Syneron Medical Reports Third Quarter 2016 Revenue of $71.5 Million

IRVINE, Calif., Nov. 9, 2016 /PRNewswire/ -- Syneron Medical Ltd. (NASDAQ:ELOS), a leading global aesthetic device company, today announced financial results for the three month period ended September 30, 2016.

Third Quarter 2016 Financial Highlights:

• Revenue of $71.5 million, up 15.3% year-over-year
• Product revenue up 18.6% year-over-year, including 19.5% North America and 18.1% international growth
• Emerging products revenue of $24.1 million, which represents the Company's strategic growth drivers, grew 61% year-over-year
• Total Body Shaping revenue of $14.2 million grew 46% year-over-year
• GAAP earnings per share of $0.02, compared to GAAP loss per share of $(0.18) in Q3 2015; non-GAAP earnings per share of $0.08, compared to non-GAAP earnings per share of $0.03 in Q3 2015
• Cash position as of September 30, 2016 of $82.9 million with no debt; generated $3.9 million in cash flow from operations

Amit Meridor, Chief Executive Officer of Syneron Medical, said "We delivered good revenue growth and improved profitability in the third quarter. Our revenue performance was driven by our Emerging Products, including the launch of UltraShape Power in North America. We are pleased that product revenue grew in all geographies, including 19.5% in North America where we are building on this momentum with the appointment of a proven aesthetic industry veteran, Philippe Schaison, as CEO of our North America business."

Mr. Meridor continued, "We continue to benefit from our strategic focus on our Emerging Products, which drove improved operating margin and net income in the quarter. We also generated $3.9 million in cash flow from operations, further strengthening our balance sheet."

Revenue Highlights for the Third Quarter Ended September 30, 2016:

Third quarter 2016 revenue was driven by 61% growth from the Company's Emerging Products, which represent the Company's strategic growth drivers including UltraShape, VelaShape, PicoWay, Profound and CO2RE Intima. Third quarter Emerging Products revenue included $14.2 million in revenue from the Body Shaping portfolio, which grew 46% year-over-year, mainly from UltraShape sales, driven by the launch of UltraShape Power.

Third quarter 2016 revenue did not include any sales from the Company's dental laser subsidiary, which was sold in May 2016. In the third quarter 2015, the Company had $0.5 million in sales from the dental laser subsidiary.  

Financial Highlights for the Third Quarter Ended September 30, 2016:

GAAP Gross Margin for the third quarter 2016 was 51.8%, compared to 55.3% in the third quarter 2015. Non-GAAP gross margin for the third quarter 2016 was 53.1%, compared to 57.0% in the third quarter 2015. This reflects revenue growth from international distribution channels, mainly in the Asia-Pacific and EMEA regions, differences in product mix, and higher product upgrade sales from recently introduced products, compared to the third quarter 2015.

GAAP Operating Income for the third quarter 2016 was $1.4 million, compared to a GAAP operating loss of $(7.1) million in the third quarter 2015, which included $5.6 million of intangible asset and goodwill impairments related to a subsidiary. Non-GAAP operating income for the third quarter 2016 was $3.8 million, compared to $1.3 million in the third quarter 2015. GAAP operating margin for the third quarter 2016 was 2.0%, compared to a negative GAAP operating margin of (11.4)% for the third quarter of 2015. Non-GAAP operating margin for the third quarter 2016 was 5.3%, compared to 2.0% in the third quarter 2015. This increase reflects growth from the Company's higher margin Emerging Products, cost efficiencies, and revenue growth from the Company's existing international distribution channels, which has lower operating expenses for the Company.

GAAP Net Income and GAAP Earnings per Share in the third quarter 2016 was $0.6 million, or $0.02 per share, compared to GAAP net loss of $(6.5) million, or $(0.18) GAAP loss per share, in the third quarter 2015. Non-GAAP net income and non-GAAP earnings per share in the third quarter 2016 was $2.7 million, or $0.08 per share, compared to non-GAAP net income of $0.9 million, or $0.03 non-GAAP earnings per share, in the third quarter 2015.

Cash Position As of September 30, 2016, the Company's overall cash position, including cash and cash equivalents, short-term bank deposits and marketable securities, grew to $82.9 million from $76.7 million as of June 30, 2016.

Use of Non-GAAP Measures:
This press release provides financial measures for gross profit, operating income (loss), net income (loss) and earnings (loss) per share, which exclude expenses related to stock-based compensation expense, amortization of acquired intangible assets, fair value adjustment to investment in Iluminage Beauty JV, re-measurement of contingent consideration fair value, impairments of a subsidiary's goodwill and intangible assets, legal settlements and related fees, net gain from sale of the Light Instruments subsidiary, and tax benefit, and are therefore not calculated in accordance with Generally Accepted Accounting Principles (GAAP).  

Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance because it reflects our ongoing operational results, operating income (loss), net income (loss) and earnings (loss) per share, and exclude the impact of items or trends that are not considered core influences on the results of operations, financial position or cash flows. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for or superior to the financial information prepared and presented in accordance with GAAP. Management uses non-GAAP measures to make operational and investment decisions and to evaluate the Company's performance and, therefore, believes it important to make these non-GAAP adjustments available to investors. A reconciliation of each GAAP to non-GAAP financial measure discussed in this press release is contained in the accompanying financial tables.

Conference Call:
Syneron management will host its third quarter 2016 earnings conference call today at 8:30 a.m. ET. Syneron will be broadcasting live via the Investor Relations section of its website, www.investors.syneron.com. To access the call, enter the Syneron Investor Relations website, then click on the webcast link "Q3 2016 Results Webcast."

Participants are encouraged to log on at least 15 minutes prior to the conference call in order to download the applicable audio software. The call can be heard live or with an on-line replay which will follow. Those interested in participating in the call and the question and answer session should dial 877-280-3488 in the U.S., and 1-646-254-3376 from outside of the U.S. The conference pass code is: 8307359.

About Syneron Candela:
Syneron Candela is a leading global aesthetic device company with a comprehensive product portfolio and a global distribution footprint. The Company's technology enables physicians to provide advanced solutions for a broad range of medical-aesthetic applications including body contouring, hair removal, wrinkle reduction, tattoo removal, women's intimate wellness treatments, improving the skin's appearance through the treatment of superficial benign vascular and pigmented lesions, and the treatment of acne, leg veins and cellulite. The Company has a wide portfolio of trusted, leading products including UltraShape, VelaShape, GentleLase, VBeam Perfecta, PicoWay, CO₂RE, CO₂RE Intima, Profound and elōs Plus.

Founded in 2000, the company markets, services and supports its products in 86 countries. It has offices in North America, France, Germany, Italy, Portugal, Spain, UK, Australia, China, Japan, and Hong Kong and distributors worldwide.

Syneron, the Syneron logo, UltraShape, eMatrix and elos are trademarks of Syneron Medical Ltd. and may be registered in certain jurisdictions. The elos (Electro-Optical Synergy) technology is a proprietary technology of Syneron Medical Ltd. All other names are the property of their respective owners.  

SOURCE Syneron Medical Ltd.