SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
August 11, 2016
Commission File Number: 000-50867
Syneron Medical Ltd.
(Translation of registrant’s name into English)
Industrial Zone, Yokneam Illit 20692, P.O.B. 550, Israel
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F S Form 40-F £
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes £ No S
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ________
Attached hereto and incorporated herein by reference is a press release of the Company, dated August 4, 2016 entitled “Syneron Medical Reports Second Quarter 2016 Revenue of $75.0 Million and Non-GAAP EPS of $0.09.”
The GAAP financial statement tables included in the press release (pages 6-8 of the press release) are hereby incorporated by reference into the Company’s Registration Statements on Form S-8 filed with the Securities and Exchange Commission on November 16, 2004 (Registration No. 333-120559), on January 8, 2010 (Registration No. 333-164250) and on January 15, 2010 (Registration No. 333-164351), and on December 9, 2013 (Registration No. 333-192729).
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | SYNERON MEDICAL LTD. | |
| | | | |
| By: | /s/ Hugo Goldman | |
| | | Name: Hugo Goldman | |
| | | Title: Chief Financial Officer | |
| | | | |
Date: August 11, 2016
Syneron Medical Reports Second Quarter 2016 Revenue of $75.0 Million and
Non-GAAP EPS of $0.09
Emerging Products1 Total Revenue Increased 46% Year-Over-Year; Grew to 30% of Total
Revenue from 21% in 2Q15
Body Shaping Revenue of $17.3 Million, Including Significant Milestone of UltraShape Revenue
of More Than $10 Million
Irvine, CA, August 4, 2016 – Syneron Medical Ltd. (NASDAQ:ELOS), a leading global aesthetic device company, today announced financial results for the three month period ended June 30, 2016.
Second Quarter 2016 Non-GAAP2 Financial Highlights:
| · | Revenue of $75.0 million, up 2.0% year-over-year, with 11.5% international growth and a 14% decline in North America |
| · | Emerging products revenue, which represent the Company’s strategic growth drivers, grew 46% year-over-year, primarily driven by the Body Shaping portfolio |
| · | Total Body Shaping revenue of $17.3 million grew 66% year-over-year |
| · | Non-GAAP net income of $3.2 million, or $0.09 per share, compared to $2.5 million and $0.07 per share in Q2 2015 |
| · | Cash position as of June 30, 2016 of $76.7 million with no debt; generated $5.6 million in cash flow from operations |
Amit Meridor, Chief Executive Officer of Syneron Medical, said “We had a challenging quarter in North America, results were lower than anticipated, and we took immediate action to improve performance in this region. We eliminated the North America CEO position to simplify the management structure and ensure efficient support of the sales team. I have taken leadership in North America, with the Aesthetic and Body Shaping divisions reporting directly to me. Additional steps we took in North America include streamlining of the aesthetic and body sales forces and better support of the sales force across all functions.”
Amit Meridor continued, “On the positive side we delivered on several key initiatives in the second quarter, headlined by our Emerging Products growing 46% year-over-year and expanding to 30% of total revenue, increasing our installed base of systems driving high margin recurring revenue. This was primarily driven by record results from our Body Shaping products and specifically the ongoing international launch of UltraShape and the recent launch of UltraShape Power in select international markets. This contributed to overall international growth of 11.5%, which represents 68% of our total revenue. We maintained prudent expense management and delivered improved operating margin in the second quarter, demonstrating our commitment to this key element of our strategy. We are also focused on important initiatives such as the U.S. launches of UltraShape Power and the new 785nm wavelength for PicoWay, providing positive growth catalysts in the second half of the year. We are particularly excited to introduce UltraShape Power to customers in the U.S. and build on the record UltraShape worldwide results delivered in the second quarter.”
1 Emerging Products, which represent the Company’s strategic growth drivers, include product and consumable revenue from UltraShape, VelaShape, PicoWay, Profound and CO2RE Intima.
2 The second quarter 2016 year-over-year comparisons are on a non-GAAP basis, excluding items set forth in the section titled “Non-GAAP Financial Highlights for the Second Quarter Ended June 30, 2016.”
