10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

Form 10-Q

(Mark one)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number 000-51623

Cynosure, Inc.

(Exact name of registrant as specified in its charter)

Delaware	04-3125110
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5 Carlisle Road Westford, MA	01886
(Address of principal executive offices)	(Zip code)

(978) 256-4200

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    x  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ¨ Yes x No

The number of shares outstanding of each of the registrant’s classes of common stock, as of: August 2, 2012:

Class	Number of Shares
Class A Common Stock, $0.001 par value		10,016,430
Class B Common Stock, $0.001 par value		2,939,161

Cynosure, Inc.

Table of Contents

		Page No.
PART I	Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets as of June 30, 2012 and December 31, 2011		1
	Consolidated Statements of Operations for the Three and Six Month Periods Ended June 30, 2012 and 2011		2
	Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Month Periods Ended June 30, 2012 and 2011		3
	Consolidated Statements of Cash Flows for the Six Month Periods Ended June 30, 2012 and 2011		4
	Notes to Consolidated Financial Statements		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		22
Item 4.	Controls and Procedures		22
PART II	Other Information
Item 1.	Legal Proceedings		24
Item 1A.	Risk Factors		24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		24
Item 6.	Exhibits		25
SIGNATURES			26
EXHIBIT INDEX			27
EX-31.1 Section 302 Certification of Principal Executive Officer
EX-31.2 Section 302 Certification of Principal Financial Officer
EX-32.1 Section 906 Certification of Principal Executive Officer
EX-32.2 Section 906 Certification of Principal Financial Officer
EX-101 The following materials from the Cynosure, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, formatted in XBRL (eXtensible Business Reporting Language); (i) Condensed Statement of Earnings for the three and six months ended June 30, 2012 and 2011, (ii) Condensed Statement of Financial Position at June 30, 2012 and December 31, 2011, (iii) Condensed Statement of Comprehensive Income (Loss) for the three and six months ended June 30, 2012 and 2011, (iv) Condensed Statement of Cash Flows for the six months ended June 30, 2012 and 2011, and (v) Notes to Condensed Consolidated Financial Statements.

Cynosure, Inc.

Consolidated Balance Sheets

(in thousands)

	(Unaudited) June 30, 2012			December 31, 2011
Assets
Current assets:
Cash and cash equivalents	$	37,114		$	35,694
Short-term marketable securities		34,771			31,379
Accounts receivable, net		14,248			12,853
Inventories		30,786			29,568
Prepaid expenses and other current assets		3,474			3,038
Deferred income taxes		701			701
Total current assets		121,094			113,233
Property and equipment, net		8,190			7,705
Long-term marketable securities		8,090			6,595
Goodwill and intangibles, net		22,564			23,486
Other assets		415			561
Total assets	$	160,353		$	151,580
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	9,472		$	8,474
Amounts due to related party		1,064			1,550
Accrued expenses		13,689			13,944
Deferred revenue		9,333			6,388
Capital lease obligation		295			239
Total current liabilities		33,853			30,595
Capital lease obligation, net of current portion		543			494
Deferred revenue, net of current portion		278			367
Other noncurrent liability		762			497
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value
Authorized — 5,000 shares
Issued — none		—			—
Class A and Class B common stock, $0.001 par value
Authorized — 70,000 shares
Issued — 9,874 Class A shares and 2,975 Class B shares at June 30, 2012;
Issued — 9,828 Class A shares and 2,975 Class B shares at December 31, 2011, respectively		13			13
Additional paid-in capital		126,425			124,506
Retained earnings (accumulated deficit)		2,822			(678	)
Accumulated other comprehensive loss		(2,170	)		(2,041	)
Treasury stock, 197 Class A shares and 36 Class B shares, at cost		(2,173	)		(2,173	)
Total stockholders’ equity		124,917			119,627
Total liabilities and stockholders’ equity	$	160,353		$	151,580

The accompanying notes are an integral part of these consolidated financial statements.

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Cynosure, Inc.

Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Product revenues	$	32,923		$	20,675		$	61,018		$	37,286
Parts, accessories and service revenues		6,650			5,664			12,723			10,937
Total revenues		39,573			26,339			73,741			48,223
Cost of revenues		16,533			11,273			31,193			21,076
Gross profit		23,040			15,066			42,548			27,147
Operating expenses:
Sales and marketing		11,878			9,656			23,429			18,412
Research and development		3,460			2,431			6,699			4,671
Amortization of intangible assets acquired		342			14			684			24
General and administrative		3,667			4,161			7,185			7,102
Total operating expenses		19,347			16,262			37,997			30,209
Income (loss) from operations		3,693			(1,196	)		4,551			(3,062	)
Interest income, net		13			46			23			100
Other (expense) income, net		(298	)		(1	)		(89	)		213
Income (loss) before provision for income taxes		3,408			(1,151	)		4,485			(2,749	)
Provision for income taxes		728			149			986			445
Net income (loss)	$	2,680		$	(1,300	)	$	3,499		$	(3,194	)
Basic net income (loss) per share	$	0.21		$	(0.10	)	$	0.28		$	(0.25	)
Diluted net income (loss) per share	$	0.20		$	(0.10	)	$	0.27		$	(0.25	)
Basic weighted-average common shares outstanding		12,605			12,599			12,591			12,588
Diluted weighted-average common shares outstanding		13,278			12,599			13,141			12,588

The accompanying notes are an integral part of these consolidated financial statements.

2

Cynosure, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited, in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net income (loss)	$	2,680		$	(1,300	)	$	3,499		$	(3,194	)
Other comprehensive income (loss) components:
Cumulative translation adjustment		(463	)		228			(141	)		797
Unrealized gain on marketable securities		3			21			12			7
Total other comprehensive (loss) income		(460	)		249			(129	)		804
Comprehensive income (loss)	$	2,220		$	(1,051	)	$	3,370		$	(2,390	)

The accompanying notes are an integral part of these consolidated financial statements.

3

Cynosure, Inc.

Consolidated Statements of Cash Flows

(Unaudited, in thousands)

	Six Months Ended June 30,
	2012			2011
Operating activities:
Net income (loss)	$	3,499		$	(3,194	)
Reconciliation of net income (loss) to net cash provided by operating activities:
Depreciation and amortization		3,493			2,971
Stock-based compensation expense		1,397			1,325
(Gain) loss on disposal of fixed assets		(37	)		4
Net accretion of marketable securities		589			638
Changes in operating assets and liabilities:
Accounts receivable		(1,525	)		(2,565	)
Inventories		(3,556	)		(5,627	)
Net book value of demonstration inventory sold		419			543
Prepaid expenses and other current assets		(466	)		(108	)
Accounts payable		1,010			3,371
Due to related party		(485	)		1,225
Tax benefit from stock option exercises		(25	)		(32	)
Accrued expenses		127			1,750
Deferred revenue		2,870			(243	)
Net cash provided by operating activities		7,310			58
Investing activities:
Purchases of property and equipment		(1,024	)		(560	)
Proceeds from the sales and maturities of marketable securities		25,262			49,103
Purchases of marketable securities		(30,725	)		(28,196	)
Acquisitions		—			(26,970	)
Decrease in other noncurrent assets		140			4
Net cash used in investing activities		(6,347	)		(6,619	)
Financing activities:
Excess tax benefit on options exercised		25			32
Proceeds from stock option exercises		523			198
Payments on capital lease obligation		(150	)		(29	)
Net cash provided by financing activities		398			201
Effect of exchange rate changes on cash and cash equivalents		59			(165	)
Net increase (decrease) in cash and cash equivalents		1,420			(6,525	)
Cash and cash equivalents, beginning of the period		35,694			27,434
Cash and cash equivalents, end of the period	$	37,114		$	20,909
Supplemental cash flow information
Cash paid for interest	$	24		$	8
Cash paid for income taxes	$	979		$	491
Supplemental noncash investing and financing activities
Transfer of demonstration equipment from inventory to fixed assets	$	2,227		$	1,788
Assets acquired under capital lease	$	276		$	—

The accompanying notes are an integral part of these consolidated financial statements.

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Cynosure, Inc.

Notes to Consolidated Financial Statements

Note 1 — Interim Consolidated Financial Statements

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim information and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. It is recommended that these financial statements be read in conjunction with the consolidated financial statements and related notes that appear in the Annual Report on Form 10-K of Cynosure, Inc. (Cynosure) for the year ended December 31, 2011. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position, results of operations, and cash flows as of the dates and for the periods presented have been included. The results of operations for the six months ended June 30, 2012 may not be indicative of the results that may be expected for the year ending December 31, 2012, or any other period.

Note 2 — Stock-Based Compensation

Cynosure recorded stock-based compensation expense of $0.7 million for both the three months ended June 30, 2012 and 2011, respectively. Cynosure recorded stock-based compensation expense of $1.4 million and $1.3 million for the six months ended June 30, 2012 and 2011, respectively. Cynosure capitalized $15,000 and $18,000 of stock-based compensation expense as part of inventory during the six months ended June 30, 2012 and 2011, respectively.

Total stock-based compensation expense was recorded to cost of revenues and operating expenses based upon the functional responsibilities of the individual holding the respective options, as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(In thousands)
Cost of revenues	$	30	$	37	$	59	$	73
Sales and marketing		214		214		422		444
Research and development		129		116		249		236
General and administrative		359		292		667		572
Total stock-based compensation expense	$	732	$	659	$	1,397	$	1,325

Cash received from option exercises was $0.5 million and $0.2 million during the six months ended June 30, 2012 and 2011, respectively.

Cynosure granted 332,000 and 344,500 stock options during the six months ended June 30, 2012 and 2011, respectively. Cynosure has elected to use the Black-Scholes model to determine the weighted average fair value of options. The weighted average fair value of the options granted during the six months ended June 30, 2012 and 2011 was $8.66 and $7.47, respectively, using the following assumptions:

	Six Months Ended June 30,
	2012		2011
Risk-free interest rate		0.77%-0.86%		1.60%-2.37%
Expected dividend yield		—		—
Expected term		5.8 years		5.8 years
Expected volatility		57%		55% -56%
Estimated forfeiture rate		5%		5%

Option-pricing models require the input of various subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. Cynosure’s estimated expected stock price volatility is based on its own historical volatility. Cynosure’s expected term of options granted in the six months ended June 30, 2012 and 2011 was derived from the short-cut method. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield of zero is based on the fact that Cynosure has never paid cash dividends and has no present intention to pay cash dividends.

5

In March 2012, Cynosure commenced an option exchange program (the “Exchange Offer”) in which it offered eligible option holders the opportunity to voluntarily exchange certain “underwater” stock options for a lesser number of new stock options with a lower exercise price. Cynosure’s U.S. employees were eligible to participate in the Exchange Offer, and Cynosure’s directors and executive officers were not eligible to participate. The exchange ratios for the Exchange Offer were determined by using the Black-Scholes option pricing model to approximate a “value-for-value” exchange, meaning that the value of the eligible stock options was equal to the value of the new stock options. The Exchange Offer, which was subject to Rule 13e-4 under the Securities Exchange Act of 1934, as amended, expired on April 13, 2012.

In the Exchange Offer, 90 eligible option holders tendered eligible options with exercise prices of $20.00 or greater to purchase an aggregate of 325,946 shares of Class A common stock, representing 96% of the total shares of Class A common stock underlying options eligible for exchange. New stock options were granted to purchase an aggregate of 280,771 shares of Class A common stock in exchange for the cancellation of the tendered eligible options. The exercise price per share of each new option granted in the Exchange Offer is $19.78, which was the closing price of Cynosure’s Class A common stock as reported by The Nasdaq Global Market on April 13, 2012. All eligible stock options were fully vested as of April 13, 2012, the expiration date of the Exchange Offer. Because the fair value of the eligible stock options was equal to the fair value of the new stock options calculated using the Black-Scholes option pricing model, Cynosure did not recognize any stock-based compensation expense as a result of the Exchange Offer.

Note 3 — Inventories

Cynosure states all inventories at the lower of cost or market, determined on a first-in, first-out method. Inventory includes material, labor and overhead and consists of the following:

	June 30, 2012		December 31, 2011
	(in thousands)
Raw materials	$	7,009	$	7,645
Work in process		2,015		1,437
Finished goods		21,762		20,486
	$	30,786	$	29,568

Note 4 — Fair Value

U.S. GAAP establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable markets data for substantially the full term of the assets or liabilities.

• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table represents Cynosure’s fair value hierarchy for its financial assets (cash equivalents and marketable securities) measured at fair value as of June 30, 2012 (in thousands):

	Level 1		Level 2		Level 3		Total
Money market funds (1)	$	7,417	$	—	$	—	$	7,417
State and municipal bonds (2)		—		36,718		—		36,718
Treasuries and government agencies		—		9,891		—		9,891
Equity securities		17		—		—		17
Total	$	7,434	$	46,609	$	—	$	54,043

(1) Included in cash and cash equivalents at June 30, 2012.

(2) $3.8 million included in cash and cash equivalents at June 30, 2012.

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During the six months ended June 30, 2012, there were no significant transfers in and out of Level 1 and Level 2. Cynosure did not have any Level 3 financial assets at June 30, 2012 or December 31, 2011.

