Revenues Increase by 58 Percent; Net Income More than Triples;
Product Gross Margins Improve to 64 Percent
BURLINGTON, Mass., April 29 /PRNewswire-FirstCall/-- Palomar Medical
Technologies Inc (Nasdaq: PMTI), a leading researcher and developer of light-
based systems for hair removal and other cosmetic treatments, today announced
financial results for the first quarter ended March 31, 2004. The Company's
total revenues and product revenues each increased by 58 percent and its gross
profit from product sales improved by 80 percent as compared to the first
quarter of 2003. Due to growing sales of the Company's family of Lux Pulsed
Light systems, revenues have increased, product gross margins have improved
and the Company has realized net income for the past two years, with a net
income improvement of more than three times the net income for the first
quarter of 2003. The improvement in product gross margins is primarily due to
a higher margin product mix and the effects of increased sales volume. The
increase in net income has allowed the Company to improve its cash position
over the past year.
Chief Executive Officer Joseph P. Caruso commented, "This has been an
exciting and rewarding quarter for Palomar. We continue to enjoy increased
market acceptance of our new product offerings, and we believe we are
maintaining our leadership position as an innovator in our markets. Our
reputation for leading-edge technology and product reliability has resulted in
increased revenue for Palomar over the past two years in the expanding market
for light-based cosmetic procedures; a trend we think will continue throughout
2004."
Revenues for the quarter ended March 31, 2004, were $10.8 million, up from
$6.8 million in the first quarter of 2003. Gross profit from product sales
increased to $6.2 million (64 percent of product revenues), up from $3.5
million (57 percent of product revenues) in the year-earlier quarter. The
Company reported net income of $1.2 million, or $0.07 per diluted share, for
the first quarter of this year, compared to net income of $358,000, or $0.03
per diluted share, for the first quarter of last year.
During the first quarter of 2004, the Company announced the following
events:
- Received clearance from the U.S. Food and Drug Administration (FDA) to
market the LuxV(TM) handpiece for the treatment of acne. The LuxV is a
handpiece attachment for use with Palomar's family of Lux Pulsed Light
systems. The LuxV handpiece offers a long-term acne solution by treating the
root cause of acne. The LuxV emits pulses of intense light that alter the
structure and function of the sebaceous glands to reduce acne lesions without
the many side effects common to drugs while offering longer remission times
and improved efficacy rates when compared to other treatments. Acne treatment
is the most rapidly growing therapeutic category in the dermatology sector and
in the U.S. alone; more than $1.4 billion annually is spent on anti-acne
medication and treatment.
- 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.
- Results of a "Markman" ruling in the ongoing patent infringement action
brought by Palomar against Cutera, Inc (Nasdaq: CUTR). The ruling represents a
major step in Palomar's efforts to enforce its patent portfolio and will have
considerable impact on the case as it proceeds toward trial. If Palomar
prevails at trial, Cutera may be ordered to pay millions in damages for past
sales and may also be ordered to stop selling any products that perform hair
removal. In the ruling, the District Court largely embraced Palomar's
position, finding for Palomar on critical issues.
- Palomar's common stock began trading on the Nasdaq National Market
System. After meeting all the requirements for listing on the Nasdaq National
Market, Palomar upgraded from the Nasdaq Small Cap Market System while
retaining the same ticker symbol, PMTI.
- Launch of its next generation pulsed-light and laser system, the Palomar
StarLux(TM), at the American Academy of Dermatology's (AAD) Annual Meeting in
February. The StarLux is capable of operating all of the pulsed-light
handpieces available on prior Palomar pulsed light systems plus the new
Lux1064 YAG laser handpiece to treat vascular lesions including leg veins.
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 76868872 and will continue through Wednesday, May 12, 2004. A
webcast replay will also be available.
About Palomar Medical Technologies Inc: Palomar is a leading researcher
and developer of light-based systems for hair removal and other cosmetic
treatments. Last year, Palomar and the Gillette Company (NYSE: G) entered into
an agreement to complete development and commercialize a patented home-use,
light-based hair removal device for women. New and exciting indications are
being tested to further advance the hair removal market and other cosmetic
applications. 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.
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
March 31,
2004 2003
Revenues:
Product revenues $9,627,115 $ 6,105,844
Royalty revenues 193,278 235,848
Funded product development revenues 1,013,464 500,000
Total revenues 10,833,857 6,841,692
Costs and expenses:
Cost of product revenues 3,418,513 2,650,811
Cost of royalty revenues 77,311 94,339
Research and development 2,539,163 1,400,672
Selling and marketing 2,681,110 1,545,749
General and administrative 1,087,329 841,543
Total costs and expenses 9,803,426 6,533,114
Income from operations 1,030,431 308,578
Interest income 28,759 15,221
Interest expense (1,521) (23,776)
Other income 143,067 58,333
Income from operations 1,200,736 358,356
Provision for income taxes 41,515 -
Net income $1,159,221 $358,356
Net income per share:
Basic $0.08 $0.03
Diluted $0.07 $0.03
Weighted average number of shares outstanding:
Basic 15,063,754 11,889,899
Diluted 17,352,236 13,310,641
Consolidated Balance Sheets (Unaudited)
March 31, December 31,
2004 2003
Assets
Current assets:
Cash and cash equivalents $12,959,487 $10,558,946
Accounts receivable,
net of allowance of
$790,453 and $862,114, respectively 5,764,479 6,637,246
Inventories 4,169,049 3,385,316
Other current assets 671,190 384,785
Total current assets 23,564,205 20,966,293
Property and equipment, net 651,923 582,898
Other assets 111,074 111,074
Total Assets $24,327,202 $21,660,265
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $632,996 $655,923
Accrued liabilities 4,591,681 4,979,896
Deferred income taxes 1,100,000 1,100,000
Deferred revenue 540,258 560,897
Total current liabilities 6,864,935 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 -15,527,671 and 14,554,407
shares, respectively 155,277 145,544
Additional paid-in capital 170,197,584 168,267,820
Accumulated deficit (152,890,594) (154,049,815)
Total stockholders' equity 17,462,267 14,363,549
Total liabilities and stockholders' equity $24,327,202 $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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CONTACT:
Investor Relations, Palomar Medical
Technologies Inc, +1-781-993-2411, ir@palomarmedical.com
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