Exhibit 99.1
Stacy Feit
Financial Relations Board
(213) 486-6549
sfeit@frbir.com
CANDELA REPORTS FIRST QUARTER 2009 RESULTS
Announces Houlihan Lokey as Financial Advisor to Explore Full Range of Strategic Alternatives
WAYLAND, MA, October 21, 2008 — Candela Corporation (NASDAQ:CLZR) today reported results for the first fiscal quarter ended September 27, 2008. Revenues of $26.9 million in the first quarter decreased 24.2 percent from $35.5 million in the comparable prior-year period. The Company reported a net loss of $4.0 million, or $0.18 per share, for the first fiscal quarter versus net income of $187,000, or $0.01 per share, in the corresponding period last year.
Revenues from lasers and other products in the first quarter decreased to $17.2 million from $26.8 million in the prior year period. Revenues from product-related services increased to $9.6 million from $8.6 million in the prior year period.
Gross profit margin declined to 39.4 percent in the first quarter from 48.7 percent in the comparative prior-year period primarily due to lower sales volume and product reliability issues. First quarter 2009 selling, general and administrative expenses, including approximately $3.2 million in legal expenses, remained approximately flat quarter-over-quarter at $15.0 million, however increased on a percentage of sales basis to 55.7 percent from 42.4 percent last year. Research and development spending for the first quarter decreased to $2.8 million from $3.0 million in the prior year’s quarter.
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Three Months Ended |
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||||
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September 27, |
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Septmber 29, |
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(In thousands) |
|
2008 |
|
2007 |
|
||
|
|
|
|
|
|
||
Revenue |
|
|
|
|
|
||
Lasers and other products |
|
$ |
17,241 |
|
$ |
26,823 |
|
Product-related services |
|
9,632 |
|
8,650 |
|
||
|
|
|
|
|
|
||
Total |
|
$ |
26,873 |
|
$ |
35,473 |
|
|
|
|
|
|
|
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Revenue by Geography |
|
|
|
|
|
||
U.S. |
|
$ |
8,987 |
|
$ |
16,730 |
|
All other countries |
|
17,886 |
|
18,743 |
|
||
|
|
|
|
|
|
||
Gross Margin |
|
|
|
|
|
||
Lasers and other products |
|
49.1 |
% |
54.1 |
% |
||
Product-related services |
|
21.9 |
% |
32.0 |
% |
||
Total gross margin |
|
39.4 |
% |
48.7 |
% |
For the past few months, the Company has been working with Houlihan Lokey to evaluate strategic options given the challenging conditions facing the aesthetic laser industry. In light of the recent decline in the Company’s share price, the Company’s Board of Directors has expanded the scope of Houlihan Lokey’s activities to include exploration of a full range of strategic alternatives, including but not limited to, a potential merger or other business combination, to maximize long-term shareholder value.
Gerard E. Puorro, President and Chief Executive Officer said “Our financial results are a reflection of these very challenging economic and business conditions, but we do not believe the current share price appropriately reflects Candela’s operational or financial position, including a brand that we have established as the gold standard in the aesthetic laser market over the last 20 years.” Puorro continued, “We believe that we possess some of the best employees and distribution partners in the industry and we are committed to acting in the best interest of all of Candela’s constituents. As a result, we are exploring strategic and operational alternatives to enable Candela and its employees to enhance its customer offerings, augment product distribution and allow our shareholders to benefit from potential synergies inherent in a business combination and participate in the expected recovery of our industry.”
Conference Call Details
The Company will host a conference call today at 5:00 p.m. ET to discuss this announcement. The call can be accessed live by dialing (866) 225-4091 or by visiting Candela Corporation’s website at www.candelalaser.com
Investors may access a replay by dialing (888) 266-2081, passcode 1294816, which will be available from 8:30 p.m. ET on October 21, 2008 through 11:59 p.m. ET on October 24, 2008. The webcast replay will also be archived in the “Investor Relations” section of the company’s website.
About CANDELA: Candela Corporation manufactures, and distributes innovative clinical solutions that enable physicians, surgeons, and personal care practitioners to treat selected cosmetic and medical conditions using lasers, aesthetic laser systems, and other advanced technologies. Founded near Boston in 1970, the company markets and services its products in 86 countries from offices and distributors in the United States, Europe, Japan, China and other Asian locations. Candela established the aesthetic laser market 20 years ago, and currently has an installed base of over 13,500 systems worldwide. Visit Candela on the Web at http://www.candelalaser.com.
Safe Harbor Statement: Except for the historical information contained herein, this news release contains forward-looking statements that constitute Candela’s current intentions, hopes, beliefs, expectations or predictions of the future, which are therefore inherently subject to risks and uncertainties. Such statements may relate to, among other things, our exploration of strategic and operational alternatives, the expected recovery of our industry, our future revenue, gross margin, expense levels and earnings, our growth prospects, market acceptance of our products, the strength of our distribution channels, our ability to add new products, our ability to expand regulatory approvals and the liquidity of our common stock. The risks and uncertainties that may affect forward-looking statements include, among others: the availability of, and our ability to successfully implement, strategic and operational alternatives, the cancellation or deferral of customer orders, the risk of a material adverse judgment or increased litigation-related
expenses in pending litigation matters, dependence on a small number of strategic distribution relationships, difficulties in the timely development and market acceptance of new products, unanticipated increases in expenses, market developments that vary from the current public expectations concerning the growth of the laser industry, increased competitive pressures, changes in economic conditions, or difficulties in obtaining timely regulatory approvals. Further information on factors that could affect Candela’s performance is included in Candela’s periodic reports filed with the SEC. Candela cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Candela expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any such statements to reflect any change in Candela’s expectations or any change in events, conditions or circumstances on which any such statement is based.
