Syneron Medical Ltd. Investor Presentation February 2015
Safe Harbor For Forward Looking Statements Any statements contained in this presentation regarding future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Further, any statements that are not statements of historical fact (including statements containing "believes," "anticipates," "plans," "expects," "may," "will," "would," "intends," "estimates" and similar expressions) should also be considered to be forward-looking statements. There are a number of important risks and factors that could cause actual results or events to differ materially from those indicated by forward-looking statements in this presentation, including the risks set forth in Syneron Medical Ltd.'s most recent Annual Report on Form 20-F, and the other factors described in the filings that Syneron Medical Ltd. makes with the SEC from time to time. If one or more of these risks or factors materialize, or if any underlying assumptions prove incorrect, Syneron Medical Ltd.'s actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by the forward-looking statements in this presentation. Non-GAAP Financial Measures The following presentation includes certain "non-gaap financial measures" as defined in Regulation G under the Securities Exchange Act of 1934. A schedule is included in the company s Q3 2014 press release, which reconciles our results as reported under General Accepted Accounting Principles and the non-gaap financial measures included in the following presentation. 2
Syneron at a Glance A global leader in medical aesthetic devices Growing aesthetic market and consumer demand for energy based non-invasive procedures Largest worldwide presence in sales, distribution, service network and installed based 3
Drivers of Profitable Growth 1. Superior technology for non invasive Fat Destruction (UltraShape) and Body Shaping (VelaShape 7,000 units sold WW) 2. Focus on high margin recurring revenues - UltraShape s new business model for NA - Grow recurring revenue share from 30% in 2013 to 50% in 2017 3. Significant expansion and optimization of NA sales force, focused on selling high margin products 4. PicoWay breakthrough technology and immediate availability in USA, Europe and key countries in Asia 5. Global Joint Venture with Unilever for the consumer market 6. CoolTouch leading products for lucrative leg vein market with recurring revenue strategy 7. elure skin lightening opportunity 28% Worldwide Market Share¹ ~$254-$256M Revenue² (30% Recurring³) ~$100M in Cash 4 ; No Debt ~30,000 Customers 1 Based on US publicly traded companies listed here (CYNO, CUTR, ZLTQ, LMNS); Professional Aesthetic Device Sector 2 Pro-forma, excluding Syneron Beauty; trailing twelve month revenue (based on fourth quarter 2014 preliminary revenue) 3 Based on FY2013 results 4 September 30, 2014 Balance Sheet 4
Why is Non-Invasive Aesthetic Medicine Growing? The doctor can take a patient from This To this Photos: Macrene Alexiades, MD WITH NO SURGERY, MINIMAL DOWN-TIME AND A HIGH DEGREE OF PREDICTABILITY Procedure performed with Syneron s Profound device 5
Why is Non-Invasive Aesthetic Medicine Growing? The doctor can take a patient from This To this Photos: Wendy Tink, MD WITH NO SURGERY, MINIMAL DOWN-TIME AND A HIGH DEGREE OF PREDICTABILITY Procedure performed with Syneron s UltraShape device 6
Strong Shift Toward Non-Invasive Procedures 12.0 Invasive Procedures (Procedures in millions) 12.0 Non- Invasive Procedures (Procedures in millions) 10.0 CAGR= 4.4% 10.0 CAGR= 15.6% 8.0 8.0 7.6M 6.0 6.0 4.0 4.0 2.0 1.88M 2.0.939M.741M 0.0 1997 2013 0.0 1997 2013 Non-invasive procedures account for 84% and majority of growth Source: The American Society for Aesthetic Plastic Surgery 2014 7
Fat Destruction and Body Shaping Market Opportunity 8
