Exhibit 99.1
PhotoMedex Announces Third Quarter
Results
MONTGOMERYVILLE, Pa.--(BUSINESS WIRE)--Nov. 1, 2007--PhotoMedex,
Inc. (NASDAQ:PHMD) today announced financial and operating results for
the three months ended September 30, 2007. Financial highlights of the
2007 third quarter include:
-- Domestic XTRAC(R) procedures up 39% over the prior-year third
quarter and essentially unchanged sequentially
-- Domestic XTRAC treatment revenues up 36% over the prior-year
third quarter and up 12% sequentially
-- Domestic XTRAC gross margin up substantially to 50% in the
third quarter from 24% in the prior year
-- Dermatology division revenues up 12% over the prior-year third
quarter
Revenues for the third quarter of 2007 increased 8% to $8,921,871
from $8,291,547 in the third quarter of 2006. Domestic XTRAC revenues
increased 26% over the 2006 third quarter and skin care revenues were
up slightly.
Jeffrey O'Donnell, PhotoMedex CEO and President, commented, "XTRAC
procedures in the third quarter strengthened nicely compared with the
prior year, and remained at the higher level of the immediately
preceding quarter despite the seasonal slowdown that is typical in the
summer months for dermatology procedures. Notably, more than 29,000
procedures were performed during the quarter. We expect to see
continued momentum in the fourth quarter which we believe will result
in nearly 60% growth for the year and set a new record high for XTRAC
procedures."
Mr. O'Donnell further commented, "The recent significant increase
in third party payer positive reimbursement decisions for XTRAC has
resulted in an accelerated demand for units, and we added 47 new
contracted customers during the third quarter, increasing our domestic
installed base to 355 XTRAC systems. The encouraging reimbursement
news has also led us to accelerate the expansion of our field force.
We are adding both sales and clinical specialist to take advantage of
the increased demand and geographic opportunity in pursuit of our
growth objectives."
The net loss for the third quarter of 2007 was $1,652,972, or
$0.03 per share, compared with a net loss for the third quarter of
2006 of $1,693,035, or $0.03 per share. This year's third quarter net
loss included non-cash stock-based compensation expense of $395,058
and depreciation and amortization expense of $1,231,111. The net loss
for the third quarter of last year included non-cash stock-based
compensation expense of $349,553 and depreciation and amortization
expense of $1,047,178. 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 nine months ended September 30, 2007 were
$27,269,160, compared with revenues for the nine months ended
September 30, 2006 of $24,596,452.
The net loss for the nine months ended September 30, 2007 was
$5,372,211, or $0.09 per share, compared with a net loss for the nine
months ended September 30, 2006 of $5,383,228, or $0.10 per share.
This year's net loss included charges for stock-based compensation
expense of $1,197,150 and depreciation and amortization expense of
$3,563,026. Last year's loss for the first nine months included
stock-based compensation expense of $1,248,111 and depreciation and
amortization expense of $3,101,689.
As of September 30, 2007, the Company had cash and cash
equivalents of $8,276,473, 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
expense 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:
SELECT NON-GAAP RECONCILIATION
- ----------------------------------------------------------------------
For the Three Months For the Nine Months Ended
Ended September 30, September 30,
2007 2006 2007 2006
------------ ------------ ------------ ------------
Net Loss $(1,652,972) $(1,693,035) $(5,372,211) $(5,383,228)
Adjustments:
Stock-based
compensation 395,058 349,553 1,197,150 1,248,111
Depreciation and
amortization 1,231,111 1,047,178 3,563,026 3,101,689
Other non-cash
charges 19,221 22,685 103,064 110,366
------------ ------------ ------------ ------------
Total
adjustments 1,645,390 1,419,416 4,863,240 4,460,166
------------ ------------ ------------ ------------
Non-GAAP adjusted
loss $ (7,582) $ (273,619) $ (508,971) $ (923,062)
============ ============ ============ ============
Shares used in
computing basic
and fully diluted 62,956,881 52,659,132 62,735,569 52,486,758
Non-GAAP adjusted
loss per fully
diluted share $ (0.00) $ (0.01) $ (0.01) $ (0.02)
Conference Call and Webcast Details
PhotoMedex will hold a conference call to discuss the Company's
third quarter 2007 results today beginning at 4:30 p.m. Eastern time.
