10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark one)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number 000-51623

Cynosure, Inc.

(Exact name of registrant as specified in its charter)

Delaware	04-3125110
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5 Carlisle Road Westford, MA	01886
(Address of principal executive offices)	(Zip code)

(978) 256-4200

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    x  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    ¨  Yes    x  No

The number of shares outstanding of each of the registrant’s classes of common stock as of August 2, 2013:

Class	Number of Shares
Class A Common Stock, $0.001 par value		22,304,833

Cynosure, Inc.

Table of Contents

		Page No.
PART I	Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets as of June 30, 2013 and December 31, 2012		1
	Consolidated Statements of Operations for the Three and Six Month Periods Ended June 30, 2013 and 2012		2
	Consolidated Statements of Comprehensive (Loss) Income for the Three and Six Month Periods Ended June 30, 2013 and 2012		3
	Consolidated Statements of Cash Flows for the Six Month Periods Ended June 30, 2013 and 2012		4
	Notes to Consolidated Financial Statements		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		22
Item 4.	Controls and Procedures		22
PART II	Other Information
Item 1.	Legal Proceedings		23
Item 1A.	Risk Factors		25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		40
Item 6.	Exhibits		40
SIGNATURES			42
EXHIBIT INDEX			43
EX-2.1(1) Amended and Restated Agreement and Plan of Merger, dated as of May 15, 2013, among Cynosure, Inc., Commander Acquisition, LLC and Palomar Medical Technologies, Inc. (incorporated by reference to Exhibit 2.1 to Cynosure’s Current Report on Form 8-K filed May 16, 2013)
EX-10.1 Amended and Restated 2005 Stock Incentive Plan
EX-31.1 Section 302 Certification of Principal Executive Officer
EX-31.2 Section 302 Certification of Principal Financial Officer
EX-32.1 Section 906 Certification of Principal Executive Officer
EX-32.2 Section 906 Certification of Principal Financial Officer
EX-101 The following materials from the Cynosure, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Operations for the three and six months ended June 30, 2013 and 2012, (ii) Consolidated Balance Sheets at June 30, 2013 and December 31, 2012, (iii) Consolidated Statements of Comprehensive (Loss) Income for the three and six months ended June 30, 2013 and 2012, (iv) Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and 2012, and (v) Notes to Consolidated Financial Statements.

(1) Schedules to this Exhibit have been omitted in reliance on Item 601(b)(2) of Regulation S-K. Cynosure, Inc. will furnish copies of any such schedules to the SEC upon request.

Cynosure, Inc.

Consolidated Balance Sheets

(in thousands)

	(Unaudited) June 30, 2013			December 31, 2012
Assets
Current assets:
Cash and cash equivalents	$	55,395		$	86,057
Short-term marketable securities		37,259			40,617
Accounts receivable, net		37,816			17,970
Inventories		56,407			32,906
Prepaid expenses and other current assets		5,595			5,149
Deferred income taxes		2,304			783
Total current assets		194,776			183,482
Property and equipment, net		37,864			8,207
Long-term marketable securities		13,486			20,071
Goodwill		106,768			15,811
Intangibles, net		45,534			5,937
Other assets		1,331			1,061
Total assets	$	399,759		$	234,569
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	16,676		$	8,346
Amounts due to related party		1,433			1,896
Accrued expenses		32,960			17,201
Deferred revenue		7,425			6,319
Capital lease obligation		307			322
Total current liabilities		58,801			34,084
Capital lease obligation, net of current portion		297			432
Deferred revenue, net of current portion		1,071			281
Other noncurrent liabilities		6,622			2,265
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value
Authorized — 5,000 shares
Issued — none		—			—
Class A and Class B common stock, $0.001 par value
Authorized — 70,000 shares
Issued — 22,525 Class A shares and no Class B shares at June 30, 2013;
Issued — 16,402 Class A shares and no Class B shares at December 31, 2012		23			17
Additional paid-in capital		334,756			190,979
Retained earnings		2,568			10,283
Accumulated other comprehensive loss		(2,206	)		(1,599	)
Treasury stock, 233 Class A shares, at cost		(2,173	)		(2,173	)
Total stockholders’ equity		332,968			197,507
Total liabilities and stockholders’ equity	$	399,759		$	234,569

The accompanying notes are an integral part of these consolidated financial statements.

1

Cynosure, Inc.

Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Product revenues	$	43,022		$	32,923		$	77,139		$	61,018
Parts, accessories and service revenues		7,069			6,650			13,642			12,723
Total revenues		50,091			39,573			90,781			73,741
Cost of revenues		22,304			16,533			39,307			31,193
Gross profit		27,787			23,040			51,474			42,548
Operating expenses:
Sales and marketing		14,231			11,878			26,834			23,429
Research and development		3,536			3,460			7,317			6,699
Amortization of intangible assets acquired		283			342			497			684
General and administrative		24,376			3,667			29,477			7,185
Total operating expenses		42,426			19,347			64,125			37,997
(Loss) income from operations		(14,639	)		3,693			(12,651	)		4,551
Interest income, net		23			13			55			23
Other expense, net		(46	)		(298	)		(403	)		(89	)
(Loss) income before (benefit) provision for income taxes		(14,662	)		3,408			(12,999	)		4,485
(Benefit) provision for income taxes		(5,708	)		728			(5,284	)		986
Net (loss) income	$	(8,954	)	$	2,680		$	(7,715	)	$	3,499
Basic net (loss) income per share	$	(0.54	)	$	0.21		$	(0.47	)	$	0.28
Diluted net (loss) income per share	$	(0.54	)	$	0.20		$	(0.47	)	$	0.27
Basic weighted-average common shares outstanding		16,636			12,605			16,412			12,591
Diluted weighted-average common shares outstanding		16,636			13,278			16,412			13,141

The accompanying notes are an integral part of these consolidated financial statements.

2

Cynosure, Inc.

Consolidated Statements of Comprehensive (Loss) Income

(Unaudited, in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Net (loss) income	$	(8,954	)	$	2,680		$	(7,715	)	$	3,499
Other comprehensive loss components:
Cumulative translation adjustment		(34	)		(463	)		(628	)		(141	)
Unrealized (loss) gain on marketable securities, net of taxes		(4	)		3			21			12
Total other comprehensive loss		(38	)		(460	)		(607	)		(129	)
Comprehensive (loss) income	$	(8,992	)	$	2,220		$	(8,322	)	$	3,370

The accompanying notes are an integral part of these consolidated financial statements.

3

Cynosure, Inc.

Consolidated Statements of Cash Flows

(Unaudited, in thousands)

	Six Months Ended June 30,
	2013			2012
Operating activities:
Net (loss) income	$	(7,715	)	$	3,499
Reconciliation of net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization		3,256			3,493
Stock-based compensation expense		1,703			1,397
Loss (gain) on disposal of fixed assets		4			(37	)
Deferred income taxes		(5,625	)		—
Net accretion of marketable securities		1,130			589
Changes in operating assets and liabilities:
Accounts receivable		(10,515	)		(1,525	)
Inventories		(435	)		(3,556	)
Net book value of demonstration inventory sold		348			419
Prepaid expenses and other current assets		250			(466	)
Accounts payable		1,140			1,010
Due to related party		(463	)		(485	)
Tax benefit from stock option exercises		(1	)		(25	)
Accrued expenses		7,551			127
Deferred revenue		(1,037	)		2,870
Other noncurrent liabilities		(109	)		—
Net cash (used in) provided by operating activities		(10,518	)		7,310
Investing activities:
Purchases of property and equipment		(1,668	)		(1,024	)
Proceeds from the sales and maturities of marketable securities		56,880			25,262
Purchases of marketable securities		(10,961	)		(30,725	)
Cash paid for acquisition, net of cash received		(64,978	)		—
Decrease in other noncurrent assets		42			140
Net cash used in investing activities		(20,685	)		(6,347	)
Financing activities:
Excess tax benefit on options exercised		1			25
Proceeds from stock option exercises		1,226			523
Acquisition-related equity issuance costs		(507	)		—
Payments on capital lease obligation		(158	)		(150	)
Net cash provided by financing activities		562			398
Effect of exchange rate changes on cash and cash equivalents		(21	)		59
Net (decrease) increase in cash and cash equivalents		(30,662	)		1,420
Cash and cash equivalents, beginning of the period		86,057			35,694
Cash and cash equivalents, end of the period	$	55,395		$	37,114
Supplemental cash flow information
Cash paid for interest	$	14		$	24
Cash paid for income taxes	$	490		$	979
Supplemental noncash investing and financing activities
Transfer of demonstration equipment from inventory to fixed assets	$	2,452		$	2,227
Assets acquired under capital lease	$	24		$	276
Shares of common stock issued in connection with the acquisition of Palomar	$	141,353		$	—

The accompanying notes are an integral part of these consolidated financial statements.

4

Cynosure, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Note 1 — Interim Consolidated Financial Statements

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim information and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. It is recommended that these financial statements be read in conjunction with the consolidated financial statements and related notes that appear in the Annual Report on Form 10-K of Cynosure, Inc. (Cynosure) for the year ended December 31, 2012, as amended. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position, results of operations, and cash flows as of the dates and for the periods presented have been included. The results of operations for the six months ended June 30, 2013 may not be indicative of the results that may be expected for the year ending December 31, 2013, or any other period.

Note 2 — Stock-Based Compensation

Cynosure recorded stock-based compensation expense of $0.9 and $0.7 million for the three months ended June 30, 2013 and 2012, respectively. Cynosure recorded stock-based compensation expense of $1.7 million and $1.4 million for the six months ended June 30, 2013 and 2012, respectively. Cynosure capitalized $19,000 and $15,000 of stock-based compensation expense as part of inventory during the six months ended June 30, 2013 and 2012, respectively.

Total stock-based compensation expense was recorded to cost of revenues and operating expenses based upon the functional responsibilities of the individual holding the respective options, as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
	(In thousands)
Cost of revenues	$	41	$	30	$	77	$	59
Sales and marketing		261		214		501		422
Research and development		150		129		291		249
General and administrative		412		359		834		667
Total stock-based compensation expense	$	864	$	732	$	1,703	$	1,397

Cash received from option exercises was $1.2 million and $0.5 million during the six months ended June 30, 2013 and 2012, respectively.

Cynosure granted 327,700 and 332,000 stock options during the six months ended June 30, 2013 and 2012, respectively. Cynosure has elected to use the Black-Scholes model to determine the weighted average fair value of options. The weighted average fair value of the options granted during the six months ended June 30, 2013 and 2012 was $13.15 and $8.66, respectively, using the following assumptions:

	Six Months Ended June 30,
	2013			2012
Risk-free interest rate		0.79% - 1.48	%		0.77% - 0.86	%
Expected dividend yield		—			—
Expected term		4.8 years			5.8 years
Expected volatility		55% - 56	%		57	%
Estimated forfeiture rate		5	%		5	%

Option-pricing models require the input of various subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. Cynosure’s estimated expected stock price volatility is based on its own historical volatility. Cynosure’s expected term of options granted during the six months ended June 30, 2013 represents the weighted average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and Cynosure’s historical exercise patterns. Cynosure’s expected term of options granted during the six months ended June 30, 2012 was derived from the simplified method described in ASC 718-10-S99. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield of zero is based on the fact that Cynosure has never paid cash dividends and has no present intention to pay cash dividends.

5

Note 3 — Inventories

Cynosure states all inventories at the lower of cost or market, determined on a first-in, first-out method. Inventory includes material, labor and overhead and consists of the following:

	June 30, 2013		December 31, 2012
	(in thousands)
Raw materials	$	15,310	$	9,076
Work in process		4,666		1,134
Finished goods		36,431		22,696
	$	56,407	$	32,906

Note 4 — Fair Value

U.S. GAAP establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable markets data for substantially the full term of the assets or liabilities.

• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table represents Cynosure’s fair value hierarchy for its financial assets (cash equivalents and marketable securities) measured at fair value as of June 30, 2013 (in thousands):

	Level 1		Level 2		Level 3		Total
Money market funds (1)	$	675	$	—	$	—	$	675
State and municipal bonds		—		13,630		—		13,630
Treasuries and government agencies		—		24,043		—		24,043
Corporate obligations and commercial paper		—		13,015		—		13,015
Equity securities		57		—		—		57
Total	$	732	$	50,688	$	—	$	51,420

(1) Included in cash and cash equivalents at June 30, 2013.

During the six months ended June 30, 2013, there were no significant transfers in and out of Level 1 and Level 2. Cynosure did not have any Level 3 financial assets at June 30, 2013 or December 31, 2012.

Note 5 — Short and Long-Term Marketable Securities

Cynosure’s available-for-sale securities at June 30, 2013 consist of approximately $50.7 million of investments in debt securities consisting of state and municipal bonds, treasuries and government agencies, corporate obligations and commercial paper and approximately $57,000 in equity securities. All investments in available-for-sale securities are recorded at fair market value, with any unrealized gains and losses reported as a separate component of accumulated other comprehensive loss. As of June 30, 2013, Cynosure’s marketable securities consist of the following (in thousands):

	Market Value		Amortized Cost		Unrealized Gains		Unrealized Losses
Available-for-sale Securities:
Short-term marketable securities:
State and municipal bonds	$	12,177	$	12,174	$	4	$	(1	)
Treasuries and government agencies		14,022		14,014		8		—
Corporate obligations and commercial paper		11,003		11,004		2		(3	)

6

	Market Value		Amortized Cost		Unrealized Gains		Unrealized Losses
Equity securities		57		9		48		—
Total short-term marketable securities	$	37,259	$	37,201	$	62	$	(4	)
Long-term marketable securities:
State and municipal bonds	$	1,453	$	1,452	$	1	$	—
Treasuries and government agencies		10,021		10,021		2		(2	)
Corporate obligations and commercial paper		2,012		2,022		—		(10	)
Total long-term marketable securities	$	13,486	$	13,495	$	3	$	(12	)
Total available-for-sale securities	$	50,745	$	50,696	$	65	$	(16	)
Total marketable securities	$	50,745

As of December 31, 2012, Cynosure’s marketable securities consist of the following (in thousands):

	Market Value		Amortized Cost		Unrealized Gains		Unrealized Losses
Available-for-Sale Securities:
Cash equivalents:
State and municipal bonds	$	4,417	$	4,417	$	—	$	—
Government agencies		1,000		1,000		—		—
Total cash equivalents	$	5,417	$	5,417	$	—	$	—
Short-term marketable securities:
State and municipal bonds	$	33,250	$	33,251	$	6	$	(7	)
Treasuries and government agencies		7,346		7,345		1		—
Equity securities		21		6		15		—
Total short-term marketable securities	$	40,617	$	40,602	$	22	$	(7	)
Long-term marketable securities:
State and municipal bonds	$	18,046	$	18,052	$	2	$	(8	)
Treasuries and government agencies		2,025		2,021		4		—
Total long-term marketable securities	$	20,071	$	20,073	$	6	$	(8	)
Total available-for-sale securities	$	66,105	$	66,092	$	28	$	(15	)
Total marketable securities	$	60,688

As of June 30, 2013, Cynosure’s available-for-sale debt securities mature as follows (in thousands):

	Total		Maturities
			Less Than One Year		One to Five Years		More than five years
State and municipal bonds	$	13,630	$	12,177	$	1,453	$	—
Treasuries and government agencies		24,043		14,022		10,021		—
Corporate obligations and commercial paper		13,015		11,003		2,012		—
Total available-for-sale debt securities	$	50,688	$	37,202	$	13,486	$	—

Note 6 — Acquisition

Palomar Medical Technologies, Inc.

On June 24, 2013, Cynosure acquired Palomar Medical Technologies, Inc. (Palomar). The acquisition complements and broadens Cynosure’s product lineup with the addition of Palomar’s intense pulsed light, fractional laser and diode aesthetic systems, doubles the number of patents in Cynosure’s portfolio and enhances Cynosure’s global distribution network. As a result of the transaction, former Palomar stockholders, in the aggregate, received for their shares of Palomar common stock $145.8 million in cash and 6.0 million shares of Cynosure Class A common stock. The total consideration is valued at $287.2 million, based upon the closing price of Cynosure Class A common stock on June 24, 2013. This acquisition was considered a business acquisition for accounting purposes.

7

Cynosure has retained an independent valuation firm to assess the fair value of the identifiable intangible assets and certain tangible assets acquired and is also currently assessing the fair value of other assets acquired and liabilities assumed and plans to file pro forma financial information with the SEC within the applicable time period. Cynosure has preliminarily allocated the purchase price to the net tangible and intangible assets based on their estimated fair values as of June 24, 2013. As such, the fair value of the assets acquired and liabilities assumed, including intangible assets, presented in the table below are provisional and will be finalized in a later period once the fair value procedures are completed.

The following table summarizes the preliminary purchase price allocation, net of $117.9 million in cash, cash equivalents and marketable securities acquired (in thousands):

Purchase price:
Cash and stock paid	$	287,204
Cash, cash equivalents and marketable securities acquired		(117,929	)
Purchase price, net	$	169,275
Assets (liabilities) acquired:
Accounts receivable		9,607
Inventory		25,881
Prepaids and other assets		722
Property and equipment		28,445
Other assets		332
Intangible assets		40,320
Goodwill		91,037
Accounts payable		(7,269	)
Accrued expenses		(11,339	)
Deferred revenue		(3,010	)
Deferred tax liability		(5,451	)
Total	$	169,275

Revenue and net loss related to Palomar’s operations was $5.1 million and $(18.2) million, respectively, for the five business days following the June 24, 2013 acquisition date, and is included in Cynosure’s consolidated statements of operations for the three months ended June 30, 2013.

The following unaudited pro forma condensed consolidated operating results for the three and six months ended June 30, 2013 and 2012 summarize the combined results of operations for Cynosure and Palomar. The unaudited pro forma condensed consolidated operating results includes the business combination accounting effects as if the acquisition had been completed as of January 1, 2012 (for both the 2013 and 2012 period results) after giving effect to certain adjustments. These pro forma financial statements are for informational purposes only and are not necessarily indicative of the operating results that would have occurred if the transaction had occurred on such date. No effect has been given for synergies, if any, that may be realized through the acquisition.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(In thousands)
Revenue (unaudited)	$	69,035		$	58,444		$	132,026		$	110,738
Pre-tax loss (unaudited)	$	(5,254	)	$	(1,017	)	$	(3,725	)	$	(36,034	)

The unaudited consolidated pro forma financial information above includes significant, non-recurring adjustments made to account for certain costs which would have been incurred if the acquisition had been completed on January 1, 2012, including $18.5 million in change of control severance payments and $4.6 million associated with the step up in fair value of finished goods inventory acquired through the acquisition.

During the three and six months ended June 30, 2013, Cynosure incurred $20.4 million and $21.5 million, respectively, in costs associated with the acquisition of Palomar. In connection with the acquisition of Palomar, certain terminated Palomar employees were, and certain continuing Palomar employees are, entitled to severance benefits in specified circumstances associated with the change of control of Palomar. In connection with the acquisition and these change of control severance arrangements, Cynosure incurred $18.5 million of compensation expense during the three months ended June 30, 2013, and Cynosure expects to incur an additional $1.5 million of compensation expense during each of the next four quarters. Costs associated with the acquisition of Palomar, including the aforementioned $18.5 million, are primarily recorded in the general and administrative expenses within the consolidated statement of operations.

8

During the three months ended June 30, 2013, Cynosure incurred $0.5 million in equity issuance costs associated with the acquisition of Palomar. These amounts were recorded to additional paid-in capital.

Note 7 — Goodwill

Changes to goodwill during the six months ended June 30, 2013 were as follows (in thousands):

	Total
Balance — December 31, 2012	$	15,811
Palomar acquisition		91,037
Translation adjustment		(80	)
Balance — June 30, 2013	$	106,768

Note 8 — Other Intangible Assets

Other intangible assets consist of the following at June 30, 2013 and December 31, 2012 (in thousands):

	Developed Technology & Patents			Business Licenses			Customer Relationships			Trade Names			Other			Total
June 30, 2013
Cost	$	21,620		$	384		$	14,913		$	13,010		$	48		$	49,975
Translation adjustment		—			29			18			—			3			50
Accumulated amortization		(1,540	)		(208	)		(2,368	)		(369	)		(6	)		(4,491	)
Balance, June 30, 2013	$	20,080		$	205		$	12,563		$	12,641		$	45		$	45,534
December 31, 2012
Cost	$	3,250		$	384		$	3,323		$	2,650		$	48		$	9,655
Translation adjustment		—			38			24			—			3			65
Accumulated amortization		(1,292	)		(195	)		(2,019	)		(272	)		(5	)		(3,783	)
Balance, December 31, 2012	$	1,958		$	227		$	1,328		$	2,378		$	46		$	5,937

Cynosure acquired $40.3 million of identifiable intangible assets in the Palomar acquisition, of which $18.4 million was assigned to technology patents, $11.6 million was assigned to customer relationships and $10.3 million was assigned to trademarks in the six months ended June 30, 2013. These identifiable intangible assets are being amortized on an accelerated basis up to a 20-year period and are included in the table above.

Cynosure is currently evaluating the fair value of assets acquired and liabilities assumed from the Palomar acquisition, including identifiable intangible assets and their related amortization periods. As such, the $40.3 million in intangible assets presented in the table above are provisional and will be finalized in a later period once the fair value procedures are completed.

Amortization expense related to developed technology and patents is classified as a component of cost of revenues. Amortization expense related to customer relationships and trade names is classified as a component of amortization of intangible assets acquired. Amortization expense related to business licenses and other is classified as a component of general and administrative expenses. Cynosure recognized $0.1 million in amortization expense related to the identifiable intangible assets from the Palomar acquisition, all of which is classified as a component of amortization of intangible assets acquired for the three and six months ended June 30, 2013.

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Amortization expense for the three months ended June 30, 2013 and 2012 was $0.4 million and $0.5 million, respectively. Amortization expense for the six months ended June 30, 2013 and 2012 was $0.7 million and $0.9 million, respectively. Cynosure has approximately $41,000 of indefinite-life intangible assets that are included in other intangible assets in the table above. As of June 30, 2013, amortization expense on existing intangible assets for the next five years and beyond is as follows (in thousands):

Remainder of 2013	$	2,725
2014		5,117
2015		4,768
2016		4,134
2017		3,816
2018 and thereafter		24,933
Total	$	45,493

The table above includes $0.9 million for the remainder of 2013, $1.6 million for 2014, $1.6 million for 2015, $1.6 million for 2016, $1.7 million for 2017 and $17.8 million for 2018 and thereafter, to be recognized within operating expenses related to intangible assets acquired through the Palomar, Eleme Medical and ConBio acquisitions, with the remainder recognized within cost of revenues. As such, the amortization related to the estimated $40.3 million of identifiable intangible assets from the Palomar acquisition is included in the table above.

Note 9 — Warranty Costs

Cynosure typically provides a one-year parts and labor warranty on end-user sales of laser systems. Distributor sales generally include a warranty on parts only. Estimated future costs for initial product warranties are provided at the time of revenue recognition. The following table provides the detail of the change in Cynosure’s product warranty accrual during the six months ended June 30, 2013, which is a component of accrued expenses in the consolidated balance sheets:

	Total
	(in thousands)
Warranty accrual, beginning of period	$	3,415
Warranty provision related to new sales		3,857
Warranty provision assumed from acquisition		1,225
Costs incurred		(2,643	)
Warranty accrual, end of period	$	5,854

Cynosure is currently evaluating the fair value of assets acquired and liabilities assumed from the Palomar acquisition, including its warranty accrual. As a result, the warranty accrual related to the Palomar acquisition above is preliminary in nature.

Note 10 — Segment Information

In accordance with ASC 280, Segment Reporting Topic, operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. Cynosure’s chief decision-maker, as defined under ASC 280, is a combination of the Chief Executive Officer and the Chief Financial Officer. Cynosure views its operations and manages its business as one segment, aesthetic treatment products and services.

The following table represents total revenue by geographic destination:

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
	(in thousands)
United States	$	22,693	$	19,034	$	40,434	$	34,194
Europe		9,005		7,153		16,773		14,172
Asia / Pacific		12,793		11,016		23,729		20,292
Other		5,600		2,370		9,845		5,083
Total	$	50,091	$	39,573	$	90,781	$	73,741

Total assets by geographic area are as follows:

	June 30, 2013			December 31, 2012
	(in thousands)
United States	$	376,365		$	210,596
Europe		17,955			15,623
Asia / Pacific		16,240			11,038
Eliminations		(10,801	)		(2,688	)
Total	$	399,759		$	234,569

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Long-lived assets by geographic area are as follows:

	June 30, 2013		December 31, 2012
	(in thousands)
United States	$	36,072	$	7,266
Europe		2,010		1,570
Asia / Pacific		1,113		432
Total	$	39,195	$	9,268

No individual country within Europe or Asia/Pacific represented greater than 10% of total revenue, total assets or total long lived assets for any period presented.

The increase in the amount of total assets is due primarily to the Palomar acquisition. The increase in the amount of long-lived assets is due to the tangible net assets acquired from the Palomar acquisition. Cynosure is currently evaluating the fair value of assets acquired and liabilities assumed.

Note 11 — Net (Loss) Income Per Common Share

Basic net (loss) income per share is determined by dividing net (loss) income by the weighted average common shares outstanding during the period. Diluted net (loss) income per share is determined by dividing net (loss) income by the diluted weighted average shares outstanding during the period. Diluted weighted average shares reflect the dilutive effect, if any, of common stock options based on the treasury stock method. For the three and six months ended June 30, 2013, there are no outstanding Class B shares, and Cynosure may not issue Class B shares in the future. For the three and six months ended June 30, 2012, common shares outstanding include both Class A and Class B as each share participated equally in earnings. Class B shares were convertible at any time into shares of Class A on a one-for-one basis at the option of the holder.

A reconciliation of basic and diluted shares is as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2013			2012		2013			2012
Net (loss) income	$	(8,954	)	$	2,680	$	(7,715	)	$	3,499
Basic weighted average common shares outstanding		16,636			12,605		16,412			12,591
Weighted average common equivalent shares		—			673		—			550
Diluted weighted average common shares outstanding		16,636			13,278		16,412			13,141
Basic net (loss) income per share	$	(0.54	)	$	0.21	$	(0.47	)	$	0.28
Diluted net (loss) income per share	$	(0.54	)	$	0.20	$	(0.47	)	$	0.27

For the three and six months ended June 30, 2013, the number of basic and diluted weighted average shares outstanding was the same, as any increase in the number of shares of common stock equivalents for the three and six months ended June 30, 2013 would be antidilutive based on the net loss for the period. For the three and six months ended June 30, 2013, respectively, outstanding options to purchase 1.1 million shares were excluded from the computation of diluted earnings per share because their inclusion would have been antidilutive.

For the three and six months ended June 30, 2012, respectively, options to purchase approximately 0.6 million and 1.3 million shares of Cynosure’s Class A common stock were excluded from the calculation of diluted weighted average common shares outstanding as their effect was antidilutive.

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Note 12 — Accumulated Other Comprehensive Loss

Changes to accumulated other comprehensive loss during the six months ended June 30, 2013 were as follows (in thousands):

	Unrealized Gain on Marketable Securities, net of taxes		Translation Adjustment			Accumulated Other Comprehensive Loss
Balance — December 31, 2012	$	13	$	(1,612	)	$	(1,599	)
Current period other comprehensive loss		21		(628	)		(607	)
Balance — June 30, 2013	$	34	$	(2,240	)	$	(2,206	)

Note 13 — Related Party Transactions

As of June 30, 2013, El. En. S.p.A. (El.En.) owned 9% of Cynosure’s outstanding common stock. Purchases of inventory from El.En. during the three months ended June 30, 2013 and 2012 were approximately $1.3 million and $1.0 million, respectively. Purchases of inventory from El.En. during the six months ended June 30, 2013 and 2012 were approximately $2.9 million and $2.1 million, respectively. As of June 30, 2013 and December 31, 2012, amounts due to related party for these purchases were approximately $1.4 million and $1.9 million, respectively. There were no amounts due from El.En. as of June 30, 2013 or December 31, 2012.

