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PhotoMedex Inc. Reports Operating Results (10-Q)

November 13, 2012 | About:

10qk

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PhotoMedex Inc. (PHMD) filed Quarterly Report for the period ended 2012-11-13.

Photomedex, Inc. has a market cap of $244.6 million; its shares were traded at around $11.77 with a P/E ratio of 9 and P/S ratio of 1.9.

Highlight of Business Operations:

International (excluding North America). In the international consumer segment, sales were approximately $16.0 million and $10.3 million for the three months ended September 30, 2012 and 2011, respectively. In the international consumer segment, sales were approximately $37.6 million and $29.7 million for the nine months ended September 30, 2012 and 2011, respectively. We utilize various sales and marketing methods including sales by direct-to-consumer, sales to retailers and home shopping channels. Our main international markets are Japan, United Kingdom, Argentina and Australia. Our distribution has become geographically diverse over the past year; for example, as revenues have increased, our Japanese distributor, Ya-Man, Ltd., accounted for approximately 14% and 10% of our total revenues for the three and nine months ended September 30, 2012, compared to 24% and 23% of total revenues for the three and nine months ended September 30, 2011.

Direct to Consumer. Revenues for the three months ended September 30, 2012 were $30,001 compared to $18,614 for the same period in 2011. Revenues for the nine months ended September 30, 2012 were $95,211 compared to $57,945 for the same period in 2011. The increase of 61% and 64%, respectively, were mainly due to our successful marketing programs which have led to rapid year-over-year revenue growth. Additionally, in May 2011, we launched marketing programs in the United Kingdom (“UK”), resulting in approximately $3,278 and $10,244 in revenues for the three and nine months ended September 30, 2012, respectively, compared to $1,381 and $2,024 in revenues for the three and nine months ended September 30, 2011, respectively.

For the three months ended September 30, 2012, dermatology equipment revenues were $728. Included in this amount were domestic XTRAC laser sales of $105 on 3 lasers sold. For the nine months ended September 30, 2012, dermatology equipment revenues were $3,380. Included in this amount were domestic XTRAC laser sales of $899 on 20 lasers sold. We sell the laser directly to the customer for certain reasons, including the costs of logistical support and customer preference. Our preference is to consign lasers to customers which will thrive under the per-procedure model. The international sales of our XTRAC and VTRAC systems were $623 for the three months ended September 30, 2012. We sold 26 systems for the three months ended September 30, 2012, 19 of which were VTRAC systems, a lamp-based alternative UVB light source that has a wholesale sales price that is below our competitors international dermatology equipment and below our XTRAC laser. The international sales of our XTRAC and VTRAC systems were $2,481 for the nine months ended September 30, 2012. We sold 93 systems for the nine months ended September 30, 2012, 63 of which were VTRAC systems, a lamp-based alternative UVB light source that has a wholesale sales price that is below our competitors international dermatology equipment and below our XTRAC laser.

Gross profit increased to $45,400 for the three months ended September 30, 2012 from $26,603 during the same period in 2011. As a percentage of revenues, the gross margin increased to 80.1% for the three months ended September 30, 2012 from 76.6% for the same period in 2011. Gross profit increased to $130,990 for the nine months ended September 30, 2012 from $83,279 during the same period in 2011. As a percentage of revenues, the gross margin decreased to 79.0% for the nine months ended September 30, 2012 from 80.6% for the same period in 2011.

Gross profit for the three months ended September 30, 2012 increased by $128 from the comparable period in 2011. Gross profit for the nine months ended September 30, 2012 increased by $1,340 from the comparable period in 2011. The key factor for the increases was the increase in revenues. For the three months ended September 30, 2012, the gross margin percentage was 42.6% compared to 62.0% for the three months ended September 30, 2011. For the nine months ended September 30, 2012, the gross margin percentage was 44.8% compared to 63.1% for the nine months ended September 30, 2011. The decrease was due to the addition of the Pre-merged PhotoMedex products. The Dermatology equipment, Omnilux/Lumiere equipment and Surgical laser revenues in this segment are all generated through the Pre-merged PhotoMedex products. As we completed the reverse acquisition on December 13, 2011 these revenues/costs are included only from the completion date forward. There were no corresponding revenues/costs for the periods ended September 30, 2011.

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