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Tuesday
May012007

Thermage, Inc. Reports Record Revenue: It feels like I'm paying most of it.

Thermage, Inc. Reports Record Revenue and First Quarter Results Q1 Revenue Increases by 22% and Gross Profit Increases by 27% Over Prior Year Period

 

thermageTip.jpgHAYWARD, Calif., May 1 -- Thermage, Inc. (Nasdaq: THRM), a leader in non-invasive tissue tightening in the aesthetic industry, today reported financial results for the first quarter ended March 31, 2007.

Revenue for the quarter ended March 31, 2007 was $15.2 million, up 22% from $12.4 million for the quarter ended March 31, 2006. Gross profit increased to $11.0 million or 72.6% of revenue, for the quarter ended March 31, 2007, up from $8.7 million or 69.6% of revenue for the quarter ended March 31, 2006.

The Company reported GAAP net income of $0.1 million, or breakeven earnings per share, for the quarter ended March 31, 2007, versus a net loss of $2.8 million, or $0.68 per share, for the quarter ended March 31, 2006. Non- GAAP (1) net income for the first quarter of 2007 was $1.3 million, or $0.05 per diluted share, compared to a net loss of $0.7 million, or $0.04 per share, for the prior year period.

"We continued to produce over 70% of sales from our high margin consumables products," said Stephen J. Fanning, President and Chief Executive Officer. "In addition, in mid-February we began shipping our new generator platform, ThermaCool NXT(TM), and received strong worldwide demand from both new and existing customers. As a result, we sold more generators in the first quarter than in any previous quarter for over the past two years."

"In January, we introduced a new procedure, Hands by Thermage(TM), with a corresponding new treatment tip," continued Mr. Fanning. "This is the first of several new procedures and treatment tips we plan to launch in 2007 that are designed to expand the range of applications for Thermage procedures, improve patient outcomes, and increase the value proposition for our customers."

"We continue to build the Thermage brand. In April, we launched Stars of Thermage(TM), an on-line DTC media campaign that features the real-life experiences of women who have had the Thermage procedure. We continue to be pleased with the high profile media coverage of Thermage generated recently in media such as US Magazine, USA Today, MSN Health and Fitness, and The Learning Channel. We have good momentum and will continue our strong marketing efforts to drive patient demand for Thermage applications," concluded Mr. Fanning.

Guidance: Management expects revenue for full year 2007 to be in a range of $65 million to $68 million, an increase of 20% to 25% over full year 2006. For the full year 2007, we expect GAAP diluted earnings per share to be in a range of a net loss of $0.04 per share to net income of $0.03 per share. Non-GAAP (1) diluted earnings per share are expected to be in a range of net income of $0.16 to $0.23 per share. The per share earnings amounts are based on fully diluted weighted average shares of 26 million.

Reader Comments (8)

You're not paying most of it... It feels like I'm paying at least half. I don't mind that Theremage is making money hand over fist. I just wish they'd stop charging me $600 for a Thermage tip that costs them $5. The "consumables" is part of the business plan born of greed, not necessity. Theremage could easily produce tips that last many thousands of pulses. Well, enough of my griping. I've go to go back to work. I've got Thermage bills to pay.
05.2 | Unregistered CommenterLarryDO
Larry DO

Read into the story. This is only the second quarter since the start of the company (2002) that they have posted a profit (I've been tracking since they went public). My suggestion to you is that you stop doing Thermage and see if you miss the revenue more than you miss the disposable cost!

What company in America sells products for the cost of manufacturing them. If you are pricing Thermage as I am I bring in a tidy profit (as good or better than anything in my spa). I don't think that I am on the high side either as I am in a smaller market. Have your Thermage rep do a review of your last year as mine did. It's an eye opener.

Profitability is one thing, maximizing your ROI is another. I'm always amazed at how readily folks overlook this point when deciding on equipment.

