Revenues for the first quarter of 2009 were $11.9 million, reflecting the low level of economic activity in global markets. This compares with revenues of $34.1 million for the first quarter of 2008. Syneron's gross margins were 58.1% in the first quarter. Despite margins still being lower than historical trends, the improvement in gross margins from the last quarter of 2008 reflects cost savings resulting from the first stages of the restructuring program.

Syneron recorded a net loss in the first quarter of $8.2 million on a GAAP basis, compared to a net loss of $15.9 million in the fourth quarter of 2008 and a net profit of $8.3 million in the first quarter of 2008. The net loss for the first quarter of 2009 includes approximately $4.4 million in one-time charges incurred in the first quarter and a credit of approximately $4 million arising from a legal settlement. The GAAP result for the first quarter is equivalent to a loss of $0.30 per basic and diluted share, compared to a loss of $0.58 per basic and diluted share in the last quarter of 2008 and earnings per share of $0.30 in the first quarter of 2008. On a non-GAAP basis, excluding stock-based compensation expenses, net loss in the first quarter was $6.2 million, compared to a net loss of $13.7 million in the fourth quarter of 2008 and a net profit of $10.2 million in the first quarter of 2008. The non-GAAP result for the first quarter is equivalent to a loss of $0.23 per basic and diluted share, compared to a fourth quarter loss in 2008 of $0.50 per basic and diluted share and earnings per share of $0.37 in the first quarter of 2008.

Syneron's balance sheet and cash position remain strong. Syneron's cash position (including long-term deposits) totaled $215.2 million as of March 31, 2009 and Syneron continues to have no debt. Trade receivables decreased to $22.1 million from $32.6 million at the end of 2008. Shareholders' equity at the end of the first quarter of 2009 was $235.8 million.

Commenting on the results and his first quarter as CEO of Syneron, Lou Scafuri said, "My first priority this quarter was to complete the restructuring program to make Syneron more efficient and more responsive to market conditions. We continued to cut costs and improve efficiencies across the company with the result of a further 10% reduction in operating expenses.

"My second and no less important priority was to get all parts of the Syneron team to work together to design and begin to implement tactical changes in our systems and marketing strategy to make our business model more responsive to our customers and to current and future economic volatility. As we announced last month, we are designing all new systems to be able to be marketed at a lower initial entry price, but with significant recurring revenue. This enhanced value proposition will increase our competitiveness across the market segments including the core practitioners."

Mr. Scafuri concluded, saying, "At the Aesthetics Show next month in Las Vegas, we will be launching the new product line of platforms with disposables. This new product base, combined with a strong financial position, leaner corporate structure, more diversified revenue base, and selective international investments has significantly strengthened Syneron's competitive position in North American and global markets. Now that we might be beginning to see the first signs of improvements in core physician interest and market conditions, it is my priority to execute the initiatives that the Syneron teams have developed to ensure that Syneron again assumes the position of industry leader capitalizing on its innovation and profitability as markets strengthen."

Conference call

Syneron management will host its first 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 "Q1 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): 877-795-3613 in the U.S., and 719-325-4835 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. The Company'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 Medical Ltd. is located in Israel.