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PhotoMedex Inc. Reports Operating Results (10-Q)

August 16, 2010 | About:
10qk

10qk

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PhotoMedex Inc. (PHMD) filed Quarterly Report for the period ended 2010-06-30.

Photomedex Inc. has a market cap of $15.58 million; its shares were traded at around $5.62 with and P/S ratio of 0.48. Photomedex Inc. had an annual average earning growth of 0.3% over the past 5 years.

Highlight of Business Operations:

Recognized treatment revenue for the three months ended June 30, 2010 and 2009 for domestic XTRAC procedures was $2,532,957 and $2,635,623, respectively, reflecting billed procedures of 39,074 and 35,602, respectively. In addition, 1,400 and 1,221 procedures were performed in the three months ended June 30, 2010 and 2009, respectively, without billing from us, in connection with clinical research and customer evaluations of the XTRAC laser. Recognized treatment revenue for the six months ended June 30, 2010 and 2009 for domestic XTRAC procedures was $4,754,854 and $4,672,627, respectively, reflecting billed procedures of 76,115 and 71,346, respectively. In addition, 2,791 and 3,026 procedures were performed in the six months ended June 30, 2010 and 2009, respectively, without billing from us, in connection with clinical research and customer evaluations of the XTRAC laser. The increase in procedures in the periods ended June 30, 2010 compared to the comparable periods in 2009 was largely related to our increased marketing programs. Increases in procedures are dependent upon building market acceptance through marketing programs with our physician partners and their patients demonstrating that the XTRAC procedures will be of clinical benefit and generally reimbursed.

Management believes this approach closely approximates the actual amount of unused treatments that existed at the end of a period. For the three months ended June 30, 2010 and 2009, we recognized net revenues of $17,801 (277 procedures) and $298,881 (4,554 procedures), respectively. For the six months ended June 30, 2010 and 2009, we deferred net revenues of $130,380 (2,031 procedures) and $22,152 (337 procedures), respectively.

For the three months ended June 30, 2010 and 2009, domestic XTRAC laser sales were $1,163,046 and $523,680, respectively. There were 25 and 11 lasers sold during these periods, respectively. For the six months ended June 30, 2010 and 2009, domestic XTRAC laser sales were $1,291,246 and $1,161,985, respectively. There were 29 and 25 lasers sold during these periods, respectively. We sell the laser directly to the customer for certain reasons, including the costs of logistical support and customer preference as well as a means of addressing under-performing accounts while preserving the vendor-customer relationship. We believe that we are thus able to reach, at reasonable margins, a sector of the laser market that is better suited to a sale model than a per-procedure, or consignment, model.

For the three months ended June 30, 2010 revenues were $1,311,524 compared to $1,416,311 in the three months ended June 30, 2009. For the six months ended June 30, 2010 revenues were $2,555,897 compared to $2,832,465 in the six months ended June 30, 2009. These revenues are generated from the sale of various skin, hair care and wound products to physicians in the domestic market. We believe our skincare products are more susceptible to the macro-economic conditions than our other products because cosmetic products are more likely to be discretionary and not medically necessary.

International sales of our XTRAC and VTRAC laser systems and related parts were $667,257 for the three months ended June 30, 2010 compared to $1,090,607 for the three months ended June 30, 2009. We sold 15 and 25 systems in the three-month periods ended June 30, 2010 and 2009, respectively. International sales of our XTRAC and VTRAC laser systems and related parts were $1,299,262 for the six months ended June 30, 2010 compared to $2,059,691 for the six months ended June 30, 2009. We sold 31 and 40 systems in the six-month periods ended June 30, 2010 and 2009, respectively. The average price of dermatology equipment sold internationally varies due to the quantities of refurbished domestic XTRAC systems and VTRAC systems sold. Both of these products have lower average selling prices than new XTRAC laser systems. However, by adding these to our product offerings along with expanding into new geographic territories where the products are sold, we have been able to increase overall international dermatology equipment revenues.

For the three months ended June 30, 2010 revenues were $326,409 compared to $207,483 in the three months ended June 30, 2009. For the six months ended June 30, 2010 revenues were $687,980 compared to $479,167 in the six months ended June 30, 2009. These revenues are generated from the sale of various skin, hair care and wound products to distributors in international markets. The increase was due to increased volume with existing distributors.

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