Note 14 — Income Taxes

During the three months ended June 30, 2013, Cynosure recorded an income tax benefit of $5.7 million, representing an effective tax rate of 39%. Included in this tax benefit is a non-recurring benefit of $5.8 million for the release of a portion of the domestic valuation allowance due to taxable temporary differences available as a source of income to realize the benefit of certain pre-existing Cynosure deferred tax assets as a result of the Palomar business combination.

At March 31, 2013, Cynosure had gross tax-effected unrecognized tax benefits of $0.4 million, of which $0.2 million, if recognized, would favorably impact the effective tax rate. During the three months ended June 30, 2013, unrecognized tax benefits, inclusive of accrued interest, increased by $3.1 million as a result of the acquisition of Palomar, of which $1.1 million, if recognized, would favorably impact the effective tax rate. The $3.1 million increase in unrecognized tax benefits was recorded in purchase accounting against goodwill in the second quarter upon the acquisition of Palomar and includes $0.3 million in interest and penalties. Cynosure classifies interest and penalties related to income taxes as a component of its provision for income taxes.

Cynosure files income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. Cynosure is no longer subject to U.S. federal income tax examinations by tax authorities for years before 2010. With few exceptions, Cynosure is no longer subject to U.S. state tax examinations for years before 2008. Additionally, certain non-U.S. jurisdictions are no longer subject to income tax examinations by tax authorities for years before 2008. Palomar’s pre-acquisition income tax filings for the years 2006-2012 remain open to examination by the taxation jurisdictions in which they were filed.

Note 15 — Recent Accounting Pronouncements

In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. Under this ASU, an entity is required to provide information about the amounts reclassified out of Accumulated Other Comprehensive Income (AOCI) by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in the financial statements. ASU 2013-02 is effective for interim and annual periods beginning after December 15, 2012. The adoption of this guidance did not materially impact Cynosure’s financial statements or disclosures.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this Quarterly Report regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about:

• our ability to identify and penetrate new markets for our products and technology;

• our strategy of growing through acquisitions;

• our ability to innovate, develop and commercialize new products;

• our ability to obtain and maintain regulatory clearances;

• our sales and marketing capabilities and strategy in the United States and internationally;

• our ability to resolve reliability issues in our products and meet warranty and service obligations to our customers;

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• our intellectual property portfolio; and

• our estimates regarding expenses, future revenues, capital requirements and needs for additional financing.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors below under the heading “Risk Factors” in Part II, Item 1A, and in our other public filings with the Securities and Exchange Commission that could cause actual results or events to differ materially from the forward-looking statements that we make.

You should read this Quarterly Report and the documents that we have filed as exhibits to the Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. It is routine for internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations are made as of the date of this Quarterly Report on Form 10-Q and may change prior to the end of each quarter or the year. While we may elect to update forward-looking statements at some point in the future, we do not undertake any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

The following discussion should be read in conjunction with, and is qualified in its entirety by, the consolidated financial statements and notes thereto included in Item 1 of this Quarterly Report and the consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 8, 2013, as amended on Form 10-K/A filed with the SEC on April 29, 2013. Historical results and percentage relationships among any amounts in the financial statements are not necessarily indicative of trends in operating results for any future periods.

Company Overview

We develop and market aesthetic treatment systems that are used by physicians and other practitioners to perform non-invasive and minimally invasive procedures to remove hair, treat vascular and benign pigmented lesions, treat multi-colored tattoos, rejuvenate the skin, liquefy and remove unwanted fat through laser lipolysis, reduce cellulite and treat onychomycosis. We are also developing in conjunction with our development agreement with Unilever a laser treatment system for the home use market.

Our systems incorporate a broad range of laser and other light-based energy sources, including Alexandrite, pulse dye, Nd:Yag and diode lasers, as well as intense pulsed light. We believe that we are one of only a few companies that currently offer aesthetic treatment systems utilizing Alexandrite and pulse dye lasers, which are particularly well suited for some applications and skin types. We offer single energy source systems as well as workstations that incorporate two or more different types of lasers or pulsed light technologies. We offer multiple technologies and system alternatives at a variety of price points depending primarily on the number and type of energy sources included in the system. Our products are designed to be easily upgradeable to add additional energy sources and handpieces, which provides our customers with technological flexibility as they expand their practices.

We focus our development and marketing efforts on offering leading, or flagship, products for the following high volume applications:

• our Elite product line for hair removal and treatment of facial and leg veins and pigmentations;

• our Smartlipo product line for LaserBodySculpting^SM for the removal of unwanted fat;

• our Cellulaze product line for the treatment of cellulite;

• our SmoothShapes XV product line for the temporary reduction in the appearance of cellulite;

• our Affirm/SmartSkin product line for anti-aging applications, including treatments for wrinkles, skin texture, skin discoloration and skin tightening;

• our Cynergy product line for the treatment of vascular lesions;

• our Accolade, MedLite C6 and RevLite product lines for the removal of benign pigmented lesions, as well as multi-colored tattoos; and

• our PicoSure product line for the treatment of tattoos and benign pigmented lesions.

On June 24, 2013, we acquired Palomar. The acquisition complements and broadens our product lineup with the addition of Palomar’s intense pulsed light, fractional laser and diode laser aesthetic systems, doubles the number of patents in our portfolio and enhances our global distribution network. As a result of the transaction, former Palomar stockholders, in the aggregate, received for their shares of Palomar common stock $145.8 million in cash and 6.0 million shares of our Class A common stock. The total consideration is valued at $287.2 million, based upon the closing price of our Class A common stock on June 24, 2013. We have stopped manufacturing and distributing the Pavlovia skin renewing laser previously offered by Palomar. The main aesthetic laser products which have been added to our portfolio as a result of the acquisition include:

• the Icon Aesthetic System for fractional skin rejuvenation and wrinkle reduction;

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• the StarLux laser and pulsed light system; and

• the Vectus diode laser for high volume hair removal.

A key element of our business strategy is to launch innovative new products and technologies into high-growth aesthetic applications. Our research and development team builds on our existing broad range of laser and light-based technologies to develop new solutions and products to target unmet needs in significant aesthetic treatment markets. Innovation continues to be a strong contributor to our strength. For the six months ended June 30, 2013, 46% of our product revenues were attributable to the sale of systems that we have introduced to the market since the beginning of 2010, excluding product revenue attributable to Palomar during the second quarter of 2013. As stated in our second-quarter 2013 financial results conference call on July 31, 2013, during the integration process we have identified reliability issues with Palomar’s Vectus laser, primarily involving the large tip delivery system. We are currently reviewing shipments to new customers while we address these issues. Demand for the Vectus laser remains high and we are working to resolve these issues and support customers in the coming quarters.

In March 2013, we commenced commercialization of our PicoSure system, our picosecond laser technology platform for the treatment of tattoos and benign pigmented lesions. PicoSure is the first commercially available picosecond Alexandrite aesthetic laser platform. Picosecond lasers deliver pulses that are measured in trillionths of a second, in contrast with nanosecond technology, such as our MedLite and RevLite products, which deliver pulses in billionths of a second. FDA clearance to market PicoSure was received in November 2012.

In July 2012, we received FDA clearance in the United States to market an at home device for the treatment of wrinkles that we are developing in partnership with Unilever. Unilever has advised us that it expects to launch the product commercially near the beginning of 2014.

We generate revenues primarily from sales of our products and parts and accessories and from services, including product warranty revenues. During the six months ended June 30, 2013, we derived approximately 85% of our revenues from sales of our products and 15% of our revenues from parts, accessories and service revenues. During the six months ended June 30, 2012, we derived approximately 83% of our revenues from sales of products and 17% of our revenues from parts, accessories and service revenues. Generally, we recognize revenues from the sales of our products upon delivery to our customers, revenues from service contracts and extended product warranties ratably over the coverage period and revenues from service in the period in which the service occurs.

We sell our products through a direct sales force in North America, France, Spain, the United Kingdom, Germany, Australia, Korea, China, Japan and Mexico, and use distributors to sell our products in other countries where we do not have a direct presence. During the six months ended June 30, 2013 and 2012, we derived 53% and 52% of our revenues, respectively, from sales outside North America. As of June 30, 2013, including expansion from the acquisition of Palomar, we had 77 sales employees covering North America and 61 sales employees in France, Spain, the United Kingdom, Germany, Korea, China, Japan and Australia. We utilize a global distribution network covering approximately 120 countries.

The following table provides revenue data by geographical region for the six months ended June 30, 2013 and 2012:

	Percentage of Revenues
	Six Months Ended June 30,
Region	2013			2012
North America		47	%		48	%
Europe		18			19
Asia/Pacific		26			28
Other		9			5
Total		100	%		100	%

See Note 10 to our consolidated financial statements included in this Quarterly Report for revenues and asset data by geographic region.

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Results of Operations

The following table contains selected statement of operations information, which serves as the basis of the discussion of our results of operations for the three months ended June 30, 2013 and 2012, respectively (in thousands, except for percentages):

	Three Months Ended June 30,												$ Change			% Change
	2013						2012
	Amount			As a % of Total Revenues			Amount			As a % of Total Revenues
Product revenues	$	43,022			86	%	$	32,923			83	%	$	10,099			31	%
Parts, accessories and service revenues		7,069			14			6,650			17			419			6
Total revenues		50,091			100			39,573			100			10,518			27
Cost of revenues		22,304			45			16,533			42			5,771			35
Gross profit		27,787			55			23,040			58			4,747			21
Operating expenses
Sales and marketing		14,231			28			11,878			30			2,353			20
Research and development		3,536			7			3,460			9			76			2
Amortization of intangible assets acquired		283			—			342			1			(59	)		(17	)
General and administrative		24,376			49			3,667			9			20,709			565
Total operating expenses		42,426			84			19,347			49			23,079			119
(Loss) income from operations		(14,639	)		(29	)		3,693			9			(18,332	)		(496	)
Interest income, net		23			—			13			—			10			77
Other expense, net		(46	)		—			(298	)		(1	)		252			85
(Loss) income before (benefit) provision for income taxes		(14,662	)		(29	)		3,408			9			(18,070	)		(530	)
(Benefit) provision for income taxes		(5,708	)		(11	)		728			2			(6,436	)		(884	)
Net (loss) income	$	(8,954	)		(18	)%	$	2,680			7	%	$	(11,634	)		(434	)%

Revenues

	Three Months Ended June 30,				$ Change		% Change
	2013		2012
Product sales in North America (in thousands)	$	20,738	$	16,432	$	4,306		26	%
Product sales outside North America (in thousands)		22,284		16,491		5,793		35
Global parts, accessories and service sales (in thousands)		7,069		6,650		419		6
Total Revenues	$	50,091	$	39,573	$	10,518		27	%

Revenues in the three months ended June 30, 2013 increased from the three months ended June 30, 2012 by $10.5 million, or 27%. The increase was attributable to a number of factors:

• Revenues from the sale of products in North America increased by approximately $4.3 million, or 26%, from the 2012 period primarily due to an increase in average selling prices attributable to the introduction of new products, including PicoSure and Elite Plus. Our newly acquired Palomar business contributed $2.2 million in North America product revenues for the five business days following the June 24, 2013 acquisition date.

• Revenues from the sale of products outside of North America increased by approximately $5.8 million, or 35%, from the 2012 period primarily due to an increase in the number of units sold by our European subsidiaries and distributors, including the introduction of Apogee Plus. Our newly acquired Palomar business contributed $2.7 million in product revenues outside of North America for the five business days following the June 24, 2013 acquisition date.

• Revenues from the sale of parts, accessories and services increased by approximately $0.4 million, or 6%, from the 2012 period primarily due to an increase in revenues generated from performing service on laser systems.

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Cost of Revenues

	Three Months Ended June 30,						$ Change		% Change
	2013			2012
Cost of revenues (in thousands)	$	22,304		$	16,533		$	5,771		35	%
Cost of revenues (as a percentage of total revenues)		45	%		42	%

Total cost of revenues increased $5.8 million, or 35%, to $22.3 million for three months ended June 30, 2013, as compared to $16.5 million for the three months ended June 30, 2012. The increase was primarily associated with our 27% increase in total revenues. Total cost of revenues increased as a percentage of total revenues, to 45% for the three months ended June 30, 2013, from 42% for the three months ended June 30, 2012, primarily due to a purchase accounting charge of $1.4 million associated with the step up in fair value of finished goods inventory acquired through our acquisition of Palomar and sold during the period. We expect our gross margin percentage to return to approximately 58% by the fourth quarter of 2013 as the remaining finished goods inventory from the acquisition is sold.

Sales and Marketing

	Three Months Ended June 30,						$ Change		% Change
	2013			2012
Sales and marketing (in thousands)	$	14,231		$	11,878		$	2,353		20	%
Sales and marketing (as a percentage of total revenues)		28	%		30	%

Sales and marketing expenses increased $2.4 million, or 20%, for the three months ended June 30, 2013 as compared to the three months ended June 30, 2012. The increase was primarily due to an increase in sales and marketing costs of $0.9 million from an increased number of workshops, trade shows and other promotional efforts, including those related to the launch of PicoSure. Personnel and travel expenses increased $0.6 million, primarily as a result of efforts related to the launch of PicoSure, and professional services expenses increased $0.1 million. Palomar’s sales and marketing expenses were $0.8 million for the five business days following the June 24, 2013 acquisition date. Sales and marketing expenses for the three months ended June 30, 2013 decreased as a percentage of total revenues to 28%, due to favorable product mix and continued operating leverage.

Research and Development

	Three Months Ended June 30,						$ Change		% Change
	2013			2012
Research and development (in thousands)	$	3,536		$	3,460		$	76		2	%
Research and development (as a percentage of total revenues)		7	%		9	%

Research and development expenses increased $0.1 million, or 2% for the three months ended June 30, 2013 as compared to the three months ended June 30, 2012. This increase was due to Palomar’s research and development expenses of $0.1 million for the five business days following the June 24, 2013 acquisition date. Research and development expenses for the three months ended June 30, 2013 decreased as a percentage of total revenues to 7%, primarily due to the 27% increase in total revenues and continued operating leverage.

Amortization of Intangible Assets Acquired

	Three Months Ended June 30,						$ Change			% Change
	2013			2012
Amortization of intangible assets acquired (in thousands)	$	283		$	342		$	(59	)		(17	)%
Amortization of intangible assets acquired (as a percentage of total revenues)		—	%		1	%

For the three month period ending June 30, 2013, we recognized amortization expense of $0.3 million in our operating expenses relating to the identifiable intangible assets acquired through our 2013 acquisition of Palomar and certain intangible assets acquired through our 2011 acquisitions of Eleme Medical and ConBio’s aesthetic businesses.

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General and Administrative

	Three Months Ended June 30,						$ Change		% Change
	2013			2012
General and administrative (in thousands)	$	24,376		$	3,667		$	20,709		565	%
General and administrative (as a percentage of total revenues)		49	%		9	%

General and administrative expenses increased $20.7 million, or 565%, for the three months ended June 30, 2013 as compared to the three months ended June 30, 2012. The increase is primarily due to $20.4 million in costs associated with the acquisition of Palomar during the three months ended June 30, 2013. In connection with our acquisition of Palomar, certain terminated Palomar employees were, and certain continuing Palomar employees are, entitled to severance benefits in specified circumstances associated with the change of control of Palomar. In connection with the acquisition and these change of control severance arrangements, we incurred $18.5 million of compensation expense during the three months ended June 30, 2013, and we expect to incur an additional $1.5 million of compensation expense during each of the next four quarters.

Interest Income, net

	Three Months Ended June 30,				$ Change		% Change
	2013		2012
Interest income, net (in thousands)	$	23	$	13	$	10		77	%

The increase in interest income, net was primarily due to higher interest rates on cash invested in interest-bearing securities, as well as lower capital lease interest payments during the three months ended June 30, 2013 as compared to the three months ended June 30, 2012.

Other Expense, net

	Three Months Ended June 30,				$ Change		% Change
	2013		2012
Other expense, net (in thousands)	$	46	$	298	$	252		85	%

The change in other expense, net is primarily a result of less net foreign currency remeasurement losses in the second quarter of 2013, as compared to the second quarter of 2012.

(Benefit) Provision for Income Taxes

	Three Months Ended June 30,						$ Change			% Change
	2013			2012
(Benefit) provision for income taxes (in thousands)	$	(5,708	)	$	728		$	(6,436	)		(884	)%
(Benefit) provision as a percentage of income before (benefit) provision for income taxes		39	%		21	%

The (benefit) provision for income taxes results from a combination of the activities of our domestic and foreign subsidiaries. During the three months ended June 30, 2013, we recorded an income tax benefit of $5.7 million, representing an effective tax rate of 39%. Included in this tax benefit is a non-recurring benefit of $5.8 million for the release of a portion of the domestic valuation allowance due to taxable temporary differences available as a source of income to realize the benefit of certain pre-existing Cynosure deferred tax assets as a result of the Palomar business combination. Excluding this item, the income tax provision for the three months ended June 30, 2013 would have been $0.1 million, which is primarily attributable to the current tax provision on the earnings of our foreign operations.

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SIX MONTHS ENDED JUNE 30, 2013 AND 2012

The following table contains selected statement of operations information, which serves as the basis of the discussion of our results of operations for the six months ended June 30, 2013 and 2012, respectively (in thousands, except for percentages):

	Six Months Ended June 30,
	2013						2012
	Amount			As a % of Total Revenues			Amount			As a % of Total Revenues			$ Change			% Change
Product revenues	$	77,139			85	%	$	61,018			83	%	$	16,121			26	%
Parts, accessories and service revenues		13,642			15			12,723			17			919			7
Total revenues		90,781			100			73,741			100			17,040			23
Cost of revenues		39,307			43			31,193			42			8,114			26
Gross profit		51,474			57			42,548			58			8,926			21
Operating expenses
Sales and marketing		26,834			30			23,429			32			3,405			15
Research and development		7,317			8			6,699			9			618			9
Amortization of intangible assets acquired		497			1			684			1			(187	)		(27	)
General and administrative		29,477			32			7,185			10			22,292			310
Total operating expenses		64,125			71			37,997			52			26,128			69
(Loss) income from operations		(12,651	)		(14	)		4,551			6			(17,202	)		(378	)
Interest income, net		55			—			23			—			32			139
Other expense, net		(403	)		—			(89	)		—			(314	)		(353	)
(Loss) income before (benefit) provision for income taxes		(12,999	)		(14	)		4,485			6			(17,484	)		(390	)
Benefit (provision) for income taxes		(5,284	)		(6	)		986			1			(6,270	)		(636	)
Net (loss) income	$	(7,715	)		(8	)%	$	3,499			5	%	$	(11,214	)		(320	)%

Revenues

	Six Months Ended June 30,				$ Change		% Change
	2013		2012
Product sales in North America (in thousands)	$	37,075	$	29,993	$	7,082		24	%
Product sales outside North America (in thousands)		40,064		31,025		9,039		29
Global parts, accessories and service sales (in thousands)		13,642		12,723		919		7
Total Revenues	$	90,781	$	73,741	$	17,040		23	%

Revenues in the six months ended June 30, 2013 increased from the six months ended June 30, 2012 by $17.0 million, or 23%. The increase was attributable to a number of factors:

• Revenues from the sale of products in North America increased by approximately $7.1 million, or 24%, from the 2012 period due to an increase in average selling prices attributable to the introduction of new products, including PicoSure and Elite Plus. Our newly acquired Palomar business contributed $2.2 million in North America product revenues for the five business days following the June 24, 2013 acquisition date.

• Revenues from the sale of products outside of North America increased by approximately $9.0 million, or 29%, from the 2012 period primarily due to an increase in the number of units sold by our European and Asia Pacific subsidiaries and distributors, including the introduction of Apogee Plus. Our newly acquired Palomar business contributed $2.7 million in product revenues outside of North America for the five business days following the June 24, 2013 acquisition date.

• Revenues from the sale of parts, accessories and services increased by approximately $0.9 million, or 7%, from the 2012 period primarily due to an increase in revenues generated from performing service on laser systems.

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Cost of Revenues

	Six Months Ended June 30,						$ Change		% Change
	2013			2012
Cost of revenues (in thousands)	$	39,307		$	31,193		$	8,114		26	%
Cost of revenues (as a percentage of total revenues)		43	%		42	%

Total cost of revenues increased $8.1 million, or 26%, to $39.3 million for the six months ended June 30, 2013, as compared to $31.2 million for the six months ended June 30, 2012. The increase was primarily associated with our 23% increase in total revenues. Total cost of revenues increased as a percentage of total revenues, to 43% for the six months ended June 30, 2013, from 42% for the six months ended June 30, 2012, primarily due to a purchase accounting charge of $1.4 million associated with the step up in fair value of finished goods inventory acquired through our acquisition of Palomar and sold during the period. We expect our gross margin percentage to return to approximately 58% by the fourth quarter of 2013 as the remaining finished goods inventory from the acquisition is sold.

Sales and Marketing

	Six Months Ended June 30,						$ Change		% Change
	2013			2012
Sales and marketing (in thousands)	$	26,834		$	23,429		$	3,405		15	%
Sales and marketing (as a percentage of total revenues)		30	%		32	%

Sales and marketing expenses increased by $3.4 million, or 15%, for the six months ended June 30, 2013 as compared to the six months ended June 30, 2012. The increase was primarily due to an increase in sales and marketing costs of $1.0 million from an increased number of workshops, trade shows and other promotional efforts, including those related to the launch of PicoSure. Personnel expenses increased $1.2 million due to an increase in the number of our sales employees, and professional services expenses increased $0.4 million. Palomar’s sales and marketing expenses were $0.8 million for the five business days following the June 24, 2013 acquisition date. Sales and marketing expenses for the six months ended June 30, 2013 decreased as a percentage of total revenues to 30%, due to favorable product mix and continued operating leverage.

Research and Development

	Six Months Ended June 30,						$ Change		% Change
	2013			2012
Research and development (in thousands)	$	7,317		$	6,699		$	618		9	%
Research and development (as a percentage of total revenues)		8	%		9	%

Research and development expenses increased by $0.6 million for the six months ended June 30, 2013 as compared to the six months ended June 30, 2012. This increase was primarily due to an increase of $0.5 million in personnel and professional services costs associated with the development of new products. Palomar’s research and development expenses were $0.1 million for the five business days following the June 24, 2013 acquisition date. Research and development expenses for the three months ended June 30, 2013 decreased as a percentage of total revenues to 8%, primarily due to the 23% increase in total revenues and continued operating leverage.

Amortization of Intangible Assets Acquired

	Six Months Ended June 30,						$ Change			% Change
	2013			2012
Amortization of intangible assets acquired (in thousands)	$	497		$	684		$	(187	)		(27	)%
Amortization of intangible assets acquired (as a percentage of total revenues)		1	%		1	%

For the six month period ending June 30, 2013, we recognized amortization expense of $0.5 million in our operating expenses relating to the identifiable intangible assets acquired through our 2013 acquisition of Palomar and certain intangible assets acquired through our 2011 acquisitions of Eleme Medical and ConBio’s aesthetic businesses.

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General and Administrative

	Six Months Ended June 30,						$ Change		% Change
	2013			2012
General and administrative (in thousands)	$	29,477		$	7,185		$	22,292		310	%
General and administrative (as a percentage of total revenues)		32	%		10	%

General and administrative expenses increased $22.3 million, or 310%, for the six months ended June 30, 2013 as compared to the six months ended June 30, 2012. The increase is primarily due to $21.5 million in costs associated with the acquisition of Palomar during the six months ended June 30, 2013. In connection with our acquisition of Palomar, certain terminated Palomar employees were, and certain continuing Palomar employees are, entitled to severance benefits in specified circumstances associated with the change of control of Palomar. In connection with the acquisition and these change of control severance arrangements, we incurred $18.5 million of compensation expense during the six months ended June 30, 2013, and we expect to incur an additional $1.5 million of compensation expense during each of the next four quarters. Excluding acquisition costs, general and administrative expenses increased due to personnel and legal costs.

Interest Income, net

	Six Months Ended June 30,				$ Change		% Change
	2013		2012
Interest income, net (in thousands)	$	55	$	23	$	32		139	%

The increase in interest income, net was primarily due to increased cash invested in interest-bearing securities during the six months ended June 30, 2013 as compared to the six months ended June 30, 2012, well as higher interest rates and decreased interest payments associated with capital leases.

Other Expense, net

	Six Months Ended June 30,				$ Change			% Change
	2013		2012
Other expense, net (in thousands)	$	403	$	89	$	(314	)		(353	)%

The change in other expense, net is primarily a result of increased net foreign currency remeasurement losses in the six months ended June 30, 2013, as compared to the six months ended June 30, 2012, due to the strengthening of the U.S. dollar.

(Benefit) Provision for Income Taxes

	Six Months Ended June 30,						$ Change			% Change
	2013			2012
(Benefit) provision for income taxes (in thousands)	$	(5,284	)	$	986		$	(6,270	)		(636	)%
(Benefit) Provision as a percentage of (loss) income before (benefit) provision for income taxes		41	%		22	%

The (benefit) provision for income taxes results from a combination of the activities of our domestic and foreign subsidiaries. During the six months ended June 30, 2013, we recorded an income tax benefit of $5.3 million, representing an effective tax rate of 41%. Included in this tax benefit is a non-recurring benefit of $5.8 million for the release of a portion of the domestic valuation allowance due to taxable temporary differences available as a source of income to realize the benefit of certain pre-existing Cynosure deferred tax assets as a result of the Palomar business combination. Excluding this item, the income tax provision for the six months ended June 30, 2013 would have been $0.5 million, which is primarily attributable to the current tax provision on the earnings of our foreign operations.

Liquidity and Capital Resources

We require cash to pay our operating expenses, make capital expenditures, fund acquisitions and pay our long-term liabilities. We have funded our operations through proceeds from public offerings of our Class A common stock and funds generated from our operations. In November 2012, we raised approximately $55.3 million through a public offering of shares of our Class A common stock.

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We acquired Palomar on June 24, 2013. As a result of the transaction, former Palomar stockholders, in the aggregate, received for their shares of Palomar common stock $145.8 million in cash and 6.0 million shares of Cynosure Class A common stock. The total consideration was valued at $287.2 million, based upon the closing price of our Class A common stock on June 24, 2013.

At June 30, 2013, our cash, cash equivalents and short and long-term marketable securities were $106.1 million. Our cash and cash equivalents of $55.3 million are highly liquid investments with maturities of 90 days or less at date of purchase and consist of cash in operating accounts and investments in money market funds. Our short-term marketable securities of $37.3 million consist of investments in various state and municipal governments, U.S. government agencies and treasuries, and corporate obligations and commercial paper, all of which mature by June 27, 2014. Our long-term marketable securities of $13.5 million consist of investments in various state and municipal governments, U.S. government agencies and treasuries, and corporate obligations and commercial paper, all of which mature by February 13, 2015.

Our future capital requirements depend on a number of factors, including the rate of market acceptance of our current and future products, the resources we devote to developing and supporting our products and continued progress of our research and development of new products. During the six months ended June 30, 2013 and 2012, we purchased $1.7 million and $1.0 million, respectively, of property and equipment. During the six months ended June 30, 2013 and 2012, we transferred $2.5 million and $2.2 million, respectively, of demonstration equipment to fixed assets. We expect that our capital expenditures during the remainder of 2013 will increase compared with the 2012 period as a result of the acquisition of Palomar.

In July 2009, our board of directors authorized the repurchase of up to $10 million of our Class A common stock, from time to time, on the open market or in privately negotiated transactions under a stock repurchase program. The program will terminate upon the purchase of $10 million in common stock, unless our board of directors discontinues it sooner. During the six months ended June 30, 2013 and 2012, we did not repurchase any shares of our common stock under this program. As of June 30, 2013, we have repurchased an aggregate of 196,970 shares under this program at an aggregate cost of $1.9 million.

We believe that our current cash, cash equivalents and short and long-term marketable securities, as well as cash generated from operations, will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for the foreseeable future.

