Fourth Quarter Revenues Increase 63 Percent; Net Income Increases 417 Percent
BURLINGTON, Mass., Feb. 10 /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, 2004. The Company's fourth
quarter total revenues increased by 63 percent, product revenues increased by
51 percent, and gross profit from product sales improved by 73 percent as
compared to the same quarter in 2003. The Company realized a significant
increase in income from operations of $3.2 million, or 297 percent, and a net
income improvement of $4.3 million, or 417 percent, as compared to the fourth
quarter of 2003. The Company also strengthened its balance sheet since the
end of last year, including increasing its cash position from $10.6 million to
$25.2 million.
Revenues for the quarter ended December 31, 2004, were $16.4 million, up
from $10.1 million in the fourth quarter of 2003. Gross profit from product
sales increased to $9.6 million (69 percent of product revenues), up from $5.5
million (60 percent of product revenues) in the year-earlier quarter. The
Company reported income from operations of $4.2 million for the fourth quarter
of this year, as compared to $1.1 million for the fourth quarter of last year.
The Company reported net income of $5.4 million, or $0.29 per diluted share,
which includes a benefit from income taxes of $1.1 million from the reduction
of tax reserves, for the fourth quarter of this year, versus net income of
$1.0 million, or $0.06 per diluted share, for the fourth quarter of last year.
Revenues for the year ended December 31, 2004, were $54.4 million, up from
$34.8 million for the same period in 2003. Gross profit from product sales
increased to $30.3 million (66 percent of revenues), up from $18.3 million (58
percent of revenues) in the year-earlier period. The Company reported net
income of $10.6 million, or $0.60 per diluted share for the year ended
December 31, 2004, versus net income of $3.4 million, or $0.21 per diluted
share for the same period in 2003.
During fiscal year 2004, the Company announced the following events:
* The Company and The Gillette Company (NYSE: G) completed the initial
phase of their agreement and moved into the next phase. In conjunction
with entering this next phase, the parties amended the agreement to
provide for additional development funding to further technical
innovations. The original agreement provided for $7 million in
development funding from Gillette. Under the amendment, Gillette will
provide $2.1 million in additional development funding over a nine
month extension of the development phase, for a total of $9.1 million,
which is planned to be completed by August 31, 2006.
* The Company and Johnson & Johnson Consumer Companies, Inc, a Johnson &
Johnson company, signed an agreement to develop, clinically test and
potentially commercialize home-use, light-based devices for (i) reducing
or reshaping body fat including cellulite; (ii) reducing appearance of
skin aging; and (iii) reducing or preventing acne.
* Awarded a $2.5 million research contract by the Department of the Army
to develop a light-based self-treatment device for Pseudofolliculitis
Barbae ("PFB"). PFB, commonly known as "razor bumps", has been called
"the most significant dermatologic disease in the US Army"; affecting
combat readiness, unit cohesion, and individual morale of over 50% of
African American and Hispanic military personnel.
* The Company and Lumenis Ltd. reached a settlement resolving their on-
going litigation concerning both patent infringement and contractual
matters. Under the terms of the settlement, Lumenis paid $868,000 in
the second quarter for sales of the LightSheer made prior to July 1,
2002 and agreed to pay $3.225 million over the next six quarters, or
$537,500 per quarter, for royalties due on sales of the LightSheer made
between July 1, 2002 and December 31, 2003. Beginning on January 1,
2004, Lumenis agreed to pay Palomar a 5% royalty on sales of the
LightSheer and other professional laser hair removal devices and
modules. In addition, Lumenis granted Palomar a paid up license to a
variety of Lumenis' patents for Palomar's light based devices. Palomar
granted Lumenis a paid up license to the '568 and '844 patents for
Lumenis' lamp based devices. Both parties have agreed to the validity
and enforceability of each others patents and not to challenge such
validity and enforceability in the future.
Chief Executive Officer Joseph P. Caruso commented, "I am pleased with
Palomar's progress during the fourth quarter of 2004 and the full fiscal year,
which includes the above mentioned milestones. Especially encouraging is the
fact that our revenues continue to increase at a rapid rate, allowing us to
further expand our sales, marketing, research and development efforts.
Palomar has worked hard to maintain our reputation with customers for
providing leading-edge technology addressing major market opportunities in the
light-based cosmetic market. These markets are growing at an astonishing rate
and we intend to capitalize on the popularity of these new procedures. We
believe this is the beginning of a shift toward light based treatments for
cosmetic applications that will change the standard of treatment in years to
come. This positioning has resulted in continued growth for Palomar over the
past three years in the expanding market for light-based cosmetic procedures.
