Well, now we know where most of the sales in the aesthetic-laser industry went. Syneron
The Motley Fool Rule Breakers recommendation showed no sign of an industry slowdown, which was feared when rival Candela
While Palomar Medical Technologies
The North American market accounts for more than half of Syneron's total revenue, and it saw a 33% increase this quarter. One out of every 10 aesthetic-laser procedures is performed at American Laser Center locations, and Syneron is in the catbird seat as their sole provider. Still, sales and marketing expenses were significantly higher than last year, and while they declined sequentially from the fourth quarter, they comprise a large chunk of the expenses Syneron realized. That, however, contributed to the laser maker's top-line growth.
It was those investments that appeared to knock back profits this quarter, as they came in 3% lower on a GAAP basis. Syneron prefers to look at pro forma results, which would exclude some one-time events and stock-based compensation. While I might have difficulty accepting the exclusion of stock-option grants from the equation, non-GAAP results were actually 8% higher than last year at $0.40 per share.
Before we get too excited, though, the company has guided to 20% revenue growth for the year. That means that going forward, we'll find some quarters with significantly lower results than what we've become accustomed to. Like its competitors, Syneron wants to diversify its revenue stream through greater sales of consumables, as well as entering the consumer market.
Proctor & Gamble
Syneron has a large pile of cash to throw at different markets. It says it wants to use the money to make strategic investments and acquisitions. The company is based in Israel, and it primarily looks at small Israel-based companies that complement its business, but it is not opposed to making a larger acquisition or looking abroad for targets.
With a lot of irons in the fire, Syneron continues to hone in on building its reputation. It notes that 25% of its business comes from referrals. Consumer vanity remains at the heart of the industry, and Syneron has shown that it is alive and well. Trading at a discount to its rivals, Syneron makes for an interesting investment that could continue to burnish its name in the market.
Syneron is a recommendation of Motley Fool Rule Breakers. A 30-day free trial gives you full access to all of the market-beating recommendations.
Fool contributor Rich Duprey owns shares of Candela but does not have a financial interest in any of the other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.