BURLINGTON, Mass., Feb. 7 /PRNewswire-FirstCall/ -- Palomar Medical
Technologies, Inc. (Nasdaq: PMTI), a leading researcher and developer of
light-based systems for cosmetic treatments, today announced financial
results for the fourth quarter and year ended December 31, 2007. Revenues
for the quarter ended December 31, 2007 were $28.2 million, of which $24.5
million were product revenues, $2.4 million were royalty revenues, and $1.3
million were funded development revenues. Fourth quarter gross margin from
product revenues, which includes a $1.5 million favorable royalty
adjustment, increased to 73% from 66% in the third quarter of 2007.
Excluding the $1.5 million favorable royalty adjustment, gross margin from
product revenues increased to 67%. Income before taxes for the fourth
quarter ended December 31, 2007 was $5.6 million. The Company strengthened
its balance sheet since December 31, 2006, including increasing its cash
and investments from $104 million to $132 million.
Revenues for the year ended December 31, 2007 were $123.8 million, of
which $103.2 million were product revenues. Royalty revenues were $13.0
million, of which $3.1 million related to the recognition of a portion of
the back-owed royalties associated with a settlement agreement with Alma
Lasers, Inc. Funded development revenues were $6.7 million and other
revenues were $894,000 related to the recognition of a portion of the trade
dress infringement associated with the settlement agreement with Alma.
Gross margin from product revenues was 68% for the year ended December 31,
2007. Income before taxes was $33.1 million.
The Company reported net income of $3.5 million, or $0.18 per diluted
share for the fourth quarter of this year and $20.5 million, or $1.07 per
diluted share for the year ended December 31, 2007. Non-GAAP net income for
the quarter ended December 31, 2007, which includes adjustments for cost of
product revenues and non-cash taxes, resulted in $4.2 million, or $0.22 per
diluted share. Non-GAAP net income for the year ended December 31, 2007,
which includes adjustments for back-owed royalties and other revenues, cost
of product revenues, cost of royalty revenues, legal expense reimbursement,
interest on back-owed royalties and fees, and non-cash taxes, resulted in
$27.9 million, or $1.45 per diluted share. The Company had a cash tax rate
of 6% and an effective book tax rate of 38% for financial statement
purposes for the year ended December 31, 2007 versus a cash tax rate of 3%
and an effective book tax benefit of 10% for the prior twelve month period.
Please refer to the financial statements included in this news release for
a reconciliation of GAAP results to non-GAAP results for the three and
twelve months ended December 31, 2007 and 2006.
Chief Executive Officer Joseph P. Caruso commented, "We are pleased
with our financial results for 2007 and the steps we have taken during the
year to position Palomar at the forefront of technology. These steps
include adding novel technology to our unique laser and light-based
platform, including new ablative and non-ablative fractional handpieces for
our popular StarLux 500 system. These new handpieces were launched last
week at the AAD meeting and we believe they will be a great addition to our
suite of products. We will continue to lead our industry in the future with
innovative products. Another important step is our recently announced
distribution agreement with the Swedish company Q-Med, the producer of
Restylane, one of the most popular and widely distributed dermal fillers in
the world. This relationship should provide access to a broader market than
we could reach on our own and provide synergistic sales of our products and
Q-Med's. As always, we remain steadfast in our defense of our intellectual
property as a way to protect our research and development efforts. Through
these and other steps, we believe Palomar is well positioned to capitalize
on and lead the way toward long term growth of the light-based aesthetic
industry."
Use of Non-GAAP Financial Measures
To supplement Palomar's consolidated financial statements presented in
accordance with GAAP, this news release uses the following measures defined
as non-GAAP financial measures by the SEC: non-GAAP income before taxes,
non-GAAP provision for income taxes, non-GAAP net income, and non-GAAP
diluted earnings per share. The presentation of this 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. In
addition, the non-GAAP financial measures included in this news release may
be different from, and therefore not comparable to, similar measures used
by other companies. For more information on these non-GAAP financial
measures, please see the non-GAAP data included below. This data has more
details of the GAAP financial measures that are most directly comparable to
non-GAAP financial measures and the related reconciliations between these
financial measures. Palomar's management believes that these non-GAAP
financial measures provide meaningful supplemental information regarding
our performance by excluding certain items that may not be indicative of
our core business operating results. Palomar believes that both management
and investors benefit from referring to these non-GAAP financial measures
in assessing Palomar's performance and when planning, forecasting and
analyzing future periods. These non-GAAP financial measures also facilitate
management's internal comparisons to Palomar's historical performance and
our competitors' operating results. Palomar believes that these non-GAAP
measures are useful to investors in allowing for greater transparency with
respect to supplemental information used by management in its financial and
operational decision making.
