Palomar Medical Reports Financial Results for First Quarter 2013

Palomar Medical Reports Financial Results for First Quarter 2013

BURLINGTON, Mass., May 2, 2013 (GLOBE NEWSWIRE) -- Palomar Medical
Technologies, Inc. (Nasdaq:PMTI), a global leader in laser and other
light-based systems for aesthetic treatments, today announced financial
results for the first quarter ended March 31, 2013.

First Quarter 2013 Year-Over-Year Financial Highlights Include:

  *Execution of definitive agreement to be acquired by Cynosure, Inc.
  *Professional product revenues of $17.3 million, up 46%
  *North America professional product revenues of $8.1 million, up 20%
  *International professional product revenues of $9.2 million, up 80%
  *Loss from operations of $0.9 million, which includes $1.2 million of
    expenses related to the Cynosure acquisition, compared to 2012 loss from
    operations of $2.3 million
  *Cash and investments portfolio of $100.8 million

Joseph P. Caruso, Palomar's President, Chief Executive Officer and Chairman of
the Board of Directors, commented, "We are pleased with the progress that we
have made with our distribution expansion and introduction of new products.
This quarter we focused on driving initial product placements with our Vectus
diode hair removal system in our international distribution network and
additional luminaries and reference sites around the world. The feedback from
the field remains strong and we believe that the Vectus could quickly become a
leading product in the aesthetic laser market. We have invested in key
technology that we believe gives us a competitive advantage in terms of speed
and consumer satisfaction. Light-based hair removal continues to be the
largest segment of the aesthetic light-based market. The Icon continues to
drive top-line growth, which is also driven by some of our proprietary and
unique technologies, like our Max G and Lux 1540 hand pieces for the treatment
of pigmented lesions, vascular lesions and wrinkles and the Skintel melanin
optical measurement technology. We believe that the combination of Vectus and
Icon provides best-in-class technology for many of the non-invasive
high-volume aesthetic light-based treatments performed in physician offices

Mr. Caruso added, "On March 18, we and Cynosure, Inc. jointly announced the
execution of a definitive agreement, pursuant to which Cynosure will acquire
Palomar and Palomar stockholders will receive $6.825 per Palomar share in cash
and $6.825 per Palomar share in Cynosure common stock, subject to the
adjustment and collar provisions described in the definitive agreement. Our
Board of Directors believes that the terms of the definitive agreement offer
Palomar stockholders an attractive acquisition premium, as well as the ability
to participate in the future growth opportunities of the combined company."

Professional and consumer segment results for the three months ended March 31,
2013 and 2012 are as follows:

             For the three months ended March 31,
(in           2013                            2012
             Professional Consumer Total     Professional Consumer Total
Revenues      $22,512    $711   $23,223 $18,021    $979   $19,000
Cost of
revenues and  9,484       668     10,152   7,280       835     8,115
Gross profit  13,028      43      13,071   10,741      144     10,885
Operating     13,819      191     14,010   12,258      948     13,206
Loss from     $(791)     $(148) $(939)  $(1,517)   $(804) $(2,321)

Conference Call: As previously announced, Palomar will conduct a conference
call and webcast today at 11:30 AM Eastern Time. Management will discuss
financial results and strategic matters. If you would like to participate,
please call (877) 881-2595 or listen to the webcast in the About
Palomar/Investors section of the Company's website at A
webcast replay will also be available.

About Palomar Medical Technologies, Inc.: Palomar designs, produces and sells
the most advanced cosmetic lasers and intense pulsed light (IPL) systems to
dramatically improve the appearance of women's and men's skin.For over 15
years, Palomar has pioneered the science of using lasers and light to improve
appearances. As the industry's technology leader, Palomar has invested in
creating cosmetic laser and IPL systems that put real value in the hands of
physicians and other professionals to benefit consumers.Thousands of
physicians worldwide trust and depend on Palomar technology to not only
introduce new aesthetic treatments such as advanced laser hair removal, laser
liposuction, skin resurfacing, acne, laser treatments for scars, wrinkle
treatment, stretch marks (striae), and photofacials for pigmented and vascular
lesions, but to also make them robust, faster, more powerful, and more
comfortable for those being treated. In June 2009, Palomar became the first
company to receive a 510(k) over-the-counter ("OTC") clearance from the FDA
for a new, patented, home-use, laser device for the treatment of fine lines
and wrinkles around the eyes (periorbital wrinkles). This OTC clearance allows
the PaloVia^® Skin Renewing Laser^® to be marketed and sold directly to
consumers without a prescription.

For more information on Palomar and its products, visit Palomar's website at for professional products or for consumer
products. To continue receiving the most up-to-date information and latest
news on Palomar as it happens, sign up to receive automatic e-mail alerts by
going to the About Palomar/Investors section of the website.

