Syneron Medical Ltd.
Investor Presentation
August 2015
Safe Harbor For Forward Looking Statements
Any statements contained in this presentation regarding future expectations, beliefs, goals, plans or
prospects constitute forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Further, any statements that are not statements of historical fact
(including statements containing "believes," "anticipates," "plans," "expects," "may," "will," "would,"
"intends," "estimates" and similar expressions) should also be considered to be forward-looking
statements. There are a number of important risks and factors that could cause actual results or
events to differ materially from those indicated by forward-looking statements in this presentation,
including the risks set forth in Syneron Medical Ltd.'s most recent Annual Report on Form 20-F, and
the other factors described in the filings that Syneron Medical Ltd. makes with the SEC from time to
time. If one or more of these risks or factors materialize, or if any underlying assumptions prove
incorrect, Syneron Medical Ltd.'s actual results, performance or achievements may vary materially
from any future results, performance or achievements expressed or implied by the forward-looking
statements in this presentation.
Non-GAAP Financial Measures
The following presentation includes certain "non-GAAP financial measures" as defined in
Regulation G under the Securities Exchange Act of 1934. A schedule is included in the company’s
Q2 2015 press release, which reconciles our results as reported under General Accepted
Accounting Principles and the non-GAAP financial measures included in the following presentation.
2
Syneron at a Glance
• A global leader in medical
aesthetic devices
• Growing aesthetic market and
consumer demand for energy
based non-invasive procedures
• Largest worldwide presence in
sales, distribution, service
network and installed based
3
Drivers of Profitable Growth
1. Superior technology for non invasive Fat
Destruction (UltraShape) and Body Shaping
(VelaShape – 7,000 units sold WW)
27% Worldwide Market
Share¹
2. Focus on high margin recurring revenues
3. Significant expansion and optimization of NA
sales force, focused on selling high margin
products
4. PicoWay breakthrough technology for tattoo
removal and treatment of pigmented lesions
5. Profound RF micro-needle technology
addresses growing demand for high-end facial
treatments
~$271M Revenue² (30%
Recurring³)
~$92M in Cash4; No Debt
~30,000 Customers
1 Based on US publicly traded companies listed here (CYNO,
CUTR, ZLTQ, LMNS); Professional Aesthetic Device Sector
2 Trailing twelve month revenue
3 Based on FY2014 results
4 June 30, 2015 Balance Sheet
4
Why is Non-Invasive Aesthetic Medicine Growing?
The doctor can take a patient from
This
To this
Photos: Macrene Alexiades, MD
WITH NO SURGERY, MINIMAL DOWN-TIME
AND A HIGH DEGREE OF PREDICTABILITY
Procedure performed with Syneron’s Profound™ device
5
Why is Non-Invasive Aesthetic Medicine Growing?
The doctor can take a patient from
This
To this
Photos: Wendy Tink, MD
WITH NO SURGERY, MINIMAL DOWN-TIME
AND A HIGH DEGREE OF PREDICTABILITY
Procedure performed with Syneron’s UltraShape™ device
6
Strong Shift Toward Non-Invasive Procedures
Invasive Procedures
Non- Invasive Procedures
(Procedures in millions)
(Procedures in millions)
12.0
12.0
10.0
CAGR= 4.02%
10.0
8.0
8.0
6.0
6.0
4.0
4.0
2.0
1.76M
CAGR= 15.75%
8.9M
2.0
.901M
.741M
0.0
0.0
1997
1997
2014
2014
Non-invasive procedures account for 83% and majority of growth
Source: The American Society for Aesthetic Plastic Surgery 2015
7
Superior Technology to Address
Fat Destruction and Body Shaping
Market Opportunity
8
Potential Market for Body Shaping Procedures
154.7M Americans over the age of 20 are overweight or obese(1)
33.5%
Obese
Target
Population
32.6%
Overweight
33.8%
Normal or Underweight
Total Potential US Patient Market Approximately 100M Patients
KEY (Based on BMI(1)) | BMI of 30 or above is obese | BMI of 25-30 is overweight | BMI of 18.5-25 is normal
weight | BMI of 18.5 or lower is underweight
¹ 2013 American Heart Association, Inc.
