EX-99 2 ex99.htm ex99.htm
 
 
 

NEWS RELEASE for October 28, 2010 at 8:00AM Eastern Time
 
 
 Contacts: Kerry McAnistan
  Investor Relations Assistant
  Palomar Medical Technologies, Inc.
  781-993-2411
  ir@palomarmedical.com
 
               
PALOMAR MEDICAL REPORTS FINANCIAL RESULTS FOR THIRD QUARTER 2010
 
BURLINGTON, MA (October 28, 2010)…Palomar Medical Technologies, Inc. (NASDAQ: PMTI), a leading researcher and developer of light-based systems for cosmetic treatments, today announced financial results for the third quarter ended September 30, 2010.  Revenues for the quarter ended September 30, 2010 increased to $15.8 million, as compared to $14.5 million reported in the third quarter of 2009.  Product and service revenues increased to $13.0 million, a 16 percent increase over the $11.2 million reported in the third quarter of 2009.  Third quarter gross margin from product and service revenues was 60 percent, an increase over the 57 percent reported in the third quarter of 2009.  Loss before income taxes for the third quarter ended September 30, 2010 was $2.0 million, which included a $1.5 million patent litigation expense and a $0.9 million non-cash stock-based compensation expense.  Loss before income taxes for the third quarter ended September 30, 2009 was $0.2 million, which included a $100,000 patent litigation expense and a $1.0 million non-cash stock-based compensation expense.  The Company reported net loss of $2.0 million, or $0.11 per share for the third quarter of 2010 and $0.3 million for the third quarter of 2009.  The balance sheet continues to be strong with $102.8 million in cash, cash equivalents, short-term investments and marketable securities with no borrowings.
 
Chief Executive Officer Joseph P. Caruso commented, “Given the current economic climate, we are happy with the progress we are making, especially the trends experienced in the last few quarters.  Our 23% increase in product revenues this quarter as compared to the same quarter last year is gratifying as this is the fourth consecutive quarter of growth and the largest percentage growth year over year in the last three years.  Prices are stable and gross margins remain strong throughout the world.  Our gross margin this quarter was a big improvement over the same time last year.  Our efforts over the past two years to increase our international distribution are also paying off with 48% of total product and service revenues coming from outside North America.  Our product portfolio and platform approach gives us the flexibility to adjust our business to meet the challenges in today’s economy.   Our sales and distribution network configure technology solutions to fit physicians’ sites throughout the world in response to the particular economic pressure they are experiencing. We have also had great success with shifting our business model from principally one-time capital equipment sales to include recurring sources.   This quarter, 41% of our revenue was generated from recurring sources.”
 
 
Mr. Caruso continued, “We continue to invest in our consumer products initiative.   Our branding and packaging are complete and we are building inventory to support a planned launch early next year.  This is a new and exciting challenge for us representing a great opportunity to grow the business in the future.”
 
Conference Call: As previously announced, Palomar will conduct a conference call and webcast today at 11:30 AM Eastern Time. Management will discuss financial results and strategic matters. If you would like to participate, please call (866) 800-8651 or listen to the webcast in the About Palomar/Investors section of the Company’s website at www.palomarmedical.com. A webcast replay will also be available.
 
About Palomar Medical Technologies Inc: Palomar is a leading researcher and developer of light-based systems for cosmetic treatments. Palomar pioneered the optical hair removal field, when, in 1997, it introduced the first high-powered laser hair removal system. Since then, many of the major advances in light-based cosmetic treatments have been based on Palomar technology. In December 2006, Palomar became the first company to receive a 510(k) over-the-counter (OTC) clearance from the United States Food and Drug Administration (FDA) for a new, patented, home-use, light-based hair removal device. In June 2009, Palomar became the first company to receive a 510(k) OTC clearance from the FDA for a new, patented, home-use, laser device for the treatment of periorbital wrinkles. OTC clearance allows the product to be marketed and sold directly to consumers without a prescription. There are now millions of light-based cosmetic procedures performed around the world every year in physician offices, clinics, spas and salons. Palomar is testing many new and exciting applications to further advance the hair removal market and other cosmetic applications. Palomar is focused on developing proprietary light-based technology for introduction to the mass markets.
For more information on Palomar and its products, visit Palomar’s website at www.palomarmedical.com. To continue receiving the most up-to-date information and latest news on Palomar as it happens, sign up to receive automatic e-mail alerts by going to the About Palomar/Investors section of the website.
 