Safe Harbor Statement

With the exception of the historical information contained in this release,
the matters described herein contain forward-looking statements, including,
but not limited to, statements relating to new markets, future royalty amounts
due from third parties, development and introduction of new products,
financial and operating projections, the anticipated closing of the merger,
the merger consideration to be paid to holders of Palomar common stock
pursuant to the merger, the anticipated benefits to Palomar stockholders of
the merger and future growth opportunities of the combined company. These
forward-looking statements are neither promises nor guarantees, but involve
risk and uncertainties that may individually or mutually impact the matters
herein, and cause actual results, events and performance to differ materially
from such forward-looking statements. These risk factors include, but are not
limited to, results of future operations, difficulties or delays in developing
or introducing new products and keeping them on the market, the results of
future research, lack of product demand and market acceptance for current and
future products, adverse events, product changes, the effect of economic
conditions, challenges in managing joint ventures and research with third
parties, the impact of competitive products and pricing, governmental
regulations with respect to medical devices, including whether FDA clearance
will be obtained for future products and additional applications, the results
of litigation, difficulties in collecting royalties, potential infringement of
third-party intellectual property rights, factors affecting the Company's
future income and resulting ability to utilize its NOLs, difficulties in
combining the operations of Cynosure and Palomar, failure to receive approval
from the stockholders of Palomar or Cynosure or to satisfy other conditions to
the parties' obligations to complete the merger, the effects of disruption
from the merger making it more difficult to maintain relationships with
employees, licensees, customers, suppliers or other business partners or
governmental entities, the ability of Cynosure to successfully integrate
Palomar's operations and employees, the ability to realize anticipated
synergies and cost savings, other business effects, including the effects of
industry, economic or political conditions outside of the parties' control,
transaction costs, actual or contingent liabilities, the risk that competing
offers for Palomar will be made and/or other factors, and/or other factors,
which are detailed from time to time in the Company's SEC reports, including
the Company's report on Form 10-K for the year ended December 31, 2012 and any
subsequently filed quarterly report on Form 10-Q. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as
of the date hereof. The Company undertakes no obligation to release publicly
the result of any revisions to these forward-looking statements that may be
made to reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events.

Additional Information about the Proposed Transaction and Where to Find It

In connection with the proposed merger, Cynosure has filed with the Securities
and Exchange Commission ("SEC") a Registration Statement on Form S-4 that
includes a joint proxy statement of Cynosure and Palomar that also constitutes
a prospectus of Cynosure. Palomar and Cynosure also have filed and plan to
file other relevant documents with the SEC regarding the proposed merger.
INFORMATION. You may obtain a free copy of the joint proxy
statement/prospectus and other relevant documents filed by Cynosure and
Palomar with the SEC at the SEC's website at You may also obtain
these documents by contacting Cynosure's Investor Relations Department at
(617) 542-5300 or, or by contacting Palomar's
Investor Relations Department at (781) 993-2411 or

Cynosure and Palomar and their respective directors and executive officers and
other members of management and employees may be deemed to be participants in
the solicitation of proxies in respect of the proposed transaction.
Information about Cynosure's directors and executive officers is available in
the joint proxy statement/prospectus. As of March 15, 2013, Cynosure's
directors and executive officers beneficially owned approximately 16.9% of
Cynosure's common stock. Information about Palomar's directors and executive
officers is available in Amendment No. 1 to Palomar's Annual Report, filed on
Form 10-K/A on April 26, 2013 and in the joint proxy statement/prospectus. As
of March 15, 2013, Palomar's directors and executive officers beneficially
owned approximately 13.1% of Palomar's common stock. In addition, in
connection with the execution of the definitive agreement relating to the
merger, Joseph P. Caruso, Palomar's President, Chief Executive Officer and
Chairman of the Board of Directors, entered into (1) with Palomar, an
amendment to his existing employment agreement with Palomar that will become
effective at the closing of the merger and that provides for (among other
things) payment by Palomar of 110% of his retention bonus (which is equal to
the sum of (a) three times his annual compensation (including 2013 salary and
last paid bonus), plus (b) a pro rata portion of his bonus payable with
respect to 2013)), 75% of which will be paid within ten days after the closing
of the merger and 35% of which will be paid one day prior to the first
anniversary of the closing of the merger and (2) with Cynosure, a new
employment agreement that will become effective at the closing of the merger
and that provides for, among other things, Mr. Caruso to be appointed
Cynosure's President and Vice Chairman of the Board of Directors, a three-year
term of employment with Cynosure, subject to two-year extensions (unless
terminated by either party not less than 12 months prior to the end of the
then-current term), an initial annual base salary of $465,000, a target
performance bonus that is between the target performance bonus established for
Cynosure's Chief Executive Officer and Chief Financial Officer, a grant of
Cynosure equity awards and certain benefits upon a termination of employment
by Cynosure without "cause" (which may occur only after the first 12 months of
the initial term), Mr. Caruso for "good reason" or either party within 18
months after a "change in control" of Cynosure (each as defined in the new
employment agreement). Also in connection with the execution of the definitive
agreement relating to the merger, Paul Weiner, Palomar's Chief Financial
Officer, entered into a letter agreement with Palomar that will become
effective at the closing of the merger and that amends his existing employment
agreement with Palomar to (i) provide that amounts payable to Mr. Weiner
following the termination of his employment in connection with the merger will
be paid within 10 days after the closing of the merger and (ii) narrow the
scope of the restrictive covenants applicable to Mr. Weiner. Unvested
restricted stock awards with a value of approximately $4.7 million that are
held by Palomar's directors and executive officers will vest in full upon
completion of the merger.Other information regarding the participants in the
proxy solicitation and a description of their direct and indirect interests,
by security holdings or otherwise, is contained in the joint proxy
statement/prospectus and other relevant materials filed with the SEC regarding
the merger. Investors should read the joint proxy statement/prospectus
carefully before making any voting or investment decisions. You may obtain
free copies of these documents from Cynosure or Palomar using the sources
indicated above.

