Syneron Reports Third Quarter 2009 Financial Results

YOKNEAM, ISRAEL, Nov 09 (MARKET WIRE) --
Syneron Medical Ltd. (NASDAQ: ELOS)

Recent highlights

-- Third consecutive quarter of gross margin improvement
-- Return to positive cash flow from operating activities during the
three-month period ending September 30, 2009
-- Sequential revenue growth in the seasonally weakest quarter
-- DSOs fall for third consecutive quarter
-- Inventories lowered for the third consecutive quarter
-- Signed definitive agreement for merger transaction with Candela
Corporation
-- Completed acquisition of Primaeva Medical Inc.

Syneron Medical Ltd. (NASDAQ: ELOS), an innovator in the development,
marketing and sales of elos(TM) combined-energy medical aesthetic devices,
today announced financial results for the third quarter ended September
30, 2009.

Revenues for the third quarter of 2009 were $14.3 million, compared to
revenues of $14.2 million in the second quarter of 2009, and revenues of
$28.5 million for the third quarter of 2008.

Syneron's gross margins improved for the third consecutive quarter. Gross
margins widened to 67% in the third quarter from 64.8% in the second
quarter of 2009. Syneron's gross margin has risen by 12.3 percentage
points since the fourth quarter of 2008.

Syneron recorded a net loss in the third quarter of $5.5 million on a GAAP
basis which includes $0.7 million in stock-based compensation and
approximately $1.2 million of expenses related to the merger of Syneron
with Candela Corporation, announced on September 9, 2009. The third
quarter net loss of $5.5 million compares to a similar net loss of $5.5
million in the second quarter of 2009 and a net profit of $2.2 million in
the third quarter of 2008. The merger related expenses are included in the
GAAP results in accordance with FASB statement number 141(R) "Business
Combinations" which is effective for business combinations occurring after
January 1, 2009. Syneron will continue to note merger related expenses on
a quarterly basis until the transaction is completed.

On a non-GAAP basis, excluding stock-based compensation expenses, net loss
in the third quarter was $4.8 million, compared to a net profit on a
non-GAAP basis of $3.1 million in the third quarter of 2008.

GAAP EPS amounted this quarter to a loss of $0.20 per basic and diluted
share, compared to a loss of $0.20 per basic and diluted share in the
second quarter of 2009, and earnings per basic and diluted share of $0.08
in the third quarter of 2008. On a non-GAAP basis, the result for the
third quarter is equivalent to a loss of $0.17 per basic and diluted
share, compared to earnings per basic and diluted share on a non-GAAP
basis of $0.11 in the third quarter of 2008.

Commenting on the results and developments in the third quarter, Syneron
CEO Lou Scafuri said, "I am pleased with the results for the third
quarter, especially the strong improvement in our gross margin during the
past nine months, our return to a positive cash flow from operating
activities, and the sequential improvement in revenue in the third
quarter which, traditionally, is the weakest quarter for the aesthetic
device sector. The continued improvement in the gross margin and the
positive turn in cash flow from operations reflect, primarily, the
success of deep company-wide restructuring, while the sequential increase
in revenue, although modest, is evidence of physician acceptance of the
new products we have introduced to the market since the start of the
year. These sales figures are also encouraging because they support the
indications of gradually improving demand for procedures and devices
which we have begun receiving from our luminary doctors and major
customers.

"The economic challenges of the past year," Mr. Scafuri continued, "have
been the catalyst for dynamic change across markets, our sector clearly
included. The aesthetic industry was impacted by the economic downturn and
credit tightening, but I believe we are emerging as a much stronger sector
and I am proud that Syneron is leading that change, most significantly
with our announcement in September of the contemplated merger between
Syneron and Candela Corporation. We have also led with the launch of
several new products which offer a new business model suitable to today's
market requirement for an enhanced value proposition, as well as efficacy
and less patient down time. These products include the unique and
innovative eMatrix(TM), which has been well received by physicians, and
is based on a new paradigm of treatment aimed at transforming the sector
into one that is significantly more flexible and responsive to changing
patient and physician criteria for less invasive yet highly efficacious
aesthetic treatments."

Syneron emerged out of the third quarter with a significantly stronger
balance sheet. Syneron's cash position (including long-term deposits)
totaled $213.3 million as of September 30, 2009 and Syneron continues to
have no debt. Trade receivables, net, decreased to $16.8 million as of
September 30, 2009 from $32.6 million at the end of 2008. Inventories fell
for the third consecutive quarter to $9.7 million, representing a 24%
decline since December 31, 2008. Shareholders' equity at the end of the
third quarter of 2009 was $228.1 million.

