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Zeltiq Announces Third Quarter 2015 Financial Results

The following excerpt is from the company's SEC filing.

34% Year-over-Year Revenue Growth to $61.2 Million

Increases Full Year 2015 Revenue & Profitability Guidance

Receives FDA Clearance to Treat Submental Fat

Announces Collaboration with Massachusetts General Hospital for Treatment of Acne

337 systems shipped, compared to 260 systems in third quarter 2014, bringing total system installed base to 4,247 systems

247,298 revenue cycles, up 55% from third quarter 2014

Third quarter GAAP net income of $2.1 million, or $0.05 per share

Third quarter Adjusted EBITDA of $5.6 million, or 9.2% of total revenue

ZELTIQ

, (Nasdaq: ZLTQ) a medical technology company focused on developing and commercializing products utilizing its proprietary controlled-cooling technology platform, today announced financial results for the third quarter 2015.

Mark Foley, President and Chief Executive Officer, said, I am very pleased with our ongoing, successful execution and our ability to continue to expand and grow the non-invasive fat reduction market which we believe remains in its early stages of evolution. Our third quarter revenue of $61.2M reflects the significant momentum we are experiencing, our expanding leadership position and our ability to continue to penetrate the largely untapped $4 billion non-invasive fat reduction market. In the quarter, over 50% of our revenue came from consumables and our 34% year-over-year total revenue growth was driven by our ninth consecutive quarter of year-over-year account utilization growth. These results and our expectations for the fourth quarter have led us to raise our full year revenue guidance to approximately $252 million.

Mr. Foley continued, I am also pleased with the progress we continue to make on our strategic initiatives which include new product introductions, expanded indications, increasing brand awareness, shorter treatment times and increasing account utilization. In the third quarter we expanded our direct-to-consumer pilot, continued the successful roll out of our CoolSmooth PRO applicator, received FDA clearance to treat submental fat and launched our CoolMini applicator. Early feedback on our CoolMini applicator and its ability to treat submental fat has been very positive and we are excited about the significant new market opportunity CoolMini opens up and its ability to bring new patients into the aesthetic channel. Our CoolSmooth Pro applicator continues to receive positive feedback as more physicians experience the economic and convenience benefits of a shorter treatment time and better practice efficiency. In addition, we remain on track to introduce colder temperatures to our suction-based applicators in 2016 which we believe will enable our practices to reduce treatment times by almost half. Our direct-to-consumer pilot continues to generate positive results and our expansion into seven additional U.S. cities and one international market is having a measurable effect. Lastly, we are pleased to announce that we entered into a collaboration and license agreement with Massachusetts General Hospital (MGH) for the treatment of acne. The agreement provides ZELTIQ with the rights, on an exclusive worldwide basis, to the intellectual property generated from the collaboration. As part of this, we will be paying MGH a 3% royalty for any future products that are commercialized under this agreement. We have confidence that our technology, strategic initiatives, deep pipeline, marketing expertise and compelling practice economics will continue to drive robust top-line growth.

Third Quarter Financial Review

Total revenue for the third quarter 2015 was $61.2 million, consisting of $29.3 million of system revenue and $31.9 million of consumable revenue. This compares to total revenue of $45.7 million, consisting of $24.8 million of system revenue and $20.9 million of consumable revenue for the third quarter 2014. Total revenue cycles shipped increased 55% to 247,298 for the third quarter 2015, compared to 159,116 for the third quarter 2014.

Gross profit was $45.2 million, or 74% of revenue, for the third quarter 2015, compared to gross profit of $33.1 million, or 73% of revenue, for the third quarter 2014. Operating expenses for the third quarter 2015 were $43.2 million, compared to $28.2 million for the third quarter 2014.

Income from operations for the third quarter 2015 was $1.9 million, compared to $5.0 million for the third quarter 2014. Net income for the third quarter 2015 was $2.1 million, or $0.05 per share, compared to $4.8 million for the third quarter 2014, or $0.12 per share. Weighted average diluted shares outstanding was 40.9 million for the third quarter 2015 and 2014.

On a non-GAAP basis, the Company reported adjusted EBITDA of $5.6 million, or 9% of revenue, for...


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