According to the purchase agreement, purchase orders are to be placed with Candela for drop-shipment at a doctor's facility no sooner than 30 days from the time of the order. However, after speaking with PSSI representatives, it appears that in some instances PSSI will hold an inventory of machines. The purchase agreement also states that sales will not be recognized until PSSI proves the sale of a machine to an end user. This leaves CLZR open to demand shocks, which could drastically affect operating result. Hair removal lasers have taken off in limited markets.
Further penetration seems unlikely.
Dr. Gross emphasized the fact that he offers the surgery only if someone asks about it. He does not own a laser and considers the surgery to be scarcely profitable. He also noted that even if he were in a large metropolitan market, offering the surgery and owning the equipment would prove unprofitable in the long run. He asserts that the process does not achieve what patients expect, which he feels will quickly subdue the recent excitement about the application. Mike Pizzaro, from whom Dr. Gross rents lasers when needed, echoed Dr. Gross' sentiments about the long term success of the products.