Potential Market for Body Shaping Procedures 154.7M Americans over the age of 20 are overweight or obese (1) 33.5% Obese Target Population 32.6% Overweight 33.8% Normal or Underweight Total Potential US Patient Market Approximately 100M Patients KEY (Based on BMI (1) ) BMI of 30 or above is obese BMI of 25-30 is overweight BMI of 18.5-25 is normal weight BMI of 18.5 or lower is underweight ¹ 2013 American Heart Association, Inc. 9
Potential Market for Fat Destruction Procedures In a survey of 1,045 women in NA 1 56% 32.6% Overweight 33.8% Normal or Underweight indicated interest in non-invasive fat destruction procedures Total Addressable Market in the US: 19.5M Patients 2 1 Syneron proprietary consumer research, 2012 2 2013 Census estimates the US population 20 years and older to be 233M; and that 34.9% of the adult population has personal income of $35,000 or above. 10
Women Are Interested in Treating Multiple Body Areas * A proprietary Syneron research study of 1045 women, aged 25 and above in NA concluded that: 51% of women are not satisfied with their thighs 58% of women are not satisfied with their flanks 72% of women are not satisfied with their stomach 54% of women are not satisfied with their buttocks 49% of woman are not satisfied with their back/bra fat Source: Syneron proprietary consumer survey 2012. *In the US, UltraShape is currently indicated for treatment of the abdomen. 11
Physician Qualitative Research Reveals Importance of Pain-Free Advantage Research Takeaway Pain Free represents advancement over existing technologies + opportunity to tap into growth of body shaping category. Supporting Quotes Over 75% of patients come in to my office and immediately ask How much is it going to hurt?" "100% of patients ask about downtime." Pain-free with no downtime, it s effective and totally believable. Pain-free permanent fat removal BOTTOM LINE! 12
44% of surveyed aesthetic clinics indicated that they plan to buy body shaping equipment in 2014 (1) Planned Purchasing of New Equipment in 2014 44% Hair removal Skin rejuvenation Vein Reduction Tattoo removal Pigmented lesions Skin tightening Body shaping Body Shaping is one of the most profitable businesses for aesthetic clinics, second only to toxins & fillers (1) Medical Insight Inc., The Annual Aesthetic Practice Survey January 2014 13
Market Learnings More than half of the women (56%) are interested in noninvasive fat destruction A pain free procedure is the #1 consideration for patients Almost three quarters (72%) of the women are unhappy with their abdomen and want to remove fat from their stomach Almost half of the doctors (44%) are looking to buy noninvasive body shaping equipment Syneron is ideally positioned to serve these patient and doctor market needs 14
Broad Body Shaping Portfolio Holistic Approach to Body Shaping Treatments: Fat Cell Destruction, Skin Tightening and Cellulite Targeting and destroying fat Targeting connective tissue 15
UltraShape Pulsed Focused Ultrasound (PFU) Focused ultrasound energy Mechanical acoustic effects breaks fat cell membranes Immediate and permanent fat cell destruction Comfortable No Pain Selective: Skin, vessels, nerves and connective tissue remain unharmed 16
Superior Technology for Non Invasive Fat Destruction Immediate Fat Cell Destruction! Control Immediately post single tx X 40 X 40 UltraShape Technology, In-Vivo Porcine Model: Acute Micro Effects Brown SA, Greenbaum L, Shtukmaster S, Zadok Y, Ben-Ezra S, Kushkuley L. Characterization of nonthermal focused ultrasound for noninvasive selective fat cell disruption (lysis): technical and preclinical assessment. Plast Reconstr Surg. 2009 Jul;124(1):92-101 17
Superior Technology for Non Invasive, Immediate Fat Destruction Highly Selective! Intact Blood Vessel Fat Cell Destruction Intact Nerves X100 UltraShape Technology, In-Vivo Porcine Model: Acute Micro Effects Brown SA, Greenbaum L, Shtukmaster S, Zadok Y, Ben-Ezra S, Kushkuley L. Characterization of nonthermal focused ultrasound for noninvasive selective fat cell disruption (lysis): technical and preclinical assessment. Plast Reconstr Surg. 2009 Jul;124(1):92-101 18