9
Potential Market for Fat Destruction Procedures
In a survey of 1,045 women in NA 1
32.6%
Overweight
56%
33.8%
Normal or Underweight
indicated interest in non-invasive fat destruction
procedures
Total Addressable Market in the US: 19.5M Patients
1 Syneron
22013
proprietary consumer research, 2012
Census estimates the US population 20 years and older to be 233M;
and that 34.9% of the adult population has personal income of $35,000 or above. 10
2
Women Are Interested in Treating
Multiple Body Areas*
A proprietary Syneron research study of 1045 women, aged 25 and above in NA
concluded that:
51% of women are
not satisfied with
their thighs
58% of women are
not satisfied with
their flanks
54% of women are
not satisfied with
their buttocks
Source: Syneron proprietary consumer survey 2012.
*In the US, UltraShape is currently indicated for treatment of the
abdomen.
72% of women are
not satisfied with
their stomach
49% of woman are
not satisfied with
their back/bra fat
11
Rapid Growth of Non-Invasive Body Shaping
Procedures¹
Liposuction
(# of Procedures in Thousands, US)
Non-Invasive Fat Reduction
(# of Procedures in Thousands, US)
Growth Rate
-5.9%
Growth Rate
42.6%
364
135
95
342
2013
2014
(1) American Society of Aesthetic Plastic Surgery 2014
2013
2014
Physician Qualitative Research Reveals Importance of
Pain-Free Advantage
•
Research Takeaway
• Pain Free represents advancement over existing technologies +
opportunity to tap into growth of body shaping category.
•
Supporting Quotes
• “Over 75% of patients come in to my office and immediately ask
“How much is it going to hurt?" "100% of patients ask about
downtime."
• “Pain-free with no downtime, it’s effective and totally believable.”
• “Pain-free permanent fat removal…BOTTOM LINE!”
13
Market Learnings
•
•
•
•
More than half of the women (56%) are interested in non-invasive fat destruction
A pain free procedure is the #1 consideration for patients
Almost three quarters (72%) of the women are unhappy with their abdomen and
want to remove fat from their stomach
Almost half of the doctors (44%) are looking to buy non-invasive body shaping
equipment
What do women look for in a non-invasive fat destruction treatment?
Syneron is ideally positioned to serve these patient and doctor market needs
14
Broad Body Shaping Portfolio
Holistic Approach to Body Shaping Treatments: Fat Cell Destruction,
Skin Tightening and Cellulite
Targeting
connective tissue
Targeting and
destroying fat
15
UltraShape Pulsed Focused Ultrasound (PFU)
®
 Focused ultrasound energy
 Mechanical acoustic effects
breaks fat cell membranes
 Immediate and permanent fat
cell destruction
 Comfortable – No Pain
 Selective: Skin, vessels,
nerves and connective tissue
remain unharmed
16
Superior Technology for Non Invasive Fat Destruction
Immediate Fat Cell Destruction!
Immediately post single tx
Control
X 40
X 40
UltraShape Technology, In-Vivo Porcine Model: Acute Micro Effects
Brown SA, Greenbaum L, Shtukmaster S, Zadok Y, Ben-Ezra S, Kushkuley L. Characterization of nonthermal focused ultrasound for noninvasive
selective fat cell disruption (lysis): technical and preclinical assessment. Plast Reconstr Surg. 2009 Jul;124(1):92-101
17
Superior Technology for Non Invasive, Immediate Fat Destruction
Highly Selective!
Intact
Blood
Vessel
Fat Cell
Destruction
Intact
Nerves
X100
UltraShape Technology, In-Vivo Porcine Model: Acute Micro Effects
Brown SA, Greenbaum L, Shtukmaster S, Zadok Y, Ben-Ezra S, Kushkuley L. Characterization of nonthermal focused ultrasound for noninvasive
selective fat cell disruption (lysis): technical and preclinical assessment. Plast Reconstr Surg. 2009 Jul;124(1):92-101
18
Superior Technology for Non Invasive, Immediate Fat Destruction
Exceptional Efficacy!
