BURLINGTON, Mass., July 31 /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 second quarter ended June 30, 2008. Revenues for the
quarter ended June 30, 2008 were $23.1 million, of which $19.2 million were
product revenues, $2.3 million were royalty revenues, $0.4 million were
funded development revenues, and $1.25 million were other revenues. Second
quarter gross margin from product revenues was 67 percent as compared to 63
percent in the previous quarter. Income before taxes for the second quarter
ended June 30, 2008 was $1.4 million, which included approximately $2.9
million in legal expenses related to the Candela lawsuits and a $523,000
FAS 123R stock-based compensation expense.
The Company reported net income of $0.8 million, or $0.04 per diluted
share for the second quarter of 2008 versus net income of $5.8 million, or
$0.30 per diluted share for the second quarter of 2007. Non-GAAP net income
for the quarter ended June 30, 2008, which includes adjustments for the FAS
123R compensation expense and non-cash taxes, resulted in $1.8 million, or
$0.10 per diluted share. Non-GAAP net income for the quarter ended June 30,
2007, which includes adjustments for the FAS 123R compensation expense,
other income, and non-cash taxes, resulted in $8.4 million, or $0.43 per
diluted share. Please refer to the financial statements included in this
news release for a reconciliation of GAAP to non-GAAP results for the three
and six months ended June 30, 2008 and 2007.
The Company's balance sheet continues to be strong and includes $128
million in cash and marketable securities. The Company has classified
approximately $7.2 million of its marketable securities as non-current
assets due to the recent illiquidity in the auction-rate securities market.
The Company has the intent and ability to hold these investments to
maturity.
Chief Executive Officer Joseph P. Caruso commented, "We continue to see
the effects of a weakened economy in the United States, but investments
made in our domestic sales group over the past few quarters are starting to
show improvement. Specifically, product revenues increased 30 percent in
North America as compared to the previous quarter and accounted for 76
percent of our product revenues this quarter. Internationally, we are in
the process of transitioning distribution of the first country to Q-Med. In
the meantime, we will continue to support both our existing and new
distributors throughout the rest of the world to further enhance sales.
Future transition decisions will be based on the success of the first
transition country to Q-Med. These choices, and others, will be made to
strengthen our global presence and brand recognition as we prepare for an
expansion of our product line later this year."
Mr. Caruso continued, "During the second quarter, we introduced the
Palomar Aspire(TM) body sculpting system and SlimLipo(TM) handpiece. We
showcased the system at the American Society of Lasers in Medicine meeting
and other important industry meetings during the quarter. Our technology
uses a proprietary wavelength that is preferentially absorbed by fat in
addition to a one-time use disposable delivery system. These advantages
have been well-received by the medical community and we look forward to
placing our first Aspire systems during the third quarter. Laser-assisted
lipolysis is one of the fastest growing segments of the aesthetic laser
market today. This new platform complements our laser and pulsed-light
systems, including the flagship StarLux 500(R), and the combination of both
platforms provides our customers with a full range of treatment options for
their patients."
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) 362-4831 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 86399673 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
granted The Procter & Gamble Company a non-exclusive License Agreement to
certain patents, technology and FDA documents related to the home-use,
light-based hair removal field for women. In addition, Palomar has an
exclusive development and license 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.