Note 5 — Short and Long-Term Marketable Securities

Cynosure’s available-for-sale securities at June 30, 2012 consist of approximately $46.6 million of investments in debt securities consisting of state and municipal bonds, treasuries and government agencies and approximately $17,000 in equity securities. All investments in available-for-sale securities are recorded at fair market value, with any unrealized gains and losses reported as a separate component of accumulated other comprehensive loss. As of June 30, 2012, Cynosure’s marketable securities consist of the following (in thousands):

	Market Value		Amortized Cost		Unrealized Gains		Unrealized Losses
Available-for-sale Securities:
Cash equivalents:
State and municipal bonds	$	3,765	$	3,764	$	1	$	—
Total cash equivalents	$	3,765	$	3,764	$	1	$	—
Short-term marketable securities:
State and municipal bonds	$	27,395	$	27,387	$	12	$	(4	)
Treasuries and government agencies		7,359		7,355		4		—
Equity securities		17		18		—		(1	)
Total short-term marketable securities	$	34,771	$	34,760	$	16	$	(5	)
Long-term marketable securities:
State and municipal bonds	$	5,558	$	5,550	$	8	$	—
Treasuries and government agencies		2,532		2,532		1		(1	)
Total long-term marketable securities	$	8,090	$	8,082	$	9	$	(1	)
Total available-for-sale securities	$	46,626	$	46,606	$	26	$	(6	)
Total marketable securities	$	42,861

As of December 31, 2011, Cynosure’s marketable securities consist of the following (in thousands):

	Market Value		Amortized Cost		Unrealized Gains		Unrealized Losses
Available-for-sale Securities:
Cash equivalents:
State and municipal bonds	$	3,264	$	3,263	$	1	$	—
Total cash equivalents	$	3,264	$	3,263	$	1	$	—
Short-term marketable securities:
State and municipal bonds	$	18,868	$	18,858	$	12	$	(2	)
Treasuries and government agencies		12,505		12,499		6		—
Equity securities		6		5		1		—
Total short-term marketable securities	$	31,379	$	31,362	$	19	$	(2	)
Long-term marketable securities:
State and municipal bonds	$	4,719	$	4,713	$	6	$	—
Treasuries and government agencies		1,876		1,875		1		—
Total long-term marketable securities	$	6,595	$	6,588	$	7	$	—
Total available-for-sale securities	$	41,238	$	41,213	$	27	$	(2	)
Total marketable securities	$	37,974

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As of June 30, 2012, Cynosure’s available-for-sale debt securities mature as follows (in thousands):

	Total		Maturities
			Less Than One Year		One to Five Years		More than five years
State and municipal bonds	$	36,718	$	31,160	$	5,558	$	—
Treasuries and government agencies		9,891		7,359		2,532		—
Total available-for-sale debt securities	$	46,609	$	38,519	$	8,090	$	—

Note 6 — Goodwill and Other Intangible Assets

Changes to goodwill during the six months ended June 30, 2012 were as follows (in thousands):

	Total
Balance — December 31, 2011	$	15,712
Translation adjustment		(3	)
Balance — June 30, 2012	$	15,709

Other intangible assets consist of the following at June 30, 2012 and December 31, 2011 (in thousands):

	Developed Technology & Patents			Business Licenses			Customer Relationships			Trade Names			Other			Total
June 30, 2012
Cost	$	3,250		$	384		$	3,323		$	2,650		$	48		$	9,655
Translation adjustment		—			27			17			—			2			46
Accumulated amortization		(1,082	)		(167	)		(1,410	)		(182	)		(5	)		(2,846	)
Balance, June 30, 2012	$	2,168		$	244		$	1,930		$	2,468		$	45		$	6,855
December 31, 2011
Cost	$	3,250		$	384		$	3,323		$	2,650		$	48		$	9,655
Translation adjustment		—			27			20			—			2			49
Accumulated amortization		(874	)		(147	)		(812	)		(93	)		(4	)		(1,930	)
Balance, December 31, 2011	$	2,376		$	264		$	2,531		$	2,557		$	46		$	7,774

Amortization expense related to developed technology and patents is classified as a component of cost of revenues in the Consolidated Statements of Operations. Amortization expense related to customer relationships and trade names is classified as a component of amortization of intangible assets acquired in the Consolidated Statements of Operations. Amortization expense related to business licenses and other is classified as a component of general and administrative expenses in the Consolidated Statements of Operations.

Amortization expense for the three months ended June 30, 2012 and 2011 was $0.5 million and $0.1 million, respectively. Amortization expense for the six months ended June 30, 2012 and 2011 was $0.9 million and $0.1 million, respectively. Cynosure has approximately $41,000 of indefinite-life intangible assets that are included in other intangible

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assets in the table above. As of June 30, 2012, amortization expense on existing intangible assets for the next five years and beyond is as follows (table in thousands):

Remainder of 2012	$	922
2013		1,299
2014		950
2015		765
2016 and thereafter		2,878
Total	$	6,814

The table above includes $0.7 million for the remainder of 2012, $0.9 million for 2013, $0.6 million for 2014, $0.4 million for 2015 and $1.8 million for 2016 and thereafter, to be recognized within operating expenses related to intangible assets acquired through the Eleme Medical and ConBio acquisitions.

Note 7 — Warranty Costs

Cynosure typically provides a one-year parts and labor warranty on end-user sales of laser systems. Distributor sales generally include a warranty on parts only. Estimated future costs for initial product warranties are provided at the time of revenue recognition.

The following table provides the detail of the change in Cynosure’s product warranty accrual during the six months ended June 30, 2012, which is a component of accrued expenses in the consolidated balance sheets:

	June 30, 2012
	(in thousands)
Warranty accrual, beginning of period	$	3,171
Warranty provision related to new sales		2,113
Costs incurred		(2,078	)
Warranty accrual, end of period	$	3,206

Note 8 — Segment Information

In accordance with ASC 280, Segment Reporting Topic, operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. Cynosure’s chief decision-maker, as defined under ASC 280, is a combination of the Chief Executive Officer and the Chief Financial Officer. Cynosure views its operations and manages its business as one segment, aesthetic treatment products and services.

The following table represents total revenue by geographic destination:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in thousands)
United States	$	19,034	$	10,429	$	34,194	$	18,414
Europe		7,153		7,253		14,172		14,721
Asia / Pacific		11,016		5,449		20,292		9,571
Other		2,370		3,208		5,083		5,517
Total	$	39,573	$	26,339	$	73,741	$	48,223

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Total assets by geographic area are as follows:

	June 30, 2012			December 31, 2011
	(in thousands)
United States	$	139,871		$	132,041
Europe		13,013			12,688
Asia / Pacific		9,840			8,855
Eliminations		(2,371	)		(2,004	)
Total	$	160,353		$	151,580

Long-lived assets by geographic area are as follows:

	June 30, 2012		December 31, 2011
	(in thousands)
United States	$	6,925	$	6,461
Europe		1,155		1,344
Asia / Pacific		525		461
Total	$	8,605	$	8,266

No individual country within Europe or Asia/Pacific represented greater than 10% of total revenue, total assets or total long lived assets for any period presented.

Note 9 — Net Income (Loss) Per Common Share

Basic net income (loss) per share was determined by dividing net income (loss) by the weighted average common shares outstanding during the period. Diluted net income (loss) per share was determined by dividing net income (loss) by diluted weighted average shares outstanding. Diluted weighted average shares reflect the dilutive effect, if any, of common stock options based on the treasury stock method. Common shares outstanding includes both Class A and Class B common stock as each participates equally in earnings. Class B shares are convertible at any time into shares of Class A on a one-for-one basis at the option of the holder.

A reconciliation of basic and diluted shares is as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2012		2011			2012		2011
Net income (loss)	$	2,680	$	(1,300	)	$	3,499	$	(3,194	)
Basic weighted average common shares outstanding		12,605		12,599			12,591		12,588
Weighted average common equivalent shares		673		—			550		—
Diluted weighted average common shares outstanding		13,278		12,599			13,141		12,588
Basic net income (loss) per share	$	0.21	$	(0.10	)	$	0.28	$	(0.25	)
Diluted net income (loss) per share	$	0.20	$	(0.10	)	$	0.27	$	(0.25	)

For the three and six months ended June 30, 2012, respectively, options to purchase approximately 0.6 million and 1.3 million shares of the Company’s Class A common stock were excluded from the calculation of diluted weighted average common shares outstanding as their effect was antidilutive.

For the three and six months ended June 30, 2011, the number of basic and diluted weighted average shares outstanding was the same, as any increase in the number of shares of common stock equivalents for the three and six months ended June 30, 2011 would be antidilutive based on the net loss for the period. During the three and six months ended June 30, 2011, respectively, outstanding options to purchase 2.0 million shares were excluded from the computation of diluted earnings per share because their inclusion would have been antidilutive.

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Note 10 — Accumulated Other Comprehensive Loss

Changes to accumulated other comprehensive loss during the six months ended June 30, 2012 were as follows (in thousands):

	Unrealized Gain on Marketable Securities, net of taxes		Translation Adjustment			Accumulated Other Comprehensive Loss
Balance — December 31, 2011	$	23	$	(2,064	)	$	(2,041	)
Current period other comprehensive loss		12		(141	)		(129	)
Balance — June 30, 2012	$	35	$	(2,205	)	$	(2,170	)

Note 11 — Litigation

In 2005, Dr. Ari Weitzner, individually and as putative representative of a purported class, filed a complaint against Cynosure under the federal Telephone Consumer Protection Act (TCPA) in Massachusetts Superior Court in Middlesex County seeking monetary damages, injunctive relief, costs and attorneys fees. The complaint alleges that Cynosure violated the TCPA by sending unsolicited advertisements by facsimile to the plaintiff and other recipients without the prior express invitation or permission of the recipients. Under the TCPA, recipients of unsolicited facsimile advertisements are entitled to damages of up to $500 per facsimile for inadvertent violations and up to $1,500 per facsimile for knowing or willful violations. Based on discovery in this matter, the plaintiff alleges that approximately three million facsimiles were sent on Cynosure’s behalf by a third party to approximately 100,000 individuals. In 2008, the plaintiff served, and the Court held a hearing regarding a motion for class certification. In 2010, the Court issued an order dismissing the complaint without prejudice for Dr. Weitzner’s failure to prosecute the case and subsequently allowed a plaintiff motion for relief from the dismissal order. In January 2012, the Court issued a Memorandum of Decision denying the class certification motion. The Court has scheduled a status conference for September 20, 2012 regarding Dr. Weitzner’s individual claims. On July 23, 2012, Dr. Weitzner filed a new purported class action, based on the same operative facts and asserting the same claims as the Massachusetts action, in federal court in the Eastern District of New York. Cynosure has not been served with a summons or complaint in the New York action. Cynosure believes it has numerous defenses to Dr. Weitzner’s claims.

In addition to the matter discussed above, from time to time, Cynosure is subject to various claims, lawsuits, disputes with third parties, investigations and pending actions involving various allegations against Cynosure incident to the operation of its business, principally product liability. Each of these other matters is subject to various uncertainties, and it is possible that some of these other matters may be resolved unfavorably to Cynosure. Cynosure establishes accruals for losses that management deems to be probable and subject to reasonable estimate. Cynosure believes that the ultimate outcome of these matters will not have a material adverse impact on its consolidated financial position, results of operations or cash flows.

Note 12 — Related Party Transactions

As of June 30, 2012, El. En. S.p.A. (El.En.) owned 23% of Cynosure’s outstanding common stock. Purchases of inventory from El.En. during the three months ended June 30, 2012 and 2011 were approximately $1.0 million and $2.2 million, respectively. Purchases of inventory from El.En. during the six months ended June 30, 2012 and 2011 were approximately $2.1 million and $4.3 million, respectively. As of June 30, 2012 and December 31, 2011, amounts due to related party for these purchases were approximately $1.1 million and $1.5 million, respectively. There were no amounts due from El.En. as of June 30, 2012 or December 31, 2011.

Note 13 — Income Taxes

At June 30, 2012, Cynosure had no unrecognized tax benefits. Cynosure files income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. With few exceptions, Cynosure is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2008. Additionally, certain non-U.S. jurisdictions are no longer subject for income tax examinations by tax authorities for years before 2007.

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Note 14 — Recent Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board, or FASB, issued new accounting guidance that requires companies to present the components of net income and other comprehensive income either as one continuous statement or as two consecutive statements and eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. The guidance does not change the items which must be reported in other comprehensive income, how such items are measured or when they must be reclassified to net income. Cynosure adopted this new accounting guidance effective January 1, 2012. The adoption of this guidance had no material effect on Cynosure’s financial condition, results of operations or cash flows.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this Quarterly Report regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about:

• our ability to identify and penetrate new markets for our products and technology;

• our ability to innovate, develop and commercialize new products;

• our ability to obtain and maintain regulatory clearances;

• our sales and marketing capabilities and strategy in the United States and internationally;

• our intellectual property portfolio; and

• our estimates regarding expenses, future revenues, capital requirements and needs for additional financing.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in our Annual Report on Form 10-K for the year ended December 31, 2011, particularly in Part I — Item 1A and in our other public filings with the Securities and Exchange Commission that could cause actual results or events to differ materially from the forward-looking statements that we make.

You should read this Quarterly Report and the documents that we have filed as exhibits to the Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. It is routine for internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations are made as of the date of this Quarterly Report on Form 10-Q and may change prior to the end of each quarter or the year. While we may elect to update forward-looking statements at some point in the future, we do not undertake any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

The following discussion should be read in conjunction with, and is qualified in its entirety by, the condensed consolidated financial statements and notes thereto included in Item 1 of this Quarterly Report and the condensed consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K filed with the SEC on March 8, 2012. Historical results and percentage relationships among any amounts in the financial statements are not necessarily indicative of trends in operating results for any future periods.