Revenue Highlights for the Second Quarter Ended June 30, 2016:
Second quarter 2016 revenue was driven by 46% growth from the Company’s Emerging Products, which represent the Company’s strategic growth drivers including UltraShape, VelaShape, PicoWay, Profound and CO2RE Intima. Second quarter Emerging Products growth was primarily driven by the Body Shaping portfolio, which delivered revenue of $17.3 million, up 66% year-over-year. This included the significant milestone of more than $10 million of UltraShape revenue, driven by the ongoing international launch of UltraShape and the launch of UltraShape Power in select international markets. The Company is launching UltraShape Power in the United States in the third quarter 2016.
In May, the Company sold its Dental laser subsidiary. The divestiture of this non-core asset is aligned with the Company’s strategy to focus on driving growth and improving profitability with its Emerging Products. Second quarter 2016 revenue included only $0.2 million in sales from the Dental laser subsidiary, reflecting only the sale at the end of May. This compares to $0.7 million in sales for the Dental laser subsidiary in the second quarter 2015.
Non-GAAP Financial Highlights for the Second Quarter Ended June 30, 2016:
Gross Margin for the second quarter 2016 was 52.8%, compared to 53.9% in the second quarter 2015. This decrease reflects an increased mix of international distributor revenue, partially offset by sales of the Company’s higher margin Emerging Products.
Operating Income for the second quarter 2016 was $4.4 million, compared to $2.9 million in the second quarter 2015. Operating margin for the second quarter 2016 was 5.8%, compared to 4.0% in the second quarter 2015. This increase reflects growth from the Company’s higher margin Emerging Products, cost efficiency initiatives and lower spending, and expansion in international markets starting to leverage the Company’s existing infrastructure.
Net Income and Earnings per Share in the second quarter 2016 was $3.2 million, or $0.09 per share, compared to net income of $2.5 million, or $0.07 per share, in the second quarter 2015. The Company had an average of 35.3 million shares outstanding in the second quarter 2016, compared to an average of 36.5 million shares outstanding in the second quarter 2015.
The non-GAAP financial information for the second quarter 2016 is adjusted to exclude the following items, which are detailed in the Company's financial tables presented at the end of this press release:
| - | Stock-based compensation expense of $0.8 million, compared to $0.9 million in the second quarter 2015. |
| - | Amortization of acquired intangible assets of $1.2 million, compared to $1.5 million in the second quarter 2015. |
| - | Fair Value adjustment to investment in Illuminage Beauty JV of $2.0 million, compared to $(0.6) million in the second quarter 2015. |
| - | Gain from sale of Light Instruments (dental laser subsidiary) of $1.5 million. |
| - | Legal settlements and related fees of $0.0, compared to $1.4 million in the second quarter 2015. |
| - | Tax benefit of $0.3 million, compared to $0.4 million in the second quarter 2015. |
GAAP Financial Highlights for the Second Quarter Ended June 30, 2016:
Gross Margin for the second quarter 2016 was 51.6%, compared to 52.4% in the second quarter 2015.
Operating Income/Loss for the second quarter 2016 was positive operating income of $1.9 million, compared to an operating loss of $(0.2) million in the second quarter 2015.
Net Income/Loss and Earnings/Loss per Share in the second quarter 2016 was net positive income of $1.0 million, or earnings of $0.03 per share, compared to a net loss of $(0.3) million, or loss of $(0.01) per share, in the second quarter 2015.
Cash Position As of June 30, 2016, the Company’s overall cash position, including cash and cash equivalents, short-term bank deposits and marketable securities, grew to $76.7 million from $72.1 million as of March 31, 2016.
Use of Non-GAAP Measures:
This press release provides financial measures for gross margin, operating income (loss), net income (loss) and earnings (loss) per share, which exclude expenses related to stock-based compensation expense, amortization of acquired intangible assets, fair value adjustment to investment in Illuminage Beauty JV, re-measurement of contingent consideration fair value, legal settlements and related fees, gain from sale of Light Instruments, and tax benefit, and are therefore not calculated in accordance with Generally Accepted Accounting Principles (GAAP).
Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance because it reflects our ongoing operational results, operating income (loss), net income (loss) and earnings (loss) per share, and exclude the impact of non-recurring, unusual items or trends that are not considered core influences on the results of operations, financial position or cash flows. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information prepared and presented in accordance with GAAP. Management uses non-GAAP measures to make operational and investment decisions and to evaluate the Company's performance and, therefore, believes it important to make these non-GAAP adjustments available to investors. A reconciliation of each GAAP to non-GAAP financial measure discussed in this press release is contained in the accompanying financial tables.