Commenting on the improved financial position, CFO Fabian Tenenbaum said,
"The continued improvement in the balance sheet in the third quarter
reflects enhanced processes and controls introduced as part of the
restructuring program. Combined with the streamlining of operations and
cost savings, these better financial controls will place Syneron in a
favorable position as the rise in macroeconomic activity positively
impacts the aesthetic medical device industry."

Conference call

Syneron management will host its third quarter earnings conference call
today at 8:30am ET. Syneron will be broadcasting live via the Investor
Relations section of its website, www.syneron.com. To access the call,
enter the Syneron website, then click on the Investors Relations Overview
and select "Q3 2009 Results Conference Call." Participants are encouraged
to log on at least 15 minutes prior to the conference call in order to
download the applicable audio software. The call can be heard live or with
an on-line replay which will follow. Those interested in participating in
the call and the question and answer session should dial (toll free):
888-211-7360 in the U.S., and 913-312-0959 from overseas.

Use of Non-GAAP Measures

This press release provides financial measures for net loss, net loss per
diluted share, net profit and net profit per diluted share, which exclude
an expense charge related to stock-based compensation and are therefore
not calculated in accordance with generally accepted accounting principles
(GAAP). Management believes that these non-GAAP financial measures provide
meaningful supplemental information regarding our performance because it
reflects our operational results and enhances management's and investors'
ability to evaluate the Company's net profit and net profit per diluted
share. The presentation of this non-GAAP financial information is not
intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with GAAP.
Management uses both GAAP and non-GAAP measures when evaluating the
business internally and, therefore, felt it important to make these
non-GAAP adjustments available to investors. A reconciliation of each
GAAP to non-GAAP financial measure discussed in this press release is
contained in the accompanying financial tables.

About Syneron

Syneron Medical Ltd. (NASDAQ: ELOS) manufactures and distributes medical
aesthetic devices that are powered by the proprietary, patented elos
combined-energy technology of Bi-Polar Radio Frequency and Light.
Syneron's innovative elos technology provides the foundation for highly
effective, safe and cost-effective systems that enable physicians to
provide advanced solutions for a broad range of medical-aesthetic
applications including hair removal, wrinkle reduction, rejuvenating the
skin's appearance through the treatment of superficial benign vascular
and pigmented lesions, and the treatment of acne, leg veins and
cellulite. Founded in 2000, the corporate, R&D, and manufacturing
headquarters for Syneron are located in Israel. Syneron has offices and
distributors throughout the world, including North American Headquarters
and Logistics Support in Irvine, CA, and Asia-Pacific Headquarters in
Hong Kong, which provide sales, service and support. Additional
information can be found at www.syneron.com.

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning
of the U.S. Private Securities Litigation Reform Act of 1995 relating to
future events or Syneron's future performance, including statements with
respect to Syneron's expectations regarding, but not limited to Syneron's
profitability and maintaining a leadership position in core markets.
Forward-looking statements involve known and unknown risks, uncertainties
and other factors that may cause Syneron's actual results, levels of
activity, performance or achievements to be materially different from any
future results, levels of activity, performance or achievements expressed
or implied in those forward-looking statements, including, but not limited
to the risks associated with Syneron's ability to operate under the
difficult conditions of the current global economy; the risk associated
with Syneron's ability to commercialize new products and identify new
markets for Syneron's technology; ability to manage Syneron's growth,
competition and pricing pressure; risks associated with Syneron's
international operations; risks associated with Syneron's collaboration
with Procter & Gamble; risks associated with regulatory qualifications or
approvals; risks related to Syneron's intellectual property; risks related
to Syneron's operations in Israel; the ability of each of Syneron and
Candela to satisfy the closing conditions and consummate the merger
transaction, including obtaining the approval of the transaction by
Candela's stockholders; the risk that the businesses of Syneron and
Candela may not be coordinated successfully; the risk that the merger
transaction of Syneron and Candela may involve unexpected costs or
unexpected liabilities; the risk that synergies from the merger
transaction may not be fully realized or may take longer to realize than
expected and the risk that disruptions from the merger transaction make
it more difficult to maintain relationships with customers, employees, or
suppliers. Further information regarding these and other risks relating
to Syneron's business, including the operations of Candela, is set forth
under the heading "Risk Factors" in Syneron's registration statement on
Form F-4, filed with the Securities and Exchange Commission (the "SEC")
on October 28, 2009 and in other reports filed with the SEC. These
factors are updated from time to time through the filing of reports and
registration statements with the SEC. Syneron does not assume any
obligation to update the forward-looking information contained in this
press release.