Cash Flows

Net cash used in operating activities was $10.5 million for the six months ended June 30, 2013, and resulted primarily from the net loss for the period of $7.7 million and changes in deferred income taxes of $5.6 million, partially offset by $5.0 million in depreciation and amortization and stock-based compensation expense and $1.1 million in net accretion of marketable securities. Net changes in working capital items decreased cash from operating activities by $3.3 million primarily related to an increase in accounts receivable of $10.5 million and a decrease in deferred revenue of $1.0 million. These were partially offset by an increase in accrued expenses of $7.6 million. Net cash used in investing activities was $20.7 million for the six months ended June 30, 2013, which consisted primarily of the cash paid for the Palomar acquisition, net of cash received, of $65.0 million and purchases of marketable securities of $11.0 million, partially offset by proceeds from the sales and maturities of marketable securities of $56.9 million. Net cash provided by financing activities during the six months ended June 30, 2013 was $0.6 million, principally relating to the proceeds of stock option exercises, partially offset by acquisition-related stock issuance costs.

Net cash provided by operating activities was $7.3 million for the six months ended June 30, 2012, and resulted primarily from the net income for the period of $3.5 million, increased by approximately $4.9 million in depreciation and amortization and stock-based compensation expense and by approximately $0.6 million in net accretion of marketable securities. Net changes in working capital items decreased cash from operating activities by approximately $1.7 million primarily related to an increase in inventory of $3.6 million, net of demonstration equipment transfers, associated with increased purchases to meet the increased revenue requirements. Accounts receivable increased by approximately $1.5 million as a result of increased revenues. These increases were partially offset by an increase in deferred revenue of $2.9 million and an increase in accounts payable of $1.0 million. Net cash used in investing activities was $6.3 million for the six months ended June 30, 2012, which consisted of net purchases of marketable securities of $5.4 million and purchases of property and equipment of $1.0 million, partially offset by a decrease in other noncurrent assets of $0.1 million. Net cash provided by financing activities during the six months ended June 30, 2012 was $0.4 million, principally relating to the proceeds of stock option exercises.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations set forth above are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our estimates and judgments, including those described in our Annual Report on Form 10-K for the year ended December 31, 2012, as amended. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the

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carrying values of assets and liabilities, and the reported amounts of revenues and expenses, that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. A discussion of our critical accounting policies and the related judgments and estimates affecting the preparation of our consolidated financial statements is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, as amended. There have been no material changes to our critical accounting policies as of June 30, 2013.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The following discussion about our market risk disclosures involves forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. We are exposed to market risk related to changes in interest rates and foreign currency exchange rates. We do not use derivative financial instruments.

Interest Rate Sensitivity. We maintain an investment portfolio consisting mainly of money market funds, state and municipal government obligations, U.S. government agencies and treasuries. The securities, other than money market funds, are classified as available-for-sale and consequently are recorded on the balance sheet at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive loss. All investments mature by February 13, 2015. These available-for-sale securities are subject to interest rate risk and will fall in value if market interest rates increase, which could result in a realized loss if we are forced to sell an investment before its scheduled maturity. We currently have the ability and intent to hold our fixed income investments until maturity. We do not utilize derivative financial instruments to manage our interest rate risks.

The following table provides information about our investment portfolio in available-for-sale debt securities. For investment securities, the table presents principal cash flows (in thousands) and weighted average interest rates by expected maturity dates.

	June 30, 2013			Future Maturities in 2013			Future Maturities in 2014			Future Maturities in 2015
Investments (at fair value)	$	50,688		$	27,228		$	21,449		$	2,011
Weighted average interest rate		0.32	%		0.33	%		0.28	%		0.57	%

Foreign Currency Exchange. A significant portion of our operations is conducted through operations in countries other than the United States. Revenues from our international operations that were recorded in U.S. dollars represented approximately 45% of our total international revenues during the three months ended June 30, 2013. Substantially all of the remaining 55% were sales in euros, British pounds, Japanese yen, Chinese yuan, South Korean won and Australian dollars. Since we conduct our business in U.S. dollars, our main exposure, if any, results from changes in the exchange rate between these currencies and the U.S. dollar. Our functional currency is the U.S. dollar. Our policy is to reduce exposure to exchange rate fluctuations by having most of our assets and liabilities, as well as most of our revenues and expenditures, in U.S. dollars, or U.S. dollar linked. We have not historically engaged in hedging activities relating to our non-U.S. dollar operations. We sell inventory to our subsidiaries in U.S. dollars. These amounts are recorded at our local subsidiaries in local currency rates in effect on the transaction date. Therefore, we may be exposed to exchange rate fluctuations that occur while the payment is outstanding, which we recognize as unrealized gains and losses in our statements of operations. Upon settlement of these payments, we may record realized foreign exchange gains and losses. We may incur negative foreign currency translation charges as a result of changes in currency exchange rates.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2013. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2013, our principal executive officer and principal financial officer have concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

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Changes in Internal Control over Financial Reporting

We acquired Palomar on June 24, 2013. We are in the process of integrating the acquired operations into our overall internal control over financial reporting process and have extended our oversight and monitoring processes that support our internal control over financial reporting to include the acquired operations. There was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II — Other Information

Item 1. Legal Proceedings

Telephone Consumer Protection Act Litigation:

In 2005, a plaintiff, individually and as putative representative of a purported class, filed a complaint against us under the federal Telephone Consumer Protection Act, or the TCPA in Massachusetts Superior Court in Middlesex County, captioned Weitzner v. Cynosure, Inc., No. MICV2005-01778 (Superior Court, Middlesex County), seeking monetary damages, injunctive relief, costs and attorneys’ fees. The complaint alleges that we violated the TCPA by sending unsolicited advertisements by facsimile to the plaintiff and other recipients without the prior express invitation or permission of the recipients. Under the TCPA, recipients of unsolicited facsimile advertisements are entitled to damages of up to $500 per facsimile for inadvertent violations and up to $1,500 per facsimile for knowing or willful violations. Based on discovery in this matter, the plaintiff alleges that approximately three million facsimiles were sent on our behalf by a third party to approximately 100,000 individuals. In January 2012, the Court denied the class certification motion. In November 2012, the Court issued the final judgment and awarded the plaintiff $6,000 in damages and awarded us $3,495 in costs. The plaintiff has appealed this decision. In addition, in July 2012, the plaintiff filed a new purported class action, based on the same operative facts and asserting the same claims as in the Massachusetts action, in federal court in the Eastern District of New York, captioned Weitzner, et al. v. Cynosure, Inc., No. 1:12-cv-03668-MKB-RLM (U.S District Court, Eastern District of New York). In February 2013, that court granted our motion to dismiss the plaintiff’s claims. In March 2013, the plaintiff drafted a motion seeking reconsideration of the court’s judgment and vacation of the court’s order of dismissal. In April 2013, we drafted a response opposing the plaintiff’s motion. To date, the plaintiff has not filed its motion with the court and we believe this New York case is closed. With regard to the Massachusetts case, we expect a hearing on the plaintiff’s appeal to be scheduled in the fourth quarter.

Merger Litigation

On March 21, 2013, a putative stockholder class action complaint, captioned Edgar Calin v. Palomar Medical Technologies, Inc., et al., No. 13-1051 BLS1 (Superior Court, Suffolk County), was filed against Palomar, its board of directors, us and Commander Acquisition, LLC, a Delaware limited liability company and wholly-owned subsidiary of Cynosure, or Commander, in Massachusetts Superior Court in Suffolk County. On April 9, 2013, a second putative stockholder class action complaint, captioned Vladimir Gusinsky Living Trust v. Palomar Medical Technologies, Inc., et al., No. 13-1328 BLS1 (Superior Court, Suffolk County), was filed against Palomar, its board of directors and us in Massachusetts Superior Court in Suffolk County. On April 12, 2013, a third putative stockholder class action complaint, captioned Albert Saffer v. Palomar Medical Technologies, Inc. et al., No. 13-1385 BLS1 (Superior Court, Suffolk County), was filed against Palomar, its board of directors, us and Commander in Massachusetts Superior Court in Suffolk County. On April 23, 2013, each of the plaintiffs in the foregoing suits filed an amended complaint. Each amended complaint alleges that members of the Palomar board of directors breached their fiduciary duties in connection with the approval of the merger contemplated by the agreement and plan of merger, dated as of March 17, 2013, by and among Palomar, us and Commander, and that we and, with respect to the Calin and Saffer suits, Commander, aided and abetted the alleged breach of fiduciary duties. Each amended complaint alleges that the Palomar directors breached their fiduciary duties in connection with the proposed transaction by, among other things, conducting a flawed sale process and failing to maximize stockholder value and obtain the best financial and other terms, and that the registration statement filed by us is materially deficient. Each of these plaintiffs seeks injunctive and other equitable relief, including enjoining the defendants from consummating the merger, in addition to other unspecified damages, fees and costs. The plaintiffs in the three Massachusetts actions moved to expedite the proceedings on May 1, 2013 and moved to consolidate the actions on May 1, 2013. On May 13, 2013, each of the defendants in the three Massachusetts actions filed an opposition to expedite, an opposition to consolidate and a cross motion to stay its respective action. On May 16, 2013, each of the plaintiffs filed oppositions to defendants’ cross motion to stay. On May 17, 2013, the Massachusetts Superior Court issued an order denying plaintiffs’ motion for expedited proceedings and granting defendants’ cross motion to stay the Massachusetts actions.

On April 19, 2013, a fourth putative stockholder class action complaint, captioned Gary Drabek v. Palomar Medical Technologies, Inc. et al., No. 8491, (Del. Ch.) was filed against Palomar, its board of directors, us and Commander in Delaware Chancery Court. On May 1, 2013, a fifth putative stockholder class action complaint, captioned Daniel Moore v. Palomar Medical Technologies, Inc. et al., No. 8516, (Del. Ch.) was filed against Palomar, its board of directors, us and Commander in Delaware Chancery Court. Each of the foregoing lawsuits alleges that members of the Palomar board of directors breached their fiduciary duties in connection with the approval of the merger and that we and Commander aided and abetted the alleged breach of fiduciary duties.

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Each complaint alleges that the Palomar directors breached their fiduciary duties in connection with the proposed transaction by, among other things, conducting a flawed sale process and failing to maximize stockholder value and obtain the best financial and other terms, and that the registration statement filed by us is materially deficient. Each of these plaintiffs seeks injunctive and other equitable relief, including enjoining the defendants from consummating the merger, in addition to other unspecified damages, fees and costs. The plaintiff in the Drabek action moved to expedite the proceedings on April 29, 2013, and the plaintiff in the Moore action moved to expedite and moved for a preliminary injunction on May 3, 2013. On May 7, 2013, the plaintiffs in the Drabek and Moore actions jointly submitted a proposed order of consolidation to consolidate the class actions as In re Palomar Medical Technologies Shareholder Litigation , C.A. No. 8491-VCP, which order was granted by the court on the same day.

On May 28, 2013, a sixth putative stockholder class action complaint, captioned Melvin Lax v. Palomar Medical Technologies, Inc., et al., No. 13-11276 (D. Mass.), was filed against Palomar, its board of directors, Cynosure, and Commander in the U.S. District Court for the District of Massachusetts. The lawsuit alleges that members of the Palomar board of directors breached their fiduciary duties in connection with the approval of the merger, that Cynosure and Commander aided and abetted the alleged breach of fiduciary duties, and that the defendants violated Section 14(a) of the Securities Exchange Act of 1934 and Rule 14a-9 promulgated thereunder by issuing a materially misleading Proxy Statement. Plaintiff seeks injunctive and other equitable relief, including enjoining the defendants from consummating the Merger, in addition to other unspecified damages, fees and costs. On August 5, 2013, the parties filed a stipulation and joint motion to stay proceedings.

On June 7, 2013, Palomar entered into a memorandum of understanding, which we refer to as the Delaware Memorandum of Understanding, with the Delaware plaintiffs regarding the settlement of the Delaware putative stockholder class actions and, on June 10, 2013, Palomar filed with the SEC a Current Report on Form 8-K to supplement the Proxy Statement pursuant to the terms of the Delaware Memorandum of Understanding.

On June 14, 2013, Palomar entered into a memorandum of understanding, which we refer to as the Massachusetts Memorandum of Understanding, with the Massachusetts plaintiffs, pursuant to which the plaintiffs in the Massachusetts state and federal actions agreed to be bound by the terms of the Delaware Memorandum of Understanding and on June 14, 2013, Palomar filed with the SEC a Current Report on Form 8-K to supplement the Proxy Statement pursuant to the terms of the Massachusetts Memorandum of Understanding.

The Delaware Memorandum of Understanding and the Massachusetts Memorandum of Understanding contemplate that the parties will enter into a stipulation of settlement. The stipulation of settlement will be subject to customary conditions, including court approval following notice to former stockholders of Palomar. In the event that the parties enter into a stipulation of settlement, a hearing will be scheduled at which the Court of Chancery of the State of Delaware will consider the fairness, reasonableness and adequacy of the settlement. If the settlement is finally approved by the court, it will resolve and release all claims that were or could have been brought challenging any aspect of the proposed merger, the merger agreement, and any disclosure made in connection therewith (but excluding claims for appraisal under Section 262 of the Delaware General Corporation Law) and the Delaware actions will be dismissed with prejudice. As part of the settlement, the Massachusetts plaintiffs will also dismiss their actions with prejudice. In addition, in connection with the settlement, the parties contemplate that plaintiffs’ counsel will file a petition in the Court of Chancery of the State of Delaware for an award of attorneys’ fees and expenses to be paid by Palomar or its successor, which the defendants may oppose. As Palomar’s successor, we will pay or cause to be paid any attorneys’ fees and expenses awarded by the Court of Chancery of the State of Delaware. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the Court of Chancery of the State of Delaware will approve the settlement even if the parties were to enter into such stipulation. In such event, the proposed settlement as contemplated by the Delaware and Massachusetts Memorandums of Understanding may be terminated.

Tria Beauty, Inc., First Massachusetts Litigation

On June 24, 2009, Palomar commenced an action for patent infringement against Tria Beauty, Inc. (previously named Spectragenics, Inc.), in the U.S. District Court for the District of Massachusetts seeking both monetary damages and injunctive relief. The complaint alleged that the Tria System, which uses light-based technology for hair removal, willfully infringes U.S. Patent No. 5,735,844, which is exclusively licensed to us by MGH. Tria answered the complaint denying that its products infringe valid claims of the asserted patent and filing a counterclaim seeking a declaratory judgment that the asserted patent is not infringed, is invalid and not enforceable. Palomar filed a reply denying the material allegations of the counterclaims. On September 21, 2009, following successful re-examination of U.S. Patent No. 5,595,568 (the “‘568 patent”) Palomar filed a motion to amend our complaint to add a claim for willful infringement of the ‘568 patent, which is also exclusively licensed to us by MGH. Palomar’s motion also included adding MGH as a plaintiff in the lawsuit. A claim construction hearing (also known as a Markman hearing) was held on August 10, 2010, and Palomar received what they consider to be a favorable ruling on October 13, 2010. On January 25, 2011, Tria filed a second amended answer and counterclaim

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including another claim that the patents are unenforceable for inequitable conduct. On April 12, 2013, Tria filed a motion for summary judgment of non-infringement. On May 17, 2013, Palomar filed a response to Tria’s motion for summary judgment, and on June 14, 2013, Tria filed its reply to Palomar’s response. A hearing on this motion is scheduled for September 17, 2013. No trial date has yet been set.

Tria Beauty, Inc., Second Massachusetts Litigation

On May 22, 2012, Palomar commenced an action for patent infringement against Tria Beauty, Inc. in the U.S. District Court for the District of Massachusetts seeking both monetary damages and injunctive relief. The complaint alleged that the Tria System, which uses light-based technology for hair removal, willfully infringes U.S. Patent No. 8,182,473 (the “‘473 patent”). On July 16, 2012, Tria answered the complaint denying that its products infringe valid claims of the ‘473 patent and filing counterclaims seeking a declaratory judgment that the asserted patent is not infringed, is invalid and not enforceable. Tria’s answer further included purported counterclaims of violation of Massachusetts General Laws Chapter 93A and abuse of process, seeking damages “in excess of $75,000, exclusive of interest and costs.” Palomar has filed a response to Tria’s answer denying and asserting defenses to Tria’s purported counterclaims. On December 20, 2012, Palomar filed a second amended complaint which further alleges that the Tria System infringes U.S. Patent Nos. 8,328,794 and 8,328,796. On January 13, 2013, Tria answered the second amended complaint denying that its products infringe valid claims of the asserted patents and filing counterclaims seeking a declaratory judgment that the asserted patents are not infringed, are invalid and not enforceable. On February 14, 2013, Palomar filed a response to Tria’s answer denying and asserting defenses to Tria’s purported counterclaims. The parties are in discovery. No trial date has yet been set.

Asclepion Laser Technologies GmbH, German Litigation

On October 13, 2010, Palomar commenced an action for patent infringement against Asclepion Laser Technologies GmbH in the District Court of Düsseldorf, Germany seeking both monetary damages and injunctive relief. The complaint alleged that Asclepion’s MeDioStar and RubyStar products infringe European Patent Number EP 0 806 913, which is the first issued European patent corresponding to U.S. Patent Nos. 5,595,568 and 5,735,844. On October 29, 2010, Asclepion asked the court to stay its proceedings until a final decision is rendered by the Court of Rome in Italy (see Asclepion Laser Technologies GmbH, Italian Litigation below) and until a final decision in the opposition proceedings is rendered by the European Patent Office. On December 16, 2010, Asclepion filed an intervention to the opposition appeal proceedings concerning patent EP 0 806 913 requesting that the patent be revoked in its entirety. On January 20, 2011, Palomar agreed to Asclepion’s request for a stay of this lawsuit. On January 31, 2011, the District Court of Düsseldorf stayed this lawsuit until a final decision is rendered by the Court of Rome in Italy.

Asclepion Laser Technologies GmbH, Italian Litigation

On October 22, 2010, Palomar was served with an International Summons for a lawsuit filed September 20, 2010 by Asclepion Laser Technologies GmbH in the Court of Rome in Italy. In this suit, Asclepion asks the Italian court to declare that Asclepion’s MedioStar and RubyStar products do not infringe either the Italian or German portions of EP 0 806 913 B1 or EP 1 230 900 B1, which are the first two issued European patents corresponding to U.S. Patent Nos. 5,595,568 and 5,735,844. We believe the Court of Rome lacks jurisdiction over the German claims of these European Patents and have filed a request to the Italian Supreme Court challenging the international jurisdiction of the Italian Courts for deciding infringement of the non-Italian parts of the European patents. A hearing was held May 28, 2013 before the Italian Supreme Court. In a development contrary to settled Italian case law, the Italian Supreme Court ruled that the Italian Court of Rome has jurisdiction over the Italian as well as the German portions of the European patent. We are reviewing our options.

In addition to the matters discussed above, from time to time, we are subject to various claims, lawsuits, disputes with third parties, investigations and pending actions involving various allegations against us incident to the operation of its business, principally product liability. Each of these other matters is subject to various uncertainties, and it is possible that some of these other matters may be resolved unfavorably to us. We establish accruals for losses that management deems to be probable and subject to reasonable estimate. We believe that the ultimate outcome of these matters will not have a material adverse impact on our consolidated financial position, results of operations or cash flows.

Item 1A. Risk Factors

We have revised and re-ordered our discussion of the risk factors affecting our business since those presented in our Quarterly Report on Form 10-Q, Part II, Item 1A, for the quarterly period ended March 31, 2013. For convenience, all of our risk factors are included below, and we have denoted with an asterisk (*) those risk factors that have been materially revised. If any of the following risks actually occurs, our business, financial condition, results of operations and cash flows could be materially adversely affected. This section contains forward-looking statements. You should refer to the explanation of the qualifications and limitations on forward-looking statements beginning on page 12.

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Risks Related to Our Business and Industry

* We have a history of net losses.

We incurred net losses of approximately $2.9 million in 2011 and $5.5 million in 2010. Although we were profitable in 2012, we incurred a net loss in the first half of 2013. If we are unable to return to profitability, the market value of our stock may decline, and an investor could lose all or a part of their investment.

If there is not sufficient consumer demand for the procedures performed with our products, practitioner demand for our products could decline, which would adversely affect our operating results.

The aesthetic laser and light-based treatment system industry in which we operate is particularly vulnerable to economic trends. Most procedures performed using our aesthetic treatment systems are elective procedures that are not reimbursable through government or private health insurance. The cost of these elective procedures must be borne by the patient. As a result, the decision to undergo a procedure that utilizes our products may be influenced by the cost.

Consumer demand, and therefore our business, is sensitive to a number of factors that affect consumer spending, including political and macroeconomic conditions, health of credit markets, disposable consumer income levels, consumer debt levels, interest rates and consumer confidence. If there is not sufficient consumer demand for the procedures performed with our products, practitioner demand for our products would decline, and our business would suffer.

Consumer demand for these procedures, and practitioner demand for our products, decreased dramatically during 2009, which contributed to a decrease in our total product revenues from $123.2 million in 2008 to $55.9 million in 2009. However, demand has increased from 2010 through the first quarter of 2013. We believe that consumer demand for discretionary aesthetic laser treatments remains uncertain and may continue to adversely affect our operating results.

Our financial results may fluctuate from quarter to quarter, which makes our results difficult to predict and could cause our results to fall short of expectations.

Our financial results may fluctuate as a result of a number of factors, many of which are outside of our control. For these reasons, comparing our financial results on a period-to-period basis may not be meaningful, and you should not rely on our past results as an indication of our future performance. Our future quarterly and annual expenses as a percentage of our revenues may be significantly different from those we have recorded in the past or which we expect for the future. Our financial results in some quarters may fall below our expectations or the expectations of market analysts or investors. Any of these events could cause our stock price to fall. Each of the risk factors listed in this “Risk Factors” section, and the following factors, may adversely affect our financial results:

• our inability to introduce new products to the market in a timely fashion, or at all;

• our inability to quickly address and resolve reliability issues in our products and/or meet warranty and service obligations to our customers;

• continued availability of attractive equipment leasing terms for our customers, which may be negatively influenced by interest rate increases or lack of available credit;

• increases in the length of our sales cycle; and

• reductions in the efficiency of our manufacturing processes.

In addition, we may be subject to seasonal fluctuations in our results of operations, because our customers may be more likely to make equipment purchasing decisions near year-end, and because practitioners may be less likely to make purchasing decisions in the summer months.

Our competitors may prevent us from achieving further market penetration or improving operating results.

Competition in the aesthetic device industry is intense. Our products compete against products offered by public companies, such as Cutera, Solta Medical, Syneron Medical, and ZELTIQ Aesthetics, as well as several smaller specialized private companies, such as Alma Lasers (acquired in May 2013 by Shanghai Fosun Pharmaceutical (Group) Ltd.). Some of these competitors have greater financial and human resources than we do and have established reputations, as well as worldwide distribution channels and sales and marketing capabilities that are larger and more established than ours. Additional competitors may enter the market, and we are likely to compete with new companies in the future.

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We also face competition against non-light-based medical products, such as BOTOX^®and collagen injections, and surgical and non-surgical aesthetic procedures, such as face lifts, chemical peels, abdominoplasty, liposuction, microdermabrasion, sclerotherapy and electrolysis. We may also face competition from manufacturers of pharmaceutical and other products that have not yet been developed. As a result of competition with these companies, products and procedures, we could experience loss of market share and decreasing revenue as well as reduced prices and profit margins, any of which would harm our business and operating results.

As a result of competition with our competitor companies, products and procedures, we could experience loss of market share and decreasing revenue as well as reduced prices and profit margins, any of which would harm our business and operating results.

Our ability to compete effectively depends upon our ability to distinguish our company and our products from our competitors and their products. Factors affecting our competitive position include:

• product performance, reliability and design;

• ability to sell products tailored to meet the applications needs of clients and patients;

• quality of customer support;

• product pricing;

• product safety;

• sales, marketing and distribution capabilities;

• success and timing of new product development and introductions; and

• intellectual property protection.

We may be exposed to credit risk of customers that have been adversely affected by weakened markets.

In the event of deterioration of general business conditions or the availability of credit, the financial strength and stability of our customers and potential customers may deteriorate over time, which may cause them to cancel or delay their purchase of our products. In addition, we may be subject to increased risk of non-payment of our accounts receivables. We may also be adversely affected by bankruptcies or other business failures of our customers and potential customers. A significant delay in the collection of funds or a reduction of funds collected may impact our liquidity or result in bad debts.

If we do not continue to develop and commercialize new products and identify new markets for our products and technology, we may not remain competitive, and our revenues and operating results could suffer.

The aesthetic laser and light-based treatment system industry is subject to continuous technological development and product innovation. For the six months ended June 30, 2013, 46% of our product revenues were attributable to the sale of systems that we have introduced to the market since the beginning of 2010. This excludes Palomar’s product revenues recognized in the second quarter of 2013. If we do not continue to innovate and develop new products and applications, our competitive position will likely deteriorate as other companies successfully design and commercialize new products and applications. Accordingly, our success depends in part on developing or acquiring new and innovative applications of laser and other light-based technology and identifying new markets for and applications of existing products and technology. If we are unable to develop and commercialize new products, identify and acquire complementary businesses, products or technologies, and identify new markets for our products and technology, our product and technology offerings could become obsolete and our revenues and operating results could be adversely affected.

To remain competitive, we must:

• develop or acquire new technologies that either add to or significantly improve our current products;

• convince our target practitioner customers that our new products or product upgrades would be attractive revenue-generating additions to their practices;

• sell our products to non-traditional customers, including primary care physicians, gynecologists and other specialists;

• identify new markets and emerging technological trends in our target markets and react effectively to technological changes;

• preserve goodwill and brand value with customers; and

• maintain effective sales and marketing strategies.

* If our new products do not gain market acceptance, our revenues and operating results could suffer, and our newer generation product sales could cause earlier generation product sales to suffer.

The commercial success of the products and technology we develop will depend upon the acceptance of these products by providers of aesthetic procedures and their patients and clients, and in the case of our home-use system, consumers. It is difficult for us to predict how successful recently introduced products, or products we are currently developing, will be over the long term. If the products we develop do not gain market acceptance or meet customer expectations, our revenues and operating results could suffer.

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We expect that many of the products we develop will be based upon new technologies or new applications of existing technologies. It may be difficult for us to achieve market acceptance of some of our products, particularly the first products that we introduce to the market based on new technologies or new applications of existing technologies.

For example, in the first quarter of 2013 we launched our PicoSure laser system for the removal of tattoos and benign pigmented lesions. The PicoSure system, which is based on several years of research and development effort and expense, is the first commercially available picosecond Alexandrite aesthetic laser system on the market. Acceptance of our PicoSure laser system by providers of aesthetic procedures and their patients and clients is important to our commercial success.

As another example, Palomar launched the Vectus diode laser in the first quarter of 2012 for hair removal. This is the first diode laser commercialized by Palomar since the late 1990’s. Years of research and development work led to the largest spot size and most uniform beam profile available today for laser hair removal. We have identified reliability issues with the Vectus laser, primarily involving the large tip delivery system. We are currently reviewing shipments to new customers while we address these issues. If we are unable to quickly resolve these reliability issues, we may experience an increase in warranty claims, loss of customers, and damage to our reputation. We have reallocated technical resources from working on future products to working on the Vectus laser which could delay the launch of future products. As a consequence, our financial results in some quarters may fall below our expectations or the expectations of market analysts or investors and our stock price could fall. Acceptance of our Vectus laser by providers of aesthetic procedures and their patients and clients and our ability to meet customer demand and expectations is important to our commercial success.

We are also developing in conjunction with Unilever a laser treatment system for the home-use market. This system has been cleared by the FDA for marketing in the United States for the treatment of wrinkles. Unilever holds exclusive rights to sell this product, and Unilever has advised us that it expects to launch this product commercially near the beginning of 2014. However, because competitors have already introduced home-use laser systems to the market, this home-use system may not gain anticipated levels of market acceptance. If these products or others that we introduce do not gain market acceptance, our business would suffer.

As we introduce new technologies to the market, our earlier generation product sales could suffer, which may result in write-offs of those earlier generation products. For example, in 2009, we recorded a $2.1 million charge to cost of product revenues related to the write-down of an earlier generation product. The write-down resulted, in part, from customers adopting our newer generation products more quickly than we anticipated, coupled with the downturn in the overall aesthetic laser market.

If demand for our aesthetic treatment systems by physician customers does not increase, or if our home-use product does not achieve market acceptance, our revenues will suffer and our business will be harmed.

