HAYWARD, Calif., July 30 /PRNewswire-FirstCall/ -- Solta Medical, Inc. (Nasdaq: SLTM), a global leader in the medical aesthetics market, today announced results for the second quarter ended June 30, 2009. Revenue for the quarter was $27.4 million, an increase of approximately $9.5 million, or 53%, as compared to the second quarter 2008 reflecting increased revenue as a result of the acquisition of Reliant Technologies, Inc. on December 23, 2008. The company generated $2.4 million in cash flow from operations during the quarter and achieved profitability.
Solta Medical's reported results for the second quarter of 2009 include non-cash purchase price related charges of $1.4 million and non-cash stock based compensation charges of $0.9 million. The GAAP net income for the quarter including these charges was $0.1 million, or $0.00 per share as compared to a net income of $2.0 million, or $0.08 per share reported for the second quarter of 2008. The non-GAAP net income for the quarter excluding these charges was $2.3 million, or $0.05 per share as compared to a non-GAAP net income of $3.0 million, or $0.12 per share reported for the second quarter of 2008.
"Our second quarter performance further reflects the successful integration of our Reliant acquisition. Our revenue rose sequentially from the previous quarter by $2.2 million, or 9%, while our operating expenses declined from the previous quarter by $2.3 million, or 12%," said Stephen J. Fanning, Chairman of the Board, President and CEO of Solta Medical. "As with the first quarter, international markets accounted for 57% of total revenue. U.S. and international revenues grew sequentially from the first quarter by 10% and 8%, respectively. We also drove sequential revenue growth in the range of 7% to 10% from all major product segments with tips and other consumables accounting for 49% of total revenue."
"In addition, our working capital has grown by $2.4 million, or 17%, from year-end 2008. We demonstrated solid management of our inventory levels which have declined by nearly $7 million, or 38%, from year-end 2008. At the end of the quarter we had cash and investments of $19.1 million," Mr. Fanning concluded.
Financial Goals for 2009
The Company updated its financial goals for 2009 as follows:
- Realize up to $25 million in cost synergies as a result of the acquisition of Reliant Technologies, Inc.
- Generate positive EBITDA for the full year 2009
- Generate positive cash flow from operations for the second half of 2009
- Achieve a non-GAAP gross margin in the range of 64% to 66% for the full year 2009 excluding non-cash amortization charges and non-cash purchase price related adjustments. The gross margin has been decreased from the previous goal of 70% due to a higher proportion of revenue derived from both international distributors and system upgrades.
Non-GAAP Presentation
To supplement the condensed consolidated financial information presented on a GAAP basis, management has provided non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP EBITDA, non-GAAP net income (loss) and non-GAAP earnings (loss) per share measures that exclude the impact of purchase price related adjustments, severance costs, merger related costs, and stock-based compensation expenses, all net of income taxes. The Company believes that these non-GAAP financial measures provide investors with insight into what is used by management to conduct a more meaningful and consistent comparison of the Company's ongoing operating results and trends, compared with historical results. This presentation is also consistent with management's internal use of the measures, which it uses to measure the performance of ongoing operating results, against prior periods and against our internally developed targets. There are limitations in using these non-GAAP financial measures because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. These non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP financial measures. Investors and potential investors should consider non-GAAP financial measures only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP and the reconciliation of non-GAAP financial measures attached to this release.
Conference Call Information
Solta Medical will host a conference call and webcast today, Thursday, July 30, 2009, at 4:30 p.m. Eastern Time (1:30 p.m. Pacific) to discuss the financial results and current corporate developments. The dial-in number for the conference call is 877-941-1848 for domestic participants and 480-629-9722 for international participants.
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 800-406-7325 for domestic callers and 303-590-3030 for international callers. Both callers will need to use the Passcode 4093352#. To access the live webcast of the call, go to Solta Medical's website at www.solta.com and click on Investor Relations. An archived webcast will also be available at www.solta.com.
About Solta Medical, Inc.
Solta Medical, Inc. is a global leader in the medical aesthetics market providing innovative, safe, and effective anti-aging solutions for patients which enhance and expand the practice of medical aesthetics for physicians.