IMPORTANT ADDITIONAL INFORMATION

In connection with the combination of Syneron and Candela pursuant to an
Agreement and Plan of Merger (the "Merger"), Syneron has filed with the
SEC a registration statement on Form F-4, which includes a proxy
statement of Candela and a prospectus of Syneron and other relevant
materials in connection with the proposed transactions. Candela has also
filed the same proxy statement/prospectus with the SEC. Investors and
security holders are urged to read the proxy statement/prospectus and the
other relevant materials (when they become available) because these
materials will contain important information about Syneron, Candela, and
the proposed transaction. The proxy statement/prospectus and the other
relevant materials (when they become available), and any and all
documents filed with the SEC, may be obtained free of charge at the SEC's
web site at www.sec.gov. In addition, free copies of the documents filed
with the SEC by Syneron will be available on the investor relations
portion of Syneron's website at www.syneron.com. Free copies of the
documents filed with the SEC by Candela will be available on the investor
relations portion of Candela's website at www.candelalaser.com. INVESTORS
AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND
THE OTHER RELEVANT MATERIALS (WHEN THEY BECOME AVAILABLE) BEFORE MAKING
ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED
TRANSACTIONS.

Syneron, the Syneron logo, and elos are trademarks of Syneron Medical Ltd.
and may be registered in certain jurisdictions. elos (Electro-Optical
Synergy) is a proprietary technology of Syneron Medical Ltd. All other
names are the property of their respective owners.

Syneron Medical Ltd.
CONSOLIDATED STATEMENTS OF INCOME
U.S. dollars in thousands, except per share data

Three Months ended Nine Months ended
September 30, September 30,
2009 2008 2009 2008
(unaudited)(unaudited)(unaudited)(unaudited)
---------- ---------- ---------- ---------
Revenues 14,279 28,493 40,323 100,805
Cost of Revenues 4,705 7,026 14,664 23,252
---------- ---------- ---------- ---------
Gross Profit 9,574 21,467 25,659 77,553

Operating expenses:
Research and development 3,063 3,646 8,949 10,633
Selling and marketing 7,531 13,259 26,287 41,548
General and administrative 4,225 2,684 13,059 9,924
Legal settelement, net of legal
cost - - (3,975) -
---------- ---------- ---------- ---------
Total operating expenses 14,819 19,589 44,320 62,105

---------- ---------- ---------- ---------
Operating (Loss) Income (5,245) 1,878 (18,661) 15,448
Financial Income, net 447 529 1,661 3,226
---------- ---------- ---------- ---------
Income (Loss) before taxes on
income (4,798) 2,407 (17,000) 18,674
Taxes on income 858 219 2,455 (2,825)
---------- ---------- ---------- ---------
Income (Loss) before non
controlling interest (5,656) 2,188 (19,455) 21,499
Net loss attributable to non
controlling interest 107 - 213 -
---------- ---------- ---------- ---------
Net (Loss) income attributable
to Syneron shareholders (5,549) 2,188 (19,242) 21,499

Basic net (Loss) Income per
share (0.20) 0.08 (0.70) 0.78
Diluted net (Loss) Income per
share (0.20) 0.08 (0.70) 0.78
========= ========= ========= ========
Weighted average number
of shares used in per share
calculation (in thousands):
Basic 27,530 27,436 27,505 27,394
Diluted 27,530 27,503 27,505 27,518
========= ========= ========= ========

Syneron Medical Ltd.
CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands

September 30, December 31,
2009 2008
(unaudited) (audited)
------------- -------------
CURRENT ASSETS
Cash and cash equivalents (*) 32,282 72,366
Short term bank deposit (*) 1,923 -
Available-for-sale marketable securities (*) 156,868 117,342
Trade receivables 16,759 32,637
Other accounts receivables and prepaid expenses 2,064 4,249
Inventories 9,668 12,660
------------- -------------
Total Current Assets 219,564 239,254

LONG-TERM ASSETS
Severance pay fund 209 107
Long-term deposits and others (*) 209 180
Long-term available-for-sale marketable
securities (*) 22,022 27,214
Investments in affiliated companies 3,300 4,225
Property and equipment, net 2,940 3,656
Intangible assets, net 5,412 3,828
Goodwill 4,251 2,822
------------- -------------
Total Long-Term Assets 38,343 42,032

------------- -------------
Total Assets 257,907 281,286
============= =============

CURRENT LIABILITIES
Trade Payables 3,582 8,675
Other accounts payable and accrued expenses 22,748 25,587
------------- -------------
Total Current Liabilities 26,330 34,262

LONG-TERM LIABILITIES
Deferred Revenues 2,367 3,140
Warranty Accruals 803 1,117
Accrued severance pay 307 171
------------- -------------
Total Long-Term Liabilities 3,477 4,428

EQUITY 228,100 242,596
------------- -------------
Total Liabilities and Equity 257,907 281,286
============= =============