We market our aesthetic treatment systems to physicians and other practitioners. In addition, through our development agreement with Unilever, we plan to begin to address the home-use aesthetic laser market near the beginning of 2014. We believe, and our growth expectations assume, that we and other companies selling lasers and other light-based aesthetic treatment systems have not fully penetrated these markets and that we will continue to receive a significant percentage of our revenues from selling to these markets. If our expectations as to the size of these markets and our ability to sell our products to participants in these markets are not correct, our revenues will suffer and our business will be harmed.

We sell our products and services through subsidiaries and distributors in numerous international markets. Our operating results may suffer if we are unable to manage our international operations effectively.

We sell our products and services through subsidiaries and distributors in approximately 100 foreign countries, and we therefore are subject to risks associated with having international operations. We derived 49%, 56% and 55% of our product revenues from sales outside North America for the years ended December 31, 2012, 2011 and 2010, respectively. In the first half of 2013 we derived 52% of our product revenues from sales outside of North America. Our gross margin has decreased from periods prior to 2009 as a result of a higher percentage of laser revenue from our international markets, where our products tend to have lower average selling prices than in North America.

Our international sales are subject to a number of risks, including:

• foreign certification and regulatory requirements;

• difficulties in staffing and managing our foreign operations;

• import and export controls; and

• political and economic instability.

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If we are unsuccessful at managing these risks, our results of operations may be adversely affected.

We may incur foreign currency translation charges as a result of changes in currency exchange rates, which could cause our operating results to suffer.

The U.S. dollar is our functional currency. Although we sell our products and services through subsidiaries and distributors in approximately 100 foreign countries, approximately 50% of our revenues outside of North America for the year ended December 31, 2012, and 44% of our revenues outside of North America for the year ended December 31, 2011, were denominated in or linked to the U.S. dollar. In the first half of 2013, 45% of our revenues outside of North America were denominated in or linked to the U.S. dollar. Substantially all of our remaining revenues and all of our operating costs outside of North America are recognized in euros, British pounds, Japanese yen, Chinese yuan, South Korean won and Australian dollars. We have not historically engaged in hedging activities relating to our non-U.S. dollar operations. Fluctuations in exchange rates between the currencies in which such revenues are realized or costs are incurred and the dollar may have a material adverse effect on our results of operations and financial condition.

We may not receive revenues from our current research and development efforts for several years, if at all.

Investment in product development often involves a long payback cycle and risks associated with new technology. For example, our PicoSure laser system, which we launched in the first quarter of 2013, has been in development by us for several years. We have made and expect to continue making significant investments in research and development and related product opportunities. Accelerated product introductions and short product life cycles require high levels of expenditures for research and development that could adversely affect our operating results if not offset by revenue increases. We believe that we must continue to dedicate a significant amount of resources to our research and development efforts to maintain our competitive position. However, we may not generate anticipated revenues from these investments for several years, if at all.

Because we do not require training for users of our non-invasive products, and we sell these products to non-physicians, there exists an increased potential for misuse of these products, which could harm our reputation and our business.

Federal regulations allow us to sell our products to or on the order of practitioners licensed by law to use or order the use of a prescription device. The definition of “licensed practitioners” varies from state to state. As a result, our products may be purchased or operated by physicians with varying levels of training and, in many states, by non-physicians, including nurse practitioners, chiropractors and technicians. Outside the United States, many jurisdictions do not require specific qualifications or training for purchasers or operators of our products. We do not supervise the procedures performed with our products, nor can we require that direct medical supervision occur. We and our distributors offer product training sessions, but neither we nor our distributors require purchasers or operators of our non-invasive products to attend training sessions. The lack of required training and the purchase and use of our non-invasive products by non-physicians may result in product misuse and adverse treatment outcomes, which could harm our reputation and expose us to costly product liability litigation.

We may be unable to attract and retain management and other personnel we need to succeed.

Our success depends on the services of our senior management and other key research and development, manufacturing, sales and marketing employees. The loss of the services of one or more of these employees could have a material adverse effect on our business. We consider retaining Michael R. Davin, our president and chief executive officer, to be key to our efforts to develop, sell and market our products and remain competitive. We have entered into an employment agreement with Mr. Davin; however, the employment agreement is terminable by him on short notice and may not ensure his continued service with our company. Our future success will depend in large part upon our ability to attract, retain and motivate highly skilled employees. We cannot be certain that we will be able to do so.

Our stock price has fluctuated substantially, and we expect it will continue to do so.

Our Class A common stock price has fluctuated substantially since our initial public offering in 2005. From January 1, 2011 through August 8, 2013, our Class A common stock has traded as high as $30.20 per share and as low as $8.84 per share. The stock market in general has experienced extreme volatility that has often been unrelated to the operating performance of particular companies. The market price for our Class A common stock may be influenced by many factors, including:

• the success of competitive products or technologies;

• regulatory developments in the United States and foreign countries;

• developments or disputes concerning patents or other proprietary rights;

• the recruitment or departure of key personnel;

• variations in our financial results or those of companies that are perceived to be similar to us;

• market conditions in our industry and issuance of new or changed securities analysts’ reports or recommendations; and

• general economic, industry and market conditions.

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In addition, if the stock market in general experiences a loss of investor confidence, the trading price of our Class A common stock could decline for reasons unrelated to our business, financial condition or results of operations. A decline in our stock price could result in the loss of all or a part of our stockholders’ investments.

* We may not be able to successfully collect licensing royalties.

Portions of our revenues consist of royalties from sub-licensing patents licensed to us on an exclusive basis by MGH. These patents expire on February 1, 2015. If we are unable to collect our licensing royalties, our revenues will decline. In addition, our revenues will decline following expiration of such patents as we will no longer receive any royalties from such patents.

* We face risks associated with product warranties.

We could incur substantial costs as a result of product failures for which we are responsible under warranty obligations.

* If we are unable to protect our information technology infrastructure against service interruptions, data corruption, cyber-based attacks or network security breaches, our business and operating results may suffer.

We rely on information technology networks and systems, including the Internet, to process and transmit sensitive electronic information and to manage or support a variety of business processes and activities, including procurement and supply chain, manufacturing, distribution, and invoicing and collection of payments for our products. We use enterprise information technology systems to record, process, and summarize financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal, and tax requirements. Our information technology systems, some of which are managed by third-parties, may be susceptible to damage, disruptions or shutdowns due to failures during the process of upgrading or replacing software, databases or components thereof, power outages, hardware failures, computer viruses, attacks by computer hackers, telecommunication failures, user errors or catastrophic events. If our information technology systems suffer severe damage, disruption or shutdown and we are unable to effectively resolve the issues in a timely manner, our business and operating results may suffer.

Risks Related to Our Reliance on Third Parties

* If we fail to obtain key components of our products from our sole source or limited source suppliers or service providers, our ability to manufacture and sell our products would be impaired and our business could be materially harmed.

We depend on sole or limited suppliers of certain components and systems that are critical to the products that we manufacture and sell, and to which the significant majority of our revenues are attributable. We depend on El.En. for the SmartLipo MPX system and the SLT II laser system that we integrate with our own proprietary software and delivery systems into our Smartlipo Triplex and Cellulaze systems. We use Alexandrite rods to manufacture the lasers for our Elite and PicoSure products and Nd:Yag rods to manufacture the lasers for our RevLite / MedLite C6 products. We depend exclusively on Northrop Grumman SYNOPTICS to supply both the Alexandrite and Nd:Yag rods to us, and we are aware of no alternative supplier of Alexandrite rods meeting our quality standards. We use gaussian mirrors and polarizers to manufacture our RevLite / MedLite C6 product lines, for which we depend exclusively on Channel Islands Opto-Mechanical Engineering and JDS Uniphase Corporation, respectively. We offer our SmartCool treatment cooling systems for use with our laser aesthetic treatment systems, and we depend exclusively on Zimmer Elektromedizin GmbH to supply SmartCool systems to us. In addition, one third party supplier assembles and tests many of the components and subassemblies for our Elite, Cynergy, SmoothShapes XV, Affirm and Accolade product families. We use we use diode laser subassemblies from IPG Photonics to manufacture our Aspire^® body sculpting system with SlimLipo handpiece, and we use diode laser bars from Coherent to manufacture our Vectus Laser. Although alternative suppliers exist for the diode laser subassemblies and diode laser bars, they could take months to qualify and implement.

In October 2012, we entered into a new exclusive distribution agreement with El.En., which replaced our prior distribution agreements with El.En., and pursuant to which we purchase from it the SmartLipo MPX system and the SLT II laser system. We have exclusive worldwide rights under this agreement to sell the SmartLipo MPX systems and products containing the SLT II laser system. The price at which we purchase the SLT II laser system from El.En.is specified in the agreement; however, it may be changed by El.En. at its discretion upon 30 days’ notice. We are required to use commercially reasonable efforts to sell and promote our systems containing the SLT II laser system, and we are responsible for obtaining and maintaining regulatory approvals for systems containing the SLT II laser system. The new distribution agreement has an initial term that expires in October 2019, and it will automatically renew for additional one-year terms unless either party provides notice of termination at least six months prior to the expiration of the initial term or any subsequent renewal term. We or El.En. may terminate the agreement at any time based upon material uncured

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breaches by, or the insolvency of, the other party. In addition. El.En. may terminate the agreement if we do not meet annual minimum purchase obligations specified in the agreement and we may terminate if El.En. rejects a purchase order that is in line with our forecast.

Other than with El.En., we do not have long-term arrangements with any of our suppliers for the supply of these components or systems or with the assembly and test service provider referenced above, but instead purchase from them on a purchase order basis. Northrop Grumman SYNOPTICS, Channel Islands Opto-Mechanical Engineering, JDS Uniphase, Zimmer Elektromedizin, IPG Photonics and Coherent are not required, and may not be able or willing, to meet our future requirements at current prices, or at all.

Under our agreement with El.En. and our purchase order arrangements with our other suppliers and service providers, we are vulnerable to supply shortages and cessations and price fluctuations with respect to these critical components and systems and services. Such shortages or cessations could occur either as a result of breach by El.En. or us of our new distribution agreement, or as a result of other types of business decisions made by El.En. or other suppliers and service providers. Any extended interruption in our supplies of these components or systems or in the assembly and test services could materially harm our business.

We rely on third party distributors to market, sell and service a significant portion of our products. If these distributors do not commit the necessary resources to effectively market, sell and service our products or if our relationships with these distributors are disrupted, our business and operating results may be harmed.

In North America, France, Spain, the United Kingdom, Germany, Korea, China, Japan, Australia and Mexico, we sell our products through our internal sales organization. Outside of these markets, we sell our products through third party distributors. Our home-use laser system for the treatment of wrinkles, which we expect to be launched in the United States near the end of 2013, will be sold by Unilever. Our sales and marketing success in these other markets depends on these distributors, in particular their sales and service expertise and relationships with the customers in the marketplace. Sales of our aesthetic treatment systems by third party distributors represented 25%, 25% and 18% of our product revenue in 2012, 2011 and 2010, respectively. In the first half of 2013, sales of our aesthetic treatment systems by third party distributors represented 27% of our product revenue. The increases in 2012 and 2011 primarily related to sales of our ConBio products, which are generally sold through distributors.

We do not control our distributors or Unilever, and these parties may not be successful in marketing our products. These parties may terminate their relationships with us, or fail to commit the necessary resources to market and sell our products to the level of our expectations. Currently, we have written distributor agreements in place with most of our third party distributors. The third party distributors with which we do not have written distributor agreements may terminate their relationships with us and stop selling and servicing our products with little or no notice. If current or future third party distributors or other parties that sell our products do not perform adequately, or if we fail to maintain our existing relationships with these parties or fail to recruit and retain distributors in particular geographic areas, our revenue from international sales may be adversely affected and our operating results could suffer.

Risks Related to Our Relationship with El.En. and Our Corporate Structure

El.En. and its subsidiaries market and sell products that compete with our products, and any increased competition from El.En. could have a material adverse effect on our business.

El.En. is a leading laser manufacturer in Europe and a leading light-based medical device manufacturer worldwide. El.En. and its subsidiaries develop and produce laser systems with scientific, industrial, commercial and medical applications. In October 2012 we entered into a new seven-year exclusive distribution agreement with El.En., which replaced our prior distribution agreements with El.En. Under this new agreement, we purchase from El.En. its proprietary SmartLipo MPX system and its SLT II laser system. The SLT II laser system is an essential component of our SmartLipo Triplex and Cellulaze systems, which also incorporate our proprietary software and delivery systems. El.En. markets, sells, promotes and licenses other products that compete with our products, both in North America and elsewhere throughout the world, and our agreement with El.En. does not prevent El.En. from competing with us by selling products that we purchased in the past from El.En., including earlier generation SmartLipo systems. In the event that our distribution agreement with El.En. terminates, El.En. would be able to compete with us worldwide with the SmartLipo MPX system and with products containing the SLT II laser system. Our business could be materially and adversely affected by increased competition from El.En.

Provisions in our corporate charter documents and under Delaware law may delay or prevent attempts by our stockholders to change our management and hinder efforts to acquire a controlling interest in us.

Provisions of our certificate of incorporation and bylaws may discourage, delay or prevent a merger, acquisition or other change in control that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. These provisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. These provisions include:

• the classification of the members of our board of directors;

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• limitations on the removal of our directors;

• advance notice requirements for stockholder proposals and nominations;

• the inability of stockholders to act by written consent or to call special meetings; and

• the ability of our board of directors to designate the terms of and issue new series of preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors.

The affirmative vote of the holders of at least 75% of our shares of capital stock entitled to vote is necessary to amend or repeal the above provisions of our certificate of incorporation. In addition, absent approval of our board of directors, our bylaws may only be amended or repealed by the affirmative vote of the holders of at least 75% of the voting power of our shares of capital stock entitled to vote. In addition, Section 203 of the Delaware General Corporation Law prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person which together with its affiliates owns or within the last three years has owned 15% of our voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner. Accordingly, Section 203 may discourage, delay or prevent a change in control of our company.

The price of our common stock may decline because of future sales of our shares by El.En.

El.En. may sell all or part of the shares of our common stock that it owns. El.En. is not subject to any contractual obligation to maintain its ownership position in our shares, and, consequently, El.En. may not maintain its ownership of our common stock. Sales by El.En. of substantial amounts of our common stock in the public market could adversely affect prevailing market prices for our common stock. The shelf registration statement on Form S-3 that was declared effective on October 26, 2012, which we refer to as the shelf registration statement, permits us and El.En. to offer and sell shares of our common stock in one or more offerings.

If El.En. sells the shares of our stock held by it, our commercial relationship with El.En. may be adversely affected.

El.En. is not subject to any contractual obligation to maintain an ownership position in our shares. The shelf registration statement permits us and El.En. to offer and sell shares of our common stock in one or more offerings. If El.En. does not have a continuing interest or reduced interest in our financial success, it may be more inclined to compete with us in North America and in other markets, not to enter into future commercial agreements with us or to terminate or not renew our existing distribution agreement. If any of these events were to occur, it could harm our business.

Risks Related to Intellectual Property

If we infringe or are alleged to infringe intellectual property rights of third parties, our business could be adversely affected.

Our products may infringe or be claimed to infringe patents or patent applications under which we do not hold licenses or other rights. Third parties may own or control these patents and patent applications in the United States and abroad. These third parties could bring claims against us that would cause us to incur substantial expenses and, if successfully asserted against us, could cause us to pay substantial damages. Further, if a patent infringement suit were brought against us, we could be forced to stop or delay manufacturing or sales of the product that is the subject of the suit.

As a result of patent infringement claims, or in order to avoid potential claims, we may choose or be required to seek a license from the third party and be required to pay license fees or royalties or both, as we did in a 2006 patent license agreement with Palomar. Such licenses may not be available on acceptable terms, or at all. Even if we were able to obtain a license, the rights may be nonexclusive, which could result in our competitors gaining access to the same intellectual property. Ultimately, we could be forced to cease some aspect of our business operations if, as a result of actual or threatened patent infringement claims, we are unable to enter into licenses on acceptable terms. This could harm our business significantly.

There has been substantial litigation and other proceedings regarding patent and other intellectual property rights in our industry. In addition to infringement claims against us, we may become a party to other types of patent litigation and other proceedings, including reexamination proceedings or interference proceedings declared by the U.S. Patent and Trademark Office and opposition proceedings in the European Patent Office, regarding intellectual property rights with respect to our products and technology. The cost to us of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace. Patent litigation and other proceedings may also absorb significant management time.

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If we are unable to obtain or maintain intellectual property rights relating to our technology and products, the commercial value of our technology and products will be adversely affected and our competitive position could be harmed.

Our success and ability to compete depends in part upon our ability to obtain protection in the United States and other countries for our products by establishing and maintaining intellectual property rights relating to or incorporated into our technology and products. We own numerous patents and patent applications in the United States and corresponding patents and patent applications in many foreign jurisdictions. We do not know how successful we would be in any instance in which we asserted our patents against suspected infringers. Our pending and future patent applications may not issue as patents or, if issued, may not issue in a form that would be advantageous to us. Even if issued, our patents may be challenged, narrowed, invalidated or circumvented, which could limit our ability to stop competitors from marketing similar products or limit the length of term of patent protection we may have for our products. Changes in either patent laws or in interpretations of patent laws in the United States and other countries may diminish the value of our intellectual property or narrow the scope of our patent protection.

If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be adversely affected.

In addition to patented technology, we rely upon unpatented proprietary technology, processes and know-how, particularly with respect to our Alexandrite and pulse dye lasers. We generally seek to protect this information in part by confidentiality agreements with our employees, consultants and third parties. These agreements may be breached, and we may not have adequate remedies for any such breach. In addition, our trade secrets may otherwise become known or be independently developed by competitors.

Risks Related to Government Regulation

If we fail to obtain and maintain necessary U.S. Food and Drug Administration clearances for our products and indications or if clearances for future products and indications are delayed or not issued, our business would be harmed.

Our products are classified as medical devices and are subject to extensive regulation by the FDA and other federal, state and local authorities. These regulations relate to manufacturing, labeling, sale, promotion, distribution, importing and exporting and shipping of our products. In the United States, before we can market a new medical device, or a new use of, or claim for, an existing product, we must first receive either 510(k) clearance or premarket approval from the FDA, unless an exemption applies. Both of these processes can be expensive and lengthy and entail significant user fees, unless exempt. The FDA’s 510(k) clearance process usually takes from three to 12 months, but it can last longer. The process of obtaining premarket approval is much more costly and uncertain than the 510(k) clearance process. It generally takes from one to three years, or even longer, from the time the premarket approval application is submitted to the FDA until an approval is obtained.

In order to obtain premarket approval and, in some cases, a 510(k) clearance, a product sponsor must conduct well controlled clinical trials designed to test the safety and effectiveness of the product. Conducting clinical trials generally entails a long, expensive and uncertain process that is subject to delays and failure at any stage. The data obtained from clinical trials may be inadequate to support approval or clearance of a submission. In addition, the occurrence of unexpected findings in connection with clinical trials may prevent or delay obtaining approval or clearance. If we conduct clinical trials, they may be delayed or halted, or be inadequate to support approval or clearance, for numerous reasons, including:

• the FDA, other regulatory authorities or an institutional review board may place a clinical trial on hold;

• patients may not enroll in clinical trials, or patient follow-up may not occur, at the rate we expect;

• patients may not comply with trial protocols;

• institutional review boards and third party clinical investigators may delay or reject our trial protocol;

• third party clinical investigators may decline to participate in a trial or may not perform a trial on our anticipated schedule or consistent with the clinical trial protocol, good clinical practices, or other FDA requirements;

• third party organizations may not perform data collection and analysis in a timely or accurate manner;

• regulatory inspections of our clinical trials or manufacturing facilities may, among other things, require us to undertake corrective action or suspend or terminate our clinical trials, or invalidate our clinical trials;

• changes in governmental regulations or administrative actions; and

• the interim or final results of the clinical trials may be inconclusive or unfavorable as to safety or effectiveness.

Medical devices may be marketed only for the indications for which they are approved or cleared. The FDA may not approve or clear indications that are necessary or desirable for successful commercialization. Indeed, the FDA may refuse our requests for 510(k) clearance or premarket approval of new products, new intended uses or modifications to existing products. Our clearances can be revoked if safety or effectiveness problems develop.

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After clearance or approval of our products, we are subject to continuing regulation by the FDA, and if we fail to comply with FDA regulations, our business could suffer.

Even after clearance or approval of a product, we are subject to continuing regulation by the FDA, including the requirements that our facility be registered and our devices listed with the agency. We are subject to Medical Device Reporting regulations, which require us to report to the FDA if our products may have caused or contributed to a death or serious injury or malfunction in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur. We must report corrections and removals to the FDA where the correction or removal was initiated to reduce a risk to health posed by the device or to remedy a violation of the Federal Food, Drug, and Cosmetic Act caused by the device that may present a risk to health, and maintain records of other corrections or removals. The FDA closely regulates promotion and advertising and our promotional and advertising activities could come under scrutiny. If the FDA objects to our promotional and advertising activities or finds that we failed to submit reports under the Medical Device Reporting regulations, for example, the FDA may allege our activities resulted in violations.

The FDA and state authorities have broad enforcement powers. Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA or state agencies, which may include any of the following sanctions:

• untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;

• repair, replacement, refunds, recall or seizure of our products;

• operating restrictions or partial suspension or total shutdown of production;

• refusing or delaying our requests for 510(k) clearance or premarket approval of new products or new intended uses;

• withdrawing 510(k) clearance or premarket approvals that have already been granted; and

• criminal prosecution.

If any of these events were to occur, they could harm our business.

Federal regulatory reforms may adversely affect our ability to sell our products profitably.

From time to time, legislation is drafted and introduced in Congress that could significantly change the statutory provisions governing the clearance or approval, manufacture and marketing of a device. In addition, FDA regulations and guidance are often revised or reinterpreted by the agency in ways that may significantly affect our business and our products. For example, the FDA recently proposed changing its standards for determining when a medical device modification must receive premarket clearance or approval. Although Congress objected to these revised standards, it is possible that the FDA will seek to implement these or similar changes in the future.

In addition, beginning in 2013, most of the products and systems that we sell became subject to a new excise tax on sales of certain medical devices in the United States after December 31, 2012 by the manufacturer, producer or importer in an amount equal to 2.3% of the sale price. Under the law, additional charges, including warranties, may be deemed to be included in the sale price for purposes of determining the amount of the excise tax. We believe this excise tax could harm our sales and reduce our profitability.

In 2012, the SEC adopted a final rule that will require public companies to make disclosures about the use of certain “conflict minerals” in the products that they manufacture. The rule requires annual disclosures by public companies for which conflict minerals (regardless of the place of origin of such minerals) are necessary to the functionality or production of products that they manufacture. Such companies must conduct inquiries into the country of origin of their necessary conflict minerals and disclose the results of such inquiries. If, based on its country of origin, a company determines that its conflict minerals originated in the Democratic Republic of Congo, or adjacent nations, and did not come from recycled or scrap sources, or has reason to believe that such conflict minerals may have originated in the covered countries and may not have come from recycled or scrap sources, then it must (i) exercise due diligence on the source and chain of custody of such conflict minerals and (ii) prepare an independently audited Conflict Minerals Report that, among other things, describes its due diligence efforts and identifies products containing conflict minerals that directly or indirectly finance or benefit designated armed groups perpetrating serious human rights abuses in the covered countries. The rules include an exception from the audit requirement for two years where the company is unable to determine if the minerals are “DRC conflict free.” All companies providing disclosures under the final rule must do so on a new Form SD, to be filed annually with the SEC on or before May 31 of each year. Information on Form SD will cover a company’s conflict minerals disclosure for the prior calendar year, regardless of the company’s fiscal year end. The first Form SDs will be due on or before May 31, 2014 and will cover conflict minerals disclosures for calendar year 2013. Because certain materials used in the manufacturing of our products are considered conflict minerals, we anticipate that we will file a Form SD before May 31, 2014 for conflict minerals disclosures for calendar year 2013. We believe our efforts to comply with these requirements will be costly and time consuming.

It is impossible to predict whether other legislative changes will be enacted or government regulations, guidance or interpretations changed, and what the impact of such changes, if any, may be.

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We have modified some of our products without FDA clearance. The FDA could retroactively determine that the modifications were improper and require us to stop marketing and recall the modified products.

Any modifications to one of our FDA-cleared devices that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance or a premarket approval. We may be required to submit extensive pre-clinical and clinical data depending on the nature of the changes. We may not be able to obtain additional 510(k) clearances or premarket approvals for modifications to, or additional indications for, our existing products in a timely fashion, or at all. Delays in obtaining future clearances or approvals would adversely affect our ability to introduce new or enhanced products in a timely manner, which in turn would harm our revenue and operating results. We have made modifications to our devices in the past and may make additional modifications in the future that we believe do not or will not require additional clearances or approvals. If the FDA disagrees, and requires new clearances or approvals for the modifications, we may be required to recall and to stop marketing the modified devices, which could harm our operating results and require us to redesign, among other things, our products.

If we fail to comply with the FDA’s Quality System Regulation and laser performance standards, our manufacturing operations could be halted, and our business would suffer.

We are currently required to demonstrate and maintain compliance with the FDA’s QSR. The QSR is a complex regulatory scheme that covers the methods and documentation of the design, testing, control, manufacturing, labeling, quality assurance, packaging, storage and shipping of our products. Because our products involve the use of lasers, our products also are covered by a performance standard for lasers set forth in FDA regulations. The laser performance standard imposes specific record keeping, reporting, product testing and product labeling requirements. These requirements include affixing warning labels to laser products as well as incorporating certain safety features in the design of laser products. The FDA enforces the QSR and laser performance standards through periodic unannounced inspections. We have been, and anticipate in the future being, subject to such inspections. Our failure to comply with the QSR or to take satisfactory corrective action in response to an adverse QSR inspection or our failure to comply with applicable laser performance standards could result in enforcement actions, including a public warning letter, a shutdown of or restrictions on our manufacturing operations, delays in approving or clearing a product, refusal to permit the import or export of our products, a recall or seizure of our products, fines, injunctions, civil or criminal penalties, or other sanctions, such as those described in the preceding paragraphs, any of which could cause our business and operating results to suffer.

If we fail to comply with state laws and regulations, or if state laws or regulations change, our business could suffer.

In addition to FDA regulations, most of our products are also subject to state regulations relating to their sale and use. These regulations are complex and vary from state to state, which complicates monitoring compliance. In addition, these regulations are in many instances in flux. For example, federal regulations allow our prescription products to be sold to or on the order of “licensed practitioners,” that is, practitioners licensed by law to use or order the use of a prescription device. Licensed practitioners are defined on a state-by-state basis. As a result, some states permit non-physicians to purchase and operate our products, while other states do not. Additionally, a state could change its regulations at any time to prohibit sales to particular types of customers. We believe that, to date, we have sold our prescription products only to licensed practitioners. However, our failure to comply with state laws or regulations and changes in state laws or regulations may adversely affect our business.

We, or our distributors, may be unable to obtain or maintain international regulatory qualifications or approvals for our current or future products and indications, which could harm our business.

Sales of our products outside the United States are subject to foreign regulatory requirements that vary widely from country to country. In many countries, our third party distributors are responsible for obtaining and maintaining regulatory approvals for our products. We do not control our third party distributors, and they may not be successful in obtaining or maintaining these regulatory approvals. In addition, the FDA regulates exports of medical devices from the United States.

Complying with international regulatory requirements can be an expensive and time consuming process, and approval is not certain. The time required to obtain foreign clearances or approvals may be longer than that required for FDA clearance or approval, and requirements for such clearances or approvals may differ significantly from FDA requirements. Foreign regulatory authorities may not clear or approve our products for the same indications cleared or approved by the FDA. The foreign regulatory approval process may include all of the risks associated with obtaining FDA clearance or approval in addition to other risks. Although we or our distributors have obtained regulatory approvals in the European Union and other countries outside the United States for many of our products, we or our distributors may be unable to maintain regulatory qualifications, clearances or approvals in these countries or obtain qualifications, clearances or approvals in other countries. For example, we are in the process of seeking regulatory approvals from the Japanese Ministry of Health, Labour and Welfare for the direct sale of our products into that country. If we are not successful in doing so, our business will be harmed. We may also incur significant costs in attempting to obtain and in maintaining foreign regulatory clearances, approvals or qualifications. Foreign regulatory agencies, as well as the FDA, periodically inspect manufacturing facilities both in the United States and abroad. If we experience delays in receiving necessary qualifications, clearances or approvals to market our products outside the United States, or if we fail to receive those qualifications, clearances or approvals, or if we fail to comply with other foreign regulatory requirements, we and our distributors may be unable to market our products or enhancements in international markets effectively, or at all. Additionally, the imposition of new requirements may significantly affect our business and our products. We may not be able to adjust to such new requirements.

