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Cynosure Reports Record Revenues and Net Income for the Fourth Quarter of 2007

Wednesday, February 13, 2008 General News J E 4
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WESTFORD, Mass., Feb. 12 Cynosure, Inc.(Nasdaq: CYNO), a leading developer and manufacturer of a broad array oflight-based aesthetic treatment systems, today announced record revenues andnet income for the quarter and year ended December 31, 2007.

Fourth Quarter 2007 Financial Results

Revenues increased 49% to $36.6 million in the fourth quarter of 2007 from$24.6 million for the fourth quarter of 2006. Gross profit margin increasedmore than 600 basis points to 66% of total revenues compared with 60% for thesame period in 2006. Fourth quarter 2007 net income was $5.3 million, or$0.41 per diluted share, compared with net income of $1.5 million, or $0.13per diluted share, in the fourth quarter of 2006.

Non-GAAP net income, which excludes stock-based compensation expense andits related income tax effects, was $5.9 million, or $0.46 per diluted share,for the fourth quarter of 2007. This compares with non-GAAP net income of$2.5 million, or $0.21 per diluted share, in the fourth quarter of 2006, whichexcludes stock-based compensation expense and its related income tax effects.Please refer to the financial reconciliations included in this news releasefor a reconciliation of GAAP results to non-GAAP results for the three monthsended December 31, 2007 and 2006.

"We concluded a banner year in 2007 with another quarter of recordfinancial results, powered by continued customer demand for our flagshipaesthetic laser systems," said President and Chief Executive Officer MichaelDavin. "Laser product revenue increased 50% in the fourth quarter from thesame period in 2006 led by the success of our Smartlipo(R) laser lipolysisworkstation and our multi-energy Affirm(R) anti-aging platform, both of whichenjoyed a record quarter. In addition, we achieved a 66% gross margin in thequarter, reflecting our emphasis on higher-margin products, our strong brandin a competitive marketplace and efficient execution of our distributionstrategy."

"Cynosure's focus on direct distribution continues to yield positiveresults," Davin said. "In 2007, we added a total of 20 North American directsales reps, including a new surgical specialty sales force to market ourSmartlipo workstation in North America, bringing our total sales force inNorth America to 66. As a result, laser product revenue for the quarter fromdirect distribution rose 64% year-over-year, and contributed 83% of productrevenue in the fourth quarter compared with 76% of product revenue in thefourth quarter of 2006. While we plan to continue our sales force expansionin the quarters ahead, we believe the groundwork completed during the pastyear gives us strong momentum as we begin 2008."

Company Introduces Proprietary New Aesthetic Products at AAD 2008

Cynosure launched a new flagship workstation and two new productinnovations at this month's American Academy of Dermatology 2008 AnnualMeeting in San Antonio:

"We continue to focus on introducing proprietary products that enable ourcustomers to expand their aesthetic practices, and each of the innovations weunveiled at AAD fulfills that mission," Davin said. "Accolade creates newopportunities in the international markets where we continue to expand.SmartSense is our first offering of an intelligent delivery system, furtherextending our leadership position in laser lipolysis. And the Affirm Erhandpiece broadens the applications of our Affirm anti-aging workstation as acomplete solution to address a patient's skin rejuvenation needs."

2007 Financial Results

Revenues in 2007 increased approximately 59% to $124.3 million from $78.4million in 2006. Net income for 2007 was $14.5 million, or $1.15 per dilutedshare, versus a net loss of $650,000, or $0.06 per share, in 2006.

Non-GAAP net income, which excludes stock-based compensation expense andits related income tax effects and, for 2006, expenses r
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