Superior Technology for Non Invasive, Immediate Fat Destruction Exceptional Efficacy! UltraShape MRI Measurement of Fat Thickness Baseline Post 3 Tx Treated Area: Abdomen Fat Layer Thickness: 4.9 cm Treated Area: Abdomen Fat Layer Thickness: 3.8 cm Fat Thickness Reduction: 1.1 cm Circumference Reduction: 4.5 cm Leal H. et al, Procedures in Cosmetic Dermatology (book); Focused Ultrasound for Fat Reduction: Ultralipotripsy. pp 107-121 (2010) 19
Superior Technology for Non Invasive, Immediate Fat Destruction 13 published clinical studies with more than 900 subjects treated! Investigator Publication Year Patient Population Avg. Circumference Reduction Results Teitelbaum S. et al 1 US, UK, Japan 2007 164 2.0 cm (1 Tx) 82% > 0.5 cm circumference reduction Leal H. 2,3 Monterrey, Mexico 2009 24 3.0-3.4 cm (1 combo Tx) 1 Published in peer-reviewed journal 2 Presented in scientific conference 3 Data on file 96% > 1.5 cm circumference reduction 100% patient satisfaction Moreno-Moraga J 1 Madrid, Spain 2007 30 3.95 cm (3 tx) 100% measurable and visual improvement Leal H. 2,3 Monterrey, Mexico 2008 36 5.0 cm (3 tx) 100% measureable reduction 94% patient satisfaction Ad El D. 2,3 Beilinson Med, Israel 2008 26 3.96 cm (3 tx) 90% > 2.0 cm circumference reduction Mulholland S. 2 Toronto, Canada 2008 21 3.48 cm (3 tx) 86% patient satisfaction Inglefield C. 2 London, UK 2007 148 6.3 cm (3 tx) 93% patient satisfaction de Almeida G. 2 Sao Paulo, Brazil 2007 20 5.4 cm (3 tx) 100% measurable reduction 86% patient satisfaction Benchetrit A. 2 Montreal, Canada 2010 109 4.5 cm (3 tx) 96% measurable reduction 86% patient satisfaction Niwa A. 1 São Paulo, Brazil. 2010 120 4.95 cm (3 tx) 92% measurable reduction 94% reported comfortable treatment Ascher B. 1 Paris, France 2010 25 3.58 cm (3 tx) 90% reported no pain S.-L. Chang 1,2 Taiwan 2013 32 3.91 cm (3 tx) 21.4% and 25% reduction in fat thickness measured by MRI Weiss, Coleman, Kenkel, Ad-El 3 US, Israel 2013 32 3.34cm (3 tx) 100% reported very low pain levels Average circumference reduction ranges from 3.3 to 6.3 cm (one to three pant size reduction) Average response rate ranged from 83% to 100% 20
UltraShape Three Treatment Results Upper/ Lower Abdomen Pre-Treatment 4 Weeks Post Treatment Pre-Treatment 4 Weeks Post Treatment Reduction -4.7 cm upper, -5.4 cm lower abdomen Weight change -2.2Kg Reduction -5 cm Weight change -2.2Kg Courtesy of Dr. Arie Benchetrit, Montreal, Quebec 21 21
UltraShape Three Treatment Results Flanks Pre-Treatment 2 Months Post Treatment Pre-Treatment 2 weeks Post Treatment Reduction -14 cms Weight change -3.2Kg Reduction -10 cms Weight change -3.2Kg Courtesy of Dr. Wendy Tink, Vive Clinic Calgary, Alberta 22 22
New FDA cleared: 25% power increase and VDF protocol Control Regular protocol VDF Multi-Focus In-vivo Porcine Model: Acute Macro Effects Immediate Fat Destruction 23 More Fat Volume Destruction Per Pulse
UltraShape Non-Invasive Fat Destruction Tracking & Guidance Camera Tracking & Guidance Monitor UltraShape Treatments Effective - 1 to 3 pant size reductions Comfortable No pain, Excellent Safety Record Results seen as early as 2 weeks post treatment Flexible - Any shape and size of fat pocket can be treated with the VDF and U-Sculpt applicators Quick - enables enhanced patient throughput Less than 1 hour needed for full abdominal treatment UltraShape V3.1 Platform Computer Guided treatment Intuitive graphic guidance monitor Fast learning curve Treatment can be delegated to staff Fast, full abdomen in less than 1 hour Supports applicator and software upgrades 24
