PhotoMedex Announces Second Quarter Results
MONTGOMERYVILLE, Penn.--(BUSINESS WIRE)--Aug. 2, 2007--PhotoMedex,
Inc. (NASDAQ:PHMD) today announced financial and operating results for
the three months ended June 30, 2007. Financial highlights of the 2007
second quarter include:
-- Domestic XTRAC(R) procedures up 30% over the prior-year second
quarter and up 11% sequentially
-- Domestic XTRAC(R) revenues up 67% over the prior-year second
quarter and up 23% sequentially
-- XTRAC(R) gross profit up 158% over the prior-year second
quarter and up 53% sequentially
-- Domestic XTRAC gross margin up substantially to 52% in the
second quarter from 34% in the prior year
-- Dermatology division revenues up 26% over the prior-year
second quarter
Revenues for the second quarter of 2007 increased 13% to
$9,318,720 from $8,223,743 in the second quarter of 2006. Domestic
XTRAC revenues increased 67% over the 2006 second quarter and skin
care revenues were up slightly. Domestic XTRAC revenues increased 23%
over the first quarter of 2007.
Jeffrey O'Donnell, PhotoMedex CEO and President, commented, "We
continue to gain momentum with the sales our XTRAC program. Our
recurring procedure revenues continue to grow in proportion to new
insurance reimbursement and our patient-awareness efforts. Margins
from the XTRAC business continue to increase as a result of the
increases in recurring revenue as well as from capital sales of the
XTRAC system."
Mr. O'Donnell further commented, "We are also very excited about
the upcoming opportunities in our skin care business. As announced
this morning, we will be the exclusive providers of a break-through
product that promotes the appearance of longer, fuller, thicker
eyelashes in as little as one week. In addition, we will be marketing
our own clinically tested skin lightener, which is an effective
substitute for hydroquinone products that have come under scrutiny by
the FDA in recent months. These events, combined with robust orders at
the beginning of the third quarter from both existing and new
customers, bolster our belief that we will meet or exceed our annual
goal set for the skin care business. With the growth in the skin care
business that these new developments and continued success in the
XTRAC business are expected to bring, our expectations for the year
remain intact."
The net loss for the second quarter of 2007 was $1,835,958, or
$(0.03) per share, compared with a net loss for the second quarter of
2006 of $1,339,931, or $(0.03) per share. This year's second quarter
net loss included non-cash charges for stock-based compensation of
$375,772 and depreciation and amortization expense of $1,182,715. The
net loss for the second quarter of last year included non-cash charges
for stock-based compensation of $415,582 and depreciation and
amortization expense of $1,037,066. A reconciliation of non-GAAP
financial measures used in this news release to GAAP financial
measures and a presentation of the most directly comparable GAAP
financial measures is included below in the section on Non-GAAP
Measures.
Revenues for the six months ended June 30, 2007 were $18,347,288,
compared with revenues for the six months ended June 30, 2006 of
$16,304,905.
The net loss for the first half of 2007 was $3,719,440, or $(0.06)
per share, compared with a net loss for the first half of 2006 of
$3,690,192, or $(0.07) per share. This year's net loss included
charges for stock-based compensation expense of $802,091 and
depreciation and amortization expense of $2,331,915. Last year's loss
for the first six months included charges for stock-based compensation
of $805,752 and depreciation and amortization expense of $2,054,511.
As of June 30, 2007, the Company had cash and cash equivalents of
$10,679,607, including restricted cash of $117,000.
Non-GAAP Measures
To supplement PhotoMedex's consolidated financial statements
presented in accordance with GAAP, PhotoMedex is providing certain
non-GAAP measures of financial performance. These non-GAAP measures
include non-GAAP net loss and non-GAAP loss per share. PhotoMedex's
reference to these non-GAAP measures should be considered in addition
to results prepared under current accounting standards, but are not a
substitute for, nor superior to, GAAP results. These non-GAAP measures
are included to enhance investors' overall understanding of
PhotoMedex's current financial performance and to provide further
information for comparative information due to the adoption of
accounting standard FAS 123R.
Specifically, the Company believes the non-GAAP measures provide
useful information to management and to investors by isolating certain
expenses, gains and losses that may not be indicative of its core
operating results and business outlook. In addition, PhotoMedex
believes the non-GAAP measures that exclude stock-based compensation
enhance the comparability of results against prior periods.