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New regulations may limit our ability to sell to non-physicians, which could harm our business.

Currently, we sell our products primarily to physicians and, outside the United States, to aestheticians. In addition, we also market our products to the growing aesthetic spa market, where non-physicians under physician supervision perform aesthetic procedures at dedicated facilities. However, federal, state and international regulations could change at any time, disallowing sales of our products to aestheticians, and limiting the ability of aestheticians and non-physicians to operate our products. Any limitations on our ability to sell our products to non-physicians or on the ability of aestheticians and non-physicians to operate our products could cause our business and operating results to suffer.

Risks Related to Litigation

Product liability and business liability suits could be brought against us due to defective design, material or workmanship or due to misuse of our products. These lawsuits could be expensive and time consuming and result in substantial damages to us and increases in our insurance rates.

If our products are defectively designed, manufactured or labeled, contain defective components or are misused, we may become subject to substantial and costly litigation by our customers or their patients or clients. Misusing our products or failing to adhere to operating guidelines for our products can cause severe burns or other significant damage to the eyes, skin or other tissue. If our products fail to function properly, our customers may lose the ability to treat their patients or clients resulting in a loss of business for our customers. We are routinely involved in claims related to the use of our products. Product liability and business liability claims could divert management’s attention from our core business, be expensive to defend and result in sizable damage awards against us. Our current insurance coverage may not apply or may not be sufficient to cover these claims, and the coverage we have is subject to deductibles for which we are responsible. Moreover, in the future, we may not be able to obtain insurance in amount or scope sufficient to provide us with adequate coverage against potential liabilities. Any product liability or other claims brought against us, with or without merit, could increase our product liability insurance rates or prevent us from securing continuing coverage, could harm our reputation in the industry and reduce product sales. We would need to pay any losses in excess of our insurance coverage out of cash reserves, harming our financial condition and adversely affecting our operating results.

We may incur substantial expenses if our past practices are shown to have violated the Telephone Consumer Protection Act.

We previously used facsimiles to disseminate information about our clinical workshops to large numbers of customers and potential customers. These facsimiles were transmitted by third parties retained by us, and were sent to recipients whose facsimile numbers were supplied by us as well as other recipients whose facsimile numbers we purchased from other sources. In May 2005, we stopped sending unsolicited facsimiles to customers and potential customers.

Under the federal Telephone Consumer Protection Act, or TCPA, recipients of unsolicited facsimile “advertisements” may be entitled to damages of up to $500 per facsimile for inadvertent violations and up to $1,500 per facsimile for knowing or willful violations. Recipients of unsolicited facsimile advertisements may seek enforcement of the TCPA in state courts. The TCPA also permits states to initiate a civil action in a federal district court to enforce the TCPA against a party who engages in a pattern or practice of violations of the TCPA. In addition, complaints may be filed with the Federal Communications Commission, which has the power to assess penalties against parties for violations of the TCPA.

In 2005, a plaintiff, individually and as putative representative of a purported class, filed a complaint against us under the TCPA in Massachusetts Superior Court in Middlesex County seeking monetary damages, injunctive relief, costs and attorneys’ fees. The complaint alleged that we violated the TCPA by sending unsolicited advertisements by facsimile to the plaintiff and other recipients without the prior express invitation or permission of the recipients. Based on discovery in this matter, the plaintiff alleges that approximately three million facsimiles were sent on our behalf by a third party to approximately 100,000 individuals. In January 2012, the Court denied the class certification motion. In November 2012, the Court issued the final judgment and awarded the plaintiff $6,000 in damages and awarded us $3,495 in costs. The plaintiff has appealed this decision. In addition, in July 2012, the plaintiff filed a new purported class action, based on the same operative facts and asserting the same claims as in the Massachusetts action, in federal court in the Eastern District of New York. In February 2013 that court granted our motion to dismiss the plaintiff’s claims. In March 2013, the plaintiff drafted a motion seeking reconsideration of the court’s judgment and vacation of the court’s order of dismissal. In April 2013, we drafted a response opposing the plaintiff’s motion. To date, the plaintiff has not filed its motion with the court and we believe this New York case is closed. With regard to the Massachusetts case, we expect a hearing on the plaintiff’s appeal to be scheduled in the fourth quarter.

We are vigorously defending these lawsuits. However, litigation is subject to numerous uncertainties and we are unable to predict the ultimate outcome of this or any other matter. Moreover, the amount of any potential liability in connection with this lawsuit will depend, to a large extent, on whether a class in a class action lawsuit is certified and, if one is certified, on the scope of the class, neither of which we can predict at this time.

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These and any future lawsuits that we may face regarding these issues could materially and adversely affect our results of operations, cash flows and financial condition, cause us to incur significant expenses and divert the attention of our management and key personnel from our business operations.

* Employment related lawsuits could be brought against us for improper termination of employment, sexual harassment, hostile work environment and other claims. These lawsuits could be expensive and time consuming and result in substantial damages to us and increases in our insurance rates.

If we terminate employment for improper reasons or fail to provide an appropriate work environment, we may become subject to substantial and costly litigation by our former and current employees. We are routinely involved in claims related to improper termination and other claims. Such claims could divert management’s attention from our core business, be expensive to defend and result in sizable damage awards against us. Our current insurance coverage may not apply or may not be sufficient to cover these claims, and the coverage we have is subject to deductibles for which we are responsible. Moreover, in the future, we may not be able to obtain insurance in amount or scope sufficient to provide us with adequate coverage against potential liabilities. Any employment related claims brought against us, with or without merit, could increase our employment law insurance rates or prevent us from securing continuing coverage, could harm our reputation in the industry and reduce product sales. We would need to pay any losses in excess of our insurance coverage out of cash reserves, harming our financial condition and adversely affecting our operating results.

Risks Related to Our Acquisition of Palomar

* Uncertainty about the merger may adversely affect our relationships with our respective customers, suppliers and employees.

As a result of our acquisition of Palomar, our existing or prospective customers or suppliers may:

• delay, defer or cease purchasing goods or services from or providing goods or services to us;

• delay or defer other decisions concerning us or refuse to extend credit to us; or

• otherwise seek to change the terms on which they do business with us.

Any such delays or changes to terms could seriously harm our business.

In addition, as a result of the acquisition, current and prospective employees could experience uncertainty about their future with us. These uncertainties may impair our ability to retain, recruit or motivate key personnel.

* Any delay in the completion of the integration of the Palomar business, including employees, into Cynosure following the acquisition may significantly reduce the benefits expected to be obtained from the acquisition or could adversely affect the market price of our Class A common stock or our future business and financial results.

Failure to integrate the Palomar business, including employees, into Cynosure in a timely manner would prevent us from realizing the anticipated benefits of the acquisition. Any delay in completing the integration may significantly reduce the synergies and other benefits that we expect to achieve.

In addition, the market price of our Class A common stock may reflect various market assumptions as to whether and when the integration will be completed. Consequently, the completion of, the failure to complete, or any delay in the completion of the integration could result in a significant change in the market price of our Class A common stock.

* Sales of substantial amounts of our Class A common stock in the open market by former Palomar stockholders could depress the market price of our Class A common stock.

Shares of our Class A common stock that were issued to stockholders of Palomar in the merger are freely tradable by such stockholders without restrictions or further registration under the Securities Act, provided, however, that any stockholders who are affiliates of Cynosure are subject to the resale restrictions of Rule 144 under the Securities Act.

We issued approximately 6.0 million shares of our Class A common stock in the merger.

Palomar’s former stockholders may sell substantial amounts of our Class A common stock in the public market. Consequently, the market price of our Class A common stock may decrease. These sales might also make it more difficult for us to raise capital by selling equity or equity-related securities at a time and price that we otherwise would deem appropriate.

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* Integration of the Palomar business may cause a diversion of management’s attention that could harm us.

Integration of the Palomar business is requiring a significant amount of time and attention from our management. The diversion of management’s attention away from ongoing operations could adversely affect our ongoing operations and business relationships.

* We may be unable to integrate successfully the business of Palomar and realize the anticipated benefits of the acquisition.

Due to legal restrictions, we conducted only limited planning regarding the integration of Palomar into our business prior to the completion of the acquisition. The combined company is requiring the devotion of significant management attention and resources to integrating the two companies. Delays in this process could adversely affect our business, financial results, financial condition and stock price.

Achieving the anticipated benefits of the acquisition will depend, in part, on the integration of operations, personnel and technology of Palomar into our company. If we are unable to successfully integrate Palomar’s business into our business in a manner that permits the combined company to achieve the cost savings and operating synergies anticipated to result from the acquisition, the anticipated benefits of the acquisition may not be realized fully or at all or may take longer to realize than expected.

Potential difficulties the combined company may encounter in the integration process include the following:

• lost sales and customers as a result of certain of our customers or Palomar’s customers deciding not to do business with the combined company;

• the inability to procure goods and services on favorable terms as a result of our suppliers or Palomar’s suppliers deciding not to do business with the combined company;

• the inability to retain, recruit or motivate key personnel;

• complexities associated with managing the combined businesses;

• difficulties associated with integrating personnel from diverse corporate cultures while maintaining focus on providing consistent, high quality products and customer service;

• potential unknown liabilities and unforeseen increased expenses or delays associated with the integration process;

• performance shortfalls as a result of the diversion of management’s attention to the integration process;

• disruption or interruption of, or loss of momentum in, our ongoing business; and

• inconsistencies in standards, controls, procedures and policies.

Any of these difficulties could adversely affect our ability to maintain relationships with suppliers, customers and employees or our ability to achieve the anticipated benefits of the acquisition, or could reduce our earnings or otherwise adversely affect the business and financial results of the combined company. For example, any inconsistencies in technical standards, controls, procedures and policies may require the diversion of management and technical resources toward addressing such inconsistencies which may delay or slow commercialization of new products, increase our costs, damage our reputation and lower our sales.

Even if we are able to integrate Palomar’s business operations successfully, this integration may not result in the realization of the full benefits of synergies, cost savings, innovation and operational efficiencies that may be possible from this integration and these benefits may not be achieved within a reasonable period of time.

Additionally, we may, from time to time, evaluate potential strategic acquisitions of other complementary businesses, products or technologies, as well as consider joint ventures and other collaborative projects. However, we cannot assure you that these completed acquisitions, or any future acquisitions that we may make, will enhance our products or strengthen our competitive position. In particular, we may encounter difficulties assimilating or integrating the acquired businesses, technologies, products, personnel or operations of the acquired companies, and in retaining and motivating key personnel from these businesses. The integration of these businesses may not result in the realization of the full benefits of synergies, cost savings, innovation and operational efficiencies that may be possible from this integration and these benefits may not be achieved within a reasonable period of time.

* We have and will continue to incur significant costs in connection with the acquisition.

We have and will continue to incur substantial expenses related to the acquisition. We have incurred direct transaction costs of approximately $21.5 million in connection with the acquisition, including approximately $18.5 million in “golden parachute” compensation (also known as change of control payments).

We expect to continue to incur significant additional expenses. There are a large number of systems that must be integrated, including management information, purchasing, accounting and finance, sales, billing, payroll and benefits, fixed assets and lease administration systems, and regulatory compliance. While we have assumed that a certain level of expenses would be incurred from the integration of the two companies, there are a number of factors beyond our control that could affect the total amount or the timing

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of all the expected integration expenses. Moreover, many of the expenses that will be incurred, by their nature, are impracticable to estimate at the present time. These expenses could, particularly in the near term, exceed the savings that we expect to achieve from the elimination of duplicative expenses, the realization of economies of scale, and cost savings and revenue synergies related to the integration of the two companies following the completion of the merger. The amount and timing of any these charges are uncertain at the present time. In addition, the combined company may incur additional material charges in subsequent fiscal quarters to reflect additional costs in connection with the acquisition.

We will face uncertainties related to the effectiveness of internal controls as a result of the acquisition of the Palomar business.

Public companies in the United States are required to review their internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002. Any system of control, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, any design may not achieve its stated goal under all potential future conditions, regardless of how remote.

Our integration with Palomar, and our respective internal control systems and procedures, may result in or lead to a future material weakness in our internal controls, or we or our independent registered public accounting firm may identify a material weakness in our internal controls in the future. A material weakness in internal control over financial reporting would require management and our independent public accounting firm to evaluate our internal controls as ineffective. If our internal control over financial reporting is not considered adequate, we may experience a loss of public confidence, which could have an adverse effect on its business and stock price.

Over time we may identify deficiencies or weaknesses in its internal controls and, where and when appropriate, report on these deficiencies or weaknesses. However, the internal control procedures can provide only reasonable, and not absolute, assurance that deficiencies or weaknesses are identified. Deficiencies or weaknesses that have not been identified by us could emerge and these deficiencies or weaknesses could have a material impact on our results of operations.

Charges to earnings resulting from the application of the acquisition method of accounting may adversely affect the market value of our Class A common stock.

In accordance with generally accepted accounting principles in the United States, the acquisition is being accounted for using the acquisition method of accounting, which will result in charges to earnings that could have an adverse impact on the market value of our Class A common stock. Under the acquisition method of accounting, the total estimated purchase price is being allocated to Palomar’s net tangible assets and identifiable intangible assets based on their respective fair values as of the date of completion of the merger. Any excess of the purchase price over those fair values is being recorded as goodwill. The combined company will incur additional amortization expense based on the identifiable amortizable intangible assets acquired pursuant to the merger agreement and their relative useful lives. Additionally, to the extent the value of goodwill or identifiable intangible assets or other long-lived assets may become impaired, the combined company will be required to incur material charges relating to the impairment. These amortization and potential impairment charges could have a material impact on the combined company’s results of operations.

We will incur approximately $40.3 million of incremental amortization expense relating to the acquisition of Palomar. The incremental amortization expense is based on the preliminary estimate of the fair value of the developed technology and patents, customer relationships and trade names acquired in the merger. Changes in earnings per share, including as a result of this incremental expense, could adversely affect the market price of our Class A common stock.

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* Stockholder class-action lawsuits have been brought against Palomar, its directors and us in connection with the merger. These lawsuits could be expensive and time consuming and cause Palomar’s former directors and us to pay substantial damages and incur additional costs and expenses.

Following the announcement of the merger on March 18, 2013, six putative stockholder class action complaints were filed against Palomar, its directors and us. The complaints allege that the Palomar board of directors breached their fiduciary duties to the Palomar stockholders in connection with the approval of the merger and that we and, in five of the six lawsuits, Commander, aided and abetted the alleged breach of fiduciary duties. The complaints allege that the Palomar board of directors breached their fiduciary duties in connection with the proposed transaction by, among other things, conducting a flawed sale process, failing to maximize stockholder value and to obtain the best financial and other terms, and that the registration statement we filed is materially deficient. In all six lawsuits, we have entered into memorandums of understanding that contemplate the parties entering into a stipulation of settlement. The stipulation of settlement will be subject to customary conditions, including court approval following notice to stockholders. In the event that the parties enter into a stipulation of settlement, a hearing will be scheduled at which the Court of Chancery of the State of Delaware will consider the fairness, reasonableness and adequacy of the settlement. If the settlement is finally approved by the court, it will resolve and release all claims that were or could have been brought challenging any aspect of the merger, the Merger Agreement, and any disclosure made in connection therewith (but excluding claims for appraisal under Section 262 of the Delaware General Corporation Law) and the Delaware actions will be dismissed with prejudice. As part of the settlement, the Massachusetts plaintiffs will also dismiss their actions with prejudice. In addition, in connection with the settlement, the parties contemplate that plaintiffs’ counsel will file a petition in the Court of Chancery of the State of Delaware for an award of attorneys’ fees and expenses to be paid by us, which we may oppose. We will pay or cause to be paid any attorneys’ fees and expenses awarded by the Court of Chancery of the State of Delaware. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the Court of Chancery of the State of Delaware will approve the settlement even if the parties were to enter into such stipulation. In such event, the proposed settlement as contemplated by the Delaware Memorandum of Understanding and the Massachusetts Memorandum of Understanding may be terminated, and we will continue to vigorously defending these lawsuits. However, litigation is subject to numerous uncertainties and we are unable to predict the ultimate outcome of this or any other matter. If one or more of the lawsuits is successful, it could result in substantial damages to Palomar’s former directors and us and cause us to incur additional costs and expenses in connection with the merger.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In July 2009, our Board of Directors authorized the repurchase of up to $10 million of our Class A common stock, from time to time, on the open market or in privately negotiated transactions under a stock repurchase program. The program will terminate upon the purchase of $10 million in common stock, unless our Board of Directors discontinues it sooner. During the six months ended June 30, 2013, we did not repurchase any shares of our common stock under this program. As of June 30, 2013, we have repurchased an aggregate of 196,970 shares under this program at an aggregate cost of $1.9 million.

Item 4. Mine Safety Disclosure

None.

Item 6. Exhibits

(a) Exhibits

Exhibit No.	Description
2.1(1)	Amended and Restated Agreement and Plan of Merger, dated as of May 15, 2013, among Cynosure, Inc., Commander Acquisition, LLC and Palomar Medical Technologies, Inc. (incorporated by reference to Exhibit 2.1 to Cynosure’s Current Report on Form 8-K filed May 16, 2013)
10.1	Amended and Restated 2005 Stock Incentive Plan
31.1	Certification of the Principal Executive Officer
31.2	Certification of the Principal Financial Officer
32.1	Certification of the Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of the Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*	The following materials from the Cynosure, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Operations for the three and six months ended June 30, 2013 and 2012, (ii) Consolidated Balance Sheets at June 30, 2013 and December 31, 2012, (iii) Consolidated Statements of Comprehensive (Loss) Income for the three and six months ended June 30, 2013 and 2012, (iv) Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and 2012, and (v) Notes to Consolidated Financial Statements.

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* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

(1) Schedules to this Exhibit have been omitted in reliance on Item 601(b)(2) of Regulation S-K. Cynosure, Inc. will furnish copies of any such schedules to the SEC upon request.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant certifies that it has caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Cynosure, Inc.
	(Registrant)
Date: August 9, 2013	By:	/S/    MICHAEL R. DAVIN
		Michael R. Davin
		Chairman, President, Chief Executive Officer
Date: August 9, 2013	By:	/S/    TIMOTHY W. BAKER
		Timothy W. Baker
		Executive Vice President, Chief Financial Officer and Treasurer

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EXHIBIT INDEX

Exhibit No.	Description
2.1(1)	Amended and Restated Agreement and Plan of Merger, dated as of May 15, 2013, among Cynosure, Inc., Commander Acquisition, LLC and Palomar Medical Technologies, Inc. (incorporated by reference to Exhibit 2.1 to Cynosure’s Current Report on Form 8-K filed May 16, 2013)
10.1	Amended and Restated 2005 Stock Incentive Plan
31.1	Certification of the Principal Executive Officer
31.2	Certification of the Principal Financial Officer
32.1	Certification of the Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of the Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*	The following materials from the Cynosure, Inc. Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Operations for the three and six months ended June 30, 2013 and 2012, (ii) Consolidated Balance Sheets at June 30, 2013 and December 31, 2012, (iii) Consolidated Statements of Comprehensive (Loss) Income for the three and six months ended June 30, 2013 and 2012, (iv) Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and 2012, and (v) Notes to Consolidated Financial Statements.

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

(1) Schedules to this Exhibit have been omitted in reliance on Item 601(b)(2) of Regulation S-K. Cynosure, Inc. will furnish copies of any such schedules to the SEC upon request.

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EX-10.1

Exhibit 10.1

CYNOSURE, INC.

AMENDED AND RESTATED 2005 STOCK INCENTIVE PLAN

(as amended by the Board of Directors on April 12, 2013 and approved by the stockholders on June 24, 2013)

1. Purpose

The purpose of this Amended and Restated 2005 Stock Incentive Plan (the “Plan”) of Cynosure, Inc., a Delaware corporation (the “Company”), is to advance the interests of the Company’s stockholders by enhancing the Company’s ability to attract, retain and motivate persons who are expected to make important contributions to the Company and by providing such persons with equity ownership opportunities and performance-based incentives that are intended to align their interests with those of the Company’s stockholders. Except where the context otherwise requires, the term “Company” shall include any of the Company’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the “Code”) and any other business venture (including, without limitation, joint venture or limited liability company) in which the Company has a controlling interest, as determined by the Board of Directors of the Company (the “Board”). The Plan is amended and restated effective as of and conditioned upon the approval of the Company’s stockholders at its 2013 annual meeting of stockholders (with the effective date of the Plan as amended being the “2013 Effective Date”).

2. Eligibility

All of the Company’s employees, officers, directors, consultants and advisors (as such terms are defined and interpreted for purposes of Form S-8 under the Securities Act of 1933, as amended (the “Securities Act”), or any successor form) are eligible to receive options, restricted stock, restricted stock units, stock appreciation rights (“SARs”), and other stock-based awards (each, an “Award”) under the Plan. Each person who receives an Award under the Plan is deemed a “Participant.”

3. Administration and Delegation

(a) Administration by Board of Directors. The Plan will be administered by the Board. The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative rules, guidelines and practices relating to the Plan as it shall deem advisable. The Board may construe and interpret the terms of the Plan and any Award agreements entered into under the Plan. The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem expedient, and it shall be the sole and final judge of such expediency. All decisions by the Board shall be made in the Board’s sole discretion and shall be final and binding on all persons having or claiming any interest in the Plan or in any Award.

(b) Appointment of Committees. To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to one or more committees or subcommittees of the Board (a “Committee”). All references in the Plan to the “Board” shall

mean the Board or a Committee of the Board or the officers referred to in Section 3(c) to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee or officers.

(c) Delegation to Officers. To the extent permitted by applicable law, the Board may delegate to one or more officers of the Company the power to grant Options and other Awards that constitute rights under Delaware law (subject to any limitations under the Plan) to employees or officers of the Company or any of its present or future subsidiary corporations and to exercise such other powers under the Plan as the Board may determine, provided that the Board shall fix the terms of the Awards to be granted by such officers (including the exercise price of such Awards, which may include a formula by which the exercise price will be determined) and the maximum number of shares subject to Awards that the officers may grant; provided further, however, that no officer shall be authorized to grant Awards to any “executive officer” of the Company (as defined by Rule 3b-7 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or to any “officer” of the Company (as defined by Rule 16a-1 under the Exchange Act). The Board may not delegate authority under this Section 3(c) to grant Restricted Stock, unless Delaware law then permits such delegation.

(d) Awards to Non-Employee Directors. Discretionary Awards to non-employee directors may be granted and administered only by a Committee, all of the members of which are independent directors as defined by Section 5605(a)(2) of the NASDAQ Marketplace Rules.

4. Stock Available for Awards

(a) Number of Shares; Share Counting.

(1) Authorized Number of Shares. Subject to adjustment under Section 9, Awards may be made under the Plan for up to 5,588,369 shares of Class A Common Stock, par value $0.001 per share, of the Company (the “Common Stock”), any or all of which Awards may be in the form of Incentive Stock Options (as defined in Section 5(b)). Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.

(2) Share Counting. For purposes of counting the number of shares available for the grant of Awards under the Plan, the following rules will apply as of 2013 Effective Date in lieu of the rules contained in the Plan before such date:

(a) if any Award (i) expires or is terminated, surrendered or canceled without having been fully exercised or is forfeited in whole or in part (including as the result of shares of Common Stock subject to such Award being repurchased by the Company at the original issuance price pursuant to a contractual repurchase right) or (ii) results in any Common Stock not being issued (including as a result of an SAR that was settleable either in cash or in stock actually being settled in cash), the unused Common Stock covered by such Award shall again be available for the grant of Awards; provided, however, that (1) in the case of Incentive Stock Options, the foregoing shall be subject to any limitations under the Code

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and (2) in the case of the exercise of an SAR, the number of shares counted against the shares available under the Plan shall be the full number of shares subject to the SAR multiplied by the percentage of the SAR actually exercised, regardless of the number of shares actually used to settle such SAR upon exercise;

(b) shares of Common Stock delivered (either by actual delivery or net exercise) to the Company by a Participant to (i) purchase shares of Common Stock upon the exercise of an Award or (ii) satisfy tax withholding obligations (including shares retained from the Award creating the tax obligation) shall not be added back to the number of shares available for the future grant of Awards;

(c) shares of Common Stock repurchased by the Company on the open market using the proceeds from the exercise of an Award shall not increase the number of shares available for future grant of Awards; and

(d) all shares of Common Stock covered by SARs shall be counted against the number of shares available for the grant of Awards under the Plan; provided, however, that SARs that may be settled only in cash shall not be so counted.

(b) Section 162(m) Per-Participant Limit. Subject to adjustment under Section 9, the maximum number of shares of Common Stock with respect to which Awards may be granted to any Participant under the Plan shall be 250,000 per calendar year. The per Participant limit described in this Section 4(b) shall be construed and applied consistently with Section 162(m) of the Code or any successor provision thereto, and the regulations thereunder (“Section 162(m)”).

(c) Substitute Awards. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Board may grant Awards in substitution for any options or other stock or stock-based awards granted by such entity or an affiliate thereof. Substitute Awards may be granted on such terms as the Board deems appropriate in the circumstances, notwithstanding any limitations on Awards contained in the Plan. Substitute Awards shall not count against the overall share limit set forth in Section 4(a)(1), except as may be required by reason of Section 422 and related provisions of the Code.

5. Stock Options

(a) General. The Board may grant options to purchase Common Stock (each, an “Option”) and determine the number of shares of Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option, including conditions relating to applicable federal or state securities laws, as it considers necessary or advisable. An Option which is not intended to be an Incentive Stock Option (as hereinafter defined) shall be designated a “Nonstatutory Stock Option.”

(b) Incentive Stock Options. An Option that the Board intends to be an “incentive stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall only be

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granted to employees of Cynosure, Inc., any of Cynosure, Inc.’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Code, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code, and shall be subject to and shall be construed consistently with the requirements of Section 422 of the Code. The Company shall have no liability to a Participant, or any other party, if an Option (or any part thereof) that is intended to be an Incentive Stock Option is not an Incentive Stock Option or if the Company converts an Incentive Stock Option to a Nonstatutory Stock Option.

(c) Exercise Price. The Board shall establish the exercise price of each Option and specify the exercise price in the applicable Option agreement. The exercise price shall be not less than 100% of the Fair Market Value per share of Common Stock as determined by (or in a manner approved by) the Board on the date the Option is granted; provided that if the Board approves the grant of an Option with an exercise price to be determined on a future date, the exercise price shall be not less than 100% of the Fair Market Value on such future date. “Fair Market Value” of a share of Common Stock for purposes of the Plan will be determined as follows:

(i) if the Common Stock trades on a national securities exchange, the closing sale price (for the primary trading session) on the date of grant; or

(ii) if the Common Stock does not trade on any such exchange, the average of the closing bid and asked prices as reported by an authorized OTCBB market data vendor as listed on the OTCBB website (otcbb.com) on the date of grant; or

(iii) if the Common Stock is not publicly traded, the Board will determine the Fair Market Value for purposes of the Plan using any measure of value it determines to be appropriate (including, as it considers appropriate, relying on appraisals) in a manner consistent with the valuation principles under Code Section 409A, except as the Board may expressly determine otherwise.

For any date that is not a trading day, the Fair Market Value of a share of Common Stock for such date will be determined by using the closing sale price or average of the bid and asked prices, as appropriate, for the immediately preceding trading day and with the timing in the formulas above adjusted accordingly. The Board can substitute a particular time of day or other measure of “closing sale price” or “bid and asked prices” if appropriate because of exchange or market procedures or can, in its sole discretion, use weighted averages either on a daily basis or such longer period as complies with Code Section 409A. The Board has sole discretion to determine the Fair Market Value for purposes of the Plan, and all Awards are conditioned on the participants’ agreement that the Administrator’s determination is conclusive and binding even though others might make a different determination.

(d) Duration of Options. Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable option agreement; provided, however, that no Option will be granted with a term in excess of 10 years.

