Saul Sterman

Palomar Technologies' Patent Play

Subbu-

The quotes above from Paul Weiner are confirmed in writing as of 9/14/06. If your conclusion is different than mine, please show me how you interpret the statements.

Note that I am not taking sides over here. I am not addressing the issue of whether or not the suit will succeed. Syneron’s silence is deafening. I waited in vain more than a reasonable amount of time for a response from CLZR and ELOS. I had to try and balance the article to the best of my ability without the assistance of David or Judith (Syneron).

I know that you are heavily invested in ELOS and I wish I could provide you with more clarity. Frankly, I have no idea how the markets will interpret this development. CrossProfit has not been able to post an evaluation line for CLZR, PMTI and ELOS because of the patent issue. It could be a lot more painful than we think – both ways.

Syneron Medical: Update and Corrections To This Promising Story (ELOS)

Retail Investor-

I must confess that when writing this article I had no idea that there was such interest in Syneron. E-mails received for the most part are about all three issues being raised by Retail Investor – Subbu. I have written beforehand but have never received e-mails! I hope to answer all by the end of this weekend. (Please use faq-at-crossprofit.com and not the other e-mail addresses on the site.)

The vast majority queried the security issue which I have addressed.

Subbu raises two additional distinctively separate issues. The first pertains to demand from the consumer (in your terminology ‘retail’). The second deals with point of sale (‘wholesale’?).

As a side note I take issue with the notion that ‘baby boomer vanity’ is the prime market for Syneron’s products. I also do not care much for the phrase itself. We are all vain, baby boomer or not. Do you not shave in the morning? Do you not enjoy putting on a nice clean pressed shirt? Do you not fix your hair or look in the mirror?

For now I will say that there are several categories of discretionary spending. If I can not find a site/article that explains this I will try to find the time to write a comprehensive article covering discretionary spending. Keep in mind that during the great depression beauty salons did very well while the haberdasheries were closing one after another. There is a reason for this…too long for a comment, will have to wait for site/article.

Point of sale is short and sweet. Money is money in all cultures and throughout the history of mankind. Yes, if a Doctor can pick up an extra buck especially in a respectable professional manner you better believe that he/she will do so. Why not?

Syneron Medical: Update and Corrections To This Promising Story (ELOS)

Retail Investor-

I see you have done your homework! I didn’t want to get into the knotty details but after your last comment it would be a disservice to SA readers not to explain.

At CrossProfit when compiling data on nearly 1000 U.S. listed companies we analyze their BCP – Business Continuity Program. Truth be told, with most Israeli companies we don’t bother.

Willy-nilly most Israeli companies had a BCP in place long before 9/11. Syneron is no exception. Syneron subcontracts all manufacturing. This is one of its strengths on an ongoing basis and provides the basic structure of its BCP.

The way Syneron has structured its BCP is typical Israeli style i.e. a three prong approach.

1) Primary protocol: Manufacturing is outsourced to three Israeli companies.

2) Secondary protocol: The three sites are located in three different geographical locations within Israel. Any two out of the three have the ability to manufacture the complete product line. Syneron will confirm this.

3) Backup protocol: Syneron maintains all production files at a location other than the three Primary sites. At the drop of a hat production can be transferred to several other predetermined locations/subcontracto... (in or) out of Israel. Syneron will confirm the existence of the production files but will not disclose details of its backup protocol.

In the case of a general call up of all reserves (unlikely) Syneron could activate its Secondary protocol and combine manufacturing to two sites. There are other options as well.

In the case of: nuclear (Iran?)/chemical (Syria)/biological (?) attack (not on the table now) Syneron could turnkey its Backup protocol.

Sorry for the doomsday prognosis but you did want to know if there was any added risk due to the Middle East situation. The answer is none.

Very few Fortune 500 companies have this type of a global production capability. The Primary/Secondary/Back... structure is the best known/cost effective BCP method available. The backup protocol is confidential. Hence, we do not know where the production lines would popup should the occasion arise.

It is beyond the scope of this comment to go into the numerous BCP categories and how different sectors/companies test and update their protocols.

I should have said ‘can be done globally’ and not ‘done globally’. Thank you for noticing.

Syneron Medical: Update and Corrections To This Promising Story (ELOS)

Retail Investor-

The tense situation in Israel has no effect on ELOS. Manufacturing is done globally. Supply lines are secure.

In the odd chance of an all out ground offensive into Lebanon, the IDF would call up only a small portion of the reserves. A few younger scientists in R&D might miss a month or two at work but that would be the extent of a worst case scenario. General Management is accustomed to doubling up whenever an employee goes off to do their annual reserve duty. A war situation is no different.

Currently action is limited to sending a clear message that Israel will not tolerate the abduction of civilians or soldiers from its sovereignty. Neither would anyone else tolerate such madness.

It is a shame that the language that is most understood in the Middle East is not English, Hebrew or Arabic. Firepower is.

Syneron Medical: Update and Corrections To This Promising Story (ELOS)

Just read your posts on Retail Investor & SeekingAlpha. You may be blessed with too much foresight, that is to say your right but way ahead of time.

What puzzles me is that you mentioned in one of your blogs that Syneron needs to come out with smack on earnings or better in order to regain the Street’s confidence. I agree – so why didn’t you wait until it was obvious that they would hit Q2 expectations? The report is due out in the beginning of August and the Street usually gets around to noticing these things two weeks beforehand. Timing is important. I bought today simply because next week might be a bit into the upswing.

If you would be kind enough to compile a list of the Medical Blogs mentioned in your comment and post them either in a nested comment here or on your site, it would be much appreciated. Kindly, Saul