UltraShape MRI Measurement of Fat Thickness
Baseline
Post 3 Tx
Treated Area: Abdomen
Fat Layer Thickness: 4.9 cm
Treated Area: Abdomen
Fat Layer Thickness: 3.8 cm
Fat Thickness Reduction: 1.1 cm Circumference Reduction:
4.5 cm
Leal H. et al, Procedures in Cosmetic Dermatology (book); Focused Ultrasound for Fat Reduction: Ultralipotripsy. pp 107-121 (2010)
19
Superior Technology for Non Invasive, Immediate Fat Destruction
13 published clinical studies with more than 900 subjects treated!
Publication
Year
Patient
Population
Avg. Circumference
Reduction
Teitelbaum S. et al1 US, UK, Japan
2007
164
2.0 cm (1 Tx)
82% > 0.5 cm circumference reduction
Leal H.2,3 Monterrey, Mexico
2009
24
3.0-3.4 cm (1 combo Tx)
96% > 1.5 cm circumference reduction
100% patient satisfaction
Moreno-Moraga J1 Madrid, Spain
2007
30
3.95 cm (3 tx)
Leal H.2,3 Monterrey, Mexico
2008
36
5.0 cm (3 tx)
Ad El D.2,3 Beilinson Med, Israel
2008
26
3.96 cm (3 tx)
Mulholland S.2 Toronto, Canada
2008
21
Inglefield C.2 London, UK
2007
148
3.48 cm (3 tx)
6.3 cm (3 tx)
de Almeida G.2 Sao Paulo, Brazil
2007
20
Benchetrit A.2 Montreal, Canada
2010
109
Niwa A. 1 São Paulo, Brazil.
2010
120
4.95 cm (3 tx)
Ascher B.1 Paris, France
2010
25
3.58 cm (3 tx)
90% reported no pain
S.-L. Chang1,2 Taiwan
2013
32
3.91 cm (3 tx)
21.4% and 25% reduction in fat thickness
measured by MRI
Weiss, Coleman, Kenkel, Ad-El3 US, Israel
2013
32
3.34cm (3 tx)
100% reported very low pain levels
Investigator
5.4 cm (3 tx)
4.5 cm (3 tx)
Results
100% measurable and visual improvement
100% measureable reduction
94% patient satisfaction
90% > 2.0 cm circumference reduction
86% patient satisfaction
93% patient satisfaction
100% measurable reduction
86% patient satisfaction
96% measurable reduction
86% patient satisfaction
92% measurable reduction
94% reported comfortable treatment
Average circumference reduction ranges from 3.3 to 6.3 cm (one to three pant
size reduction)
Average response rate ranged from 83% to 100%
1Published
in peer-reviewed journal 2Presented in scientific conference 3Data on file
20
UltraShape Three Treatment Results
®
Upper/ Lower Abdomen
Pre-Treatment
4 Weeks Post
Treatment
Pre-Treatment
Reduction  -4.7 cm upper, -5.4 cm
lower abdomen
4 Weeks Post Treatment
Reduction -5 cm
Weight change -2.2Kg
Weight change -2.2Kg
Courtesy of Dr. Arie Benchetrit, Montreal, Quebec
21
21
UltraShape Three Treatment Results
®
Flanks
Pre-Treatment
2 Months Post Treatment
Pre-Treatment
2 weeks Post Treatment
Reduction -14 cms
Reduction -10 cms
Weight change -3.2Kg
Weight change -3.2Kg
Courtesy of Dr. Wendy Tink, Vive Clinic – Calgary, Alberta
22
22
New FDA cleared: 25% power increase and VDF protocol
Control
Regular protocol
Immediate Fat Destruction
U.S. Launch in Q2 2015
In-vivo Porcine Model: Acute Macro Effects
23
VDF Multi-Focus
More Fat Volume Destruction
Per Pulse
UltraShape Non-Invasive Fat Destruction
UltraShape Treatments
•
•
Tracking&
GuidanceCamera
•
•
Tracking&
GuidanceMonitor
•
Effective - 1 to 3 pant size reductions
Comfortable – No pain, Excellent Safety
Record
Results seen as early as 2 weeks post
treatment
Flexible - Any shape and size of fat pocket
can be treated with the VDF and U-Sculpt
applicators
Quick - enables enhanced patient
throughput – Less than 1 hour needed for
full abdominal treatment
UltraShape System
•
•
•
•
•
•
24
Computer Guided treatment
Intuitive graphic guidance monitor
Fast learning curve
Treatment can be delegated to staff
Fast, full abdomen in less than 1 hour
Supports applicator and software
upgrades
High Margin Recurring Revenue Business Model
UltraShape Consumer Business Model
Revenues from Consumables