(e) Exercise of Option. Options may be exercised by delivery to the Company of a notice of exercise in a form (which may be electronic) approved by the Company, together with

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payment in full (in the manner specified in Section 5(f)) of the exercise price for the number of shares for which the Option is exercised. Shares of Common Stock subject to the Option will be delivered by the Company as soon as practicable following exercise.

(f) Payment Upon Exercise. Common Stock purchased upon the exercise of an Option granted under the Plan shall be paid for as follows:

(1) in cash or by check, payable to the order of the Company;

(2) except as may otherwise be provided in the applicable Option agreement or approved by the Board in its sole discretion, by (i) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price and any required tax withholding or (ii) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price and any required tax withholding;

(3) to the extent provided for in the applicable Option agreement or approved by the Board, in its sole discretion, by delivery of shares of Common Stock owned by the Participant valued at their Fair Market Value, provided (i) such method of payment is then permitted under applicable law, (ii) such Common Stock, if acquired directly from the Company, was owned by the Participant for such minimum period of time, if any, as may be established by the Board in its discretion and (iii) such Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;

(4) to the extent provided for in the applicable Nonstatutory Stock Option agreement or approved by the Board in its sole discretion, by delivery of a notice of “net exercise” to the Company, as a result of which the Participant would receive (i) the number of shares underlying the portion of the Option being exercised, less (ii) such number of shares as is equal to (A) the aggregate exercise price for the portion of the Option being exercised divided by (B) the Fair Market Value on the date of exercise;

(5) to the extent permitted by applicable law and provided for in the applicable Option agreement or approved by the Board, in its sole discretion, by payment of such other lawful consideration as the Board may determine; or

(6) by any combination of the above permitted forms of payment.

(g) Limitation on Repricing. Unless such action is approved by the Company’s stockholders, on or after the 2013 Effective Date, the Company may not (except as provided for under Section 9): (1) amend any outstanding Option granted under the Plan to provide an exercise price per share that is lower than the then-current exercise price per share of such outstanding Option, (2) cancel any outstanding option (whether or not granted under the Plan) and grant in substitution therefor new Awards under the Plan (other than Awards granted pursuant to Section 4(c)) covering the same or a different number of shares of Common Stock and having an exercise price per share lower than the then-current exercise price per share of the cancelled option, (3) cancel in exchange for a cash payment any outstanding Option with an exercise price per share above the then-current Fair Market Value, other than pursuant to Section 9, or (4) take any other action under the Plan that constitutes a “repricing” within the meaning of the rules of the NASDAQ Stock Market (“NASDAQ”).

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(h) No Reload Options. No Option granted under the Plan shall contain any provision entitling the Participant to the automatic grant of additional Options in connection with any exercise of the original Option.

(i) No Dividend Equivalents. No Option shall provide for the payment or accrual of dividends or Dividend Equivalents.

6. Stock Appreciation Rights

(a) General. The Board may grant Awards consisting of SARs entitling the holder, upon exercise, to receive an amount of Common Stock determined by reference to appreciation, from and after the date of grant, in the Fair Market Value of a share of Common Stock over the measurement price established pursuant to Section 6(b). The date as of which such appreciation is determined shall be the exercise date.

(b) Measurement Price. The Board shall establish the measurement price of each SAR and specify it in the applicable SAR agreement. The measurement price shall not be less than 100% of the Fair Market Value on the date the SAR is granted; provided that if the Board approves the grant of an SAR effective as of a future date, the measurement price shall be not less than 100% of the Fair Market Value on such future date.

(c) Duration of SARs. Each SAR shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable SAR agreement; provided, however, that no SAR will be granted with a term in excess of 10 years.

(d) Exercise of SARs. SARs may be exercised by delivery to the Company of a notice of exercise in a form (which may be electronic) approved by the Company, together with any other documents required by the Board.

(e) Limitation on Repricing. Unless such action is approved by the Company’s stockholders, the Company may not (except as provided for under Section 9): (1) amend any outstanding SAR granted under the Plan to provide a measurement price per share that is lower than the then-current measurement price per share of such outstanding SAR, (2) cancel any outstanding SAR (whether or not granted under the Plan) and grant in substitution therefor new Awards under the Plan (other than Awards granted pursuant to Section 4(c)) covering the same or a different number of shares of Common Stock and having an exercise or measurement price per share lower than the then-current measurement price per share of the cancelled SAR, (3) cancel in exchange for a cash payment any outstanding SAR with a measurement price per share above the then-current Fair Market Value, other than pursuant to Section 9, or (4) take any other action under the Plan that constitutes a “repricing” within the meaning of the rules of the NYSE/NASDAQ.

(f) No Reload SARs. No SARs granted under the Plan shall contain any provision entitling the Participant to the automatic grant of additional SARs in connection with any exercise of the original SAR.

(g) No Dividend Equivalents. No SAR shall provide for the payment or accrual of dividends or Dividend Equivalents.

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7. Restricted Stock; Restricted Stock Units.

(a) General. The Board may grant Awards entitling recipients to acquire shares of Common Stock (“Restricted Stock”), subject to the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price (or to require forfeiture of such shares if issued at no cost) from the recipient in the event that conditions specified by the Board in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by the Board for such Award. Instead of granting Awards for Restricted Stock, the Board may grant Awards entitling the recipient to receive shares of Common Stock to be delivered at the time such shares of Common Stock vest (“Restricted Stock Units”) (Restricted Stock and Restricted Stock Units are each referred to herein as a “Restricted Stock Award”).

(b) Terms and Conditions for All Restricted Stock Awards. The Board shall determine the terms and conditions of a Restricted Stock Award, including the conditions for repurchase (or forfeiture) and the issue price, if any.

(c) Minimum Vesting for Restricted Stock Awards. With respect to Awards made on or after the 2013 Effective Date, Restricted Stock Awards for employees that vest solely based on the passage of time shall be zero percent vested prior to the first anniversary of the date of grant, no more than one-third vested prior to the second anniversary of the date of grant, and no more than two-thirds vested prior to the third anniversary of the date of grant. With respect to Awards made on or after the 2013 Effective Date, Restricted Stock Awards for employees that do not vest solely based on the passage of time (excluding Performance Awards granted pursuant to Section 10(i)) shall not vest prior to the first anniversary of the date of grant. Notwithstanding any other provision of the Plan (other than Section 10(i), if applicable), the Board may, either at the time a Restricted Stock Award is made or at any time thereafter, waive its right to repurchase shares of Common Stock (or waive the forfeiture thereof) or remove or modify the restrictions applicable to the Restricted Stock Award, in whole or in part, in the event of the death or disability of the Participant; the termination of the Participant’s employment by or service to the Company under specified circumstances; or a merger, consolidation, sale, reorganization, recapitalization, or change in control of the Company.

(d) Additional Provisions Relating to Restricted Stock.

(1) Dividends. Unless otherwise provided in the applicable Award agreement, any dividends (whether paid in cash, stock or property) declared and paid by the Company with respect to shares of Restricted Stock (“Accrued Dividends”) shall be paid to the Participant only if and when such shares become free from the restrictions on transferability and forfeitability that apply to such shares. Each payment of Accrued Dividends will be made no later than the end of the calendar year in which the dividends are paid to stockholders of that class of stock or, if later, the 15th day of the third month following the lapsing of the restrictions on transferability and the forfeitability provisions applicable to the underlying shares of Restricted Stock.

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(2) Stock Certificates. The Company may require that any stock certificates issued in respect of shares of Restricted Stock, as well as dividends or distributions paid on such Restricted Stock, shall be deposited in escrow by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). At the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or if the Participant has died, to his or her Designated Beneficiary. “Designated Beneficiary” means (i) the beneficiary designated, in a manner determined by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the event of the Participant’s death or (ii) in the absence of an effective designation by a Participant, the Participant’s estate.

(e) Additional Provisions Relating to Restricted Stock Units.

(1) Settlement. Upon the vesting of and/or lapsing of any other restrictions (i.e., settlement) with respect to each Restricted Stock Unit, the Participant shall be entitled to receive from the Company one share of Common Stock or (if so provided in the applicable Award agreement) an amount of cash equal to the Fair Market Value of one share of Common Stock. The Board may, in its discretion, provide that settlement of Restricted Stock Units shall be deferred, on a mandatory basis or at the election of the Participant, in a manner that complies with Section 409A of the Code.

(2) Voting Rights. A Participant shall have no voting rights with respect to any Restricted Stock Units.

(f) Dividend Equivalents. The Award agreement for Restricted Stock Units may provide Participants with the right to receive an amount equal to any dividends or other distributions declared and paid on an equal number of outstanding shares of Common Stock (“Dividend Equivalents”). Dividend Equivalents may be paid currently or credited to an account for the Participant, may be settled in cash and/or shares of Common Stock and may be subject to the same restrictions on transfer and forfeitability as the Restricted Stock Units with respect to which paid, in each case to the extent provided in the Award agreement.

8. Other Stock-Based Awards

(a) General. Other Awards of shares of Common Stock, and other Awards that are valued in whole or in part by reference to, or are otherwise based on, shares of Common Stock or other property, may be granted hereunder to Participants (“Other Stock-Based-Awards”). Such Other Stock-Based Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan or as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock-Based Awards may be paid in shares of Common Stock or cash, as the Board shall determine.

(b) Terms and Conditions. Subject to the provisions of the Plan, the Board shall determine the terms and conditions of each Other Stock-Based Award, including any purchase price applicable thereto.

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9. Adjustments for Changes in Common Stock and Certain Other Events.

(a) Changes in Capitalization. In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution to holders of Common Stock other than an ordinary cash dividend, (i) the number and class of securities available under the Plan, (ii) the share counting rules and limit set forth in Sections 4(a) and 4(b), (iii) the number and class of securities and exercise price or measurement price per share of each outstanding Option or SAR, (iv) the number of shares subject to and the repurchase price per share subject to each outstanding Restricted Stock Award and (v) the share and per-share-related provisions and the purchase price, if any, of each outstanding Other Stock-Based Award, shall be equitably adjusted by the Company (or substituted Awards may be made, if applicable) in the manner determined by the Board. Without limiting the generality of the foregoing, if the Company effects a split of the Common Stock by means of a stock dividend and the exercise price or measurement price of and the number of shares subject to an outstanding Option or SAR are adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend), then an optionee or recipient who exercises an Option or SAR between the record date and the distribution date for such stock dividend shall be entitled to receive, on the distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such Option or SAR exercise, notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend.

(b) Reorganization and Change in Control Events

(1) Definitions

(a) A “Reorganization Event” shall mean:

(i) any merger or consolidation of the Company with or into another entity as a result of which all of the Common Stock of the Company is converted into or exchanged for the right to receive cash, securities or other property or is cancelled;

(ii) any transfer or disposition of all of the Common Stock of the Company for cash, securities or other property pursuant to a share exchange or other transaction; or

(iii) any liquidation or dissolution of the Company.

(b) A “Change in Control Event” shall mean:

(i) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more of either (x) the aggregate number of shares of Common

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Stock then-outstanding (the “Outstanding Company Common Stock”) or (y) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control Event: (A) any acquisition directly from the Company (excluding an acquisition pursuant to the exercise, conversion or exchange of any security exercisable for, convertible into or exchangeable for common stock or voting securities of the Company, unless the Person exercising, converting or exchanging such security acquired such security directly from the Company or an underwriter or agent of the Company), (B) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (C) any acquisition by any corporation pursuant to a Business Combination (as defined below) which complies with clauses (x) and (y) of subsection (iii) of this definition; or

(ii) such time as the Continuing Directors (as defined below) do not constitute a majority of the Board (or, if applicable, the Board of Directors of a successor corporation to the Company), where the term “Continuing Director” means at any date a member of the Board (x) who was a member of the Board on the date of the initial adoption of this Plan by the Board or (y) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (y) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board; or

(iii) the consummation of a merger, consolidation, reorganization, recapitalization or share exchange involving the Company or a sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless, immediately following such

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Business Combination, each of the following two conditions is satisfied: (x) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns the Company or substantially all of the Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring Corporation”) in substantially the same proportions as their ownership of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such Business Combination and (y) no Person (excluding any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of the then-outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination); or

(iv) the liquidation or dissolution of the Company.

(c) “Good Reason” shall mean any significant diminution in the Participant’s title, authority, or responsibilities from and after such Reorganization Event or Change in Control Event, as the case may be, or any reduction in the annual cash compensation payable to the Participant from and after such Reorganization Event or Change in Control Event, as the case may be, or the relocation of the place of business at which the Participant is principally located to a location that is greater than 50 miles from its location immediately prior to such Reorganization Event or Change in Control Event.

(d) “Cause” shall mean any (i) willful failure by the Participant, which failure is not cured within 30 days of written notice to the Participant from the Company, to perform his or her material

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responsibilities to the Company, (ii) willful misconduct by the Participant which affects the business reputation of the Company, (iii) material breach by the Participant of any employment, confidentiality, non-competition or non-solicitation agreement with the Company, (iv) conviction or plea of nolo contendere (no contest) by the Participant to a felony, or (v) commission by the Participant of any act involving fraud, theft or dishonesty with respect to the Company’s business or affairs. The Participant shall be considered to have been discharged for “Cause” if the Company determines, within 30 days after the Participant’s resignation, that discharge for Cause was warranted.

(2) Effect on Options and SARs.

(a) Reorganization Event. Upon the occurrence of a Reorganization Event (regardless of whether such event also constitutes a Change in Control Event), or the execution by the Company of any agreement with respect to a Reorganization Event (regardless of whether such event will result in a Change in Control Event), the Board shall provide that all outstanding Options and SARs shall be assumed, or equivalent options or stock appreciation rights shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof); provided, however, that if such Reorganization Event also constitutes a Change in Control Event, except to the extent specifically provided to the contrary in the instrument evidencing any Option or SAR or any other agreement between a Participant and the Company, such assumed or substituted options or stock appreciation rights shall become immediately exercisable in full if, on or prior to the date that is eighteen months after the date of the consummation of the Reorganization Event, the Participant’s employment with the Company or the acquiring or succeeding corporation is terminated for Good Reason by the Participant or is terminated without Cause by the Company or the acquiring or succeeding corporation. For purposes hereof, an Option or SAR shall be considered to be assumed if, following consummation of the Reorganization Event, the Option or SAR confers the right to purchase (or for an SAR receive), for each share of Common Stock subject to the Option or SAR immediately prior to the consummation of the Reorganization Event, the consideration (whether cash, securities or other property) received as a result of the Reorganization Event by holders of Common Stock for each share of Common Stock held immediately prior to the consummation of the Reorganization Event (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock); provided, however, that if the consideration received as a result of the Reorganization Event is not solely

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common stock of the acquiring or succeeding corporation (or an affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation, provide for the consideration to be received upon the exercise of Options or SARs to consist solely of common stock of the acquiring or succeeding corporation (or an affiliate thereof) equivalent in value (as determined by the Board) to the per share consideration received by holders of outstanding shares of Common Stock as a result of the Reorganization Event.

Notwithstanding the foregoing, if the acquiring or succeeding corporation (or an affiliate thereof) does not agree to assume, or substitute for, such Options or SARs, or in the event of a liquidation or dissolution of the Company, the Board shall, upon written notice to the Participants, provide that all then unexercised Options and SARs will become exercisable in full as of a specified time prior to the Reorganization Event and will terminate immediately prior to the consummation of such Reorganization Event, except to the extent exercised by the Participants before the consummation of such Reorganization Event; provided, however, that in the event of a Reorganization Event under the terms of which holders of Common Stock will receive upon consummation thereof a cash payment for each share of Common Stock surrendered pursuant to such Reorganization Event (the “Acquisition Price”), then the Board may instead provide that all outstanding Options and SARs shall terminate upon consummation of such Reorganization Event and that each Participant shall receive, in exchange therefor, a cash payment equal to the amount (if any) by which (A) the Acquisition Price multiplied by the number of shares of Common Stock subject to such outstanding Options or SARs (whether or not then exercisable), exceeds (B) the aggregate exercise price of such Options and the aggregate measurement price of such SARs.

(b) Change in Control Event that is not a Reorganization Event. Upon the occurrence of a Change in Control Event that does not also constitute a Reorganization Event, except to the extent specifically provided to the contrary in the instrument evidencing any Option or SAR or any other agreement between a Participant and the Company, each then-outstanding Option and SAR shall continue to become vested in accordance with the original vesting schedule set forth in such Option or SAR; provided, however, that each such Option or SAR shall become immediately exercisable in full if, on or prior to the date that is eighteen months after the date of the consummation of the Change in Control Event, the Participant’s employment with the Company or the acquiring or succeeding corporation is terminated for Good Reason by the Participant or is terminated without Cause by the Company or the acquiring or succeeding corporation.

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(3) Effect on Restricted Stock Awards

(a) Reorganization Event that is not a Change in Control Event. Upon the occurrence of a Reorganization Event that is not a Change in Control Event, the repurchase and other rights of the Company under each outstanding Restricted Stock Award shall inure to the benefit of the Company’s successor and shall apply to the cash, securities or other property which the Common Stock was converted into or exchanged for pursuant to such Reorganization Event in the same manner and to the same extent as they applied to the Common Stock subject to such Restricted Stock Award.

(b) Change in Control Event. Upon the occurrence of a Change in Control Event (regardless of whether such event also constitutes a Reorganization Event), except to the extent specifically provided to the contrary in the instrument evidencing any Restricted Stock Award or any other agreement between a Participant and the Company, each then-outstanding Restricted Stock Award shall continue to become free from conditions or restrictions in accordance with the original schedule set forth in such Restricted Stock Award; provided, however, that each such Restricted Stock Award shall immediately become free from all conditions or restrictions if, on or prior to the date that is eighteen months after the date of the consummation of the Change in Control Event, the Participant’s employment with the Company or the acquiring or succeeding corporation is terminated for Good Reason by the Participant or is terminated without Cause by the Company or the acquiring or succeeding corporation.

(c) Effect of Section 409A. Notwithstanding the foregoing, in the case of outstanding Restricted Stock Units that are subject to Section 409A of the Code, if the applicable Restricted Stock Unit agreement provides that the Restricted Stock Units shall be settled upon a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i), and the Change in Control Event constitutes such a “change in control event,” then no assumption, substitution, or continuation shall be permitted and the Restricted Stock Units shall instead be settled in accordance with the terms of the applicable Restricted Stock Unit agreement, unless other treatment is permissible under Section 409A of the Code.

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(4) Effect on Other Stock Unit Awards

The Board may specify in an Award at the time of the grant the effect of a Reorganization Event and Change in Control Event on any Other Stock Unit Award.

10. General Provisions Applicable to Awards

(a) Transferability of Awards. Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution or, other than in the case of an Incentive Stock Option, pursuant to a qualified domestic relations order, and, during the life of the Participant, shall be exercisable only by the Participant; provided, however, that the Board may permit or provide in an Award for the gratuitous transfer of the Award by the Participant to or for the benefit of any immediate family member, family trust or other entity established for the benefit of the Participant and/or an immediate family member thereof if the Company would be eligible to use a Form S-8 under the Securities Act for the registration of the sale of the Common Stock subject to such Award to such proposed transferee; provided further, that the Company shall not be required to recognize any such permitted transfer until such time as such permitted transferee shall, as a condition to such transfer, deliver to the Company a written instrument in form and substance satisfactory to the Company confirming that such transferee shall be bound by all of the terms and conditions of the Award. References to a Participant, to the extent relevant in the context, shall include references to authorized transferees. For the avoidance of doubt, nothing contained in this Section 10(a) shall be deemed to restrict a transfer to the Company.

(b) Documentation. Each Award shall be evidenced in such form (written, electronic or otherwise) as the Board shall determine. Each Award may contain terms and conditions in addition to those set forth in the Plan.

(c) Board Discretion. Except as otherwise provided by the Plan, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award need not be identical, and the Board need not treat Participants uniformly.

(d) Termination of Status. The Board shall determine the effect on an Award of the disability, death, termination or other cessation of employment or other service providing relationship, authorized leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, or the Participant’s legal representative, conservator, guardian or Designated Beneficiary, may exercise rights under the Award.

(e) Withholding. Each Participant must satisfy all applicable federal, state, and local or other income and employment tax withholding obligations before the Company will deliver stock certificates or otherwise recognize ownership of Common Stock under an Award. The Company may decide to satisfy the withholding obligations through additional withholding on salary or wages. If the Company elects not to or cannot withhold from other compensation, the Participant must pay the Company the full amount, if any, required for withholding or have a broker tender to the Company cash equal to the withholding obligations. Payment of withholding obligations is due before the Company will issue any shares on exercise, vesting or release from forfeiture of an Award or at the same time as payment of the exercise or purchase

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price, unless the Company determines otherwise. If provided for in an Award or approved by the Board in its sole discretion, a Participant may satisfy such tax obligations in whole or in part by delivery of shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value; provided, however, except as otherwise provided by the Board, that the total tax withholding where stock is being used to satisfy such tax obligations cannot exceed the Company’s minimum statutory withholding obligations (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income). Shares used to satisfy tax withholding requirements cannot be subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.

(f) Amendment of Award. The Board may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option. The Participant’s consent to such action shall be required unless (i) the Board determines that the action, taking into account any related action, does not materially and adversely affect the Participant’s rights under the Plan or (ii) the change is permitted under Section 9.

(g) Conditions on Delivery of Stock. The Company will not be obligated to deliver any shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously issued or delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and regulations and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.

(h) Acceleration. Except as otherwise provided in Section 7(c) and 10(i), the Board may at any time provide that any Award shall become immediately exercisable in whole or in part, free of some or all restrictions or conditions, or otherwise realizable in whole or in part, as the case may be.

(i) Performance Awards.

(1) Grants. Restricted Stock Awards and Other Stock-Based Awards under the Plan may be made subject to the achievement of performance goals pursuant to this Section 10(i) (“Performance Awards”). Subject to Section 10(i)(4), no Performance Awards shall vest prior to the first anniversary of the date of grant.

(2) Committee. Grants of Performance Awards to any Covered Employee (as defined below) intended to qualify as “performance-based compensation” under Section 162(m) (“Performance-Based Compensation”) shall be made only by a Committee (or a subcommittee of a Committee) comprised solely of two or more directors eligible to serve on a committee making Awards qualifying as “performance-based compensation” under Section 162(m). In the case of such Awards granted to Covered Employees, references to the Board or to a Committee

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shall be treated as referring to such Committee (or subcommittee). “Covered Employee” shall mean any person who is, or whom the Committee, in its discretion, determines may be, a “covered employee” under Section 162(m)(3) of the Code.

(3) Performance Measures. For any Award that is intended to qualify as Performance-Based Compensation, the Committee shall specify that the degree of granting, vesting and/or payout shall be subject to the achievement of one or more objective performance measures established by the Committee, which shall be based on the relative or absolute attainment of specified levels of one or any combination of the following, which may be determined pursuant to generally accepted accounting principles (“GAAP”) or on a non-GAAP basis, as determined by the Committee: net income, earnings before or after discontinued operations, interest, taxes, depreciation and/or amortization, operating profit before or after discontinued operations and/or taxes, sales, sales growth, earnings growth, cash flow or cash position, gross margins, stock price, market share, return on sales, assets, equity or investment, improvement of financial ratings, achievement of balance sheet or income statement objectives or total stockholder return. Such goals may reflect absolute entity or business unit performance or a relative comparison to the performance of a peer group of entities or other external measure of the selected performance criteria and may be absolute in their terms or measured against or in relationship to other companies comparably, similarly or otherwise situated. The Committee may specify that such performance measures shall be adjusted to exclude any one or more of (i) extraordinary items, (ii) gains or losses on the dispositions of discontinued operations, (iii) the cumulative effects of changes in accounting principles, (iv) the writedown of any asset, (vi) fluctuation in foreign currency exchange rates, and (vi) charges for restructuring and rationalization programs. Such performance measures: (i) may vary by Participant and may be different for different Awards; (ii) may be particular to a Participant or the department, branch, line of business, subsidiary or other unit in which the Participant works and may cover such period as may be specified by the Committee; and (iii) shall be set by the Committee within the time period prescribed by, and shall otherwise comply with the requirements of, Section 162(m). Awards that are not intended to qualify as Performance-Based Compensation may be based on these or such other performance measures as the Board may determine.

(4) Adjustments. Notwithstanding any provision of the Plan, with respect to any Performance Award that is intended to qualify as Performance-Based Compensation, the Committee may adjust downwards, but not upwards, the cash or number of shares payable pursuant to such Award, and the Committee may not waive the achievement of the applicable performance measures except in the case of the death or disability of the Participant or a change in control of the Company.

(5) Other. The Committee shall have the power to impose such other restrictions on Performance Awards as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements for Performance-Based Compensation.

11. Miscellaneous

(a) No Right To Employment or Other Status. No person shall have any claim or right to be granted an Award by virtue of adoption or amendment of the Plan, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any

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other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan, except as expressly provided in the applicable Award.

(b) No Rights As Stockholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed with respect to an Award until becoming the record holder of such shares.

(c) Effective Date and Term of Plan. The Plan as amended shall become effective on the 2013 Effective Date. No Awards shall be granted under the Plan after the completion of 10 years from the 2013 Effective Date, but Awards previously granted may extend beyond that date.

(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time provided that (i) to the extent required by Section 162(m), no Award granted to a Participant that is intended to comply with Section 162(m) after the date of such amendment shall become exercisable, realizable or vested, as applicable to such Award, unless and until the Company’s stockholders approve such amendment in the manner required by Section 162(m); (ii) no amendment that would require stockholder approval under the rules of the NASDAQ may be made effective unless and until the Company’s stockholders approve such amendment; and (iii) if the NASDAQ amends its corporate governance rules so that such rules no longer require stockholder approval of material amendments to equity compensation plans, then, from and after the effective date of such amendment to the NASDAQ rules, no amendment to the Plan (A) materially increasing the number of shares authorized under the Plan (other than pursuant to Sections 4(c) or 9), (B) expanding the types of Awards that may be granted under the Plan, or (C) materially expanding the class of participants eligible to participate in the Plan shall be effective unless and until the Company’s stockholders approve such amendment. In addition, if at any time the approval of the Company’s stockholders is required as to any other modification or amendment under Section 422 of the Code or any successor provision with respect to Incentive Stock Options, the Board may not effect such modification or amendment without such approval. Unless otherwise specified in the amendment, any amendment to the Plan adopted in accordance with this Section 11(d) shall apply to, and be binding on the holders of, all Awards outstanding under the Plan at the time the amendment is adopted, provided the Board determines that such amendment, taking into account any related action, does not materially and adversely affect the rights of Participants under the Plan. No Award shall be made that is conditioned upon stockholder approval of any amendment to the Plan unless the Award provides that (i) it will terminate or be forfeited if stockholder approval of such amendment is not obtained within no more than 12 months from the date of grant and (2) it may not be exercised or settled (or otherwise result in the issuance of Common Stock) prior to such stockholder approval.

(e) Authorization of Sub-Plans (including for Grants to Non-U.S. Employees). The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable securities, tax or other laws of various jurisdictions. The Board shall establish such sub-plans by adopting supplements to the Plan containing (i) such limitations on the Board’s discretion under the Plan as the Board deems necessary or desirable or (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem

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necessary or desirable. All supplements adopted by the Board shall be deemed to be part of the Plan, but each supplement shall apply only to Participants within the affected jurisdiction and the Company shall not be required to provide copies of any supplement to Participants in any jurisdiction which is not the subject of such supplement.

(f) Compliance with Section 409A of the Code. Except as provided in individual Award agreements initially or by amendment, if and to the extent (i) any portion of any payment, compensation or other benefit provided to a Participant pursuant to the Plan in connection with his or her employment termination constitutes “nonqualified deferred compensation” within the meaning of Section 409A and (ii) the Participant is a specified employee as defined in Section 409A(a)(2)(B)(i) of the Code, in each case as determined by the Company in accordance with its procedures, by which determinations the Participant (through accepting the Award) agrees that he or she is bound, such portion of the payment, compensation or other benefit shall not be paid before the day that is six months plus one day after the date of “separation from service” (as determined under Section 409A of the Code) (the “New Payment Date”), except as Section 409A of the Code may then permit. The aggregate of any payments that otherwise would have been paid to the Participant during the period between the date of separation from service and the New Payment Date shall be paid to the Participant in a lump sum on such New Payment Date, and any remaining payments will be paid on their original schedule.

