Solta Medical Reports Fourth Quarter and Full Year 2008 Results
Gross margin for the quarter was
The fourth quarter non-GAAP loss before interest, taxes, depreciation and amortization (EBITDA) and excluding the charges related to the Reliant acquisition and stock based compensation was approximately
“Our fourth quarter results were in-line with the preliminary results provided in late January and illustrate the impact of the overall economic environment on our industry,” said
“As we look forward to 2009, while we expect the current market environment to remain quite challenging, we are confident about the potential of Solta Medical,” continued Mr. Fanning. “By combining the two companies, we remain on track to realize approximately
Financial Goals for 2009
The Company reiterated the following financial goals for 2009:
- Realize approximately
$19 million in cost synergies as a result of the acquisition of Reliant Technologies, Inc. - Generate positive cash flow from operations and positive EBITDA for the full year
- Achieve a non-GAAP gross margin of 70% for the year excluding non-cash amortization charges
Non-GAAP Presentation
To supplement the condensed consolidated financial information presented on a GAAP basis, management has provided non-GAAP operating income (loss), non-GAAP EBITA, non-GAAP net income (loss) and non-GAAP earnings (loss) per share measures that exclude the impact of acquired in-process R&D, purchase price related adjustments, severance costs, merger related integration expense, stock-based compensation expenses and loss on investments, 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,
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 800-405-2236 for domestic callers and 303-590-3000 for international callers. Both callers will need to use the Passcode 11125653#. 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 that 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 in nearly 80 countries. Thermage and Fraxel are the perfect complement for any aesthetic practice. 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 expectations regarding the market environment, our positioning to capitalize on improvements in the market environment, the adequacy of our financial resources and 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-K for the year ended
Solta Medical, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands of dollars, except share and per share data)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
Net revenue $9,549 $16,582 $56,681 $63,101
Cost of revenue 3,404 3,895 15,066 15,976
Gross margin 6,145 12,687 41,615 47,125
Operating expenses:
Sales and marketing 6,671 6,990 27,001 26,195
Research and development 2,448 2,119 9,502 9,099
Acquired in-process R&D 9,060 - 9,060 -
General and administrative 3,489 3,138 13,662 11,300
Total operating expenses 21,668 12,247 59,225 46,594
Income (loss) from
operations (15,523) 440 (17,610) 531
Interest and other income 553 674 2,334 2,520
Interest expense (15) - (15) -
Loss on investments (225) - (1,088) -
Income (loss) before income
taxes (15,210) 1,114 (16,379) 3,051
Provision for income taxes 166 (124) (9) (271)
Net income (loss) $(15,044) $990 $(16,388) $2,780
Net income (loss) per
share - basic $(0.57) $0.04 $(0.67) $0.12
Net income (loss) per
share - diluted $(0.57) $0.04 $(0.67) $0.11
Weighted average shares
outstanding used in
calculating net income
(loss) per share:
Basic 26,393,189 23,508,356 24,506,673 23,241,031
Diluted 26,393,189 24,847,858 24,506,673 24,884,458
Solta Medical, Inc.
NON-GAAP RECONCILIATION OF OPERATING INCOME (LOSS), NET INCOME
(LOSS) AND NET INCOME (LOSS) PER SHARE
(in thousands, except share and per share data)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
Income (loss) from
operations $(15,523) $440 $(17,610) $531
Non-GAAP adjustments to
income (loss) from
operations:
Acquired in-process R&D 9,060 - 9,060 -
Purchase price related
adjustments 222 - 222 -
Severance expenses 977 - 977 -
Merger related costs 353 - 1,434 -
Stock-based compensation 891 1,093 3,680 4,798
Non-GAAP income from
operations $(4,020) $1,533 $(2,237) $5,329
Non-GAAP income from
operations $(4,020) $1,533 $(2,237) $5,329
Depreciation expenses 407 318 1,405 1,386
Non-GAAP EBITDA $(3,613) $1,851 $(832) $6,715
GAAP net income (loss) $(15,044) $990 $(16,388) $2,780
Non-GAAP adjustments to
net income (loss):
Acquired in-process R&D,
net of taxes 9,060 - 9,060 -
Purchase price related
adjustments, net of taxes 222 - 222 -
Severance expenses, net
of taxes 977 - 977 -
Merger related costs,
net of taxes 353 - 1,428 -
Stock-based compensation,
net of taxes 891 1,093 3,680 4,798
Loss on investments,
net of taxes 39 - 902 -
Non-GAAP net income (loss) $(3,502) $2,083 $(119) $7,578
GAAP basic net income
(loss) per share $(0.57) $0.04 $(0.67) $0.12
Non-GAAP adjustments
to basic income (loss)
per share:
Acquired in-process R&D 0.34 - 0.37 -
Purchase price related
adjustments 0.01 - 0.01 -
Severance 0.04 - 0.04 -
Merger related costs 0.01 - 0.06 -
Stock-based compensation 0.03 0.05 0.15 0.21
Loss on investments 0.00 - 0.04 -
Non-GAAP basic net income
(loss) per share $(0.13) $0.09 $(0.00) $0.33
Non-GAAP diluted net income
(loss) per share $(0.13) $0.08 $(0.00) $0.30
GAAP weighted average
shares outstanding used
in calculating basic net
income (loss) per share 26,393,189 23,508,356 24,506,673 23,241,031
Adjustments for dilutive
potential common stock - 1,867,695 2,136,613 2,198,587
Weighted average shares
outstanding used in
calculating non-GAAP
diluted net income.
(loss) per share 26,393,189 25,376,051 26,643,286 25,439,618
Solta Medical, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of dollars, except share and per share data)
(Unaudited)
December 31, December 31,
2008 2007
ASSETS
Current assets:
Cash and cash equivalents $7,555 $13,650
Marketable investments 17,870 38,707
Accounts receivable, net 5,119 4,809
Inventories, net 18,304 6,639
Prepaid expenses and other current
assets 2,900 1,782
Total current assets 51,748 65,587
Property and equipment, net 6,841 3,000
Purchased intangible assets, net 40,999 -
Goodwill 48,088 -
Other assets 247 140
Total assets $147,923 $68,727
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable $8,064 $1,341
Accrued liabilities 14,629 6,850
Current portion of deferred revenue 3,658 1,544
Current portion of notes payable and
other obligations 12,404 -
Customer deposits 288 18
Total current liabilities 39,043 9,753
Deferred revenue, net of current portion 688 601
Long-term debt, less current portion 33 -
Other liabilities 330 255
Total liabilities 40,094 10,609
Stockholders' equity:
Common stock, $0.001 par value:
100,000,000 shares authorized
47,758,823 and 23,605,415 shares
issued and outstanding at
December 31, 2008 and
December 31, 2007, respectively 48 24
Additional paid-in capital 165,680 99,588
Deferred stock-based compensation (2) (4)
Accumulated other comprehensive
income (loss) - 19
Accumulated deficit (57,897) (41,509)
Total stockholders' equity 107,829 58,118
Total liabilities and
stockholders' equity $147,923 $68,727
SOURCE Solta Medical, Inc.