Filed by Thermage, Inc.
Pursuant to Rule 425
Under the Securities Act of 1933 and
Pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: Thermage, Inc.
Commission File No.: 001-33123
 Thermage, Inc.
Thermage, Inc. (Nasdaq: THRM) (Nasdaq: THRM) Stephen Fanning Stephen Fanning Chairman and CEO Chairman and CEO |
 Additional Information and Where You Can Find It This communication may be deemed to be solicitation material in respect of the proposed transaction between Thermage and Reliant. In connection with the transaction, Thermage will file a registration statement on Form S-4 with the SEC containing a proxy statement/prospectus/information statement. The proxy statement/prospectus/information statement will be mailed to the stockholders of Thermage and Reliant. Investors and security holders of Thermage and Reliant are urged to read the proxy statement/prospectus/information statement when it becomes available because it will contain important information about Thermage, Reliant and the proposed transaction. The proxy statement / prospectus/information statement (when it becomes available), and any other documents filed by Thermage with the SEC, may be obtained free of charge at the SEC's web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Thermage by contacting Thermage Investor Relations by e-mail at IR@thermage.com or by telephone at (510) 259-7117. Investors and security holders are urged to read the proxy statement/prospectus/information statement and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed transaction. Thermage and its respective directors and executive officers may be deemed to be participants in the solicitation of proxies from its stockholders in favor of the proposed transaction. Information about the directors and executive officers of Thermage and their respective interests in the proposed transaction will be available in the proxy statement/prospectus/information statement. 2 |
 Forward
Looking Statements Forward Looking Statements This presentation contains forward-looking statements within the meaning of
the U.S. Private Securities Litigation Reform Act of 1995, including statements
regarding potential transaction timing, projected financial results, and
anticipated cost savings, synergies and other opportunities.
Forward-looking statements are based on management's current, preliminary
expectations and are subject to risks and uncertainties, which may cause
actual results to differ materially from the statements contained herein,
including the risks that the transaction is delayed or ultimately not
consummated, and that the anticipated financial and operating benefits of the
transaction are not realized, among other risks. Further information on
potential risk factors that could affect Thermage's business are detailed in the Company's Form 10-Q for the
quarter ended March 31, 2008, and additional risk factors relating to the proposed transaction discussed in this presentation will be presented in future
public filings. Undue reliance should not be placed on forward-looking
statements, which speak only as of the date they are made. Thermage undertakes no obligation to update publicly any forward-looking statements
to reflect new information, events or circumstances after the date they were
made, or to reflect the occurrence of unanticipated events. 3 |
 Agenda Agenda • Relay Transaction • Strategic Rationale • Market Opportunity • Combined Company Benefits • Transaction Details Overview • Financial Highlights • Prior to filing the final proxy, communications regarding the merger are restricted 4 |
 Creating a
Global Leader Creating a Global Leader Strategic Rationale Financial Rationale Combines two of the most differentiated and valued brands in aesthetic devices Highly complementary product offering Targeting the highest growth market sectors Strong economies of scale Significant cross-selling opportunities Track record of innovation Creates one of the largest sales forces in aesthetic devices Enhanced resources to target international sales Unique recurring revenue financial model Significant cost synergy opportunities benefiting from proximity of headquarters Anticipated cash flow generation of over $15 million in 2009 Expected to be accretive to GAAP EPS in 2009 5 |
 Significant Synergy
Opportunity Significant Synergy Opportunity EPS Accretive in 2009* Over $14 million in projected annual costs savings achieved in 12 months Significant efficiencies created in SG&A and manufacturing Leverage combined purchasing power Consolidate administrative activities and close proximity of headquarters Projected revenue opportunities Cross-selling Enhanced consumable opportunities Potential for product bundling * As compared to First Call 2009 consensus GAAP EPS of $0.26 as of July 3, 2008 6 |
 Thermage Thermage • Leader in skin tightening • Recent introduction of cellulite reduction • Over 500,000 procedures performed since commercialization in November 2002 • Broad Distribution: • Over 80 countries • OUS revenue of almost 50% • Industry’s leading disposables business model • Unique IP-protected technology 7 |
 Relay Relay • Leader in skin resurfacing and rejuvenation • Pioneer of fractional resurfacing in 2004 • Strong momentum in new product placements • Broad distribution: • Over 60 countries • OUS revenue of almost 38% 8 |
