Thursday, Cynosure Inc. (CYNO), a manufacturer of cosmetic and medical lasers, announced that it expects to report a loss for the fourth-quarter, compared to profit last year, reflecting the global economic downturn and weakening credit environment.
The company sells 16 different aesthetic treatment systems that use lasers or pulsed light technologies. Cynosure's beauty treatment systems, which are FDA-approved, involve non-invasive procedures to remove hair, treat vascular lesions, rejuvenate skin, temporarily reduce the appearance of cellulite, treat wrinkles, skin texture, skin discoloration and skin tightening, and to perform minimally invasive procedures for LaserBodySculpting for the removal of unwanted fat.
On a GAAP basis, the company anticipates quarterly net loss of $2.2 million to $2.7 million, or $0.17 to $0.21 per share, compared with net income of $5.3 million or $0.41 per share for the same period in 2007.
GAAP loss is expected to include a bad debt charge of about $2.5 million. This charge is related to uncollectible accounts from certain customers affected by the overall economic environment and the tightening of credit markets, which subsequently caused a number of practitioners to be unable to meet their payment obligations.
The company's revenue for the quarter is anticipated to range between $25 million and $26 million, down from $36.6 million reported in the comparable quarter a year before.
Wall Street analysts expect the company to earn $0.39 per share, on revenue of $38.58 million. Analysts' estimate typically excludes one-time items.
Cynosure is scheduled to announce its full financial results for the fourth quarter and full year period ended December 31, 2008 before the opening of the market on Tuesday, February 10, 2009.
Cynosure President and CEO Michael Davin said, "The effect of the global economic crisis on the aesthetic laser industry has been swift and severe, hampering the ability of many prospective customers to obtain financing and prompting others to delay their capital equipment purchases until conditions improve."
The company noted that in response to the economic challenges, it is taking actions to reduce its cost structure. Cynosure said it has reduced its worldwide headcount by 17% to approximately 285 employees at the end of the 2008.
The company also revealed that it has decreased spending on various programs, implemented general cost-control initiatives and undertaken other actions intended to lower its operating expenses in 2009. The cost-cutting measures are expected to result in an annualized operating expense savings of about $8 million to $10 million in 2009.
CYNO closed Wednesday's trade at $8.61. For the past 12 months, the stock has traded in the range of $6.64 - $28.24.
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