The company offers products to address aging skin under the industry's two premier brands: Thermage(R) and Fraxel(R). Thermage is an innovative, non-invasive radiofrequency procedure for tightening and contouring skin. As the leader in fractional laser technology, Fraxel delivers minimally invasive clinical solutions to resurface aging and sun damaged skin. Since 2002, over one million Thermage and Fraxel procedures have been performed worldwide. Thermage and Fraxel are the perfect complement for any aesthetic practice. Our products are available in over 100 countries. For more information about Solta Medical, call 877-782-2286 or log on to www.Solta.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, including statements regarding our financial goals for 2009. Forward-looking statements are based on management's current, preliminary expectations and are subject to risks and uncertainties, which may cause Solta Medical's actual results to differ materially from the statements contained herein. Factors that might cause such a difference include the possibility that the development and release of new products and initiatives do not proceed as anticipated, the market for the sale of these new products and initiatives does not develop as expected, the remaining risks and uncertainties with the integration process, the risks related to our future liquidity if we fail to achieve adequate levels of revenue or sustained profitability, if unanticipated expenses or other uses of cash arise or if we are not able to maintain compliance with borrowing facility covenants and the risks relating to Solta Medical's ability to achieve its stated financial goals as a result of, among other things, economic conditions and consumer and physician confidence causing changes in consumer and physician spending habits that affect demand for our products and treatments. Further information on potential risk factors that could affect Solta Medical's business and its financial results are detailed in its Form 10-Q for the quarter ended March 31, 2009, and other reports as filed from time to time with the Securities and Exchange Commission. Undue reliance should not be placed on forward-looking statements, especially guidance on future financial performance, which speaks only as of the date they are made. Solta Medical undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date they were made, or to reflect the occurrence of unanticipated events.
Web Site: http://www.Solta.com
Solta Medical, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands of dollars, except share and per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
---------- ---------- ---------- ----------
Net revenue $27,417 $17,881 $52,662 $34,112
Cost of revenue 10,777 4,095 22,284 8,453
---------- ---------- ---------- ----------
Gross margin 16,640 13,786 30,378 25,659
---------- ---------- ---------- ----------
Operating expenses:
Sales and marketing 9,038 6,993 19,513 14,415
Research and development 3,949 2,173 7,865 4,904
General and administrative 3,452 3,046 7,770 7,598
---------- ---------- ---------- ----------
Total operating expenses 16,439 12,212 35,148 26,917
---------- ---------- ---------- ----------
Income (loss) from operations 201 1,574 (4,770) (1,258)
Interest and other income 41 543 302 1,146
Interest and other expense (104) - (151) -
---------- ---------- ---------- ----------
Income (loss) before
income taxes 138 2,117 (4,619) (112)
Provision for income taxes (53) (78) (71) (86)
---------- ---------- ---------- ----------
Net income (loss) $85 $2,039 $(4,690) $(198)
========== ========== ========== ==========
Net income (loss)
per share - basic $0.00 $0.09 $(0.10) $(0.01)
========== ========== ========== ==========
Net income (loss) per
share - diluted $0.00 $0.08 $(0.10) $(0.01)
========== ========== ========== ==========
Weighted average shares
outstanding used in
calculating net income
(loss) per share:
Basic 47,806,228 23,855,246 47,782,656 23,743,043
========== ========== ========== ==========
Diluted 47,920,161 24,418,630 47,782,656 23,743,043
========== ========== ========== ==========
Solta Medical, Inc.
