UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
______________
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
report (Date of earliest event reported): August 7, 2013
PhotoMedex, Inc.
(Exact
Name of Registrant Specified in Charter)
Nevada | 0-11635 | 59-2058100 | ||
(State or Other Jurisdiction of |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
||
Incorporation) |
|
147 Keystone Drive, Montgomeryville, Pennsylvania |
18936 |
(Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: 215-619-3600
Not Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On August 7, 2013, PhotoMedex, Inc. (the “Company”) issued a press release announcing its results of operations for the second fiscal quarter ended June 30, 2013. The full text of such press release is furnished as Exhibit 99.1 to this report.
The Company makes reference to non-GAAP financial information in the press release furnished herewith. These non-GAAP measures include non-GAAP adjusted income and non-GAAP adjusted income per share. There are limitations in using these non-GAAP financial measures because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. The Company’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 the Company’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, the Company believes non-GAAP measures enhance the comparability of results against prior periods. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is contained in the press release.
The information set forth under this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following press release is furnished as an exhibit to this Current Report on Form 8-K pursuant to Item 2.02 and shall not be deemed to be “filed”:
99.1 Press Release dated August 7, 2013 issued by PhotoMedex, Inc.
SIGNATURES
Pursuant to
the requirements of the Securities Exchange Act of 1934, the Company has
duly caused this current report to be signed on its behalf by the
undersigned hereunto duly authorized.
PHOTOMEDEX, INC. |
||||
|
||||
Date: | August 7, 2013 | By: |
/s/ Dolev Rafaeli |
|
Dolev Rafaeil |
||||
Chief Executive Officer |
EXHIBIT INDEX
Exhibit No. |
Description of Exhibit |
99.1 |
Press Release dated August 7, 2013 issued by PhotoMedex, Inc. |
Exhibit 99.1
PhotoMedex Reports Second Quarter 2013 Financial Results
Net Income Up 68%, Diluted EPS Up 70%, XTRAC Revenues Up 104%
Gross Margin Expands in all Business Segments
Board Authorizes Additional $30 Million Share Repurchase Program
MONTGOMERYVILLE, Pa.--(BUSINESS WIRE)--August 7, 2013--PhotoMedex, Inc. (NASDAQ: PHMD) today reported financial results for the three and six months ended June 30, 2013. Financial highlights of the 2013 second quarter and first half include:
Reported Financial Results
Revenues for the second quarter of 2013 were $58.1 million, a decrease of 1.4% compared with revenues for the second quarter of 2012 of $58.9 million.
Net income for the second quarter of 2013 was $7.1 million or $0.34 per diluted per share, which included $1.3 million in stock-based compensation expense and $1.5 million in depreciation and amortization expense. This compares with net income for the second quarter of 2012 of $4.2 million or $0.20 per diluted share, which included $1.5 million in stock-based compensation expense and $1.4 million in depreciation and amortization expense.
Revenues for the six months ended June 30, 2013 were $115.3 million, an increase of 5.6% compared with revenues for the six months ended June 30, 2012 of $109.2 million.
Net income for the six months ended June 30, 2013 was $14.3 million or $0.68 per diluted per share, which included $2.6 million in stock-based compensation expense and $3.0 million in depreciation and amortization expense. This compares with net income for the six months ended June 30, 2012 of $9.1 million or $0.45 per diluted share, which included $3.3 million in stock-based compensation expense and $2.8 million in depreciation and amortization expense.
As of June 30, 2013 the Company had cash and cash equivalents of $62.5 million or $2.97 per diluted share, compared with $62.3 million as of December 31, 2012. During the second quarter the Company repurchased 324,758 shares of its common stock in the open market at an average price of $16.53 per share, for a total of $5.4 million. Current assets included $28.6 million in accounts receivable, compared with $19.1 million as of December 31, 2012. The increase in accounts receivables was largely due to the timing of $5.2 million of second quarter shipments related to television home shopping special events in Europe and North America, as well as a $5.3 million site letter of credit not collected until after the quarter had ended.
Management expects revenues for the third quarter of 2013 to be in line with second quarter 2013 revenues.
Dr. Dolev Rafaeli, PhotoMedex CEO, commented, “We are pursuing the next major phase of our growth strategy through expansion of the no!no! brand into Brazil and continued ramp-up in Germany, while building the domestic XTRAC business to critical mass by expanding our patient marketing campaigns and installed base of systems. XTRAC advertising has now been rolled out nationally. Our second quarter XTRAC revenues, which more than doubled over the prior year, show the successful execution of our plan.”
Dr. Rafaeli added, “We are very pleased with the earnings and cash flow we have been consistently generating, and with our ability to increase or decrease our media spend as warranted by market conditions and with a focus on driving profitability. During the quarter our U.S. consumer revenues were impacted by the attack during the Boston Marathon and by the tornados in Oklahoma, which muted the response to our domestic consumer advertising programs as our target customers were engaged with these events yet our advertising expenditures had already been committed. Our efforts to cross-sell the Neova skincare line to the consumer market have been very successful, with sales of more than $1.0 million this quarter representing a 10-fold increase in one year.”
