Delaware
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000-51481
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13-3986004
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(State or Other
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(Commission File
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(I.R.S. Employer
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Jurisdiction of
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Number)
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Identification No.)
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Incorporation)
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100 Lakeside Drive, Suite 100, Horsham, Pennsylvania
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19044
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(Address of Principal Executive Offices)
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(Zip Code)
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Exhibit No.
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Exhibit Description
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99.1
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Press Release dated November 13, 2018 issued by STRATA Skin Sciences, Inc.
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|
STRATA SKIN SCIENCES, INC.
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|
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Date: November 13, 2018
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By:
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/s/ Matthew C. Hill
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|
|
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Matthew C. Hill
|
|
|
|
Chief Financial Officer
|
|
·
|
Revenues were $7.9 million, an increase of 8%
|
·
|
Recurring XTRAC® revenues were $5.6 million, or 70% of total revenues. Average revenue per device was $7,448, an increase of 4.6%
|
·
|
Gross margins were 61.4%, an increase of 6.4%
|
·
|
Dermatology Recurring Procedures Revenue margin was 68.4%, an increase of 6%
|
·
|
Cash and cash equivalents as of September 30, 2018 of $15.9 million, an increase of $1.5 million over June 30, 2018
|
For the Three Months Ended September 30,
|
For the Nine Months Ended September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Net Loss
|
$
|
(290
|
)
|
$
|
(13,671
|
)
|
$
|
(3,868
|
)
|
$
|
(17,111
|
)
|
||||
Adjustments:
|
||||||||||||||||
Depreciation/amortization
|
1,253
|
1,602
|
3,993
|
4,811
|
||||||||||||
Income taxes
|
(80
|
)
|
38
|
-
|
181
|
|||||||||||
Interest expense
|
239
|
1,343
|
930
|
4,264
|
||||||||||||
Non-GAAP EBITDA
|
1,122
|
(10,688
|
)
|
1,055
|
(7,855
|
)
|
||||||||||
Stock compensation
|
366
|
63
|
570
|
136
|
||||||||||||
Change in fair value of warrants
|
79
|
(81
|
)
|
101
|
(77
|
)
|
||||||||||
Write-off of Nordlys inventory & assets
|
-
|
-
|
280
|
-
|
||||||||||||
Loss on extinguishment of debt
|
-
|
11,799
|
-
|
11,799
|
||||||||||||
Impairment of distributors rights agreement
|
-
|
-
|
(11
|
)
|
-
|
|||||||||||
Non-GAAP adjusted EBITDA
|
$
|
1,567
|
$
|
1,093
|
$
|
1,995
|
$
|
4,003
|
||||||||
(in thousands except for Average Recurring Revenue per Consigned Systems and Systems Placed under Recurring Revenue Model)
|
||||||||||||||||||||||||||||
Q1 2017
|
Q2 2017
|
Q3 2017
|
Q4 2017
|
Q1 2018
|
Q2 2018
|
Q3 2018
|
||||||||||||||||||||||
Dermatology recurring procedures revenue
|
$
|
5,556
|
$
|
5,971
|
$
|
5,525
|
$
|
5,588
|
$
|
4,498
|
$
|
5,167
|
$
|
5,556
|
||||||||||||||
Dermatology procedures equipment revenue
|
$
|
1,537
|
$
|
2,500
|
$
|
1,751
|
$
|
3,008
|
$
|
1,968
|
$
|
2,366
|
$
|
2,336
|
||||||||||||||
Systems placed under dermatology procedure recurring revenue model (installed base)
|
791
|
795
|
776
|
753
|
746
|
746
|
746
|
|||||||||||||||||||||
Average recurring revenue per consigned system per quarter
|
$
|
7,024
|
$
|
7,511
|
$
|
7,120
|
$
|
7,421
|
$
|
6,029
|
$
|
6,926
|
$
|
7,448
|
||||||||||||||
Dermatoloty recurring procedures segment margin percent
|
63.2
|
%
|
69.1
|
%
|
62.3
|
%
|
56.7
|
%
|
56.7
|
%
|
63.6
|
%
|
68.4
|
%
|
||||||||||||||
Total Company gross margin percent, including Nordlys inventory and fixed asset write off
|
61.5
|
%
|
62.5
|
%
|
55.0
|
%
|
49.8
|
%
|
49.0
|
%
|
53.6
|
%
|
61.4
|
%
|
||||||||||||||
The Dermatology procedures equipment revenue includes $0, $391, $118, $684, $218, $59, $57 for the quarters reqpresented above, respectively, in the cancelled Nordlys product line.
