STRATA Skin Sciences Reports Record Fourth Quarter 2022 Revenue
Achieved record revenue of
Company to host conference call and webcast today,
Fourth Quarter 2022 and Recent Business Highlights:
- Revenue in the fourth quarter of 2022 was a record
$10.6 million , an increase of 17% over the fourth quarter of 2021- Global recurring revenue was
$6.5 million - Gross domestic recurring billings were
$5.8 million
- Global recurring revenue was
- Revenue for the full year 2022 was
$36.2 million , a 21% increase over the full year 2021- Global recurring revenue was
$23.0 million - Gross domestic recurring billings were
$22.3 million (See Reconciliation of Non-GAAP measures below)
- Global recurring revenue was
- Domestic installed base increased to 909 XTRAC® devices at
December 31, 2022 - In
January 2022 , announced the acquisition of acne treatment device, TheraClear®X, fromTheravant Corporation and commercially launched the system inJuly 2022 - Announced the additions of
Michael E. Goodman as Head of International Sales inMay 2022 andJohn Bagdasarian as Vice President of Professional Relations inMarch 2022 - Entered into the estimated
$300 million acne, psoriasis, and vitiligo market inMexico with exclusive distribution agreement for TheraClear®X, VTRAC®, and XTRAC® - Poster accepted at ODAC Dermatology, Aesthetic & Surgical Conference titled “Advancement of Personalized Photopneumatic Therapy for Rapid, Visible Improvement in Patients to Mild to Moderate Acne”
- Launched new XTRAC website, with Practice Finder function, allowing potential patients to find dermatologists in surrounding area offering XTRAC services
“This past year, we successfully executed on multiple fronts that contributed to our strong commercial performance,” mentioned
Fourth Quarter 2022 Financial Results
Revenues for the fourth quarter of 2022 were
Gross profit for the fourth quarter of 2022 was
Selling and marketing costs for the fourth quarter of 2022 were
Other expense for the fourth quarter of 2022 were
Net loss for the fourth quarter of 2022 was
Full Year 2022 Financial Results
Revenues for the full year 2022 were
Gross profit for the full year 2022 was
Selling and marketing costs for the full year 2022 were
Other expenses for the full year 2022 were
Net loss for the full year 2022 was
Cash, cash equivalents and restricted cash at
Financial Outlook
STRATA projects 2023 full-year revenue to be between
Webcast and Conference Call Information
STRATA management will host a conference call today, beginning at
Reconciliation of Non-GAAP Measures
To supplement the Company’s consolidated financial statements, prepared in accordance with accounting principles generally accepted in
The Company’s reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards but is not a substitute for, nor superior to, GAAP results. These non-GAAP measures are provided to enhance investors' overall understanding of our current financial performance and to provide further information for comparative purposes.
Specifically, the Company believes the non-GAAP measures provide useful information to management and investors by isolating certain expenses, gains, and losses that may not be indicative of the Company’s core operating results and business outlook. In addition, the Company believes non-GAAP measures enhance the comparability of results against prior periods. Reconciliation of the GAAP measures of net loss to non-GAAP measures included in this press release is as follows (in thousands) (unaudited):
For the Twelve Months Ended | For the Three Months Ended |
||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Net loss | ( |
) | ( |
) | ( |
) | ( |
) | |||||||
Adjustments: | |||||||||||||||
Depreciation and amortization | 5,293 | 3,736 | 1,322 | 1,047 | |||||||||||
Amortization of right-of-use asset | 395 | 350 | 147 | 89 | |||||||||||
Loss on disposal of property and equipment | 52 | 140 | - | 67 | |||||||||||
Income taxes | 63 | 34 | 63 | 22 | |||||||||||
Loss (Gain) on forgiveness of debt | - | (2,029 | ) | - | (1 | ) | |||||||||
Interest income | (89 | ) | (15 | ) | (44 | ) | 1 | ||||||||
Interest expense | 926 | 314 | 275 | 205 | |||||||||||
Non-GAAP EBITDA | 1,091 | (176 | ) | 1,603 | 581 | ||||||||||
Stock-based compensation expense | 1,466 | 1,643 | 191 | 80 | |||||||||||
Non-GAAP adjusted EBITDA | 2,557 | 1,467 | 1,794 | 661 |
XTRAC® Gross Domestic Recurring Billings
XTRAC® gross domestic recurring billings represent the amount invoiced to partner clinics when treatment codes are sold to the physician. It does not include normal GAAP adjustments, which are deferred revenue from prior quarters recorded as revenue in the current quarter, the deferral of revenue from the current quarter recorded as revenue in future quarters, adjustments for co-pay and other discounts. This excludes international recurring revenues.