CANDELA CORPORATION
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
|
|
September 27, |
|
June 28, |
|
||
|
|
2008 |
|
2008 |
|
||
Assets |
|
|
|
|
|
||
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
18,737 |
|
$ |
21,059 |
|
Marketable securities |
|
8,196 |
|
12,131 |
|
||
Accounts receivable, net |
|
34,435 |
|
43,320 |
|
||
Notes receivable |
|
756 |
|
728 |
|
||
Inventories, net |
|
35,123 |
|
33,141 |
|
||
Other current assets |
|
11,980 |
|
9,043 |
|
||
|
|
|
|
|
|
||
Total current assets |
|
109,227 |
|
119,422 |
|
||
|
|
|
|
|
|
||
Property and equipment, net |
|
4,327 |
|
4,027 |
|
||
|
|
|
|
|
|
||
Long-term investments |
|
2,848 |
|
3,512 |
|
||
Other assets |
|
28,551 |
|
31,134 |
|
||
|
|
|
|
|
|
||
Total assets |
|
$ |
144,953 |
|
$ |
158,095 |
|
|
|
|
|
|
|
||
Liabilities and Stockholders’ Equity |
|
|
|
|
|
||
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
||
Accounts payable |
|
$ |
13,520 |
|
$ |
15,917 |
|
Accrued payroll and related expenses |
|
4,388 |
|
4,680 |
|
||
Accrued warranty |
|
5,374 |
|
5,373 |
|
||
Other accrued liabilities |
|
8,815 |
|
10,176 |
|
||
Current liabilities of discontinued operations |
|
1,192 |
|
1,200 |
|
||
Deferred income |
|
11,342 |
|
13,614 |
|
||
|
|
|
|
|
|
||
Total current liabilities |
|
44,631 |
|
50,960 |
|
||
|
|
|
|
|
|
||
Other long-term liabilities |
|
4,862 |
|
7,346 |
|
||
|
|
|
|
|
|
||
Stockholders’ equity |
|
|
|
|
|
||
Common stock |
|
262 |
|
261 |
|
||
Less: Treasury stock |
|
(24,855 |
) |
(24,855 |
) |
||
Additional paid-in capital |
|
74,128 |
|
73,174 |
|
||
Accumulated earnings |
|
41,579 |
|
45,588 |
|
||
Accumulated other comprehensive income |
|
4,346 |
|
5,621 |
|
||
|
|
|
|
|
|
||
Total stockholders’ equity |
|
95,460 |
|
99,789 |
|
||
|
|
|
|
|
|
||
Total liabilities and stockholders’ equity |
|
$ |
144,953 |
|
$ |
158,095 |
|
CANDELA CORPORATION
Unaudited Condensed Consolidated Statements of Income (Loss)
(in thousands, except per share data)
|
|
For the three-months ended |
|
||||
|
|
September 27, |
|
September 29, |
|
||
|
|
2008 |
|
2007 |
|
||
|
|
|
|
|
|
||
Revenue |
|
$ |
26,873 |
|
$ |
35,473 |
|
Cost of sales |
|
16,296 |
|
18,197 |
|
||
|
|
|
|
|
|
||
Gross profit |
|
10,577 |
|
17,276 |
|
||
|
|
|
|
|
|
||
Operating expenses: |
|
|
|
|
|
||
Research and development |
|
2,824 |
|
2,996 |
|
||
Selling, general and administrative |
|
14,974 |
|
15,028 |
|
||
|
|
|
|
|
|
||
Total operating expenses |
|
17,798 |
|
18,024 |
|
||
|
|
|
|
|
|
||
Loss from operations |
|
(7,221 |
) |
(748 |
) |
||
|
|
|
|
|
|
||
Other income (expense): |
|
|
|
|
|
||
Interest income |
|
243 |
|
463 |
|
||
Other income (expense) |
|
(261 |
) |
741 |
|
||
|
|
|
|
|
|
||
Total other income (expense) |
|
(18 |
) |
1,204 |
|
||
|
|
|
|
|
|
||
(Loss) income before income taxes |
|
(7,239 |
) |
456 |
|
||
|
|
|
|
|
|
||
(Benefit from) provision for income taxes |
|
(3,230 |
) |
269 |
|
||
|
|
|
|
|
|
||
Net (loss) income |
|
$ |
(4,009 |
) |
$ |
187 |
|
|
|
|
|
|
|
||
Net (loss) income per share of common stock: |
|
|
|
|
|
||
Basic |
|
$ |
(0.18 |
) |
$ |
0.01 |
|
|
|
|
|
|
|
||
Diluted |
|
$ |
(0.18 |
) |
$ |
0.01 |
|
|
|
|
|
|
|
||
Weighted average shares outstanding: |
|
|
|
|
|
||
Basic |
|
22,697 |
|
22,905 |
|
||
|
|
|
|
|
|
||
Diluted |
|
22,697 |
|
23,105 |
|