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, future
royalty amounts due from third parties, development and introduction of new
products, and financial and operating projections. 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, 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, 2007 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 Six Months Ended
June 30, June 30,
2008 2007 2008 2007
Revenues:
Product revenues $19,206,511 $28,280,653 $36,895,304 $55,679,198
Royalty revenues 2,269,561 2,073,621 5,516,584 4,758,175
Funded product
development revenues 398,467 2,414,218 995,037 3,849,298
Other revenues 1,250,000 - 2,747,625 -
Total revenues 23,124,539 32,768,492 46,154,550 64,286,671
Costs and expenses:
Cost of product
revenues 6,330,668 10,308,578 12,925,000 18,926,966
Cost of royalty
revenues 907,824 829,448 2,206,634 1,903,270
Research and
development 4,549,960 3,752,093 9,933,607 8,055,435
Selling and
marketing 5,647,400 6,358,629 12,425,717 12,634,617
General and
administrative 5,095,069 4,150,911 11,331,661 7,295,001
Total costs and
expenses 22,530,921 25,399,659 48,822,619 48,815,289
Income (loss) from
operations 593,618 7,368,833 (2,668,069) 15,471,382
Interest income 833,494 1,533,077 2,249,034 2,899,376
Other income 227 500,000 18,244 500,000
Income (loss)
before income
taxes 1,427,339 9,401,910 (400,791) 18,870,758
Provision for (benefit
from) income taxes 667,222 3,572,726 (156,268) 7,170,888
Net income (loss) $760,117 $5,829,184 $(244,523) $11,699,870
Net income (loss) per share:
Basic $0.04 $0.32 ($0.01) $0.64
Diluted $0.04 $0.30 ($0.01) $0.60
Weighted average number of
shares outstanding:
Basic 18,151,396 18,333,091 18,137,680 18,306,598
Diluted 18,432,016 19,418,394 18,137,680 19,493,964
Non-GAAP data:
Income (loss) before
income taxes $1,427,339 $9,401,910 $(400,791) $18,870,758
Royalty revenues:
Back-owed royalty - - (682,380) -
Other revenues: Trade
dress infringement fees - - (247,625) -
Cost of royalty revenues:
Back-owed royalty - - 272,952 -
General and administrative:
Investment banking fee for
international distributor
agreement - - 1,013,899 -
FAS 123R stock-based
compensation 522,618 1,402 3,866,093 (13,973)
Interest income:
Interest on back-owed
royalty - - (52,409) -
Other income: Expiration
of standstill agreement - (500,000) - (500,000)
Non-GAAP income before
income taxes 1,949,957 8,903,312 3,769,739 18,356,785
Provision for (benefit
from) income taxes 667,222 3,572,726 (156,268) 7,170,888
Provision for income
taxes - non-cash (531,625) (3,008,611) 90,771 (6,038,643)
Tax effect related to
one-time events - cash 49,649 (29,916) 450,919 (30,838)
Non-GAAP provision for
income taxes 185,246 534,199 385,422 1,101,407
Non-GAAP net income $1,764,711 $8,369,113 $3,384,317 $17,255,378
Non-GAAP diluted net income
per share $0.10 $0.43 $0.18 $0.89
Diluted weighted average
number of shares
outstanding 18,432,016 19,418,394 18,450,430 19,493,964
Consolidated Balance Sheets (Unaudited)
June 30, December 31,
2008 2007
Assets
Current assets:
Cash and cash equivalents $118,909,12 $90,460,350
Available-for-sale investments, at market
value 1,850,000 41,910,000
Accounts receivable, net 10,430,151 16,037,475
Inventories 16,285,101 12,896,154
Deferred tax assets 6,045,645 3,811,873
Other current assets 931,183 1,129,300
Total current assets 154,451,201 166,245,152
Marketable securities, at market value 7,157,612 -
Property and equipment, net 1,446,323 1,250,437
Other assets 114,076 111,074
Total assets $163,169,212 $167,606,663
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable $3,070,650 $1,987,579
Accrued liabilities 7,412,283 12,606,422
Deferred revenue 4,576,997 5,789,936
Total current liabilities 15,059,930 20,383,937
Deferred taxes 2,533,220 2,533,220
Total liabilities $17,593,150 $22,917,157
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 - 18,479,345 and 18,442,846 shares,
respectively 184,794 184,429
Additional paid-in capital 204,743,809 199,988,081
Accumulated other comprehensive (loss)
income (89,167) 12,590
Accumulated deficit (52,723,531) (52,479,008)
Treasury stock, at cost - 435,000 and
105,000 shares, respectively (6,539,843) (3,016,586)
Total stockholders' equity $145,576,062 $144,689,506
Total liabilities and stockholders' equity $163,169,212 $167,606,663
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.palomarmedical.com
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CONTACT:
Kayla Castle, Investor Relations Manager of
Palomar Medical Technologies, Inc., +1-781-993-2411,
ir@palomarmedical.com
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