Syneron bumped president Amit Meridor into the corner office, with company co-founder Shimon Eckhouse transitioning back to chair the board, effective immediately. Former chairman David Schlachet will remain with the board, which also welcomed the additions of company insiders Dominick Arena and Steve Fanning.
Meridor joined the company as president just last year, coming from a a background leading companies in the medical device as well as the apparel industries. Analysts at Leerink Swann labeled the swap a net positive for Syneron, saying that it signals a pivot point for the aesthetics devices maker.
"On the one hand it represents yet another CEO change in the past year (the 2nd CEO in the last 12 months), which can create some disruptions," analyst Richard Newitter wrote. "But in this case we believe consensus will view this positively as a potential signal that more strategic initiatives are in the works given: (1) Amit’s track record as a "turnaround leader," and (2) we believe Amit was involved in recent positive strategic decisions (i.e., Unilever JV) and has been integral to ELOS’s underway turnaround strategy that looks set to yield accelerating sales growth and improved profit margins in 2014 and beyond."
The news came amid a tough quarter for Syneron, which posted an 11.7% dip in sales and a 2.4% slide in profits. Most of the company’s net earnings came from a $3.3 million tax benefit related to a settlement with Israeli tax authorities, which contributed about 9¢ per share to Syneron’s bottom line.
In total the company posted profits of $4 million, or 27¢ per diluted share, on sales of $64.3 million during the 3 months ended December 31. That compared with profits of $4.1 million, or 15¢ per share, on sales of $72.8 million during the same period the previous year.
Adjusted per-share earnings came to 11¢ for the 4th quarter, beating analysts’ consensus estimate by 3¢.
Syneron also announced the acquisition of California-based New Lasers Inc. and its CoolTouch family of aesthetic systems. Syneron agreed to pay $11 million in cash with up to $4 million more in milestone-based payments until the end of 2015. The deal is slated to close in March 2014 and should become accretive to earnings starting next year.
"The acquisition of CoolTouch significantly enhances Syneron’s product offerings and market opportunity while also improving the recurring revenue profile of our business," outgoing CEO Eckhouse said in prepared remarks. "We believe CoolTouch will add value to Syneron’s product offerings by expanding our reach into new markets such as the endovascular treatment of varicose veins and minimally-invasive laser assisted lipolysis. In addition, the CoolTouch business model also supports our strategy to increase sales of products with recurring revenue streams."
ELOS shares jumped on Friday to close at $11.71, a 2.1% increase on the day. Share are down 4.8% since the start of the year.