per share
(0.22)Basic weighted average shares outstanding
12,711Condensed Consolidated Balance Sheet(In thousands)Mar. 31,Dec. 31,20112010(unaudited)Assets:Cash, cash equivalents and short-term marketable securities
$ 81,841$ 86,836Accounts receivable, net
21,27118,684Prepaid expenses and other current assets
3,6843,902Deferred tax asset, current portion
510489Total current assets
117,703120,532Property and equipment, net
8,8878,892Long-term marketable securities
13,7859,990Other noncurrent assets
3,8652,398Total assets$ 144,240$ 141,812Liabilities and stockholders’ equity:Accounts payable and accrued expenses
$ 17,563$ 15,267Amounts due to related parties
3,8843,660Capital lease obligations
93133Total current liabilities
24,02320,845Capital lease obligations, net of current portion
3040Deferred revenue, net of current portion
293348Other long-term liabilities
239279Total stockholders’ equity
119,655120,300Total liabilities and stockholders’ equity$ 144,240$ 141,812
|SOURCE Cynosure, Inc.|
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