|
Date:
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Tuesday, November 13
|
|
Time:
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8:30 am Eastern Time
|
|
Toll Free:
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888-204-4368
|
|
International:
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323-994-2082
|
|
Israel-local
|
1809-212-909
|
|
Passcode:
|
3967099
|
|
Webcast:
|
www.strataskinsciences.com
|
Matthew Hill, Chief Financial Officer
|
Jeremy Feffer, Managing Director
|
STRATA Skin Sciences, Inc.
|
LifeSci Advisors, LLC
|
215-619-3200
|
212-915-2568
|
ir@strataskin.com
|
jeremy@lifesciadvisors.com
|
September 30, 2018
|
December 31, 2017
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
15.888
|
$
|
4,069
|
||||
Accounts receivable, net
|
2,728
|
3,141
|
||||||
Inventories
|
2,488
|
3,009
|
||||||
Other current assets
|
670
|
533
|
||||||
Property and equipment, net
|
5,698
|
7,703
|
||||||
Goodwill and intangible assets, net
|
18,670
|
20,128
|
||||||
Other non-current assets, net
|
48
|
48
|
||||||
Total assets
|
$
|
46,190
|
$
|
38,631
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Long-term debt and other notes payable
|
$
|
7,362
|
$
|
10,597
|
||||
Accounts payable and accrued current liabilities
|
4,464
|
4,637
|
||||||
Current portion of deferred revenues
|
327
|
291
|
||||||
Deferred tax liability
|
392
|
414
|
||||||
Other long-term liabilities
|
268
|
447
|
||||||
Stockholders' equity
|
33,377
|
22,245
|
||||||
Total liabilities and stockholders' equity
|
$
|
46,190
|
$
|
38,631
|
For the Three Months Ended
September 30,
|
||||||||
2018
|
2017
|
|||||||
Revenues
|
$
|
7,892
|
$
|
7,285
|
||||
Cost of revenues
|
3,049
|
3,276
|
||||||
Gross profit
|
4,843
|
4,009
|
||||||
|
||||||||
Operating expenses:
|
||||||||
Engineering and product development
|
224
|
411
|
||||||
Selling and marketing
|
2,487
|
2,492
|
||||||
General and administrative
|
2,184
|
1,678
|
||||||
|
4,895
|
4,581
|
||||||
Operating loss before other income (expense), net
|
(52
|
)
|
(572
|
)
|
||||
|
||||||||
Other income (expense), net:
|
||||||||
Interest expense, net
|
(239
|
)
|
(1,343
|
)
|
||||
Change in fair value of warranty liability
|
(79
|
)
|
81
|
|||||
Loss on extinguishment of debt
|
-
|
(11,799
|
)
|
|||||
(318
|
)
|
(13,061
|
)
|
|||||
Loss before income taxes
|
(370
|
)
|
(13,633
|
)
|
||||
Income tax benefit (expense)
|
80
|
(38
|
)
|
|||||
Net loss
|
$
|
(290
|
)
|
$
|
(13,671
|
)
|
||
Net loss per common share - basic and diluted
|
$
|
(0.01
|
)
|
$
|
(3.32
|
)
|
||
Shares used in computing net loss per basic and diluted common share
|
29,912,827
|
2,477,743
|
||||||
Net loss per Preferred C share - basic and diluted
|
$
|
(3.23
|
)
|
$
|
(1,235.43
|
)
|
||
Shares used in computing net loss per basic and diluted Preferred C share
|
10,049
|
4,400
|
For the Nine Months Ended
September 30,
|
||||||||
2018
|
2017
|
|||||||
Revenues
|
$
|
21,982
|
$
|
22,852
|
||||
Cost of revenues
|
9,842
|
9,182
|
||||||
Gross profit
|
12,050
|
13,670
|
||||||
|
||||||||
Operating expenses:
|
||||||||
Engineering and product development
|
831
|
1,309
