Cynosure Inc. (CYNO)

[skietz]

Cynosure Reports Record Third-Quarter Revenue of $71.5 Million, Up 18% Year-Over-Year
3 hours 54 minutes ago - DJNF
WESTFORD, Mass., Oct. 28, 2014 /PRNewswire/ -- Cynosure, Inc. (Nasdaq: CYNO), which designs, manufactures and markets medical devices for aesthetic procedures and precision surgical applications worldwide, today reported financial results for the three months ended September 30, 2014.

Third-Quarter 2014 Highlights

-- Revenue up 18% year-over-year to $71.5 million

-- Non-GAAP net income of $5.5 million, or $0.25 per diluted share,

excluding amortization expenses, acquisition costs and unrealized

foreign exchange loss

-- GAAP net income of $3.1 million, or $0.14 per diluted share, including

amortization expenses, acquisition costs and unrealized foreign exchange

loss

-- $113 million in cash and investments at September 30, 2014

-- Repurchased $6.6 million of common stock under share repurchase program

-- Acquired assets of RF medical device manufacturer Ellman International,

Inc.

"Cynosure delivered record third-quarter revenue of $71.5 million, up 18 percent year-over-year as revenue in each of our direct sales channels improved from the same period in 2013," said Cynosure Chairman and Chief Executive Officer Michael Davin. "North American laser revenue increased 17 percent, revenue from our Asia Pacific subsidiaries rose 46 percent, while our European direct sales channel was up 7 percent. Product and technology innovation, expanded indications and new international marketing clearances continue to drive favorable results for the Company."

"Demand for our flagship PicoSure(R) Picosecond Laser Workstation continues to exceed our expectations," Davin continued. "Based on enthusiastic customer feedback and patient and physician satisfaction, we believe this technology is becoming the gold standard for the removal of tattoos and benign pigmented lesions. New FDA marketing clearances, combined with recent international regulatory approvals in Korea, Taiwan and Australia, demonstrate the successful execution of our strategy to drive growth for PicoSure worldwide."

Recent Highlights

-- Ellman International, Inc. Acquisition. During the third quarter,

Cynosure announced that it acquired the assets of Ellman International,

Inc. for approximately $13.2 million in cash. Based in Hicksville, NY,

Ellman develops, manufactures and markets advanced radiofrequency (RF)

technology for precision surgical and aesthetic procedures and offers a

line of aesthetic lasers.

-- PicoSure System Receives FDA Clearance for New Indications. The Company

received clearance from the U.S. Food and Drug Administration to market

the PicoSure system, previously approved for the removal of tattoos and

benign pigmented lesions, for the additional indications of acne scarring

as well as the treatment of fine lines and wrinkles.

-- Share Repurchase Program. During the third quarter, the Company

repurchased $6.6 million of common stock under its $35 million share

repurchase program. Approximately $4 million remained available under the

program at September 30, 2014.

"We ended the third quarter of 2014 with cash and investments of $113 million and generated cash from operations of $14.1 million during the quarter," Davin said. "We continued to effectively maintain our balance sheet strength while returning capital to our stockholders and investing to profitably grow the business."

Business Outlook

"Looking ahead, Cynosure is well-positioned to deliver top-line growth and increased profitability," Davin said. "Our healthy, unencumbered balance sheet supports our strategy to drive growth organically and through strategic acquisitions. We are on schedule to launch our next flagship platform in 2015 for non-invasive fat removal, and we believe this large addressable market represents a significant growth opportunity for the Company."

Third-Quarter Financial Results Conference Call

In conjunction with the announcement of its third-quarter 2014 financial results, Cynosure will host a conference call for investors and analysts at 9:00 a.m. ET today. On the call, Michael Davin and Timothy Baker, the Company's President and Chief Financial Officer, will discuss Cynosure's financial results and provide a business overview. Those who wish to listen to the conference call webcast should visit the "Investors" section of the Company's website at www.cynosure.com. The live call can also be accessed by dialing [phone] or [phone]. If you are unable to listen to the live call, the webcast will be archived for one year on the Company's website.

About Cynosure, Inc.

Cynosure designs, manufactures and markets medical devices for aesthetic procedures and precision surgical applications worldwide that enable plastic surgeons, dermatologists and other medical practitioners to perform non-invasive and minimally invasive procedures to remove hair, treat vascular and benign pigmented lesions, remove multi-colored tattoos, revitalize the skin, liquefy and remove unwanted fat through laser lipolysis, reduce cellulite, clear nails infected by toe fungus and ablate sweat glands. Cynosure's product portfolio is composed of a broad range of energy sources including Alexandrite, diode, Nd: YAG, picosecond, pulse dye, Q-switched lasers, intense pulsed light and radiofrequency technology. Cynosure sells its products globally under the Cynosure, Palomar, ConBio and Ellman brand names through a direct sales force in the United States, Canada, Mexico, France, Germany, Spain, the United Kingdom, Australia, China, Japan and Korea, and through international distributors in approximately 120 other countries. For corporate or product information, visit Cynosure's website at www.cynosure.com.

Forward-Looking Statements

Any statements in this press release about future expectations, plans and prospects for Cynosure, Inc., including Cynosure's intention to repurchase shares of its common stock from time to time under the share repurchase program, Cynosure's intention to broaden its reach through expanded indications and marketing programs, research and development projects, and Cynosure's active pipeline of potential acquisition opportunities, as well as other statements containing the words "believes," "anticipates," "plans," "expects," "will" and similar expressions, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the market price of Cynosure's stock prevailing from time to time, the nature of other investment opportunities presented to the Company from time to time, the Company's cash flows from operations, levels of demand for procedures performed with Cynosure products and for Cynosure products themselves, competition in the aesthetic laser industry, general business and economic conditions, effects of acquisitions that Cynosure has made or may make, Cynosure's ability to develop and commercialize new products, Cynosure's reliance on sole source suppliers, the inability to accurately predict the timing or outcome of regulatory decisions, and economic, market, technological and other factors discussed in Cynosure's most recent Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q for the first and second quarters of 2014, which are filed with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent Cynosure's views as of the date of this press release. Cynosure anticipates that subsequent events and developments will cause its views to change. However, although Cynosure may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Cynosure's views as of any date subsequent to the date of this press release.

Contact:

Timothy Baker Scott Solomon

President and Chief Financial Officer Vice President

Cynosure, Inc. Sharon Merrill Associates

[phone] [phone]

[e-mail] [e-mail]

Consolidated Statements of Income (Unaudited)

---------------------------------------------------------------------------------------

(In thousands, except per share data)

Three Months Ended September 30, Nine Months Ended September 30,

2014 2013 2014 2013

-------------- ---------------- --------------- ------------------

Revenues $ 71,530 $ 60,692 $ 206,107 $ 151,473

Cost of revenues 31,232 26,558 89,721 65,865

-------------- ---------------- --------------- ------------------

Gross profit 40,298 34,134 116,386 85,608

Operating

expenses

Selling and

marketing 21,721 17,364 62,710 44,198

Research and

development 5,746 5,033 16,319 12,350

Amortization of

intangible

assets

acquired 740 451 2,166 948

General and

administrative 6,841 12,712 22,197 42,189

-------------- ---------------- --------------- ------------------

Total operating

expenses 35,048 35,560 103,392 99,685

Income (loss)

from

operations 5,250 (1,426) 12,994 (14,077)

Interest

(expense)

income, net (342) 25 (1,034) 80

Other (expense)

(MORE TO FOLLOW) Dow Jones Newswires

October 28, 2014 08:00 ET (12:00 GMT)