Reconciliation to GAAP accounting of all non-GAAP measures included in
this press release is as follows:
SELECTED NON-GAAP RECONCILIATION
- ----------------------------------------------------------------------
For the Three Months For the Six Months ended
Ended June 30, June 30,
2007 2006 2007 2006
------------ ------------ ------------ ------------
Net Loss $(1,835,958) $(1,339,931) $(3,719,440) $(3,690,192)
Adjustments:
Stock-based
compensation 375,772 415,582 802,091 805,752
Depreciation
and
amortization 1,182,715 1,037,416 2,331,915 2,054,511
Other non-cash
charges 83,843 14,718 83,843 87,682
------------ ------------ ------------ ------------
Total
adjustments 1,642,330 1,467,716 3,217,849 2,947,945
------------ ------------ ------------ ------------
Non-GAAP adjusted
income (loss) $ (193,628) $ 127,785 $ (501,591) $ (742,247)
============ ============ ============ ============
Shares used in
computing basic
and fully
diluted 62,709,147 52,622,189 62,623,079 52,399,143
Non-GAAP adjusted
loss per fully
diluted share $ (0.00) $ 0.00 $ (0.01) $ (0.01)
Conference Call and Webcast Details
PhotoMedex will hold a conference call to discuss the Company's
second quarter 2007 results today at 4:30 p.m. Eastern time. In
addition to senior PhotoMedex management, David Goldberg, M.D.,
Director of Skin Laser & Surgery Specialists of New York and New
Jersey, and John Koo, M.D., Director of Psoriasis Treatment Center at
the University of California, San Francisco, will participate in the
call.
To participate in the conference call, dial 877.704.5384 (and
confirmation code # 2351514) approximately five to 10 minutes prior to
the scheduled start time. If you are unable to participate, a replay
of the call will be available from Thursday, August 2 at 7:30 p.m.
Eastern time until Wednesday, August 15 at 12 midnight, by dialing
888.203.1112 and using confirmation code # 2351514.
The live broadcast of PhotoMedex, Inc.'s quarterly conference call
will be available online with accompanying slide presentation by going
to www.photomedex.com and clicking on the link to Investor Relations,
and at www.streetevents.com. The online replay will be available
shortly after the call at those sites.
About PhotoMedex
PhotoMedex provides contract medical procedures to hospitals,
surgi-centers and doctors' offices, offering a wide range of products
and services across multiple specialty areas, including dermatology,
urology, gynecology, orthopedics, and other surgical specialties. The
Company is a leader in the development, manufacturing and marketing of
medical laser products and services. In addition as a result of the
merger with ProCyte, PhotoMedex now develops and markets products
based on its patented, clinically proven Copper Peptide technology for
skin health, hair care and wound care. The Company sells directly to
dermatologists, plastic and cosmetic surgeons, spas and salons and
through licenses with strategic partners into the consumer market,
including a long-term worldwide license agreement with Neutrogena(R),
a Johnson & Johnson company. ProCyte brands include Neova(R),
Ti-Silc(R), VitalCopper(R), Simple Solutions(R) and AquaSante(R).
SAFE HARBOR STATEMENT
Some portions of the conference call, particularly those
describing PhotoMedex' strategies, operating expense reductions and
business plans, will contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. While
PhotoMedex is working to achieve those goals, actual results could
differ materially from those projected in the forward-looking
statements as a result of a number of factors, including difficulties
in marketing its products and services, need for capital, competition
from other companies and other factors, any of which could have an
adverse effect on the business plans of PhotoMedex, its reputation in
the industry or its results. In light of significant uncertainties
inherent in forward-looking statements included herein and in the
conference call, the inclusion of such information in the conference
call should not be regarded as a representation by PhotoMedex or its
subsidiaries that the forward looking statements will be achieved. For
further details and a discussion of these and other risks and
uncertainties, please see our annual report on From 10-k for the year
ended December 31, 2006 and quarterly report on Form 10-Q for the
quarterly period ended March 31, 2007, which are on file with the SEC.
We undertake no obligation to publicly update any forward looking
statement, either as a result of new information, future events or
otherwise.