The following is a reconciliation of non-GAAP XTRAC® gross domestic billings to domestic recorded revenue for the fourth quarter and year ended 2022 and 2021 (in thousands):
Three Months Ended |
Year Ended |
|||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||
Gross domestic recurring billings | ||||||||||||
Co-Pay adjustments | 294 | (58 | ) | (268 | ) | (600 | ) | |||||
Other discounts | (40 | ) | (38 | ) | (163 | ) | (154 | ) | ||||
Deferred revenue from prior quarters | 2,309 | 2,107 | 1,867 | 1,765 | ||||||||
Deferral of revenue to future quarters | (2,170 | ) | (1,867 | ) | (2,170 | ) | (1,867 | ) | ||||
GAAP Recorded domestic revenue |
About
STRATA is proud to offer these exciting technologies in the
Safe Harbor
This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company’s plans, objectives, expectations and intentions and may contain words such as “will,” “may,” “seeks,” and “expects,” that suggest future events or trends. These statements, the Company’s ability to launch and sell an acne treatment device and to integrate that device into its product offerings, the Company’s ability to develop, launch and sell products recently acquired or to be developed in the future, the Company’s ability to develop social media marketing campaigns, direct to dermatologist marketing campaigns, and the Company’s ability to build a leading franchise in dermatology and aesthetics, are based on the Company’s current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company’s expectations due to financial, economic, business, competitive, market, regulatory, adverse market conditions or supply chain interruptions resulting from the coronavirus and political factors or conditions affecting the Company and the medical device industry in general, future responses to and effects of COVID-19 pandemic and its variants including the distribution and effectiveness of the COVID-19 vaccines, as well as more specific risks and uncertainties set forth in the Company’s
Investor Contact:
Phone: +1 (404) 736-3838
sskn@cg.capital
Consolidated Balance Sheets
(in thousands except share and per share data)
2022 | 2021 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 5,434 | $ | 12,586 | ||||
Restricted cash | 1,361 | — | ||||||
Accounts receivable, net of allowance for doubtful accounts of |
4,471 | 3,433 | ||||||
Inventories | 5,547 | 3,489 | ||||||
Prepaid expenses and other current assets | 691 | 462 | ||||||
Total current assets | 17,504 | 19,970 | ||||||
Property and equipment, net | 7,498 | 6,883 | ||||||
Operating lease right-of-use assets | 975 | 638 | ||||||
Intangible assets, net | 17,394 | 10,083 | ||||||
8,803 | 8,803 | |||||||
Other assets | 98 | 216 | ||||||
Total assets | $ | 52,272 | $ | 46,593 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 3,425 | $ | 2,822 | ||||
Accrued expenses and other current liabilities | 6,555 | 6,377 | ||||||
Deferred revenues | 2,778 | 3,285 | ||||||
Current portion of operating lease liabilities | 355 | 318 | ||||||
Current portion of contingent consideration | 313 | — | ||||||
Total current liabilities | 13,426 | 12,802 | ||||||
Long-term debt, net | 7,476 | 7,319 | ||||||
Deferred revenues and other liabilities | 314 | 400 | ||||||
Deferred tax liability | 306 | 266 | ||||||
Operating lease liabilities, net of current portion | 610 | 392 | ||||||
Contingent consideration, net of current portion | 8,309 | — | ||||||
Total liabilities | 30,441 | 21,179 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Series C convertible preferred stock, |
— | — | ||||||
Common stock, |
35 | 34 | ||||||
Additional paid-in capital | 249,024 | 247,059 | ||||||
Accumulated deficit | (227,228 | ) | (221,679 | ) | ||||
Total stockholders’ equity | 21, 831 | 25,414 | ||||||
Total liabilities and stockholders’ equity | $ | 52,272 | $ | 46,593 |
Consolidated Statements of Operations
(in thousands except share and per share data)
Year Ended |
||||||||||||||
2022 | 2021 | |||||||||||||
Revenues, net | $ | 36,161 | $ | 29,977 | ||||||||||
Cost of revenues | 14,393 | 10,127 | ||||||||||||