Share Repurchase Expanded
Last year on August 18, 2012 the Company announced that its Board of Directors authorized the repurchase of its common shares on the open market during the ensuing 12 months. It is expected that by the 2013 anniversary date of this program, the Company will have fulfilled the $25 million limit under this program. Consequently, the Board of Directors has authorized an additional $30 million share repurchase program of its common shares in the open market over the next 12 months, at such times and prices as determined appropriate by the Company's management in collaboration with the Board of Directors. The shares will be purchased with cash on hand.
“The expansion of our share repurchase program by a further $30 million is reflective of the confidence we have in the growth of PhotoMedex, our ability to generate free cash flow and our commitment to building shareholder value,” Dr. Rafael concluded.
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 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 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||
Net income as reported | $ | 7,094 | $ | 4,213 | $ | 14,306 | $ | 9,070 | ||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||
Depreciation and amortization expense | 1,517 | 1,389 | 2,959 | 2,771 | ||||||||||||||||||||||||
Interest expense, net | 4 | 219 | 9 | 408 | ||||||||||||||||||||||||
Income tax expense | 1,897 | 866 | 4,408 | 1,106 | ||||||||||||||||||||||||
EBITDA | $ | 10,512 | $ | 6,687 | $ | 21,682 | $ | 13,355 | ||||||||||||||||||||
Stock-based compensation expense | 1,294 | 1,535 | 2,584 | 3,288 | ||||||||||||||||||||||||
Non-GAAP adjusted income | $ | 11,806 | $ | 8,222 | $ | 24,266 | $ | 16,643 | ||||||||||||||||||||
Fully diluted shares outstanding at June 30 | 21,033 | 21,035 | 21,085 | 19,942 | ||||||||||||||||||||||||
Non-GAAP adjusted income per share | $ | 0.56 | $ | 0.39 | $ | 1.15 | $ | 0.83 | ||||||||||||||||||||
Conference Call
PhotoMedex will hold a conference call to discuss the Company's second quarter 2013 results and answer questions today, August 7, 2013 beginning at 11:00 a.m. Eastern time.
To participate in the conference call, dial toll-free 800-894-5910 or International/toll 785-424-1052 (and confirmation code # 5523007). For the convenience of participants in Israel, a local/toll-free number (1-80-925-6145) has been set up (the confirmation code remains the same # 5523007). If you are unable to participate, a replay of the call will be available from 2:00 p.m. Eastern time Wednesday, August 7 to 2:00 p.m. Eastern time Wednesday, August 21 by dialing toll-free 888-203-1112 or International/toll 719-457-0820 (participants in Israel may dial 1-80-924-6038) and using confirmation code # 5523007.
The live broadcast of PhotoMedex, Inc.'s quarterly conference call will be available in the Investor Relations section of www.photomedex.com, and at www.streetevents.com. The online replay will be available shortly after the conclusion of the call.
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. As a result of its December 2011 merger with Radiancy Inc., PhotoMedex has added a range of 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 conference call, particularly those describing PhotoMedex' strategies, operating expense reductions and business plans will 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 successfully integrating the products and employees of the Company and Radiancy, as well as the 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 conference call 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 |
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(UNAUDITED) | |||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||
(ooo's) except per share amounts | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||||
Revenues | $ | 58,065 | $ | 58,906 | $ | 115,281 | $ | 109,179 | |||||||||||||||||||||||
Cost of revenues | 11,390 | 12,355 | 23,256 | 23,589 | |||||||||||||||||||||||||||
Gross profit | 46,675 | 46,551 | 92,025 | 85,590 | |||||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||
Selling and marketing | 30,468 | 31,068 | 59,794 | 56,903 | |||||||||||||||||||||||||||
General and administrative | 6,268 | 9,243 | 11,927 | 16,362 | |||||||||||||||||||||||||||
Research and development and engineering | 814 | 760 | 1,587 | 1,518 | |||||||||||||||||||||||||||
37,550 | 41,071 | 73,308 | 74,783 | ||||||||||||||||||||||||||||
Operating income | 9,125 | 5,480 | 18,717 | 10,807 | |||||||||||||||||||||||||||
Interest and other financing income (expense), net | (134 | ) | (401 | ) | (3 | ) | (631 | ) | |||||||||||||||||||||||
Income before taxes expense | 8,991 | 5,079 | 18,714 | 10,176 | |||||||||||||||||||||||||||
Income tax expense (benefit) | 1,897 | 866 | 4,408 | 1,106 | |||||||||||||||||||||||||||
