Solta Medical Reports Fourth Quarter 2011 Results

HAYWARD, Calif., Feb. 13, 2012 /PRNewswire/ -- Solta Medical, Inc. (NASDAQ: SLTM), a global leader in the medical aesthetics market, today reported product revenue during the fourth quarter of 2011 grew 11% as compared with the quarter ended December 31, 2010. Sales of new systems and upgrades rose 14% to $15.9 million. Revenue from treatment tips and other consumables of $15.9 million grew $1.3 million, or 9%, as compared to the fourth quarter of 2010, and accounted for 48% of total revenue. Total revenue for the quarter, including service and other revenue, of $33.2 million increased $3.1 million, or 10%, compared to the same period last year.

"As we anticipated, our Clear + Brilliant skin rejuvenation platform helped drive double-digit product revenue growth for the second consecutive quarter.  Clear + Brilliant is a unique approach to laser skin care for patients looking to prevent the signs of aging skin and to maintain a youthful appearance. The treatment is comfortable, fast, effective, and affordable, with results that go beyond spa treatments, lotions, and creams," said Stephen J. Fanning, Chairman, President & CEO of Solta Medical.  "We also initiated the commercial roll-out of the second generation Liposonix non-invasive fat reduction system, and the initial response from physicians and patients has been very positive."

GAAP net income for the quarter was $1.0 million, or $0.02 per diluted share, as compared to GAAP net loss of $0.2 million, or $0.00 per share, reported for the fourth quarter of 2010. The fourth quarter of 2011 includes a $6.4 million benefit for income taxes arising from a one-time release of the Company's valuation allowance to offset deferred tax liabilities generated from acquiring Liposonix.  Non-GAAP net loss for the quarter was $23,000, or $0.00 per share, as compared to non-GAAP net income of $1.7 million, or $0.03 per diluted share, for the same period last year. Non-GAAP earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $1.3 million for the fourth quarter.

Solta Medical's GAAP results for the fourth quarter include non-cash amortization, other acquisition related charges, and severance of $4.3 million, non-cash stock based compensation charges of $1.0 million, as well as the one-time release of our valuation allowance to offset deferred tax liabilities generated from acquiring Liposonix of $6.4 million. The Company provides additional non-GAAP financial measures that exclude these charges and expenses. A reconciliation of GAAP to non-GAAP results is provided in the tables included in this release.

"We produced our ninth consecutive quarter of non-GAAP operating income despite incurring additional operating costs for November and December at the Liposonix facility with little immediate benefit of Liposonix revenue. We are the only company in the aesthetic energy device space with this sustained record of performance," said Mr. Fanning. "In addition, we have nearly completed the integration process related to the acquisition of Liposonix and our production ramp at the facility in Washington is on schedule."

Product revenue for the twelve months ended December 31, 2011 grew year-over-year by 7%. Total revenue for the full year including service and other revenue of $116.0 million increased $5.1 million, or 5%, compared to the prior year.

The GAAP net loss for the year was $1.3 million, or a loss of $0.02 per share, as compared to a net loss of $2.0 million, or a loss of $0.03 per share reported for the full year 2010. The full year 2011 results include a $6.4 million benefit for income taxes arising from a one-time release of the Company's valuation allowance to offset deferred tax liabilities generated from acquiring Liposonix. Non-GAAP net income for the full year was $3.6 million, or $0.06 per diluted share as compared to non-GAAP net income of $6.8 million, or $0.11 per diluted share reported for the full year 2010.  Non-GAAP EBITDA for the full year was $7.5 million.

Solta Medical's GAAP results for the full year 2011 include non-cash amortization, other acquisition related charges, and severance of $8.0 million, non-cash stock based compensation charges of $3.3 million, and a one-time release of our valuation allowance to offset deferred tax liabilities generated from acquiring Liposonix of $6.4 million. The Company provides additional non-GAAP financial measures that exclude these charges and expenses. A reconciliation of GAAP to non-GAAP results is provided in the tables included in this release.

Financial Outlook for 2012

The company provided a preliminary financial outlook for 2012 as follows:

• Revenue for the full year 2012 is expected to be approximately $140 million representing year-over-year revenue growth of approximately 20% driven by sales of the second generation Liposonix non-invasive fat reduction system.
• As a result of an anticipated higher proportion of revenue generated by sales of systems in 2012, non-GAAP gross margin is estimated to be in the range of 63% to 65% for the full year 2012. Non-GAAP gross margin excludes non-cash amortization charges, non-cash stock based compensation charges, severance costs, and acquisition related adjustments. For 2011, the company's non-GAAP gross margin was 67%.
• Positive non-GAAP EBITDA for every quarter and for the full-year 2012. Non-GAAP EBITDA excludes non-cash amortization charges, non-cash stock based compensation charges, severance costs, and acquisition related adjustments. For 2011 non-GAAP EBITDA totaled $7.5 million.

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 acquisition related adjustments, severance costs, acquisition related costs, and stock-based compensation expenses.  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 the measures management 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

The Company will also host a conference call and webcast today, Monday, February 13, 2012, 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 800-762-8779 for domestic participants and 480-629-9771 for international participants.

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 solutions for patients that enhance and expand the practice of medical aesthetics for physicians. The company offers products to address a range of skin issues under the industry´s six premier brands: Thermage®, Fraxel®, Liposonix®, Isolaz®, CLARO® and Clear + Brilliant®. 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. The Liposonix system uses advanced high–intensity focused ultrasound (HIFU) technology to permanently destroy targeted fat just beneath the skin in the treatment areas of the abdomen and flanks as a noninvasive, nonsurgical approach to aesthetic waist circumference reduction. Isolaz was the first laser or light based system indicated for the treatment of inflammatory acne, comedonal acne, pustular acne, and mild–to–moderate inflammatory acne. CLARO is a personal care acne system that is the first FDA cleared over–the–counter IPL device that uses a powerful combination of both heat and light to clear skin quickly and naturally. Clear + Brilliant is a unique, cost–effective treatment that utilizes safe, fractional laser technology to correct and prevent early signs of aging and is FDA cleared and CE marked. Since 2002, over one million Thermage, Fraxel and Isolaz procedures have been performed in over 100 countries. For more information about Solta Medical, call 1-877-782-2286 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 outlook for 2012. 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 risk that physician adoption of our systems does not grow, the risk that customers do not continue to purchase treatment tips, the possibility that the market for the sale of new products does not develop as expected, 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 September 30, 2011, 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.

SOURCE Solta Medical, Inc.