Company Overview

We develop and market aesthetic treatment systems that are used by physicians and other practitioners to perform non-invasive and minimally invasive procedures to remove hair, treat vascular and pigmented lesions, remove multi-colored tattoos, rejuvenate the skin, liquefy and remove unwanted fat through laser lypolysis, reduce cellulite and treat onychomycosis. We are also developing in conjunction with our development agreement with Unilever Ltd. (Unilever) a laser treatment system for the home use market.

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Our systems incorporate a broad range of laser and other light-based energy sources, including Alexandrite, pulse dye, Nd:Yag and diode lasers, as well as intense pulsed light. We believe that we are one of only a few companies that currently offer aesthetic treatment systems utilizing Alexandrite and pulse dye lasers, which are particularly well suited for some applications and skin types. We offer single energy source systems as well as workstations that incorporate two or more different types of lasers or pulsed light technologies. We offer multiple technologies and system alternatives at a variety of price points depending primarily on the number and type of energy sources included in the system. Our newer products are designed to be easily upgradeable to add additional energy sources and handpieces, which provides our customers with technological flexibility as they expand their practices. As the aesthetic treatment market evolves to include new customers, such as aesthetic spas and additional physician specialties, we believe that our broad technology base and tailored solutions will provide us with a competitive advantage.

We focus our development and marketing efforts on offering leading, or flagship, products for the following high volume applications:

• the Elite product line for hair removal, treatment of facial and leg veins and pigmentations;

• the Smartlipo product line for LaserBodySculpting^SM for the removal of unwanted fat;

• the Cellulaze product line for the reduction of cellulite;

• the SmoothShapes XV product line for the temporary reduction in the appearance of cellulite;

• the Affirm/SmartSkin product line for anti-aging applications, including treatments for wrinkles, skin texture, skin discoloration and skin tightening;

• the Cynergy product line for the treatment of vascular lesions; and

• the Accolade, MedLite C6, and RevLite product lines for the removal of benign pigmented lesions, as well as multi-colored tattoos.

A key element of our business strategy is to launch innovative new products and technologies into high-growth aesthetic applications. Our research and development team builds on our existing broad range of laser and light-based technologies to develop new solutions and products to target unmet needs in significant aesthetic treatment markets. Innovation continues to be a strong contributor to our strength. Since 2002, we have introduced 24 new products. In January 2012, we received FDA clearance in the United States to sell and market Cellulaze, the world’s first aesthetic laser device for the reduction of cellulite. On July 18, 2012 we received FDA clearance in the United States to market an at home device for the treatment of wrinkles being developed in partnership with Unilever. Unilever expects to launch the product commercially in 2013.

We generate revenues primarily from sales of our products and parts and accessories and from services, including product warranty revenues. During the six months ended June 30, 2012, we derived approximately 83% of our revenues from sales of our products and 17% of our revenues from parts, accessories and service revenues. During the six months ended June 30, 2011, we derived approximately 77% of our revenues from sales of products and 23% of our revenues from parts, accessories and service revenues. Generally, we recognize revenues from the sales of our products upon delivery to our customers, revenues from service contracts and extended product warranties ratably over the coverage period and revenues from service in the period in which the service occurs.

We sell our products through a direct sales force in North America, France, Spain, the United Kingdom, Germany, Korea, China, Japan and Mexico, and use distributors to sell our products in other countries where we do not have a direct presence. During the six months ended June 30, 2012 and 2011, we derived 52% and 57% of our revenues, respectively, from sales outside North America. As of June 30, 2012, we had 39 sales employees covering North America, 36 sales employees in France, Spain, the United Kingdom, Germany, Korea, China and Japan and 68 distributors covering 97 countries.

The following table provides revenue data by geographical region for the six months ended June 30, 2012 and 2011:

	Percentage of Revenues
	Six Months Ended June 30,
Region	2012			2011
North America		48	%		43	%
Europe		19			31
Asia/Pacific		28			20
Other		5			6
Total		100	%		100	%

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See Note 8 to our consolidated financial statements included in this Quarterly Report for revenues and asset data by geographic region.

Results of Operations

The following table contains selected income statement information, which serves as the basis of the discussion of our results of operations for the three months ended June 30, 2012 and 2011, respectively (in thousands, except for percentages):

	Three Months Ended June 30,												$ Change			% Change
	2012						2011
	Amount			As a % of Total Revenues			Amount			As a % of Total Revenues
Product revenues	$	32,923			83	%	$	20,675			78	%	$	12,248			59	%
Parts, accessories and service revenues		6,650			17			5,664			22			986			17
Total revenues		39,573			100			26,339			100			13,234			50
Cost of revenues		16,533			42			11,273			43			5,260			47
Gross profit		23,040			58			15,066			57			7,974			53
Operating expenses
Sales and marketing		11,878			30			9,656			37			2,222			23
Research and development		3,460			9			2,431			9			1,029			42
Amortization of intangible assets acquired		342			1			14			—			328			2,343
General and administrative		3,667			9			4,161			16			(494	)		(12	)
Total operating expenses		19,347			49			16,262			62			3,085			19
Income (loss) from operations		3,693			9			(1,196	)		(5	)		4,889			409
Interest income, net		13			—			46			—			(33	)		(72	)
Other expense, net		(298	)		(1	)		(1	)		—			(297	)		(29,700	)
Income (loss) before provision for income taxes		3,408			9			(1,151	)		(4	)		4,559			396
Provision for income taxes		728			2			149			—			579			389
Net income (loss)	$	2,680			7	%	$	(1,300	)		(5	)%	$	3,980			306	%

Revenues

Revenues in the three months ended June 30, 2012 increased from the three months ended June 30, 2011 by $13.2 million or 50%. The increase was attributable to a number of factors (in thousands, except for percentages):

	Three Months Ended June 30,				$ Change		% Change
	2012		2011
Product sales in North America	$	16,432	$	8,555	$	7,877		92	%
Product sales outside North America		16,491		12,120		4,371		36
Global parts, accessories and service sales		6,650		5,664		986		17
Total Revenues	$	39,573	$	26,339	$	13,234		50	%

• Revenues from the sale of products in North America increased by approximately $7.9 million, or 92%, from the 2011 period, reflecting the increased number of units sold from the first full quarter of Cellulaze sales along with sales of our ConBio and PinPointe FootLaser product lines.

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• Revenues from the sale of products outside of North America increased by approximately $4.4 million, or 36%, from the 2011 period primarily due to an increase in the number of units sold through our ConBio, SmoothShapes and Pin Pointe FootLaser product lines.

• Revenues from the sale of parts, accessories and services increased by approximately $1.0 million, or 17%, from the 2011 period, primarily due to an increase in revenues generated from our extended service contracts and revenues generated from performing service on laser systems.

Cost of Revenues

	Three Months Ended June 30,						$ Change		% Change
	2012			2011
Cost of revenues (in thousands)	$	16,533		$	11,273		$	5,260		47	%
Cost of revenues (as a percentage of total revenues)		42	%		43	%

Total cost of revenues increased $5.3 million, or 47%, to $16.5 million for three months ended June 30, 2012, as compared to $11.3 million for the three months ended June 30, 2011, primarily related to the 50% increase in total revenues. Our total cost of revenues decreased slightly as a percentage of total revenues to 42% for the three months ended June 30, 2012, from 43% for the three months ended June 30, 2011, due to a higher percentage of laser revenue from our North American distribution, where average selling prices tend to be higher.

Sales and Marketing

	Three Months Ended June 30,						$ Change		% Change
	2012			2011
Sales and marketing (in thousands)	$	11,878		$	9,656		$	2,222		23	%
Sales and marketing (as a percentage of total revenues)		30	%		37	%

Sales and marketing expenses increased $2.2 million, or 23%, for the three months ended June 30, 2012 as compared to the three months ended June 30, 2011. The increase is attributed to an increase in commission expense of $1.2 million due to the 59% increase in product revenues. Our personnel, administrative costs and travel expenses increased $1.0 million as a result of efforts related to the launch of Cellulaze and an increase in the number of our sales employees. Our sales and marketing expenses for the three months ended June 30, 2012 decreased as a percentage of total revenues to 30% primarily due to the 50% increase in total revenues.

Research and Development

	Three Months Ended June 30,						$ Change		% Change
	2012			2011
Research and development (in thousands)	$	3,460		$	2,431		$	1,029		42	%
Research and development (as a percentage of total revenues)		9	%		9	%

Research and development expenses increased $1.0 million, or 42% for the three months ended June 30, 2012 as compared to the three months ended June 30, 2011. This increase was primarily due to a $0.6 million increase in personnel and administrative costs associated with the integration of our ConBio research and development team. Professional fees and project materials expenses increased $0.4 million related to increased clinical studies and other research and development efforts.

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Amortization of Intangible Assets Acquired

	Three Months Ended June 30,					$ Change		% Change
	2012			2011
Amortization of intangible assets acquired (in thousands)	$	342		$	14	$	328		2,343	%
Amortization of intangible assets acquired (as a percentage of total revenues)		1	%		—

For the three month period ending June 30, 2012, we recognized amortization expense of $0.3 million in our operating expenses relating to certain intangible assets acquired through our acquisitions of Eleme Medical and ConBio’s aesthetic business. We expect our amortization expense associated with these intangible assets that will be recognized in our operating expenses over the next five years and beyond to be $0.7 million for the remainder of 2012, $0.9 million for 2013, $0.6 million for 2014, $0.4 million for 2015 and $1.8 million for 2016 and beyond.

General and Administrative

	Three Months Ended June 30,						$ Change			% Change
	2012			2011
General and administrative (in thousands)	$	3,667		$	4,161		$	(494	)		(12	)%
General and administrative (as a percentage of total revenues)		9	%		16	%

General and administrative expenses decreased $0.5 million, or 12%, for the three months ended June 30, 2012 as compared to the three months ended June 30, 2011. The decrease is primarily due to acquisition costs of $1.2 million in legal, accounting, and investment banking fees associated with the acquisition of ConBio that were recognized in 2011, partially offset by an increase in personnel and other administrative costs.

Interest Income, net

	Three Months Ended June 30,				$ Change			% Change
	2012		2011
Interest income, net (in thousands)	$	13	$	46	$	(33	)		(72	)%

The decrease in interest income, net was primarily due to less cash invested in 2012 when compared to 2011, due to cash used for acquisitions during the first half of 2011, as well as increased interest payments associated with capital leases.

Other Expense, net

	Three Months Ended June 30,						$ Change			% Change
	2012			2011
Other expense, net (in thousands)	$	(298	)	$	(1	)	$	(297	)		(29,700	)%

The change in other expense, net is primarily a result of increased net foreign currency remeasurement losses in the three months ended June 30, 2012 as compared to the three months ended June 30, 2011 due to the strengthening of the U.S. dollar against the euro.

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Provision for Income Taxes

	Three Months Ended June 30,						$ Change		% Change
	2012			2011
Provision for income taxes (in thousands)	$	728		$	149		$	579		389	%
Provision as a percentage of income before provision for income taxes		21	%		(13	)%

The provision for income taxes results from a combination of the activities of our domestic and foreign subsidiaries. During the three months ended June 30, 2012, we recorded an income tax provision of $0.7 million, representing an effective tax rate of 21%. We continue to maintain a valuation allowance against our net domestic deferred tax assets as well as the deferred tax assets of our German, Japanese and Mexican subsidiaries at June 30, 2012. During the three months ended June 30, 2011, we recorded an income tax provision of $0.1 million, representing an effective tax rate of (13)% mainly attributable to taxable income generated in foreign jurisdictions. We recorded a tax provision on a pre-tax loss for the three months ended June 30, 2011 because we did not record a benefit for our domestic tax loss. The change in the effective tax rate from the 2011 period to the 2012 period is primarily due to changes in the jurisdictional mix of earnings.

SIX MONTHS ENDED JUNE 30, 2012 AND 2011

The following table contains selected income statement information, which serves as the basis of the discussion of our results of operations for the six months ended June 30, 2012 and 2011, respectively (in thousands, except for percentages):

	Six Months Ended June 30,												$ Change			% Change
	2012						2011
	Amount			As a % of Total Revenues			Amount			As a % of Total Revenues
Product revenues	$	61,018			83	%	$	37,286			77	%	$	23,732			64	%
Parts, accessories and service revenues		12,723			17			10,937			23			1,786			16
Total revenues		73,741			100			48,223			100			25,518			53
Cost of revenues		31,193			42			21,076			44			10,117			48
Gross profit		42,548			58			27,147			56			15,401			57
Operating expenses
Sales and marketing		23,429			32			18,412			38			5,017			27
Research and development		6,699			9			4,671			10			2,028			43
Amortization of intangible assets acquired		684			1			24			—			660			2,750
General and administrative		7,185			10			7,102			15			83			1
Total operating expenses		37,997			52			30,209			63			7,788			26
Income (loss) from operations		4,551			6			(3,062	)		(6	)		7,613			249
Interest income, net		23			—			100			—			(77	)		(77	)
Other income (expense), net		(89	)		—			213			—			(302	)		(142	)
Income (loss) before provision for income taxes		4,485			6			(2,749	)		(6	)		7,234			263
Provision for income taxes		986			1			445			1			541			122
Net income (loss)	$	3,499			5	%	$	(3,194	)		(7	)%	$	6,693			210	%

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Revenues

Revenues in the six months ended June 30, 2012 increased from the six months ended June 30, 2011 by $25.5 million, or 53%. The increase was attributable to a number of factors (in thousands, except for percentages):

	Six Months Ended June 30,				$ Change		% Change
	2012		2011
Product sales in North America	$	29,993	$	15,649	$	14,344		48	%
Product sales outside North America		31,025		21,637		9,388		43
Global parts, accessories and service sales		12,723		10,937		1,786		16
Total Revenues	$	73,741	$	48,223	$	25,518		53	%

• Revenues from the sale of products in North America increased by approximately $14.3 million, or 48%, from the 2011 period, reflecting the increased number of units sold through the launch of Cellulaze and sales of our ConBio and PinPointe FootLaser product lines.

