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 March 31, 2015

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 Exchange Act).    ¨  Yes    x  No

The number of shares outstanding of the registrant’s Class A common stock as of May 1, 2015:

Class	Number of Shares
Class A Common Stock, $0.001 par value	22,160,724

Cynosure, Inc.

Table of Contents

		Page No.
PART I	Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014		3
	Consolidated Statements of Operations for the Three Months Ended March 31, 2015 and 2014		4
	Consolidated Statements of Comprehensive (Loss) Income for the Three Months Ended March 31, 2015 and 2014		5
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2015 and 2014		6
	Notes to Consolidated Financial Statements (Unaudited)		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		22
Item 4.	Controls and Procedures		22
PART II	Other Information
Item 1.	Legal Proceedings		24
Item 1A.	Risk Factors		25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		36
Item 6.	Exhibits		36
SIGNATURES			37
EXHIBIT INDEX			38

EX-10.1 Sixth Amendment to the Lease, dated April 16, 2015, between the Company and Glenborough Westford Center, LLC

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 March 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014, (ii) Consolidated Balance Sheets at March 31, 2015 and December 31, 2014, (iii) Consolidated Statements of Comprehensive (Loss) Income for the three months ended March 31, 2015 and 2014, (iv) Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014, and (v) Notes to Consolidated Financial Statements.

2

PART I — Financial Information

Item 1. Financial Statements (Unaudited)

Cynosure, Inc.

Consolidated Balance Sheets

(in thousands, except par value data)

	(Unaudited) March 31, 2015			December 31, 2014
Assets
Current assets:
Cash and cash equivalents	$	71,914		$	75,131
Short-term marketable securities		24,585			32,055
Accounts receivable, net		45,311			42,524
Inventories		68,209			59,318
Prepaid expenses and other current assets		10,580			9,629
Deferred income taxes		17,144			17,228
Total current assets		237,743			235,885
Property and equipment, net		35,523			34,256
Long-term marketable securities		30,082			26,189
Goodwill		105,877			105,764
Intangibles, net		51,272			53,583
Other assets		1,966			2,047
Total assets	$	462,463		$	457,724
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	27,062		$	20,856
Accrued expenses		38,875			42,426
Deferred revenue		11,575			10,971
Capital lease obligation		135			137
Total current liabilities		77,647			74,390
Capital lease obligation, net of current portion		16,563			16,088
Deferred revenue, net of current portion		839			809
Other noncurrent liabilities		7,924			8,325
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 — 23,335 Class A shares and no Class B shares at March 31, 2015; Issued — 23,253 Class A shares and no Class B shares at December 31, 2014		23			23
Additional paid-in capital		357,834			355,082
Retained earnings		39,966			39,974
Accumulated other comprehensive loss		(5,229	)		(3,863	)
Treasury stock, 1,628 Class A shares, at cost		(33,104	)		(33,104	)
Total stockholders’ equity		359,490			358,112
Total liabilities and stockholders’ equity	$	462,463		$	457,724

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

3

Cynosure, Inc.

Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)

	Three Months Ended March 31,
	2015			2014
Product revenues	$	56,502		$	49,701
Parts, accessories, service and royalty revenues		18,410			12,303
Total revenues		74,912			62,004
Cost of revenues		32,139			26,609
Gross profit		42,773			35,395
Operating expenses:
Sales and marketing		25,696			20,122
Research and development		5,958			5,574
Amortization of intangible assets acquired		736			713
General and administrative		8,330			7,640
Total operating expenses		40,720			34,049
Income from operations		2,053			1,346
Interest expense, net		(402	)		(349	)
Other (expense) income, net		(1,663	)		66
(Loss) income before provision for income taxes		(12	)		1,063
(Benefit) provision for income taxes		(4	)		374
Net (loss) income	$	(8	)	$	689
Basic net (loss) income per share	$	(0.00	)	$	0.03
Diluted net (loss) income per share	$	(0.00	)	$	0.03
Basic weighted average common shares outstanding		21,664			21,978
Diluted weighted average common shares outstanding		21,664			22,568

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

4

Cynosure, Inc.

Consolidated Statements of Comprehensive (Loss) Income

(Unaudited, in thousands)

	Three Months Ended March 31,
	2015			2014
Net (loss) income	$	(8	)	$	689
Other comprehensive loss components:
Cumulative translation adjustment		(1,379	)		(49	)
Unrealized gain (loss) on marketable securities, net of taxes		13			(6	)
Total other comprehensive loss		(1,366	)		(55	)
Comprehensive (loss) income	$	(1,374	)	$	634

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

5

Cynosure, Inc.

Consolidated Statements of Cash Flows

(Unaudited, in thousands)

	Three Months Ended March 31,
	2015			2014
Operating activities:
Net (loss) income	$	(8	)	$	689
Reconciliation of net (loss) income to net cash used in operating activities:
Depreciation and amortization		4,686			4,241
Stock-based compensation expense		1,820			1,466
Loss on disposal of fixed assets		5			32
Noncash interest expense on capital lease obligations		395			366
Noncash interest expense on license transfer agreement		51			—
Deferred income taxes		21			44
Net accretion of marketable securities		514			240
Changes in operating assets and liabilities:
Accounts receivable		(3,698	)		(3,617	)
Inventories		(10,963	)		(2,732	)
Net book value of demonstration inventory sold		94			126
Prepaid expenses and other current assets		(1,290	)		260
Accounts payable		6,321			3,103
Tax benefit from the exercise of stock options		(27	)		(382	)
Accrued expenses		(3,056	)		(4,748	)
Deferred revenue		779			(8	)
Other noncurrent liabilities		(402	)		—
Net cash used in operating activities		(4,758	)		(920	)
Investing activities:
Purchases of property and equipment		(2,814	)		(4,394	)
Proceeds from the sales and maturities of marketable securities		13,150			3,565
Purchases of marketable securities		(10,081	)		(17,083	)
Decrease in other noncurrent assets		(19	)		(127	)
Net cash provided by (used in) investing activities		236			(18,039	)
Financing activities:
Excess tax benefit on options exercised		27			382
Proceeds from stock option exercises		901			7,340
Payments on capital lease obligation		(73	)		(311	)
Net cash provided by financing activities		855			7,411
Effect of exchange rate changes on cash and cash equivalents		450			(77	)
Net decrease in cash and cash equivalents		(3,217	)		(11,625	)
Cash and cash equivalents, beginning of the period		75,131			93,655
Cash and cash equivalents, end of the period	$	71,914		$	82,030
Supplemental cash flow information:
Cash paid for interest	$	5		$	5
Cash paid for income taxes	$	515		$	810
Supplemental noncash investing and financing activities:
Transfer of demonstration equipment from inventory to fixed assets	$	2,108		$	556
Assets acquired under capital lease	$	151		$	—
Net effect of acquisition-related opening balance sheet adjustments	$	140		$	115

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

6

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 (U.S. GAAP) for interim information and pursuant to the rules and regulations of the Securities and Exchange Commission 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, 2014. 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 three months ended March 31, 2015 may not be indicative of the results that may be expected for the year ending December 31, 2015, or any other period.

Note 2 — Stock-Based Compensation

Cynosure recorded stock-based compensation expense of $1.8 million and $1.5 million for the three months ended March 31, 2015 and 2014, respectively. As of March 31, 2015 and 2014, respectively, Cynosure had $26,000 and $25,000 of stock-based compensation expense capitalized as a part of inventory.

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 share-based payments, as follows:

	Three Months Ended March 31,
	2015		2014
	(In thousands)
Cost of revenues	$	68	$	65
Sales and marketing		475		443
Research and development		257		228
General and administrative		1,020		730
Total stock-based compensation expense	$	1,820	$	1,466

Cash received from option exercises was $0.9 million and $7.3 million during the three months ended March 31, 2015 and 2014, respectively.

Cynosure granted 319,509 and 657,240 stock options during the three months ended March 31, 2015 and 2014, respectively. Cynosure utilizes the Black-Scholes model to determine the weighted average fair value of options. The weighted average fair value of the options granted during the three months ended March 31, 2015 and 2014 was $11.78 and $11.23, respectively, using the following assumptions:

	Three Months Ended March 31,
	2015	2014
Risk-free interest rate	1.39% - 1.53%	1.44% - 1.76%
Expected dividend yield	—	—
Expected term	4.8 years	4.6 years
Expected volatility	43%	43% - 44%
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 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. The risk-free interest 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.

7

Cynosure granted 86,618 and 44,840 restricted stock units during the three months ended March 31, 2015 and 2014, respectively, to employees at a fair market value of its common stock on the date of grant and which vest annually over a three-year period. Cynosure is recognizing the related compensation expense on a straight-line basis over the three-year period.

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:

	March 31, 2015		December 31, 2014
	(in thousands)
Raw materials	$	18,415	$	16,875
Work in process		4,344		3,526
Finished goods		45,450		38,917
	$	68,209	$	59,318

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 March 31, 2015 (in thousands):

	Level 1		Level 2		Level 3		Total
Money market funds(1)	$	5,531	$	—	$	—	$	5,531
State and municipal bonds		—		46,359		—		46,359
Treasuries and government agencies		—		8,299		—		8,299
Equity securities		9		—		—		9
Total	$	5,540	$	54,658	$	—	$	60,198

The following table represents Cynosure’s fair value hierarchy for its financial assets (cash equivalents and marketable securities) measured at fair value as of December 31, 2014 (in thousands):

	Level 1		Level 2		Level 3		Total
Money market funds(1)	$	1,753	$	—	$	—	$	1,753
State and municipal bonds		—		47,744		—		47,744
Treasuries and government agencies		—		8,486		—		8,486
Corporate obligations and commercial paper		—		2,001		—		2,001
Equity securities		13		—		—		13
Total	$	1,766	$	58,231	$	—	$	59,997

(1) Included in cash and cash equivalents at March 31, 2015 and December 31, 2014.

8

During the three months ended March 31, 2015, there were no significant transfers in and out of Level 1 and Level 2. Cynosure did not have any Level 3 financial assets at March 31, 2015 or December 31, 2014.

Note 5 — Short and Long-Term Marketable Securities

Cynosure’s available-for-sale securities at March 31, 2015 consist of approximately $54.7 million of investments in debt securities consisting of state and municipal bonds, treasuries and government agencies and approximately $9,000 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 March 31, 2015, 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	$	23,576	$	23,571	$	5	$	—
Treasuries and government agencies		1,000		1,000		—		—
Equity securities		9		13		—		(4	)
Total short-term marketable securities	$	24,585	$	24,584	$	5	$	(4	)
Long-term marketable securities:
State and municipal bonds	$	22,783	$	22,786	$	6	$	(9	)
Treasuries and government agencies		7,299		7,299		3		(3	)
Total long-term marketable securities	$	30,082	$	30,085	$	9	$	(12	)
Total available-for-sale securities	$	54,667	$	54,669	$	14	$	(16	)
Total marketable securities	$	54,667

As of December 31, 2014, 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	$	26,041	$	26,033	$	8	$	—
Treasuries and government agencies		4,000		4,000		—		—
Corporate obligations and commercial paper		2,001		2,001		—		—
Equity securities		13		18		—		(5	)
Total short-term marketable securities	$	32,055	$	32,052	$	8	$	(5	)
Long-term marketable securities:
State and municipal bonds	$	21,703	$	21,721	$	2	$	(20	)
Treasuries and government agencies		4,486		4,500		—		(14	)
Total long-term marketable securities	$	26,189	$	26,221	$	2	$	(34	)
Total available-for-sale securities	$	58,244	$	58,273	$	10	$	(39	)
Total marketable securities	$	58,244

9

As of March 31, 2015, Cynosure’s available-for-sale debt securities mature as follows (in thousands):

			Maturities
	Total		Less Than One Year		One to Five Years		More than Five Years
State and municipal bonds	$	46,359	$	23,576	$	22,783	$	—
Treasuries and government agencies		8,299		1,000		7,299		—
Total available-for-sale debt securities	$	54,658	$	24,576	$	30,082	$	—

Note 6 — Acquisition

Ellman International, Inc.

On September 5, 2014, Cynosure acquired substantially all of the assets of Ellman International, Inc. (Ellman) for $13.2 million in cash. In addition, Cynosure assumed current liabilities associated with normal working capital and certain contractual liabilities. The purchase price was based primarily on the net working capital on the date of purchase plus an amount to retire all of Ellman’s long term debt on the date of sale. Cynosure also assumed a license transfer agreement as part of the purchase valued at $4.2 million, which is classified as a liability. The acquisition complements Cynosure’s aesthetic treatment platform with radiofrequency energy sources and accessory products. The acquisition of substantially all of the assets of Ellman was considered a business acquisition for accounting purposes.

Cynosure is assessing the fair value of the assets acquired and liabilities assumed. Pro forma financial information was filed with the Securities and Exchange Commission within the applicable time period. Cynosure has allocated the purchase price to the net tangible and intangible assets based on their estimated fair values as of September 5, 2014. During the fourth quarter of 2014, Cynosure completed its fair value procedures on the intangible assets, fixed assets and the license transfer agreement acquired in the Ellman acquisition. As such, the fair value of the accounts receivable, inventory, prepaid and other assets acquired, along with the accounts payable, accrued expenses and deferred revenue assumed presented in the table below are provisional and will be finalized in a later period once the fair value procedures are completed. Goodwill represents the excess of purchase price over the fair value of the net assets acquired. During the first quarter of 2015, Cynosure revised its estimates of the assets acquired and liabilities assumed in the Ellman acquisition, and as a result, increased goodwill from $6.6 million at December 31, 2014 to $6.7 million at March 31, 2015, with the offsetting decrease to inventory. The following table summarizes the estimated fair value as of September 5, 2014 of the net assets acquired (in thousands):

Purchase price:
Cash paid	$	13,235
Total	$	13,235
Assets (liabilities) acquired:
Accounts receivable		2,147
Inventory		3,542
Prepaid and other assets		488
Fixed assets		612
Intangible assets		6,800
Goodwill		6,738
Accounts payable		(9	)
Accrued expenses		(2,469	)
Deferred revenue		(454	)
License transfer agreement		(4,160	)
Total	$	13,235

Note 7 — Goodwill and Other Intangible Assets

Changes to goodwill during the three months ended March 31, 2015 were as follows (in thousands):

Balance — December 31, 2014	$	105,764
Ellman acquisition		140
Translation adjustment		(27	)
Balance — March 31, 2015	$	105,877

10

Other intangible assets consisted of the following at March 31, 2015 and December 31, 2014 (in thousands):

	Developed Technology & Patents			Business Licenses			Customer Relationships			Trade Names			Other			Total
March 31, 2015
Cost	$	29,240		$	384		$	19,718		$	18,390		$	1,353		$	69,085
Translation adjustment		—			—			(45	)		—			—			(45	)
Accumulated amortization		(9,394	)		(221	)		(6,294	)		(1,834	)		(25	)		(17,768	)
Balance, March 31, 2015	$	19,846		$	163		$	13,379		$	16,556		$	1,328		$	51,272
December 31, 2014
Cost	$	29,240		$	384		$	19,718		$	18,390		$	1,338		$	69,070
Translation adjustment		—			34			2			—			2			38
Accumulated amortization		(7,840	)		(252	)		(5,818	)		(1,607	)		(8	)		(15,525	)
Balance, December 31, 2014	$	21,400		$	166		$	13,902		$	16,783		$	1,332		$	53,583

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.

