Biotech Values

[DewDiligence]

THRM Reports 1Q07 Results

[Revenue in 1Q07 was $15.2M, +22% vs 1Q06 and +3% vs 4Q06. More important, procedures per installed system, a gauge of what doctors think of the technology, were down slightly in 1Q07. Worldwide, doctors performed 1.25 procedures per system per week; in the U.S., they performed 1.0 procedures per system per week. I find it hard to see how THRM can become a successful business with these kinds of metrics. If the average utilization is this low, it implies that many docs have resorted to turning their systems into fancy clothes hangars, which in turn suggests that they don’t believe the procedure works.

The IPO lockup expiration that I’ve been waiting for occurs on May 18. Starting May 21, 55-60% of the overall shares outstanding will be released from the lockup. You don’t have to be a genius to predict what is likely to happen then.]

http://biz.yahoo.com/prnews/070501/sftu120.html?.v=78

>>
Tuesday May 1, 4:01 pm ET

Q1 Revenue Increases by 22% and Gross Profit Increases by 27% Over Prior Year Period

HAYWARD, Calif., May 1 /PRNewswire-FirstCall/ -- Thermage, Inc. (Nasdaq: THRM ), a leader in non-invasive tissue tightening in the aesthetic industry, today reported financial results for the first quarter ended March 31, 2007.

Revenue for the quarter ended March 31, 2007 was $15.2 million, up 22% from $12.4 million for the quarter ended March 31, 2006. Gross profit increased to $11.0 million or 72.6% of revenue, for the quarter ended March 31, 2007, up from $8.7 million or 69.6% of revenue for the quarter ended March 31, 2006. The Company reported GAAP net income of $0.1 million, or breakeven earnings per share, for the quarter ended March 31, 2007, versus a net loss of $2.8 million, or $0.68 per share, for the quarter ended March 31, 2006. Non- GAAP net income for the first quarter of 2007 was $1.3 million, or $0.05 per diluted share, compared to a net loss of $0.7 million, or $0.04 per share, for the prior year period.

"We continued to produce over 70% of sales from our high margin consumables products," said Stephen J. Fanning, President and Chief Executive Officer. "In addition, in mid-February we began shipping our new generator platform, ThermaCool NXT(TM), and received strong worldwide demand from both new and existing customers. As a result, we sold more generators in the first quarter than in any previous quarter for over the past two years."

"In January, we introduced a new procedure, Hands by Thermage(TM), with a corresponding new treatment tip," continued Mr. Fanning. "This is the first of several new procedures and treatment tips we plan to launch in 2007 that are designed to expand the range of applications for Thermage procedures, improve patient outcomes, and increase the value proposition for our customers."

"We continue to build the Thermage brand. In April, we launched Stars of Thermage(TM), an on-line DTC media campaign that features the real-life experiences of women who have had the Thermage procedure. We continue to be pleased with the high profile media coverage of Thermage generated recently in media such as US Magazine, USA Today, MSN Health and Fitness, and The Learning Channel. We have good momentum and will continue our strong marketing efforts to drive patient demand for Thermage applications," concluded Mr. Fanning.

Guidance:

Management expects revenue for full year 2007 to be in a range of $65 million to $68 million, an increase of 20% to 25% over full year 2006. [Even if they achieve this, it will merely be enough to reach breakeven GAAP income for the year, as stated below.]

For the full year 2007, we expect GAAP diluted earnings per share to be in a range of a net loss of $0.04 per share to net income of $0.03 per share. Non-GAAP diluted earnings per share are expected to be in a range of net income of $0.16 to $0.23 per share. The per share earnings amounts are based on fully diluted weighted average shares of 26 million. [The non-GAAP figure excludes stock-option expenses.]

Conference Call

The conference call is scheduled to begin at 1:30 p.m. PDT (4:30 p.m. EDT) on May 1, 2007. The call will be broadcast live over the Internet hosted at the Investor Relations section of the Company's website at http://www.thermage.com . In addition, you may call to listen to the live broadcast: 800-257-1836 for domestic participants and 303-262-2143 for international participants. Participating in the call will be Stephen J. Fanning, President and Chief Executive Officer, and Laureen DeBuono, Chief Financial Officer.

A taped replay of the conference call will also be available beginning approximately one hour after the call's conclusion and will remain accessible for seven days. This replay can be accessed by dialing 800-405-2236, Pass code 11077434# for domestic callers and 303-590-3000, Pass code 11077434# for international callers. An archived web cast will also be available at http://www.thermage.com .

About Thermage, Inc.

Thermage's innovative technology provides a unique non-invasive procedure designed to tighten and contour skin, significantly expanding the non-invasive aesthetic applications physicians can offer to the rapidly growing "anti-aging" market. For more information, call 1-510-259-7117 or visit http://www.thermage.com .
<<