NON-GAAP RECONCILIATION OF GROSS MARGIN, OPERATING INCOME (L0SS), EBITDA,
NET INCOME (LOSS) AND NET INCOME (LOSS) PER SHARE
(in thousands, except share and per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
---------- ---------- ---------- ----------
GAAP Gross margin $16,640 $13,786 $30,378 $25,659
Non-GAAP adjustments
to gross margin:
Purchase price related
adjustments 1,048 - 4,024 -
Stock-based compensation 61 53 114 96
---------- ---------- ---------- ----------
Non-GAAP gross margin $17,749 $13,839 $34,516 $25,755
========== ========== ========== ==========
Non-GAAP gross margin as
% of sales 65% 77% 66% 76%
========== ========== ========== ==========
GAAP income (loss) from
operations $201 $1,574 $(4,770) $(1,258)
Non-GAAP adjustments to
income (loss)
from operations:
Purchase price related
adjustments 1,383 - 4,675 -
Severance expenses - - 118 -
Merger-related costs - - - 969
Stock-based compensation 864 923 1,653 1,902
---------- ---------- ---------- ----------
Non-GAAP income from
operations 2,448 2,497 1,676 1,613
Depreciation expenses 670 335 1,395 666
---------- ---------- ---------- ----------
Non-GAAP EBITDA $3,118 $2,832 $3,071 $2,279
========== ========== ========== ==========
GAAP net income (loss) $85 $2,039 $(4,690) $(198)
Non-GAAP adjustments
to net income (loss):
Purchase price related
adjustments 1,383 - 4,675 -
Severance expenses - - 118 -
Merger-related costs - - - 969
Stock-based compensation 864 923 1,653 1,902
---------- ---------- ---------- ----------
Non-GAAP net income $2,332 $2,962 $1,756 $2,673
========== ========== ========== ==========
GAAP basic net income
(loss) per share $0.00 $0.09 $(0.10) $(0.01)
Non-GAAP adjustments to basic
income (loss) per share:
Purchase price related
adjustments 0.03 - 0.10 -
Severance expenses - - 0.00 -
Merger-related costs - - - 0.04
Stock-based compensation 0.02 $0.03 0.04 0.08
---------- ---------- ---------- ----------
Non-GAAP basic net income
per share $0.05 $0.12 $0.04 $0.11
========== ========== ========== ==========
Non-GAAP diluted net income
per share $0.05 $0.12 $0.04 $0.11
========== ========== ========== ==========
GAAP weighted average shares
outstanding used in
calculating
basic net income (loss)
per share 47,806,228 23,855,246 47,782,656 23,743,043
========== ========== ========== ==========
GAAP weighted average shares
outstanding used in
calculating diluted net
income (loss) per share 47,920,161 24,418,630 47,782,656 23,743,043
Adjustments for dilutive
potential common stock 447,282 313,718 400,552 1,105,538
---------- ---------- ---------- ----------
Weighted average shares
outstanding used in
calculating non-GAAP
diluted net income
(loss) per share 48,367,443 24,732,348 48,183,208 24,848,581
========== ========== ========== ==========
Solta Medical, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of dollars, except share and per share data)
(Unaudited)
June 30, December 31,
2009 2008
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $14,615 $7,556
Marketable investments 4,519 17,870
Accounts receivable, net 13,337 5,119
Inventories, net 11,365 18,304
Prepaid expenses and other current assets 4,047 4,074
---------- ----------
Total current assets 47,883 52,923
Property and equipment, net 6,197 6,841
Purchased intangible assets, net 38,899 40,999
Goodwill 48,348 48,158
Other assets 266 247
---------- ----------
Total assets $141,593 $149,168
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable $4,963 $8,080
Accrued liabilities 11,685 11,085
Accrued restructuring 596 3,549
Current portion of deferred revenue 4,134 3,658
Short-term margin account borrowings 3,329 12,399
Line of credit obligation 5,225 -
Current portion of term loan 1,389 -
Customer deposits 346 288
---------- ----------
Total current liabilities 31,667 39,059
Deferred revenue, net of current portion 689 688
Term loan, net of current portion 2,359 -
Non-current tax liabilities 1,520 1,464
Other liabilities 314 133
---------- ----------
Total liabilities 36,549 41,344
---------- ----------
Stockholders' equity:
Common stock, $0.001 par value:
100,000,000 shares authorized
47,852,445 and 47,758,823 shares issued
and outstanding at June 30, 2009 and
December 31, 2008 48 48
Additional paid-in capital 167,427 165,680
Deferred stock-based compensation - (2)
Accumulated other comprehensive loss 161 -
Accumulated deficit (62,592) (57,902)
---------- ----------
Total stockholders' equity 105,044 107,824
---------- ----------
Total liabilities and stockholders' equity $141,593 $149,168
========== ==========
SOURCE Solta Medical, Inc.