Amortization expense for the three months ended March 31, 2015 and 2014 was $2.2 million and $2.1 million, respectively. Cynosure has approximately $1.0 million of indefinite-life intangible assets that are included in other intangible assets in the table above. As of March 31, 2015, amortization expense on existing intangible assets for the next five years and beyond is as follows (in thousands):

Remainder of 2015	$	6,916
2016		8,428
2017		6,439
2018		4,923
2019		3,188
2020 and thereafter		20,402
Total	$	50,296

Note 8 — Warranty Costs

Cynosure typically provides a one-year parts and labor warranty on end-user sales of lasers. Distributor sales generally include a one-year warranty on parts only. Estimated future costs for initial product warranties are provided for at the time of revenue recognition. The following table sets forth activity in the accrued warranty account, which is a component of accrued expenses in the consolidated balance sheets (in thousands):

Balance — December 31, 2014	$	8,118
Warranty provision related to new sales		2,997
Costs incurred		(3,311	)
Balance — March 31, 2015	$	7,804

Note 9 — Segment Information

In accordance with Accounting Standards Codification (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.

11

The following table represents total revenue by geographic area:

	Three Months Ended March 31,
	2015		2014
	(in thousands)
United States	$	41,451	$	27,948
Europe		10,657		12,133
Asia / Pacific		16,814		15,527
Other		5,990		6,396
Total	$	74,912	$	62,004

Total assets by geographic area are as follows:

	March 31, 2015			December 31, 2014
	(in thousands)
United States	$	427,998		$	420,513
Europe		20,796			23,235
Asia / Pacific		19,269			19,182
Eliminations		(5,600	)		(5,206	)
Total	$	462,463		$	457,724

Long-lived assets (property and equipment only) by geographic area are as follows:

	March 31, 2015		December 31, 2014
	(in thousands)
United States	$	31,339	$	30,912
Europe		1,453		1,656
Asia / Pacific		2,731		1,688
Total	$	35,523	$	34,256

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

Note 10 — 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 and restricted stock units based on the treasury stock method.

12

A reconciliation of basic and diluted shares is as follows (in thousands, except per share data):

	Three Months Ended March 31,
	2015			2014
Net (loss) income	$	(8	)	$	689
Basic weighted average common shares outstanding		21,664			21,978
Weighted average common equivalent shares		—			590
Diluted weighted average common shares outstanding		21,664			22,568
Basic net (loss) income per share	$	(0.00	)	$	0.03
Diluted net (loss) income per share	$	(0.00	)	$	0.03

For the three months ended March 31, 2015, 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 months ended March 31, 2015 would be antidilutive based on the net loss for the period. For the three months ended March 31, 2015, outstanding options and restricted stock units to purchase 1.7 million shares were excluded from the computation of diluted earnings per share because their inclusion would have been antidilutive.

For the three months ended March 31, 2014, approximately 1.1 million weighted average stock options and restricted stock units to purchase shares of the Company’s Class A common stock were excluded from the calculation of diluted weighted average common shares outstanding as their effect was antidilutive.

Note 11 — Accumulated Other Comprehensive Loss

Changes to accumulated other comprehensive loss during the three months ended March 31, 2015 were as follows (in thousands):

	Unrealized (Loss) Gain on Marketable Securities, net of taxes			Translation Adjustment			Accumulated Other Comprehensive Loss
Balance — December 31, 2014	$	(10	)	$	(3,853	)	$	(3,863	)
Current period other comprehensive loss		13			(1,379	)		(1,366	)
Balance — March 31, 2015	$	3		$	(5,232	)	$	(5,229	)

Note 12 — Income Taxes

During the three months ended March 31, 2015 and 2014, Cynosure recorded an income tax benefit of $4,000 and an income tax provision of $374,000, respectively. The income tax benefit for the three months ended March 31, 2015 is primarily attributable to applying the Company’s estimated annual effective tax rate to its year-to-date worldwide loss.

At March 31, 2015 and December 31, 2014, Cynosure had gross tax-effected unrecognized tax benefits of $0.8 million of which the entire amount, if recognized, would favorably impact the effective tax rate. Cynosure classifies interest and penalties related to income taxes as a component of its provision for income taxes. Cynosure does not expect any material changes in the amounts of unrecognized tax benefits over the next 12 months.

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 2011. With few exceptions, Cynosure is no longer subject to U.S. state tax examinations for years before 2010. Additionally, certain non-U.S. jurisdictions are no longer subject to income tax examinations by tax authorities for years before 2010.

Note 13 — Commitments and Contingencies

Lease Commitments

Cynosure leases the land portion of its U.S. operating facility and certain foreign facilities under non-cancellable operating lease agreements expiring through May 2027. These leases are non-cancellable and typically contain renewal options. Certain leases contain

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rent escalation clauses for which Cynosure recognizes the expense on a straight-line basis. Rent expense for the three months ended March 31, 2015 and 2014 was approximately $0.5 million and $1.0 million, respectively. The 2014 period rent expense includes approximately $0.5 million incurred on the former Palomar Medical Technologies, Inc. (Palomar) headquarters, which Cynosure occupied through July 2014.

Cynosure leases the buildings portion of its U.S. operating facility and certain equipment and vehicles under capital lease agreements with payments due through May 2027. Commitments under Cynosure’s lease arrangements are as follows as of March 31, 2015, and reflect the impact of an April 2015 amendment on Cynosure’s U.S. operating facility lease (in thousands):

	Operating Leases		Capital Leases
Remainder of 2015	$	1,428	$	145
2016		1,850		2,327
2017		1,845		2,719
2018		1,800		2,626
2019		1,389		2,611
Thereafter		2,842		20,947
Total minimum lease payments	$	11,154	$	31,375
Less amount representing interest				(14,677	)
Present value of obligations under capital leases			$	16,698
Current portion of capital lease obligations				135
Capital lease obligations, net of current portion			$	16,563

Contractual Obligations

Cynosure’s significant outstanding contractual obligations relate to its capital leases from its facilities leases, including the buildings portion of its U.S. operating facility, and equipment financings. Cynosure’s leases are non-cancellable and typically contain renewal options. Certain leases contain rent escalation clauses for which Cynosure recognizes the expense on a straight-line basis. Cynosure has summarized in the table below its fixed contractual cash obligations as of March 31, 2015. The table below reflects the impact of the April 2015 amendment on Cynosure’s U.S. operating facility lease.

	Total		Less Than One Year		One to Three Years		Three to Five Years		More than Five Years
	(in thousands)
Capital lease obligations, including interest	$	31,375	$	727	$	5,121	$	5,209	$	20,318
Operating leases		11,154		1,890		3,682		2,953		2,629
Total contractual obligations	$	42,529	$	2,617	$	8,803	$	8,162	$	22,947

Contingencies

Cynosure continually assesses litigation to determine if an unfavorable outcome would lead to a probable loss or reasonably possible loss, which could be estimated. In accordance with the Financial Accounting Standards Board’s guidance on accounting for contingencies, Cynosure accrues for all direct costs associated with the estimated resolution of contingencies at the earliest date at which it is deemed probable that a liability has been incurred and the amount of such liability can be reasonably estimated. If the estimate of a probable loss is a range and no amount within the range is more likely, Cynosure accrues the minimum amount of the range. In cases where Cynosure believes that a reasonably possible loss exists, Cynosure discloses the facts and circumstances of the litigation, including an estimable range, if possible. In management’s opinion, Cynosure is not currently involved in any legal proceedings, which, individually or in the aggregate, could have a material effect on Cynosure’s financial statements. Cynosure believes that contingent losses associated with any current litigation were remote as of March 31, 2015 and at the time of the filing of this Quarterly Report on Form 10-Q, and as such, Cynosure has not recorded or disclosed any material loss contingencies.

Note 14 — Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board issued guidance codified in ASC 606, Revenue Recognition — Revenue  from Contracts with Customers, which amends the guidance in ASC 605, Revenue Recognition. This new revenue standard creates a

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single source of revenue guidance for all companies in all industries and is more principles-based than the current revenue guidance. The new guidance must be adopted using either a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. ASC 606 was originally scheduled to be effective for interim and annual periods beginning after December 15, 2016. In April 2015, the Financial Accounting Standards Board proposed a one-year deferral of the effective date for ASC 606. Under the proposal, the standard would be effective for public entities for interim and annual reporting periods beginning after December 15, 2017. Cynosure is currently evaluating the impact of the provisions of ASC 606.

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

Forward-Looking Statements

This Quarterly Report on Form 10-Q, which we refer to as this Quarterly Report, 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 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 in the cautionary statements included in this Quarterly Report, particularly in Part II, Item 1A of this Quarterly Report, 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 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 on March 13, 2015. 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, manufacture, and market aesthetic treatment systems that enable plastic surgeons, dermatologists and other medical practitioners to perform non-invasive and minimally invasive procedures to remove hair, treat vascular and benign pigmented lesions, remove multi-colored tattoos, revitalize the skin, liquefy and remove unwanted fat through laser lipolysis, reduce cellulite, clear nails infected by toe fungus, ablate sweat glands and improve vaginal health. We also market radiofrequency energy sourced medical devices for precision surgical applications such as facial plastic and general surgery, gynecology, ear, nose, and throat procedures, ophthalmology, oral and maxillofacial surgery, podiatry and proctology. We sell our products through a direct sales force in the United States, Canada, Mexico, France, Morocco, Germany, Spain, the United Kingdom, Australia, China, Japan and Korea and through international distributors in approximately 120 other countries.

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Our product portfolio is composed of a broad range of energy sources including Alexandrite, diode, Nd: YAG, picosecond, pulse dye, Q-switched lasers, intense pulsed light and radiofrequency technology. 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 provide 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^S for the removal of unwanted fat;

• our Cellulaze product line for the treatment 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;

• our PicoSure product line for the treatment of tattoos, benign pigmented lesions, acne scars, fine lines and wrinkles;

• our Icon Aesthetic System for hair removal, wrinkle reduction and scar and stretch mark treatment;

• our Vectus diode laser for high volume hair removal; and

• our MonaLisa Touch laser for the treatment of vaginal atrophy.

On September 5, 2014, we acquired substantially all of the assets of Ellman International, Inc., or Ellman, for $13.2 million in cash. In addition, we assumed certain of its contractual and current liabilities.

The Ellman acquisition complements our platform with RF energy sources and accessory products for aesthetic and surgical indications. Ellman’s product line encompasses multiple RF generators and single-use electrodes for aesthetic and multi-specialty surgical indications such as facial plastic and general surgery, gynecology, ear, nose and throat procedures, ophthalmology, oral and maxillofacial surgery, podiatry and proctology. Ellman’s proprietary high frequency, low-temperature RF technology is optimized for achieving surgical precision and controlled hemostasis. The main products which have been added to our portfolio as a result of the acquisition include:

• the Surgitron^® radiowave platform technology line of RF surgical generators;

• the Pelleve^® wrinkle reduction system for skin tightening and non-ablative skin rejuvenation; and

• the PelleFirm™ RF body treatment system for skin tightening and reduction in the appearance of cellulite.

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, light-based technologies and other energies 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.

In November 2014, we signed an exclusive agreement with El.En. S.p.A., or El.En., to market and distribute in North America the MonaLisa Touch, a carbon dioxide laser for the treatment of vaginal atrophy, a condition that affects primarily postmenopausal women, breast cancer survivors and women who have undergone hysterectomies. We launched the product in the United States in the first quarter of 2015 through a specialty surgical sales force.

In March 2013, we commenced commercialization of our PicoSure^® system, our picosecond laser technology platform for the treatment of tattoos and benign pigmented lesions. The PicoSure system 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. U.S. Food and Drug Administration, or FDA, clearance to market the PicoSure laser was received in November 2012. In October 2013, we launched the PicoSure FOCUS Lens Array which microscopically concentrates the PicoSure laser pulse to a precise depth and exposes less than 10% of the skin to areas of high fluence while the surrounding skin is exposed to a low background fluence. We received marketing authorization for our PicoSure system in Canada in July 2013, in Australia in November 2013, and in Korea and Taiwan in January 2014. In July 2014, we received FDA clearance to market PicoSure for the treatment of acne scars. In September 2014, we received FDA clearance to market PicoSure with PicoSure FOCUS Lens Array for the treatment of wrinkles. In February 2015, we received FDA clearance to market the 532 nm wavelength for PicoSure designed to more effectively treat red, yellow and orange tattoo ink colors, which we offer as an upgrade to our current PicoSure customer base.

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Revenues

We generate revenues primarily from sales of our products and parts and accessories and from services, including product warranty revenues, and royalty payments received from our licensees. During the three months ended March 31, 2015, we derived approximately 75% of our revenues from sales of our products and 25% of our revenues from parts, accessories, service and royalty revenues. During the three months ended March 31, 2014, we derived approximately 80% of our revenues from sales of our products and 20% of our revenues from parts, accessories, service and royalty 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 recognize royalty revenues when we can reliably estimate such amounts and collectability is reasonably assured. As such, we recognize royalty revenues in the quarter reported to us by our licensees, which is generally one quarter following the quarter in which sales by our licensees occurred. Royalty revenues also include amounts due from settlements with licensees for back-owed royalties from prior periods. These settlement amounts are considered revenue, when collectability is reasonably assured, because they constitute our ongoing major or central operations.

