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PhotoMedex Reports 2010 Fourth Quarter and Full Year Results

^{Published on 2011-03-31 05:36:54 - Market Wire}
 

MONTGOMERYVILLE, Pa.--([ BUSINESS WIRE ])--PhotoMedex, Inc. (NASDAQ GM: PHMD) today reported financial results for the three and 12 months ended December 31, 2010. Please note that all per-share figures reflect the February 3, 2010 1-for-6 reverse stock split. Financial highlights of the 2010 fourth quarter and year include:

• Revenues for the fourth quarter increased 27% to $10.5 million from the prior year.
• Revenues for the year increased 6.5% to $34.8 million from the prior year.
• Cash flow from operations increased $2.4 million from the prior year.
• Cash at December 31, 2010 was $3.5 million. The Companya™s net increase in cash for the fourth quarter was $1.0 million after making $1.0 million in debt payments
• Capital expenditures for the year 2010 decreased by $1.5 million from the 2009 level and $4.8 million from the 2008 level.
• Operating Expenses for the year 2010 decreased $2.9 million from the 2009 level and $6.5 million from the 2008 level.

Reported Financial Results

Revenues for the fourth quarter of 2010 were $10,518,522, compared with the fourth quarter of 2009 of $8,279,440, an increase of 27.0%. Revenues for the year ended December 31, 2010 were $34,801,535, compared with the year ended December 31, 2009 of $32,688,084, an increase of 6.5%.

The net loss for the fourth quarter of 2010 was $1,811,874 or $0.65 per share, compared with a net loss for the fourth quarter of 2009 of $2,288,079 or $1.12 per share. Included in the net loss for the fourth quarter 2010 were non-cash charges of $2,654,030 and cash interest expense of $111,048. Included in the net loss for the fourth quarter of 2009 were non-cash charges of $2,422,255 and cash interest expense of $123,900.

The net loss for year 2010 was $8,723,189 or $3.37 per share compared to a net loss for 2009 of $10,520,775, or $6.42 per share. The 2010 net loss included non-cash charges of $8,998,771 and cash interest expenses of $534,177. The 2009 net loss included non-cash charges of $7,060,724 and cash interest expense of $675,389.

Included in non-cash charges are stock-based compensation expense, depreciation and amortization, impairment of certain intangibles and inventory valuations and changes in the fair value of warrants and non-cash interest expense, all of which are detailed in the non-GAAP presentation below.

As of December 31, 2010, the Company had cash and cash equivalents of $3,523,948.

Commenting on the 2010 results, Mr. Dennis McGrath, CEO stated: aWe believe we have strategically positioned the Company, with our mix of reimbursed medical procedures and non-reimbursed treatments and products, to have successfully weathered the macroeconomic issues of 2009 that persisted into 2010. Our product offerings have been improved and expanded and include the XTRAC Velocitya", capable of treating severe psoriasis, being studied to potentially clear severe psoriasis in a few weeks when used in conjunction with certain topical treatments; and a new line of proprietary copper-peptide and DNA repair enzyme-based skincare products marketed to physicians both domestically and internationally under the NEOVAa" brand, introduced in the fourth quarter of 2010. We expanded our sales force in 2010 by 25% in order to be in a better position to take advantage of these revenue opportunities and have invested significantly in sales training for our sales professionals and our customers. Our strategic focus has been centered on leveraging our core products and people to grow our business organically and open new channels of distribution globally in both the physician and non-medical markets.a

Continuing, Mr. McGrath further stated, aI am proud of our employeea™s contributions to these positive changes that have been accomplished while concurrently reducing our annual operating expenses by more than $6.5 million and curtailing our annual capital expenditures by nearly $5 million in the last 24 months, increasing 2010 revenues by 6.5% and improving cash flow from operations by $2.4 million, including achieving net positive cash flow of more than $1.0 million, after paying nearly $1 million in debt payments, in the fourth quarter alone.a

A reconciliation of non-GAAP financial measures to GAAP financial measures, and a presentation of the most directly comparable GAAP financial measures are included below.

Non-GAAP Measures

To supplement PhotoMedexa™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 net loss and non-GAAP adjusted loss per share.

PhotoMedexa™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 PhotoMedexa™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 Companya™s core operating results and business outlook. In addition, PhotoMedex believes non-GAAP measures that exclude stock-based compensation expense and other non-cash or non-recurring expenses 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:

(1) Share amounts and basic and diluted net loss per share amounts shown on the consolidated statements of operations have been adjusted to reflect the reverse stock split of 1-for-6 effective February 3, 2010.

(2) Interest expense includes cash interest of $111,048 and $123,900 for the three month periods ended December 31, 2010 and 2009, respectively and $534,177 and $675,389 for the years ended December 31, 2010 and 2009, respectively.

About PhotoMedex

PhotoMedex is a Global Skin Health Solutionsa" company that provides integrated disease management and aesthetic solutions through complementary laser and light-based devices, and skincare products. We are a leader in the development, manufacturing and global marketing of dermatology products and techniques focused on advancing cost-effective technologies that provide patients with better outcomes and a higher quality of life. The diseases and conditions we address include psoriasis, vitiligo, acne, actinic keratosis and sun damage. Medical devices include the XTRAC® Excimer Laser for the treatment of psoriasis and vitiligo and the Omniluxa" non-laser Light Emitting Diodes (LED) for the treatment of clinical and aesthetic dermatological conditions including acne, photodamage, skin rejuvenation and wound healing. PhotoMedex also develops and markets products based on its patented, clinically proven Copper Peptide technology and DNA repair enzymes for skin health, hair care and wound care.

For more information, visit [ www.photomedex.com ].

SAFE HARBOR STATEMENT

Some portions of this release, particularly those describing PhotoMedexa™ strategies contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1993, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. While PhotoMedex is working to achieve those goals, actual results could differ materially from those projected in the forward-looking statements as a result of a number of factors, including difficulties in marketing its products and services, need for capital, competition from other companies and other factors, any of which could have an adverse effect on the business plans of PhotoMedex, its reputation in the industry or its results. In light of significant uncertainties inherent in forward-looking statements included herein, the inclusion of such statements should not be regarded as a representation by PhotoMedex or its subsidiaries that the forward-looking statements will be achieved. For further details and a discussion of these and other risks and uncertainties, please see our annual report on Form 10-k for the year ended December 31, 2010 which is on file with the SEC. We undertake no obligation to publicly update any forward looking statement, either as a result of new information, future events or otherwise.