To participate in the conference call, dial 877-681-3373 (and
confirmation code 4189561). A replay of the call will be available
from Thursday, November 1 at 7:30 p.m. Eastern time until Wednesday,
November 14 at 12:00 midnight, by dialing 888-203-1112 and using
confirmation code 4189561.
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 continued
increase in XTRAC procedures performed, 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
June 30, 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.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
September 30,
2007 2006
------------ ------------
Revenues $ 8,921,871 $ 8,291,547
Cost of Sales 4,682,789 4,658,936
------------ ------------
Gross profit 4,239,082 3,632,611
------------ ------------
Operating expenses:
Selling, general and administrative (2) 5,548,329 4,899,404
Research and development and
engineering 202,163 267,062
------------ ------------
5,750,492 5,166,466
Loss from operations before
interest expense, net (1,511,410) (1,533,855)
Interest expense, net (141,562) (159,180)
------------ ------------
Net loss (1)$(1,652,972) $(1,693,035)(1)
============ ============
Basic and diluted net loss per share $ (0.03) $ (0.03)
============ ============
Shares used in computing basic and
diluted
net loss per share 62,956,881 52,659,132
============ ============
(1) Includes Depreciation and
Amortization 1,231,111 1,047,178
(2) Share-based compensation expense 395,058 349,553
PHOTOMEDEX, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Nine Months Ended
September 30,
2007 2006
------------- ------------
Revenues $27,269,160 $24,596,452
Cost of Sales 14,491,887 13,591,024
------------- ------------
Gross profit 12,777,273 11,005,428
------------- ------------
Operating expenses:
Selling, general and administrative 17,165,901 15,206,041
Research and development and engineering 603,636 764,445
------------- ------------
17,769,537 15,970,486
Loss from operations before
interest expense, net (4,992,264) (4,965,058)
Interest expense, net (379,947) (418,170)
------------- ------------
Net loss $(5,372,211) $(5,383,228)
============= ============
Basic and diluted net loss per share $ (0.09) $ (0.10)
============= ============
Shares used in computing basic and diluted
net loss per share 62,735,569 52,486,758
============= ============
(1) Includes Depreciation and Amortization 3,563,026 3,101,689
(2) Share-based compensation expense 1,197,150 1,248,111
PHOTOMEDEX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, December 31,
2007 2006
------------- ------------
Assets
Cash and cash equivalents $ 8,276,473 $12,885,742
Accounts receivable, net 5,828,110 4,999,224
Inventories 7,999,879 7,301,695
Other current assets 657,993 534,135
Property and equipment, net 10,056,058 9,054,098
Other assets 21,718,785 22,706,627
------------- ------------
Total Assets $ 54,537,298 $57,481,521
============= ============
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities $ 5,632,853 $ 5,681,143
Other current liabilities 1,320,890 755,913
Bank and Lease Notes Payable 7,537,537 6,941,551
Stockholders' equity 40,046,018 44,102,914
------------- ------------
Total Liabilities and Stockholders'
Equity $ 54,537,298 $57,481,521
============= ============
PHOTOMEDEX, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
------------ ------------ ------------ ------------
CASH FLOWS FROM
OPERATING
ACTIVITIES:
Net loss $(1,652,972) $(1,693,035) $(5,372,211) $(5,383,228)
Adjustments to
reconcile net
loss to net
cash used in
operating
activities:
Depreciation and
amortization 1,231,111 1,047,178 3,563,026 3,101,689
Stock-based
compensation
expense
related to
employee
options and
restricted
stock 395,058 349,552 1,197,150 1,248,111
Provision for
bad debts 19,221 7,965 103,064 66,211
Other - 14,720 - 44,155
Changes in assets
and liabilities:
(Increase)
decrease in:
Accounts
Receivables (154,277) 135,114 (931,950) (136,471)
Inventories (158,333) 640,212 (724,448) 612,427
Prepaid expenses
and other
assets 544,859 343,358 648,793 710,407
Increase
(decrease) in:
Accounts
payable &
other
accrued
expenses (167,943) 205,858 194,754 355,939
Deferred
revenues 68,398 28,051 477,930 198,758
------------ ------------ ------------
Net cash (used
in) provided by
operating
activities 125,122 1,078,973 (843,892) 817,998
CASH FLOWS FROM
INVESTING