Revenues from Capital Equipment
• Consumables will be sold in the form of
Focal Treatment Zones (FTZ)
• Average abdominal treatment requires
10 FTZ’s
• Practice purchases FTZ’s based on
patient volumes
• Cost of FTZs represents 25%-33% of
treatment revenue charged by physician
System List Price $109,000*
FTZ List Price: $25
UltraShape GM Over 70%
* List price as of August 2015
25
UltraShape Practice Value Proposition
®
• New technology provides clinic
differentiation – attracts new patients
• Cross selling opportunities with other
offerings – attracts new patients
• Practice Development Partner (PDP)
marketing and clinical support for
practice
• Computer guided treatment
- Easy to learn & use
- High staff acceptance
• 10 new patients per month
(20 treatments per month) =
$220,000 - $250,000 in annual revenue
26
Ultrashape Launch – Marketing Campaign
 Raise consumer awareness and
Interest in Ultrashape as a
breakthrough body shaping solution
 Establish Ultrashape’s competitive
edge to become the category leader
 Support Ultrashape’s practices with
consumer demand building tools via
Co-op program
UltraShape Brand Ambassador Larisa Pippen
Consumer Campaign
Practice Campaign
• Consumer website
• Collateral materials
• PR campaign
• Digital campaign (banners, text)
• Digital campaign
• PDP program
• Search Engine Marketing
• Marketing Incentive program
• Print campaign
• Print campaign
27
UltraShape® 2015 Target Customers
• Differentiate practice
• Differentiate practice
• Complementary to
VelaShape
• Painless; low side
effect profile
• New marketing
program
• New marketing
program
• Offer latest Immediate Fat
Destruction technology
• Alternative for “painsensitive” patients
• Correcting unevenness
from Lipo/other devices
• Can treat any size and
shape of fat pocket
28
UltraShape®: A Game Changer for Syneron Candela
• 2015 year-to-date U.S. – 94 systems sold
• Planned 2015 revenue: $20M
• $65M-$100M in UltraShape revenues within 3 years
• Above 70% gross margin on UltraShape business
• 50% capital equipment and 50% recurrent revenues within 3 years
• Achieving a long term win-win partnership with our customers
• International re-launch in 2016, expanding recurring revenue business model
29
Broad Body Shaping Portfolio
Holistic Approach to Body Shaping Treatments: Fat Cell Destruction,
Skin Tightening and Cellulite
Targeting
connective tissue
Targeting and
destroying fat
30
VelaShape III
Cellulite, Skin Laxity, Circumferential Reduction
• FDA cleared for the treatment of
cellulite and circumferential
reduction (abdomen and thighs)
• Increased RF Power by a factor
of 2.5 to 150W
• Single treatment with an
average abdominal
circumferential reduction of
2.5cm and 100% patient
responders
31
Treatment of Skin Laxity with VelaShape Technology
Before
After
Photos: Regine Bousquet, MD
32
VelaShape III - Single Treatment Protocol
42 patient trial
Average Abdominal Circumference
Reduction
% of Patients with CR of at least 1cm, 1.5cm and 2cm
1 cm
Mean abdomen circumference reduction
1.5 cm
2 cm
3.5
100%
3
2.6
80%
80%
67%
2
60%
1.8
1.5
40%
1
0.8
55%
36%
27%
20%
0.5
0 0
Baseline
71%
[%]
[cm]
2.5
100%
4 weeks
7 weeks
10 weeks
0%
0%
Baseline
33
4 weeks
7 weeks
10 weeks
Body Shaping as a Growth Driver - Leveraging Our Strengths
•
Installed base of close to 15,000 systems in NA out of which 2,000
are body shaping systems
•
Superior technology platforms
•
Ability to offer comprehensive body shaping solutions for all major
indications (Non-Invasive Fat Destruction, Skin Laxity, Cellulite,
Circumference)
•
Cross selling opportunities with other devices
34
Body Division
