GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

PhotoMedex Inc. Reports Operating Results (10-Q)

November 16, 2009 | About:
insider

10qk

18 followers
PhotoMedex Inc. (PHMD) filed Quarterly Report for the period ended 2009-09-30.

Photomedex, Inc. develops, manufactures and markets therapeutic excimer laser-based instrumentation designed to treat psoriasis and vitiligo. They are also developing their technology for the treatment of other skin disorders. They've received the first Food and Drug Administration, or FDA, approval to market an excimer laser system, XTRAC system, for the treatment of psoriasis. They have commercially launched the XTRAC system in the United States. Photomedex Inc. has a market cap of $10.3 million; its shares were traded at around $0.78 with and P/S ratio of 0.3.

Highlight of Business Operations:

Revenues from our Surgical Services segment, in the amount of $736,298 and $4,398,047 for the three and nine months ended September 30, 2008, respectively, have been accounted for in 2008 as a discontinued operation.

Recognized treatment revenue for the three months ended September 30, 2009 and 2008 for domestic XTRAC procedures was $2,467,887 and $1,967,748, respectively, reflecting billed procedures of 36,632 and 36,079, respectively. In addition, 1,846 and 1,800 procedures were performed in the three months ended September 30, 2009 and 2008, respectively, without billing from us, in connection with clinical research and customer evaluations of the XTRAC laser. Recognized treatment revenue for the nine months ended September 30, 2009 and 2008 for domestic XTRAC procedures was $7,140,514 and $5,870,803, respectively, reflecting billed procedures of 107,978 and 98,374, respectively. In addition, 4,872 and 4,449 procedures were performed in the nine months ended

We have a program to support certain physicians who may be denied reimbursement by private insurance carriers for XTRAC treatments. We recognize service revenue under this program from the sale of XTRAC procedures or equivalent treatments to physicians participating in this program only to the extent the physicians have been reimbursed for the treatments. For the three months ended September 30, 2009, we deferred net revenues of $5,245 (82 procedures) under this program compared to deferred net revenues of $15,496 (238 procedures) for the three months ended September 30, 2008. For the nine months ended September 30, 2009, we deferred net revenues of $9,146 (140 procedures) under this program compared to deferred net revenues of $74,343 (1,139 procedures) for the nine months ended September 30, 2008. The change in deferred revenue under this program is presented in the table below.

We defer substantially all sales of treatment codes ordered by and delivered to the customer within the last two weeks of the period in determining the amount of procedures performed by its physician-customers. 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 September 30, 2009, we recognized net revenues of $125,803 (1,963 procedures) and for the three months September 30, 2008, we deferred net revenues of $367,199 (5,636 procedures), respectively, under this approach. For the nine months ended September 30, 2009, we recognized net revenues of $107,552 (1,649 procedures) and for the nine months ended September 30, 2008, we deferred net revenues of $474,877 (7,277 procedures), respectively, under this approach.

For the three and nine months ended September 30, 2009, domestic XTRAC laser sales were $1,078,890 and $2,240,875, respectively. There were 35 and 60 lasers sold, respectively. For the three and nine months ended September 30, 2008, domestic XTRAC laser sales were $1,034,130 and $2,675,780, respectively. There were 20 and 51 lasers sold, 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 able to reach a sector of the laser market that is better suited to a sale model than a per-procedure, or consignment, model at reasonable margins.

International sales of our XTRAC and VTRAC laser systems and related parts were $819,568 for the three months ended September 30, 2009 compared to $1,096,853 for the three months ended September 30, 2008. We sold 18 and 25 systems in the three-month periods ended September 30, 2009 and 2008, respectively. International sales of our XTRAC and VTRAC laser systems and related parts were $2,879,259 for the nine months ended September 30, 2009 compared to $2,963,031, for the nine months ended September 30, 2008. We sold 58 and 63 systems in the nine-month periods ended September 30, 2009 and 2008, respectively. The average price of dermatology equipment sold internationally varies due to the quantities of refurbished domestic XTRAC systems and VTRACs 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.

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 4.5/5 (2 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK