PhotoMedex, Inc. (NasdaqGS and TASE: PHMD) reports
financial results for the three months ended March 31, 2015.
Financial highlights of the first quarter of 2015 include the
following (all comparisons are with the first quarter of 2014 and
all figures quoted are GAAP, unless stated otherwise):
- Revenues of $28.1 million, a decrease
of 44%
- Gross profit of $20.2 million, a
decrease of 49%
- Non-GAAP adjusted loss per share of
($0.05), compared with non-GAAP adjusted income per share of
$0.23
- Net loss (including discontinued
operations) of $10.0 million or ($0.51) per share, compared with
net loss of $0.3 million or ($0.02) per share
- Consumer revenues of $18.1 million, a
decrease of 56%
- Global direct-to-consumer channel
revenues of $13.8 million, a decrease of 55%
- Global retail and home shopping channel
revenues of $4.3 million, a decrease of 55%
- Global distributor consumer channel
revenues of $0.1 million, a decrease of 85%
- XTRAC® psoriasis and vitiligo treatment
recurring revenues of $5.4 million, an increase of 22%
- Cash, cash equivalents and short-term
investments as of March 31, 2015 of $6.2 million, or $0.31 per
diluted share
Management Commentary
“Our consumer business had a difficult first quarter including
declines in direct, retail, home shopping and distributor channel
sales. This reflects challenges with marketing efficiencies, media
availability and the continued transition towards online
advertising, each of which we are working to address,” said Dr.
Dolev Rafaeli, PhotoMedex CEO. “Importantly, there have been
several encouraging developments for PhotoMedex in recent weeks. We
are delighted to be preparing to bring the no!no!™ line of hair
removal products back to the Japanese market, following the signing
of an agreement with Synergy Trading Corporation last month.
Synergy has placed its initial order, and we will be shipping
product to them in the coming weeks. We are working closely with
Synergy to ensure a successful launch in what historically has been
an important market for the brand. In addition, our XTRAC recurring
physician business continues to grow, posting a 22% year-over-year
increase in revenue during the quarter. We added a net 20 XTRAC
systems to our installed base, which now stands at 640 units.”
He added, “Our first quarter financial results are within the
requirements of our revised forbearance agreement, and we continue
to work with our lenders to pursue a satisfactory resolution.”
Reported Financial Results
Revenues for the first quarter of 2015 were $28.1 million, a
decrease of 44% compared with revenues for the first quarter of
2014 of $50.1 million.
Gross profit for the first quarter of 2015 was $20.2 million, or
72% of total revenues, compared with gross profit of $39.7 million,
or 79% of total revenues, in the first quarter of 2015.
Net loss for the first quarter of 2015 was $10.0 million or
($0.51) per share, which included a $1.7 million loss on
discontinued operations, $1.0 million in stock-based compensation
expense and $1.9 million in depreciation and amortization expenses.
This compares with net loss for the first quarter of 2014 of $0.3
million or ($0.02) per diluted share, which included $1.3 million
in stock-based compensation expense and $1.6 million in
depreciation and amortization expenses.
As of March 31, 2015 the Company had cash, cash equivalents and
short-term investments of $6.2 million, compared with $10.6 million
as of December 31, 2014.
Non-GAAP Measures
To supplement PhotoMedex’s consolidated financial statements
presented in accordance with GAAP, PhotoMedex provides certain
non-GAAP measures of financial performance. These non-GAAP measures
include non-GAAP adjusted income and non-GAAP adjusted income per
share.
PhotoMedex’s reference to these non-GAAP measures should be
considered in addition to results prepared under current accounting
standards, but are not a substitute for, nor superior to, GAAP
results. These non-GAAP measures are provided to enhance investors'
overall understanding of PhotoMedex’s current financial performance
and to provide further information for comparative purposes.