Creating Bifurcated Body Shaping Business Group (team of 50-60 reps by end of 2015)
Practice Development
Partners (PDP’s)
Territory Managers For
Capital Sales
• Focus on educating practices
• Initial Focus on Installations
• Provide marketing support
• Expansion of installed base
• Drive utilization of Focal
• Ensure healthy pipeline
Treatment Zones (FTZs)
• Targeting 2,000 VelaShape NA installed base and users of competitive systems
• Potential for bundling with VelaShape
35
PicoWay Breakthrough Technology for Tattoo Removal and
Treatment of Pigmented Lesions
Dual wavelength PicoWay - Shortest Picosecond Pulse, Highest Peak Power
36
PicoWay – Shortest Picosecond Pulse, Highest Peak Power
Dual wavelength picosecond laser to treat tattoos of all types and colors, and
pigmented lesions on any skin type
•
FDA Clearance in late Oct. 2014 for removal of tattoos of all
colors; April 2015 for pigmented lesions
•
•
Investing in sales & marketing to support launch
US potential market for tattoo removal procedures: $11.4B - $22.7B1
•
Received CE Mark in July 2014 for removal of tattoos of all
colors and pigmented lesions
•
Received Korean regulatory clearance in July 2015
•
$260K list price and 15-20% higher gross margin on top of
current gross margin levels
•
Growth driver with $7.3M in revenue in 1H 2015
¹ 2013 Census; 21% of adults in America have at least one tattoo; The Harris Poll, 2012 Harris Interactive; 14%
of those with a tattoo regret their tattoo; The Harris Poll, 2012 Harris Interactive; Estimated average tattoo
removal procedure fee is $400; 4-8 treatments required
37
Candela global installed
base of ~1,400 dedicated
tattoo removal & pigmented
lesion lasers and >11,000
platforms that include
pigmented lesion indications
PicoWay – Shortest Picosecond Pulse, Highest Peak Power
•
Treat widest range of tattoos & pigmented lesions
2 wavelengths + ultra-short 450 picosecond pulses enable
treatment of more patients than single wavelength picosecond
units
•
Compared to other picosecond or Q-switched lasers
PicoWay’s ultra-short pulses optimizes the photoacoustic
pressure on the target better than any device, shattering the ink
with the least amount of heat transferred into the skin
•
Pulse-on-demand
Lower cost of ownership than other picosecond laser systems
which run continuously throughout the day
•
Compact system
Fast and easy to use
•
Upgradability
Additional applications and upgrades
38
PicoWay Treatment Results
Tattoo Removal and Pigmented Lesion
39
Facial Aesthetics Treatments
Growing Demand for High-End Facial Treatments
** Syneron Candela proprietary online consumer survey 2015
Assuming household income of >$50,000, US Census Bureau June 2014
Assuming treatment price of $5,000
Comprehensive Solution for Most In-Demand
Facial Concerns
Facial concerns for women over the age of 35*:
* Syneron Candela proprietary online consumer survey 2015
Profound ™ Facial Aesthetics Treatments
•
•
•
•
Minimally invasive microneedle electrode array with unique real-time
temperature controlled RF
Creates dermal volume, naturally, to answer a big challenge
physicians doing aesthetic treatments have: how to replace lost volume
in aging skin
One treatment. One hour. 100% response. 2.6 years younger skin
Long lasting and Predicatible results due to complete control over
temperature endpoints and duration of treatment
 Recurring revenue model ($400 disposable tip)
 Dedicated U.S. sales force under the Aesthetics
Division
Clinically Proof: New Elastin, Collagen & Hyaluronic Acid
Histological studies confirm that Profound yields neoelastogenesis and neocollagenesis
Profound Results in a Single Treatment