PHOTOMEDEX, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three Months
Ended June 30,
2007 2006
------------ ------------
Revenues $ 9,318,720 $ 8,223,743
Cost of Sales 4,904,473 4,224,190
------------ ------------
Gross profit 4,414,247 3,999,553
------------ ------------
Operating expenses:
Selling, general and administrative (2) 5,858,379 4,946,458
Research development and engineering 229,859 255,179
------------ ------------
6,088,238 5,201,637
Loss from continuing operations
before interest expense, net (1,673,991) (1,202,084)
Interest expense, net (161,967) (137,847)
------------ ------------
Net loss (1)$(1,835,958) $(1,339,931)
============ ============
Basic and diluted net loss per share $ (0.03) $ (0.03)
============ ============
Shares used in computing basic and diluted
net loss per share 62,709,147 52,622,189
============ ============
(1) Includes Depreciation and Amortization $ 1,182,715 $ 1,037,066
(2) Share-based compensation expense $ 375,772 $ 415,582
For the Six Months
Ended June 30,
2007 2006
------------ ------------
Revenues $18,347,288 $16,304,905
Cost of Sales 9,682,161 8,932,088
------------ ------------
Gross profit 8,665,127 7,372,817
------------ ------------
Operating expenses:
Selling, general and administrative 11,670,174 10,306,636
Research development and engineering 476,007 497,383
------------ ------------
12,146,181 10,804,019
Loss from continuing operations
before interest expense, net (3,481,054) (3,431,202)
Interest expense, net (238,386) (258,990)
------------ ------------
Net loss (1)$(3,719,440) $(3,690,192)
============ ============
Basic and diluted net loss per share $ (0.06) $ (0.07)
============ ============
Shares used in computing basic and diluted
net loss per share 62,623,079 52,399,143
============ ============
(1) Includes Depreciation and Amortization $ 2,331,915 $ 2,054,511
(2) Share-based compensation expense $ 802,091 $ 805,752
PHOTOMEDEX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December
2007 31, 2006
----------- -----------
Assets
Cash and cash equivalents $10,679,607 $12,885,742
Accounts receivable, net 5,692,954 4,999,224
Inventories 7,840,302 7,301,695
Other current assets 1,121,147 534,135
Property and equipment, net 9,581,929 9,054,098
Other assets, principally intangibles 22,086,609 22,706,627
----------- -----------
Total Assets $57,002,548 $57,481,521
=========== ===========
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities $ 5,984,704 $ 5,681,143
Other current liabilities 1,224,585 755,913
Bank and Lease Notes Payable 8,491,103 6,941,551
Stockholders' equity 41,302,156 44,102,914
----------- -----------
Total Liabilities and Stockholders'
Equity $57,002,548 $57,481,521
=========== ===========
PHOTOMEDEX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended June
30, Six Months Ended June 30,
2007 2006 2007 2006
------------ ------------ ------------ ------------
CASH FLOWS FROM
OPERATING
ACTIVITIES:
Net loss $(1,835,958) $(1,339,931) $(3,719,440) $(3,690,192)
Adjustments
to reconcile
net loss to
net cash
used in
operating
activities:
Depreciation
and
amortization 1,182,715 1,037,416 2,331,915 2,054,511
Stock-based
compensation
expense
related to
employee
options and
restricted
stock 375,772 431,768 802,091 898,559
Provision for
bad debts 83,843 - 83,843 58,246
Other - 14,718 - 29,436
Changes in
assets and
liabilities:
(Increase)
decrease in:
Accounts
Receivables (182,570) (126,936) (777,573) (271,585)
Inventories (109,095) (556,675) (566,115) (27,785)
Prepaid
expenses and
other assets (76,834) 273,813 103,935 367,049
Increase
(decrease)
in:
Accounts
payable &
other
accrued
expenses (717,863) (581,158) 362,698 150,078
Deferred
revenues 252,026 64,615 409,532 170,707
------------ ------------ ------------ ------------
Net cash (used
in) provided
by operating
activities (1,027,964) (782,370) (969,114) (260,976)
CASH FLOWS FROM
INVESTING
ACTIVITIES: (1,256,190) (1,042,222) (2,125,581) (2,132,755)
CASH FLOWS FROM
FINANCING
ACTIVITIES: 800,083 498,622 927,560 1,123,037
------------ ------------ ------------ ------------
NET DECREASE IN
CASH (1,484,071) (1,325,970) (2,167,135) (1,270,694)
CASH, BEGINNING
OF PERIOD 12,046,678 5,458,312 12,729,742 5,403,036
------------ ------------ ------------ ------------
CASH, END OF
PERIOD 10,562,607 4,132,342 10,562,607 4,132,342
RESTRICTED CASH 117,000 168,167 117,000 168,167
------------ ------------ ------------ ------------
TOTAL $10,679,607 $ 4,300,509 $10,679,607 $ 4,300,509
============ ============ ============ ============
The following tables reflect unaudited results of operations for
our business segments for the periods indicated below:
Unaudited
Three Months Ended June 30, 2007
------------------------------------------------------
INTERN'L SKIN CARE
DOMESTIC DERM.