Conference Call:
Syneron management will host its second quarter 2016 earnings conference call today at 8:30 a.m. ET. Syneron will be broadcasting live via the Investor Relations section of its website, www.investors.syneron.com. To access the call, enter the Syneron Investor Relations website, then click on the webcast link “Q2 2016 Results Webcast.”
Participants are encouraged to log on at least 15 minutes prior to the conference call in order to download the applicable audio software. The call can be heard live or with an on-line replay which will follow. Those interested in participating in the call and the question and answer session should dial 877-280-2296 in the U.S., and 1-212-444-0412 from outside of the U.S. The conference pass code is: 9768954.
About Syneron Medical:
Syneron Medical is a leading global aesthetic device company with a comprehensive product portfolio and a global distribution footprint. The Company's technology enables physicians to provide advanced solutions for a broad range of medical-aesthetic applications including body contouring, hair removal, wrinkle reduction, tattoo removal, improving the skin's appearance through the treatment of superficial benign vascular and pigmented lesions, and the treatment of acne, leg veins and cellulite. The Company has a wide portfolio of trusted, leading products sold under the Syneron and Candela brand names, including UltraShape, VelaShape, CO2RE, CO2RE Intima, GentleLase, VBeam Perfecta, PicoWay, Profound and elos Plus.
Founded in 2000, the corporate, R&D, and manufacturing headquarters for Syneron Medical are located in Israel. Syneron Medical also has R&D and manufacturing operations in the U.S. The company markets, services and supports its products in 86 countries. It has offices in North America, France, Germany, Italy, Portugal, Spain, UK, Australia, China, Japan, and Hong Kong and distributors worldwide.
For additional information, please visit http://www.syneron-candela.com.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
Any statements contained in this document regarding future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Further, any statements that are not statements of historical fact (including statements containing “believes,” “anticipates,” “plans,” “expects,” “may,” “will,” “would,” “intends,” “estimates” and similar expressions) should also be considered to be forward-looking statements.
Forward-looking statements in this press release include Mr. Meridor’s statement that the advanced features and performance of UltraShape Power will drive increased adoption and utilization, as well as the statement that the new 785nm wavelength for PicoWay will be a growth driver in the second half of 2016. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including the risks associated with the successful build-out of our North American sales force and its ability to enable us to generate more North American revenue and improve margins, the market acceptance of our new products, including UltraShape and PicoWay products, and the continued growth in the APAC region, as well as those risks set forth in Syneron Medical Ltd.’s most recent Annual Report on Form 20-F, and the other factors described in the filings that Syneron Medical Ltd. makes with the SEC from time to time. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, Syneron Medical Ltd.’s actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements.
In addition, the statements in this document reflect the expectations and beliefs of Syneron Medical Ltd. as of the date of this document. While Syneron Medical Ltd. may elect to update these forward-looking statements publicly in the future, it specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Syneron Medical Ltd.’s views as of any date after the date of this document.
Syneron, the Syneron logo, UltraShape, eMatrix and elos are trademarks of Syneron Medical Ltd. and may be registered in certain jurisdictions. The elos (Electro-Optical Synergy) technology is a proprietary technology of Syneron Medical Ltd. All other names are the property of their respective owners.