In December 2013, we completed a comprehensive settlement agreement with Tria Beauty, Inc., or Tria, which ended the patent infringement litigation between Tria and Palomar Medical Technologies, Inc., or Palomar. Under the agreement, we are entitled to receive $10.0 million plus future royalty payments. We will pay approximately $2.0 million of this revenue to Massachusetts General Hospital, or MGH, under an exclusive license agreement between Palomar and MGH, which will be recorded as cost of revenues within our consolidated statement of operations. We recognized the final $3.0 million of this revenue in the three months ended March 31, 2015, which is recorded as royalty revenues within our consolidated statement of operations.

We sell our products globally under the Cynosure, Palomar, ConBio and Ellman brand names through a direct sales force in the United States, Canada, Mexico, France, Morocco, Germany, Spain, the United Kingdom, Australia, China, Japan and Korea, and use distributors to sell our products in other countries where we do not have a direct presence. During the three months ended March 31, 2015 and 2014, we derived 43% and 53% of our total revenues, respectively, from sales outside North America. As of March 31, 2015, we had 110 sales employees covering North America and 64 sales employees in France, Morocco, Germany, Spain, the United Kingdom, Australia, China, Japan and Korea. We utilize a global distribution network covering approximately 120 countries.

The following table provides revenue data by geographical region for the three months ended March 31, 2015 and 2014:

	Percentage of Revenues
	Three Months Ended March 31,
Region	2015			2014
North America		57	%		47	%
Europe		14			20
Asia/Pacific		22			25
Other		7			8
Total		100	%		100	%

See Note 9 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

THREE MONTHS ENDED MARCH 31, 2015 AND 2014

The following table contains selected statement of operations data, which serve as the basis of the discussion of our results of operations for the three months ended March 31, 2015 and 2014, respectively (in thousands, except for percentages):

	Three Months Ended March 31,
	2015						2014
	Amount			As a % of Total Revenues			Amount			As a % of Total Revenues			$ Change			% Change
Product revenues	$	56,502			75	%	$	49,701			80	%	$	6,801			14	%
Parts, accessories, service and royalty revenues		18,410			25			12,303			20			6,107			50
Total revenues		74,912			100			62,004			100			12,908			21
Cost of revenues		32,139			43			26,609			43			5,530			21
Gross profit		42,773			57			35,395			57			7,378			21
Operating expenses
Sales and marketing		25,696			34			20,122			32			5,574			28
Research and development		5,958			8			5,574			9			384			7
Amortization of intangible assets acquired		736			1			713			1			23			3
General and administrative		8,330			11			7,640			13			690			9
Total operating expenses		40,720			54			34,049			55			6,671			20
Income from operations		2,053			3			1,346			2			707			53
Interest expense, net		(402	)		(1	)		(349	)		—			(53	)		(15	)
Other (expense) income, net		(1,663	)		(2	)		66			—			(1,729	)		(2,620	)
(Loss) income before (benefit) provision for income taxes		(12	)		—			1,063			2			(1,075	)		(101	)
(Benefit) provision for income taxes		(4	)		—			374			1			(378	)		(101	)
Net (loss) income	$	(8	)		—	%	$	689			1	%	$	(697	)		(101	)%

Revenues

Total revenues for the three months ended March 31, 2015 increased by $12.9 million, or 21%, to $74.9 million, as compared to the three months ended March 31, 2014 revenues of $62.0 million (in thousands, except for percentages):

	Three Months Ended March 31,				$			%
	2015		2014		Change			Change
Product sales in North America	$	31,278	$	21,609	$	9,669			45	%
Product sales outside North America		25,224		28,092		(2,868	)		(10	)
Global parts, accessories, service and royalty sales		18,410		12,303		6,107			50
Total revenues	$	74,912	$	62,004	$	12,908			21	%

The increase in total revenues was attributable to a number of factors:

• Revenues from the sale of products in North America increased by approximately $9.7 million, or 45%, from the 2014 period, primarily due to an increase in the number of units sold, including the products acquired from Ellman in 2014 and the launch of MonaLisa Touch.

• Revenues from the sale of products outside of North America decreased by approximately $2.9 million, or 10%, from the 2014 period, primarily due to unfavorable exchange rates impacting our European and Asia Pacific subsidiaries and units sold to our European distributors.

• Revenues from the sale of parts, accessories, services and royalties increased by approximately $6.1 million, or 50%, from the 2014 period, primarily due to the $3.0 million settlement received from Tria pursuant to our December 2013 patent license agreement and accessories revenues attributable to products acquired from Ellman.

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Cost of Revenues

	Three Months Ended March 31,						$		%
	2015			2014			Change		Change
Cost of revenues (dollars in thousands)	$	32,139		$	26,609		$	5,530		21	%
Cost of revenues (as a percentage of total revenues)		43	%		43	%

Total cost of revenues increased $5.5 million, or 21%, to $32.1 million for the 2015 period, as compared to $26.6 million in the 2014 period. The increase was primarily associated with our 21% increase in total revenues in 2015 compared to 2014. Our total cost of revenues as a percentage of total revenues remained consistent for the 2015 and 2014 periods.

Sales and Marketing

	Three Months Ended March 31,						$		%
	2015			2014			Change		Change
Sales and marketing (dollars in thousands)	$	25,696		$	20,122		$	5,574		28	%
Sales and marketing (as a percentage of total revenues)		34	%		32	%

Sales and marketing expenses increased $5.6 million, or 28%, to $25.7 million for the 2015 period, as compared to $20.1 million in the 2014 period. The increase was primarily due to increases in the number of our sales employees, as well as an increase in commission expense due to increased product revenues. Our total sales and marketing expenses for the 2015 period increased as a percentage of total revenues as compared to the 2014 period due primarily to the additional costs of incorporating the acquired Ellman organization as well as marketing costs associated with MonaLisa Touch.

Research and Development

	Three Months Ended March 31,						$		%
	2015			2014			Change		Change
Research and development (dollars in thousands)	$	5,958		$	5,574		$	384		7	%
Research and development (as a percentage of total revenues)		8	%		9	%

Research and development expenses increased $0.4 million, or 7%, to $6.0 million for the 2015 period, as compared to $5.6 million for the 2014 period. The increase was primarily due to Ellman’s research and development expenses of $0.6 million for the 2015 period offset by a reduction in project materials expenses. Our total research and development expenses for the 2015 period decreased as a percentage of total revenues as compared to the 2014 period.

Amortization of Intangible Assets Acquired

	Three Months Ended March 31,						$		%
	2015			2014			Change		Change
Amortization of intangible assets acquired (dollars in thousands)	$	736		$	713		$	23		3	%
Amortization of intangible assets acquired (as a percentage of total revenues)		1	%		1	%

Amortization of intangible assets acquired increased $23,000, or 3%, for the 2015 period as compared to the 2014 period. The increase resulted from the addition of the identifiable intangible assets from the Ellman acquisition included in the 2015 period. Amortization of intangible assets acquired as a percentage of total revenues remained consistent for the 2015 and 2014 periods.

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General and Administrative

	Three Months Ended March 31,						$		%
	2015			2014			Change		Change
General and administrative (dollars in thousands)	$	8,330		$	7,640		$	690		9	%
General and administrative (as a percentage of total revenues)		11	%		13	%

General and administrative expenses increased $0.7 million, or 9%, to $8.3 million for the 2015 period, as compared to $7.6 million for the 2014 period. The increase is primarily due to increased headcount, legal expenses and Ellman administration expenses. These are offset by $0.7 million less in severance and change in control costs associated with acquisitions during the 2015 period as compared to the 2014 period. Excluding acquisition costs, our total general and administrative expenses as a percentage of total revenues remained consistent for the 2015 and 2014 periods.

Interest Expense, net

	Three Months Ended March 31,						$			%
	2015			2014			Change			Change
Interest expense, net (dollars in thousands)	$	(402	)	$	(349	)	$	(53	)		(15	)%

The increase in interest expense, net was primarily due to interest charges on the license transfer agreement acquired in the 2014 Ellman acquisition, which are included in the 2015 period.

Other (Expense) Income, net

	Three Months Ended March 31,					$			%
	2015			2014		Change			Change
Other (expense) income, net (dollars in thousands)	$	(1,663	)	$	66	$	(1,729	)		(2,620	)%

The change in other (expense) income, net was primarily a result of net foreign currency remeasurement losses in the 2015 period, as compared to net foreign currency remeasurement gains in the 2014 period, primarily due to the strengthening of the U.S. dollar against the euro, British pound, Japanese yen and Australian dollar.

(Benefit) Provision for Income Taxes

	Three Months Ended March 31,						$			%
	2015			2014			Change			Change
(Benefit) provision for income taxes (dollars in thousands)	$	(4	)	$	374		$	(378	)		(101	)%
Effective tax rate		35	%		35	%

The benefit for income taxes results from a combination of the activities of our U.S. entities and foreign subsidiaries. In the first quarter of 2015, we recorded an income tax benefit of $4,000, representing an effective tax rate of 35%. The income tax benefit for the 2015 period was primarily attributable to applying our estimated annual effective tax rate to our year-to-date worldwide loss. The income tax provision for the 2014 period was primarily attributable to the tax provision on the earnings of our foreign and domestic operations. We continue to maintain a valuation allowance on the net deferred assets of our subsidiaries in Mexico, Japan, and Germany.

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 cash generated from our operations and proceeds from public offerings of our Class A common stock.

At March 31, 2015, our cash, cash equivalents and short and long-term marketable securities were $126.6 million. Our cash and cash equivalents of $71.9 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 $24.6 million consist of

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investments in various state and municipal governments, U.S. government agencies and treasuries, all of which mature by March 15, 2016. Our long-term marketable securities of $30.1 million consist of investments in various state and municipal governments, all of which mature by March 1, 2017.

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 three months ended March 31, 2015, we purchased $2.8 million of property and equipment. During the three months ended March 31, 2014, we purchased $4.4 million of property and equipment, which included $2.9 million for the expansion and improvement of our corporate headquarters. During the three months ended March 31, 2015 and 2014, we transferred $2.1 million and $0.6 million, respectively, of demonstration equipment to fixed assets. We expect that our capital expenditures during the remainder of 2015 will decrease compared with the 2014 period, as we have completed the integration of Palomar and the expansion and improvement of our corporate headquarters.

On October 29, 2013, we announced that our board of directors authorized the repurchase of up to $25 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. On April 30, 2014, our board of directors approved an increase of $10 million to the stock repurchase program. The program will terminate upon the purchase of $35 million in common stock or expiration of the program on November 1, 2015. During the three months ended March 31, 2015, we did not repurchase any shares of our common stock under this program. As of March 31, 2015, approximately $4.1 million remains available to repurchase shares under the program. As of March 31, 2015, we have repurchased an aggregate of 1,395,480 shares under this program at an aggregate cost of $30.9 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 $4.8 million for the three months ended March 31, 2015. This resulted primarily from net changes in working capital items decreasing cash from operating activities by approximately $12.2 million driven by increases in inventory and accounts receivable and decreases in accrued expenses. This was partially offset by approximately $6.5 million in depreciation, amortization and stock-based compensation expense. Net cash provided by investing activities was $0.2 million for the three months ended March 31, 2015, which consisted primarily of net proceeds from the sales and maturities of marketable securities of $13.2 million partially offset by purchases of marketable securities of $10.1 million and purchases of property and equipment of $2.8 million. Net cash provided by financing activities during the three months ended March 31, 2015 was $0.9 million, primarily relating to proceeds from stock option exercises.

Net cash used in operating activities was $0.9 million for the three months ended March 31, 2014. This resulted primarily from net changes in working capital items decreasing cash from operating activities by approximately $8.0 million driven by increases in inventory and accounts receivable and decreases in accrued expenses. This was partially offset by approximately $6.1 million in depreciation, amortization, stock-based compensation and interest expense and by approximately $0.7 million in net income for the period. Net cash used in investing activities was $18.0 million for the three months ended March 31, 2014, which consisted of purchases of marketable securities of $17.1 million and purchases of property and equipment of $4.4 million, offset by net proceeds from the sales and maturities of marketable securities of $3.6 million. Net cash provided by financing activities during the three months ended March 31, 2014 was $7.4 million, primarily relating to proceeds from stock option exercises.

Off-Balance Sheet Arrangements

Since inception, we have not engaged in any off-balance sheet financing activities.

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, 2014. 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 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, 2014. There have been no material changes to our critical accounting policies as of March 31, 2015.

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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 March 1, 2017. 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.

	March 31, 2015			Future Maturities in 2015			Future Maturities in 2016			Future Maturities in 2017
Investments (at fair value)	$	54,658		$	19,636		$	30,048		$	4,974
Weighted average interest rate		0.35	%		0.23	%		0.37	%		0.68	%

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 47% of our total international revenues during the three months ended March 31, 2015. Substantially all of the remaining 53% were sales in euros, British pounds, Moroccan dirham, 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 debt is outstanding which we recognize as unrealized gains and losses in our statements of operations. Upon settlement of these debts, we may record realized foreign exchange gains and losses in our statements of operations. 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 chief executive officer and chief financial officer (our principal executive and principal financial officers, respectively), evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2015. 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 Securities and Exchange Commission’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 March 31, 2015, our chief executive officer and chief financial officer 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 substantially all of the assets of Ellman on September 5, 2014. 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 first quarter of the year ending December 31, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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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 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 appealed this decision, and oral argument on the appeal was held in October 2013 before the Commonwealth of Massachusetts Appeals Court. In March 2014, the appeals court affirmed the lower court’s ruling, and in April 2014 the plaintiff filed a request for further appellate review by the Supreme Judicial Court. On May 6, 2014, the Supreme Judicial Court issued a Notice of Denial of Application for Further Appellate Review. No further appeals are possible in Massachusetts. 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. In August 2013, plaintiff filed its motion with the court, although the deadline had been April 2013. We filed a letter with the court objecting to this untimely motion and requesting sanctions. In February 2014, the court denied plaintiff’s motion and denied our request for sanctions. On March 6, 2014, plaintiff filed an appeal of the court’s judgment entered on March 5, 2013. On July 23, 2014, the Second Circuit notified the parties that it will not hear oral arguments and will decide the case based on the briefs.