XTRAC EQUIPMENT
----------- ---------- -----------
Revenues $2,215,927 $618,953 $3,094,697
Costs of revenues 1,058,351 383,023 1,001,517
----------- ---------- -----------
Gross profit 1,157,576 235,930 2,093,180
----------- ---------- -----------
Gross profit % 52.2% 38.1% 67.6%
Allocated Operating expenses:
Selling, general and
administrative 1,448,670 44,479 1,424,583
Engineering and product
development - - 99,599
Unallocated Operating expenses - - -
----------- ---------- -----------
1,448,670 44,479 1,524,182
----------- ---------- -----------
Income (loss) from operations (291,094) 191,451 568,998
Interest expense, net - - -
----------- ---------- -----------
Net income (loss) ($291,094) $191,451 $ 568,998
=========== ========== ===========
SURGICAL
SURGICAL PRODUCTS
SERVICES AND OTHER TOTAL
----------- ----------- -------------
Revenues $2,008,123 $1,381,020 $ 9,318,720
Costs of revenues 1,645,625 815,957 4,904,473
----------- ----------- -------------
Gross profit 362,498 565,063 4,414,247
----------- ----------- -------------
Gross profit % 18.1% 40.9% 47.4%
Allocated Operating expenses:
Selling, general and
administrative 230,889 161,305 3,309,925
Engineering and product
development - 130,260 229,859
Unallocated Operating expenses - - 2,548,454
----------- ----------- -------------
230,889 291,565 6,088,238
----------- ----------- -------------
Income (loss) from operations 131,609 273,498 (1,673,991)
Interest expense, net - - (161,967)
----------- ----------- -------------
Net income (loss) $ 131,609 $ 273,498 ($1,835,958)
=========== =========== =============
Unaudited
Three Months Ended June 30, 2006
------------------------------------------------------
INTERN'L
DOMESTIC DERM.
XTRAC EQUIPMENT SKIN CARE
----------- ---------- -----------
Revenues $1,328,215 $290,616 $3,069,827
Costs of revenues 879,464 122,069 939,795
----------- ---------- -----------
Gross profit 448,751 168,547 2,130,032
----------- ---------- -----------
Gross profit % 33.8% 58.0% 69.4%
Allocated Operating expenses:
Selling, general and
administrative 973,050 44,136 1,213,772
Engineering and product
development - - 126,520
Unallocated Operating expenses - - -
----------- ---------- -----------
973,050 44,136 1,340,292
----------- ---------- -----------
Income (loss) from operations (524,299) 124,411 789,740
Interest expense, net - - -
----------- ---------- -----------
Net income (loss) ($524,299) $124,411 $ 789,740
=========== ========== ===========
SURGICAL
SURGICAL PRODUCTS
SERVICES AND OTHER TOTAL
----------- ----------- -------------
Revenues $1,749,315 $1,785,770 $ 8,223,743
Costs of revenues 1,363,760 919,102 4,224,190
----------- ----------- -------------
Gross profit 385,555 866,668 3,999,553
----------- ----------- -------------
Gross profit % 22.0% 48.5% 48.6%
Allocated Operating expenses:
Selling, general and
administrative 253,573 137,790 2,622,321
Engineering and product
development - 128,659 255,179
Unallocated Operating expenses - - 2,324,137
----------- ----------- -------------
253,573 266,449 5,201,637
----------- ----------- -------------
Income (loss) from operations 131,982 600,219 (1,202,084)
Interest expense, net - - (137,847)
----------- ----------- -------------
Net income (loss) $ 131,982 $ 600,219 ($1,339,931)
=========== =========== =============
CONTACT: PhotoMedex, Inc.
Dennis McGrath, CFO, 215-619-3287
info@photomedex.com
or
Lippert/Heilshorn & Associates, Inc.
Kim Sutton Golodetz (investors)
212-838-3777
Kgolodetz@lhai.com
Bruce Voss, 310-691-7100
Bvoss@lhai.com