We expect to keep extending the applications of our technology during upcoming
quarters, and the strength of our balance sheet should allow us to continue as
a powerful competitor in this dynamic market."
Commenting on Palomar's ongoing program to expand its shareholder base,
Chief Financial Officer Paul S. Weiner concluded, "Due to our strong operating
and financial performance at Palomar during 2004 we substantially increased
the institutional following of the Company. We are continuing our efforts to
expand our shareholder base with an ongoing program of meetings with
professional money managers and analysts nationwide. We are currently
scheduling our next round of investor meetings at this year's Annual Meeting
of the American Academy of Dermatology (AAD), to be held in New Orleans from
February 19 to 21, 2005. To reserve a time to meet with Palomar management
and/or receive product demonstrations, please contact Palomar's Investor
Relations department at 781-993-2411."
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 (888) 339-2688 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 20802871 and will continue
through Thursday, February 24, 2005. 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.
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 indications to further advance the hair removal
market and other cosmetic applications. Palomar is uniquely focused on
developing proprietary light-based technology for introduction to the mass
markets. Palomar has an agreement with The Gillette Company (NYSE: G) to
develop and potentially commercialize a patented home-use, light-based hair
removal device for women, 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 E-mail Alerts page in the Investor
Relations' section of the website.
With the exception of the historical information contained in this
release, the matters described herein contain forward-looking statements,
including but not limited to statements relating to new markets, development
and introduction of new products, and financial projections that 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, the results of litigation, difficulties in collecting royalties,
potential infringement of third-party intellectual property rights, 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,
2003 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 (Amounts in thousands, except per share data):
Consolidated Statements of Operations (Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
Revenues:
Product revenues $13,896,552 $9,184,939 $45,810,177 $31,332,125
Royalty revenues 1,148,753 192,169 4,052,078 840,614
Funded product
development
revenues 1,375,534 700,000 4,569,618 2,600,000
Total revenues 16,420,839 10,077,108 54,431,873 34,772,739
Costs and expenses:
Cost of product
revenues 4,280,927 3,642,196 15,513,695 13,031,316
Cost of royalty
revenues 459,501 76,867 1,620,831 336,245
Research and
development 2,734,493 2,085,610 10,296,463 6,574,563
Selling and
marketing 3,189,995 2,414,972 12,030,308 8,483,138
General and
administrative 1,521,080 790,817 5,228,889 3,738,911
Total costs and
expenses 12,185,996 9,010,462 44,690,186 32,164,173
Income from
operations 4,234,843 1,066,646 9,741,687 2,608,566
Interest income,
net of interest
expense 107,281 18,741 250,346 45,666
Other income
(expense), net 1,500 - (214,433) 58,333
Income from
operations before
income taxes 4,343,624 1,085,387 9,777,600 2,712,565
Provision (benefit)
from income
taxes (1,016,723) 48,000 (855,713) (656,521)
Net income $5,360,347 $1,037,387 $10,633,313 $3,369,086
Net income per share:
Basic $0.33 $ 0.07 $0.68 $0.25
Diluted $0.29 $ 0.06 $0.60 $0.21
Weighted average
number of shares
outstanding:
Basic 16,109,294 14,308,537 15,688,855 13,399,178
Diluted 18,536,882 16,789,466 17,719,861 15,917,392
Consolidated Balance Sheets (Unaudited)
December 31, December 31,
2004 2003
Assets
Current assets:
Cash and cash equivalents $25,158,856 $10,558,946
Accounts receivable, net 7,122,745 6,637,246
Inventories 5,866,494 3,385,316
Other current assets 440,254 384,785
Total current assets 38,588,349 20,966,293
Property and equipment, net 899,368 582,898
Other assets 111,074 111,074
Total assets $39,598,791 $21,660,265
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $971,030 $655,923
Accrued liabilities 8,014,207 4,979,896
Deferred income taxes - 1,100,000
Deferred revenue 1,439,639 560,897
Total current liabilities 10,424,876 7,296,716
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 -16,231,502 and 14,554,407 shares,
respectively 162,315 145,544
Additional paid-in capital 172,428,102 168,267,820
Accumulated deficit (143,416,502) (154,049,815)
Total stockholders' equity 29,173,915 14,363,549
Total liabilities and stockholders'
equity $39,598,791 $21,660,265
Contacts: Investor Relations
Palomar Medical Technologies Inc
781-993-2411
ir@palomarmedical.com
SOURCE Palomar Medical Technologies Inc
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