Exhibit 99.1

 

STRATA Skin Sciences Reports Third Quarter 2023 Revenue

 

Third Quarter 2023 and Recent Business Highlights:

“I am pleased to have rejoined the STRATA Skin Sciences team,” commented Dr. Dolev Rafaeli, Vice-Chairman, and Chief Executive Officer.  “As a significant and long-standing shareholder, I am committed to ensuring that we maximize the inherent growth potential in the business by re-establishing our previous successful initiatives focused on driving utilization and average revenue per device in our domestic recurring partnership model. As we move forward, we will seek to drive value with our clinical partners and solidify our continued leadership in the market.”

Third Quarter Financial Results

Revenues for the third quarter of 2023 were $8.9 million, compared to revenues of $9.4 million for the third quarter of 2022.

Global recurring revenues for the third quarter of 2023 were $5.3 million, compared to global recurring revenues of $5.8 million for the third quarter of 2022. Equipment revenues were $3.6 million for the third quarter of 2023, as compared to $3.6 million for the third quarter of 2022, staying flat.

Gross profit for the third quarter of 2023 was $5.0 million, or 56% of revenues, compared to $5.8 million, or 62% of revenues, for the third quarter of 2022. The decrease in gross profit percentage was primarily the result of higher depreciation due to more XTRAC lasers and new TheraClear devices placed into service, higher material costs, and a change in product mix with lower dermatology recurring revenue procedures during the three months ended September 30, 2023.

Selling and marketing costs for the third quarter of 2023 were $3.0 million, as compared to $3.8 million for the third quarter of 2022. The lower selling and marketing costs can be attributed to a reduction in advertising costs. General and administrative costs for the third quarter of 2023 were $2.3 million, as compared to $2.6 million for the third quarter of 2022. The reduction in general and administrative costs are primarily attributed to the decrease in employee-related expenses, such as salaries and stock-based compensation expense, and lower computer-related costs.

Other expense for the third quarter of 2023 was $0.4 million, compared to $0.2 million for the third quarter of 2022. The increase in other expenses for the third quarter was primarily attributed to the result of a higher interest rate on the variable rate Senior Term Facility entered into in September 2021.

Net loss for the third quarter of 2023 was $1.1 million, or a loss of $0.03 per basic and diluted common share, as compared to the net loss for the third quarter of 2022 of $1.0 million, or a net loss of $0.03 per basic and diluted common share.

For the period ending September 30, 2023, the company had a cash and cash equivalents balance of $8.5 million, compared to the balance on December 31, 2022, of $6.8 million.  This increase was primarily attributed to additional proceeds received upon the refinancing of the Senior Term Facility on June 30, 2023, offset by an increase in inventories, and a decrease in accrued expenses and other current liabilities.

Suspension of Guidance

As a result of the recent management change, the company has suspended guidance for the fiscal year ending December 31, 2023, and until further notice.

“We look forward to Dr. Dolev Rafaeli’s execution on steering the business back towards strong revenue growth and profitability,” stated Dr. Uri Geiger, Chairman of the Board. “Given his successful track record, the Board is enthusiastic about the opportunities ahead.”

Webcast and Conference Call Information

STRATA management will host a conference call today, beginning at 4:30 PM ET. The conference call will be concurrently webcast.

 

The link to the webcast is available here: STRATA Skin Sciences Earnings Webcast

 

To listen to the conference call, please dial 877-269-7756 (US/Canada), 1-201-689-7817 (International), and use the conference ID number 13741439.

 

Reconciliation of Non-GAAP Measures

To supplement the Company’s consolidated financial statements, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), the Company provides certain non-GAAP measures of financial performance, including non-GAAP adjusted EBITDA and Gross Domestic Recurring Billings.

 

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):

 

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 third quarter of 2023 and 2022 (in thousands):

 

About STRATA Skin Sciences, Inc.

 

STRATA is proud to offer these exciting technologies in the U.S. through its unique Partnership Program. STRATA’s popular partnership approach includes a fee per treatment cost structure versus an equipment purchase, installation and use of the device, on-site training for practice personnel, service and maintenance of the equipment, dedicated account and customer service associates, and co-op advertising support to help raise awareness and promote the program within the practice.

 

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 labor supply shortages, or supply chain interruptions resulting from the coronavirus, fiscal, and political factors, responses, or conditions affecting the Company, the medical device industry and our customers and patients in general, as well as more specific risks and uncertainties set forth in the Company’s SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all these forward-looking statements may prove to be incorrect or unreliable. The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not undertake any obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release. The Company urges investors to carefully review its SEC disclosures available at www.sec.gov and www.strataskinsciences.com.

 

Investor Contact:

Rich Cockrell

CG Capital

Phone: +1 (404) 736-3838