Conference Call: As previously announced, Palomar will conduct a
conference call and webcast today at 11:30 AM Eastern Time. Management will
discuss financial results and strategic matters. If you would like to
participate, please call (866) 770-7125 or listen to the webcast in the
Investor Relations section of the Company's website at
http://www.palomarmedical.com. The telephone replay will be available one hour
after the call at (888) 286-8010 passcode 18710466 and will be available
for fourteen days. A webcast replay will also be available.
About Palomar Medical Technologies Inc: Palomar is a leading researcher
and developer of light-based systems for cosmetic treatments. Palomar
pioneered the optical hair removal field, when, in 1997, it introduced the
first high-powered laser hair removal system. Since then, many of the major
advances in light-based hair removal have been based on Palomar technology.
In December 2006, Palomar became the first company to receive a 510(k)
over-the-counter (OTC) clearance from the United States Food and Drug
Administration (FDA) for a new, patented, home use, light-based hair
removal device. OTC clearance allows the product to be marketed and sold
directly to consumers without a prescription. There are now millions of
light-based cosmetic procedures performed around the world every year in
physician offices, clinics, spas and salons. Palomar is testing many new
and exciting applications to further advance the hair removal market and
other cosmetic applications. Palomar is focused on developing proprietary
light-based technology for introduction to the mass markets. Palomar has an
agreement with The Gillette Company to develop and commercialize home-use,
light-based devices for women for hair removal and an agreement with
Johnson & Johnson Consumer Companies to develop and potentially
commercialize home-use, light- based devices for reducing or reshaping body
fat including cellulite, reducing the appearance of skin aging, and
reducing or preventing acne.
For more information on Palomar and its products, visit Palomar's
website at http://www.palomarmedical.com. To continue receiving the most
up-to-date information and latest news on Palomar as it happens, sign up to
receive automatic e-mail alerts by going to the Investor Relations section
of the website.
This press release contains forward-looking statements within the
meaning of the U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on the Company's current expectations,
plans, intentions, beliefs or predictions. These forward-looking statements
are neither promises nor guarantees, but involve risk and uncertainties
that may individually or mutually impact the matters herein, and cause
actual results, events and performance to differ materially from such
forward-looking statements. These risk factors include, but are not limited
to, results of future operations, technological difficulties in developing
or introducing new products, the results of future research, lack of
product demand and market acceptance for current and future products, the
effect of economic conditions, challenges in managing joint ventures and
research with third parties and government contracts, the impact of
competitive products and pricing, governmental regulations with respect to
medical devices, including whether FDA clearance will be obtained for
future products and additional applications, the results of litigation,
including patent infringement lawsuits, difficulties in collecting
royalties, potential infringement of third-party intellectual property
rights, factors affecting the Company's future income and resulting ability
to utilize its NOLs, and/or other factors, which are detailed from time to
time in the Company's SEC reports, including the report on Form 10-K for
the year ended December 31, 2006 and the Company's quarterly reports on
Form 10-Q. Readers are cautioned not to place undue reliance on these
forward- looking statements, which speak only as of the date hereof. The
Company undertakes no obligation to release publicly the result of any
revisions to these forward-looking statements that may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence
of unanticipated events.