• Revenues from the sale of products outside of North America increased by approximately $9.4 million, or 43%, from the 2011 period primarily due to an increase in the number of units sold through our ConBio, SmoothShapes and Pin Pointe FootLaser product lines.

• Revenues from the sale of parts, accessories and services increased by approximately $1.8 million, or 16%, from the 2011 period, primarily due to an increase in revenues generated from our extended service contracts and revenues generated from performing service on laser systems.

Cost of Revenues

	Six Months Ended June 30,						$ Change		% Change
	2012			2011
Cost of revenues (in thousands)	$	31,193		$	21,076		$	10,117		48	%
Cost of revenues (as a percentage of total revenues)		42	%		44	%

Total cost of revenues increased $10.1 million, or 48%, to $31.2 million for the six months ended June 30, 2012, as compared to $21.1 million for the six months ended June 30, 2011, primarily related to the 53% increase in total revenues. Our cost of revenues decreased slightly as a percentage of total revenues to 42% for the six months ended June 30, 2012, from 44% for the six months ended June 30, 2011, due to a higher percentage of laser revenue from our North American distribution, where average selling prices tend to be higher.

Sales and Marketing

	Six Months Ended June 30,						$ Change		% Change
	2012			2011
Sales and marketing (in thousands)	$	23,429		$	18,412		$	5,017		27	%
Sales and marketing (as a percentage of total revenues)		32	%		38	%

Sales and marketing expenses increased by $5.0 million, or 27%, for the six months ended June 30, 2012 as compared to the six months ended June 30, 2011. The increase is attributed to an increase in commission expense of $2.2 million due to the 64% increase in product revenues. Our personnel, administrative costs and travel expenses increased $2.1 million as a result of efforts related to the launch of Cellulaze and an increase in the number of our sales employees. Promotional costs increased $0.7 million, due to an increased number of workshops, trade shows and other promotional efforts, including those related to the launch of Cellulaze. Our sales and marketing expenses for the six months ended June 30, 2012 decreased as a percentage of total revenues to 32% primarily due to the 53% increase in total revenues.

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Research and Development

	Six Months Ended June 30,						$ Change		% Change
	2012			2011
Research and development (in thousands)	$	6,699		$	4,671		$	2,028		43	%
Research and development (as a percentage of total revenues)		9	%		10	%

Research and development expenses increased by $2.0 million for the six months ended June 30, 2012 as compared to the six months ended June 30, 2011. This increase was primarily due to a $1.3 million increase in personnel and administrative costs associated with the integration of our ConBio research and development team. Professional fees and project materials expenses increased $0.7 million related to increased clinical studies and other research and development efforts. Our research and development expenses for the six months ended June 30, 2012 decreased as a percentage of total revenues to 9% primarily due to the 53% increase in total revenues.

Amortization of Intangible Assets Acquired

	Six Months Ended June 30,					$ Change		% Change
	2012			2011
Amortization of intangible assets acquired (in thousands)	$	684		$	24	$	660		2,750	%
Amortization of intangible assets acquired (as a percentage of total revenues)		1	%		—

For the six month period ending June 30, 2012, we recognized amortization expense of $0.7 million in our operating expenses relating to certain intangible assets acquired through our acquisitions of Eleme Medical and ConBio’s aesthetic business.

General and Administrative

	Six Months Ended June 30,						$ Change		% Change
	2012			2011
General and administrative (in thousands)	$	7,185		$	7,102		$	83		1	%
General and administrative (as a percentage of total revenues)		10	%		15	%

General and administrative expenses increased $0.1 million, or 1%, for the six months ended June 30, 2012 as compared to the six months ended June 30, 2011. The increase is primarily due to an increase in personnel and other administrative costs offset by legal, accounting, and investment banking fees associated with the acquisition of ConBio that were recognized in 2011.

Interest Income, net

	Six Months Ended June 30,				$ Change			% Change
	2012		2011
Interest income, net (in thousands)	$	23	$	100	$	(77	)		(77	)%

The decrease in interest income, net was primarily due to less cash invested in 2012 when compared to 2011, due to cash used for acquisitions during the first half of 2011, as well as increased interest payments associated with capital leases.

19

Other Income (Expense), net

	Six Months Ended June 30,					$ Change			% Change
	2012			2011
Other income (expense), net (in thousands)	$	(89	)	$	213	$	(302	)		(142	)%

The change in other income (expense), net is primarily a result of net foreign currency remeasurement losses in the six months ended June 30, 2012 due to the strengthening of the U.S. dollar, compared to net foreign currency remeasurement gains in the six months ended June 30, 2011 due to the weakening of the U.S. dollar, primarily against the euro.

Provision for Income Taxes

	Six Months Ended June 30,						$ Change		% Change
	2012			2011
Provision for income taxes (in thousands)	$	986		$	445		$	541		122	%
Provision as a percentage of income before provision for income taxes		22	%		(16	)%

The provision for income taxes results from a combination of the activities of our domestic and foreign subsidiaries. During the six months ended June 30, 2012, we recorded an income tax provision of $1.0 million, representing an effective tax rate of 22%. We continue to maintain a valuation allowance against our net domestic deferred tax assets as well as the deferred tax assets of our German, Japanese and Mexican subsidiaries at June 30, 2012. During the six months ended June 30, 2011, we recorded an income tax provision of $0.4 million, representing an effective tax rate of (16)% mainly attributable to taxable income generated in foreign jurisdictions. We recorded a tax provision on a pre-tax loss for the three months ended June 30, 2011 because we did not record a benefit for our domestic tax loss. The change in the effective tax rate from the 2011 period to the 2012 period is primarily due to changes in the jurisdictional mix of earnings.

Liquidity and Capital Resources

We require cash to pay our operating expenses, make capital expenditures and pay our long-term liabilities. Since our inception, we have funded our operations through our 2005 initial public offering, private placements of equity securities, short-term borrowings and funds generated from our operations.

At June 30, 2012, our cash, cash equivalents and short and long-term marketable securities were $80.0 million. Our cash and cash equivalents of $37.1 million are highly liquid investments with maturity of 90 days or less at date of purchase and consist of cash in operating accounts, investments in money market funds and various state and municipal governments. Our short-term marketable securities of $34.8 million consist of investments in various state and municipal governments, U.S. government agencies and treasuries all of which mature by June 15, 2013. Our long-term marketable securities of $8.1 million consist of investments in various state and municipal governments, U.S. government agencies and treasuries, all of which mature by April 1, 2014.

Our future capital requirements depend on a number of factors, including the rate of market acceptance of our current and future products, the resources we devote to developing and supporting our products and continued progress of our research and development of new products. Our capital expenditures increased for the six months ended June 30, 2012 as compared to the six months ended June 30, 2011, and we expect that our capital expenditures during the remainder of 2012 will increase as a result of manufacturing and purchasing new demonstration equipment. During the six months ended June 30, 2012 and 2011, respectively, we transferred $2.2 million and $1.8 million of demonstration equipment to fixed assets.

In March 2012, we commenced an option exchange program (the “Exchange Offer”) in which we offered eligible option holders the opportunity to voluntarily exchange certain “underwater” stock options for a lesser number of new stock options with a lower exercise price. Our U.S. employees were eligible to participate in the Exchange Offer, and our directors and executive officers were not eligible to participate. The exchange ratios for the Exchange Offer were determined by using the Black-Scholes option pricing model to approximate a “value-for-value” exchange, meaning that the value of the eligible stock options was equal to the value of the new stock options. The Exchange Offer, which was subject to Rule 13e-4 under the Securities Exchange Act of 1934, as amended, expired on April 13, 2012.

In the Exchange Offer, 90 eligible option holders tendered eligible options with exercise prices of $20.00 or greater to purchase an aggregate of 325,946 shares of Class A common stock, representing 96% of the total shares of Class A common

20

stock underlying options eligible for exchange. New stock options were granted to purchase an aggregate of 280,771 shares of Class A common stock in exchange for the cancellation of the tendered eligible options. The exercise price per share of each new option granted in the Exchange Offer is $19.78, which was the closing price of our Class A common stock as reported by The Nasdaq Global Market on April 13, 2012. All eligible stock options were fully vested as of April 13, 2012, the expiration date of the Exchange Offer. Because the fair value of the eligible stock options was equal to the fair value of the new stock options calculated using the Black-Scholes option pricing model, we did not recognize any stock-based compensation expense as a result of the Exchange Offer.

On July 28, 2009, our Board of Directors authorized the repurchase of up to $10 million of our Class A common stock, from time to time, on the open market or in privately negotiated transactions under a stock repurchase program. The program will terminate upon the purchase of $10 million in common stock, unless our Board of Directors discontinues it sooner. During the six months ended June 30, 2012, we did not repurchase any shares of our common stock under this program. As of June 30, 2012 we have repurchased an aggregate of 196,970 shares under this program at an aggregate cost of $1.9 million.

We believe that our current cash, cash equivalents and short and long-term marketable securities, as well as cash generated from operations, will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for the foreseeable future.

Cash Flows

Net cash provided by operating activities was $7.3 million for the six months ended June 30, 2012, and resulted primarily from the net income for the period of $3.5 million, increased by approximately $4.9 million in depreciation and amortization and stock-based compensation expense and by approximately $0.6 million in net accretion of marketable securities. Net changes in working capital items decreased cash from operating activities by approximately $1.7 million primarily related to an increase in inventory of $3.6 million, net of demonstration equipment transfers, associated with increased purchases to meet the increased revenue requirements. Accounts receivable increased $1.5 million associated with increased revenues. These increases were partially offset by an increase in deferred revenue of $2.9 million and an increase in accounts payable of $1.0 million. Net cash used in investing activities was $6.3 million for the six months ended June 30, 2012, which consisted of net purchases of marketable securities of $5.4 million and purchases of property and equipment of $1.0 million, offset by a decrease in other noncurrent assets of $0.1 million. Net cash provided by financing activities during the six months ended June 30, 2012 was $0.4 million, principally relating to the proceeds of stock option exercises.

Net cash provided by operating activities was $0.1 million for the six months ended June 30, 2011, and resulted primarily from the net loss for the period of $3.2 million, increased by approximately $4.3 million in depreciation and amortization and stock-based compensation expense and by approximately $0.6 million in accretion of discounts on marketable securities. Net changes in working capital items decreased cash from operating activities by approximately $1.7 million primarily related to an increase in inventory of $5.6 million due to increased purchases to meet the increased revenue requirements. Accounts receivable increased $2.6 million associated with increased revenues. These increases were partially offset by an increase in accounts payable of $3.4 million, accrued expenses of $1.7 million and amounts due to related party of $1.2 million. Net cash used in investing activities was $6.6 million for the six months ended June 30, 2011, which consisted primarily of $27.0 million used to acquire Eleme Medical and ConBio, and $0.6 million used for fixed asset purchases, partially offset by net proceeds of marketable securities of $20.9 million. Net cash provided by financing activities during the six months ended June 30, 2011 was $0.2 million, principally relating to the proceeds of stock option exercises.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations set forth above are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our estimates and judgments, including those described in our Annual Report on Form 10-K for the year ended December 31, 2011. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities, and the reported amounts of revenues and expenses, that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. A discussion of our critical accounting policies and the related judgments and estimates affecting the preparation of our consolidated financial statements is included in our Annual Report on Form 10-K for the year ended December 31, 2011. There have been no material changes to our critical accounting policies as of June 30, 2012.

21

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The following discussion about our market risk disclosures involves forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. We are exposed to market risk related to changes in interest rates and foreign currency exchange rates. We do not use derivative financial instruments.

Interest Rate Sensitivity. We maintain an investment portfolio consisting mainly of money market funds, state and municipal government obligations, U.S. government agencies and treasuries. The securities, other than money market funds, are classified as available-for-sale and consequently are recorded on the balance sheet at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive loss. All investments mature by April 1, 2014. These available-for-sale securities are subject to interest rate risk and will fall in value if market interest rates increase, which could result in a realized loss if we are forced to sell an investment before its scheduled maturity. We currently have the ability and intent to hold our fixed income investments until maturity. We do not utilize derivative financial instruments to manage our interest rate risks.

The following table provides information about our investment portfolio in available-for-sale debt securities. For investment securities, the table presents principal cash flows (in thousands) and weighted average interest rates by expected maturity dates.

