Product Revenues Increase 42 Percent; Net Income Increases 82 Percent
BURLINGTON, Mass., Oct. 26 /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 third quarter ended September 30, 2006. The Company's third
quarter product revenues increased by 42 percent as compared to the third
quarter in 2005. The Company's third quarter total revenues increased by 45
percent and net income increased by 82 percent, including back-owed
royalties as described below, as compared to the third quarter in 2005. The
Company also strengthened its balance sheet since the third quarter of last
year, including increasing its cash and investments from $40 million to $81
million.
Revenues for the quarter ended September 30, 2006 were $28 million, up
from $19.3 million in the third quarter of 2005. Product revenues increased
to $23.7 million from $16.7 million and gross profit from product revenues
increased to $16.6 million or 70 percent, up from $11.5 million or 69
percent in the year-earlier quarter. The Company reported net income of
$8.4 million, or $0.41 per diluted share, for the third quarter of this
year, versus net income of $4.6 million, or $0.24 per diluted share, for
the third quarter of last year.
Revenues for the nine months ended September 30, 2006 were $87.1
million, up from $54.5 million in the nine months ended September 30, 2005.
Product revenues increased to $65.7 million from $46.8 million and gross
profit from product revenues increased to $47 million or 72 percent, up
from $31.8 million or 68 percent in the first nine months of 2006 as
compared to the first nine months of 2005. The increase in total revenues
for the nine months ended September 30, 2006 compared to 2005 includes an
increase in royalty revenues of $15.7 million, due in part to royalties
resulting from our settlement with Cutera in the second quarter of 2006 and
back-owed royalties from Laserscope in the third quarter of 2006. The
Company reported net income of $32 million, or $1.59 per diluted share, for
the first nine months of this year, versus net income of $12.1 million, or
$0.64 per diluted share, for the first nine months of last year.
As a result of a royalty audit of Laserscope's product sales from
January 1, 2001 through June 30, 2006, there was an increase in the third
quarter royalty revenue of $2.2 million, cost of royalty revenue of
$864,000 and net income of $1.2 million. On October 18, 2006, Palomar and
Laserscope entered into a new license agreement and terminated the prior
license agreement. Under the new license agreement, Laserscope will pay
Palomar a 7.5% royalty on sales of its current light-based hair removal
products, including the Lyra and Gemini Laser Systems and the Solis IPL
System, as well as on sales of new light-based hair removal systems
developed in the future. For more information, please see the Non-Exclusive
Patent License Agreement filed as Exhibit 99.2 to a Current Report on Form
8-K filed today.
Chief Executive Officer Joseph P. Caruso commented, "We are pleased to
report another strong quarter of substantial increases in revenue and
income. Our flagship Lux systems continue to drive our significant revenue
growth. Over the last nine months we continued to strengthen our balance
sheet by considerably increasing our cash and investments. We believe the
popularity and acceptance of light-based solutions for cosmetic treatments
will continue to increase as consumer awareness increases. Palomar is the
driving force in shaping this trend. Our projects with Gillette, Johnson &
Johnson and the government are progressing as planned, and we are satisfied
with the balance we have been able to maintain between short-term financial
performance and long-term strategic goals. It remains an important goal of
ours to maintain our strategy of investing the necessary resources in
research and development and intellectual property protection to maintain
our technology leadership position in the professional market as we advance
our technology toward the consumer market."
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) 510-0708 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 13344157 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. There are now millions of light-based cosmetic
procedures performed around the world every year in physicians' 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 uniquely focused on developing proprietary
light-based technology for introduction to the mass markets. Palomar has an
agreement with The Gillette Company to develop and potentially
commercialize a patented home-use, light-based hair removal device for
women (please note that in October 2005, Procter & Gamble Company completed
its acquisition of Gillette. Under the Development and License Agreement,
Procter & Gamble, as the acquiring party, assumed all of Gillette's rights
and obligations.) Palomar also has 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, and
was awarded a contract by the Department of the Army to develop a
light-based self-treatment device for Pseudofolliculitis Barbae ("PFB").
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,
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 and additional
applications, 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, 2005 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 Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
Revenues
Product revenues $23,671,555 $16,726,018 $65,678,399 $46,789,990
Royalty revenues 3,642,413 1,211,547 18,439,355 3,724,266
Funded product
development revenues 707,814 1,341,108 3,015,171 4,032,539
Total revenues 28,021,782 19,278,673 87,132,925 54,546,795
Costs and expenses
Cost of product
revenues 7,036,514 5,220,270 18,689,965 14,977,455
Cost of royalty
revenues 1,456,969 484,619 7,375,742 1,489,706
Research and
development 3,537,561 3,162,199 11,021,628 9,218,413
Selling and
marketing 5,821,573 4,335,302 17,043,040 12,512,292
General and
administrative 2,362,082 1,712,847 3,045,800 4,733,197
Total costs and
expenses 20,214,699 14,915,237 57,176,175 42,931,063
Income from
operations 7,807,083 4,363,436 29,956,750 11,615,732
Interest income 1,031,530 315,116 3,476,494 741,133
Income before income
taxes 8,838,613 4,678,552 33,433,244 12,356,865
Provision for income
taxes 470,948 90,677 1,454,733 244,243
Net income $8,367,665 $4,587,875 $31,978,511 $12,112,622
Net income per share
Basic $0.47 $0.27 $1.83 $0.72
Diluted $0.41 $0.24 $1.59 $0.64
Weighted average number
of shares outstanding
Basic 17,642,215 16,942,281 17,438,247 16,815,519
Diluted 20,244,414 19,115,171 20,109,935 19,044,006
Consolidated Balance Sheets (Unaudited)
September 30, December 31,
2006 2005
Assets
Current assets
Cash and cash equivalents $ 22,392,771 $ 10,536,144
Available-for-sale investments,
at market value 58,760,386 38,757,575
Accounts receivable, net 15,197,198 8,686,227
Inventories 10,183,051 6,753,110
Other current assets 3,068,462 582,074
Total current assets 109,601,868 65,315,130
Property and equipment, net 1,019,175 909,676
Other assets 111,074 111,074
Total Assets $ 110,732,117 $ 66,335,880
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $2,314,150 $1,278,823
Accrued liabilities 13,421,376 11,465,100
Deferred revenue 4,697,766 1,725,849
Total current liabilities 20,433,292 14,469,772
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 and outstanding -- 17,673,859
and 17,126,467 shares, respectively 176,739 171,265
Additional paid-in capital 184,106,867 177,658,135
Accumulated deficit (93,984,781) (125,963,292)
Total stockholders' equity 90,298,825 51,866,108
Total liabilities and stockholders' equity $110,732,117 $ 66,335,880
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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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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