 Combining
Two of the Most Differentiated & Combining Two of the Most Differentiated
& Valued Brands in Aesthetics Valued Brands in Aesthetics • Creates one of the largest Aesthetic device companies in the industry • Strong balance between recurring revenue and new product placement • Highly differentiated technologies • Large installed base of approximately 4,000 systems • Track record of innovation 9 |
 Aesthetic Market
Overview Aesthetic Market Overview Key Growth Drivers Key Growth Drivers • Aging of U.S. Population • Broader Range of Non-invasive Treatments • Changing Practitioner Economics – managed care and government reimbursement restrictions • Increased Acceptance of Aesthetic Procedures Enormous U.S. Aesthetic Market with 11.7 Million Procedures and $13.5 Billion in Spending in 2007 (1) (1) Source: ASAPS Cosmetic Surgery National Data Bank, data derived from core
physicians 10 |
 Targeting the
Highest Growth Markets Targeting the Highest Growth Markets CAGR for U.S. Procedures & Device Sales (2007-2011) 33% 14% 26% 11% 23% 16% 19% 34% 17% 11% 18% 12% 0% 5% 10% 15% 20% 25% 30% 35% 40% Skin Tightening Skin Rejuvenation Skin Resurfacing Cellulite Reduction Hair Removal Acne Reduction No. of Procedures Device Sales ($MM) Source: Millennium Research Group 2007 report. Initial Target Markets 11 |
     Installed
Base Over 1,500 Installed Base Over 2,500 Cross Selling Opportunities Cross Selling Opportunities Cross-Branding Opportunities Strong Combination Therapy One Stop Shopping For Physicians Potential to Bundle Technology 12 |
 Creating One of
the Largest Sales Forces in Creating One of the Largest Sales Forces in Aesthetic Devices Aesthetic Devices Largest Bifurcated U.S. Sales Force Focused on Disposables Focused on Generators 13 |
 Consumable
Revenue Consumable Revenue 2007 Consumable Revenue Per Installed Instrument Dedicated sales force focused on consumables Proven cooperative marketing campaigns with physicians Enhanced resources to increase visibility with physicians and patients $20,300 $13,700 $- $5,000 $10,000 $15,000 $20,000 $25,000 Thermage Reliant 14 |
 Creating a
Strong Sustainable Business Creating a Strong Sustainable Business 2007 Revenue Streams 68% 26% 6% 20% 72% 8% 42% 51% 7% 0% 20% 40% 60% 80% 100% Thermage Reliant NewCo Tips Systems Other 15 |
 4/26/06
Eyes by Thermage™ Track Record of Innovation Track Record of Innovation 10/26/06 2/1/07 ThermaCool®NXT Tummy by Thermage™ 2/2/07 Hands by Thermage™ 6/26/07 Lips by Thermage™ 8/2/07 ThermaTip™ STC 10/1/07 ThermaTip™ DC and Body Shape procedure 2/1/08 ThermaTip™ CL (Cellulite) 8/14/06 Fraxel ® SR1500 Laser 2/2/07 Roller tips 2/2/07 2 Generation Optical Tracking™ 6/4/07 Fraxel Re:Fine™ Laser System 9/7/07 Fraxel Skin Ecology System 1/31/08 Q1 2007 Q4 Q3 Q4 Q3 Q2 Q1 Q2 Q1 2008 2006 Q1 2007 Q4 Q3 Q4 Q3 Q2 Q1 Q2 Q1 2008 2006 16 nd Fraxel Re:Pair™ Laser |
 Transaction Overview Transaction Overview Purchase Consideration 23.6 million shares and $25 million in cash, plus the assumption of $7.0 million of net debt, for an approximate total consideration of $95 million, based upon the closing price of Thermage common stock on July 3, 2008 Pro Forma Ownership (treasury stock method) Thermage: 51.1% Reliant: 48.9% Board/Management Chairman & CEO: Steve Fanning CFO: Jack Glenn Thermage: Six Directors Reliant: Three Directors Approvals Transaction is subject to approval of Thermage stockholders, of which certain stockholders holding 33%of the shares outstanding have agreed to vote in favor of the transaction Reliant stockholders have already approved the transaction by written consent Additional customary conditions to closing Anticipated Timing To Closing Fourth Quarter of 2008 17 |
 Combined Financial
Strength Combined Financial Strength Thermage 2007 Revenue $63.1 Reliant 2007 Revenue $70.5 Combined Company 2007 Revenue $133.6 Shares Outstanding 48 mil. 18 |
 International
Sales International Sales 62% 38% United States Rest of World 52% 22% 16% 10% United States Asia Pacific Europe & Middle East Rest of World • Expansion of international distribution for Reliant products • Greater leverage with distributors 19 |
 $63 $71 $102 $124 $124 $134 $141 $149 $0 $20 $40 $60 $80 $100 $120 $140 $160 THRM Reliant CUTR PMTI CYNO NewCo ELOS CLZR Creating Strong Economies of Scale Creating Strong Economies of Scale Source: Wall Street Research, and company (Thermage and Reliant) management. Strong Economies of Scale Greater Liquidity Enhanced Cash Flow Greater Resources to Drive R&D Better Negotiating Leverage With Suppliers and Distributors 2007 Revenue 20 |
 Creating a
Global Leader Creating a Global Leader Strategic Rationale Financial Rationale Combines two of the most differentiated and valued brands in Aesthetics Highly complementary product offering Targeting the highest growth market sectors Strong economies of scale Significant cross-selling opportunities Track record of innovation Creates one of the largest sales forces in Aesthetics Enhanced resources to target international sales Unique recurring revenue financial model Significant cost synergy opportunities benefiting from proximity of headquarters Anticipated cash flow generation of over $15 million in 2009 Expected to be accretive to GAAP EPS in 2009 21 |