Investor Meeting UltraShape Update (Sep. 2014) Panel of 3 leading Physicians Dr. Bruce Katz New York In terms of the outcome I just treated a patient two weeks ago after one treatment alone she saw a two inch reduction in her abdomen, so you [have] see[n] results a lot faster with this technology than perhaps with the other two CoolSculpting and Liposonix which can take two months to see the eventual outcome. and you really can t tell anything was done, you look at person s body after and you can t see, bruising, swelling. I mean it s really a very rapid recovery.its a great choice for our practice. Dr. David Amron Beverly Hills Why UltraShape? I think it really is the most sophisticated specific technology for fat reduction non-invasive that is out there.this is so sophisticated and so specific that it really is a next generation As you were made aware there is no shelving the demarcation like you can see with CoolSculpting, there is no pain and we talked about that absolute advantage, it s very safe - an important thing. And there is no visible sign of treatment. Arie Benchetrit - Canada We treated over 800 patients so that s over 2000 treatment cycles over the last seven years. The treatments are very well tolerated. We ve never had a patient dropout of a treatment cycle and that s very important if you speak to doctor like Dr. Amron or others who have had Liposonix or some of the other devices patients dropout. They can t tolerate the pain or side effects and often don t finish their treatment cycle That has never happened in seven years with the UltraShape. Over 60 investors and sell side analysts participated 3 active treatment rooms with over 15 investors and analysts undergoing on-site treatment demonstrations Participants provided positive feedback on UltraShape experience and opportunity We decided to undergo a procedure ourselves. Following our experience we can objectively concur with the notion that discomfort would not be a deterrent for an UltraShape procedure. It simply felt as if we were receiving a fetal ultrasound. - Zack Ajzenman, Griffin Securities 25
High Margin Recurring Revenue Business Model Shift to a Consumables Business Model Revenues from Capital Equipment Revenues from Consumables Consumables will be sold in the form of Focal Treatment Zones (FTZ) Average abdominal treatment requires 10 FTZ s Practice purchases FTZ s based on patient volumes Cost of FTZs represents 25%-33% of treatment revenue charged by physician System List Price $99,000 FTZ List Price: $25 UltraShape GM Over 70% 26
UltraShape Practice Value Proposition New technology provides clinic differentiation attracts new patients Cross selling opportunities with other offerings attracts new patients Practice Development Partner (PDP) marketing and clinical support for practice Computer guided treatment - Easy to learn & use - High staff acceptance 10 new patients per month (20 treatments per month) = $220,000 - $250,000 in annual revenue 27
Ultrashape Launch Marketing Campaign Raise consumer awareness and Interest in Ultrashape as a breakthrough body shaping solution Establish Utrashape s competitive edge to become the category leader Support Ultrashape s practices with consumer demand building tools via Co-op program Consumer Campaign Consumer website PR campaign Digital campaign Search Engine Marketing Print campaign Practice Campaign Collateral materials Practice Campaign Digital campaign (banners, text) PDP program Marketing Incentive program Print campaign 28
UltraShape 2015 Target Customers Differentiate practice Complementary to VelaShape New marketing program Differentiate practice Painless; low side effect profile New marketing program Offer latest Immediate Fat Destruction technology Alternative for painsensitive patients Correcting unevenness from Lipo/other devices Can treat any size and shape of fat pocket 29
UltraShape : A Game Changer for Syneron Candela >50 units sold in fourth quarter 2014, first quarter of commercial launch Planned 2015 revenue: $20M $65M-$100M in UltraShape revenues within 3 years Above 70% gross margin on UltraShape business 50% capital equipment and 50% recurrent revenues within 3 years Achieving a long term win-win partnership with our customers 30
