Thermage Q2: Robust Results in Ailing Aesthetics Market

Despite the slowdown seen in the aesthetics market, second quarter revenue at Thermage totaled $17.9 million, a 2% increase over Q2 2007. International revenue increased 10 percent while domestic revenues declined four percent.

The company offset weaker sales of its ThermCool system by selling more treatment tips and other consumables. During the second quarter, the average selling price of treatment tips increased 12% year-over-year.

Consumables drove second quarter gross profit of $13.8 million, a robust 77.1% of revenue, better than the 72.5% reported in Q2 2007. Despite flat revenue growth, Thermage managed net income of $2.0 million.

The real story remains the pending acquisition of Reliant. Reliant generated $22.6 million in revenue in its second quarter, an increase of 19% from the same period last year.

For the remainder of 2008, Thermage will focus on increasing systems sales, especially in international markets, generating recurring revenue from the sale of treatment tips, and closing the Reliant transaction.

Not accounting for the Reliant transaction, Thermage maintains its previously announced revenue guidance of $67 to $70 million for full-year 2008.

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