Iluminage Beauty - Unilever Syneron Joint Venture
Structure
Strategic Rationale
• Build on investments in Syneron Beauty to
create focused home beauty device
business with enhanced growth and
profitability profile
• Unilever participation provides additional
validation of Syneron Beauty and robust
home-use beauty device market
• Eliminate impact of Syneron Beauty on
consolidated financials and cash flow while
retaining upside potential
• Allows Syneron Medical to focus on the
significant opportunities in the professional
business
• Improves core business margins and
profitability
• Agreement closed December 8, 2013
• Global joint venture with Unilever to include:
- Syneron Beauty
- Iluminage (Unilever subsidiary)
- $25 million Unilever investment
• Ownership: Unilever 60% / Syneron 40%
(Based on: Unilever preferred shares,
Syneron ordinary shares)
• Management / Board of Directors
- Shimon Eckhouse – Chairman
- Syneron 2 seats / Unilever 2 seats / 1
independent director/ Unilever entitled
to add 2 directors
• Valuation based on the Fair Value of the JV,
$20.8M as of July 2015
July 2015 – Iluminage Beauty sold teeth whitening technology to Colgate-Palmolive
• Received ~$10 million dollars and a mid-single digit percent earn-out on product sales
• Entered into a Supply Agreement with Colgate-Palmolive for the teeth whitening product
45
Additional Potential Business Opportunities
CoolTouch™ opportunity
elure™ opportunity
Strengthens recurring revenue strategy;
Entry into new markets
Addresses growing skin lightening
market, especially in Asia
• Integration on track
• Signed a distribution agreement in Korea
• FDA clearance received October 31, 2014 for our OEM 30-Watt Holmium Laser for breaking of kidney stones and
soft tissue urological work
• Signed a distribution agreement in China – In
discussion with large chains, commercial as of Q1
2015
• Addressing the lucrative vein treatment market with high
recurring revenue component
• Japan – in discussions with strong local potential
partners
• 6 dedicated sales reps in U.S. are on board
Revenue Highlights for Q2 2015
•
Constant currency revenue growth of 19%
–
–
Revenue negatively impacted by $3.1 million due to changes in foreign currency exchange
rates
Primarily devaluation of the Euro and Japanese Yen against the U.S. dollar
•
Total revenue was $73.5 million, up 13.8% y/y
•
Recurring revenue was $19.3 million, down (1.8%) y/y, sequentially up $1.5M
Y/Y Revenues ($M)
76
74
72
70
14% (19% cc)
Total Revenues
North America
International
Total
Revenue ($M)
27.6
45.9
73.5
Reported Growth
26%
8%
14%
Constant Currency Growth
26%
15%
19%
19.6
18.0
15.4
1.2
45%
9%
16%
(21%)
32%
14%
25%
(21%)
54.2
21%
25%
68
66
64
62
60
Q2 14
Q2 15
NA Product
EMEA Product
APAC Product
LATAM Product
Total Product Revenues
47
Financial Highlights 5Q Trend (Non-GAAP)
$ Thousands (except per margins)
Q2 14
Revenues
64,618
Q3 14
Q4 14
Act
60,257 74,062
Q1 15
Q2 15
Y2013
63,399
73,507
Act
232,129 255,750
6.1%
8.3%
23.7%
11.6%
13.8%
Cost Of Revenue
Gross Profit
29,609
35,009
26,775
33,482
32,810
41,252
29,654
33,746
33,904
39,603
105,187 115,592
126,943 140,158
GM %
Total OPEX
54.2%
31,851
55.6%
30,858
55.7%
36,050
53.2%
32,631
53.9%
36,663
54.7%
54.8%
115,170 127,283
% OPEX
49.3%
51.2%
48.7%
51.5%
49.9%
49.6%
49.8%
EBIT
3,158
2,624
5,202
1,115
2,940
11,773
12,875
4.9%
4.4%
7.0%
1.8%
4.0%
5.1%
5.0%
228
3,386
900
(764)
1,860
920
(316)
4,886
1,696
(243)
872
262
409
3,349
900
221
11,994
-1,431
(688)
12,187
4,243
27%
49%
35%
30%
27%
2,486
940
3,190
610
2,449
13,525
7,944
37,237 37,228 37,128
0.07
0.03
0.09
37,328
0.02
37,283
0.07
36,254