Broad Body Shaping Portfolio Holistic Approach to Body Shaping Treatments: Fat Cell Destruction, Skin Tightening and Cellulite Targeting and destroying fat Targeting connective tissue 31
VelaShape III Cellulite, Skin Laxity, Circumferential Reduction FDA cleared for the treatment of cellulite and circumferential reduction (abdomen and thighs) Increased RF Power by a factor of 2.5 to 150W Single treatment with an average abdominal circumferential reduction of 2.5cm and 100% patient responders 32
Treatment of Skin Laxity with VelaShape Technology Before After Photos: Regine Bousquet, MD 33
VelaShape III - Single Treatment Protocol 42 patient trial Average Abdominal Circumference Reduction % of Patients with CR of at least 1cm, 1.5cm and 2cm Mean abdomen circumference reduction 1 cm 1.5 cm 2 cm 3.5 3 100% 100% 2.5 2.6 80% 71% 80% [cm] 2 1.5 1 0.5 0.8 1.8 [%] 60% 40% 20% 36% 27% 67% 55% 0 0 Baseline 4 weeks 7 weeks 10 weeks 0% 0% Baseline 4 weeks 7 weeks 10 weeks 34
Body Shaping as a Growth Driver - Leveraging Our Strengths Installed base of close to 15,000 systems in NA out of which 2,000 are body shaping systems Superior technology platforms Ability to offer comprehensive body shaping solutions for all major indications (Non-Invasive Fat Destruction, Skin Laxity, Cellulite, Circumference) Cross selling opportunities with other devices 35
Body Division Creating Bifurcated Body Shaping Business Group (team of 50-60 reps by end of 2015) Territory Managers For Capital Sales Initial Focus on Installations Expansion of installed base Ensure healthy pipeline Practice Development Partners (PDP s) Focus on educating practices Provide marketing support Drive utilization of Focal Treatment Zones (FTZs) Targeting 7,000 VelaShape WW installed base and users of competitive systems Potential for bundling with VelaShape 36
Expansion and Optimization of NA Sales Org Expanded NA sales force from 35 to 75 over the last 12 months: better product and territory coverage Focus on selling high margin products Dedicated Body Shaping sales team of 50-60 by the end of 2015: 25-30 capital equipment sales reps and 25-30 consumable PDP s 15 PDP s on board from 4Q14 15 sales reps to the Body Division in January 2015, comprised of new hires and some from existing NA sales team 6 additional reps focused on CoolTouch products Optimization of sales coverage will add focus on both core and non-core markets 37
Dual wavelength PicoWay - Shortest Picosecond Pulse, Highest Peak Power 38
PicoWay Shortest Picosecond Pulse, Highest Peak Power Dual wavelength picosecond laser to treat tattoos of all types and colors, and pigmented lesions on any skin type FDA Clearance in late October for removal of tattoos of all colors Immediate U.S. launch in November 2014 Investing in sales & marketing to support launch US potential market for tattoo removal procedures: $11.4B - $22.7B 1 Received CE Mark in July for removal of tattoos of all colors and pigmented lesions Featured at medical meetings in late September in Europe Full launch in late October 2014 at EADV meeting in Europe $260K list price and 15-20% higher gross margin on top of current gross margin levels Growth driver starting November 2014 with ~$2.5M contribution to revenues in Q4 14 Candela global installed base of ~1,400 dedicated tattoo removal & pigmented lesion lasers and >11,000 platforms that include pigmented lesion indications ¹ 2013 Census; 21% of adults in America have at least one tattoo; The Harris Poll, 2012 Harris Interactive; 14% of those with a tattoo regret their tattoo; The Harris Poll, 2012 Harris Interactive; Estimated average tattoo removal procedure fee is $400; 4-8 treatments required 39