(*) Total Cash and Liquid Investments 213,304 217,102

Syneron Medical Ltd.
CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

Three Months ended Nine Months ended
September 30, September 30,
2009 2008 2009 2008
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- ----------
CASH FLOWS FROM
OPERATING
ACTIVITIES
Net (loss) income before
non controlling
interest (5,656) 2,188 (19,455) 21,499
Adjustments to reconcile
net (loss) income to
net cash provided by
(used in) operating
activities:
Depreciation and
amortization 355 453 1,509 1,250
Deferred taxes, net 550 - 1,366 -
Increase (decrease) in
accrued severance pay,
net 4 (2) 13 39
Decrease (increase) in
trade receivables 2,098 (1,337) 15,878 (4,028)
Decrease (increase) in
other accounts
receivables and prepaid
expenses 9 (163) 831 1,847
Decrease (increase) in
inventories 823 (405) 3,161 (2,659)
Increase (decrease) in
trade payables 811 (1,436) (5,160) (979)
Increase (decrease) in
other account payables
and accrued expenses 1,247 395 (842) (1,436)
Impairments of
available-for-sale
marketable securities 36 350 208 467
Realized loss, changes
in accrued interest and
amortization of premium
on marketable
securities 333 279 1,322 191
Equity based
compensation 738 895 3,427 5,400
Decrease in deferred
revenues and warranty
accruals (986) (1,052) (3,161) (494)
----------- ----------- ----------- ----------

Net cash provided by
(used in) operating
activities 362 165 (903) 21,097
----------- ----------- ----------- ----------

CASH FLOWS FROM
INVESTING ACTIVITIES

Maturity (purchase) of
short-term deposits,
net (130) - (1,923) 1,000
Purchase of
available-for-sale
marketable securities (100,870) (33,125) (247,368) (180,439)
Proceeds from sale and
redemption of
available-for-sale
marketable securities 90,380 15,556 211,565 140,856
Payments for investments
in Affiliated Companies (350) (723) (750) (1,303)
Net cash paid in
conjunction with
acquisition of a
subsidiary - - (41) -
Acquisition of minority
shares in a subsidiary (16) (40) (440) (40)
Investment in long-term
deposits and others (35) (37) (22) (50)
Purchase of property and
equipment (175) (318) (396) (830)
----------- ----------- ----------- ----------

Net cash used in
investing activities (11,196) (18,687) (39,375) (40,806)
----------- ----------- ----------- ----------

CASH FLOWS FROM
FINANCING ACTIVITIES

Repurchase of ordinary
shares from
shareholders at cost - - - (1,927)
Issuance of shares as a
result of exercise of
options and RSU's 193 1 194 4
----------- ----------- ----------- ----------
Net cash provided by
(used in) financing
activities 193 1 194 (1,923)
----------- ----------- ----------- ----------
Decrease in cash and
cash equivalents (10,641) (18,521) (40,084) (21,632)
Cash and cash
equivalents at the
beginning of the period 42,923 39,513 72,366 42,624
----------- ----------- ----------- ----------
Cash and cash
equivalents at the end
of the period 32,282 20,992 32,282 20,992
----------- ----------- ----------- ----------

Syneron Medical Ltd.
Reconciliation Between GAAP To Non-GAAP Consolidated Statement Of Income
U.S. dollars in thousands, except per share data

Three Months ended Nine Months ended
September 30, September 30,
2009 2008 2009 2008
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
Operating (Loss) Income
(GAAP) (5,245) 1,878 (18,661) 15,448
Non-GAAP adjustment:
Stock based
compensation 738 895 3,427 5,400
----------- ----------- ----------- -----------
Non-GAAP operating
(Loss) Income (4,507) 2,773 (15,234) 20,848

Net (Loss) Income (GAAP) (5,549) 2,188 (19,242) 21,499
Non-GAAP adjustment:
Stock based
compensation 738 895 3,427 5,400
----------- ----------- ----------- -----------
Non-GAAP Net (Loss)
Income (4,811) 3,083 (15,815) 26,899

Non-GAAP net (Loss)
Income per share :
Basic net (Loss) Income
per share (0.17) 0.11 (0.57) 0.98
Diluted net (Loss)
Income per share (0.17) 0.11 (0.57) 0.97

Weighted average number
of shares used in per
share calculation (in
thousands):
Basic 27,530 27,436 27,505 27,394
Diluted 27,530 27,695 27,505 27,751
========= ========= ========= =========

For more information, please contact:

Fabian Tenenbaum
CFO
+972 73 244 2283
email: Email Contact

Judith Kleinman
VP Investor Relations
+972 54 646 1688
email: Email Contact

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