The Company makes no representations or warranty and shall have no liability to the Participant or any other person if any provisions of or payments, compensation or other benefits under the Plan are determined to constitute nonqualified deferred compensation subject to Section 409A of the Code but do not to satisfy the conditions of that section.

(g) Limitations on Liability. Notwithstanding any other provisions of the Plan, no individual acting as a director, officer, employee or agent of the Company will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan, nor will such individual be personally liable with respect to the Plan because of any contract or other instrument he or she executes in his or her capacity as a director, officer, employee or agent of the Company. The Company will indemnify and hold harmless each director, officer, employee or agent of the Company to whom any duty or power relating to the administration or interpretation of the Plan has been or will be delegated, against any cost or expense (including attorneys’ fees) or liability (including any sum paid in settlement of a claim with the Board’s approval) arising out of any act or omission to act concerning the Plan unless arising out of such person’s own fraud or bad faith.

(h) Governing Law. The provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware, excluding choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than such state.

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EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Michael R. Davin, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cynosure, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2013	/s/    Michael R. Davin
	Michael R. Davin
	Chairman, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Timothy W. Baker, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cynosure, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2013	/s/    Timothy W. Baker
	Timothy W. Baker
	Executive Vice President, Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Cynosure, Inc. (the “Company”) for the period ended June 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Michael R. Davin, Chairman, President and Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that, to his knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2013	/s/    Michael R. Davin
	Michael R. Davin
	Chairman, President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Cynosure, Inc. (the “Company”) for the period ended June 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Timothy W. Baker, Executive Vice President, Chief Financial Officer and Treasurer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that, to his knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2013	/s/    Timothy W. Baker
	Timothy W. Baker
	Executive Vice President, Chief Financial Officer and Treasurer

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Net (Loss) Income Per Common Share

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Net (Loss) Income Per Common Share

Note 11 — Net (Loss) Income Per Common Share

Basic net (loss) income per share is determined by dividing net (loss) income by the weighted average common shares outstanding during the period. Diluted net (loss) income per share is determined by dividing net (loss) income by the diluted weighted average shares outstanding during the period. Diluted weighted average shares reflect the dilutive effect, if any, of common stock options based on the treasury stock method. For the three and six months ended June 30, 2013, there are no outstanding Class B shares, and Cynosure may not issue Class B shares in the future. For the three and six months ended June 30, 2012, common shares outstanding include both Class A and Class B as each share participated equally in earnings. Class B shares were convertible at any time into shares of Class A on a one-for-one basis at the option of the holder.

A reconciliation of basic and diluted shares is as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2013			2012		2013			2012
Net (loss) income	$	(8,954	)	$	2,680	$	(7,715	)	$	3,499
Basic weighted average common shares outstanding		16,636			12,605		16,412			12,591
Weighted average common equivalent shares		—			673		—			550
Diluted weighted average common shares outstanding		16,636			13,278		16,412			13,141
Basic net (loss) income per share	$	(0.54	)	$	0.21	$	(0.47	)	$	0.28
Diluted net (loss) income per share	$	(0.54	)	$	0.20	$	(0.47	)	$	0.27

For the three and six months ended June 30, 2013, the number of basic and diluted weighted average shares outstanding was the same, as any increase in the number of shares of common stock equivalents for the three and six months ended June 30, 2013 would be antidilutive based on the net loss for the period. For the three and six months ended June 30, 2013, respectively, outstanding options to purchase 1.1 million shares were excluded from the computation of diluted earnings per share because their inclusion would have been antidilutive.

For the three and six months ended June 30, 2012, respectively, options to purchase approximately 0.6 million and 1.3 million shares of Cynosure’s Class A common stock were excluded from the calculation of diluted weighted average common shares outstanding as their effect was antidilutive.

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Segment Information - Schedule of Total Assets by Geographic Area (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Revenues from External Customers and Long-Lived Assets [Line Items]
Total assets	$ 399,759	$ 234,569
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total assets	376,365	210,596
Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total assets	17,955	15,623
Asia / Pacific [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total assets	16,240	11,038
Eliminations [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total assets	$ (10,801)	$ (2,688)

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Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Statement [Abstract]
Product revenues	$ 43,022	$ 32,923	$ 77,139	$ 61,018
Parts, accessories and service revenues	7,069	6,650	13,642	12,723
Total revenues	50,091	39,573	90,781	73,741
Cost of revenues	22,304	16,533	39,307	31,193
Gross profit	27,787	23,040	51,474	42,548
Operating expenses:
Sales and marketing	14,231	11,878	26,834	23,429
Research and development	3,536	3,460	7,317	6,699
Amortization of intangible assets acquired	283	342	497	684
General and administrative	24,376	3,667	29,477	7,185
Total operating expenses	42,426	19,347	64,125	37,997
(Loss) income from operations	(14,639)	3,693	(12,651)	4,551
Interest income, net	23	13	55	23
Other expense, net	(46)	(298)	(403)	(89)
(Loss) income before (benefit) provision for income taxes	(14,662)	3,408	(12,999)	4,485
(Benefit) provision for income taxes	(5,708)	728	(5,284)	986
Net (loss) income	$ (8,954)	$ 2,680	$ (7,715)	$ 3,499
Basic net (loss) income per share	$ (0.54)	$ 0.21	$ (0.47)	$ 0.28
Diluted net (loss) income per share	$ (0.54)	$ 0.20	$ (0.47)	$ 0.27
Basic weighted-average common shares outstanding	16,636	12,605	16,412	12,591
Diluted weighted-average common shares outstanding	16,636	13,278	16,412	13,141

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Fair Value

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value

Note 4 — Fair Value

U.S. GAAP establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable markets data for substantially the full term of the assets or liabilities.

• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The following table represents Cynosure’s fair value hierarchy for its financial assets (cash equivalents and marketable securities) measured at fair value as of June 30, 2013 (in thousands):

	Level 1		Level 2		Level 3		Total
Money market funds (1)	$	675	$	—	$	—	$	675
State and municipal bonds		—		13,630		—		13,630
Treasuries and government agencies		—		24,043		—		24,043
Corporate obligations and commercial paper		—		13,015		—		13,015
Equity securities		57		—		—		57
Total	$	732	$	50,688	$	—	$	51,420

(1) Included in cash and cash equivalents at June 30, 2013.

During the six months ended June 30, 2013, there were no significant transfers in and out of Level 1 and Level 2. Cynosure did not have any Level 3 financial assets at June 30, 2013 or December 31, 2012.

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Inventories (Tables)

6 Months Ended

Jun. 30, 2013

Inventory Disclosure [Abstract]

Inventories

Inventory includes material, labor and overhead and consists of the following:

	June 30, 2013		December 31, 2012
	(in thousands)
Raw materials	$	15,310	$	9,076
Work in process		4,666		1,134
Finished goods		36,431		22,696
	$	56,407	$	32,906

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Net (Loss) Income Per Common Share - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Outstanding options to purchase (shares)	1,100,000	600,000	1,100,000	1,300,000
Common Stock Class B [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Class B Common stock outstanding	0		0

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Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Accumulated Other Comprehensive Loss

Note 12 — Accumulated Other Comprehensive Loss

Changes to accumulated other comprehensive loss during the six months ended June 30, 2013 were as follows (in thousands):

	Unrealized Gain on Marketable Securities, net of taxes		Translation Adjustment			Accumulated Other Comprehensive Loss
Balance — December 31, 2012	$	13	$	(1,612	)	$	(1,599	)
Current period other comprehensive loss		21		(628	)		(607	)
Balance — June 30, 2013	$	34	$	(2,240	)	$	(2,206	)

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Other Intangible Assets - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended		3 Months Ended	6 Months Ended			6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013 Palomar [Member]	Jun. 30, 2013 Palomar [Member]	Jun. 24, 2013 Palomar [Member]	Jun. 30, 2013 Palomar, Eleme and Conbio Acquisitions [Member]	Jun. 30, 2013 Patented Technology [Member]	Jun. 30, 2013 Customer Relationships [Member]	Jun. 30, 2013 Trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Identifiable intangible assets acquired						$ 40,300,000			$ 18,400,000	$ 11,600,000	$ 10,300,000
Period of amortized identifiable intangible assets						20 years
Fair value of identifiable intangible assets acquired						40,300,000
Amortization expense	400,000	500,000	700,000	900,000	100,000	100,000
Indefinite-life intangible assets	41,000		41,000
Remainder of 2013	2,725,000		2,725,000					900,000
2014	5,117,000		5,117,000					1,600,000
2015	4,768,000		4,768,000					1,600,000
2016	4,134,000		4,134,000					1,600,000
2017	3,816,000		3,816,000					1,700,000
2018 and thereafter	24,933,000		24,933,000					17,800,000
Estimated identifiable intangible assets					$ 40,320,000	$ 40,320,000	$ 40,320,000

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Net (Loss) Income Per Common Share - Schedule of Reconciliation of Basic and Diluted Shares (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Earnings Per Share [Abstract]
Net (loss) income	$ (8,954)	$ 2,680	$ (7,715)	$ 3,499
Basic weighted average common shares outstanding	16,636	12,605	16,412	12,591
Weighted average common equivalent shares		673		550
Diluted weighted average common shares outstanding	16,636	13,278	16,412	13,141
Basic net (loss) income per share	$ (0.54)	$ 0.21	$ (0.47)	$ 0.28
Diluted net (loss) income per share	$ (0.54)	$ 0.20	$ (0.47)	$ 0.27

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Fair Value - Measurement of Fair Value Hierarchy for Financial Assets (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	$ 51,420
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	732
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	50,688
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	0	0
Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	675
Money Market Funds [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	675
Money Market Funds [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets
Money Market Funds [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets
State and Municipal Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	13,630
State and Municipal Bonds [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets
State and Municipal Bonds [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	13,630
State and Municipal Bonds [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets
Treasuries and Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	24,043
Treasuries and Government Agencies [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets
Treasuries and Government Agencies [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	24,043
Treasuries and Government Agencies [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets
Corporate Obligations and Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	13,015
Corporate Obligations and Commercial Paper [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets
Corporate Obligations and Commercial Paper [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	13,015
Corporate Obligations and Commercial Paper [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets
Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	57
Equity Securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	57
Equity Securities [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets
Equity Securities [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets

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Acquisition (Tables)

6 Months Ended

Jun. 30, 2013

Business Combinations [Abstract]

Estimated Fair Value of Net Assets Acquired

The following table summarizes the preliminary purchase price allocation, net of $117.9 million in cash, cash equivalents and marketable securities acquired (in thousands):

Purchase price:
Cash and stock paid	$	287,204
Cash, cash equivalents and marketable securities acquired		(117,929	)
Purchase price, net	$	169,275
Assets (liabilities) acquired:
Accounts receivable		9,607
Inventory		25,881
Prepaids and other assets		722
Property and equipment		28,445
Other assets		332
Intangible assets		40,320
Goodwill		91,037
Accounts payable		(7,269	)
Accrued expenses		(11,339	)
Deferred revenue		(3,010	)
Deferred tax liability		(5,451	)
Total	$	169,275

Pro-forma Condensed Consolidated Operating Results

The following unaudited pro forma condensed consolidated operating results for the three and six months ended June 30, 2013 and 2012 summarize the combined results of operations for Cynosure and Palomar.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(In thousands)
Revenue (unaudited)	$	69,035		$	58,444		$	132,026		$	110,738
Pre-tax loss (unaudited)	$	(5,254	)	$	(1,017	)	$	(3,725	)	$	(36,034	)

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Short and Long-Term Marketable Securities (Tables)

6 Months Ended

Jun. 30, 2013

Investments Debt And Equity Securities [Abstract]

Schedule of Marketable Securities

As of June 30, 2013, Cynosure’s marketable securities consist of the following (in thousands):

	Market Value		Amortized Cost		Unrealized Gains		Unrealized Losses
Available-for-sale Securities:
Short-term marketable securities:
State and municipal bonds	$	12,177	$	12,174	$	4	$	(1	)
Treasuries and government agencies		14,022		14,014		8		—
Corporate obligations and commercial paper		11,003		11,004		2		(3	)
Equity securities		57		9		48		—
Total short-term marketable securities	$	37,259	$	37,201	$	62	$	(4	)
Long-term marketable securities:
State and municipal bonds	$	1,453	$	1,452	$	1	$	—
Treasuries and government agencies		10,021		10,021		2		(2	)
Corporate obligations and commercial paper		2,012		2,022		—		(10	)
Total long-term marketable securities	$	13,486	$	13,495	$	3	$	(12	)
Total available-for-sale securities	$	50,745	$	50,696	$	65	$	(16	)
Total marketable securities	$	50,745

As of December 31, 2012, Cynosure’s marketable securities consist of the following (in thousands):

	Market Value		Amortized Cost		Unrealized Gains		Unrealized Losses
Available-for-Sale Securities:
Cash equivalents:
State and municipal bonds	$	4,417	$	4,417	$	—	$	—
Government agencies		1,000		1,000		—		—
Total cash equivalents	$	5,417	$	5,417	$	—	$	—
Short-term marketable securities:
State and municipal bonds	$	33,250	$	33,251	$	6	$	(7	)
Treasuries and government agencies		7,346		7,345		1		—
Equity securities		21		6		15		—
Total short-term marketable securities	$	40,617	$	40,602	$	22	$	(7	)
Long-term marketable securities:
State and municipal bonds	$	18,046	$	18,052	$	2	$	(8	)
Treasuries and government agencies		2,025		2,021		4		—
Total long-term marketable securities	$	20,071	$	20,073	$	6	$	(8	)
Total available-for-sale securities	$	66,105	$	66,092	$	28	$	(15	)
Total marketable securities	$	60,688

Schedule of Available-for-Sale Debt Securities Mature

As of June 30, 2013, Cynosure’s available-for-sale debt securities mature as follows (in thousands):

	Total		Maturities
			Less Than One Year		One to Five Years		More than five years
State and municipal bonds	$	13,630	$	12,177	$	1,453	$	—
Treasuries and government agencies		24,043		14,022		10,021		—
Corporate obligations and commercial paper		13,015		11,003		2,012		—
Total available-for-sale debt securities	$	50,688	$	37,202	$	13,486	$	—

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Goodwill - Schedule of Changes to Goodwill (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Goodwill And Intangible Assets Disclosure [Abstract]
Balance - December 31, 2012	$ 15,811
Palomar acquisition	91,037
Translation adjustment	(80)
Balance - June 30, 2013	$ 106,768

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Stock-Based Compensation - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock-based compensation expense	$ 900,000	$ 700,000	$ 1,703,000	$ 1,397,000
Stock based compensation expense capitalized to inventory			19,000	15,000
Cash received from option exercises			$ 1,200,000	$ 500,000
Stock options granted			327,700	332,000
Weighted average fair value of the options granted			$ 13.15	$ 8.66
Dividend yield			0.00%	0.00%

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Short and Long-Term Marketable Securities - Additional Information (Detail) (USD $)	Jun. 30, 2013
Amortized Cost And Fair Value Debt Securities [Abstract]
Available for sale securities in debt	$ 50,700,000
Available for sale securities in equity	$ 57,000

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Other Intangible Assets - Schedule of Amortization Expenses on Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Finite Lived Intangible Assets Future Amortization Expense Current And Five Succeeding Fiscal Years [Abstract]
Remainder of 2013	$ 2,725
2014	5,117
2015	4,768
2016	4,134
2017	3,816
2018 and thereafter	24,933
Total	$ 45,493

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Schedule of Total Revenue by Geographic Destination

The following table represents total revenue by geographic destination:

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
	(in thousands)
United States	$	22,693	$	19,034	$	40,434	$	34,194
Europe		9,005		7,153		16,773		14,172
Asia / Pacific		12,793		11,016		23,729		20,292
Other		5,600		2,370		9,845		5,083
Total	$	50,091	$	39,573	$	90,781	$	73,741

Schedule of Total Assets by Geographic Area

Total assets by geographic area are as follows:

	June 30, 2013			December 31, 2012
	(in thousands)
United States	$	376,365		$	210,596
Europe		17,955			15,623
Asia / Pacific		16,240			11,038
Eliminations		(10,801	)		(2,688	)
Total	$	399,759		$	234,569

Schedule of Long-Lived Assets by Geographic Area

Long-lived assets by geographic area are as follows:

	June 30, 2013		December 31, 2012
	(in thousands)
United States	$	36,072	$	7,266
Europe		2,010		1,570
Asia / Pacific		1,113		432
Total	$	39,195	$	9,268

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Acquisition - Additional Information (Detail) (USD $) Share data in Millions, unless otherwise specified	3 Months Ended		6 Months Ended		1 Months Ended	3 Months Ended	6 Months Ended
	Jun. 30, 2013 D	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 24, 2013 Palomar [Member]	Jun. 30, 2013 Palomar [Member]	Jun. 30, 2013 Palomar [Member]
Business Acquisition [Line Items]
Cash consideration					$ 145,800,000
Number of shares issued					6.0
Cash and stock paid per Merger Agreement					287,204,000
Cash and cash equivalents acquired					117,900,000
Revenue related to Palomar's operations	50,091,000	39,573,000	90,781,000	73,741,000		5,100,000
Loss related to Palomar's operations	(8,954,000)	2,680,000	(7,715,000)	3,499,000		(18,200,000)
Number of business days considered following acquisition	5
Amount associated with step up in fair value of finished goods inventory included in consolidated pro forma financial information						4,600,000	4,600,000
Acquisition related costs	20,400,000		21,500,000
Change of control Payments						18,500,000	18,500,000
Acquisition-related equity issuance costs			507,000			500,000
Additional compensation expense						$ 1,500,000	$ 1,500,000

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Fair Value (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Measurement of Fair Value Hierarchy for Financial Assets

The following table represents Cynosure’s fair value hierarchy for its financial assets (cash equivalents and marketable securities) measured at fair value as of June 30, 2013 (in thousands):

	Level 1		Level 2		Level 3		Total
Money market funds (1)	$	675	$	—	$	—	$	675
State and municipal bonds		—		13,630		—		13,630
Treasuries and government agencies		—		24,043		—		24,043
Corporate obligations and commercial paper		—		13,015		—		13,015
Equity securities		57		—		—		57
Total	$	732	$	50,688	$	—	$	51,420

(1) Included in cash and cash equivalents at June 30, 2013.

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Operating activities:
Net (loss) income	$ (7,715)	$ 3,499
Reconciliation of net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	3,256	3,493
Stock-based compensation expense	1,703	1,397
Loss (gain) on disposal of fixed assets	4	(37)
Deferred income taxes	(5,625)
Net accretion of marketable securities	1,130	589
Changes in operating assets and liabilities:
Accounts receivable	(10,515)	(1,525)
Inventories	(435)	(3,556)
Net book value of demonstration inventory sold	348	419
Prepaid expenses and other current assets	250	(466)
Accounts payable	1,140	1,010
Due to related party	(463)	(485)
Tax benefit from stock option exercises	(1)	(25)
Accrued expenses	7,551	127
Deferred revenue	(1,037)	2,870
Other noncurrent liabilities	(109)
Net cash (used in) provided by operating activities	(10,518)	7,310
Investing activities:
Purchases of property and equipment	(1,668)	(1,024)
Proceeds from the sales and maturities of marketable securities	56,880	25,262
Purchases of marketable securities	(10,961)	(30,725)
Cash paid for acquisition, net of cash received	(64,978)
Decrease in other noncurrent assets	42	140
Net cash used in investing activities	(20,685)	(6,347)
Financing activities:
Excess tax benefit on options exercised	1	25
Proceeds from stock option exercises	1,226	523
Acquisition-related equity issuance costs	(507)
Payments on capital lease obligation	(158)	(150)
Net cash provided by financing activities	562	398
Effect of exchange rate changes on cash and cash equivalents	(21)	59
Net (decrease) increase in cash and cash equivalents	(30,662)	1,420
Cash and cash equivalents, beginning of the period	86,057	35,694
Cash and cash equivalents, end of the period	55,395	37,114
Supplemental cash flow information
Cash paid for interest	14	24
Cash paid for income taxes	490	979
Supplemental noncash investing and financing activities
Transfer of demonstration equipment from inventory to fixed assets	2,452	2,227
Assets acquired under capital lease	24	276
Shares of common stock issued in connection with the acquisition of Palomar	$ 141,353

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

Note 2 — Stock-Based Compensation

Cynosure recorded stock-based compensation expense of $0.9 and $0.7 million for the three months ended June 30, 2013 and 2012, respectively. Cynosure recorded stock-based compensation expense of $1.7 million and $1.4 million for the six months ended June 30, 2013 and 2012, respectively. Cynosure capitalized $19,000 and $15,000 of stock-based compensation expense as part of inventory during the six months ended June 30, 2013 and 2012, respectively.

Total stock-based compensation expense was recorded to cost of revenues and operating expenses based upon the functional responsibilities of the individual holding the respective options, as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
	(In thousands)
Cost of revenues	$	41	$	30	$	77	$	59
Sales and marketing		261		214		501		422
Research and development		150		129		291		249
General and administrative		412		359		834		667
Total stock-based compensation expense	$	864	$	732	$	1,703	$	1,397

Cash received from option exercises was $1.2 million and $0.5 million during the six months ended June 30, 2013 and 2012, respectively.

Cynosure granted 327,700 and 332,000 stock options during the six months ended June 30, 2013 and 2012, respectively. Cynosure has elected to use the Black-Scholes model to determine the weighted average fair value of options. The weighted average fair value of the options granted during the six months ended June 30, 2013 and 2012 was $13.15 and $8.66, respectively, using the following assumptions:

	Six Months Ended June  30,
	2013	2012
Risk-free interest rate	0.79% - 1.48%	0.77% - 0.86%
Expected dividend yield	—	—
Expected term	4.8 years	5.8 years
Expected volatility	55% - 56%	57%
Estimated forfeiture rate	5%	5%

Option-pricing models require the input of various subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. Cynosure’s estimated expected stock price volatility is based on its own historical volatility. Cynosure’s expected term of options granted during the six months ended June 30, 2013 represents the weighted average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and Cynosure’s historical exercise patterns. Cynosure’s expected term of options granted during the six months ended June 30, 2012 was derived from the simplified method described in ASC 718-10-S99. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield of zero is based on the fact that Cynosure has never paid cash dividends and has no present intention to pay cash dividends.

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Short and Long-Term Marketable Securities

6 Months Ended

Jun. 30, 2013

Investments Debt And Equity Securities [Abstract]

Short and Long-Term Marketable Securities

Note 5 — Short and Long-Term Marketable Securities

Cynosure’s available-for-sale securities at June 30, 2013 consist of approximately $50.7 million of investments in debt securities consisting of state and municipal bonds, treasuries and government agencies, corporate obligations and commercial paper and approximately $57,000 in equity securities. All investments in available-for-sale securities are recorded at fair market value, with any unrealized gains and losses reported as a separate component of accumulated other comprehensive loss. As of June 30, 2013, Cynosure’s marketable securities consist of the following (in thousands):

	Market Value		Amortized Cost		Unrealized Gains		Unrealized Losses
Available-for-sale Securities:
Short-term marketable securities:
State and municipal bonds	$	12,177	$	12,174	$	4	$	(1	)
Treasuries and government agencies		14,022		14,014		8		—
Corporate obligations and commercial paper		11,003		11,004		2		(3	)
Equity securities		57		9		48		—
Total short-term marketable securities	$	37,259	$	37,201	$	62	$	(4	)
Long-term marketable securities:
State and municipal bonds	$	1,453	$	1,452	$	1	$	—
Treasuries and government agencies		10,021		10,021		2		(2	)
Corporate obligations and commercial paper		2,012		2,022		—		(10	)
Total long-term marketable securities	$	13,486	$	13,495	$	3	$	(12	)
Total available-for-sale securities	$	50,745	$	50,696	$	65	$	(16	)
Total marketable securities	$	50,745

As of December 31, 2012, Cynosure’s marketable securities consist of the following (in thousands):

	Market Value		Amortized Cost		Unrealized Gains		Unrealized Losses
Available-for-Sale Securities:
Cash equivalents:
State and municipal bonds	$	4,417	$	4,417	$	—	$	—
Government agencies		1,000		1,000		—		—
Total cash equivalents	$	5,417	$	5,417	$	—	$	—
Short-term marketable securities:
State and municipal bonds	$	33,250	$	33,251	$	6	$	(7	)
Treasuries and government agencies		7,346		7,345		1		—
Equity securities		21		6		15		—
Total short-term marketable securities	$	40,617	$	40,602	$	22	$	(7	)
Long-term marketable securities:
State and municipal bonds	$	18,046	$	18,052	$	2	$	(8	)
Treasuries and government agencies		2,025		2,021		4		—
Total long-term marketable securities	$	20,071	$	20,073	$	6	$	(8	)
Total available-for-sale securities	$	66,105	$	66,092	$	28	$	(15	)
Total marketable securities	$	60,688

As of June 30, 2013, Cynosure’s available-for-sale debt securities mature as follows (in thousands):

	Total		Maturities
			Less Than One Year		One to Five Years		More than five years
State and municipal bonds	$	13,630	$	12,177	$	1,453	$	—
Treasuries and government agencies		24,043		14,022		10,021		—
Corporate obligations and commercial paper		13,015		11,003		2,012		—
Total available-for-sale debt securities	$	50,688	$	37,202	$	13,486	$	—

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Inventories

6 Months Ended

Jun. 30, 2013

Inventory Disclosure [Abstract]

Inventories

Note 3 — Inventories

Cynosure states all inventories at the lower of cost or market, determined on a first-in, first-out method. Inventory includes material, labor and overhead and consists of the following:

	June 30, 2013		December 31, 2012
	(in thousands)
Raw materials	$	15,310	$	9,076
Work in process		4,666		1,134
Finished goods		36,431		22,696
	$	56,407	$	32,906

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Short and Long-Term Marketable Securities - Schedule of Marketable Securities (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Market Value	$ 50,745	$ 60,688
Short-Term Marketable Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value	37,259	40,617
Amortized Cost	37,201	40,602
Unrealized Gains	62	22
Unrealized Losses	(4)	(7)
Short-Term Marketable Securities [Member] | State and Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value	12,177	33,250
Amortized Cost	12,174	33,251
Unrealized Gains	4	6
Unrealized Losses	(1)	(7)
Short-Term Marketable Securities [Member] | Treasuries and Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value	14,022	7,346
Amortized Cost	14,014	7,345
Unrealized Gains	8	1
Unrealized Losses
Short-Term Marketable Securities [Member] | Corporate Obligations and Commercial Paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value	11,003
Amortized Cost	11,004
Unrealized Gains	2
Unrealized Losses	(3)
Short-Term Marketable Securities [Member] | Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value	57	21
Amortized Cost	9	6
Unrealized Gains	48	15
Unrealized Losses
Long-Term Marketable Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value	13,486	20,071
Amortized Cost	13,495	20,073
Unrealized Gains	3	6
Unrealized Losses	(12)	(8)
Long-Term Marketable Securities [Member] | State and Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value	1,453	18,046
Amortized Cost	1,452	18,052
Unrealized Gains	1	2
Unrealized Losses		(8)
Long-Term Marketable Securities [Member] | Treasuries and Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value	10,021	2,025
Amortized Cost	10,021	2,021
Unrealized Gains	2	4
Unrealized Losses	(2)
Long-Term Marketable Securities [Member] | Corporate Obligations and Commercial Paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value	2,012
Amortized Cost	2,022
Unrealized Gains
Unrealized Losses	(10)
Long-Term Marketable Securities [Member] | Total Available-for-Sale Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value	50,745	66,105
Amortized Cost	50,696	66,092
Unrealized Gains	65	28
Unrealized Losses	(16)	(15)
Cash Equivalents [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value		5,417
Amortized Cost		5,417
Unrealized Gains
Unrealized Losses
Cash Equivalents [Member] | State and Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value		4,417
Amortized Cost		4,417
Unrealized Gains
Unrealized Losses
Cash Equivalents [Member] | Treasuries and Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value		1,000
Amortized Cost		1,000
Unrealized Gains
Unrealized Losses

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Goodwill (Tables)

6 Months Ended

Jun. 30, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of Changes to Goodwill

Changes to goodwill during the six months ended June 30, 2013 were as follows (in thousands):

	Total
Balance — December 31, 2012	$	15,811
Palomar acquisition		91,037
Translation adjustment		(80	)
Balance — June 30, 2013	$	106,768

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Net (Loss) Income Per Common Share (Tables)

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Schedule of Reconciliation of Basic and Diluted Shares

A reconciliation of basic and diluted shares is as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
	2013			2012		2013			2012
Net (loss) income	$	(8,954	)	$	2,680	$	(7,715	)	$	3,499
Basic weighted average common shares outstanding		16,636			12,605		16,412			12,591
Weighted average common equivalent shares		—			673		—			550
Diluted weighted average common shares outstanding		16,636			13,278		16,412			13,141
Basic net (loss) income per share	$	(0.54	)	$	0.21	$	(0.47	)	$	0.28
Diluted net (loss) income per share	$	(0.54	)	$	0.20	$	(0.47	)	$	0.27

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Inventories - Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Inventory Disclosure [Abstract]
Raw materials	$ 15,310	$ 9,076
Work in process	4,666	1,134
Finished goods	36,431	22,696
Inventories, Total	$ 56,407	$ 32,906

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Segment Information - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2013 Country
Segment Reporting [Abstract]
Number of individual countries with greater than 10% of total revenue, total assets or total long lived assets	0
Percentage of total revenue	10.00%

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Warranty Costs - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2013
Guarantees [Abstract]
Warranty on end-user sales	1 year

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Acquisition - Pro-forma Condensed Consolidated Operating Results (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Business Combinations [Abstract]
Revenue (unaudited)	$ 69,035	$ 58,444	$ 132,026	$ 110,738
Pre-tax loss (unaudited)	$ (5,254)	$ (1,017)	$ (3,725)	$ (36,034)

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000	5,000
Preferred stock, shares issued	0	0
Class A and Class B common stock, shares authorized	70,000	70,000
Common Stock Class A [Member]
Common stock, shares issued	22,525	16,402
Common stock, par value	$ 0.001	$ 0.001
Treasury stock, shares	233	233
Common Stock Class B [Member]
Common stock, shares issued	0	0
Common stock, par value	$ 0.001	$ 0.001

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Other Intangible Assets

6 Months Ended

Jun. 30, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Other Intangible Assets

Note 8 — Other Intangible Assets

Other intangible assets consist of the following at June 30, 2013 and December 31, 2012 (in thousands):

	Developed Technology & Patents			Business Licenses			Customer Relationships			Trade Names			Other			Total
June 30, 2013
Cost	$	21,620		$	384		$	14,913		$	13,010		$	48		$	49,975
Translation adjustment		—			29			18			—			3			50
Accumulated amortization		(1,540	)		(208	)		(2,368	)		(369	)		(6	)		(4,491	)
Balance, June 30, 2013	$	20,080		$	205		$	12,563		$	12,641		$	45		$	45,534
December 31, 2012
Cost	$	3,250		$	384		$	3,323		$	2,650		$	48		$	9,655
Translation adjustment		—			38			24			—			3			65
Accumulated amortization		(1,292	)		(195	)		(2,019	)		(272	)		(5	)		(3,783	)
Balance, December 31, 2012	$	1,958		$	227		$	1,328		$	2,378		$	46		$	5,937

Cynosure acquired $40.3 million of identifiable intangible assets in the Palomar acquisition, of which $18.4 million was assigned to technology patents, $11.6 million was assigned to customer relationships and $10.3 million was assigned to trademarks in the six months ended June 30, 2013. These identifiable intangible assets are being amortized on an accelerated basis up to a 20-year period and are included in the table above.

