Cynosure, Inc. (CYNO)

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Cynosure Inc. (CYNO)

Q1 2013 Earnings Call

April 30, 2013 9:00 am ET


Scott Solomon - VP, Sharon Merrill Associates

Michael Davin - President & CEO

Tim Baker - EVP & CFO


Matthew Dodds - Citigroup

Rich Newitter - Leerink Swann

Anthony Vendetti - Maxim Group

Jim Sidoti - Sidoti & Company

Andy Schopick - Nutmeg Securities

Bill Plovanic - Canaccord



Good day and welcome to Cynosure’s First Quarter 2013 Conference Call. Today’s call is being recorded. There will be an opportunity for questions at the end of the call. (Operator Instructions)

At this time, I would like to turn the call over to Mr. Scott Solomon, Vice President for Sharon Merrill Associates. Please go ahead, sir.

Scott Solomon

Thank you, Webb, and good morning, everyone. Thank you for joining us today. With me on this morning’s call are Michael Davin, Cynosure’s President and Chief Executive Officer; and Tim Baker, Executive Vice President and Chief Financial Officer.

Michael will begin today’s call with a discussion of Cynosure’s first quarter results and a business overview. Tim will take you through the financials, after which management will take your questions.

Before we begin, please note that various remarks management makes on this conference call about future expectations, plans and prospects constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

Forward-looking statements involve risks and uncertainties. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including those discussed in Cynosure’s most recent Annual Report on Form 10-K, for the year ended December 31, 2012, which was filed with the SEC on March 8, 2013 and any subsequent filing of quarterly report on Form 10-Q, which are filed with the SEC.

In connection with the proposed transaction between Cynosure and Palomar, Cynosure filed a registration statement on Form S4 file number 333187895 with the SEC on April 12, 2013. The registration statement includes a joint proxy statement of Cynosure and Palomar that also constitutes a prospectus of Cynosure. Palomar and Cynosure also planned to file other relevant documents with the SEC regarding their proposed transaction. Investors are urged to read the joint proxy statement prospectus and the other relevant documents filed with the SEC, if and when they become available because they contain or will contain important information. These filings can be accessed on the Investor Relations section of the company’s website

In addition, any forward-looking statements represent the company’s views as of today, April 30, 2013. These statements should not be relied upon as representing the company’s views as of any subsequent date. While Cynosure may elect to update forward-looking statements at some point in the future, the company specifically disclaims any obligation to do so.

During today’s call management will refer to adjusted net income and adjusted net income per share. These metrics are non-GAAP financial measures which the company believes hope investors to gain a meaningful understanding of Cynosure’s cooperative results exclusive of acquisition related expenses and can also help investors who wish to make comparisons between Cynosure and other companies on both a GAAP and a non-GAAP basis. For more information on these non-GAAP financial measures please see the discussion and reconciliation table included in this morning’s earnings release. The table has more details of the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures.

With that, I’ll turn the call over to Michael Davin.

Michael Davin

Thank you, Scott and good morning everyone.

First quarter of 2013 was highlighted by the U.S. launch of our newest flagship product PicoSure Picosecond Laser Workstation. PicoSure is the world’s first Picosecond Laser indicated for the removal of tattoos and benign pigmented lesions.

We unveil PicoSure for the Cynosure team during our national sales meeting in January and for the public at the American Academy of dermatology annual meeting in March. Along the successful introduction at AAD demand for PicoSure has been very positive. With the revenue ramp up slightly steeper than we had anticipated at this point post launch. We did begin shipping the first PicoSure units at the end of Q1 but in limited quantities. But we do not breakout revenue by individual product PicoSure is on pace to achieve the 10 million sales target we have historically established for the introduction of our flagship laser systems in their first full year on the market.

We began introducing PicoSure in the U.S. to key opinion leaders and other luminaries and aesthetic dermatology and plastic surgery, their report seeing excellent results in terms of tissue reaction and inclearance with the Picosecond pulse.

In addition to clearance in the U.S., we recently received the European CE Mark for PicoSure, allowing us to sell the device in the European Union. We will make the device available in the second quarter through our direct sales offices in Germany, Spain, France and the United Kingdom. We anticipate minimal revenue from the European launch of PicoSure in the second quarter with an increasing sales as we move toward the end of 2013.

A presentation of clinical data and the publication of scientific research have played an important role in conveying the benefits of our aesthetic technology to physicians. That remains a prominent aspect of our PicoSure strategy. Four abstracts describing the safety and efficacy of PicoSure were accepted for presentation at last month’s American Society Laser Medicine for Surgery Meeting held in Boston.

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