Net income 1 | $ | 7,094 | $ | 4,213 | $ | 14,306 | $ | 9,070 | |||||||||||||||||||||||
Net income per share: | |||||||||||||||||||||||||||||||
Basic | 0.34 | 0.21 | 0.69 | 0.47 | |||||||||||||||||||||||||||
Diluted | 0.34 | 0.20 | 0.68 | 0.45 | |||||||||||||||||||||||||||
Shares used in computing net income per share: | |||||||||||||||||||||||||||||||
Basic | 20,573 | 20,547 | 20,625 | 19,455 | |||||||||||||||||||||||||||
Diluted | 21,033 | 21,035 | 21,085 | 19,942 | |||||||||||||||||||||||||||
1 Includes: depreciation and amortization | 1,517 | 1,389 | 2,959 | 2,771 | |||||||||||||||||||||||||||
Share-based compensation expense | 1,294 | 1,535 | 2,584 | 3,288 | |||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF REVENUES | |||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||
(ooo's) | For the Three Months ended: | ||||||||||||||||||||||
June 30, 2013 | March 31, 2013 | June 30, 2012 | |||||||||||||||||||||
Consumer: | |||||||||||||||||||||||
Direct | $ | 30,320 | $ | 31,722 | $ | 33,696 | |||||||||||||||||
Distributors | 8,435 | 5,291 | 7,007 | ||||||||||||||||||||
Retailer and home shopping channels | 9,918 | 12,047 | 9,761 | ||||||||||||||||||||
sub-total | 48,673 | 49,060 | 50,464 | ||||||||||||||||||||
Physician Recurring | |||||||||||||||||||||||
XTRAC treatments | 4,024 | 2,569 | 1,977 | ||||||||||||||||||||
Skin care | 2,142 | 2,226 | 2,135 | ||||||||||||||||||||
Other | 1,210 | 1,160 | 1,162 | ||||||||||||||||||||
sub-total | 7,376 | 5,955 | 5,274 | ||||||||||||||||||||
Professional | 2,016 | 2,201 | 3,168 | ||||||||||||||||||||
Total Revenues | $ | 58,065 | $ | 57,216 | $ | 58,906 | |||||||||||||||||
PHOTOMEDEX, INC. | ||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||||
(UNAUDITED) | ||||||||||||||
(000's) | ||||||||||||||
June 30, 2013 | December 31, 2012 | |||||||||||||
Assets | ||||||||||||||
Cash, cash equivalents, and short-term investments | $ | 62,485 | $ | 62,348 | ||||||||||
Accounts receivable, net | 28,548 | 19,064 | ||||||||||||
Inventories | 22,741 | 22,467 | ||||||||||||
Other current assets | 27,519 | 32,294 | ||||||||||||
Property and equipment, net | 8,857 | 6,759 | ||||||||||||
Other non-current assets | 64,982 | 68,958 | ||||||||||||
Total Assets | $ | 215,132 | $ | 211,890 | ||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||
Accounts payable and accrued liabilities | $ | 27,762 | $ | 34,618 | ||||||||||
Other current liabilities | 6,478 | 5,259 | ||||||||||||
Bank and lease notes payable | 374 | 619 | ||||||||||||
Other liabilities | 3,451 | 4,067 | ||||||||||||
Stockholders' equity | 177,067 | 167,327 | ||||||||||||
Total Liabilities and Stockholders' Equity | $ | 215,132 | $ | 211,890 | ||||||||||
PHOTOMEDEX, INC. | ||||||||||||||||||
CONDENSED STATEMENTS OF CASH FLOWS | ||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||
For the Six Months Ended | ||||||||||||||||||
June 30 | ||||||||||||||||||
2013 | 2012 | |||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||
Net income | $ | 14,306 | $ | 9,070 | ||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities-- |
||||||||||||||||||
Depreciation and amortization | 2,959 | 2,771 | ||||||||||||||||
Provision for doubtful accounts | 2,125 | 2,091 | ||||||||||||||||
Deferred income taxes | 1,982 | (1,234 | ) | |||||||||||||||
Stock-based compensation | 2,584 | 3,288 | ||||||||||||||||
Changes in assets and liabilities: | ||||||||||||||||||
(Increase) decrease in-- | ||||||||||||||||||
Current Assets | (8,357 | ) | (23,717 | ) | ||||||||||||||
Current liabilities | (6,079 | ) | 10,076 | |||||||||||||||
Net cash provided by operating activities | 9,520 | 2,345 | ||||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||
Lasers placed in service | (2,780 | ) | (949 | ) | ||||||||||||||
Purchases of PP&E, net | (474 | ) | (218 | ) | ||||||||||||||
Other | (3,285 | ) | (63 | ) | ||||||||||||||
Net cash used in investing activities | (6,539 | ) | (1,230 | ) | ||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||
Proceeds from exercise of options/issuance (share-purchase) of securities, net | (5,358 | ) | 37,651 | |||||||||||||||
Repayments of debt | (432 | ) | (2,349 | ) | ||||||||||||||
Net cash (used in) provided by financing activities | (5,790 | ) | 35,302 | |||||||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (239 | ) | (80 | ) | ||||||||||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (3,048 | ) | 36,337 | |||||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 44,348 | 16,549 | ||||||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 41,300 | $ | 52,886 | ||||||||||||||
Supplemental information: | ||||||||||||||||||
Cash paid for income taxes | $ | 4,381 | $ | 10,922 | ||||||||||||||
Cash paid for interest | $ | 11 | $ | 77 | ||||||||||||||
CONTACT:
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