When your consumable costs chew up almost a third of your treatment income, you've got to wonder what that's doing to your ROI.

In case your Thermage rep failed to mention the opportunity cost of choosing Thermage, you may want to have a look at the following report: The Long-Term Impact of Thermage Treatments

06.27 | Unregistered CommenterPhil

Phil,

$2500 procedure $450 for the tip. 90 minutes to perform. That's pretty good math.

Your link goes to an advertisment.

Not to defend Thermage because I think the tips are way too expensive but you must also include the national advertising they do such as getting the message out on Oprah. Their web presence etc. I recently bought Thermage on a 90 day same as cash. My goal is to have it all paid for within the 90 days and we are on schedule to accomplish that mission. Therefore anything past that is direct profit after cost of consumables.

07.1 | Unregistered CommenterLH

Phil,

I was finally able to open the link you sent. The biggest thing that is missing is what you read in the disclaimer at the bottom of the article. It states " Disclaimer: This is strictly a cost analysis and does not reflect on product quality or treatment outcomes. Products mentioned in the report are assumed to preform stisfactorily and give similar results."

First, the article does not take into account any of the consumables for the other machines. The Titan is 30 to 33 cents per pulse. Now you must include this in the review as well. The average face for the Titan is a minimum of 200 pulses (we usually use more as we feel it is not as effecteve) therefore the treatment will cost me about $66+. The next thing is you must take into account multiple treaments. So for the Titan 3 to 5 treatments my cost is $198 to $330.

The next step you must figure in is the cost of your overhead. To do a full face with Thermage it takes about 75 to 90 minutes and is a one time shot. For me about $37.50 for nursing. So we must take nursing time for the Titan which comes out to 90 minutes per treatment and 2 to 4 more treatments for the Titan than Thermage. This adds an additional cost of $37.50 per treatment and $75 to $150 for a series.

So now as you see when you compare Titan and Thermage. You basically come up with a total cost of about $462.50 (should add about $30 for grounding pad, contact gel and grids) including nursing time for the Thermage and you come up with about $310.50 to $517.50 for the Titan using 3 to 5 treatments.

Next question is how much do you charge the patient? We charge $2150 for full face Thermage and $700 for full face of the Titan. The pt will pay us $2150 for the Thermage and come in once. For the Titan they will pay us $2100 to $3500 and come in 3 to 5 times. So at this time it is looking like a wash.

Now we must look at the most important protion of this article do they work? First of all many pts do not want to have to come in 3 to 5 times and would prefer only once. I have reviewed all of the pieces in the article and have yet to see any before and afters that compare to the best of Thermages. Thermage is the gold standard right now for non-surgical skin tightening and is the only one that can directly treat the eyelids. Making the assumption that all of these work equally well is a very large leap of faith.

I am only able to speak abouth Thermage vs Titan as I own both. The others also have consumables and are multiple treatments but I can not give exact figures. If I find a skin tightening device that will perform as well as Thermage and have significantly less overhead costs and consumables then I will switch.

So what I am saying to you Phil is that you need to compare apples to apples and not oranges to apples. You must include ALL costs when completing a financial analysis. This article seems to have forgotten a lot of the information and makes a huge assumption that all of these systems work equally well.

07.1 | Unregistered CommenterLH

LH

Comparing the three devices you have Thermage vs Titan vs ST by Sciton what is the best for skin tightening?I think that you prefer Thermage but if if you compare the results and the cost of three which has the best profit for doctor and patient?

07.2 | Unregistered CommenterCharry

If you are looking at profit alone it would have to be the Skintyte because of no consumables.

I have only had the Skintyte and Thermage for a short time so the jury is still out as far as results.

I did do a little research on Titan yesterday and there was a poster presented at the ASLMS this year and it did show fairly nice results in multiple pictures. We have used the same perameters and never had those kind of results.

I do like the fact that with Thermage you can treat within the orbital rim.

07.2 | Unregistered CommenterLH

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