Asclepion Laser Technologies GmbH, Italian Litigation

In October 2010, Palomar was served with an International Summons for a lawsuit filed in September 2010 by Asclepion Laser Technologies GmbH, or Asclepion, in the Court of Rome in Italy. In this suit, Asclepion asked 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, which are exclusively licensed to Palomar by Massachusetts General Hospital, or MGH. We filed a request with 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 in May 2013, and in a development contrary to settled Italian case law, the Italian Supreme Court ruled that the Italian courts have jurisdiction over the Italian as well as the German portions of the European patent. Asclepion has resumed its case before the Court of Rome. In March 2014, we, Palomar and MGH entered into a comprehensive settlement agreement with Asclepion which ended the patent disputes between the companies, including this patent dispute, which terminated on April 24, 2014, the Asclepion Laser Technologies GmbH, German Litigation described below, which terminated on March 21, 2014, and pending opposition proceedings before the European Patent Office. This settlement agreement includes a Non-exclusive Patent License Agreement under which Asclepion is granted a non-exclusive, worldwide, fully paid-up license to U.S. Patent Nos. 5,735,844 and 5,595,568 and foreign counterparts, for professional hair removal products and we and Palomar are granted a non-exclusive, worldwide, royalty-free license to certain Asclepion patents. As part of the agreement, Asclepion made two payments to us for the paid-up license. The first payment was made in March 2014 and the second payment was made in March 2015. MGH received 40% of the first and second payments from Asclepion, after deducting our related outside legal costs.

Asclepion Laser Technologies GmbH, German Litigation

In October 2010, prior to being served the International Summons for the above described lawsuit in Italy (see Asclepion Laser Technologies GmbH, Italian Litigation), Palomar commenced an action for patent infringement against Asclepion 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, which are exclusively licensed to Palomar by MGH. This proceeding was stayed by mutual agreement of the parties in January 2011 pending the outcome of Asclepion Laser Technologies GmbH, Italian Litigation and a final decision in opposition proceedings rendered by the European Patent Office, in which Asclepion filed an intervention in December 2010. In March 2014, we, Palomar and MGH entered into a comprehensive settlement agreement with Asclepion which ended the patent disputes between the companies, including this patent dispute, which terminated on March 21, 2014, the Asclepion Laser Technologies GmbH, Italian Litigation described above, which terminated on April 24, 2014, and the pending opposition proceedings

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before the European Patent Office. This settlement agreement includes a Non-exclusive Patent License Agreement under which Asclepion is granted a non-exclusive, worldwide, fully paid-up license to U.S. Patent Nos. 5,735,844 and 5,595,568 and foreign counterparts, for professional hair removal products and we and Palomar are granted a non-exclusive, worldwide, royalty-free license to certain Asclepion patents. As part of the agreement, Asclepion made two payments to us for the paid-up license. The first payment was made in March 2014 and the second payment was made in March 2015. MGH received 40% of the first and second payments from Asclepion, after deducting our related outside legal costs.

Cirrex Systems LLC

In May 2014, Cirrex Systems LLC, or Cirrex, commenced an action for alleged patent infringement against us in the U.S. District Court for the District of Delaware seeking both monetary damages and injunctive relief. The complaint alleges that our SideLaze800 and SideLaze3D fibers used with our Cellulaze™ laser workstation and PrecisionTx™ laser infringe U.S. Patent Nos. 5,953,477 and 6,144,791. Cirrex is seeking to enjoin us from manufacturing, using or selling these products in the United States if we are found to infringe the patents and to obtain compensatory damages, interest and other relief. On July 21, 2014, we answered the complaint, denying that our products infringe the asserted patents and asserting that the patents are invalid and unenforceable. In April 2015, we entered into a comprehensive settlement agreement with Cirrex for nominal consideration, which ended the patent dispute between the companies.

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 other 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 our discussion of the risk factors affecting our business since those presented in our Annual Report on Form 10-K, Part I, Item 1A, for the fiscal year ended December 31, 2014. 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 15.

Risks Related to Our Business and Industry

We have incurred net losses in prior periods.

Although we were profitable in 2014 and 2012, we incurred losses in the first quarter of 2015 and in 2013, 2011 and 2010. If we are unable to maintain 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, consumer confidence and other factors. For example, consumer demand for the procedures performed with our products, and practitioner demand for our products, decreased dramatically during 2009 as a result of turmoil in the financial markets, which contributed to a significant decrease in our total product revenues during that year. 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.

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

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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, Lumenis, 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.

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 face exposure to credit risk of customers.

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.

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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. 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.

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.

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, 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 began to address the home-use aesthetic laser market in the second half 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 120 foreign countries, and we therefore are subject to risks associated with having international operations. We derived 45% of our product revenues from sales outside North America for the three months ended March 31, 2015. We derived 48%, 48%, and 49% of our product revenues from sales outside North America for the years ended December 31, 2014, 2013, and 2012, respectively.

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 120 foreign countries, approximately 47% of our revenues outside of North America for the three months ended March 31, 2015, and 47% of our revenues outside of North America for the year ended December 31, 2014, 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, Moroccan dirham, 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 U.S. dollar may have a material adverse effect on our results of operations and financial condition. For the three months ended March 31, 2015 we incurred a loss on foreign currency of $1.7 million, which is recorded as other expense (income), net within our consolidated statement of operations. This was primarily due to the weakening of the euro, British pound, Japanese yen and Australian dollar against the U.S. dollar. Unfavorable foreign exchange rates also had a negative impact on our European and Asia Pacific subsidiaries’ revenues for the three months ended March 31, 2015.

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 2013, was in development 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 chief executive officer, 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.

We may seek to acquire companies or technologies that could disrupt our ongoing business, divert the attention of our management and employees and adversely affect our results of operations.

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. We may not be able to identify suitable future acquisition candidates, consummate acquisitions on favorable terms or complete otherwise favorable acquisitions because of antitrust or other regulatory concerns. We cannot assure you that the acquisitions we have completed, including our September 2014 acquisition of substantially all of the assets of Ellman, or any future acquisitions that we may make, will enhance our products or

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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.

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

Our Class A common stock price has fluctuated substantially in recent years. From January 1, 2012 through May 1, 2015, our Class A common stock has traded as high as $35.21 per share and as low as $11.64 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.

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.

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, which could adversely affect our stock price. A decline in our stock price could result in the loss of all or a part of our stockholders’ investments.

Our common stock could be further diluted by the conversion of outstanding options and restricted stock units.

In the past, we have issued and still have outstanding convertible securities in the form of options and restricted stock units. We may continue to issue options, restricted stock units, and other equity rights as compensation for services and incentive compensation for our employees, directors and consultants or others who provide services to us. We have a substantial number of shares of common stock reserved for issuance upon the conversion and exercise of these securities. Such a conversion would dilute our stockholders and could adversely affect the market price of our common stock.

We may not be able to successfully collect licensing royalties.

Portions of our revenues consist of royalties from sub-licensing patents, including patents licensed to us on an exclusive basis by MGH. These patents expired in the United States on February 1, 2015 and their foreign counterparts will expire in several foreign jurisdictions on January 31, 2016. If we are unable to collect our licensing royalties, our revenues will decline. In addition, though we receive royalty revenues on other patents, our revenues will decline as a result of the expiration of the MGH patents because 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 reputation, 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, are 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 reputation, business and operating results may suffer.

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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 a single contract manufacturer in the United States for the subassembly of certain products that we manufacture and sell, and for the manufacturing of certain products that we sell, and to which a significant portion of our revenues are attributable to these products. We depend on El.En. for the SLT II laser system that we integrate with our own proprietary software and delivery systems into our SmartLipo Triplex, Cellulaze systems and PrecisionTx. We also depend on El.En. for the MonaLisa Touch laser system (for further information regarding our distribution agreements with El.En. please see the discussion on page 19 of our Annual Report on Form 10-K for the year ended December 31, 2014). 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 and Accolade product families. 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.

Other than with El.En., we do not have long-term arrangements with any of our suppliers or our contract manufacturer 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 agreements 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 distribution agreements, 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 the United States, Canada, Mexico, France, Morocco, Germany, Spain, the United Kingdom, Australia, China, Japan and Korea, 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 launched in the United States in the second quarter of 2014, is 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 19% of our product revenue for the three months ended March 31, 2015. Sales of our aesthetic treatment systems by third party distributors represented 21%, 25% and 25% of our product revenue for the years ended December 31, 2014, 2013, and 2012, respectively.

We do not control our distributors or Unilever, and these parties may not be successful in marketing our products. These parties may 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 and a distribution and licensing agreement in place with Unilever. We cannot be sure that our distributors or Unilever will agree with our interpretation of the terms of the agreements or that we will receive payments under the agreements. The third party distributors with which we do not have written distributor agreements may also disagree with the terms of our relationship. Our distributors and Unilever 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. If Unilever fails to successfully sell the home-use product or we fail to maintain our relationship with Unilever, this could have an adverse effect on our business, results of operations and financial condition.

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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. Under exclusive distribution agreements with El.En., 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. We also depend on El.En. for the MonaLisa Touch laser system (for further information regarding our distribution agreements with El.En. please see the discussion on page 19 of our Annual Report on Form 10-K for the year ended December 31, 2014).

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 agreements with El.En. do 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 the applicable agreement terminates, El.En. would be able to compete with us worldwide with the SmartLipo MPX system, with products containing the SLT II laser system and with the MonaLisa Touch product line. 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 our stockholders might otherwise receive a premium for their 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;

• 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.

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.

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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, inter partes or post-grant review 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.

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. 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 FDA 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 often takes from three to 12 months. The FDA may require us to withdraw an application if they cannot make a determination that the device is substantially equivalent according to the regulations. In such situations, we may re-submit the 510(k) application with additional data for reconsideration or we may determine not to commercialize the device or the new indication for use. 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;

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• 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.

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 had 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, most of the products and systems that we sell became subject in 2013 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.

The Patient Protection and Affordable Care Act includes reporting and disclosure requirements, commonly referred to as the “Sunshine Act”, for manufacturers of drugs, biological, medical devices and medical supplies with regard to payments or other transfers of value made to certain physicians and teaching hospitals. The final rules implementing the Sunshine Act are complex, ambiguous, and broad in scope. Sales related to the Ellman surgical product line are subject to the reporting requirements under the Sunshine Act. We believe that sales related to our aesthetic product lines fall under a reporting exception under this law and, accordingly, reporting related to those sales is not required.

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Our compliance with applicable legal and regulatory requirements is, and will continue to 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. If we are found to be in violation of any of this or any other law, we may be subject to penalties, including fines.

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 Quality Systems Regulation, or the 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. If we are not successful in doing so, our business will be harmed. We

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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.

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, we may be required to conduct product recalls and 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 appealed this decision and oral argument on the appeal was heard in October 2013 before the Commonwealth of Massachusetts Appeals Court. In March 2014, the appeals court affirmed the lower court’s ruling, and in April 2014 plaintiff filed a request for further appellate review by the Supreme Judicial Court. On May 6, 2014, the Supreme Judicial Court issued a Notice of Denial of Application for Further Appellate Review. No further appeals are possible in Massachusetts. 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. On August 14, 2013, plaintiff filed its motion with the court, although the deadline had been April 26, 2013. We filed a letter with the court objecting to this untimely motion and requesting sanctions. On February 6, 2014, the court denied plaintiff’s motion and denied our request for sanctions. On March 6, 2014, plaintiff filed an appeal of the court’s judgment entered on March 5, 2013. On July 23, 2014, the Second Circuit notified the parties that it will not hear oral arguments and will decide the case based on the briefs.

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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.

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 or it is alleged that we did so, 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.

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

On October 29, 2013, we announced that our board of directors authorized the repurchase of up to $25 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. On April 30, 2014, our board of directors approved an increase of $10 million to the stock repurchase program. The program will terminate upon the purchase of $35 million in common stock or expiration of the program on November 1, 2015. During the three months ended March 31, 2015, we did not repurchase any shares of our common stock under this program. As of March 31, 2015, approximately $4.1 million remains available to repurchase shares under the program. As of March 31, 2015, we have repurchased an aggregate of 1,395,480 shares under this program at an aggregate cost of $30.9 million.

Item 6. Exhibits

Exhibit No.	Description
10.1	Sixth Amendment to the Lease, dated April 16, 2015, between the Company and Glenborough Westford Center, LLC
31.1	Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
31.2	Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
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 March 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014, (ii) Consolidated Balance Sheets at March 31, 2015 and December 31, 2014, (iii) Consolidated Statements of Comprehensive (Loss) Income for the three months ended March 31, 2015 and 2014, (iv) Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014, and (v) Notes to Consolidated Financial Statements.

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Signatures

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

	Cynosure, Inc. (Registrant)
Date: May 7, 2015	By:	/S/    MICHAEL R. DAVIN
		Michael R. Davin
		Chairman and Chief Executive Officer
Date: May 7, 2015	By:	/S/    TIMOTHY W. BAKER
		Timothy W. Baker
		President, Chief Operating Officer and Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
10.1	Sixth Amendment to the Lease, dated April 16, 2015, between the Company and Glenborough Westford Center, LLC
31.1	Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
31.2	Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended
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 March 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014, (ii) Consolidated Balance Sheets at March 31, 2015 and December 31, 2014, (iii) Consolidated Statements of Comprehensive (Loss) Income for the three months ended March 31, 2015 and 2014, (iv) Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014, and (v) Notes to Consolidated Financial Statements.

38

EX-10.1

Exhibit 10.1

SIXTH AMENDMENT

THIS SIXTH AMENDMENT (the “Sixth Amendment”) is made and entered into as of the 16th day of April, 2015 (the “Execution Date”), by and between GLENBOROUGH WESTFORD CENTER, LLC, a Delaware limited liability company (“Landlord”), and CYNOSURE, INC., a Delaware corporation (“Tenant”).