	June 30, 2012			2012			2013			2014
Investments (at fair value)	$	46,609		$	21,623		$	22,788		$	2,198
Weighted average interest rate		0.29	%		0.28	%		0.30	%		0.37	%

Foreign Currency Exchange. A significant portion of our operations is conducted through operations in countries other than the United States. Revenues from our international operations that were recorded in U.S. dollars represented approximately 54% of our total international revenues during the six months ended June 30, 2012. Substantially all of the remaining 46% were sales in euros, British pounds, Japanese yen, Chinese yuan and South Korean won. Since we conduct our business in U.S. dollars, our main exposure, if any, results from changes in the exchange rate between these currencies and the U.S. dollar. Our functional currency is the U.S. dollar. Our policy is to reduce exposure to exchange rate fluctuations by having most of our assets and liabilities, as well as most of our revenues and expenditures, in U.S. dollars, or U.S. dollar linked. We have not historically engaged in hedging activities relating to our non-U.S. dollar operations. We sell inventory to our subsidiaries in U.S. dollars. These amounts at our local subsidiaries are recorded in local currency rates in effect on the transaction date. Therefore, we may be exposed to exchange rate fluctuations that occur while the debt is outstanding which we recognize as unrealized gains and losses in our statements of operations. Upon settlement of these debts, we may record realized foreign exchange gains and losses in our statements of operations. We may incur negative foreign currency translation charges as a result of changes in currency exchange rates.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2012. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2012, our principal executive officer and principal financial officer have concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

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Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II — Other Information

Item 1. Legal Proceedings

In 2005, Dr. Ari Weitzner, individually and as putative representative of a purported class, filed a complaint against us under the federal Telephone Consumer Protection Act (TCPA) in Massachusetts Superior Court in Middlesex County seeking monetary damages, injunctive relief, costs and attorneys fees. The complaint alleges that we violated the TCPA by sending unsolicited advertisements by facsimile to the plaintiff and other recipients without the prior express invitation or permission of the recipients. Under the TCPA, recipients of unsolicited facsimile advertisements are entitled to damages of up to $500 per facsimile for inadvertent violations and up to $1,500 per facsimile for knowing or willful violations. Based on discovery in this matter, the plaintiff alleges that approximately three million facsimiles were sent on our behalf by a third party to approximately 100,000 individuals. In 2008, the plaintiff served, and the Court held a hearing regarding a motion for class certification. In 2010, the Court issued an order dismissing the complaint without prejudice for Dr. Weitzner’s failure to prosecute the case and subsequently allowed a plaintiff motion for relief from the dismissal order. In January 2012, the Court issued a Memorandum of Decision denying the class certification motion. The Court has scheduled a status conference for September 20, 2012 regarding Dr. Weitzner’s individual claims. On July 23, 2012, Dr. Weitzner filed a new purported class action, based on the same operative facts and asserting the same claims as the Massachusetts action, in federal court in the Eastern District of New York. We have not been served with a summons or complaint in the New York action. We believe we have numerous defenses to Dr. Weitzner’s claims.

In addition to the matters discussed above, from time to time, we are subject to various claims, lawsuits, disputes with third parties, investigations and pending actions involving various allegations against us incident to the operation of its business, principally product liability. Each of these other matters is subject to various uncertainties, and it is possible that some of these other matters may be resolved unfavorably to us. We establish accruals for losses that management deems to be probable and subject to reasonable estimate. We believe that the ultimate outcome of these matters will not have a material adverse impact on our consolidated financial position, results of operations or cash flows.

Item 1A. Risk Factors

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described in our Annual Report on Form 10-K for the year ended December 31, 2011 in addition to the other information included in this quarterly report. If any of the risks actually occurs, our business, financial condition or results of operations would likely suffer. In that case, the trading price of our common stock could fall.

As of June 30, 2012, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, although we may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On July 28, 2009, our Board of Directors authorized the repurchase of up to $10 million of our Class A common stock from time to time on the open market or in privately negotiated transactions under a stock repurchase program. The program will terminate upon the purchase of $10 million in common stock, unless our Board of Directors terminates it sooner. During the six months ended June 30, 2012, we did not repurchase any shares of our common stock. As of June 30, 2012, we have repurchased an aggregate of 196,970 shares under the program at an aggregate cost of $1.9 million.

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Item 6. Exhibits

(a) Exhibits

Exhibit No.	Description
31.1	Certification of the Principal Executive Officer
31.2	Certification of the Principal Financial Officer
32.1	Certification of the Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of the Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*	The following materials from the Cynosure, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, formatted in XBRL (eXtensible Business Reporting Language); (i) Condensed Statement of Earnings for the three and six months ended June 30, 2012 and 2011, (ii) Condensed Statement of Financial Position at June 30, 2012 and December 31, 2011, (iii) Condensed Statement of Cash Flows for the six months ended June 30, 2012 and 2011, and (iv) Notes to Condensed Consolidated Financial Statements.

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

25

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant certifies that it has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Cynosure, Inc.
	(Registrant)
Date: August 3, 2012	By:	/S/ MICHAEL R. DAVIN
		Michael R. Davin
		Chairman, President, Chief Executive Officer
Date: August 3, 2012	By:	/S/ TIMOTHY W. BAKER
		Timothy W. Baker
		Executive Vice President, Chief Financial Officer and Treasurer

26

EXHIBIT INDEX

Exhibit No.	Description
31.1	Certification of the Principal Executive Officer
31.2	Certification of the Principal Financial Officer
32.1	Certification of the Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of the Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*	The following materials from the Cynosure, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, formatted in XBRL (eXtensible Business Reporting Language); (i) Condensed Statement of Earnings for the three and six months ended June 30, 2012 and 2011, (ii) Condensed Statement of Financial Position at June 30, 2012 and December 31, 2011, (iii) Condensed Statement of Cash Flows for the six months ended June 30, 2012 and 2011, and (iv) Notes to Condensed Consolidated Financial Statements.

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

27

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Michael R. Davin, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cynosure, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2012	/s/    Michael R. Davin
	Michael R. Davin
	Chairman, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Timothy W. Baker, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cynosure, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2012	/s/    Timothy W. Baker
	Timothy W. Baker
	Executive Vice President, Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Cynosure, Inc. (the “Company”) for the period ended June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Michael R. Davin, Chairman, President and Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that, to his knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 3, 2012	/s/    Michael R. Davin
	Michael R. Davin
	Chairman, President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Cynosure, Inc. (the “Company”) for the period ended June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Timothy W. Baker, Executive Vice President, Chief Financial Officer and Treasurer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that, to his knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 3, 2012	/s/    Timothy W. Baker
	Timothy W. Baker
	Executive Vice President, Chief Financial Officer and Treasurer

XML

Short and Long-Term Marketable Securities (Details Textual) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Short and Long-Term Marketable Securities (Textual) [Abstract]
Available-for-sale securities	$ 34,771	$ 31,379
Available-for-sale securities in equity	$ 17,000

XML

Net Income (Loss) Per Common Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Schedule of reconciliation of basic and diluted shares
Net income (loss)	$ 2,680	$ (1,300)	$ 3,499	$ (3,194)
Basic weighted average common shares outstanding	12,605	12,599	12,591	12,588
Weighted average common equivalent shares	673		550
Diluted weighted average common shares outstanding	13,278	12,599	13,141	12,588
Basic net income (loss) per share	$ 0.21	$ (0.10)	$ 0.28	$ (0.25)
Diluted net income (loss) per share	$ 0.20	$ (0.10)	$ 0.27	$ (0.25)

XML

Segment Information (Details 1) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Schedule of total assets by geographic area
Total assets	$ 160,353	$ 151,580
United States [Member]
Schedule of total assets by geographic area
Total assets	139,871	132,041
Europe [Member]
Schedule of total assets by geographic area
Total assets	13,013	12,688
Asia / Pacific [Member]
Schedule of total assets by geographic area
Total assets	9,840	8,855
Eliminations [Member]
Schedule of total assets by geographic area
Total assets	$ (2,371)	$ (2,004)

XML

Stock-Based Compensation (Details Textual) (USD $)	1 Months Ended	3 Months Ended		6 Months Ended
	Mar. 31, 2012 Person	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Stock Based Compensation (Textual) [Abstract]
Stock-based compensation expense		$ 732,000	$ 659,000	$ 1,397,000	$ 1,325,000
Capitalized of stock-based compensation expense				15,000	18,000
Cash received from option exercises				$ 500,000	$ 200,000
Stock options granted				332,000	344,500
Weighted average fair value of the options granted				$ 8.66	$ 7.47
Eligible option holders	90
Exercise prices	$ 20.00
Common Stock Class A [Member]
Stock Based Compensation (Textual) [Abstract]
Purchase shares in exchange offer	325,946
Class A common stock as a percentage of total share	96.00%
Stock options granted to purchase an aggregate of shares	280,771
Exercise price per share of each new option granted	$ 19.78

XML

Short and Long-Term Marketable Securities (Tables)

6 Months Ended

Jun. 30, 2012

Short and Long-Term Marketable Securities [Abstract]

Schedule of available-for-sale securities

	Market Value		Amortized Cost		Unrealized Gains		Unrealized Losses
Available-for-sale Securities:
Cash equivalents:
State and municipal bonds	$	3,765	$	3,764	$	1	$	—
Total cash equivalents	$	3,765	$	3,764	$	1	$	—
Short-term marketable securities:
State and municipal bonds	$	27,395	$	27,387	$	12	$	(4	)
Treasuries and government agencies		7,359		7,355		4		—
Equity securities		17		18		—		(1	)
Total short-term marketable securities	$	34,771	$	34,760	$	16	$	(5	)
Long-term marketable securities:
State and municipal bonds	$	5,558	$	5,550	$	8	$	—
Treasuries and government agencies		2,532		2,532		1		(1	)
Total long-term marketable securities	$	8,090	$	8,082	$	9	$	(1	)
Total available-for-sale securities	$	46,626	$	46,606	$	26	$	(6	)
Total marketable securities	$	42,861

	Market Value		Amortized Cost		Unrealized Gains		Unrealized Losses
Available-for-sale Securities:
Cash equivalents:
State and municipal bonds	$	3,264	$	3,263	$	1	$	—
Total cash equivalents	$	3,264	$	3,263	$	1	$	—
Short-term marketable securities:
State and municipal bonds	$	18,868	$	18,858	$	12	$	(2	)
Treasuries and government agencies		12,505		12,499		6		—
Equity securities		6		5		1		—
Total short-term marketable securities	$	31,379	$	31,362	$	19	$	(2	)
Long-term marketable securities:
State and municipal bonds	$	4,719	$	4,713	$	6	$	—
Treasuries and government agencies		1,876		1,875		1		—
Total long-term marketable securities	$	6,595	$	6,588	$	7	$	—
Total available-for-sale securities	$	41,238	$	41,213	$	27	$	(2	)
Total marketable securities	$	37,974

Schedule of available-for-sale debt securities mature

	Total		Maturities
			Less Than One Year		One to Five Years		More than five years
State and municipal bonds	$	36,718	$	31,160	$	5,558	$	—
Treasuries and government agencies		9,891		7,359		2,532		—
Total available-for-sale debt securities	$	46,609	$	38,519	$	8,090	$	—

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Accumulated Other Comprehensive Loss (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Components of accumulated other comprehensive loss
Unrealized gain on marketable securities, net of taxes, Balance - December 31, 2011			$ 23
Translation adjustment, Balance - December 31, 2011			(2,064)
Accumulated other comprehensive loss, Balance - December 31, 2011			(2,041)
Unrealized gain on marketable securities, net of taxes, Current period other comprehensive loss	3	21	12	7
Translation adjustment, Current period other comprehensive loss	(463)	228	(141)	797
Accumulated other comprehensive loss, Current period other comprehensive loss	(460)	249	(129)	804
Unrealized gain on marketable securities, net of taxes, Balance - June 30, 2012	35		35
Translation adjustment, Balance - June 30, 2012	(2,205)		(2,205)
Accumulated other comprehensive loss, Balance - June 30, 2012	$ (2,170)		$ (2,170)

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Goodwill and Other Intangible Assets (Details 2) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012
Schedule of amortization expenses on intangible assets
Remainder of 2012	$ 922
2013	1,299
2014	950
2015	765
2016 and thereafter	2,878
Total	$ 6,814

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Short and Long-Term Marketable Securities (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Schedule of available-for-sale securities
Market Value	$ 42,861	$ 37,974
Total available-for-sale securities [Member]
Schedule of available-for-sale securities
Market Value	46,626	41,238
Amortized Cost	46,606	41,213
Unrealized Gains	26	27
Unrealized Losses	(6)	(2)
Short-term marketable securities [Member]
Schedule of available-for-sale securities
Market Value	34,771	31,379
Amortized Cost	34,760	31,362
Unrealized Gains	16	19
Unrealized Losses	(5)	(2)
Short-term marketable securities [Member] | State and municipal bonds [Member]
Schedule of available-for-sale securities
Market Value	27,395	18,868
Amortized Cost	27,387	18,858
Unrealized Gains	12	12
Unrealized Losses	(4)	(2)
Short-term marketable securities [Member] | Treasuries and government agencies [Member]
Schedule of available-for-sale securities
Market Value	7,359	12,505
Amortized Cost	7,355	12,499
Unrealized Gains	4	6
Unrealized Losses
Short-term marketable securities [Member] | Equity securities [Member]
Schedule of available-for-sale securities
Market Value	17	6
Amortized Cost	18	5
Unrealized Gains		1
Unrealized Losses	(1)
Long-term marketable securities [Member]
Schedule of available-for-sale securities
Market Value	8,090	6,595
Amortized Cost	8,082	6,588
Unrealized Gains	9	7
Unrealized Losses	(1)
Long-term marketable securities [Member] | State and municipal bonds [Member]
Schedule of available-for-sale securities
Market Value	5,558	4,719
Amortized Cost	5,550	4,713
Unrealized Gains	8	6
Unrealized Losses
Long-term marketable securities [Member] | Treasuries and government agencies [Member]
Schedule of available-for-sale securities
Market Value	2,532	1,876
Amortized Cost	2,532	1,875
Unrealized Gains	1	1
Unrealized Losses	(1)
Cash equivalents [Member]
Schedule of available-for-sale securities
Market Value	3,765	3,264
Amortized Cost	3,764	3,263
Unrealized Gains	1	1
Unrealized Losses
Cash equivalents [Member] | State and municipal bonds [Member]
Schedule of available-for-sale securities
Market Value	3,765	3,264
Amortized Cost	3,764	3,263
Unrealized Gains	1	1
Unrealized Losses

