Medical Systems
ESC Medical Systems


Baby boomers with high disposable income and a desire to look good, doctors looking for sources of private income, and a health-care trend in which office procedures are preferred to hospital surgery present ESC Medical Systems with huge opportunities to expand its already leading role, in the esthetic and medical communities.

The company is a world leader in the design, manufacture and marketing of a broad range of pulsed light and laser-based systems, for aesthetic and medical use, and is a pioneer in new technologies and applications.
"The principal target markets for the company’s aesthetic products are physicians with private practices or clinics, and leading beauty/hair removal centers. These practitioners wish to tap into the vanity market, and are attempting to increase their revenues and reduce dependence on reimbursements," says Yacha Sutton, CEO of ESC Medical.

IPL Quantum
"The target market for the company’s surgical products are hospitals and outpatient clinics that use lasers for surgical procedures. Today, the trend is to perform procedures in a doctor's office, rather than in an operating theater," he said.
"Baby boomers are aging. They want to look better, and are ready to spend money on modern technologies. This is exactly where we can serve," he said

Most of the company’s products are based on proprietary technologies that utilize intense pulsed light (IPL) or state-of-the-art laser applications pioneered by ESC.
Otolam

IPL products include hair removal systems, non-invasive treatment of varicose veins and other benign vascular lesions, and removal of benign pigmented lesions, such as age spots and tattoos. In addition, the company develops and markets surgical laser systems for a number of medical applications, including ear, nose and throat, and gynecological procedures.

Since July last year, ESC has implemented a major restructuring program. The whole management team has been replaced, there has been a major cost cutting effort, and non-core activities have been eliminated. Former Governor of the Bank of Israel Prof. Jacob A. Frenkel, who presently serves as chairman of Merrill Lynch’s Sovereign Advisory and Global Financial Institutions Groups, was elected chairman of the board.

"We have established a new business model, based on profitability, R&D, and expansion into new markets," says Frenkel. "The major focus of the company is on value to the shareholder; projects are evaluated on the basis of short term and long term profit generation."

The company marked its second quarter of return to net profitability with venues of $42.5 million and net income of $6.4 million ($0.25 earnings per share). Sales for 2000 are expected to reach $160 million.

"Throughout the restructuring process the company maintained its market leadership and continued its strong R&D program," Sutton said, "resulting in the recent launching of new products."

In March 2000 the company launched its Quantum series, single application IPL systems targeting the lower end of the market, and an exciting new IPL application, photo-rejuvenation, for treating facial skin imperfections.

Near term revenue and profit drivers include several new initiatives:
Aculight Photocosmetic Program, a novel business model to extend hair removal and aesthetic services to the salon and cosmetician market.
ClearLight, a breakthrough light based treatment for acne.
GyneLase, used in the treatment of excessive menstrual bleeding menorrhagia) using an in-office procedure. Menorrhagia affects 20 percent of all menstruating women.
AccuVet, a compact, easy to use laser, for the veterinary market. This product is already selling successfully in the US and Japan.
OpusDent, a series of dental lasers which dentists can use instead of drills, when treating hard- and soft-tissue problems.
OtoLam, a major new application for replacing drainage tubes, in children suffering from otitis media. These chronic ear infections affect 20 percent of all children.

"Each of these products has the potential to make a significant impact on our bottom line," Sutton said.

Frenkel concludes: "ESC is a leading, high-technology company representing the advanced medical technology, produced by Israeli know-how. I am confident that the new management and board of directors, together with the dedicated employees of the company will lead ESC to successful, profitable growth."


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