RECITALS

A. Landlord and Tenant are parties to that certain lease dated January 31, 2005, as amended by a First Amendment to Lease dated September 16, 2005, a Second Amendment dated September 28, 2007, a Third Amendment dated as of July 1, 2011, a Fourth Amendment dated as of December 20, 2012 and a Fifth Amendment of Lease dated as of November 18, 2013 (collectively, the “Lease”). Pursuant to the Lease, Landlord has leased to Tenant space currently containing 82,027 rentable square feet located on the first (1^st) floor and second (2^nd) floor of the building located at 5 Carlisle Road, Westford, Massachusetts 01886 (hereinafter referred to as the “5 Carlisle Building”); plus 62,514 rentable square feet located on the first (1^st) floor and second (2nd) floor of the building known as 3 Carlisle Road (“3 Carlisle Building”) (collectively, the “Original Premises”).

B. Tenant has requested that additional space containing approximately 5,622 rentable square feet, described as Suite No. 105, on the first (1^st) floor of the 3 Carlisle Building, shown on Exhibit A, Sixth Amendment, attached hereto (the “Expansion Space”), be added to the Original Premises, and that the Lease be appropriately amended. Landlord is willing to do the same on the following terms and conditions.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant agree as follows:

I. Expansion and Effective Date.

Effective as of the Execution Date of this Sixth Amendment (the “Expansion Effective Date”), the Premises, as defined in the Lease, is increased from 144,541 rentable square feet to 150,163 rentable square feet by the addition of the Expansion Space. From and after the Expansion Effective Date, the Original Premises and the Expansion Space, collectively, shall be deemed the Premises, as defined in the Lease. The Term for the Expansion Space shall commence on the Expansion Effective Date, and end on May 17, 2027 (the “Termination Date”). The Expansion Space is subject to all the terms and conditions of the Lease, except as expressly modified herein, and except that Tenant shall not be entitled to receive, with respect to the Expansion Space, any allowances, abatements or other financial concessions granted with respect to the Original Premises.

II. Base Rent.

In addition to Tenant’s obligation to pay Base Rent for the Original Premises, Tenant shall pay Landlord Base Rent for the Expansion Space as follows:

Time Period	Annual Rate Per Square Foot		Annual Base Rent		Monthly Base Rent
Expansion Effective Date -2/17/16:	$	-0-	$	-0-	$	-0-
2/18/16-5/17/21:	$	19.50	$	109,629.00	$	9,135.75
5/18/21-5/17/27:	$	21.50	$	120,873.00	$	10,072.75

Tenant shall have no obligation to pay Base Rent with respect to the Expansion Space for the period commencing as of the Expansion Effective Date, and terminating as of February 17, 2016 (the “Expansion Space Rent Abatement Period”). During the Expansion Space Rent Abatement Period, only Base Rent shall be abated, and all additional rent and other costs and charges specified in the Lease shall remain as due and payable pursuant to the provisions of the Lease.

All such Base Rent shall be payable by Tenant in accordance with the terms of the Lease.

III. Tenant’s Proportionate Share.

Tenant’s Proportionate Share for the Expansion Space is 6.49% (based on 86,636 square feet in the 3 Carlisle Building).

IV. Expenses and Taxes.

For the period commencing with the Expansion Effective Date, and ending on the Termination Date, Tenant shall pay for Tenant’s Proportionate Share of Operating Costs and Tax Costs applicable to the Expansion Space in accordance with the terms of the Lease, including, without limitation, the Base Year for Operating Expenses (i.e., calendar year 2014) and the Base Year for Taxes (i.e., Fiscal Year 2012).

V. Improvements to Expansion Space.

A. Condition of Expansion Space. Tenant has inspected the Expansion Space and agrees to accept the same “as is” without any agreements, representations, understandings or obligations on the part of Landlord to perform any alterations, repairs or improvements.

B. Responsibility for Improvements to Expansion Space. Any construction, alterations or improvements to the Expansion Space shall be performed by Tenant at its sole cost and expense using contractors selected by Tenant and approved by Landlord and shall be governed in all respects by the terms of the Lease. In any and all events, the Expansion Effective Date shall not be postponed or delayed if the initial improvements to the Expansion Space are incomplete on the Expansion Effective Date for any reason whatsoever. Any delay in the completion of initial improvements to the Expansion Space shall not subject Landlord to any liability for any loss or damage resulting therefrom.

VI. Electricity in Expansion Space. The consumption of electricity in the Expansion Space shall be measured by a separate meter or submeter to be installed by Tenant, at Tenant’s cost and expense (provided, however, that Tenant may, at its expense,

-2-

connect the electric service in the Expansion Space to the meter or submeter measuring the use of electricity in other portions of the Premises located in the 3 Carlisle Building). Tenant shall pay for electricity in the Expansion Space in accordance with Section 10 of the Lease.

VII. Parking. Tenant shall continue to have Tenant’s Parking Rights, as initially defined in Section 2.12 of the Lease, and subsequently deleted and replaced with Section 6.01 of the Second Amendment, and as amended by Section V of the Third Amendment and Section XIV of the Fifth Amendment. In addition, Tenant shall be entitled to, with respect to the Expansion Space, additional parking at the ratio of 3.3 parking spaces per 1,000 rentable square feet of the Expansion Space (i.e., 19 additional parking spaces).

VIII. Tenant’s Building Connector Work. The parties acknowledge that Tenant has performed the Connector Work (as defined in Section X of the Fifth Amendment) and that Landlord has no further obligation to pay Landlord’s Connector Work Contribution (as defined in Section X of the Fifth Amendment) to Tenant with respect thereto.

IX. Landlord’s 3 Carlisle Building Lobby Work. The parties acknowledge that Landlord has completed the Lobby Work (as defined in Section XI of the Fifth Amendment) and that Landlord has no further obligation to perform any work with respect thereto.

X. Use of Pad. The parties acknowledge that Landlord has removed the existing chiller plant equipment from the Pad (as defined in Section XIX of the Fifth Amendment) and that Tenant has paid for Tenant’s share of the removal and has no further obligation with respect thereto.

XI. Inapplicable Lease Provisions.

Exhibit B to the Fifth Amendment (Work Letter) and Schedule B-1 to the Fifth Amendment (Design Plans for Initial Alterations) shall have no applicability with respect to this Sixth Amendment.

XII. Miscellaneous.

A. This Sixth Amendment sets forth the entire agreement between the parties with respect to the matters set forth herein. There have been no additional oral or written representations or agreements. Under no circumstances shall Tenant be entitled to any Rent abatement, improvement allowance, leasehold improvements, or other work to the Premises, or any similar economic incentives that may have been provided Tenant in connection with entering into the Lease, unless specifically set forth in this Sixth Amendment.

B. Except as herein modified or amended, the provisions, conditions and terms of the Lease shall remain unchanged and in full force and effect.

C. In the case of any inconsistency between the provisions of the Lease and this Sixth Amendment, the provisions of this Sixth Amendment shall govern and control.

D. Submission of this Sixth Amendment by Landlord is not an offer to enter into this Sixth Amendment but rather is a solicitation for such an offer by Tenant. Landlord shall not be bound by this Sixth Amendment until Landlord has executed and delivered the same to Tenant.

-3-

E. The capitalized terms used in this Sixth Amendment shall have the same definitions as set forth in the Lease to the extent that such capitalized terms are defined therein and not redefined in this Sixth Amendment.

F. Tenant hereby represents to Landlord that Tenant has dealt with no broker in connection with this Sixth Amendment, other than Cushman & Wakefield of Massachusetts, Inc. (the “Broker”). Tenant agrees to indemnify and hold Landlord, its trustees, members, principals, beneficiaries, partners, officers, directors, employees, mortgagee(s) and agents, and the respective principals and members of any such agents (collectively, the “Landlord Related Parties”) harmless from all claims of any brokers claiming to have represented Tenant in connection with this Sixth Amendment. Landlord hereby represents to Tenant that Landlord has dealt with no broker in connection with this Sixth Amendment. Landlord agrees to indemnify and hold Tenant, its trustees, members, principals, beneficiaries, partners, officers, directors, employees, and agents, and the respective principals and members of any such agents (collectively, the “Tenant Related Parties”) harmless from all claims of any brokers claiming to have represented Landlord in connection with this Sixth Amendment. Landlord shall pay a brokerage commission to Broker pursuant to a separate agreement between Landlord and the Broker.

G. Each signatory of this Sixth Amendment represents hereby that he or she has the authority to execute and deliver the same on behalf of the party hereto for which such signatory is acting.

IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Sixth Amendment as of the day and year first above written.

WITNESS/ATTEST:	LANDLORD:
	GLENBOROUGH WESTFORD CENTER, LLC,
	a Delaware limited liability company
	By:	/s/ Joseph Adamo
	Name:	Joseph Adamo
	Title:	Vice President
Name (print):
WITNESS/ATTEST:	TENANT:
	CYNOSURE, INC.,
	a Delaware corporation
		/s/ Timothy W. Baker
Name (print):	By:
	Name:	Timothy W. Baker
	Title:	President & CFO

-4-

EXHIBIT A, SIXTH AMENDMENT

OUTLINE AND LOCATION OF EXPANSION SPACE

Exhibit A, Sixth Amendment

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: May 7, 2015	/s/    Michael R. Davin
	Michael R. Davin
	Chairman 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: May 7, 2015	/s/    Timothy W. Baker
	Timothy W. Baker
	President, Chief Operating Officer and Chief Financial Officer

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 March 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Michael R. Davin, Chairman 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: May 7, 2015	/s/    Michael R. Davin
	Michael R. Davin
	Chairman 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 March 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Timothy W. Baker, President, Chief Operating Officer and Chief Financial 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: May 7, 2015	/s/    Timothy W. Baker
	Timothy W. Baker
	President, Chief Operating Officer and Chief Financial Officer

XML

Short and Long-Term Marketable Securities - Schedule of Marketable Securities (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Market Value	$ 54,667	$ 58,244
Amortized Cost	54,669	58,273
Unrealized Gains	14	10
Unrealized Losses	(16)	(39)
Total marketable securities	54,667	58,244
Short-Term Marketable Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value	24,585	32,055
Amortized Cost	24,584	32,052
Unrealized Gains	5	8
Unrealized Losses	(4)	(5)
Short-Term Marketable Securities [Member] | Corporate Obligations and Commercial Paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value		2,001
Amortized Cost		2,001
Short-Term Marketable Securities [Member] | State and Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value	23,576	26,041
Amortized Cost	23,571	26,033
Unrealized Gains	5	8
Short-Term Marketable Securities [Member] | Treasuries and Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value	1,000	4,000
Amortized Cost	1,000	4,000
Short-Term Marketable Securities [Member] | Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value	9	13
Amortized Cost	13	18
Unrealized Losses	(4)	(5)
Long-Term Marketable Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value	30,082	26,189
Amortized Cost	30,085	26,221
Unrealized Gains	9	2
Unrealized Losses	(12)	(34)
Long-Term Marketable Securities [Member] | State and Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value	22,783	21,703
Amortized Cost	22,786	21,721
Unrealized Gains	6	2
Unrealized Losses	(9)	(20)
Long-Term Marketable Securities [Member] | Treasuries and Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Market Value	7,299	4,486
Amortized Cost	7,299	4,500
Unrealized Gains	3
Unrealized Losses	$ (3)	$ (14)

XML

Net (Loss) Income Per Common Share - Additional Information (Detail) (Stock Options and Restricted Stock Units [Member]) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Stock Options and Restricted Stock Units [Member]
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
Outstanding options and restricted stock units to purchase common shares	1.7	1.1

XML

Warranty Costs - Schedule of Activity in Accrued Warranty Account (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Guarantees [Abstract]
Balance, beginning of period	$ 8,118
Warranty provision related to new sales	2,997
Costs incurred	(3,311)
Balance, end of period	$ 7,804

XML

Accumulated Other Comprehensive Loss - Changes to Accumulated Other Comprehensive Loss (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Unrealized (Loss) Gain on Marketable Securities, net of taxes, Beginning Balance	$ (10)
Unrealized (Loss) Gain on Marketable Securities, net of taxes, Current period other comprehensive loss	13	(6)
Unrealized (Loss) Gain on Marketable Securities, net of taxes, Ending Balance	3
Translation Adjustment, Beginning Balance	(3,853)
Translation Adjustment, Current period other comprehensive loss	(1,379)	(49)
Translation Adjustment, Ending Balance	(5,232)
Accumulated Other Comprehensive Loss, Beginning Balance	(3,863)
Accumulated Other Comprehensive Loss, Current period other comprehensive loss	(1,366)	(55)
Accumulated Other Comprehensive Loss, Ending Balance	$ (5,229)

XML

Goodwill and Other Intangible Assets - Schedule of Amortization Expenses on Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2015	$ 6,916
2016	8,428
2017	6,439
2018	4,923
2019	3,188
2020 and Thereafter	20,402
Total	$ 50,296

XML

Stock-Based Compensation - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 1,820,000	$ 1,466,000
Stock-based compensation expense capitalized to inventory	26,000	25,000
Cash received from option exercises	$ 900,000	$ 7,300,000
Stock options granted	319,509	657,240
Weighted average fair value of the options granted	$ 11.78	$ 11.23
Cash dividend yield	0.00%
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted restricted stock units to employees	86,618	44,840
Vested period	3 years
Share based compensation period	3 years

XML

Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended		1 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Jul. 31, 2014
Loss Contingencies [Line Items]
Operating lease rent expense	$ 0.5	$ 1.0
Operating lease expiration period	2027-05
Former Palomar Medical Technologies, Inc. (Palomar) [Member]
Loss Contingencies [Line Items]
Operating lease rent expense			$ 0.5

XML

Short and Long-Term Marketable Securities (Tables)

3 Months Ended

Mar. 31, 2015

Investments, Debt and Equity Securities [Abstract]

Schedule of Marketable Securities

As of March 31, 2015, 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	$	23,576	$	23,571	$	5	$	—
Treasuries and government agencies		1,000		1,000		—		—
Equity securities		9		13		—		(4	)
Total short-term marketable securities	$	24,585	$	24,584	$	5	$	(4	)
Long-term marketable securities:
State and municipal bonds	$	22,783	$	22,786	$	6	$	(9	)
Treasuries and government agencies		7,299		7,299		3		(3	)
Total long-term marketable securities	$	30,082	$	30,085	$	9	$	(12	)
Total available-for-sale securities	$	54,667	$	54,669	$	14	$	(16	)
Total marketable securities	$	54,667