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Related Party Transactions (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Related Party Transactions (Textual) [Abstract]
Percentage of common stock outstanding	23.00%		23.00%
Purchases of inventory from related party	$ 1.0	$ 2.2	$ 2.1	$ 4.3
Due to related party for purchase of inventory	$ 1.1		$ 1.1		$ 1.5

XML

Segment Information (Details 2) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Schedule of long-lived assets by geographic area
Long-lived assets	$ 8,605	$ 8,266
United States [Member]
Schedule of long-lived assets by geographic area
Long-lived assets	6,925	6,461
Europe [Member]
Schedule of long-lived assets by geographic area
Long-lived assets	1,155	1,344
Asia / Pacific [Member]
Schedule of long-lived assets by geographic area
Long-lived assets	$ 525	$ 461

XML

Inventories

6 Months Ended

Jun. 30, 2012

Inventories [Abstract]

Inventories

Note 3 — Inventories

Cynosure states all inventories at the lower of cost or market, determined on a first-in, first-out method. Inventory includes material, labor and overhead and consists of the following:

	June 30, 2012		December 31, 2011
	(in thousands)
Raw materials	$	7,009	$	7,645
Work in process		2,015		1,437
Finished goods		21,762		20,486
	$	30,786	$	29,568

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Goodwill and Other Intangible Assets (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Goodwill and Other Intangible Assets (Textual) [Abstract]
Amortization expense	$ 342,000	$ 14,000	$ 684,000	$ 24,000
Indefinite-life intangible assets	41,000		41,000
Remainder of 2012	922,000		922,000
2013	1,299,000		1,299,000
2014	950,000		950,000
2015	765,000		765,000
2016 and thereafter	2,878,000		2,878,000
Eleme Medical and ConBio Acquisitions [Member]
Goodwill and Other Intangible Assets (Textual) [Abstract]
Remainder of 2012	700,000		700,000
2013	900,000		900,000
2014	600,000		600,000
2015	400,000		400,000
2016 and thereafter	$ 1,800,000		$ 1,800,000

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Net Income (Loss) Per Common Share (Tables)

6 Months Ended

Jun. 30, 2012

Net Income (Loss) Per Common Share [Abstract]

Schedule of reconciliation of basic and diluted shares

	Three Months Ended June 30,					Six Months Ended June 30,
	2012		2011			2012		2011
Net income (loss)	$	2,680	$	(1,300	)	$	3,499	$	(3,194	)
Basic weighted average common shares outstanding		12,605		12,599			12,591		12,588
Weighted average common equivalent shares		673		—			550		—
Diluted weighted average common shares outstanding		13,278		12,599			13,141		12,588
Basic net income (loss) per share	$	0.21	$	(0.10	)	$	0.28	$	(0.25	)
Diluted net income (loss) per share	$	0.20	$	(0.10	)	$	0.27	$	(0.25	)

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2012

Segment Information [Abstract]

Schedule of total revenue by geographic destination

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in thousands)
United States	$	19,034	$	10,429	$	34,194	$	18,414
Europe		7,153		7,253		14,172		14,721
Asia / Pacific		11,016		5,449		20,292		9,571
Other		2,370		3,208		5,083		5,517
Total	$	39,573	$	26,339	$	73,741	$	48,223

Schedule of total assets by geographic area

	June 30, 2012			December 31, 2011
	(in thousands)
United States	$	139,871		$	132,041
Europe		13,013			12,688
Asia / Pacific		9,840			8,855
Eliminations		(2,371	)		(2,004	)
Total	$	160,353		$	151,580

Schedule of long-lived assets by geographic area

	June 30, 2012		December 31, 2011
	(in thousands)
United States	$	6,925	$	6,461
Europe		1,155		1,344
Asia / Pacific		525		461
Total	$	8,605	$	8,266

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Warranty Costs (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Schedule of change in product warranty accrual
Warranty accrual, beginning of period	$ 3,171
Warranty provision related to new sales	2,113
Costs incurred	(2,078)
Warranty accrual, end of period	$ 3,206
Warranty Costs (Textual) [Abstract]
warranty on end-user sales	1 year

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2012

Accumulated Other Comprehensive Loss [Abstract]

Components of accumulated other comprehensive loss

	Unrealized Gain on Marketable Securities, net of taxes		Translation Adjustment			Accumulated Other Comprehensive Loss
Balance — December 31, 2011	$	23	$	(2,064	)	$	(2,041	)
Current period other comprehensive loss		12		(141	)		(129	)
Balance — June 30, 2012	$	35	$	(2,205	)	$	(2,170	)

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Stock-Based Compensation (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Summary of stock-based compensation expenses
Total stock-based compensation expense	$ 732	$ 659	$ 1,397	$ 1,325
Cost of revenues [Member]
Summary of stock-based compensation expenses
Total stock-based compensation expense	30	37	59	73
Sales and marketing [Member]
Summary of stock-based compensation expenses
Total stock-based compensation expense	214	214	422	444
Research and development [Member]
Summary of stock-based compensation expenses
Total stock-based compensation expense	129	116	249	236
General and administrative [Member]
Summary of stock-based compensation expenses
Total stock-based compensation expense	$ 359	$ 292	$ 667	$ 572

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 2 — Stock-Based Compensation

Cynosure recorded stock-based compensation expense of $0.7 million for both the three months ended June 30, 2012 and 2011, respectively. Cynosure recorded stock-based compensation expense of $1.4 million and $1.3 million for the six months ended June 30, 2012 and 2011, respectively. Cynosure capitalized $15,000 and $18,000 of stock-based compensation expense as part of inventory during the six months ended June 30, 2012 and 2011, respectively.

Total stock-based compensation expense was recorded to cost of revenues and operating expenses based upon the functional responsibilities of the individual holding the respective options, as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(In thousands)
Cost of revenues	$	30	$	37	$	59	$	73
Sales and marketing		214		214		422		444
Research and development		129		116		249		236
General and administrative		359		292		667		572
Total stock-based compensation expense	$	732	$	659	$	1,397	$	1,325

Cash received from option exercises was $0.5 million and $0.2 million during the six months ended June 30, 2012 and 2011, respectively.

Cynosure granted 332,000 and 344,500 stock options during the six months ended June 30, 2012 and 2011, respectively. Cynosure has elected to use the Black-Scholes model to determine the weighted average fair value of options. The weighted average fair value of the options granted during the six months ended June 30, 2012 and 2011 was $8.66 and $7.47, respectively, using the following assumptions:

	Six Months Ended June 30,
	2012		2011
Risk-free interest rate		0.77%-0.86%		1.60%-2.37%
Expected dividend yield		—		—
Expected term		5.8 years		5.8 years
Expected volatility		57%		55% -56%
Estimated forfeiture rate		5%		5%

Option-pricing models require the input of various subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. Cynosure’s estimated expected stock price volatility is based on its own historical volatility. Cynosure’s expected term of options granted in the six months ended June 30, 2012 and 2011 was derived from the short-cut method. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield of zero is based on the fact that Cynosure has never paid cash dividends and has no present intention to pay cash dividends.

In March 2012, Cynosure commenced an option exchange program (the “Exchange Offer”) in which it offered eligible option holders the opportunity to voluntarily exchange certain “underwater” stock options for a lesser number of new stock options with a lower exercise price. Cynosure’s U.S. employees were eligible to participate in the Exchange Offer, and Cynosure’s directors and executive officers were not eligible to participate. The exchange ratios for the Exchange Offer were determined by using the Black-Scholes option pricing model to approximate a “value-for-value” exchange, meaning that the value of the eligible stock options was equal to the value of the new stock options. The Exchange Offer, which was subject to Rule 13e-4 under the Securities Exchange Act of 1934, as amended, expired on April 13, 2012.

In the Exchange Offer, 90 eligible option holders tendered eligible options with exercise prices of $20.00 or greater to purchase an aggregate of 325,946 shares of Class A common stock, representing 96% of the total shares of Class A common stock underlying options eligible for exchange. New stock options were granted to purchase an aggregate of 280,771 shares of Class A common stock in exchange for the cancellation of the tendered eligible options. The exercise price per share of each new option granted in the Exchange Offer is $19.78, which was the closing price of Cynosure’s Class A common stock as reported by The Nasdaq Global Market on April 13, 2012. All eligible stock options were fully vested as of April 13, 2012, the expiration date of the Exchange Offer. Because the fair value of the eligible stock options was equal to the fair value of the new stock options calculated using the Black-Scholes option pricing model, Cynosure did not recognize any stock-based compensation expense as a result of the Exchange Offer.

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Stock-Based Compensation (Details 1)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Summary of share-based compensation arrangement fair value assumptions
Risk-free interest rate - minimum	0.77%	1.60%
Risk-free interest rate - maximum	0.86%	2.37%
Expected dividend yield	0.00%	0.00%
Expected term	5 years 9 months 18 days	5 years 9 months 18 days
Expected volatility - minimum		55.00%
Expected volatility - maximum	57.00%	56.00%
Estimated forfeiture rate	5.00%	5.00%

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Goodwill and Other Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Schedule of changes to goodwill
Balance - December 31, 2011	$ 15,712
Translation adjustment	(3)
Balance - June 30, 2012	$ 15,709

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 37,114	$ 35,694
Short-term marketable securities	34,771	31,379
Accounts receivable, net	14,248	12,853
Inventories	30,786	29,568
Prepaid expenses and other current assets	3,474	3,038
Deferred income taxes	701	701
Total current assets	121,094	113,233
Property and equipment, net	8,190	7,705
Long-term marketable securities	8,090	6,595
Goodwill and intangibles, net	22,564	23,486
Other assets	415	561
Total assets	160,353	151,580
Current liabilities:
Accounts payable	9,472	8,474
Amounts due to related party	1,064	1,550
Accrued expenses	13,689	13,944
Deferred revenue	9,333	6,388
Capital lease obligation	295	239
Total current liabilities	33,853	30,595
Capital lease obligation, net of current portion	543	494
Deferred revenue, net of current portion	278	367
Other noncurrent liability	762	497
Commitments and contingencies
Stockholders' equity:
Class A and Class B common stock, $0.001 par value Authorized - 70,000 shares Issued - 9874 Class A shares and 2,975 Class B shares at June 30, 2012; Issued - 9,828 Class A shares and 2,975 Class B shares at December 31, 2011, respectively	13	13
Additional paid-in capital	126,425	124,506
Retained earnings (accumulated deficit)	2,822	(678)
Accumulated other comprehensive loss	(2,170)	(2,041)
Treasury stock, 197 Class A shares and 36 Class B shares, at cost	(2,173)	(2,173)
Total stockholders' equity	124,917	119,627
Total liabilities and stockholders' equity	$ 160,353	$ 151,580

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Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Schedule of total revenue by geographic destination
Total revenue	$ 39,573	$ 26,339	$ 73,741	$ 48,223
United States [Member]
Schedule of total revenue by geographic destination
Total revenue	19,034	10,429	34,194	18,414
Europe [Member]
Schedule of total revenue by geographic destination
Total revenue	7,153	7,253	14,172	14,721
Asia / Pacific [Member]
Schedule of total revenue by geographic destination
Total revenue	11,016	5,449	20,292	9,571
Other [Member]
Schedule of total revenue by geographic destination
Total revenue	$ 2,370	$ 3,208	$ 5,083	$ 5,517

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Operating activities:
Net income (loss)	$ 3,499	$ (3,194)
Reconciliation of net income (loss) to net cash provided by operating activities:
Depreciation and amortization	3,493	2,971
Stock-based compensation expense	1,397	1,325
(Gain) loss on disposal of fixed assets	(37)	4
Net accretion of marketable securities	589	638
Changes in operating assets and liabilities:
Accounts receivable	(1,525)	(2,565)
Inventories	(3,556)	(5,627)
Net book value of demonstration inventory sold	419	543
Prepaid expenses and other current assets	(466)	(108)
Accounts payable	1,010	3,371
Due to related party	(485)	1,225
Tax benefit from stock option exercises	(25)	(32)
Accrued expenses	127	1,750
Deferred revenue	2,870	(243)
Net cash provided by operating activities	7,310	58
Investing activities:
Purchases of property and equipment	(1,024)	(560)
Proceeds from the sales and maturities of marketable securities	25,262	49,103
Purchases of marketable securities	(30,725)	(28,196)
Acquisitions		(26,970)
Decrease in other noncurrent assets	140	4
Net cash used in investing activities	(6,347)	(6,619)
Financing activities:
Excess tax benefit on options exercised	25	32
Proceeds from stock option exercises	523	198
Payments on capital lease obligation	(150)	(29)
Net cash provided by financing activities	398	201
Effect of exchange rate changes on cash and cash equivalents	59	(165)
Net increase (decrease) in cash and cash equivalents	1,420	(6,525)
Cash and cash equivalents, beginning of the period	35,694	27,434
Cash and cash equivalents, end of the period	37,114	20,909
Supplemental cash flow information
Cash paid for interest	24	8
Cash paid for income taxes	979	491
Supplemental noncash investing and financing activities
Transfer of demonstration equipment from inventory to fixed assets	2,227	1,788
Assets acquired under capital lease	$ 276