0.37
37,160
0.21
YOY change, %
Operating Margin
Financial Income (expenses), net
Pre Tax Income
Taxes on Income (tax benefit)
Tax rate
Net Income
Avg Shares
EPS ($)
(3.8%)
Y2014
(*) Y2014 year-over-year comparison to Y2013 is on a pro-forma basis, excluding Syneron Beauty from Y2013 results following its de-consolidation as of December 8, 2013
48
10.2%
Q2 2015 Highlights
80.0
70.0
Y/Y Revenues ($M)
73.5
26%
27.6
21.9
40.0
26% const curr
Revenue by Geography
38%
8%
30.0
20.0
19% const curr
64.6
60.0
50.0
14%
42.7
45.9
Q2 14
Q2 15
62%
15% const curr
10.0
International
International
North America
Product Revenue ($M)
60.0
Revenue Mix
54.2
45.0
50.0
25%
40.0
North America
15.4
16% const curr
18.1
14% const curr
19.6
45% const curr
26%
13.4
30.0
9%
74%
16.6
20.0
45%
10.0
13.5
Q2 14
Total NA
Total EMEA
Q2 15
Total APAC
Product
Total LATAM
49
Recurring
Select Financial (Non-GAAP) Items as of Q2 15*
Gross Margin %
54.5%
•
55.6%
(cc)
54.2%
53.9%
54.0%
53.5%
Gross margin of 53.9% vs. 54.2% in Q2
2014
•
53.2%
•
1.7% negative impact from changes in
foreign currency exchange rates
Constant currency GM of 55.6%
53.0%
52.5%
Q2-2014
Q1-2015
Q2-2015
•
Operating Margin %
6.0%
•
4.9%
4.0%
4.0%
1.8%
2.0%
Operating margin of 4.0% vs. 4.9% in Q2
2014
5.7%
(cc)
•
Includes net negative impact of ~$1.5
million related to changes in foreign
currency exchange rates
Constant currency OM of 5.7%
0.0%
Q2-2014
Q1-2015
•
Q2-2015
•
EPS ($)
0.10
0.07
0.05
0.07
0.02
0.09
(cc)
•
EPS of $0.07 vs. $0.07 in Q2 2014
•
Q2-2014
Q1-2015
Q2-2015
50
Expecting to add $3-4M S&M in 2H15 vs
1H15
Expecting OM 4.5% for the full year 2015,
or 5.5%-6% in constant currency for 2015
Q2 2015 EPS would have been $0.09
excluding changes in foreign currency
exchange rates
Select Balance Sheet Items as of June 30, 2015
•
$92.3 million in cash and cash equivalents
at June 30, 2015
Cash Position ($M)
120.0
•
Used $5.4 million in cash from operations in
Q2 2015
•
•
100.0
•
100.4
92.6
Q1 14
Q2 14
Q3 14
99.9
60.0
40.0
20.0
-
Q2 2015 - repurchased 55,025 shares at
avg. price of $10.94 for $0.6 million
Since inception (Dec 2014), repurchased
431,677 shares at an avg. price of $11.1
for $5.0 million
Q4 14
Q1 15
Q2 15
Cash Flow from Operations ($M)
13.3
15.0
•
92.3
80.0
Reflects investments in inventory to
support anticipated growth in 2015 and
increased working capital related to the
Company’s increasing volumes
$20M share repurchase program:
•
110.4
96.4
DSO of 76 vs. 81 days in Q2 2014
10.0
•
Expecting to drive further improvements in
DSO, which combined with more normalized
inventory levels and spending, will put
Company back on track to generate positive
cash flow from operations
3.7
5.0
4.9
(5.0)
(10.0)
51
(4.0)
(6.5)
(4.9)
(5.8)
(5.5)
Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15
2014 Highlights*
Y/Y Revenues ($M)
300.0
250.0
200.0
10.2%
232.1
15.3%
79.6
60.0%
255.8
50.0%
30.0%
7.4%
152.5
0.37
40.0%
91.8
150.0
100.0
0.19
163.9
10.0%
0.0
0.0%
2.1%
International
0.21
0.28^
20.0%
50.0
2013
54.8%
54.7%
53.0%
2013
2014
5.1%
2013 (ex-Syneron
Beauty)
5.0%
2014
North America
Gross Margin %
Operating Margin %
EPS ($)
^ 2013 EPS would have been $0.28 excluding one-time tax settlement
Cash Position ($M)
Cash Flow from Operations ($M)
115
30
110.4
110
17
20
108.5
10
0
105
-10
-10
-20
100
2013
2014
-30
-23
2013
*The full year 2014 year-over-year comparisons to the full year 2013 are on a pro-forma basis, excluding
Syneron Beauty from the full year 2013 results following its de-consolidation as of December 8, 2013
52
2013 (ex-Syneron
Beauty)
2014
$0.50
$0.45
$0.40
$0.35
$0.30
$0.25
$0.20
$0.15
$0.10
$0.05
$0.00
Thank you!