Specifically, the Company believes the non-GAAP measures provide
useful information to both management and investors by isolating
certain expenses, gains and losses that may not be indicative of
the Company’s core operating results and business outlook. In
addition, PhotoMedex believes non-GAAP measures enhance the
comparability of results against prior periods. Reconciliation to
the most directly comparable GAAP measure of all non-GAAP measures
included in this press release is as follows:
(Unaudited)
Three Months Ended Mar 31, (ooo's)
except per share amounts 2015 2014
Net
income as reported ($ 10,013 ) ($ 345 ) Adjustments:
Depreciation and amortization expense 1,865 1,636 Interest expense,
net 2,423 47 Income tax (benefit) expense 365 (79 )
EBITDA (5,360 ) 1,259
Stock-based compensation expense,
including accelerated vesting
3,337 1,262 Acquisition costs - 979 Major litigation expenses 223
775 Extraordinary non-recurring debt costs 762 -
Non-GAAP adjusted (loss) income ($ 1,038 ) $
4,275 Fully diluted shares outstanding at March 31 19,794
18,719 Non-GAAP adjusted (loss) income per share ($0.05 ) $ 0.23
About PhotoMedex
PhotoMedex is a global skin health company providing integrated
disease management and aesthetic solutions to dermatologists,
professional aestheticians and consumers. The company provides
proprietary products and services that address skin diseases and
conditions including psoriasis, vitiligo, acne, actinic keratosis
(a precursor to certain types of skin cancer) and photo damage. Its
experience in the physician market provides the platform to expand
its skin health solutions to spa markets, as well as traditional
retail, online and infomercial outlets for home-use products.
PhotoMedex sells home-use devices under the no!no!™ brand for
various indications including hair removal, acne treatment and skin
rejuvenation. The company also offers a professional product line
for acne clearance, skin tightening, psoriasis care and hair
removal sold to physician clinics and spas.
SAFE HARBOR STATEMENT
Some portions of the press release, particularly those
describing PhotoMedex' strategies, operating expense reductions and
business plans contain “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995
that are subject to risks, uncertainties and other factors.
All statements other than statements of historical fact are
statements that could be deemed forward-looking statements,
including any statements of the plans, strategies and objectives of
management for future operations; any statements regarding product
development, product extensions, product integration or product
marketing; any statements regarding continued compliance with
government regulations, changing legislation or regulatory
environments; any statements of expectation or belief and any
statements of assumptions underlying any of the foregoing. In
addition, there are risks and uncertainties related to our ability
to ensure continued regulatory compliance, performance and/or
market growth. These risks, uncertainties and other factors,
and the general risks associated with the businesses of the Company
described in the reports and other documents filed with the SEC,
could cause actual results to differ materially from those referred
to, implied or expressed in the forward-looking statements.
The Company cautions readers not to rely on these
forward-looking statements. All forward-looking statements
are based on information currently available to the Company and are
qualified in their entirety by this cautionary statement.
The Company anticipates that subsequent events and developments
will cause its views to change. The information contained in
this press release speaks as of the date hereof and the Company has
or undertakes no obligation to update or revise these
forward-looking statements, whether as a result of new information,
future events or otherwise.
-- Financial Statements follow --
PHOTOMEDEX, INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(UNAUDITED)
Three Months Ended March 31, (ooo's) except
per share amounts 2015 2014 Revenues: Product sales $
22,773 $ 45,665 Services 5,376 4,410
28,149 50,075 Cost of revenues: Product sales 5,944 8,608
Services 1,978 1,737 7,922
10,345 Gross profit 20,227
39,730 Operating expenses: Selling and
marketing 20,132 31,625 General and administrative 4,729 7,587
Engineering and product development 755 795