As of December 31, 2014, 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	$	26,041	$	26,033	$	8	$	—
Treasuries and government agencies		4,000		4,000		—		—
Corporate obligations and commercial paper		2,001		2,001		—		—
Equity securities		13		18		—		(5	)
Total short-term marketable securities	$	32,055	$	32,052	$	8	$	(5	)
Long-term marketable securities:
State and municipal bonds	$	21,703	$	21,721	$	2	$	(20	)
Treasuries and government agencies		4,486		4,500		—		(14	)
Total long-term marketable securities	$	26,189	$	26,221	$	2	$	(34	)
Total available-for-sale securities	$	58,244	$	58,273	$	10	$	(39	)
Total marketable securities	$	58,244

Schedule of Available-for-Sale Debt Securities Mature

As of March 31, 2015, Cynosure’s available-for-sale debt securities mature as follows (in thousands):

			Maturities
	Total		Less Than One Year		One to Five Years		More than Five Years
State and municipal bonds	$	46,359	$	23,576	$	22,783	$	—
Treasuries and government agencies		8,299		1,000		7,299		—
Total available-for-sale debt securities	$	54,658	$	24,576	$	30,082	$	—

XML

Segment Information - Schedule of Total Revenue by Geographic Area (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	$ 74,912	$ 62,004
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	41,451	27,948
Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	10,657	12,133
Asia Pacific [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	16,814	15,527
Other [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	$ 5,990	$ 6,396

XML

Acquisition - Estimated Fair Value of Net Assets Acquired (Detail) (USD $) In Thousands, unless otherwise specified	0 Months Ended
	Sep. 05, 2014	Mar. 31, 2015	Dec. 31, 2014
Assets (liabilities) acquired:
Goodwill		$ 105,877	$ 105,764
Ellman International, Inc. [Member]
Business Acquisition [Line Items]
Cash paid	13,235
Total	13,235
Assets (liabilities) acquired:
Accounts receivable	2,147
Inventory	3,542
Prepaid and other assets	488
Fixed assets	612
Intangible assets	6,800
Goodwill	6,738
Accounts payable	(9)
Accrued expenses	(2,469)
Deferred revenue	(454)
License transfer agreement	(4,160)
Total	$ 13,235

XML

Fair Value - Measurement of Fair Value Hierarchy for Financial Assets (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	$ 60,198	$ 59,997
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	5,540	1,766
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	54,658	58,231
Money Market Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	5,531	1,753
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	5,531	1,753
State and Municipal Bonds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	46,359	47,744
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	46,359	47,744
Treasuries and Government Agencies [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	8,299	8,486
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	8,299	8,486
Corporate Obligations and Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets		2,001
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		2,001
Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	9	13
Equity Securities [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair value of financial assets	$ 9	$ 13

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Segment Information - Schedule of Long-Lived Assets by Geographic Area (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets,Property Plant and Equipment	$ 35,523	$ 34,256
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets,Property Plant and Equipment	31,339	30,912
Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets,Property Plant and Equipment	1,453	1,656
Asia Pacific [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Long-lived assets,Property Plant and Equipment	$ 2,731	$ 1,688

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Warranty Costs - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2015
Guarantees [Abstract]
Warranty on end-user sales	1 year

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Inventories

3 Months Ended

Mar. 31, 2015

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:

	March 31, 2015		December 31, 2014
	(in thousands)
Raw materials	$	18,415	$	16,875
Work in process		4,344		3,526
Finished goods		45,450		38,917
	$	68,209	$	59,318

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Goodwill and Other Intangible Assets - Schedule of Changes to Goodwill (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Balance - December 31, 2014	$ 105,764
Ellman acquisition	140
Translation adjustment	(27)
Balance - March 31, 2015	$ 105,877

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Schedule of Total Revenue by Geographic Area

The following table represents total revenue by geographic area:

	Three Months Ended March 31,
	2015		2014
	(in thousands)
United States	$	41,451	$	27,948
Europe		10,657		12,133
Asia / Pacific		16,814		15,527
Other		5,990		6,396
Total	$	74,912	$	62,004

Schedule of Total Assets by Geographic Area

Total assets by geographic area are as follows:

	March 31, 2015			December 31, 2014
	(in thousands)
United States	$	427,998		$	420,513
Europe		20,796			23,235
Asia / Pacific		19,269			19,182
Eliminations		(5,600	)		(5,206	)
Total	$	462,463		$	457,724

Schedule of Long-Lived Assets by Geographic Area

Long-lived assets (property and equipment only) by geographic area are as follows:

	March 31, 2015		December 31, 2014
	(in thousands)
United States	$	31,339	$	30,912
Europe		1,453		1,656
Asia / Pacific		2,731		1,688
Total	$	35,523	$	34,256

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Warranty Costs (Tables)

3 Months Ended

Mar. 31, 2015

Guarantees [Abstract]

Schedule of Activity in Accrued Warranty Account

The following table sets forth activity in the accrued warranty account, which is a component of accrued expenses in the consolidated balance sheets (in thousands):

Balance — December 31, 2014	$	8,118
Warranty provision related to new sales		2,997
Costs incurred		(3,311	)
Balance — March 31, 2015	$	7,804

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Income Taxes - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Income Tax Disclosure [Abstract]
(Benefit) provision for income taxes	$ (4,000)	$ 374,000
Unrecognized tax benefits	$ 800,000		$ 800,000

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Goodwill and Other Intangible Assets - Schedule of Components of Other Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Cost	$ 69,085	$ 69,070
Translation adjustment	(45)	38
Accumulated amortization	(17,768)	(15,525)
Other intangible assets, net	51,272	53,583
Developed Technology and Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	29,240	29,240
Accumulated amortization	(9,394)	(7,840)
Other intangible assets, net	19,846	21,400
Business Licenses [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	384	384
Translation adjustment		34
Accumulated amortization	(221)	(252)
Other intangible assets, net	163	166
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	19,718	19,718
Translation adjustment	(45)	2
Accumulated amortization	(6,294)	(5,818)
Other intangible assets, net	13,379	13,902
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	18,390	18,390
Accumulated amortization	(1,834)	(1,607)
Other intangible assets, net	16,556	16,783
Other Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	1,353	1,338
Translation adjustment		2
Accumulated amortization	(25)	(8)
Other intangible assets, net	$ 1,328	$ 1,332

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Net (Loss) Income Per Common Share (Tables)

3 Months Ended

Mar. 31, 2015

Earnings Per Share [Abstract]

Schedule of Reconciliation of Basic and Diluted Shares

A reconciliation of basic and diluted shares is as follows (in thousands, except per share data):

	Three Months Ended March 31,
	2015			2014
Net (loss) income	$	(8	)	$	689
Basic weighted average common shares outstanding		21,664			21,978
Weighted average common equivalent shares		—			590
Diluted weighted average common shares outstanding		21,664			22,568
Basic net (loss) income per share	$	(0.00	)	$	0.03
Diluted net (loss) income per share	$	(0.00	)	$	0.03

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Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

Changes to Accumulated Other Comprehensive Loss

Changes to accumulated other comprehensive loss during the three months ended March 31, 2015 were as follows (in thousands):

	Unrealized (Loss) Gain on Marketable Securities, net of taxes			Translation Adjustment			Accumulated Other Comprehensive Loss
Balance — December 31, 2014	$	(10	)	$	(3,853	)	$	(3,863	)
Current period other comprehensive loss		13			(1,379	)		(1,366	)
Balance — March 31, 2015	$	3		$	(5,232	)	$	(5,229	)

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Note 2 — Stock-Based Compensation

Cynosure recorded stock-based compensation expense of $1.8 million and $1.5 million for the three months ended March 31, 2015 and 2014, respectively. As of March 31, 2015 and 2014, respectively, Cynosure had $26,000 and $25,000 of stock-based compensation expense capitalized as a part of inventory.

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 share-based payments, as follows:

	Three Months Ended March 31,
	2015		2014
	(In thousands)
Cost of revenues	$	68	$	65
Sales and marketing		475		443
Research and development		257		228
General and administrative		1,020		730
Total stock-based compensation expense	$	1,820	$	1,466

Cash received from option exercises was $0.9 million and $7.3 million during the three months ended March 31, 2015 and 2014, respectively.

Cynosure granted 319,509 and 657,240 stock options during the three months ended March 31, 2015 and 2014, respectively. Cynosure utilizes the Black-Scholes model to determine the weighted average fair value of options. The weighted average fair value of the options granted during the three months ended March 31, 2015 and 2014 was $11.78 and $11.23, respectively, using the following assumptions:

	Three Months Ended March 31,
	2015	2014
Risk-free interest rate	1.39% - 1.53%	1.44% - 1.76%
Expected dividend yield	—	—
Expected term	4.8 years	4.6 years
Expected volatility	43%	43% - 44%
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 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. The risk-free interest 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.

Cynosure granted 86,618 and 44,840 restricted stock units during the three months ended March 31, 2015 and 2014, respectively, to employees at a fair market value of its common stock on the date of grant and which vest annually over a three-year period. Cynosure is recognizing the related compensation expense on a straight-line basis over the three-year period.

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Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Operating Facility, Certain Equipment and Vehicles Under Operating Lease and Capital Lease Agreements with Payments

Cynosure leases the buildings portion of its U.S. operating facility and certain equipment and vehicles under capital lease agreements with payments due through May 2027. Commitments under Cynosure’s lease arrangements are as follows as of March 31, 2015, and reflect the impact of an April 2015 amendment on Cynosure’s U.S. operating facility lease (in thousands):

	Operating Leases		Capital Leases
Remainder of 2015	$	1,428	$	145
2016		1,850		2,327
2017		1,845		2,719
2018		1,800		2,626
2019		1,389		2,611
Thereafter		2,842		20,947
Total minimum lease payments	$	11,154	$	31,375
Less amount representing interest				(14,677	)
Present value of obligations under capital leases			$	16,698
Current portion of capital lease obligations				135
Capital lease obligations, net of current portion			$	16,563

Summary of Fixed Contractual Cash Obligations

Cynosure has summarized in the table below its fixed contractual cash obligations as of March 31, 2015. The table below reflects the impact of the April 2015 amendment on Cynosure’s U.S. operating facility lease.

	Total		Less Than One Year		One to Three Years		Three to Five Years		More than Five Years
	(In thousands)
Capital lease obligations, including interest	$	31,375	$	727	$	5,121	$	5,209	$	20,318
Operating leases		11,154		1,890		3,682		2,953		2,629
Total contractual obligations	$	42,529	$	2,617	$	8,803	$	8,162	$	22,947

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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	Mar. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Total	$ 54,658
Less Than One Year	24,576
One to Five Years	30,082
More than Five Years	0
State and Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Total	46,359
Less Than One Year	23,576
One to Five Years	22,783
More than Five Years	0
Treasuries and Government Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Total	8,299
Less Than One Year	1,000
One to Five Years	7,299
More than Five Years	$ 0

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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
	Mar. 31, 2015	Mar. 31, 2014
Earnings Per Share [Abstract]
Net (loss) income	$ (8)	$ 689
Basic weighted average common shares outstanding	21,664	21,978
Weighted average common equivalent shares		590
Diluted weighted average common shares outstanding	21,664	22,568
Basic net (loss) income per share	$ 0.00	$ 0.03
Diluted net (loss) income per share	$ 0.00	$ 0.03

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 71,914	$ 75,131
Short-term marketable securities	24,585	32,055
Accounts receivable, net	45,311	42,524
Inventories	68,209	59,318
Prepaid expenses and other current assets	10,580	9,629
Deferred income taxes	17,144	17,228
Total current assets	237,743	235,885
Property and equipment, net	35,523	34,256
Long-term marketable securities	30,082	26,189
Goodwill	105,877	105,764
Intangibles, net	51,272	53,583
Other assets	1,966	2,047
Total assets	462,463	457,724
Current liabilities:
Accounts payable	27,062	20,856
Accrued expenses	38,875	42,426
Deferred revenue	11,575	10,971
Capital lease obligation	135	137
Total current liabilities	77,647	74,390
Capital lease obligation, net of current portion	16,563	16,088
Deferred revenue, net of current portion	839	809
Other noncurrent liabilities	7,924	8,325
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 - 23,335 Class A shares and no Class B shares at March 31, 2015; Issued - 23,253 Class A shares and no Class B shares at December 31, 2014	23	23
Additional paid-in capital	357,834	355,082
Retained earnings	39,966	39,974
Accumulated other comprehensive loss	(5,229)	(3,863)
Treasury stock, 1,628 Class A shares, at cost	(33,104)	(33,104)
Total stockholders' equity	359,490	358,112
Total liabilities and stockholders' equity	$ 462,463	$ 457,724

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Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 2.2	$ 2.1
Indefinite-life intangible assets	$ 1.0

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Operating activities:
Net (loss) income	$ (8)	$ 689
Reconciliation of net (loss) income to net cash used in operating activities:
Depreciation and amortization	4,686	4,241
Stock-based compensation expense	1,820	1,466
Loss on disposal of fixed assets	5	32
Noncash interest expense on capital lease obligations	395	366
Noncash interest expense on license transfer agreement	51
Deferred income taxes	21	44
Net accretion of marketable securities	514	240
Changes in operating assets and liabilities:
Accounts receivable	(3,698)	(3,617)
Inventories	(10,963)	(2,732)
Net book value of demonstration inventory sold	94	126
Prepaid expenses and other current assets	(1,290)	260
Accounts payable	6,321	3,103
Tax benefit from the exercise of stock options	(27)	(382)
Accrued expenses	(3,056)	(4,748)
Deferred revenue	779	(8)
Other noncurrent liabilities	(402)
Net cash used in operating activities	(4,758)	(920)
Investing activities:
Purchases of property and equipment	(2,814)	(4,394)
Proceeds from the sales and maturities of marketable securities	13,150	3,565
Purchases of marketable securities	(10,081)	(17,083)
Decrease in other noncurrent assets	(19)	(127)
Net cash provided by (used in) investing activities	236	(18,039)
Financing activities:
Excess tax benefit on options exercised	27	382
Proceeds from stock option exercises	901	7,340
Payments on capital lease obligation	(73)	(311)
Net cash provided by financing activities	855	7,411
Effect of exchange rate changes on cash and cash equivalents	450	(77)
Net decrease in cash and cash equivalents	(3,217)	(11,625)
Cash and cash equivalents, beginning of the period	75,131	93,655
Cash and cash equivalents, end of the period	71,914	82,030
Supplemental cash flow information
Cash paid for interest	5	5
Cash paid for income taxes	515	810
Supplemental noncash investing and financing activities
Transfer of demonstration equipment from inventory to fixed assets	2,108	556
Assets acquired under capital lease	151
Net effect of acquisition-related opening balance sheet adjustments	$ 140	$ 115