 
- more -
 

 
 
 

Palomar - Page 2
 

 
With the exception of the historical information contained in this release, the matters described herein contain forward-looking statements, including, but not limited to, statements relating to new markets, future royalty amounts due from third parties, development and introduction of new products, and financial and operating projections. These forward-looking statements are neither promises nor guarantees, but involve risk and uncertainties that may individually or mutually impact the matters herein, and cause actual results, events and performance to differ materially from such forward-looking statements. These risk factors include, but are not limited to, results of future operations, technological difficulties in developing or introducing new products, the results of future research, lack of product demand and market acceptance for current and future products, the effect of economic conditions, challenges in managing joint ventures and research with third parties and government contracts, the impact of competitive products and pricing, governmental regulations with respect to medical devices, including whether FDA clearance will be obtained for future products and additional applications, the results of litigation, difficulties in collecting royalties, potential infringement of third-party intellectual property rights, factors affecting the Company's future income and resulting ability to utilize its NOLs, and/or other factors, which are detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended December 31, 2009 and the Company's quarterly reports on Form 10-Q. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
- more -
 

 
 
 

Palomar - Page 3
 
Palomar Financial Summary:
 
Consolidated Statements of Operations (Unaudited)
 
   
Three Months Ended
    
Nine Months Ended
  
   
September 30,
    
September 30,
  
   
2010
    
2009
    
2010
    
2009
  
Revenues:
                        
Product revenues
   $ 9,273,158     $ 7,528,645     $ 27,655,391     $ 23,939,493  
Service revenues
     3,749,164       3,700,511       11,512,299       10,884,073  
Royalty revenues
     1,499,182       1,264,022       4,444,327       4,032,039  
Funded product development revenues
     -       806,482       -       1,636,082  
Other revenues
     1,250,000       1,250,000       3,750,000       3,750,000  
Total revenues
     15,771,504       14,549,660       47,362,017       44,241,687  
                                 
Costs and expenses:
                                
Cost of product revenues
     3,781,473       2,873,956       10,583,241       9,849,383  
Cost of service revenues
     1,367,316       1,901,303       4,320,439       5,417,280  
Cost of royalty revenues
     599,673       505,609       1,777,731       1,612,816  
Research and development
     3,545,622       3,305,311       11,320,691       10,125,279  
Selling and marketing
     4,663,632       4,062,930       14,408,442       13,464,732  
General and administrative
     4,267,535       2,451,496       11,579,566       7,566,053  
Total costs and expenses
     18,225,251       15,100,605       53,990,110       48,035,543  
                                 
Loss from operations
     (2,453,747 )     (550,945 )     (6,628,093 )     (3,793,856 )
                                 
Interest income
     108,630       218,169       309,747       551,817  
Other income
     390,784       156,941       212,922       506,761  
                                 
Loss before income taxes
     (1,954,333 )     (175,835 )     (6,105,424 )     (2,735,278 )
                                 
Provision for (benefit from) income taxes
     69,454       120,752       117,456       (780,319 )
                                 
Net loss
   $ (2,023,787 )   $ (296,587 )   $ (6,222,880 )   $ (1,954,959 )
                                 
Net loss per share:
                                
Basic
   $ (0.11 )   $ (0.02 )   $ (0.34 )   $ (0.11 )
Diluted
   $ (0.11 )   $ (0.02 )   $ (0.34 )   $ (0.11 )
                                 
Weighted average shares outstanding:
                                
Basic
     18,561,877       18,065,655       18,539,847       18,058,246  
Diluted
     18,561,877       18,065,655       18,539,847       18,058,246  

 
 
- more -
 

 
 
 

Palomar - Page 4
 
Consolidated Balance Sheets (Unaudited)
 
   
September 30,
    
December 31,
  
   
2010
    
2009
  
Assets
  
Current assets:
            
Cash and cash equivalents
   $ 76,623,685     $ 81,948,482  
Short-term investments
     1,999,675       25,000,000  
      Total cash, cash equivalents and short-term investments
     78,623,360       106,948,482  
Accounts receivable, net
     5,035,232       4,436,219  
Inventories
     12,218,475       11,126,352  
Other current assets
     1,783,674       2,179,233  
Total current assets
     97,660,741       124,690,286  
                 
Marketable securities, at estimated fair value
     24,129,348       4,024,313  
                 
Property and equipment, net
     37,271,766       34,629,410  
                 
Other assets
     218,716       126,087  
                 
Total assets
   $ 159,280,571     $ 163,470,096  
                 
Liabilities and Stockholders' Equity
  
                 
Current Liabilities:
                
Accounts payable
   $ 3,326,847     $ 2,696,217  
Accrued liabilities
     9,245,816       8,959,679  
Deferred revenue
     3,793,124       5,221,924  
Total current liabilities
     16,365,787       16,877,820  
                 
Accrued income taxes
     2,788,802       2,965,077  
                 
Total liabilities
   $ 19,154,589     $ 19,842,897  
                 
Stockholders’ equity:
                
Preferred stock, $.01 par value-
                
Authorized - 1,500,000 shares
                
Issued -  none
     -       -  
Common stock, $.01 par value-
                
Authorized - 45,000,000 shares
                
Issued – 18,573,262 and 18,521,045 shares, respectively
     185,733       185,211  
Additional paid-in capital
     209,629,876       206,740,492  
Accumulated other comprehensive loss
     (460,540 )     (292,297 )
Accumulated deficit
     (69,229,087 )     (63,006,207 )
Total stockholders’ equity
   $ 140,125,982     $ 143,627,199  
                 
Total liabilities and stockholders’ equity
   $ 159,280,571     $ 163,470,096  
# # #