Palomar Financial Summary:
Consolidated Statements of Income (Unaudited)
Three Months Ended Twelve Months Ended
December 31 December 31,
2007 2006 2007 2006
Revenues:
Product revenues $24,468,273 $26,544,261 $103,220,932 $92,222,660
Royalty revenues 2,421,193 12,042,143 13,005,459 30,481,498
Funded product
development
revenues 1,263,563 825,115 6,698,063 3,840,286
Other revenues - - 894,189 -
Total revenues 28,153,029 39,411,519 123,818,643 126,544,444
Costs and expenses:
Cost of product
revenues 6,594,776 8,206,874 33,390,942 26,896,839
Cost of royalty
revenues 968,478 4,816,856 5,202,184 12,192,598
Research and
development 4,430,197 3,586,655 16,673,191 14,055,616
Selling and
marketing 6,279,118 5,858,978 24,885,695 22,467,161
General and
administrative 5,839,838 3,611,757 17,495,400 7,645,081
Total costs and
expenses 24,112,407 26,081,120 97,647,412 83,257,295
Income from
operations 4,040,622 13,330,399 26,171,231 43,287,149
Interest income 1,585,826 1,242,190 6,411,947 4,718,684
Other income - - 500,000 -
Income before
income taxes 5,626,448 14,572,589 33,083,178 48,005,833
Provision for income
taxes - cash 337,587 421,263 1,984,991 1,390,033
Provision for income
taxes - non-cash 1,804,372 (6,846,785) 10,590,525 (6,360,822)
Net income $3,484,489 $20,998,111 $20,507,662 $52,976,622
Net income per share:
Basic $0.19 $1.18 $1.12 $3.02
Diluted $0.18 $ 1.03 $1.07 $2.62
Weighted average
number of shares
outstanding:
Basic 18,295,748 17,759,601 18,277,324 17,519,242
Diluted 18,960,555 20,484,623 19,254,023 20,208,687
Non-GAAP data:
Income before income
taxes $5,626,448 $14,572,589 $33,083,178 $48,005,833
Royalty revenues:
Back-owed royalty - (10,559,559) (3,105,710) (26,339,130)
Other revenues:
Back-owed trade
dress - - (894,189) -
Cost of product
revenues: Royalty
adjustment (1,493,394) - (662,636) (762,000)
Cost of royalty
revenues: Back-owed
royalty - 4,223,824 1,242,284 10,535,652
General and
administrative:
Royalty settlement
legal expense
reimbursement - - (227,355) (3,760,000)
FAS 123R stock-based
compensation 323,306 25,856 489,546 462,067
Interest income:
Interest on
back-owed royalty - - (259,166) (1,164,212)
Non-GAAP Income before
income taxes 4,456,360 8,262,710 29,665,952 26,978,210
Provision for income
taxes 2,141,959 (6,425,522) 12,575,516 (4,970,789)
Provision for income
taxes - non-cash (1,804,372) 6,847,544 (10,590,525) 6,476,348
Tax effect related
to one-time
events - cash (70,205) (182,734) (205,034) (724,270)
Non-GAAP Provision
for income taxes 267,382 239,288 1,779,957 781,289
Non-GAAP Net income $4,188,978 $8,023,422 $27,885,995 $26,196,921
Non-GAAP Diluted net
income per share $0.22 $0.39 $1.45 $1.30
Diluted weighted
average number of
shares outstanding 18,960,555 20,484,623 19,254,023 20,208,687
Consolidated Balance Sheets (Unaudited)
December 31, December 31,
2007 2006
Assets
Current assets:
Cash and cash equivalents $90,460,350 $36,817,257
Available-for-sale investments, at market
value 41,910,000 67,351,822
Accounts receivable, net of allowance of
$1,470,360 and $950,000, respectively 16,037,475 15,443,053
Inventories 12,896,154 11,011,710
Deferred tax asset 3,811,873 7,595,000
Other current assets 1,129,300 1,702,263
Total current assets 166,245,152 139,921,105
Property and equipment, net 1,250,437 1,129,985
Other assets 111,074 111,074
Total assets $167,606,663 $141,162,164
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable $1,987,579 $2,263,029
Accrued liabilities 15,139,642 15,798,076
Deferred revenue 5,789,936 5,969,397
Total liabilities 22,917,157 24,030,502
Stockholders' equity:
Preferred stock, $.01 par value-
Authorized - 1,500,000 shares
Issued - none - -
Common stock, $.01 par value-
Authorized - 45,000,000 shares
Issued - 18,337,846 and 18,063,103 shares,
respectively 184,429 180,631
Additional paid-in capital 199,988,081 189,937,701
Accumulated other comprehensive (loss) income 12,590 -
Accumulated deficit (52,479,008) (72,986,670)
Treasury stock, at cost - 105,000 shares (3,016,586) -
Total stockholders' equity 144,689,506 117,131,662
Total liabilities and stockholders' equity 167,606,663 $141,162,164
Contacts: Kayla Castle
Investor Relations Manager
Palomar Medical Technologies, Inc.
781-993-2411
ir@palomarmedical.com
SOURCE Palomar Medical Technologies Inc.
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Related links:
http://www.palmed.com
http://www.prnewswire.com/comp/107555.html /
CONTACT:
Kayla Castle, Investor Relations Manager of
Palomar Medical Technologies, Inc., +1-781-993-2411,
ir@palomarmedical.com
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