|
||||||
Selling and marketing
|
7,737
|
8,312
|
||||||
General and administrative
|
6,319
|
4,999
|
||||||
|
14,887
|
14,620
|
||||||
Operating loss before other income (expense), net
|
(2,837
|
)
|
(950
|
)
|
||||
|
||||||||
Other income (expense), net:
|
||||||||
Interest expense, net
|
(930
|
)
|
(4,264
|
)
|
||||
Change in fair value of warrant liability
|
(101
|
)
|
77
|
|||||
Loss on extinguishment of debt
|
-
|
(11,799
|
)
|
|||||
Other income, net
|
-
|
6
|
||||||
(1,031
|
)
|
(15,980
|
)
|
|||||
Loss before income taxes
|
(3,868
|
)
|
(16,930
|
)
|
||||
Income tax expense
|
-
|
(181
|
)
|
|||||
Net loss
|
$
|
(3,868
|
)
|
$
|
(17,111
|
)
|
||
Net loss per common share – basic and diluted:
|
$
|
(0.15
|
)
|
$
|
(5.94
|
)
|
||
Shares used in computing net loss per basic and diluted share:
|
16,099,752
|
2,328,274
|
||||||
Net loss per Preferred C share – basic and diluted:
|
$
|
(57.58
|
)
|
$
|
(2,208.96
|
)
|
||
Shares used in computing net loss per basic and diluted Preferred C share
|
23,872
|
1,483
|
For the Nine Months Ended
September 30,
|
||||||||
2018
|
2017
|
|||||||
Cash Flows From Operating Activities:
|
||||||||
Net loss
|
$
|
(3,868
|
)
|
$
|
(17,111
|
)
|
||
Adjustments to reconcile net loss to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
3,993
|
4,811
|
||||||
Provision for doubtful accounts
|
53
|
58
|
||||||
Loss on disposal of property and equipment
|
503
|
-
|
||||||
Gain on cancellation of distributor rights agreement
|
-
|
(40
|
)
|
|||||
Impairment of intangible asset and liability
|
(11
|
)
|
23
|
|||||
Stock-based compensation
|
570
|
136
|
||||||
Deferred tax provision
|
(22
|
)
|
180
|
|||||
Amortization of debt discount
|
44
|
2,344
|
||||||
Amortization of deferred financing costs
|
79
|
171
|
||||||
Loss on extinguishment of debt
|
-
|
11,799
|
||||||
Change in fair value of warrant liability
|
101
|
(77
|
)
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
361
|
130
|
||||||
Inventories
|
521
|
(716
|
)
|
|||||
Prepaid expenses and other assets
|
(137
|
)
|
406
|
|||||
Accounts payable
|
(614
|
)
|
71
|
|||||
Other accrued liabilities
|
423
|
(162
|
)
|
|||||
Other liabilities
|
(3
|
)
|
108
|
|||||
Deferred revenues
|
(198
|
)
|
115
|
|||||
Net cash provided by operating activities
|
1,795
|
2,246
|
||||||
Cash Flows From Investing Activities:
|
||||||||
Lasers placed-in-service, net
|
(1,254
|
)
|
(1,450
|
)
|
||||
Purchases of property and equipment, net
|
(6
|
)
|
(321
|
)
|
||||
Payments on distributor rights liability
|
(23
|
)
|
(115
|
)
|
||||
Net cash used in investing activities
|
(1,283
|
)
|
(1,886
|
)
|
||||
Cash Flows From Financing Activities:
|
||||||||
Proceeds from issuance of common stock
|
14,664
|
-
|
||||||
Repayments of long-term debt
|
(3,000
|
)
|
(857
|
)
|
||||
Payments on notes payable
|
(357
|
)
|
(304
|
)
|
||||
Net cash provided by (used in) financing activities
|
11,307
|
(1,161
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
11,819
|
(801
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
4,069
|
3,928
|
||||||
Cash and cash equivalents, end of period
|
$
|
15,888
|
$
|
3,127
|