25,616 40,007 Loss from
continuing operations before interest and other financing expense,
net (5,389 ) (277 ) Interest and other financing expense, net
(2,551 ) (147 ) Loss from continuing operations
before income taxes (7,940 ) (424 ) Income tax (expense)
benefit (365 ) 79 Loss from continuing
operations (8,305 ) (345 ) Discontinued operations: Loss
from discontinued operations (1,667 )
- Loss on sale from
discontinued operations (41 )
-
Net loss 1 ($ 10,013 ) $ (345 ) Basic net loss per
share: Continuing operations ($0.42 ) ($0.02 ) Discontinued
operations ( 0.09 ) 0.00 ($0.51 )
($0.02 ) Diluted net loss per share: Continuing
operations ($0.42 ) ($0.02 ) Discontinued operations ( 0.09
) 0.00 ($0.51 ) ($0.02 ) Shares
used in computing net loss per share: Basic 19,794 18,719 Diluted
19,794 18,719 1 Includes: depreciation and amortization
1,865 1,636 Share-based compensation expense 3,337 1,262
PHOTOMEDEX, INC. CONSOLIDATED STATEMENTS OF REVENUES
(UNAUDITED) (In thousands)
For the three
months ended: March 31, 2015 December
31, 2014 March 31, 2014 Consumer: Direct $
13,773 $ 17,038 $ 30,787 Distributors 95 122 627 Retailer and home
shopping channels 4,261 9,508 9,456 sub-total
18,129 26,668 40,870
Physician Recurring XTRAC
treatments 5,376 6,891 4,410 Skin care 1,327 1,365 1,927 Other
855 1,335 882 sub-total 7,558 9,591 7,219
Professional 2,462 2,619 1,986
Total Revenues $ 28,149 $ 38,878 $ 50,075
PHOTOMEDEX, INC.CONSOLIDATED STATEMENTS OF
REVENUES(UNAUDITED)(In thousands)
March 31, 2015 December 31, 2014
(UNAUDITED)
Assets Cash, cash equivalents, and
short-term bank deposits $ 6,199 $ 10,692 Accounts receivable, net
15,717 21,977 Inventories, net 19,863 19,380 Other current assets,
net 8,984 9,109 Assets held for sale, net - 70,855 Property and
equipment, net 14,547 13,802 Other non-current assets, net
40,358 41,948 Total Assets $ 105,668 $ 187,763
Liabilities and Stockholders' Equity Accounts payable and
accrued current liabilities $ 25,521 $ 28,063 Other current
liabilities 3,998 4,480 Long term debt and notes payable 40,830
77,229 Liabilities held for sale - 34,497 Other long term
liabilities 1,024 1,229 Stockholders' equity 34,295
42,265 Total Liabilities and Stockholders' Equity $ 105.668 $
187,763
PHOTOMEDEX, INC.CONDENSED STATEMENTS OF
CASH FLOWS(UNAUDITED)(In thousands)
For the Three Months Ended March
31, 2015 2014 CASH FLOWS FROM OPERATING
ACTIVITIES: Net loss ($10,013 ) ($ 345 ) Adjustments to
reconcile net loss to net cash used in operating activities--
Depreciation and amortization 1,865 1,636 Provision for doubtful
accounts 406 813 Deferred income taxes (47 ) 857 Stock-based
compensation 974 1,262 Gain on disposal of property and equipment -
(10 ) Financing expenses 1,481 - Changes in assets and liabilities:
(Increase) decrease in: Current assets 5,393 4,658 Current
liabilities (4,516 ) (13,357 )
Net cash used in
operating activities – continuing activities (4,457 ) (4,486 )
Net cash provided by operating activities – discontinued
operations 541 -
Net cash used
in operating activities (3,916 ) (4,486 )
CASH FLOWS FROM INVESTING ACTIVITIES: Lasers placed in
service (1,758 ) (1,717 ) Purchases of property and equipment (31 )
(85 ) Other 87 (4,257 )
Net cash used in
investing activities – continuing operations (1,702 ) (6,059 )
Net cash provided by investing activities – discontinued
operations 38,245 -
Net cash
provided by (used in) investing activities 36,543
(6,059 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Registrations costs (84 ) - Repayment of debt and notes payable
(36,667 ) (5,224 )
Net cash used in financing
activities – continuing operations (36,751 ) (5,224 )
Net
cash used in financing activities – discontinued operations
(66 ) -
Net cash used in financing
activities (36,817 ) (5,224 ) Effect of
exchange rate changes on cash (216 ) 105
NET DECREASE IN CASH AND CASH EQUIVALENTS (4,406 )
(15,664 )
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 10,605 45,388
CASH AND
CASH EQUIVALENTS, END OF PERIOD $ 6,199 $ 29,724
Supplemental information:
Cash paid for income taxes $ 97 $ 405 Cash paid for interest $
1,182 $ 47
PhotoMedex, Inc.Dennis McGrath, 215-619-3287Chief Financial
Officerinfo@photomedex.comorLHAKim Sutton Golodetz,
212-838-3777Kgolodetz@lhai.comorBruce Voss,
310-691-7100Bvoss@lhai.com@LHA_IR_PR
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