ACTIVITIES: (1,399,791) (1,413,424) (3,525,372) (3,546,179)
CASH FLOWS FROM
FINANCING
ACTIVITIES: (1,128,565) 483,566 (201,005) 1,606,602
------------- ------------ ------------ ------------
NET (DECREASE)
INCREASE IN CASH (2,403,234) 149,115 (4,570,269) (1,121,579)
CASH, BEGINNING OF
PERIOD 10,562,707 4,132,342 12,729,742 5,403,036
------------ ------------ ------------ ------------
CASH, END OF
PERIOD 8,159,473 4,281,457 8,159,473 4,281,457
RESTRICTED CASH 117,000 168,167 117,000 168,167
------------ ------------ ------------ ------------
TOTAL $8,276,473 $4,449,624 $8,276,473 $4,449,624
============ ============ ============ ============
The following tables reflect unaudited results of operations for
our business segments for the periods indicated below:
Unaudited
Three Months Ended September 30,
2007
----------------------------------
INTERN'L
DOMESTIC DERM. SKIN CARE
XTRAC EQUIPMENT
---------- ---------- ----------
Revenues $2,025,148 $819,442 $3,065,905
Costs of revenues 1,009,237 538,292 903,688
---------- ---------- ----------
Gross profit 1,015,911 281,150 2,162,217
---------- ---------- ----------
Gross profit % 50.2% 34.3% 70.5%
Allocated operating expenses:
Selling, general and
administrative 1,496,326 40,809 1,323,172
Engineering and product
development - - 103,696
Unallocated operating expenses - - -
---------- ---------- ----------
1,496,326 40,809 1,426,868
---------- ---------- ----------
Income (loss) from operations (480,415) 240,341 735,349
Interest expense, net - - -
---------- ---------- ----------
Net income (loss) ($480,415) $240,341 $735,349
========== ========== ==========
Unaudited
Three Months Ended September 30,
2007
-----------------------------------
SURGICAL
SURGICAL PRODUCTS
SERVICES AND OTHER TOTAL
----------- ---------- ------------
Revenues $1,899,200 $1,112,176 $8,921,871
Costs of revenues 1,545,437 686,135 4,682,789
----------- ---------- ------------
Gross profit 353,763 426,041 4,239,082
----------- ---------- ------------
Gross profit % 18.6% 38.3% 47.5%
Allocated operating expenses:
Selling, general and
administrative 170,374 144,548 3,175,229
Engineering and product
development - 98,467 202,163
Unallocated operating expenses - - 2,373,100
----------- ---------- ------------
170,374 243,015 5,750,492
----------- ---------- ------------
Income (loss) from operations 183,389 183,026 (1,510,410)
Interest expense, net - - (141,562)
----------- ---------- ------------
Net income (loss) $183,389 $183,026 ($1,652,972)
=========== ========== ============
Unaudited
Three Months Ended September 30,
2006
----------------------------------
INTERN'L
DOMESTIC DERM. SKIN CARE
XTRAC EQUIPMENT
---------- ---------- ----------
Revenues $1,601,125 $616,342 $3,050,249
Costs of revenues 1,224,007 320,502 913,012
---------- ---------- ----------
Gross profit 377,118 295,840 2,137,237
---------- ---------- ----------
Gross profit % 23.6% 48.0% 70.1%
Allocated operating expenses:
Selling, general and administrative 987,163 60,876 1,300,536
Engineering and product development
- - 144,996
Unallocated operating expenses - - -
---------- ---------- ----------
987,163 60,876 1,445,532
---------- ---------- ----------
Income (loss) from operations (610,045) 234,964 691,705
Interest expense, net - - -
---------- ---------- ----------
Net income (loss) ($610,045) $234,964 $691,705
========== ========== ==========
Unaudited
Three Months Ended September 30,
2006
-----------------------------------
SURGICAL
SURGICAL PRODUCTS
SERVICES AND OTHER TOTAL
----------- ---------- ------------
Revenues $1,793,088 $1,230,743 $8,291,547
Costs of revenues 1,409,453 791,962 4,658,936
----------- ---------- ------------
Gross profit 383,635 438,781 3,632,611
----------- ---------- ------------
Gross profit % 21.4% 35.7% 43.8%
Allocated operating expenses:
Selling, general and
administrative 226,436 120,908 2,695,919
Engineering and product
development - 122,066 267,062
Unallocated operating expenses - - 2,203,485
----------- ---------- ------------
226,436 242,974 5,166,466
----------- ---------- ------------
Income (loss) from operations 157,199 195,808 (1,533,855)
Interest expense, net - - (159,180)
----------- ---------- ------------
Net income (loss) $157,199 $195,808 ($1,693,035)
=========== ========== ============
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