XML

Fair Value (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012
Measurement of fair value hierarchy for financial assets
Fair value of financial assets	$ 54,043
Level 1 [Member]
Measurement of fair value hierarchy for financial assets
Fair value of financial assets	7,434
Level 2 [Member]
Measurement of fair value hierarchy for financial assets
Fair value of financial assets	46,609
Level 3 [Member]
Measurement of fair value hierarchy for financial assets
Fair value of financial assets
Money market funds [Member]
Measurement of fair value hierarchy for financial assets
Fair value of financial assets	7,417
Money market funds [Member] | Level 1 [Member]
Measurement of fair value hierarchy for financial assets
Fair value of financial assets	7,417
Money market funds [Member] | Level 3 [Member]
Measurement of fair value hierarchy for financial assets
Fair value of financial assets
State and municipal bonds [Member]
Measurement of fair value hierarchy for financial assets
Fair value of financial assets	36,718
State and municipal bonds [Member] | Level 2 [Member]
Measurement of fair value hierarchy for financial assets
Fair value of financial assets	36,718
State and municipal bonds [Member] | Level 3 [Member]
Measurement of fair value hierarchy for financial assets
Fair value of financial assets
Treasuries and government agencies [Member]
Measurement of fair value hierarchy for financial assets
Fair value of financial assets	9,891
Treasuries and government agencies [Member] | Level 2 [Member]
Measurement of fair value hierarchy for financial assets
Fair value of financial assets	9,891
Treasuries and government agencies [Member] | Level 3 [Member]
Measurement of fair value hierarchy for financial assets
Fair value of financial assets
Equity securities [Member]
Measurement of fair value hierarchy for financial assets
Fair value of financial assets	17
Equity securities [Member] | Level 1 [Member]
Measurement of fair value hierarchy for financial assets
Fair value of financial assets	17
Equity securities [Member] | Level 3 [Member]
Measurement of fair value hierarchy for financial assets
Fair value of financial assets

XML

Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2012

Stock-Based Compensation [Abstract]

Summary of stock-based compensation expenses

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(In thousands)
Cost of revenues	$	30	$	37	$	59	$	73
Sales and marketing		214		214		422		444
Research and development		129		116		249		236
General and administrative		359		292		667		572
Total stock-based compensation expense	$	732	$	659	$	1,397	$	1,325

Summary of share-based compensation arrangement fair value assumptions

	Six Months Ended June 30,
	2012		2011
Risk-free interest rate		0.77%-0.86%		1.60%-2.37%
Expected dividend yield		—		—
Expected term		5.8 years		5.8 years
Expected volatility		57%		55% -56%
Estimated forfeiture rate		5%		5%

XML

Fair Value (Details Textual) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012
Fair Value (Textual) [Abstract]
Cash and cash equivalents	$ 54,043
State and municipal bonds [Member]
Fair Value (Textual) [Abstract]
Cash and cash equivalents	36,718
State and municipal bonds [Member] | Cash and Cash Equivalents [Member]
Fair Value (Textual) [Abstract]
Cash and cash equivalents	3,800
Level 3 [Member]
Fair Value (Textual) [Abstract]
Cash and cash equivalents
Level 3 [Member] | State and municipal bonds [Member]
Fair Value (Textual) [Abstract]
Cash and cash equivalents

XML

Fair Value (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value [Abstract]

Measurement of fair value hierarchy for financial Assets

	Level 1		Level 2		Level 3		Total
Money market funds (1)	$	7,417	$	—	$	—	$	7,417
State and municipal bonds (2)		—		36,718		—		36,718
Treasuries and government agencies		—		9,891		—		9,891
Equity securities		17		—		—		17
Total	$	7,434	$	46,609	$	—	$	54,043

(1) Included in cash and cash equivalents at June 30, 2012.

(2) $3.8 million included in cash and cash equivalents at June 30, 2012.

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Interim Consolidated Financial Statements

6 Months Ended

Jun. 30, 2012

Interim Consolidated Financial Statements [Abstract]

Interim Consolidated Financial Statements

Note 1 — Interim Consolidated Financial Statements

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim information and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. It is recommended that these financial statements be read in conjunction with the consolidated financial statements and related notes that appear in the Annual Report on Form 10-K of Cynosure, Inc. (Cynosure) for the year ended December 31, 2011. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position, results of operations, and cash flows as of the dates and for the periods presented have been included. The results of operations for the six months ended June 30, 2012 may not be indicative of the results that may be expected for the year ending December 31, 2012, or any other period.

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000	5,000
Common Stock Class A
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	70,000	70,000
Common stock, shares issued	9,874	9,828
Treasury stock, shares	197	197
Common Stock Class B
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	70,000	70,000
Common stock, shares issued	2,975	2,975
Treasury stock, shares	36	36

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Litigation

6 Months Ended

Jun. 30, 2012

Litigation [Abstract]

Litigation

Note 11 — Litigation

In 2005, Dr. Ari Weitzner, individually and as putative representative of a purported class, filed a complaint against Cynosure under the federal Telephone Consumer Protection Act (TCPA) in Massachusetts Superior Court in Middlesex County seeking monetary damages, injunctive relief, costs and attorneys fees. The complaint alleges that Cynosure violated the TCPA by sending unsolicited advertisements by facsimile to the plaintiff and other recipients without the prior express invitation or permission of the recipients. Under the TCPA, recipients of unsolicited facsimile advertisements are entitled to damages of up to $500 per facsimile for inadvertent violations and up to $1,500 per facsimile for knowing or willful violations. Based on discovery in this matter, the plaintiff alleges that approximately three million facsimiles were sent on Cynosure’s behalf by a third party to approximately 100,000 individuals. In 2008, the plaintiff served, and the Court held a hearing regarding a motion for class certification. In 2010, the Court issued an order dismissing the complaint without prejudice for Dr. Weitzner’s failure to prosecute the case and subsequently allowed a plaintiff motion for relief from the dismissal order. In January 2012, the Court issued a Memorandum of Decision denying the class certification motion. The Court has scheduled a status conference for September 20, 2012 regarding Dr. Weitzner’s individual claims. On July 23, 2012, Dr. Weitzner filed a new purported class action, based on the same operative facts and asserting the same claims as the Massachusetts action, in federal court in the Eastern District of New York. Cynosure has not been served with a summons or complaint in the New York action. Cynosure believes it has numerous defenses to Dr. Weitzner’s claims.

In addition to the matter discussed above, from time to time, Cynosure is subject to various claims, lawsuits, disputes with third parties, investigations and pending actions involving various allegations against Cynosure incident to the operation of its business, principally product liability. Each of these other matters is subject to various uncertainties, and it is possible that some of these other matters may be resolved unfavorably to Cynosure. Cynosure establishes accruals for losses that management deems to be probable and subject to reasonable estimate. Cynosure believes that the ultimate outcome of these matters will not have a material adverse impact on its consolidated financial position, results of operations or cash flows.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Aug. 02, 2012 Common Stock Class A	Aug. 02, 2012 Common Stock Class B
Entity Registrant Name	CYNOSURE INC
Entity Central Index Key	0000885306
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		10,016,430	2,939,161

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Related Party Transactions

6 Months Ended

Jun. 30, 2012

Related Party Transactions [Abstract]

Related Party Transactions

Note 12 — Related Party Transactions

As of June 30, 2012, El. En. S.p.A. (El.En.) owned 23% of Cynosure’s outstanding common stock. Purchases of inventory from El.En. during the three months ended June 30, 2012 and 2011 were approximately $1.0 million and $2.2 million, respectively. Purchases of inventory from El.En. during the six months ended June 30, 2012 and 2011 were approximately $2.1 million and $4.3 million, respectively. As of June 30, 2012 and December 31, 2011, amounts due to related party for these purchases were approximately $1.1 million and $1.5 million, respectively. There were no amounts due from El.En. as of June 30, 2012 or December 31, 2011.

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Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Consolidated Statements of Operations [Abstract]
Product revenues	$ 32,923	$ 20,675	$ 61,018	$ 37,286
Parts, accessories and service revenues	6,650	5,664	12,723	10,937
Total revenues	39,573	26,339	73,741	48,223
Cost of revenues	16,533	11,273	31,193	21,076
Gross profit	23,040	15,066	42,548	27,147
Operating expenses:
Sales and marketing	11,878	9,656	23,429	18,412
Research and development	3,460	2,431	6,699	4,671
Amortization of intangible assets acquired	342	14	684	24
General and administrative	3,667	4,161	7,185	7,102
Total operating expenses	19,347	16,262	37,997	30,209
Income (loss) from operations	3,693	(1,196)	4,551	(3,062)
Interest income, net	13	46	23	100
Other (expense) income, net	(298)	(1)	(89)	213
Income (loss) before provision for income taxes	3,408	(1,151)	4,485	(2,749)
Provision for income taxes	728	149	986	445
Net income (loss)	$ 2,680	$ (1,300)	$ 3,499	$ (3,194)
Basic net income (loss) per share	$ 0.21	$ (0.10)	$ 0.28	$ (0.25)
Diluted net income (loss) per share	$ 0.20	$ (0.10)	$ 0.27	$ (0.25)
Basic weighted-average common shares outstanding	12,605	12,599	12,591	12,588
Diluted weighted-average common shares outstanding	13,278	12,599	13,141	12,588

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2012

Goodwill and Other Intangible Assets [Abstract]

Goodwill and Other Intangible Assets

Note 6 — Goodwill and Other Intangible Assets

Changes to goodwill during the six months ended June 30, 2012 were as follows (in thousands):

	Total
Balance — December 31, 2011	$	15,712
Translation adjustment		(3	)
Balance — June 30, 2012	$	15,709

Other intangible assets consist of the following at June 30, 2012 and December 31, 2011 (in thousands):

	Developed Technology & Patents			Business Licenses			Customer Relationships			Trade Names			Other			Total
June 30, 2012
Cost	$	3,250		$	384		$	3,323		$	2,650		$	48		$	9,655
Translation adjustment		—			27			17			—			2			46
Accumulated amortization		(1,082	)		(167	)		(1,410	)		(182	)		(5	)		(2,846	)
Balance, June 30, 2012	$	2,168		$	244		$	1,930		$	2,468		$	45		$	6,855
December 31, 2011
Cost	$	3,250		$	384		$	3,323		$	2,650		$	48		$	9,655
Translation adjustment		—			27			20			—			2			49
Accumulated amortization		(874	)		(147	)		(812	)		(93	)		(4	)		(1,930	)
Balance, December 31, 2011	$	2,376		$	264		$	2,531		$	2,557		$	46		$	7,774

Amortization expense related to developed technology and patents is classified as a component of cost of revenues in the Consolidated Statements of Operations. Amortization expense related to customer relationships and trade names is classified as a component of amortization of intangible assets acquired in the Consolidated Statements of Operations. Amortization expense related to business licenses and other is classified as a component of general and administrative expenses in the Consolidated Statements of Operations.

Amortization expense for the three months ended June 30, 2012 and 2011 was $0.5 million and $0.1 million, respectively. Amortization expense for the six months ended June 30, 2012 and 2011 was $0.9 million and $0.1 million, respectively. Cynosure has approximately $41,000 of indefinite-life intangible assets that are included in other intangible assets in the table above. As of June 30, 2012, amortization expense on existing intangible assets for the next five years and beyond is as follows (table in thousands):

Remainder of 2012	$	922
2013		1,299
2014		950
2015		765
2016 and thereafter		2,878
Total	$	6,814

The table above includes $0.7 million for the remainder of 2012, $0.9 million for 2013, $0.6 million for 2014, $0.4 million for 2015 and $1.8 million for 2016 and thereafter, to be recognized within operating expenses related to intangible assets acquired through the Eleme Medical and ConBio acquisitions.