This press release shall not constitute an offer to sell or the solicitation
of an offer to buy any securities, nor shall there be any sale of securities
in any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such jurisdiction. No offering of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the U.S. Securities
Act of 1933, as amended.

Palomar Financial Summary:
Consolidated Statements of Operations (Unaudited)
                                     Three Months Ended
                                     March 31,
                                     2013          2012
Professional product revenues         $17,326,502  $ 11,897,174
Consumer product revenues             710,900       978,768
Service revenues                      3,148,605     3,770,243
Royalty revenues                      1,979,392     1,798,062
Other revenues                        57,660        555,556
Total revenues                        23,223,059    18,999,803
Costs and expenses:                                
Cost of professional product revenues 7,308,169     4,901,098
Cost of consumer product revenues     668,339       834,383
Cost of service revenues              1,383,621     1,659,963
Cost of royalty revenues              791,757       719,225
Research and development              2,582,453     3,372,261
Selling and marketing                 7,397,665     6,681,525
General and administrative            4,029,756     3,151,967
Total costs and expenses              24,161,760    21,320,422
Loss from operations                  (938,701)     (2,320,619)
Interest income                       76,593        89,003
Other (loss) income                   (437,315)     11,802
Loss before income taxes              (1,299,423)   (2,219,814)
(Benefit) provision for income taxes  (187,695)     71,978
Net loss                              $ (1,111,728) $ (2,291,792)
Net loss per share:                                
Basic                                 $(0.06)     $(0.12)
Diluted                               $(0.06)     $(0.12)
Weighted average shares outstanding:               
Basic                                 18,963,788    18,858,464
Diluted                               18,963,788    18,858,464

Condensed Consolidated Balance Sheets (Unaudited)
                                                  March 31,     December 31,
                                                  2013          2012
Current assets:                                                 
Cash, cash equivalents and short-term investments  $ 86,832,395  $ 88,174,163
Accounts receivable, net                           12,089,511    10,558,667
Inventories                                        20,643,184    21,584,907
Other current assets                               1,087,546     667,534
Total current assets                               120,652,636   120,985,271
Marketable securities and other investments        13,986,297    11,533,090
Property and equipment, net                        35,584,230    35,885,028
Other assets                                       408,529       425,293
Total assets                                       $ 170,631,692 $ 168,828,682
Liabilities and Stockholders' Equity                            
Current Liabilities:                                            
Accounts payable                                   $ 2,694,914   $ 1,645,696
Accrued liabilities                                9,980,681     9,102,544
Deferred revenue                                   3,357,469     3,286,422
Total current liabilities                          16,033,064    14,034,662
Accrued income taxes                               3,061,556     3,256,088
Deferred revenue, net of current portion           917,832       972,918
Total liabilities                                  $ 20,012,452  $ 18,263,668
Stockholders' equity:                                          
Preferred stock, $.01 par value--                               
Authorized - 1,500,000 shares                                   
Issued --none                                     --           --
Common stock, $.01 par value--                                  
Authorized - 45,000,000 shares                                 
Issued and Outstanding – 2013: 19,974,239 and
19,974,239 and 2012: 19,970,424 and 19,966,149     199,743       199,705
shares, respectively
Additional paid-in capital                         222,013,507   221,180,420
Accumulated other comprehensive loss               41,613        (252,891)
Accumulated deficit                                (71,635,623)  (70,523,893)
Treasury stock, at cost – 0 and 4,275 shares,      --           (38,327)
Total stockholders' equity                        $ 150,619,240 $ 150,565,014
Total liabilities and stockholders' equity         $ 170,631,692 $ 168,828,682

CONTACT: Kerry McAnistan
         Investor Relations Assistant
         Palomar Medical Technologies, Inc.
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