ZELTIQ Aesthetics Announces Fourth Quarter and Full Year 2013 Financial Results

Increases Full Year 2014 Revenue Guidance Ships 1,000,000th CoolSculpting(R) Cycle Announces New CoolSmooth(TM) Applicator

Marketwired

PLEASANTON, CA--(Marketwired - Feb 25, 2014) - ZELTIQ® (NASDAQ: ZLTQ)

  • Full year 2013 revenue of $111.6 million, up 47% year-over-year
  • Fourth quarter revenue of $35.8 million, up 93% year-over-year
  • Fourth quarter system revenue of $21.4 million, up 123% year-over-year
  • Fourth quarter consumable revenue of $14.4 million, up 61% year-over-year

ZELTIQ®, a medical technology company focused on developing and commercializing products utilizing its proprietary controlled-cooling technology platform, today announced financial results for the fourth quarter and full year ended December 31, 2013.

Mark Foley, President and Chief Executive Officer, said, "Our fourth quarter and full year 2013 financial performance was driven by the focused execution of our entire organization. We believe the results further validate the large and expanding market opportunity for non-invasive fat reduction as well as our strong leadership position. We continue to deliver exceptional patient outcomes and have forged a unique partnership with our physician practices to ensure they maximize their CoolSculpting opportunity. The marketplace is clearly seeing how differentiated CoolSculpting is from both a technology and customer support perspective. We recently shipped our 1,000,000th CoolSculpting cycle which further highlights the rapid adoption and acceptance of our technology, particularly when compared to other aesthetic treatments. Additionally, we are pleased with our progress on the R&D front and still expect to launch our revolutionary new applicator, CoolSmooth™, early in the second quarter. CoolSmooth is a non-suction based, flat applicator that conforms to the body thus increasing our ability to provide customizable approaches for non-invasive fat reduction."

Mr. Foley continued, "In 2014, we expect to drive robust revenue growth and are pleased to be raising our full year revenue guidance to between $134 million and $137 million which represents an over 20% year-over-year growth rate. There is no doubt that 2013 was a pivotal year for ZELTIQ where we reorganized and reoriented the Company while delivering exceptional performance. This transition has enabled us to unlock the growth potential in the non-invasive fat reduction market while further confirming the unique and differentiated aspects of our technology. In 2014, we expect to successfully execute on our key initiatives and further enhance our leadership position. Through industry first initiatives such as CoolConnect, physician-to-consumer advertising and CoolSculpting University, we look forward to not only delivering a best-in-class technology but to helping our physician partners drive awareness and new patients into their practices. We continue to have an exciting opportunity to further penetrate and expand a large and untapped market and look forward to delivering sustainable revenue growth as we move forward."

Fourth Quarter Financial Review
Total net revenue for the fourth quarter 2013 was $35.8 million, consisting of $21.4 million of system revenue and $14.4 million of consumable revenue. This compares to total net revenue of $18.6 million, consisting of $9.6 million of system revenue and $9.0 million of consumable revenue, for the fourth quarter 2012. Third quarter 2013 total net revenue was $29.5 million, consisting of $15.9 million of system revenue and $13.6 million of consumable revenue. Cycles shipped increased 62% year-over-year to 121,791 for the fourth quarter 2013, compared to 75,172 for the fourth quarter 2012, and up 6% sequentially compared to 114,768 the third quarter 2013. 

Gross profit was $25.1 million, or 70% of revenue, for the fourth quarter 2013, compared to gross profit of $12.2 million, or 66% of revenue, for the fourth quarter 2012. Third quarter 2013 gross profit was $21.2 million, or 72% of revenue.

Operating expenses for the fourth quarter 2013 were $30.4 million, compared to $18.7 million for the fourth quarter 2012 and $24.1 million for the third quarter 2013. 

Net loss attributable to common stockholders for the fourth quarter 2013 was $5.4 million, compared to $6.5 million for the fourth quarter 2012 and $2.8 million for the third quarter 2013. Net loss attributable to common stockholders for the fourth quarter 2013 was $0.15 per share, compared to $0.18 per share for the fourth quarter 2012, and $0.08 per share for the third quarter 2013. Weighted average diluted shares outstanding for the fourth quarter 2013, fourth quarter 2012, and third quarter 2013 was 36.7 million, 35.8 million and 36.2 million, respectively. 

Full Year Financial Review
Total net revenue for the full year 2013 was $111.6 million, consisting of $61.3 million of system revenue and $50.3 million of consumable revenue. This compares to total net revenue of $76.2 million, consisting of $39.1 million of system revenue and $37.1 million of consumable revenue for the full year 2012. Cycles shipped increased 42% to 426,912 for the full year 2013, compared to 300,692 for the full year 2012. 

Gross profit was $77.4 million, or 69% of revenue, for the full year 2013, compared to gross profit of $50.7 million, or 67% of revenue, for the full year 2012. 

Operating expenses for the full year 2013 were $96.8 million, compared to $80.7 million for the full year 2012. 

Net loss attributable to common stockholders for the full year 2013 was $19.3 million, compared to $30.1 million for the full year 2012. Net loss attributable to common stockholders for the full year 2013 was $0.53 per share, compared to a net loss of $0.87 per share for the full year 2012. Weighted average diluted shares outstanding for the full year 2013 and full year 2012 were 36.2 million and 34.8 million, respectively. 

Full Year 2014 Financial Guidance

  • Revenue guidance in the range of $134 million to $137 million
  • Consumable revenue of approximately 50% total revenue
  • Gross margin of approximately 70%
  • Operating expenses of approximately 80% of total revenue

Conference Call
ZELTIQ will hold a conference call on Tuesday, February 25, 2014, at 4:30 p.m. ET to discuss the results. The dial-in numbers are (877) 280-7291 for domestic callers and (707) 287-9361 for international callers. Please use the conference ID number 47860399. A live webcast of the conference call will be available online from the investor relations page of the Company's corporate website at www.coolsculpting.com.