PicoWay Shortest Picosecond Pulse, Highest Peak Power Treat widest range of tattoos & pigmented lesions 2 wavelengths + ultra-short 450 picosecond pulses enable treatment of more patients than single wavelength picosecond units Compared to other picosecond or Q-switched lasers PicoWay s ultra-short pulses optimizes the photoacoustic pressure on the target better than any device, shattering the ink with the least amount of heat transferred into the skin Pulse-on-demand Lower cost of ownership than other picosecond laser systems which run continuously throughout the day Compact system Fast and easy to use Upgradability Additional applications and upgrades 40
PicoWay Treatment Results Tattoo Removal (U.S. & International) and Pigmented Lesion (International Only) 41
Unilever Syneron Joint Venture Structure Agreement closed December 8, 2013 Global joint venture with Unilever to include: - Syneron Beauty - Iluminage (Unilever subsidiary) - $25 million Unilever investment Ownership: Unilever 51% / Syneron 49% of ordinary shares Management / Board of Directors - Shimon Eckhouse Chairman - Syneron 2 seats / Unilever 2 seats / 1 independent director Valuation based on the Fair Value of the JV, changes to be shown in GAAP EPS Strategic Rationale Build on investments in Syneron Beauty to create focused home beauty device business with enhanced growth and profitability profile Unilever participation provides additional validation of Syneron Beauty and robust home-use beauty device market Eliminate impact of Syneron Beauty on consolidated financials and cash flow while retaining upside potential Allows Syneron Medical to focus on the significant opportunities in PAD business Improves core business margins and profitability 42
Additional Potential Business Opportunities CoolTouch opportunity Strengthens recurring revenue strategy; Entry into significant new markets Integration on track FDA clearance received October 31, 2014 for our OEM - 30-Watt Holmium Laser for breaking of kidney stones and soft tissue urological work Addressing the lucrative vein treatment market with high recurring revenue component elure opportunity Addresses growing skin lightening market, especially in Asia Signed a distribution agreement in Korea, start shipping in Q4 2014 Signed a distribution agreement in China commercial in Q1 2015 Enhanced current distributor relationship in Japan commercial in 2015 6 dedicated sales reps in U.S. are on board 43
4Q 2014 Preliminary Revenue (announced January 8, 2015) 80.0 70.0 60.0 Y/Y Revenues ($M) 72-74 20% - 24% 59.9 Fourth Quarter Revenue Highlights: Strong growth in product revenue 20-24%: North America ~50% EMEA region ~15% APAC region ~30% 50.0 260.0 250.0 240.0 230.0 220.0 Q4-2013 Q4-2014 Y/Y Revenues ($M) 232.1 9% - 10% 253.7-255.7 2013 2014 Strong UltraShape full commercial launch in U.S. with more than 50 systems sold Successful global launch of PicoWay with approximately $2.5 million in sales from mid-november 2014 through the end of the year (pro-forma excluding Syneron Beauty) 44
Financial Highlights (Non-GAAP) as of Q3 14 $ Thousands (except per margins) Total 2013 (*) Q1 14 Q2 14 Q3 14 Revenues 232,129 56,813 64,618 60,257 YOY change, % (3.8%) 2.0% 6.1% 8.3% Cost Of Revenue 105,187 26,398 29,609 26,775 Gross Profit 126,943 30,415 35,009 33,482 GM % 54.7% 53.5% 54.2% 55.6% Total OPEX 115,170 28,524 31,851 30,858 EBIT 11,771 1,891 3,158 2,624 Operating Margin 5.1% 3.3% 4.9% 4.4% Financial Income (expenses), net 222 164 228 (764) Taxes on Income (tax benefit) (1,431) 727 900 920 Net Loss attributable to non - controlling interest 100 - - - Net Income 13,524 1,328 2,486 940 EPS ($) 0.37 0.04 0.07 0.03 (*) Without SB 45
Q3 14 Highlights* 70.0 60.0 50.0 40.0 Y/Y Revenues ($M) 8.3% 55.7 16.3% 18.7 60.3 21.8 Revenue by Geography 63.9% 36.1% 30.0 20.0 10.0 0.0 20.0 4.2% 36.9 38.5 Q3-2013 Q3-2014 International North America Recurring Revenue ($M) North America International Revenue Mix 30.0% 19.0 18.0 11% 18.1 70.0% 17.0 16.4 16.0 15.0 Q3-2013 Q3-2014 Recurring Product Generated $4.9 million in cash flow from operations *The third quarter 2014 year-over-year comparisons to the third quarter 2013 are on a pro-forma basis, excluding Syneron Beauty from the third quarter 2013 results following its de-consolidation as of December 8, 2013 46