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Commitments and Contingencies - Summary of Fixed Contractual Cash Obligations (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015
Contractual Obligation [Line Items]
Capital lease obligations, including interest	$ 31,375
Operating leases	11,154
Total contractual obligations	42,529
Less Than One Year [Member]
Contractual Obligation [Line Items]
Capital lease obligations, including interest	727
Operating leases	1,890
Total contractual obligations	2,617
One To Three Years [Member]
Contractual Obligation [Line Items]
Capital lease obligations, including interest	5,121
Operating leases	3,682
Total contractual obligations	8,803
Three To Five Years [Member]
Contractual Obligation [Line Items]
Capital lease obligations, including interest	5,209
Operating leases	2,953
Total contractual obligations	8,162
More Than Five Years [Member]
Contractual Obligation [Line Items]
Capital lease obligations, including interest	20,318
Operating leases	2,629
Total contractual obligations	$ 22,947

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Stock-Based Compensation - Summary of Share-Based Compensation Arrangement Fair Value Assumptions (Detail)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Risk-free interest rate Minimum	1.39%	1.44%
Risk-free interest rate Maximum	1.53%	1.76%
Expected dividend yield	0.00%	0.00%
Expected term	4 years 9 months 18 days	4 years 7 months 6 days
Expected volatility Minimum	43.00%	43.00%
Expected volatility Maximum		44.00%
Estimated forfeiture rate	5.00%	5.00%

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based 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 share-based payments, as follows:

	Three Months Ended March 31,
	2015		2014
	(In thousands)
Cost of revenues	$	68	$	65
Sales and marketing		475		443
Research and development		257		228
General and administrative		1,020		730
Total stock-based compensation expense	$	1,820	$	1,466

Summary of Share-Based compensation Arrangement Fair Value Assumptions

The weighted average fair value of the options granted during the three months ended March 31, 2015 and 2014 was $11.78 and $11.23, respectively, using the following assumptions:

	Three Months Ended March 31,
	2015	2014
Risk-free interest rate	1.39% - 1.53%	1.44% - 1.76%
Expected dividend yield	—	—
Expected term	4.8 years	4.6 years
Expected volatility	43%	43% - 44%
Estimated forfeiture rate	5%	5%

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Inventories - Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Inventory Disclosure [Abstract]
Raw materials	$ 18,415	$ 16,875
Work in process	4,344	3,526
Finished goods	45,450	38,917
Inventories, Total	$ 68,209	$ 59,318

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Fair Value (Tables)

3 Months Ended

Mar. 31, 2015

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 March 31, 2015 (in thousands):

	Level 1		Level 2		Level 3		Total
Money market funds(1)	$	5,531	$	—	$	—	$	5,531
State and municipal bonds		—		46,359		—		46,359
Treasuries and government agencies		—		8,299		—		8,299
Equity securities		9		—		—		9
Total	$	5,540	$	54,658	$	—	$	60,198

The following table represents Cynosure’s fair value hierarchy for its financial assets (cash equivalents and marketable securities) measured at fair value as of December 31, 2014 (in thousands):

	Level 1		Level 2		Level 3		Total
Money market funds(1)	$	1,753	$	—	$	—	$	1,753
State and municipal bonds		—		47,744		—		47,744
Treasuries and government agencies		—		8,486		—		8,486
Corporate obligations and commercial paper		—		2,001		—		2,001
Equity securities		13		—		—		13
Total	$	1,766	$	58,231	$	—	$	59,997

(1) Included in cash and cash equivalents at March 31, 2015 and December 31, 2014.

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Interim Consolidated Financial Statements

3 Months Ended

Mar. 31, 2015

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 (U.S. GAAP) for interim information and pursuant to the rules and regulations of the Securities and Exchange Commission 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, 2014. 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 three months ended March 31, 2015 may not be indicative of the results that may be expected for the year ending December 31, 2015, or any other period.

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Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Class A and Class B common stock, shares authorized	70,000,000	70,000,000
Common Stock Class A [Member]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares issued	23,335,000	23,253,000
Treasury stock, shares	1,628,000	1,628,000
Common Stock Class B [Member]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares issued	0	0

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Accumulated Other Comprehensive Loss

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

Accumulated Other Comprehensive Loss

Note 11 — Accumulated Other Comprehensive Loss

Changes to accumulated other comprehensive loss during the three months ended March 31, 2015 were as follows (in thousands):

	Unrealized (Loss) Gain on Marketable Securities, net of taxes			Translation Adjustment			Accumulated Other Comprehensive Loss
Balance — December 31, 2014	$	(10	)	$	(3,853	)	$	(3,863	)
Current period other comprehensive loss		13			(1,379	)		(1,366	)
Balance — March 31, 2015	$	3		$	(5,232	)	$	(5,229	)

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Document and Entity Information	3 Months Ended
	Mar. 31, 2015	May 01, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Trading Symbol	CYNO
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		22,160,724

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Income Taxes

3 Months Ended

Mar. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Note 12 — Income Taxes

During the three months ended March 31, 2015 and 2014, Cynosure recorded an income tax benefit of $4,000 and an income tax provision of $374,000, respectively. The income tax benefit for the three months ended March 31, 2015 is primarily attributable to applying the Company’s estimated annual effective tax rate to its year-to-date worldwide loss.

At March 31, 2015 and December 31, 2014, Cynosure had gross tax-effected unrecognized tax benefits of $0.8 million of which the entire amount, if recognized, would favorably impact the effective tax rate. Cynosure classifies interest and penalties related to income taxes as a component of its provision for income taxes. Cynosure does not expect any material changes in the amounts of unrecognized tax benefits over the next 12 months.

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 2011. With few exceptions, Cynosure is no longer subject to U.S. state tax examinations for years before 2010. Additionally, certain non-U.S. jurisdictions are no longer subject to income tax examinations by tax authorities for years before 2010.

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Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Statement [Abstract]
Product revenues	$ 56,502	$ 49,701
Parts, accessories, service and royalty revenues	18,410	12,303
Total revenues	74,912	62,004
Cost of revenues	32,139	26,609
Gross profit	42,773	35,395
Operating expenses:
Sales and marketing	25,696	20,122
Research and development	5,958	5,574
Amortization of intangible assets acquired	736	713
General and administrative	8,330	7,640
Total operating expenses	40,720	34,049
Income from operations	2,053	1,346
Interest expense, net	(402)	(349)
Other (expense) income, net	(1,663)	66
(Loss) income before provision for income taxes	(12)	1,063
(Benefit) provision for income taxes	(4)	374
Net (loss) income	$ (8)	$ 689
Basic net (loss) income per share	$ 0.00	$ 0.03
Diluted net (loss) income per share	$ 0.00	$ 0.03
Basic weighted average common shares outstanding	21,664	21,978
Diluted weighted average common shares outstanding	21,664	22,568

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Acquisition

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Acquisition

Note 6 — Acquisition

Ellman International, Inc.

On September 5, 2014, Cynosure acquired substantially all of the assets of Ellman International, Inc. (Ellman) for $13.2 million in cash. In addition, Cynosure assumed current liabilities associated with normal working capital and certain contractual liabilities. The purchase price was based primarily on the net working capital on the date of purchase plus an amount to retire all of Ellman’s long term debt on the date of sale. Cynosure also assumed a license transfer agreement as part of the purchase valued at $4.2 million, which is classified as a liability. The acquisition complements Cynosure’s aesthetic treatment platform with radiofrequency energy sources and accessory products. The acquisition of substantially all of the assets of Ellman was considered a business acquisition for accounting purposes.

Cynosure is assessing the fair value of the assets acquired and liabilities assumed. Pro forma financial information was filed with the Securities and Exchange Commission within the applicable time period. Cynosure has allocated the purchase price to the net tangible and intangible assets based on their estimated fair values as of September 5, 2014. During the fourth quarter of 2014, Cynosure completed its fair value procedures on the intangible assets, fixed assets and the license transfer agreement acquired in the Ellman acquisition. As such, the fair value of the accounts receivable, inventory, prepaid and other assets acquired, along with the accounts payable, accrued expenses and deferred revenue assumed presented in the table below are provisional and will be finalized in a later period once the fair value procedures are completed. Goodwill represents the excess of purchase price over the fair value of the net assets acquired. During the first quarter of 2015, Cynosure revised its estimates of the assets acquired and liabilities assumed in the Ellman acquisition, and as a result, increased goodwill from $6.6 million at December 31, 2014 to $6.7 million at March 31, 2015, with the offsetting decrease to inventory. The following table summarizes the estimated fair value as of September 5, 2014 of the net assets acquired (in thousands):

Purchase price:
Cash paid	$	13,235
Total	$	13,235
Assets (liabilities) acquired:
Accounts receivable		2,147
Inventory		3,542
Prepaid and other assets		488
Fixed assets		612
Intangible assets		6,800
Goodwill		6,738
Accounts payable		(9	)
Accrued expenses		(2,469	)
Deferred revenue		(454	)
License transfer agreement		(4,160	)
Total	$	13,235

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Short and Long-Term Marketable Securities

3 Months Ended

Mar. 31, 2015

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 March 31, 2015 consist of approximately $54.7 million of investments in debt securities consisting of state and municipal bonds, treasuries and government agencies and approximately $9,000 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 March 31, 2015, 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	$	23,576	$	23,571	$	5	$	—
Treasuries and government agencies		1,000		1,000		—		—
Equity securities		9		13		—		(4	)
Total short-term marketable securities	$	24,585	$	24,584	$	5	$	(4	)
Long-term marketable securities:
State and municipal bonds	$	22,783	$	22,786	$	6	$	(9	)
Treasuries and government agencies		7,299		7,299		3		(3	)
Total long-term marketable securities	$	30,082	$	30,085	$	9	$	(12	)
Total available-for-sale securities	$	54,667	$	54,669	$	14	$	(16	)
Total marketable securities	$	54,667

As of December 31, 2014, 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	$	26,041	$	26,033	$	8	$	—
Treasuries and government agencies		4,000		4,000		—		—
Corporate obligations and commercial paper		2,001		2,001		—		—
Equity securities		13		18		—		(5	)
Total short-term marketable securities	$	32,055	$	32,052	$	8	$	(5	)
Long-term marketable securities:
State and municipal bonds	$	21,703	$	21,721	$	2	$	(20	)
Treasuries and government agencies		4,486		4,500		—		(14	)
Total long-term marketable securities	$	26,189	$	26,221	$	2	$	(34	)
Total available-for-sale securities	$	58,244	$	58,273	$	10	$	(39	)
Total marketable securities	$	58,244

As of March 31, 2015, Cynosure’s available-for-sale debt securities mature as follows (in thousands):

			Maturities
	Total		Less Than One Year		One to Five Years		More than Five Years
State and municipal bonds	$	46,359	$	23,576	$	22,783	$	—
Treasuries and government agencies		8,299		1,000		7,299		—
Total available-for-sale debt securities	$	54,658	$	24,576	$	30,082	$	—

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Inventories (Tables)

3 Months Ended

Mar. 31, 2015

Inventory Disclosure [Abstract]

Inventories

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

	March 31, 2015		December 31, 2014
	(in thousands)
Raw materials	$	18,415	$	16,875
Work in process		4,344		3,526
Finished goods		45,450		38,917
	$	68,209	$	59,318

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 13 — Commitments and Contingencies

Lease Commitments

Cynosure leases the land portion of its U.S. operating facility and certain foreign facilities under non-cancellable operating lease agreements expiring through May 2027. These leases are non-cancellable and typically contain renewal options. Certain leases contain rent escalation clauses for which Cynosure recognizes the expense on a straight-line basis. Rent expense for the three months ended March 31, 2015 and 2014 was approximately $0.5 million and $1.0 million, respectively. The 2014 period rent expense includes approximately $0.5 million incurred on the former Palomar Medical Technologies, Inc. (Palomar) headquarters, which Cynosure occupied through July 2014.

Cynosure leases the buildings portion of its U.S. operating facility and certain equipment and vehicles under capital lease agreements with payments due through May 2027. Commitments under Cynosure’s lease arrangements are as follows as of March 31, 2015, and reflect the impact of an April 2015 amendment on Cynosure’s U.S. operating facility lease (in thousands):

	Operating Leases		Capital Leases
Remainder of 2015	$	1,428	$	145
2016		1,850		2,327
2017		1,845		2,719
2018		1,800		2,626
2019		1,389		2,611
Thereafter		2,842		20,947
Total minimum lease payments	$	11,154	$	31,375
Less amount representing interest				(14,677	)
Present value of obligations under capital leases			$	16,698
Current portion of capital lease obligations				135
Capital lease obligations, net of current portion			$	16,563

Contractual Obligations

Cynosure’s significant outstanding contractual obligations relate to its capital leases from its facilities leases, including the buildings portion of its U.S. operating facility, and equipment financings. Cynosure’s leases are non-cancellable and typically contain renewal options. Certain leases contain rent escalation clauses for which Cynosure recognizes the expense on a straight-line basis. Cynosure has summarized in the table below its fixed contractual cash obligations as of March 31, 2015. The table below reflects the impact of the April 2015 amendment on Cynosure’s U.S. operating facility lease.

