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Solta Medical Inc. (SLTM)
Q4 2012 Earnings Call
February 19, 2013 4:30 pm ET
Jenifer Kirtland – Managing Director, EVC Group, Inc.
Stephen J. Fanning – Chairman, President and Chief Executive Officer
John F. Glenn – Chief Financial Officer
H. Daniel Ferrari – Vice President-Finance
Jeremy Feffer – Cantor Fitzgerald Securities
William J. Plovanic – Canaccord Genuity, Inc.
Richard Newitter – Leerink Swann LLC
Matt V. Dolan – ROTH Capital Partners
Anthony V. Vendetti – Maxim Group LLC
Keay T. Nakae – Ascendiant Capital Markets
Konstantin Tcherepachenets – Raymond James
Joseph Munda – Sidoti & Company
Previous Statements by SLTM
» Thermage Inc. Q3 2008 Earnings Call Transcript
» Thermage Inc. Q2 2008 Earnings Call Transcript
» Thermage Q4 2007 Earnings Call Transcript
I would now like to turn the conference over to Ms. Jenifer Kirtland. Please go ahead, ma’am.
Thank you, operator, and good morning, everyone. By now everyone should have accessed to the fourth quarter 2012 financial results release, which was distributed this afternoon after the market closed. The release is available on the Investor Relations section of Solta Medical’s website at solta.com and with our Form 8-K filed with the SEC.
Before we get started, during the course of this conference call, the company will make projections and may make other statements about the company’s business that are forward-looking and are subject to many risks and uncertainties that could cause actual results to differ materially from expectations.
A detailed discussion of the risks and uncertainties that affect our business is contained in the company’s SEC filings, particularly under the heading Risk Factors. Copies of these filings are available online from the SEC or on the Solta Medical website. The company’s projections and forward-looking statements are based on factors that are subject to change and therefore these statements speak only as of the date they are given. The company does not undertake to update any projection or forward-looking statement.
In addition, to supplement the GAAP numbers, we have provided non-GAAP gross margin, operating income and loss, EBITDA, net income and loss and non-GAAP income and loss per share information that excludes the impact of non-cash acquisition related charges, and other acquisition related charges and non-cash stock-based compensation charges.
We believe that these non-GAAP numbers provide you with insight to conduct a more meaningful and consistent comparison of our ongoing operating results and trends, compared with historical results. A table reconciling the GAAP financial information to the non-GAAP information is included in our financial results release.
And with that, I’d like to turn the call over to Steve Fanning, Chairman, President and CEO of Solta Medical.
Stephen J. Fanning
Thank you, Jenifer and good afternoon everyone. With me today is our Chief Financial Officer, Jack Glenn; and our Vice President of Finance Dan Ferrari. The fourth quarter provided a strong ending to a productive year for Solta. Revenue for the fourth quarter increased 20% to $39.8 million as compared to the fourth quarter of 2011.
Our industry leading recurring revenue business model continues to generate approximately one-half of revenue from treatment tips and other consumables. In the fourth quarter, revenue from treatment tips and consumables grew 18% year-over-year and accounted for 47% of total revenue.
The revenue growth and regional mix continue to be well balanced between North America and the international markets. Revenue rose in North America by 17% to $19.3 million and international revenue increased by 23% to $20.5 million. The Asian market delivered another quarter of exceptional revenue growth, revving for the Asia-Pacific region in Q4, up $14.7 million was up 26% from the prior year. In Europe and the Middle East, we delivered our best numbers for the year with revenue up $5.2 million, an increase of 33% over the prior year.
In addition, we generated double-digit revenue growth across all of our direct distribution markets in Western Europe. Our gross margin for Q4 expanded from the prior year by over two percentage points to 65% as we increased our sales volume and drove manufacturing efficiencies at our Liposonix facility.
Non-GAAP EBITDA for the quarter was $4 million compared to $1.3 million in the fourth quarter of last year. Our delivery of positive non-GAAP EBITDA in the fourth quarter and in every quarter over the past three years demonstrates the leverage in our business model. We also generated cash from operations of $1.4 million in the fourth quarter.
Now, for the full-year 2012, revenue of $144.5 million grew year-over-year by $28.6 million, or 25%. We completed the integration of the Liposonix acquisition ahead of plan and the first-year of our Liposonix commercial launch exceeded our expectations. During the year, we shipped approximately 360 Liposonix systems. We look forward to additional expansion opportunities of Liposonix overseas from regulatory approvals received in recent months for the markets of Taiwan, Australia, and Brazil.
Our innovative Clear and Brilliant product also continues to perform very well in the marketplace. For the year, we experienced double-digit revenue growth from our Clear and Brilliant platform for skin rejuvenation. Based on our proven fractional laser technology, Clear and Brilliant is perfect for patients who want to refresh their look, prevent signs of aging, and do all that they can to keep their skin looking younger and more radiant.
For many patients, Clear and Brilliant is a natural next step in the skincare continuum, a true fractional laser treatment that is effective and safe, but also gentle and affordable. Treatment time is equipped 15 to 20 minutes. In the second half of the year, we launched a new handpiece for our Clear and Brilliant laser system called Perméa, along with an exclusive partnership with SkinCeuticals to deliver the first fractional laser treatment along with an in-office and home use antioxidant skincare regimen.