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 10, 2015
PhotoMedex, Inc.
(Exact
Name of Registrant Specified in Charter)
Nevada | 0-11635 | 59-2058100 | ||
(State or Other |
(Commission File |
(I.R.S. Employer Identification No.) |
100 Lakeside Drive, Ste. 100, Horsham, Pennsylvania |
19044 |
(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 10, 2015, PhotoMedex, Inc. (the “Company”) (NasdaqGS and TASE: PHMD) issued a press release announcing its financial results for the three and six months ended June 30, 2015. 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. Specifically, these non-GAAP measures include non-GAAP adjusted net loss and non-GAAP adjusted loss 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 that exclude stock-based compensation expense and other non-cash or non-recurring expenses 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 10, 2015 issued by PhotoMedex, Inc.
SIGNATURE
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 10, 2015 | By: |
/s/ Dolev Rafaeli |
|
Dolev Rafaeli |
||||
Chief Executive Officer |
EXHIBIT INDEX
Exhibit No. |
Description of Exhibit |
99.1 |
Press Release dated August 10, 2015 issued by PhotoMedex, Inc. |
Exhibit 99.1
PhotoMedex Reports Second Quarter Financial Results
HORSHAM, Pa.--(BUSINESS WIRE)--August 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):
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. |
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June 30,
2015 |
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 |
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