	Total		Less Than One Year		One to Three Years		Three to Five Years		More than Five Years
	(In thousands)
Capital lease obligations, including interest	$	31,375	$	727	$	5,121	$	5,209	$	20,318
Operating leases		11,154		1,890		3,682		2,953		2,629
Total contractual obligations	$	42,529	$	2,617	$	8,803	$	8,162	$	22,947

Contingencies

Cynosure continually assesses litigation to determine if an unfavorable outcome would lead to a probable loss or reasonably possible loss, which could be estimated. In accordance with the Financial Accounting Standards Board’s guidance on accounting for contingencies, Cynosure accrues for all direct costs associated with the estimated resolution of contingencies at the earliest date at which it is deemed probable that a liability has been incurred and the amount of such liability can be reasonably estimated. If the estimate of a probable loss is a range and no amount within the range is more likely, Cynosure accrues the minimum amount of the range. In cases where Cynosure believes that a reasonably possible loss exists, Cynosure discloses the facts and circumstances of the litigation, including an estimable range, if possible. In management’s opinion, Cynosure is not currently involved in any legal proceedings, which, individually or in the aggregate, could have a material effect on Cynosure’s financial statements. Cynosure believes that contingent losses associated with any current litigation were remote as of March 31, 2015 and at the time of the filing of this Quarterly Report on Form 10-Q, and as such, Cynosure has not recorded or disclosed any material loss contingencies.

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Segment Information

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Segment Information

Note 9 — Segment Information

In accordance with Accounting Standards Codification (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 area:

	Three Months Ended March 31,
	2015		2014
	(in thousands)
United States	$	41,451	$	27,948
Europe		10,657		12,133
Asia / Pacific		16,814		15,527
Other		5,990		6,396
Total	$	74,912	$	62,004

Total assets by geographic area are as follows:

	March 31, 2015			December 31, 2014
	(in thousands)
United States	$	427,998		$	420,513
Europe		20,796			23,235
Asia / Pacific		19,269			19,182
Eliminations		(5,600	)		(5,206	)
Total	$	462,463		$	457,724

Long-lived assets (property and equipment only) by geographic area are as follows:

	March 31, 2015		December 31, 2014
	(in thousands)
United States	$	31,339	$	30,912
Europe		1,453		1,656
Asia / Pacific		2,731		1,688
Total	$	35,523	$	34,256

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

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Goodwill and Other Intangible Assets

3 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Note 7 — Goodwill and Other Intangible Assets

Changes to goodwill during the three months ended March 31, 2015 were as follows (in thousands):

Balance — December 31, 2014	$	105,764
Ellman acquisition		140
Translation adjustment		(27	)
Balance — March 31, 2015	$	105,877

Other intangible assets consisted of the following at March 31, 2015 and December 31, 2014 (in thousands):

	Developed Technology & Patents			Business Licenses			Customer Relationships			Trade Names			Other			Total
March 31, 2015
Cost	$	29,240		$	384		$	19,718		$	18,390		$	1,353		$	69,085
Translation adjustment		—			—			(45	)		—			—			(45	)
Accumulated amortization		(9,394	)		(221	)		(6,294	)		(1,834	)		(25	)		(17,768	)
Balance, March 31, 2015	$	19,846		$	163		$	13,379		$	16,556		$	1,328		$	51,272
December 31, 2014
Cost	$	29,240		$	384		$	19,718		$	18,390		$	1,338		$	69,070
Translation adjustment		—			34			2			—			2			38
Accumulated amortization		(7,840	)		(252	)		(5,818	)		(1,607	)		(8	)		(15,525	)
Balance, December 31, 2014	$	21,400		$	166		$	13,902		$	16,783		$	1,332		$	53,583

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.

Amortization expense for the three months ended March 31, 2015 and 2014 was $2.2 million and $2.1 million, respectively. Cynosure has approximately $1.0 million of indefinite-life intangible assets that are included in other intangible assets in the table above. As of March 31, 2015, amortization expense on existing intangible assets for the next five years and beyond is as follows (in thousands):

Remainder of 2015	$	6,916
2016		8,428
2017		6,439
2018		4,923
2019		3,188
2020 and thereafter		20,402
Total	$	50,296

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Warranty Costs

3 Months Ended

Mar. 31, 2015

Guarantees [Abstract]

Warranty Costs

Note 8 — Warranty Costs

Cynosure typically provides a one-year parts and labor warranty on end-user sales of lasers. Distributor sales generally include a one-year warranty on parts only. Estimated future costs for initial product warranties are provided for at the time of revenue recognition. The following table sets forth activity in the accrued warranty account, which is a component of accrued expenses in the consolidated balance sheets (in thousands):

Balance — December 31, 2014	$	8,118
Warranty provision related to new sales		2,997
Costs incurred		(3,311	)
Balance — March 31, 2015	$	7,804

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Net (Loss) Income Per Common Share

3 Months Ended

Mar. 31, 2015

Earnings Per Share [Abstract]

Net (Loss) Income Per Common Share

Note 10 — 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 and restricted stock units based on the treasury stock method.

A reconciliation of basic and diluted shares is as follows (in thousands, except per share data):

	Three Months Ended March 31,
	2015			2014
Net (loss) income	$	(8	)	$	689
Basic weighted average common shares outstanding		21,664			21,978
Weighted average common equivalent shares		—			590
Diluted weighted average common shares outstanding		21,664			22,568
Basic net (loss) income per share	$	(0.00	)	$	0.03
Diluted net (loss) income per share	$	(0.00	)	$	0.03

For the three months ended March 31, 2015, 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 months ended March 31, 2015 would be antidilutive based on the net loss for the period. For the three months ended March 31, 2015, outstanding options and restricted stock units to purchase 1.7 million shares were excluded from the computation of diluted earnings per share because their inclusion would have been antidilutive.

For the three months ended March 31, 2014, approximately 1.1 million weighted average stock options and restricted stock units to purchase shares of the Company’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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Stock-Based Compensation - Summary of Stock-Based Compensation Expenses (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 1,820	$ 1,466
Cost of Revenues [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	68	65
Sales and Marketing [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	475	443
Research and Development [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	257	228
General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 1,020	$ 730

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Segment Information - Schedule of Total Assets by Geographic Area (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Revenues from External Customers and Long-Lived Assets [Line Items]
Total assets	$ 462,463	$ 457,724
Reportable Geographical Components [Member] | United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total assets	427,998	420,513
Reportable Geographical Components [Member] | Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total assets	20,796	23,235
Reportable Geographical Components [Member] | Asia Pacific [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total assets	19,269	19,182
Eliminations [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Total assets	$ (5,600)	$ (5,206)

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Commitments and Contingencies (Policies)

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Contingencies

Cynosure continually assesses litigation to determine if an unfavorable outcome would lead to a probable loss or reasonably possible loss, which could be estimated. In accordance with the Financial Accounting Standards Board’s guidance on accounting for contingencies, Cynosure accrues for all direct costs associated with the estimated resolution of contingencies at the earliest date at which it is deemed probable that a liability has been incurred and the amount of such liability can be reasonably estimated. If the estimate of a probable loss is a range and no amount within the range is more likely, Cynosure accrues the minimum amount of the range. In cases where Cynosure believes that a reasonably possible loss exists, Cynosure discloses the facts and circumstances of the litigation, including an estimable range, if possible. In management’s opinion, Cynosure is not currently involved in any legal proceedings, which, individually or in the aggregate, could have a material effect on Cynosure’s financial statements. Cynosure believes that contingent losses associated with any current litigation were remote as of March 31, 2015 and at the time of the filing of this Quarterly Report on Form 10-Q, and as such, Cynosure has not recorded or disclosed any material loss contingencies.

Recent Accounting Pronouncements

 Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board issued guidance codified in ASC 606, Revenue Recognition — Revenue  from Contracts with Customers, which amends the guidance in ASC 605, Revenue Recognition. This new revenue standard creates a single source of revenue guidance for all companies in all industries and is more principles-based than the current revenue guidance. The new guidance must be adopted using either a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. ASC 606 was originally scheduled to be effective for interim and annual periods beginning after December 15, 2016. In April 2015, the Financial Accounting Standards Board proposed a one-year deferral of the effective date for ASC 606. Under the proposal, the standard would be effective for public entities for interim and annual reporting periods beginning after December 15, 2017. Cynosure is currently evaluating the impact of the provisions of ASC 606.

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Acquisition (Tables)

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Estimated Fair Value of Net Assets Acquired

The following table summarizes the estimated fair value as of September 5, 2014 of the net assets acquired (in thousands):

Purchase price:
Cash paid	$	13,235
Total	$	13,235
Assets (liabilities) acquired:
Accounts receivable		2,147
Inventory		3,542
Prepaid and other assets		488
Fixed assets		612
Intangible assets		6,800
Goodwill		6,738
Accounts payable		(9	)
Accrued expenses		(2,469	)
Deferred revenue		(454	)
License transfer agreement		(4,160	)
Total	$	13,235

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Segment Information - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2015 Country Segment
Segment Reporting [Abstract]
Number of operating segments	1
Number of individual countries with greater than 10% of total revenue, total assets or long lived assets	0
Percentage of total revenue	10.00%

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Acquisition - Additional Information (Detail) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Sep. 05, 2014
Business Acquisition [Line Items]
Goodwill	$ 140,000
Ellman International, Inc. [Member]
Business Acquisition [Line Items]
Cash consideration			13,200,000
Business acquisition effective date of acquisition	Sep. 05, 2014
License transfer agreement purchase price			4,200,000
Goodwill	$ 6,700,000	$ 6,600,000

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Consolidated Statements of Comprehensive (Loss) Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (8)	$ 689
Other comprehensive loss components:
Cumulative translation adjustment	(1,379)	(49)
Unrealized gain (loss) on marketable securities, net of taxes	13	(6)
Total other comprehensive loss	(1,366)	(55)
Comprehensive (loss) income	$ (1,374)	$ 634

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Fair Value

3 Months Ended

Mar. 31, 2015

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 March 31, 2015 (in thousands):

	Level 1		Level 2		Level 3		Total
Money market funds(1)	$	5,531	$	—	$	—	$	5,531
State and municipal bonds		—		46,359		—		46,359
Treasuries and government agencies		—		8,299		—		8,299
Equity securities		9		—		—		9
Total	$	5,540	$	54,658	$	—	$	60,198

The following table represents Cynosure’s fair value hierarchy for its financial assets (cash equivalents and marketable securities) measured at fair value as of December 31, 2014 (in thousands):

	Level 1		Level 2		Level 3		Total
Money market funds(1)	$	1,753	$	—	$	—	$	1,753
State and municipal bonds		—		47,744		—		47,744
Treasuries and government agencies		—		8,486		—		8,486
Corporate obligations and commercial paper		—		2,001		—		2,001
Equity securities		13		—		—		13
Total	$	1,766	$	58,231	$	—	$	59,997

(1) Included in cash and cash equivalents at March 31, 2015 and December 31, 2014.

During the three months ended March 31, 2015, there were no significant transfers in and out of Level 1 and Level 2. Cynosure did not have any Level 3 financial assets at March 31, 2015 or December 31, 2014.

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Commitments and Contingencies - Operating Facility, Certain Equipment and Vehicles Under Operating Lease and Capital Lease Agreements with Payments (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
Remainder of 2015	$ 1,428
2016	1,850
2017	1,845
2018	1,800
2019	1,389
Thereafter	2,842
Total minimum lease payments	11,154
Remainder of 2015	145
2016	2,327
2017	2,719
2018	2,626
2019	2,611
Thereafter	20,947
Total minimum lease payments	31,375
Less amount representing interest	(14,677)
Present value of obligations under capital leases	16,698
Current portion of capital lease obligations	135	137
Capital lease obligations, net of current portion	$ 16,563	$ 16,088

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes to Goodwill

Changes to goodwill during the three months ended March 31, 2015 were as follows (in thousands):

Balance — December 31, 2014	$	105,764
Ellman acquisition		140
Translation adjustment		(27	)
Balance — March 31, 2015	$	105,877

Schedule of Components of Other Intangible Assets

Other intangible assets consisted of the following at March 31, 2015 and December 31, 2014 (in thousands):

	Developed Technology & Patents			Business Licenses			Customer Relationships			Trade Names			Other			Total
March 31, 2015
Cost	$	29,240		$	384		$	19,718		$	18,390		$	1,353		$	69,085
Translation adjustment		—			—			(45	)		—			—			(45	)
Accumulated amortization		(9,394	)		(221	)		(6,294	)		(1,834	)		(25	)		(17,768	)
Balance, March 31, 2015	$	19,846		$	163		$	13,379		$	16,556		$	1,328		$	51,272
December 31, 2014
Cost	$	29,240		$	384		$	19,718		$	18,390		$	1,338		$	69,070
Translation adjustment		—			34			2			—			2			38
Accumulated amortization		(7,840	)		(252	)		(5,818	)		(1,607	)		(8	)		(15,525	)
Balance, December 31, 2014	$	21,400		$	166		$	13,902		$	16,783		$	1,332		$	53,583

Schedule of Amortization Expenses on Intangible Assets

As of March 31, 2015, amortization expense on existing intangible assets for the next five years and beyond is as follows (in thousands):

Remainder of 2015	$	6,916
2016		8,428
2017		6,439
2018		4,923
2019		3,188
2020 and thereafter		20,402
Total	$	50,296

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Short and Long-Term Marketable Securities - Additional Information (Detail) (USD $)	Mar. 31, 2015
Investments, Debt and Equity Securities [Abstract]
Available for sale securities in debt	$ 54,658,000
Available for sale securities in equity	$ 9,000

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Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2015

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

Note 14 — Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board issued guidance codified in ASC 606, Revenue Recognition — Revenue  from Contracts with Customers, which amends the guidance in ASC 605, Revenue Recognition. This new revenue standard creates a single source of revenue guidance for all companies in all industries and is more principles-based than the current revenue guidance. The new guidance must be adopted using either a full retrospective approach for all periods presented in the period of adoption or a modified retrospective approach. ASC 606 was originally scheduled to be effective for interim and annual periods beginning after December 15, 2016. In April 2015, the Financial Accounting Standards Board proposed a one-year deferral of the effective date for ASC 606. Under the proposal, the standard would be effective for public entities for interim and annual reporting periods beginning after December 15, 2017. Cynosure is currently evaluating the impact of the provisions of ASC 606.