Syneron Contacts:
Hugo Goldman, Chief Financial Officer, Syneron Medical
+972-73-2442200
Email: hugo.goldman@syneron.com
Zack Kubow, The Ruth Group
646-536-7020
Email: zkubow@theruthgroup.com
Syneron Medical Ltd.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share data)
| | | For the three-months ended | | | For the six-months ended | |
| | | June 30, | | | June 30, | | | June 30, | | | June 30, | |
| | | 2016 | | | 2015 | | | 2016 | | | 2015 | |
| | | | | | | | | | | | | |
| Revenues | | $ | 74,967 | | | $ | 73,507 | | | $ | 143,663 | | | $ | 136,884 | |
| Cost of revenues | | | 36,319 | | | | 34,960 | | | | 69,400 | | | | 65,674 | |
| | | | | | | | | | | | | | | | | |
| Gross profit | | | 38,648 | | | | 38,547 | | | | 74,263 | | | | 71,210 | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Sales and marketing | | | 23,514 | | | | 24,718 | | | | 46,221 | | | | 46,164 | |
| General and administrative | | | 6,941 | | | | 8,495 | | | | 14,439 | | | | 15,210 | |
| Research and development | | | 5,825 | | | | 6,155 | | | | 11,539 | | | | 11,814 | |
| Other (income) expenses, net | | | 506 | | | | (630 | ) | | | 506 | | | | (574 | ) |
| | | | | | | | | | | | | | | | | |
| Total operating expenses | | | 36,786 | | | | 38,738 | | | | 72,705 | | | | 72,614 | |
| | | | | | | | | | | | | | | | | |
| Operating income (loss) | | | 1,862 | | | | (191 | ) | | | 1,558 | | | | (1,404 | ) |
| | | | | | | | | | | | | | | | | |
| Financial income, net | | | 185 | | | | 410 | | | | 270 | | | | 5 | |
| | | | | | | | | | | | | | | | | |
| Income (loss) before taxes on income | | | 2,047 | | | | 219 | | | | 1,828 | | | | (1,399 | ) |
| | | | | | | | | | | | | | | | | |
| Taxes on income | | | 1,065 | | | | 509 | | | | 1,337 | | | | 381 | |
| | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | 982 | | | $ | (290 | ) | | $ | 491 | | | $ | (1,780 | ) |
| | | | | | | | | | | | | | | | | |
| Income (loss) per share: | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Basic | | | | | | | | | | | | | | | | |
| Net income (loss) per share | | $ | 0.03 | | | $ | (0.01 | ) | | $ | 0.01 | | | $ | (0.05 | ) |
| | | | | | | | | | | | | | | | | |
| Diluted | | | | | | | | | | | | | | | | |
| Net income (loss) per share | | $ | 0.03 | | | $ | (0.01 | ) | | $ | 0.01 | | | $ | (0.05 | ) |
| | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 35,275 | | | | 36,519 | | | | 34,777 | | | | 36,620 | |
| | | | | | | | | | | | | | | | | |
| Diluted | | | 35,451 | | | | 36,519 | | | | 34,953 | | | | 36,620 | |
Syneron Medical Ltd.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
| | | June 30, | | | December 31, | |
| | | 2016 | | | 2015 | |
| | | | | | | |
| Assets | | | | | | |
| | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 48,056 | | | $ | 56,330 | |
| Short-term bank deposits | | | 339 | | | | 357 | |
| Available-for-sale marketable securities | | | 19,957 | | | | 14,274 | |
| Trade receivable, net | | | 54,872 | | | | 53,423 | |
| Other accounts receivables and prepaid expenses | | | 17,488 | | | | 12,438 | |
| Inventories | | | 47,925 | | | | 49,352 | |
| | | | | | | | | |
| Total current assets | | | 188,637 | | | | 186,174 | |
| | | | | | | | | |
| Long-term assets: | | | | | | | | |
| Severance pay fund | | | 508 | | | | 509 | |
| Long-term deposits and others | | | 274 | | | | 292 | |
| Long-term available-for-sale marketable securities | | | 8,316 | | | | 15,695 | |
| Investment in affiliated company | | | 19,800 | | | | 19,800 | |
| Property and equipment, net | | | 12,071 | | | | 9,823 | |
| Deferred taxes | | | 20,968 | | | | 20,363 | |
| Intangible assets, net | | | 10,500 | | | | 12,694 | |
| Goodwill | | | 18,257 | | | | 21,442 | |
| | | | | | | | | |
| Total long-term assets | | | 90,694 | | | | 100,618 | |
| | | | | | | | | |
| Total assets | | $ | 279,331 | | | $ | 286,792 | |
| | | | | | | | | |
| Liabilities and Stockholders' Equity | | | | | | | | |
| | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 17,497 | | | $ | 23,045 | |
| Deferred revenues | | | 13,627 | | | | 12,481 | |
| Other accounts payable and accrued expenses | | | 35,218 | | | | 36,316 | |
| | | | | | | | | |
| Total current liabilities | | | 66,342 | | | | 71,842 | |
| | | | | | | | | |
| Long-term liabilities: | | | | | | | | |
| Contingent consideration liability | | | 878 | | | | 878 | |
| Deferred revenues | | | 3,183 | | | | 3,395 | |
| Warranty accruals | | | 944 | | | | 861 | |
| Accrued severance pay | | | 600 | | | | 603 | |
| | | | | | | | | |
| Total long-term liabilities | | | 5,605 | | | | 5,737 | |
| | | | | | | | | |
| Stockholders' equity: | | | 207,384 | | | | 209,213 | |
| | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 279,331 | | | $ | 286,792 | |
Syneron Medical Ltd.
Syneron Medical Ltd.
