Investor Information: Press Release

Printer Friendly Version View printer-friendly version
<< Back
PhotoMedex Reports Second Quarter Financial Results

HORSHAM, Pa.--(BUSINESS WIRE)--Aug. 10, 2015-- PhotoMedex, Inc. (NasdaqGS and TASE: PHMD) reports financial results for the three and six months ended June 30, 2015.

Financial highlights of the second quarter of 2015 include the following (all comparisons are with the second quarter of 2014, reflect continuing operations and all figures quoted are GAAP, unless stated otherwise):

  • Revenues of $19.9 million, a decrease of 37%
  • Gross profit of $15.0 million, a decrease of 42%
  • Non-GAAP adjusted loss per share of ($0.21), compared with non-GAAP adjusted loss per share of ($0.12)
  • Net income (including discontinued operations) of $6.1 million or $0.28 per share, compared with net loss of $7.5 million or ($0.40) per share
  • Consumer revenues of $17.5 million, a decrease of 38%
  • Global direct-to-consumer channel revenues of $12.1 million, a decrease of 45%
  • Global retail and home shopping channel revenues of $4.9 million, a decrease of 17%
  • Global distributor consumer channel revenues of $0.6 million, a decrease of 22%
  • Unrestricted cash, cash equivalents and short-term investments as of June 30, 2015 of $3.6 million or $0.17 per share

Management Commentary

“With the sale of the XTRAC business on June 23, 2015 enabling the extinguishment of all our outstanding bank debt, we are now focused on addressing the challenges that have affected our consumer business and on implementing the strategies and tactics we believe will improve its performance. We are pleased to have held another successful 24-hour live television home shopping weekday sales event in the U.S. earlier this month, during which consumers purchased more than $3 million of retail sales of no!no! Hair™. This event highlighted the unique benefits of no!no! compared with other home hair removal treatments, and we offered a well-received summertime animal print special edition. This most recent television home shopping sales event builds upon similarly successful events held in May in the U.S. and in June in the UK,” said Dr. Dolev Rafaeli, PhotoMedex CEO.

Reported Financial Results

Revenues from continuing operations for the second quarter of 2015 were $19.9 million, a decrease of 37% compared with revenues from continuing operations for the second quarter of 2014 of $31.8 million.

Gross profit from continuing operations for the second quarter of 2015 was $15.0 million, or 75% of revenues, compared with gross profit for the second quarter of 2014 of $26.0 million, or 82% of revenues.

Net income for the second quarter of 2015 was $6.1 million or $0.28 per share, which included a $2.1 million loss from discontinued operations, a gain on the sale of discontinued operations of $10.6 million, $0.5 million in stock-based compensation expense and $0.5 million in depreciation and amortization expenses. This compares with net loss for the second quarter of 2014 of $7.5 million or ($0.40) per share, which included a loss from discontinued operations of $0.3 million, $0.9 million in stock-based compensation expense and $0.5 million in depreciation and amortization expenses.

Revenues from continuing operations for the first half of 2015 were $40.6 million, a decrease of 46% compared with revenues from continuing operations for the first half of 2014 of $75.8 million.

Net loss for the first half of 2015 was $4.0 million or ($0.20) per share, which included a $6.7 million loss from discontinued operations, a gain on the sale of discontinued operations of $10.6 million, $1.4 million in stock-based compensation expense and $1.0 million in depreciation and amortization expenses. This compares with net loss for the first half of 2014 of $7.8 million or ($0.42) per share, which included a loss from discontinued operations of $1.6 million, $1.7 million in stock-based compensation expense and $1.0 million in depreciation and amortization expenses.

As of June 30, 2015 the Company had cash, cash equivalents and short-term investments of $4.4 million including $0.8 million of restricted cash, compared with $10.4 million of unrestricted cash 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

June 30,

    Six Months Ended

June 30,

(ooo's) except per share amounts 2015     2014     2015     2014  
   
Net income as reported $6,061 ($7,480) ($3,953)

($7,825)

Adjustments:
Depreciation and amortization expense 497

528

984

1,047
Interest expense, net 25 509 554 556
Income tax (benefit) expense (3,941) (909)     (3,577)     (988)  
 
EBITDA 2,642 ($7, 352) ($5,992) ($7,210)
 
Stock-based compensation expense, including accelerated vesting 452 878 1,351 1,738
Acquisition costs - 1,959 - 2,865
Major litigation expenses 223 501 522 1,394
Extraordinary non-recurring debt costs 762

1,632

982 -
Loss from discontinued operations 2,058 260 6,709 1,628
Gain from sale of discontinued operations (10,634) -     (10,593)     -  
 
Non-GAAP adjusted (loss) income ($4,497) ($2,122)     ($7,021)     $415  
Fully diluted shares outstanding at June 30 21,488 18,723 20,308 18,721
Non-GAAP adjusted (loss) income per share ($0.21) ($0.11) ($0.35) $0.03

About PhotoMedex

PhotoMedex is a global skin health company providing aesthetic solutions to dermatologists, professional aestheticians and consumers. The company provides proprietary products and services that address skin diseases and conditions including acne and photo damage. Its long-held experience in the physician market provides the platform to expand its skin health solutions to spa markets, as well as traditional retail, online and direct to consumer 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.

