Revenues Increase by 53 Percent; Operating Income More than Triples
BURLINGTON, Mass., July 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 second quarter ended June 30, 2004. Revenues for the
quarter ended June 30, 2004, were $13.2 million, up from $8.7 million in the
second quarter of 2003. Gross profit from product sales increased to $6.9
million (64 percent of product revenues), up from $4.5 million (58 percent of
product revenues) in the year-earlier quarter. The Company reported net income
of $2.0 million, or $0.12 per diluted share, for the second quarter of this
year, versus net income of $1.1 million, or $0.07 per diluted share, for the
second quarter of last year.
Revenues for the six months ended June 30, 2004, were $24.1 million, up
from $15.5 million for the six months ended June 30, 2003. Gross profit from
product sales increased to $13.1 million (64 percent of revenues), up from
$8.0 million (58 percent of revenues) in the year-earlier period. The Company
reported net income of $3.2 million, or $0.18 per diluted share for the six
months ended June 30, 2004, versus net income of $1.4 million, or $0.10 per
diluted share for the six months ended June 30, 2003.
The Company's total revenues increased by 53 percent, product revenues
increased by 38 percent, and its gross profit from product sales improved by
52 percent as compared to the second quarter of 2003. The Company realized a
significant increase in operating income of $1.4 million, or 228 percent, and
a net income improvement of $961,000, or 90 percent, as compared to the second
quarter of 2003.
Chief Executive Officer Joseph P. Caruso commented, "We are pleased to
report another strong quarter with a substantial increase in profitability,
and are especially encouraged that our revenues continue to grow. As we
disclosed earlier in the quarter, Palomar and Lumenis, Ltd. reached a
settlement resolving their on-going litigation concerning both patent
infringement and contractual matters. As a result of this settlement, royalty
revenues increased by $1.2 million, or 525%."
Mr. Caruso continued, "Over the past year, product gross margins have
improved significantly due to a higher margin product mix and increased sales
volume. The Company has also strengthened its balance sheet since the end of
last year with a 62 percent increase in its cash position. We anticipate this
trend to continue as we concentrate on increasing distribution both
domestically and internationally. This is all being achieved while investing
the necessary resources in research and development to maintain our technology
leadership position."
During the second quarter of 2004, the Company announced the following
events:
* The Company and The Gillette Company (NYSE: G) completed the initial
phase of their agreement and will move into the next phase. In
conjunction with entering this next phase, the parties have 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, which is planned to be
completed by August 31, 2006.
* 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. Lumenis made their first payment of $457,000 in the second
quarter for sales made in the first quarter. 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.
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 15487625 and will continue through
Monday, August 9, 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.
Contacts:
Investor Relations
Palomar Medical Technologies Inc
781-993-2411
ir@palomarmedical.com
Palomar Financial Summary (Amounts in thousands, except per share data):
Consolidated Statements of Operations (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Revenues:
Product revenues $ 10,686,773 $7,738,882 $20,313,888 $13,844,726
Royalty revenues 1,455,227 232,938 1,648,505 468,786
Funded product
development
revenues 1,088,172 700,000 2,101,636 1,200,000
Total revenues 13,230,172 8,671,820 24,064,029 15,513,512
Costs and expenses:
Cost of product
revenues 3,822,507 3,227,585 7,241,020 5,878,396
Cost of royalty
revenues 582,091 93,175 659,402 187,514
Research and
development 2,490,182 1,492,910 5,029,345 2,893,582
Selling and
marketing 3,124,608 2,127,549 5,805,718 3,673,298
General and
administrative 1,176,854 1,110,026 2,264,183 1,951,569
Total costs and
expenses 11,196,242 8,051,245 20,999,668 14,584,359
Income from
operations 2,033,930 620,575 3,064,361 929,153
Interest income 38,794 19,770 67,553 34,991
Interest expense (1,521) (1,014) (3,042) (24,790)
Other income 18,000 - 161,067 58,333
Income before
income taxes 2,089,203 639,331 3,289,939 997,687
Provision (benefit)
from income taxes 59,114 (429,521) 100,629 (429,521)
Net income $2,030,089 $1,068,852 $3,189,310 $1,427,208
Net income per share:
Basic $0.13 $0.08 $0.21 $0.11
Diluted $0.12 $0.07 $0.18 $0.10
Weighted average number of shares outstanding:
Basic 15,697,135 13,507,281 15,380,446 12,703,061
Diluted 17,607,376 15,941,140 17,465,459 14,739,107
Consolidated Balance Sheets (Unaudited)
June 30, December 31,
2004 2003
Assets
Current assets:
Cash and cash equivalents $17,111,918 $10,558,946
Accounts receivable, net 7,824,865 6,637,246
Inventories 4,141,907 3,385,316
Other current assets 722,862 384,785
Total current assets 29,801,552 20,966,293
Property and equipment, net 909,627 582,898
Other assets 111,074 111,074
Total Assets $30,822,253 $21,660,265
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $812,327 $655,923
Accrued liabilities 6,457,549 4,979,896
Deferred income taxes 1,100,000 1,100,000
Deferred revenue 2,320,270 560,897
Total current liabilities 10,690,146 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 - 15,826,558 and 14,554,407
shares, respectively 158,266 145,544
Additional paid-in capital 170,834,346 168,267,820
Accumulated deficit (150,860,505) (154,049,815)
Total stockholders' equity 20,132,107 14,363,549
Total liabilities and stockholders' equity $30,822,253 $21,660,265
SOURCE Palomar Medical Technologies Inc
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