Gross profit | 21,768 | 19,850 | ||||||||||||
Operating expenses: | ||||||||||||||
Engineering and product development | 1,029 | 1,434 | ||||||||||||
Selling and marketing | 15,301 | 13,106 | ||||||||||||
General and administrative | 10,087 | 9,712 | ||||||||||||
26,417 | 24,252 | |||||||||||||
Loss from operations | (4,649 | ) | (4,402 | ) | ||||||||||
Other (expense) income: | ||||||||||||||
Interest expense | (926 | ) | (314 | ) | ||||||||||
Interest income | 89 | 15 | ||||||||||||
Gain on forgiveness of debt | — | 2,029 | ||||||||||||
(837 | ) | 1,730 | ||||||||||||
Loss before income tax expense | (5,486 | ) | (2,672 | ) | ||||||||||
Income tax expense | (63 | ) | (34 | ) | ||||||||||
Net loss | $ | (5,549 | ) | $ | (2,706 | ) | ||||||||
Net loss per share of common stock, basic and diluted | $ | (0.16 | ) | $ | (0.08 | ) | ||||||||
Weighted average shares of common stock outstanding, basic and diluted | 34,712,246 | 34,050,274 |
Consolidated Statements of Cash Flows
(in thousands)
Year Ended |
||||||
2022 | 2021 | |||||
Cash flows from operating activities: | ||||||
Net loss | $ | (5,549 | ) | $ | (2,706 | |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||
Depreciation and amortization | 5,293 | 3,736 | ||||
Amortization of operating lease right-of-use assets | 395 | 350 | ||||
Amortization of deferred financing costs and debt discount | 157 | 37 | ||||
Provision for doubtful accounts | 107 | 1 | ||||
Stock-based compensation | 1,466 | 1,643 | ||||
Loss on disposal of property and equipment | 52 | 140 | ||||
Gain on forgiveness of debt | — | (2,029 | ||||
Deferred taxes | 40 | 12 | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | (1,145 | ) | (490 | |||
Inventories | (1,524 | ) | (45 | |||
Prepaid expenses and other assets | (111 | ) | (65 | |||
Accounts payable | 603 | 58 | ||||
Accrued expenses and other liabilities | 229 | 1,679 | ||||
Deferred revenues | (644 | ) | (444 | |||
Operating lease liabilities | (477 | ) | (369 | |||
Net cash (used in) provided by operating activities | (1,108 | ) | 1,508 | |||
Cash flows from investing activities: | ||||||
Purchase of property and equipment | (3,552 | ) | (3,653 | |||
Cash paid in connection with TheraClear asset acquisition | (631 | ) | — | |||
Cash paid in connection with Ra Medical asset acquisition | — | (3,473 | ||||
Net cash used in investing activities | (4,183 | ) | (7,126 | |||
Cash flows from financing activities: | ||||||
Payment of contingent consideration | (500 | ) | — | |||
Proceeds from long-term debt | — | 8,000 | ||||
Payment of deferred financing costs | — | (133 | ||||
Repayment of note payable | — | (7,275 | ||||
Repayment of long-term debt | — | (500 | ||||
Net cash (used in) provided by financing activities | (500 | ) | 92 | |||
Net decrease in cash, cash equivalents and restricted cash | (5,791 | ) | (5,526 | |||
Cash, cash equivalents and restricted cash at beginning of year | 12,586 | 18,112 | ||||
Cash, cash equivalents and restricted cash at end of year | $ | 6,795 | $ | 12,586 | ||
Supplemental disclosure of cash flow information: | ||||||
Cash paid during the year for interest | $ | 744 | $ | 222 | ||
Cash paid during the year for income taxes | $ | 19 | $ | — | ||
Supplemental schedule of non-cash investing and financing activities: | ||||||
Change in operating lease right-of-use assets and liabilities due to new and amended leases | $ | 732 | $ | — | ||
Inventories acquired in connection with TheraClear asset acquisition | $ | 71 | $ | — | ||
Intangible assets acquired in connection with TheraClear asset acquisition | $ | 10,182 | $ | — | ||
Contingent consideration issued in connection with TheraClear asset acquisition | $ | 9,122 | $ | — | ||
Common stock issued in connection with TheraClear asset acquisition | $ | 500 | $ | — | ||
Transfer of property and equipment to inventories | $ | 463 | $ | — | ||
Issuance of common stock warrants in connection with Senior Term Facility | $ | — | $ | 585 | ||
Assumed deferred revenues in connection with asset acquisition | $ | — | $ | 1,841 |
Source: STRATA Skin Sciences, Inc.