PHOTOMEDEX, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

       
Three Months Ended June 30, Six Months Ended June 30,
(ooo's) except per share amounts 2015   2014 2015   2014
 
Revenues $ 19,924 $ 31,799 $ 40,598 $ 75,813
 
Cost of revenues 4,915 5,802 9,573 13,263
Gross profit 15,009 25,997 31,025 62,550
 
Operating expenses:
Selling and marketing 16,161 24,391 32,094 52,880
General and administrative 4,971 8,981 9,014 15,490
Research and development and engineering 389 467 727 931
21,521 33,839 41,835 69,301
Loss from continuing operations before interest and other financing expense, net (6,512) 7,842 (10,810) (6,751)
Interest and other financing income (expense), net (56) (287) (604) (434)
 
Loss from continuing operations before income taxes (6,456) (8,129) (11,414) (7,185)
 
Income tax (expense) benefit 3,941 909 3,577 988
 
Loss from continuing operations 1 ($ 2,515) ($ 7,220) ($ 7,837) ($ 6,197)
 
Discontinued operations:
Loss from discontinued operations, net of taxes (2,058) (260) (6,709) (1,628)
Gain on sale of discontinued operations, net of taxes 10,634

-

10,593 -
 
Net income (loss) $6,061 ($7,480) ($3,953) ($7,825)
 
Basic and diluted net income (loss) per share:
Continuing operations ($0.12) ($0.39) ($0.39) ($0.33)
Discontinued operations 0.40 (0.01) 0.19 (0.09)
$0.28 ($0.40) ($0.20) ($0.42)
 
Shares used in computing basic and diluted net income (loss) per share: 21,488 18,723 20,308 18,721
 
1 Includes: depreciation and amortization 497 528 984 1,047
 
Share-based compensation expense 452 878 1,351 1,738

PHOTOMEDEX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

         

June 30,

2015
(UNAUDITED)

December 31,

2014

Assets
Cash, cash equivalents, and short-term bank deposits $ 3,619 $ 10,436
Restricted Cash 750 -
Accounts receivable, net 10,558 17,640
Inventories, net 15,156 17,111
Other current assets, net 5,624 8,841
Assets held for sale, net - 100,991
Property and equipment, net 1,306 1,412
Other non-current assets, net   30,759   31,332
Total Assets $ 67,772 $ 187,763
 
Liabilities and Stockholders' Equity
Accounts payable and accrued current liabilities $ 19,680 $ 25,476
Other current liabilities 3,021 4,340
Long term debt and notes payable 525 77,147
Liabilities held for sale - 37,401
Other long term liabilities 745 1,134
Stockholders' equity   43,801   42,265
Total Liabilities and Stockholders' Equity $ 67,772 $ 187,763

PHOTOMEDEX, INC.

CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)

 
For the Six Months Ended
June 30,
  2015       2014  
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($ 3,953 ) ($ 7,825 )
 
Adjustments to reconcile net loss to net cash used in operating activities--
Depreciation and amortization 984 1,047
Provision for doubtful accounts 938 3,442
Deferred income taxes (5 ) 198
Stock-based compensation 1,351 1,738
Gain (Loss) on disposal of property and equipment 73 (10 )
Financing expenses 1,250 -
Changes in assets and liabilities:
(Increase) decrease in:
Current assets 8,140 6,982
Current liabilities   (5,315 )   (19,456 )
Net cash (used in) provided by operating activities – continuing activities 3,463 (13,884 )
Net cash (used in) provided by operating activities – discontinued operations   5,687     (1,184 )
Net cash used in operating activities   9,150     (15,068 )
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (124 ) (242 )
Other   87     14,133  
Net cash (used in) provided by investing activities – continuing operations (37 ) 13,891
Net cash provided by investing activities – discontinued operations   61,296     (91,444 )
Net cash provided by (used in) investing activities   61,259     (77,553 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Registrations costs (84 ) -
Other financing activities - (980 )
Proceeds (Repayment) of debt and notes payable, net   (76,890 )   74,578  
Net cash (used in) provided by financing activities – continuing operations (76,974 ) 73,598
Net cash used in financing activities – discontinued operations   (92 )   (159 )
Net cash used in financing activities   (77,066 )   73,439  
 
Effect of exchange rate changes on cash   (73 )   154  
NET DECREASE IN CASH AND CASH EQUIVALENTS   (6,730 )   (19,028 )
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD   10,349     45,388  
CASH AND CASH EQUIVALENTS, END OF PERIOD   3,619   $ 26,360  
 

Supplemental information:

Cash paid for income taxes

$

364

$

405

Cash paid for interest

$

2,071

$

47

Source: PhotoMedex, Inc.

LHA
Kim Sutton Golodetz, 212-838-3777
Kgolodetz@lhai.com
or
Bruce Voss, 310-691-7100
Bvoss@lhai.com
@LHA_IR_PR
or
PhotoMedex, Inc.
Dennis McGrath, 215-619-3287
Chief Financial Officer
info@photomedex.com