Select Financial (Non-GAAP) Items as of Q3 14* 56.0% 55.0% 54.0% 53.0% 5.5% 5.0% 4.5% 4.0% 0.08 0.06 0.04 0.02 0.00 Gross Margin % 55.6% 54.5% 54.2% Q3-2013 Q2-2014 Q3-2014 Operating Margin % $21,000 5.1% 4.9% $19,000 4.4% $17,000 $15,000 Q3-2013 Q2-2014 Q3-2014 Operating Margin % Sales & Marketing Expense EPS ($) 0.07 0.07 0.03 0.05* Q3-2013 Q2-2014 Q3-2014 Gross margin of 55.6% vs. 54.5% in 3Q13 Increase driven by favorable geographic and product mix Operating margin of 4.4% vs. 5.1% in 3Q13 Decrease driven by higher S&M expenses related to expansion of NA sales force and dedicated body shaping team Decrease also due to CoolTouch integration and expenses EPS of $0.03 vs. $0.07 in 3Q13 EPS decreased by $0.02 due to changes in foreign currency exchange rates compared to the U.S. dollar. * 3Q14 EPS would have been $0.05 excluding changes in foreign exchange *The third quarter 2014 year-over-year comparisons to the third quarter 2013 are on a pro-forma basis, excluding Syneron Beauty from the third quarter 2013 results following its de-consolidation as of December 8, 2013 47
Select Balance Sheet Items as of Q3 14 $100.4 million in cash and cash equivalents at September 30, 2014 Generated $4.9 million in cash from operations 6.0 4.0 2.0 Cash Flow from Operations ($M) 3.7 4.9 $20 million share repurchase program announced 12/1/2014 DSO of 78 vs. 84 days in 3Q13 and 81 days in 2Q14 0.0-2.0-4.0-6.0-8.0-4.0-4.9-6.5 Q3-2013 Q4-2013 Q1-2014 Q2-2014 Q3-2014 Cash Position ($M) Cash Flow from Operations ($M) w/o SB 104 102 100 100.4 6.0 4.0 2.0 3.7 4.9 98 96 94 92.6 96.4 0.0-2.0-4.0-2.8-1.7 92-6.0-4.9 90 Q1-2014 Q2-2014 Q3-2014 -8.0 Q3-2013 Q4-2013 Q1-2014 Q2-2014 Q3-2014 48
Positioned for Growth A global leader in the medical aesthetics device sector with 28%¹ market share Largest global footprint and installed base Financial strength 2015 objectives: Double-digit revenue growth Continued investment in sales & marketing to drive growth for key products Operating margin increase Profitable growth drivers: - Focus on non-invasive Fat Destruction and Body Shaping markets - UltraShape US launch over 50 unit sold in Q4 14, the first quarter of commercial launch - New business model for recurring revenue - Expansion and optimization of NA sales force, focused on selling high margin products - PicoWay launch - ~ $2.5m sold in Q4 14, in the first month and a half of commercial launch - Joint Venture with Unilever - CoolTouch investment for growth - Elure skin lightening opportunity 1 Based on US publicly traded companies listed here (CYNO, CUTR, ZLTQ, LMNS); Professional Aesthetic Device Sector 49
APPENDIX Non-GAAP pro-forma results (excluding SB) included in this presentation 50
Pro-Forma Results Syneron Medical Ltd. Unaudited Non-GAAP Condensed Consolidated Statements of Income (in thousands, except per share data) For the three-months ended For the nine-months ended September 30, 2014 September 30, 2013 September 30, 2014 September 30, 2013 Consolidated Non GAAP Pro Forma Basis, Excluding Syneron Beauty Consolidated Non GAAP Pro Forma Basis, Excluding Syneron Beauty Revenues $ 60,257 $ 55,657 $ 181,688 $ 172,250 Cost of revenues 26,775 25,331 82,782 78,268 Gross profit 33,482 30,326 98,906 93,982 - - Operating Income 2,624 2,859 7,673 8,629 - - Income attributable to Syneron shareholders $ 940 $ 2,460 $ 4,754 $ 7,719 Income per share: Basic Net Income attributable to Syneron shareholders 0.03 0.07 0.10 0.22 Diluted Net Income attributable to Syneron shareholders 0.03 0.07 0.10 0.21 Weighted average shares outstanding: Basic 36,768 36,064 36,637 35,826 Diluted 37,228 36,196 37,277 36,058 51
Thank you!