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Lumenis ups guidance as aesthetic market strengthens

05 Aug 2014

Product sales climb 10% in second quarter at the Israeli medical laser company.

Lumenis, the Israeli medical laser firm that recently listed on the Nasdaq exchange, has lifted its expectations for both revenues and earnings this year following continued strong sales growth for aesthetic applications.

In the second quarter of the year, the Yokneam-headquartered company posted total revenues of $72.5 million, an increase of around 9 per cent on last year’s figure.

Reporting encouraging early adoption of the company’s new hair-removal products, CEO Tzipi Ozer-Armon told investors: “Our performance in the second quarter is the outcome of both strong fundamentals and improved business activity in all three segments, led by our aesthetic business.”

On a standard US accounting, or “GAAP”, basis, the company’s profits were actually down sharply on last year’s second quarter – although that included a $7.1 million one-off benefit relating to a legal settlement.

But excluding the legal payment, Lumenis reported earnings before interest, tax, depreciation and amortization (EBITDA) of $7.7 million, up more than 30 per cent compared with a year ago.

In terms of segment sales, aesthetic applications registered a 22 per cent increase, to $31.4 million for the period. Surgical applications, which largely relates to urological procedures, increased very slightly to $27 million, with ophthalmic sales also flat at $14 million.

In terms of geographic sales, the Asia-Pacific region was Lumenis’ strongest, accounting for $26.9 million in revenue. The Europe, the Middle East and Africa and Japanese regions registered the strongest rates of growth, with sales up by 20 per cent and 23 per cent respectively. Sales to the Americas declined by 5.4 per cent to $22 million.

Lumenis corporate video: the Pulse 120H holmium laser system:

Guidance lifted
Ozer-Armon said that the company’s introduction of new products and solid demand gave her confidence for the remainder of this year, prompting a slight increase in financial expectations. Lumenis now expects to post annual sales of between $284 million and $287 million, up $2 million on earlier predictions. EBITDA should also come in slightly higher than previously forecast.

The CEO pointed out that the company’s aesthetic business unit had now registered a double-digit sales increase for five consecutive quarters, indicating the growing importance of this sector for medical laser firms.

Demand for hair removal and skin-tightening procedures are behind that growing market, with Ozer-Armon highlighting Lumenis’ introduction of “Infinity”, a hair removal product offering two laser wavelengths: 805 nm for all skin types and 1060 nm for those with tanned or darker skin.

“We expect to see sales ramping up for the Infinity in the second half of 2014,” she told an investor conference call to discuss the latest results. “In the last three quarters we’ve introduced three products, one for skin rejuvenation and two for hair removal. All have been very well received in the market and we’ve seen a faster adoption by early adopters [than usual].”

More rapid sales growth is expected in the surgical sector next year, Ozer-Armon added, explaining that this should occur once the company’s “Pulse 120H” holmium laser system for prostate procedures gains a foothold in clinics.

“We are getting extremely positive feedback from our customers on our newly introduced products, [and] our research and development pipeline is progressing according to plan and our team is focused on enhancing profitability,” she said.

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