Obagi Medical Products 8K Results of Operations and Financial Condition | OMPI 5 Nov 09

Obagi Medical Products develops and commercializes skin health products for the dermatology, plastic surgery, and related aesthetic markets. Using its Penetrating Therapeutics™ technologies, Obagi Medical's products are designed to improve penetration of agents across the skin barrier for common and visible skin conditions in adult skin including chloasma, melasma, senile lentigines, acne vulgaris and sun damage. The history of Obagi's skin care product introductions is as follows: Obagi Nu-Derm®, 1988; Obagi-C® Rx (the first and only prescription-strength vitamin C and hydroquinone system), 2004; Obagi® Professional-C (a line of highly stable vitamin C serums), 2005; Obagi® Condition & Enhance System™ for use with cosmetic procedures to enhance patient outcomes and satisfaction, 2006; Obagi ELASTIderm® eye treatment and Obagi CLENZIderm M.D. ™ acne therapeutic systems, 2007; a formulation of Obagi CLENZIderm ®M.D. Systems for normal to dry skin, June 2007; Obagi ELASTIderm® Décolletage System, January 2008; the Rosaclear™ System for the treatment of rosacea, January 2009; and Refissa™ Tretinoin Emollient Cream, 0.05%, September 2009. Visit www.obagi.com for information.

There are forward-looking statements contained herein, which can be identified by the use of forward-looking terminology such as the words "believes," "expects," "may," "will," "should," "potential," "anticipates," "plans," or "intends" and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be materially different from the future results, events or developments indicated in such forward-looking statements. Such factors include, but are not limited to the current condition of, and continued deterioration in, the global economy, intense competition our products face and will face in the future, the level of market acceptance of our products, the possibility that our products could be rendered obsolete by technological or medical advances, the possibility that we may become involved in intellectual property claims and litigation that could adversely affect the profitability of or our ability to sell our products, the possibility that our products may cause undesirable side effects and the fact that our ability to commercially distribute our products may be significantly harmed if the state or federal regulatory environment governing our products changes. A more detailed discussion of these and other factors that could affect results is contained in our filings with the U.S. Securities and Exchange Commission. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. No assurance can be given that the future results covered by the forward-looking statements will be achieved. All information in this press release is as of the date of this press release and Obagi Medical Products does not intend to update this information.

Obagi Medical Products, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands, except share and per share amounts)

	September 30,			December 31,
	2009			2008
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	23,458		$	13,938
Short-term investments		7,743			6,000
Accounts receivable, net		20,855			20,648
Accounts receivable from related parties, net		314			518
Inventories, net		6,569			6,845
Prepaid expenses and other current assets		4,759			6,404
Total current assets		63,698			54,353
Property and equipment, net		4,890			5,340
Goodwill		4,629			4,629
Intangible assets, net		5,018			5,267
Other assets		2,297			2,670
Total assets	$	80,532		$	72,259
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	7,675		$	6,478
Current portion of long-term debt		46			47
Accrued liabilities		3,672			3,510
Amounts due to related parties		485			169
Total current liabilities		11,878			10,204
Long-term debt		2			18
Other long-term liabilities		1,592			1,516
Total liabilities		13,472			11,738
Commitments and contingencies
Stockholders' equity
Common stock, $.001 par value; 100,000,000 shares authorized,
22,748,068 and 22,691,238 shares issued and 21,912,707
and 22,044,872 shares outstanding at September 30, 2009
and December 31, 2008, respectively		23			23
Additional paid-in capital		59,378			58,026
Accumulated earnings		13,085			6,557
Treasury stock, at cost; 811,031 and 627,367 shares at September 30, 2009
and December 31, 2008, respectively		(5,348	)		(4,016	)
Accumulated other comprehensive loss		(78	)		(69	)
Total stockholders' equity		67,060			60,521
Total liabilities and stockholders' equity	$	80,532		$	72,259

Obagi Medical Products, Inc.
Condensed Consolidated Statements of Income
(Dollars in thousands, except share and per share amounts)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2009			2008			2009			2008
	(unaudited)						(unaudited)

Net sales	$	24,899		$	26,012		$	73,393		$	79,158
Cost of sales		5,250			5,114			15,552			14,888
Gross profit		19,649			20,898			57,841			64,270
Selling, general and administrative expenses		13,610			14,985			43,850			43,260
Research and development expenses		1,114			1,155			3,492			3,872
Income from operations		4,925			4,758			10,499			17,138
Interest income		34			91			147			279
Interest expense		(17	)		(28	)		(53	)		(93	)
Income before provision for income taxes		4,942			4,821			10,593			17,324
Provision for income taxes		1,897			1,914			4,065			6,920
Net income	$	3,045		$	2,907		$	6,528		$	10,404

Net income attributable to common shares
Basic	$	0.14		$	0.13		$	0.30		$	0.46
Diluted	$	0.14		$	0.13		$	0.30		$	0.46

Weighted average common shares outstanding
Basic		21,912,707			22,658,232			21,989,952			22,652,205
Diluted		21,993,263			22,693,197			22,005,721			22,703,071

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2009		2008		2009		2008
	(unaudited)				(unaudited)
Net sales by segment
Physician Dispensed	$	23,357	$	24,798	$	69,854	$	75,750
Licensing		1,542		1,214		3,539		3,408
Net sales	$	24,899	$	26,012	$	73,393	$	79,158

Gross profit by segment
Physician Dispensed	$	18,138	$	19,717	$	54,395	$	60,963
Licensing		1,511		1,181		3,446		3,307
Gross profit	$	19,649	$	20,898	$	57,841	$	64,270

Geographic information
United States	$	20,256	$	21,743	$	60,469	$	66,510
International		4,643		4,269		12,924		12,648
Net sales	$	24,899	$	26,012	$	73,393	$	79,158


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
		2009		2008		2009		2008
	(unaudited)				(unaudited)
Net sales by product line
Physician dispensed
Nu-Derm	$	13,120	$	14,764	$	39,029	$	43,973
Vitamin C		2,771		3,104		8,712		9,386
Elasticity		2,362		2,399		6,728		9,502
Therapeutic		1,800		1,805		6,590		4,714
Other		3,304		2,726		8,795		8,175
Total		23,357		24,798		69,854		75,750
Licensing		1,542		1,214		3,539		3,408
Total net sales	$	24,899	$	26,012	$	73,393	$	79,158

Obagi Medical Products (OMPI) Inactive 8-KResults of Operations and Financial Condition