BURLINGTON, Mass., July 31 MA-Palomar-Med-Q2-ern
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,
20082007 2008 2007
Revenues:
Product revenues $19,206,511 $28,280,653 $36,895,304 $55,679,198
Royalty revenues 2,269,561 2,073,6215,516,5844,758,175
Funded product
development revenues398,467 2,414,218 995,0373,849,298
Other revenues 1,250,000 -2,747,625-
Total revenues23,124,539 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
revenues907,824 829,4482,206,6341,903,270
Research and
development 4,549,960 3,752,0939,933,6078,055,435
Selling and
marketing 5,647,400 6,358,629 12,425,717 12,634,617
General and
administrative5,095,069 4,150,911 11,331,6617,295,001
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 1,533,0772,249,0342,899,376
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
compensation522,618 1,4023,866,093 (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 taxes1,949,957 8,903,3123,769,739 18,356,785
Provision for (benefit
from) income taxes667,222 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 - cash49,649 (29,916) 450,919 (30,838)
Non-GAAP provision for
income taxes 185,246 534,199 385,4221,101,407
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
outstanding18,432,016 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 assets6,045,645 3,811,873
Other current assets 931,183 1,129,300
Total current assets 154,451,201166,245,152
Marketable securities, at market value 7,157,612 -
Property and equipment, net 1,446,323 1,250,437
Other assets 114,076111,074
Total assets $163,169,212 $167,606,663
Liabilities and Stockholders' Equity
Liabilities:
Accounts payable $3,070,650 $1,987,579
Accrued liabilities7,412,283 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 184,794184,429
Additional paid-in capital 204,743,809199,988,081
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.