After the live webcast, the call will remain available on ZELTIQ's website, www.coolsculpting.com, until ZELTIQ releases its first quarter 2014 financial results. In addition, a telephonic replay of the call will be available until March 4, 2014. The replay dial-in numbers are (855) 859-2056 for domestic callers and (404) 537-3406 for international callers. Please use the replay conference ID number 47860399.

About ZELTIQ® Aesthetics
ZELTIQ is a medical technology company focused on developing and commercializing products utilizing its proprietary controlled-cooling technology platform. ZELTIQ's first commercial product, the CoolSculpting System, is designed to selectively reduce stubborn fat bulges. CoolSculpting is based on the scientific principle that fat cells are more sensitive to cold than the overlying skin and surrounding tissues. It utilizes patented technology of precisely controlled cooling to reduce the temperature of fat cells in the treated area, which is intended to cause fat cell elimination through a natural biological process known as apoptosis. ZELTIQ developed CoolSculpting to safely, noticeably, and measurably reduce the fat layer.

Forward-Looking Statements
The statements made in this press release regarding ZELTIQ's belief that it expects to drive robust revenue growth; full year revenue guidance; expectation to successfully execute on its key initiatives and further enhance its leadership position; statement that it looks forward to not only delivering a best-in-class technology but to helping its physician partners drive awareness and new patients into their practice; belief that it continues to have an exciting opportunity to further penetrate and expand a large and untapped market and looks forward to delivering sustainable revenue growth as it moves forward; expectation of the introduction of the CoolSmooth applicator early in the second quarter; belief that the investments it has made will provide continued market penetration; and the information under the caption "Full Year 2014 Financial Guidance," are forward-looking statements. The words "believe," "should," "will," "expect," "look forward" and "guidance" and similar words that denote future events or results identify these forward-looking statements. You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond ZELTIQ's control and that could materially affect the company's actual business operations and financial performance and condition. Factors that could materially affect ZELTIQ's business operations and financial performance and condition include, but are not limited to: the recent additions to the commercial sales team may require more time than ZELTIQ expects to integrate these employees into the company; less than anticipated growth in the number of physicians electing to purchase CoolSculpting Systems; patient demand for CoolSculpting procedures may be lower than ZELTIQ expects; product or procedure announcements by competitors may decrease demand for CoolSculpting procedures; ZELTIQ may incorrectly estimate or control its future expenditures; ZELTIQ's sales and marketing plans may fail to increase sales as ZELTIQ expects; as well as those other risks and uncertainties set forth in ZELTIQ's Current Report on Form 10-Q for the fiscal quarter ended September 30, 2013, filed with the SEC on October 31, 2013. These forward-looking statements speak only as of the date of this press release. ZELTIQ expressly disclaims any obligation to update information contained in these forward-looking statements whether as a result of new information, future events or otherwise.

   
ZELTIQ Aesthetics, Inc.  
Condensed Consolidated Statements of Operations  
(Unaudited)  
(In thousands, except share and per share data)  
                         
    Three Months Ended     Year Ended  
    December 31,     December 31,  
    2013     2012     2013     2012  
Revenue   $ 35,841     $ 18,597     $ 111,626     $ 76,194  
Cost of revenue     10,727       6,411       34,189       25,506  
    Gross profit     25,114       12,186       77,437       50,688  
Operating expenses:                                
  Research and development     5,187       3,477       17,090       12,693  
  Sales and marketing     20,531       11,536       63,185       51,167  
  General and administrative     4,701       3,697       16,510       16,867  
    Total operating expenses     30,419       18,710       96,785       80,727  
Loss from operations     (5,305 )     (6,524 )     (19,348 )     (30,039 )
Interest income, net     20       25       80       129  
Other (expense) income, net     (59 )     21       103       (92 )
Loss before provision for income taxes     (5,344 )     (6,478 )     (19,165 )     (30,002 )
Provision for income taxes     61       37       140       141  
Net loss   $ (5,405 )   $ (6,515 )   $ (19,305 )   $ (30,143 )
Net loss per share, basic and diluted   $ (0.15 )   $ (0.18 )   $ (0.53 )   $ (0.87 )
Weighted average shares of common stock outstanding used in computing net loss per share, basic and diluted     36,686,053       35,764,666       36,209,051       34,776,380  
                                 
                                 
ZELTIQ Aesthetics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
         
    December 31,
2013
  December 31,
2012
ASSETS            
CURRENT ASSETS:            
  Cash and cash equivalents   $ 25,798   $ 22,876
  Short-term investments     18,840     22,563
  Accounts receivable, net     10,221     7,133
  Inventory     8,406     10,871
  Prepaid expenses and other current assets     4,368     3,600
    Total current assets     67,633     67,043
Long-term investments     11,442     13,141
Restricted cash     331     469
Property and equipment, net     2,158     2,336
Intangible asset, net     6,481     7,181
Other assets     9     99
    Total assets   $ 88,054   $ 90,269
LIABILITIES AND STOCKHOLDERS' EQUITY            
CURRENT LIABILITIES:            
  Accounts payable   $ 5,165   $ 4,976
  Accrued liabilities     18,364     11,076
  Deferred revenue     1,674     1,401
    Total current liabilities     25,203     17,453
Other non-current liabilities     275     236
    Total liabilities   $ 25,478   $ 17,689
             
STOCKHOLDERS' EQUITY:            
    Total stockholders' equity     62,576     72,580
    Total liabilities and stockholders' equity   $ 88,054   $ 90,269
             

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