Cynosure is currently evaluating the fair value of assets acquired and liabilities assumed from the Palomar acquisition, including identifiable intangible assets and their related amortization periods. As such, the $40.3 million in intangible assets presented in the table above are provisional and will be finalized in a later period once the fair value procedures are completed.

Amortization expense related to developed technology and patents is classified as a component of cost of revenues. Amortization expense related to customer relationships and trade names is classified as a component of amortization of intangible assets acquired. Amortization expense related to business licenses and other is classified as a component of general and administrative expenses. Cynosure recognized $0.1 million in amortization expense related to the identifiable intangible assets from the Palomar acquisition, all of which is classified as a component of amortization of intangible assets acquired for the three and six months ended June 30, 2013.

Amortization expense for the three months ended June 30, 2013 and 2012 was $0.4 million and $0.5 million, respectively. Amortization expense for the six months ended June 30, 2013 and 2012 was $0.7 million and $0.9 million, respectively. Cynosure has approximately $41,000 of indefinite-life intangible assets that are included in other intangible assets in the table above. As of June 30, 2013, amortization expense on existing intangible assets for the next five years and beyond is as follows (in thousands):

Remainder of 2013	$	2,725
2014		5,117
2015		4,768
2016		4,134
2017		3,816
2018 and thereafter		24,933
Total	$	45,493

The table above includes $0.9 million for the remainder of 2013, $1.6 million for 2014, $1.6 million for 2015, $1.6 million for 2016, $1.7 million for 2017 and $17.8 million for 2018 and thereafter, to be recognized within operating expenses related to intangible assets acquired through the Palomar, Eleme Medical and ConBio acquisitions, with the remainder recognized within cost of revenues. As such, the amortization related to the estimated $40.3 million of identifiable intangible assets from the Palomar acquisition is included in the table above.

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Consolidated Statements of Comprehensive (Loss) Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Statement Of Income And Comprehensive Income [Abstract]
Net (loss) income	$ (8,954)	$ 2,680	$ (7,715)	$ 3,499
Other comprehensive loss components:
Cumulative translation adjustment	(34)	(463)	(628)	(141)
Unrealized (loss) gain on marketable securities, net of taxes	(4)	3	21	12
Total other comprehensive loss	(38)	(460)	(607)	(129)
Comprehensive (loss) income	$ (8,992)	$ 2,220	$ (8,322)	$ 3,370

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Accumulated Other Comprehensive Loss - Changes to Accumulated Other Comprehensive Loss (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Accumulated Other Comprehensive Loss [Line Items]
Accumulated Other Comprehensive Loss, Beginning Balance			$ (1,599)
Accumulated Other Comprehensive Loss, Current period other comprehensive loss	(38)	(460)	(607)	(129)
Accumulated Other Comprehensive Loss, Ending Balance	(2,206)		(2,206)
Unrealized Gain on Marketable Securities, Net of Taxes [Member]
Accumulated Other Comprehensive Loss [Line Items]
Accumulated Other Comprehensive Loss, Beginning Balance			13
Accumulated Other Comprehensive Loss, Current period other comprehensive loss			21
Accumulated Other Comprehensive Loss, Ending Balance	34		34
Translation Adjustment [Member]
Accumulated Other Comprehensive Loss [Line Items]
Accumulated Other Comprehensive Loss, Beginning Balance			(1,612)
Accumulated Other Comprehensive Loss, Current period other comprehensive loss			(628)
Accumulated Other Comprehensive Loss, Ending Balance	$ (2,240)		$ (2,240)

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 55,395	$ 86,057
Short-term marketable securities	37,259	40,617
Accounts receivable, net	37,816	17,970
Inventories	56,407	32,906
Prepaid expenses and other current assets	5,595	5,149
Deferred income taxes	2,304	783
Total current assets	194,776	183,482
Property and equipment, net	37,864	8,207
Long-term marketable securities	13,486	20,071
Goodwill	106,768	15,811
Intangibles, net	45,534	5,937
Other assets	1,331	1,061
Total assets	399,759	234,569
Current liabilities:
Accounts payable	16,676	8,346
Amounts due to related party	1,433	1,896
Accrued expenses	32,960	17,201
Deferred revenue	7,425	6,319
Capital lease obligation	307	322
Total current liabilities	58,801	34,084
Capital lease obligation, net of current portion	297	432
Deferred revenue, net of current portion	1,071	281
Other noncurrent liabilities	6,622	2,265
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value Authorized - 5,000 shares Issued - none
Class A and Class B common stock, $0.001 par value Authorized - 70,000 shares Issued - 22,525 Class A shares and no Class B shares at June 30, 2013; Issued - 16,402 Class A shares and no Class B shares at December 31, 2012	23	17
Additional paid-in capital	334,756	190,979
Retained earnings	2,568	10,283
Accumulated other comprehensive loss	(2,206)	(1,599)
Treasury stock, 233 Class A shares, at cost	(2,173)	(2,173)
Total stockholders' equity	332,968	197,507
Total liabilities and stockholders' equity	$ 399,759	$ 234,569

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Warranty Costs - Schedule of Change in Product Warranty Accrual (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2013
Guarantees [Abstract]
Warranty accrual, beginning of period	$ 3,415
Warranty provision related to new sales	3,857
Warranty provision assumed from acquisition	1,225
Costs incurred	(2,643)
Warranty accrual, end of period	$ 5,854

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Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of Components of Other Intangible Assets

Other intangible assets consist of the following at June 30, 2013 and December 31, 2012 (in thousands):

	Developed Technology & Patents			Business Licenses			Customer Relationships			Trade Names			Other			Total
June 30, 2013
Cost	$	21,620		$	384		$	14,913		$	13,010		$	48		$	49,975
Translation adjustment		—			29			18			—			3			50
Accumulated amortization		(1,540	)		(208	)		(2,368	)		(369	)		(6	)		(4,491	)
Balance, June 30, 2013	$	20,080		$	205		$	12,563		$	12,641		$	45		$	45,534
December 31, 2012
Cost	$	3,250		$	384		$	3,323		$	2,650		$	48		$	9,655
Translation adjustment		—			38			24			—			3			65
Accumulated amortization		(1,292	)		(195	)		(2,019	)		(272	)		(5	)		(3,783	)
Balance, December 31, 2012	$	1,958		$	227		$	1,328		$	2,378		$	46		$	5,937

Schedule of Amortization Expenses on Intangible Assets

As of June 30, 2013, amortization expense on existing intangible assets for the next five years and beyond is as follows (table in thousands):

Remainder of 2013	$	2,725
2014		5,117
2015		4,768
2016		4,134
2017		3,816
2018 and thereafter		24,933
Total	$	45,493

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Stock-Based Compensation Expenses

Total stock-based compensation expense was recorded to cost of revenues and operating expenses based upon the functional responsibilities of the individual holding the respective options, as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
	(In thousands)
Cost of revenues	$	41	$	30	$	77	$	59
Sales and marketing		261		214		501		422
Research and development		150		129		291		249
General and administrative		412		359		834		667
Total stock-based compensation expense	$	864	$	732	$	1,703	$	1,397

Summary of Share-Based Compensation Arrangement Fair Value Assumptions

The weighted average fair value of the options granted during the six months ended June 30, 2013 and 2012 was $13.15 and $8.66, respectively, using the following assumptions:

	Six Months Ended June  30,
	2013	2012
Risk-free interest rate	0.79% - 1.48%	0.77% - 0.86%
Expected dividend yield	—	—
Expected term	4.8 years	5.8 years
Expected volatility	55% - 56%	57%
Estimated forfeiture rate	5%	5%

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Acquisition - Estimated Fair Value of Net Assets Acquired (Detail) (USD $) In Thousands, unless otherwise specified			1 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 24, 2013 Palomar [Member]	Jun. 30, 2013 Palomar [Member]
Business Acquisition [Line Items]
Cash and stock paid			$ 287,204
Cash, cash equivalents and marketable securities acquired			(117,929)
Purchase price, net			169,275
Assets (liabilities) acquired:
Accounts receivable			9,607
Inventory			25,881
Prepaids and other assets			722
Property and equipment			28,445
Other assets			332
Intangible assets			40,320	40,320
Goodwill	106,768	15,811	91,037
Accounts payable			(7,269)
Accrued expenses			(11,339)
Deferred revenue			(3,010)
Deferred tax liability			(5,451)
Total			$ 169,275

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Segment Information - Schedule of Long-Lived Assets by Geographic Area (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013	Dec. 31, 2012
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 39,195	$ 9,268
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	36,072	7,266
Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	2,010	1,570
Asia / Pacific [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets	$ 1,113	$ 432

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Fair Value - Additional Information (Detail) (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013 Level 3 [Member]	Dec. 31, 2012 Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Significant transfers in and out of Level 1 and Level 2	$ 0
Fair value of financial assets	$ 51,420,000	$ 0	$ 0

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Stock-Based Compensation - Summary of Stock-Based Compensation Expenses (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 864	$ 732	$ 1,703	$ 1,397
Cost of Revenues [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	41	30	77	59
Sales and Marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	261	214	501	422
Research and Development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	150	129	291	249
General and Administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 412	$ 359	$ 834	$ 667

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Stock-Based Compensation - Summary of Share-Based Compensation Arrangement Fair Value Assumptions (Detail)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Risk-free interest rate - minimum	0.79%	0.77%
Risk-free interest rate - maximum	1.48%	0.86%
Expected dividend yield	0.00%	0.00%
Expected term	4 years 9 months 18 days	5 years 9 months 18 days
Expected volatility		57.00%
Expected volatility - minimum	55.00%
Expected volatility - maximum	56.00%
Estimated forfeiture rate	5.00%	5.00%

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Goodwill

6 Months Ended

Jun. 30, 2013

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill

Note 7 — Goodwill

Changes to goodwill during the six months ended June 30, 2013 were as follows (in thousands):

	Total
Balance — December 31, 2012	$	15,811
Palomar acquisition		91,037
Translation adjustment		(80	)
Balance — June 30, 2013	$	106,768

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Warranty Costs (Tables)

6 Months Ended

Jun. 30, 2013

Guarantees [Abstract]

Schedule of Change in Product Warranty Accrual

The following table provides the detail of the change in Cynosure’s product warranty accrual during the six months ended June 30, 2013, which is a component of accrued expenses in the consolidated balance sheets:

	Total
	(in thousands)
Warranty accrual, beginning of period	$	3,415
Warranty provision related to new sales		3,857
Warranty provision assumed from acquisition		1,225
Costs incurred		(2,643	)
Warranty accrual, end of period	$	5,854

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Short and Long-Term Marketable Securities - Schedule of Available-for-Sale Debt Securities Mature (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2013
Schedule of Available-for-sale Securities [Line Items]
Total	$ 50,688
Less Than One Year	37,202
One to Five Years	13,486
More than five years
State and Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Total	13,630
Less Than One Year	12,177
One to Five Years	1,453
More than five years
Treasuries and Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Total	24,043
Less Than One Year	14,022
One to Five Years	10,021
More than five years
Corporate Obligations and Commercial Paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Total	13,015
Less Than One Year	11,003
One to Five Years	2,012
More than five years

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Segment Information

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Segment Information

Note 10 — Segment Information

In accordance with ASC 280, Segment Reporting Topic, operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. Cynosure’s chief decision-maker, as defined under ASC 280, is a combination of the Chief Executive Officer and the Chief Financial Officer. Cynosure views its operations and manages its business as one segment, aesthetic treatment products and services.

The following table represents total revenue by geographic destination:

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
	(in thousands)
United States	$	22,693	$	19,034	$	40,434	$	34,194
Europe		9,005		7,153		16,773		14,172
Asia / Pacific		12,793		11,016		23,729		20,292
Other		5,600		2,370		9,845		5,083
Total	$	50,091	$	39,573	$	90,781	$	73,741

Total assets by geographic area are as follows:

	June 30, 2013			December 31, 2012
	(in thousands)
United States	$	376,365		$	210,596
Europe		17,955			15,623
Asia / Pacific		16,240			11,038
Eliminations		(10,801	)		(2,688	)
Total	$	399,759		$	234,569

Long-lived assets by geographic area are as follows:

	June 30, 2013		December 31, 2012
	(in thousands)
United States	$	36,072	$	7,266
Europe		2,010		1,570
Asia / Pacific		1,113		432
Total	$	39,195	$	9,268

No individual country within Europe or Asia/Pacific represented greater than 10% of total revenue, total assets or total long lived assets for any period presented.

The increase in the amount of total assets is due primarily to the Palomar acquisition. The increase in the amount of long-lived assets is due to the tangible net assets acquired from the Palomar acquisition. Cynosure is currently evaluating the fair value of assets acquired and liabilities assumed.

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Acquisition

6 Months Ended

Jun. 30, 2013

Business Combinations [Abstract]

Acquisition

Note 6 — Acquisition

Palomar Medical Technologies, Inc.

On June 24, 2013, Cynosure acquired Palomar Medical Technologies, Inc. (Palomar). The acquisition complements and broadens Cynosure’s product lineup with the addition of Palomar’s intense pulsed light, fractional laser and diode aesthetic systems, doubles the number of patents in Cynosure’s portfolio and enhances Cynosure’s global distribution network. As a result of the transaction, former Palomar stockholders, in the aggregate, received for their shares of Palomar common stock $145.8 million in cash and 6.0 million shares of Cynosure Class A common stock. The total consideration is valued at $287.2 million, based upon the closing price of Cynosure Class A common stock on June 24, 2013. This acquisition was considered a business acquisition for accounting purposes.

Cynosure has retained an independent valuation firm to assess the fair value of the identifiable intangible assets and certain tangible assets acquired and is also currently assessing the fair value of other assets acquired and liabilities assumed and plans to file pro forma financial information with the SEC within the applicable time period. Cynosure has preliminarily allocated the purchase price to the net tangible and intangible assets based on their estimated fair values as of June 24, 2013. As such, the fair value of the assets acquired and liabilities assumed, including intangible assets, presented in the table below are provisional and will be finalized in a later period once the fair value procedures are completed.

The following table summarizes the preliminary purchase price allocation, net of $117.9 million in cash, cash equivalents and marketable securities acquired (in thousands):

Purchase price:
Cash and stock paid	$	287,204
Cash, cash equivalents and marketable securities acquired		(117,929	)
Purchase price, net	$	169,275
Assets (liabilities) acquired:
Accounts receivable		9,607
Inventory		25,881
Prepaids and other assets		722
Property and equipment		28,445
Other assets		332
Intangible assets		40,320
Goodwill		91,037
Accounts payable		(7,269	)
Accrued expenses		(11,339	)
Deferred revenue		(3,010	)
Deferred tax liability		(5,451	)
Total	$	169,275

Revenue and net loss related to Palomar’s operations was $5.1 million and $(18.2) million, respectively, for the five business days following the June 24, 2013 acquisition date, and is included in Cynosure’s consolidated statements of operations for the three months ended June 30, 2013.

The following unaudited pro forma condensed consolidated operating results for the three and six months ended June 30, 2013 and 2012 summarize the combined results of operations for Cynosure and Palomar. The unaudited pro forma condensed consolidated operating results includes the business combination accounting effects as if the acquisition had been completed as of January 1, 2012 (for both the 2013 and 2012 period results) after giving effect to certain adjustments. These pro forma financial statements are for informational purposes only and are not necessarily indicative of the operating results that would have occurred if the transaction had occurred on such date. No effect has been given for synergies, if any, that may be realized through the acquisition.

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(In thousands)
Revenue (unaudited)	$	69,035		$	58,444		$	132,026		$	110,738
Pre-tax loss (unaudited)	$	(5,254	)	$	(1,017	)	$	(3,725	)	$	(36,034	)

The unaudited consolidated pro forma financial information above includes significant, non-recurring adjustments made to account for certain costs which would have been incurred if the acquisition had been completed on January 1, 2012, including $18.5 million in change of control severance payments and $4.6 million associated with the step up in fair value of finished goods inventory acquired through the acquisition.

During the three and six months ended June 30, 2013, Cynosure incurred $20.4 million and $21.5 million, respectively, in costs associated with the acquisition of Palomar. In connection with the acquisition of Palomar, certain terminated Palomar employees were, and certain continuing Palomar employees are, entitled to severance benefits in specified circumstances associated with the change of control of Palomar. In connection with the acquisition and these change of control severance arrangements, Cynosure incurred $18.5 million of compensation expense during the three months ended June 30, 2013, and Cynosure expects to incur an additional $1.5 million of compensation expense during each of the next four quarters. Costs associated with the acquisition of Palomar, including the aforementioned $18.5 million, are primarily recorded in the general and administrative expenses within the consolidated statement of operations.

During the three months ended June 30, 2013, Cynosure incurred $0.5 million in equity issuance costs associated with the acquisition of Palomar. These amounts were recorded to additional paid-in capital.

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Interim Consolidated Financial Statements

6 Months Ended

Jun. 30, 2013

Quarterly Financial Information Disclosure [Abstract]

Interim Consolidated Financial Statements

Note 1 — Interim Consolidated Financial Statements

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim information and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for reporting on Form 10-Q. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. It is recommended that these financial statements be read in conjunction with the consolidated financial statements and related notes that appear in the Annual Report on Form 10-K of Cynosure, Inc. (Cynosure) for the year ended December 31, 2012, as amended. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position, results of operations, and cash flows as of the dates and for the periods presented have been included. The results of operations for the six months ended June 30, 2013 may not be indicative of the results that may be expected for the year ending December 31, 2013, or any other period.

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Segment Information - Schedule of Total Revenue by Geographic Destination (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 50,091	$ 39,573	$ 90,781	$ 73,741
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	22,693	19,034	40,434	34,194
Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	9,005	7,153	16,773	14,172
Asia / Pacific [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	12,793	11,016	23,729	20,292
Other Country [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenue	$ 5,600	$ 2,370	$ 9,845	$ 5,083

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Other Intangible Assets - Schedule of Components of Other Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Finite-Lived Intangible Assets [Line Items]
Cost	$ 49,975	$ 9,655
Translation adjustment	50	65
Accumulated amortization	(4,491)	(3,783)
Balance	45,534	5,937
Developed Technology and Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	21,620	3,250
Translation adjustment
Accumulated amortization	(1,540)	(1,292)
Balance	20,080	1,958
Business Licenses [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	384	384
Translation adjustment	29	38
Accumulated amortization	(208)	(195)
Balance	205	227
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	14,913	3,323
Translation adjustment	18	24
Accumulated amortization	(2,368)	(2,019)
Balance	12,563	1,328
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	13,010	2,650
Translation adjustment
Accumulated amortization	(369)	(272)
Balance	12,641	2,378
Other [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	48	48
Translation adjustment	3	3
Accumulated amortization	(6)	(5)
Balance	$ 45	$ 46

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

Changes to Accumulated Other Comprehensive Loss

Changes to accumulated other comprehensive loss during the six months ended June 30, 2013 were as follows (in thousands):

	Unrealized Gain on Marketable Securities, net of taxes		Translation Adjustment			Accumulated Other Comprehensive Loss
Balance — December 31, 2012	$	13	$	(1,612	)	$	(1,599	)
Current period other comprehensive loss		21		(628	)		(607	)
Balance — June 30, 2013	$	34	$	(2,240	)	$	(2,206	)

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Related Party Transactions - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012
Related Party Transactions [Abstract]
Percentage of common stock outstanding	9.00%		9.00%
Purchases of inventory from related party	$ 1.3	$ 1.0	$ 2.9	$ 2.1
Due to related party for purchase of inventory	1.4		1.4		1.9
Amounts due from related party	$ 0		$ 0		$ 0

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Related Party Transactions

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions

Note 13 — Related Party Transactions

As of June 30, 2013, El. En. S.p.A. (El.En.) owned 9% of Cynosure’s outstanding common stock. Purchases of inventory from El.En. during the three months ended June 30, 2013 and 2012 were approximately $1.3 million and $1.0 million, respectively. Purchases of inventory from El.En. during the six months ended June 30, 2013 and 2012 were approximately $2.9 million and $2.1 million, respectively. As of June 30, 2013 and December 31, 2012, amounts due to related party for these purchases were approximately $1.4 million and $1.9 million, respectively. There were no amounts due from El.En. as of June 30, 2013 or December 31, 2012.

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Warranty Costs

6 Months Ended

Jun. 30, 2013

Guarantees [Abstract]

Warranty Costs

Note 9 — Warranty Costs

Cynosure typically provides a one-year parts and labor warranty on end-user sales of laser systems. Distributor sales generally include a warranty on parts only. Estimated future costs for initial product warranties are provided at the time of revenue recognition. The following table provides the detail of the change in Cynosure’s product warranty accrual during the six months ended June 30, 2013, which is a component of accrued expenses in the consolidated balance sheets:

	Total
	(in thousands)
Warranty accrual, beginning of period	$	3,415
Warranty provision related to new sales		3,857
Warranty provision assumed from acquisition		1,225
Costs incurred		(2,643	)
Warranty accrual, end of period	$	5,854

Cynosure is currently evaluating the fair value of assets acquired and liabilities assumed from the Palomar acquisition, including its warranty accrual. As a result, the warranty accrual related to the Palomar acquisition above is preliminary in nature.

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Stock-Based Compensation (Policies)

6 Months Ended

Jun. 30, 2013

Accounting Changes And Error Corrections [Abstract]

Stock-Based Compensation

Cynosure’s expected term of options granted during the six months ended June 30, 2012 was derived from the simplified method described in ASC 718-10-S99.

ASC 280, Segment Reporting Topic

In accordance with ASC 280, Segment Reporting Topic, operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. Cynosure’s chief decision-maker, as defined under ASC 280, is a combination of the Chief Executive Officer and the Chief Financial Officer. Cynosure views its operations and manages its business as one segment, aesthetic treatment products and services.

Recent Accounting Pronouncements

In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. Under this ASU, an entity is required to provide information about the amounts reclassified out of Accumulated Other Comprehensive Income (AOCI) by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in the financial statements. ASU 2013-02 is effective for interim and annual periods beginning after December 15, 2012. The adoption of this guidance did not materially impact Cynosure’s financial statements or disclosures.

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Income Taxes

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Note 14 — Income Taxes

During the three months ended June 30, 2013, Cynosure recorded an income tax benefit of $5.7 million, representing an effective tax rate of 39%. Included in this tax benefit is a non-recurring benefit of $5.8 million for the release of a portion of the domestic valuation allowance due to taxable temporary differences available as a source of income to realize the benefit of certain pre-existing Cynosure deferred tax assets as a result of the Palomar business combination.

At March 31, 2013, Cynosure had gross tax-effected unrecognized tax benefits of $0.4 million, of which $0.2 million, if recognized, would favorably impact the effective tax rate. During the three months ended June 30, 2013, unrecognized tax benefits, inclusive of accrued interest, increased by $3.1 million as a result of the acquisition of Palomar, of which $1.1 million, if recognized, would favorably impact the effective tax rate. The $3.1 million increase in unrecognized tax benefits was recorded in purchase accounting against goodwill in the second quarter upon the acquisition of Palomar and includes $0.3 million in interest and penalties. Cynosure classifies interest and penalties related to income taxes as a component of its provision for income taxes.

Cynosure files income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. Cynosure is no longer subject to U.S. federal income tax examinations by tax authorities for years before 2010. With few exceptions, Cynosure is no longer subject to U.S. state tax examinations for years before 2008. Additionally, certain non-U.S. jurisdictions are no longer subject to income tax examinations by tax authorities for years before 2008. Palomar’s pre-acquisition income tax filings for the years 2006-2012 remain open to examination by the taxation jurisdictions in which they were filed.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 02, 2013 Common Stock Class A [Member]
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Entity Registrant Name	CYNOSURE INC
Entity Central Index Key	0000885306
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		22,304,833

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2013

Accounting Changes And Error Corrections [Abstract]

Recent Accounting Pronouncements

Note 15 — Recent Accounting Pronouncements

In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. Under this ASU, an entity is required to provide information about the amounts reclassified out of Accumulated Other Comprehensive Income (AOCI) by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in the financial statements. ASU 2013-02 is effective for interim and annual periods beginning after December 15, 2012. The adoption of this guidance did not materially impact Cynosure’s financial statements or disclosures.

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Income Taxes - Additional Information (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Mar. 31, 2013
Income Tax Benefit [Line Items]
Unrecognized tax benefit					$ 400,000
Unrecognized tax benefit if recognized would impact effective tax rate					200,000
Income tax benefit	5,708,000	(728,000)	5,284,000	(986,000)
Effective income tax rate	39.00%
Non recurring tax benefit	5,800,000		(5,625,000)
Interest and penalties	300,000
Palomar [Member]
Income Tax Benefit [Line Items]
Unrecognized tax benefit if recognized would impact effective tax rate	1,100,000		1,100,000
Increase in Unrecognized tax benefit	$ 3,100,000