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Short and Long-Term Marketable Securities

6 Months Ended

Jun. 30, 2012

Short and Long-Term Marketable Securities [Abstract]

Short and Long-Term Marketable Securities

Note 5 — Short and Long-Term Marketable Securities

Cynosure’s available-for-sale securities at June 30, 2012 consist of approximately $46.6 million of investments in debt securities consisting of state and municipal bonds, treasuries and government agencies and approximately $17,000 in equity securities. All investments in available-for-sale securities are recorded at fair market value, with any unrealized gains and losses reported as a separate component of accumulated other comprehensive loss. As of June 30, 2012, Cynosure’s marketable securities consist of the following (in thousands):

	Market Value		Amortized Cost		Unrealized Gains		Unrealized Losses
Available-for-sale Securities:
Cash equivalents:
State and municipal bonds	$	3,765	$	3,764	$	1	$	—
Total cash equivalents	$	3,765	$	3,764	$	1	$	—
Short-term marketable securities:
State and municipal bonds	$	27,395	$	27,387	$	12	$	(4	)
Treasuries and government agencies		7,359		7,355		4		—
Equity securities		17		18		—		(1	)
Total short-term marketable securities	$	34,771	$	34,760	$	16	$	(5	)
Long-term marketable securities:
State and municipal bonds	$	5,558	$	5,550	$	8	$	—
Treasuries and government agencies		2,532		2,532		1		(1	)
Total long-term marketable securities	$	8,090	$	8,082	$	9	$	(1	)
Total available-for-sale securities	$	46,626	$	46,606	$	26	$	(6	)
Total marketable securities	$	42,861

As of December 31, 2011, Cynosure’s marketable securities consist of the following (in thousands):

	Market Value		Amortized Cost		Unrealized Gains		Unrealized Losses
Available-for-sale Securities:
Cash equivalents:
State and municipal bonds	$	3,264	$	3,263	$	1	$	—
Total cash equivalents	$	3,264	$	3,263	$	1	$	—
Short-term marketable securities:
State and municipal bonds	$	18,868	$	18,858	$	12	$	(2	)
Treasuries and government agencies		12,505		12,499		6		—
Equity securities		6		5		1		—
Total short-term marketable securities	$	31,379	$	31,362	$	19	$	(2	)
Long-term marketable securities:
State and municipal bonds	$	4,719	$	4,713	$	6	$	—
Treasuries and government agencies		1,876		1,875		1		—
Total long-term marketable securities	$	6,595	$	6,588	$	7	$	—
Total available-for-sale securities	$	41,238	$	41,213	$	27	$	(2	)
Total marketable securities	$	37,974

As of June 30, 2012, Cynosure’s available-for-sale debt securities mature as follows (in thousands):

	Total		Maturities
			Less Than One Year		One to Five Years		More than five years
State and municipal bonds	$	36,718	$	31,160	$	5,558	$	—
Treasuries and government agencies		9,891		7,359		2,532		—
Total available-for-sale debt securities	$	46,609	$	38,519	$	8,090	$	—

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Inventories (Tables)

6 Months Ended

Jun. 30, 2012

Inventories [Abstract]

Schedule of components of inventories

	June 30, 2012		December 31, 2011
	(in thousands)
Raw materials	$	7,009	$	7,645
Work in process		2,015		1,437
Finished goods		21,762		20,486
	$	30,786	$	29,568

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Income Taxes

6 Months Ended

Jun. 30, 2012

Income Taxes [Abstract]

Income Taxes

Note 13 — Income Taxes

At June 30, 2012, Cynosure had no unrecognized tax benefits. Cynosure files income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. With few exceptions, Cynosure is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2008. Additionally, certain non-U.S. jurisdictions are no longer subject for income tax examinations by tax authorities for years before 2007.

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Net Income (Loss) Per Common Share

6 Months Ended

Jun. 30, 2012

Net Income (Loss) Per Common Share [Abstract]

Net Income (Loss) Per Common Share

Note 9 — Net Income (Loss) Per Common Share

Basic net income (loss) per share was determined by dividing net income (loss) by the weighted average common shares outstanding during the period. Diluted net income (loss) per share was determined by dividing net income (loss) by diluted weighted average shares outstanding. Diluted weighted average shares reflect the dilutive effect, if any, of common stock options based on the treasury stock method. Common shares outstanding includes both Class A and Class B common stock as each participates equally in earnings. Class B shares are convertible at any time into shares of Class A on a one-for-one basis at the option of the holder.

A reconciliation of basic and diluted shares is as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2012		2011			2012		2011
Net income (loss)	$	2,680	$	(1,300	)	$	3,499	$	(3,194	)
Basic weighted average common shares outstanding		12,605		12,599			12,591		12,588
Weighted average common equivalent shares		673		—			550		—
Diluted weighted average common shares outstanding		13,278		12,599			13,141		12,588
Basic net income (loss) per share	$	0.21	$	(0.10	)	$	0.28	$	(0.25	)
Diluted net income (loss) per share	$	0.20	$	(0.10	)	$	0.27	$	(0.25	)

For the three and six months ended June 30, 2012, respectively, options to purchase approximately 0.6 million and 1.3 million shares of the Company’s Class A common stock were excluded from the calculation of diluted weighted average common shares outstanding as their effect was antidilutive.

For the three and six months ended June 30, 2011, the number of basic and diluted weighted average shares outstanding was the same, as any increase in the number of shares of common stock equivalents for the three and six months ended June 30, 2011 would be antidilutive based on the net loss for the period. During the three and six months ended June 30, 2011, respectively, outstanding options to purchase 2.0 million shares were excluded from the computation of diluted earnings per share because their inclusion would have been antidilutive.

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Warranty Costs

6 Months Ended

Jun. 30, 2012

Warranty Costs [Abstract]

Warranty Costs

Note 7 — Warranty Costs

Cynosure typically provides a one-year parts and labor warranty on end-user sales of laser systems. Distributor sales generally include a warranty on parts only. Estimated future costs for initial product warranties are provided at the time of revenue recognition.

The following table provides the detail of the change in Cynosure’s product warranty accrual during the six months ended June 30, 2012, which is a component of accrued expenses in the consolidated balance sheets:

	June 30, 2012
	(in thousands)
Warranty accrual, beginning of period	$	3,171
Warranty provision related to new sales		2,113
Costs incurred		(2,078	)
Warranty accrual, end of period	$	3,206

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Segment Information

6 Months Ended

Jun. 30, 2012

Segment Information [Abstract]

Segment Information

Note 8 — Segment Information

In accordance with ASC 280, Segment Reporting Topic, operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. Cynosure’s chief decision-maker, as defined under ASC 280, is a combination of the Chief Executive Officer and the Chief Financial Officer. Cynosure views its operations and manages its business as one segment, aesthetic treatment products and services.

The following table represents total revenue by geographic destination:

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
	(in thousands)
United States	$	19,034	$	10,429	$	34,194	$	18,414
Europe		7,153		7,253		14,172		14,721
Asia / Pacific		11,016		5,449		20,292		9,571
Other		2,370		3,208		5,083		5,517
Total	$	39,573	$	26,339	$	73,741	$	48,223

Total assets by geographic area are as follows:

	June 30, 2012			December 31, 2011
	(in thousands)
United States	$	139,871		$	132,041
Europe		13,013			12,688
Asia / Pacific		9,840			8,855
Eliminations		(2,371	)		(2,004	)
Total	$	160,353		$	151,580

Long-lived assets by geographic area are as follows:

	June 30, 2012		December 31, 2011
	(in thousands)
United States	$	6,925	$	6,461
Europe		1,155		1,344
Asia / Pacific		525		461
Total	$	8,605	$	8,266

No individual country within Europe or Asia/Pacific represented greater than 10% of total revenue, total assets or total long lived assets for any period presented.

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Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2012

Accumulated Other Comprehensive Loss [Abstract]

Accumulated Other Comprehensive Loss

Note 10 — Accumulated Other Comprehensive Loss

Changes to accumulated other comprehensive loss during the six months ended June 30, 2012 were as follows (in thousands):

	Unrealized Gain on Marketable Securities, net of taxes		Translation Adjustment			Accumulated Other Comprehensive Loss
Balance — December 31, 2011	$	23	$	(2,064	)	$	(2,041	)
Current period other comprehensive loss		12		(141	)		(129	)
Balance — June 30, 2012	$	35	$	(2,205	)	$	(2,170	)

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Inventories (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Schedule of components of inventories
Raw materials	$ 7,009	$ 7,645
Work in process	2,015	1,437
Finished goods	21,762	20,486
Inventory, Total	$ 30,786	$ 29,568

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Litigation (Details Textual) (USD $)	6 Months Ended
	Jun. 30, 2012 Person Facsimile
Litigation (Textual) [Abstract]
Unsolicited facsimile damages for each inadvertent violation	$ 500
Unsolicited facsimile damages for each knowing or willful violation	$ 1,500
Number of facsimile	3,000,000
Litigation individuals	100,000

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Segment Information (Policies)

6 Months Ended

Jun. 30, 2012

Segment Information [Abstract]

ASC 280, Segment Reporting Topic

In accordance with ASC 280, Segment Reporting Topic, operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. Cynosure’s chief decision-maker, as defined under ASC 280, is a combination of the Chief Executive Officer and the Chief Financial Officer. Cynosure views its operations and manages its business as one segment, aesthetic treatment products and services.

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2012

Goodwill and Other Intangible Assets [Abstract]

Schedule of changes to goodwill

	Total
Balance — December 31, 2011	$	15,712
Translation adjustment		(3	)
Balance — June 30, 2012	$	15,709

Schedule of components of other intangible assets

	Developed Technology & Patents			Business Licenses			Customer Relationships			Trade Names			Other			Total
June 30, 2012
Cost	$	3,250		$	384		$	3,323		$	2,650		$	48		$	9,655
Translation adjustment		—			27			17			—			2			46
Accumulated amortization		(1,082	)		(167	)		(1,410	)		(182	)		(5	)		(2,846	)
Balance, June 30, 2012	$	2,168		$	244		$	1,930		$	2,468		$	45		$	6,855
December 31, 2011
Cost	$	3,250		$	384		$	3,323		$	2,650		$	48		$	9,655
Translation adjustment		—			27			20			—			2			49
Accumulated amortization		(874	)		(147	)		(812	)		(93	)		(4	)		(1,930	)
Balance, December 31, 2011	$	2,376		$	264		$	2,531		$	2,557		$	46		$	7,774

Schedule of amortization expenses on intangible assets

Remainder of 2012	$	922
2013		1,299
2014		950
2015		765
2016 and thereafter		2,878
Total	$	6,814

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Net Income (Loss) Per Common Share (Details Textual) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net Income (Loss) Per Common Share (Textual) [Abstract]
Outstanding options to purchase (shares)	0.6	2.0	1.3	2.0

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Goodwill and Other Intangible Assets (Details 1) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Schedule of components of other intangible assets
Cost	$ 9,655	$ 9,655
Translation adjustment	46	49
Accumulated amortization	(2,846)	(1,930)
Balance	6,855	7,774
Developed Technology and Patents [Member]
Schedule of components of other intangible assets
Cost	3,250	3,250
Accumulated amortization	(1,082)	(874)
Balance	2,168	2,376
Business Licenses [Member]
Schedule of components of other intangible assets
Cost	384	384
Translation adjustment	27	27
Accumulated amortization	(167)	(147)
Balance	244	264
Customer Relationships [Member]
Schedule of components of other intangible assets
Cost	3,323	3,323
Translation adjustment	17	20
Accumulated amortization	(1,410)	(812)
Balance	1,930	2,531
Trade Names [Member]
Schedule of components of other intangible assets
Cost	2,650	2,650
Accumulated amortization	(182)	(93)
Balance	2,468	2,557
Other [Member]
Schedule of components of other intangible assets
Cost	48	48
Translation adjustment	2	2
Accumulated amortization	(5)	(4)
Balance	$ 45	$ 46

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Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Statement of Other Comprehensive Income [Abstract]
Net income (loss)	$ 2,680	$ (1,300)	$ 3,499	$ (3,194)
Other comprehensive income (loss) components:
Cumulative translation adjustment	(463)	228	(141)	797
Unrealized gain on marketable securities	3	21	12	7
Total other comprehensive (loss) income	(460)	249	(129)	804
Comprehensive income (loss)	$ 2,220	$ (1,051)	$ 3,370	$ (2,390)

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Fair Value

6 Months Ended

Jun. 30, 2012

Fair Value [Abstract]

Fair Value

Note 4 — Fair Value

U.S. GAAP establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable markets data for substantially the full term of the assets or liabilities.

• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table represents Cynosure’s fair value hierarchy for its financial assets (cash equivalents and marketable securities) measured at fair value as of June 30, 2012 (in thousands):

	Level 1		Level 2		Level 3		Total
Money market funds (1)	$	7,417	$	—	$	—	$	7,417
State and municipal bonds (2)		—		36,718		—		36,718
Treasuries and government agencies		—		9,891		—		9,891
Equity securities		17		—		—		17
Total	$	7,434	$	46,609	$	—	$	54,043

(1) Included in cash and cash equivalents at June 30, 2012.

(2) $3.8 million included in cash and cash equivalents at June 30, 2012.

During the six months ended June 30, 2012, there were no significant transfers in and out of Level 1 and Level 2. Cynosure did not have any Level 3 financial assets at June 30, 2012 or December 31, 2011.

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Warranty Costs (Tables)

6 Months Ended

Jun. 30, 2012

Warranty Costs [Abstract]

Schedule of change in product warranty accrual

	June 30, 2012
	(in thousands)
Warranty accrual, beginning of period	$	3,171
Warranty provision related to new sales		2,113
Costs incurred		(2,078	)
Warranty accrual, end of period	$	3,206

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Short and Long-Term Marketable Securities (Details 1) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012
Schedule of available-for-sale debt securities mature
Total	$ 46,609
Less Than One Year	38,519
One to Five Years	8,090
More than five years
State and municipal bonds [Member]
Schedule of available-for-sale debt securities mature
Total	36,718
Less Than One Year	31,160
One to Five Years	5,558
More than five years
Treasuries and government agencies [Member]
Schedule of available-for-sale debt securities mature
Total	9,891
Less Than One Year	7,359
One to Five Years	2,532
More than five years

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2012

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

Note 14 — Recent Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board, or FASB, issued new accounting guidance that requires companies to present the components of net income and other comprehensive income either as one continuous statement or as two consecutive statements and eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. The guidance does not change the items which must be reported in other comprehensive income, how such items are measured or when they must be reclassified to net income. Cynosure adopted this new accounting guidance effective January 1, 2012. The adoption of this guidance had no material effect on Cynosure’s financial condition, results of operations or cash flows.