STRATA Skin Sciences, Inc. (NASDAQ: SSKN) (“STRATA”), a medical
technology company in Dermatology and Plastic Surgery dedicated to
developing, commercializing and marketing innovative products for
the treatment of dermatologic conditions, today announced financial
results for the quarter ended September 30, 2020.
Recent Highlights
- Total revenue for the third quarter
of 2020 was $5.6 million, a decrease of 25.0% over the third
quarter of 2019– Recurring revenue for the third quarter of
2020 was $3.8 million, a 35.9% decrease over the third quarter of
2019 and a 37.2% increase over the second quarter of 2020–
Gross domestic recurring billings were $4.7 million, a 155%
increase over the second quarter 2020 (See Reconciliation of
Non-GAAP measures below)
- Total gross margins in the third
quarter of 2020 were 57.5%, a 4.3% decrease over third quarter
2019
- Cash, cash equivalents and
restricted cash at September 30, 2020 were $18.5 million
- Concluded the quarter with a global
recurring revenue installed base of 837 XTRAC devices, an increase
of 31 from June 30, 2020
- Results of our sponsored,
peer-reviewed study entitled, “Therapies for Psoriasis: Clinical
and Economic Comparisons,” published in the Journal of Drugs in
Dermatology. XTRAC® was found to be most effective and economical
treatment for plaque psoriasis compared to other therapies
- Cigna, a global health company
insuring over 20 million people in the United States, issued a new
medical coverage policy insuring the previously uncovered condition
of vitiligo
“We are pleased by our performance in the third
quarter, underscored by strong growth in both recurring revenue and
gross domestic recurring billings over the second quarter of 2020,
commensurate with broader trends in regional recovery. We are
confident that these results demonstrate the measures we
implemented in 2018 – to strategically focus on driving recurring
revenue – are resonating once again, picking up from the meaningful
momentum that we built in 2019,” said Dr. Dolev Rafaeli, Chief
Executive Officer of STRATA Skin Sciences.
Dr. Rafaeli continued, “While we are encouraged
by these positive trends, we remain cautiously optimistic with
variability expected from COVID-19 resurgences and rising cases
across the U.S. and the world. Despite this continued level of
uncertainty, we remain confident in the core strength of our
business and the resiliency of our team and partner clinics. We
believe that we are strategically poised to deliver durable growth
over the long term, as we continue to lead the way for improved
patient care with XTRAC.”
Third Quarter 2020 Financial ResultsRevenues
for the third quarter of 2020 were $5.6 million, as compared to
revenues of $7.5 million for the third quarter of 2019. Recurring
revenues for the third quarter of 2020 were $3.8 million, as
compared to recurring revenues of $6.0 million for the third
quarter of 2019. Equipment revenues were $1.8 million for the third
quarter of 2020, as compared to $1.5 million for the third quarter
of 2019.
Gross profit for the third quarter of 2020 was
$3.2 million, or 57.5% of revenues, as compared to $4.6 million, or
61.8% of revenues, for the third quarter of 2019. Gross profit on
recurring revenues for the third quarter of 2020 was $2.5 million,
or 64.3% of revenues, as compared to $4.0 million, or 67.2% of
revenues, for the third quarter of 2019. The decrease in gross
profit is the result of lower sales due to the COVID-19 pandemic,
fixed costs in manufacturing and the impact of the change in
deferred revenues.
Selling and marketing costs for the third
quarter of 2020 were $2.1 million, as compared to $2.9 million for
the third quarter of 2019, primarily as a result of lower tradeshow
costs, travel costs, compensation costs and direct to consumer
advertising costs. General and administrative costs for the third
quarter of 2020 were $1.9 million, as compared to $2.2 million for
the third quarter of 2019, as a result of lower legal, accounting
and consulting costs partially offset by higher insurance and stock
compensation costs. Other expense for the third quarter of 2020 was
$21,000, compared to $153,000 for the third quarter of 2019, as a
result of lower interest expense due to refinancing of the
Company’s long-term debt in December 2019.
Net loss for third quarter 2020 was $1.3
million, or a loss of $0.04 per basic and diluted common share, as
compared to the net loss for the third quarter of 2019 of $0.9
million, or a net loss of $0.03 per basic and diluted common
share.
Webcast and Conference Call
Information STRATA management will host a conference call
today, beginning at 8:30 a.m. Eastern. The conference call will be
concurrently webcast. The link to the webcast is available on the
company website (www.strataskinsciences.com) under the investor
relations section and will be archived for future reference. To
listen to the conference call, please dial 1-800-786-6705
(US/Canada), 1-212-271-4651 (International), or 1-809-468-011
(Israel) and use the conference ID number 21971988.
Reconciliation of Non-GAAP
MeasuresTo 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 Gross 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 both 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):
Adjusted EBITDA
|
|
|
For the Three Months Ended September 30, |
|
For the Nine Months EndedSeptember
30, |
|
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$(1,254 |
) |
|
$(860 |
) |
|
$(3,969 |
) |
|
$(3,275 |
) |
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Depreciation/amortization* |
|
|
890 |
|
|
|
1,183 |
|
|
|
3,035 |
|
|
|
3,677 |
|
|
Income taxes |
|
|
72 |
|
|
|
(22 |
) |
|
|
207 |
|
|
|
(111 |
) |
|
Interest expense, net |
|
|
21 |
|
|
|
153 |
|
|
|
38 |
|
|
|
433 |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP EBITDA |
|
|
(271 |
) |
|
|
454 |
|
|
|
(689 |
) |
|
|
724 |
|
|
Stock compensation |
|
|
403 |
|
|
|
257 |
|
|
|
1,243 |
|
|
|
883 |
|
Non-GAAP adjusted EBITDA |
|
$132 |
|
|
$711 |
|
|
$554 |
|
|
$1,607 |
|
Gross Domestic Recurring
BillingsGross 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.
Gross domestic recurring billings for July,
August and September 2020 were $1.4 million, $1.6 million, and $1.7
million, respectively. The total gross domestic recurring billings
for the third quarter of 2020 was $4.7 million, compared to $1.8
million for the second quarter of 2020.
The following is a reconciliation of non-GAAP
gross domestic billings to recorded revenue for the third quarter
of 2020 (in thousands):
Gross domestic recurring billings |
$4,700 |
|
|
Co-Pay adjustments |
|
(160 |
) |
|
Other discounts |
|
(6 |
) |
|
Deferred revenue from prior quarters |
|
546 |
|
|
Deferral of revenue to future quarters |
|
(1,390 |
) |
|
GAAP Recorded revenue |
$3,690 |
|
|
About STRATA Skin Sciences,
Inc.STRATA Skin Sciences is a medical technology company
in Dermatology and Plastic Surgery dedicated to developing,
commercializing and marketing innovative products for the treatment
of dermatologic conditions. Its products include the XTRAC® excimer
laser and VTRAC® lamp systems utilized in the treatment of
psoriasis, vitiligo and various other skin conditions.
The Company’s proprietary XTRAC® excimer laser
delivers a highly targeted therapeutic beam of UVB light to treat
psoriasis, vitiligo, eczema, atopic dermatitis and leukoderma;
diseases which impact over 35 million patients in the United States
alone. The technology is covered by multiple patents, including
exclusive rights for patents for the delivery of treatments to
vitiligo patients.
STRATA’s unique business model leverages
targeted Direct to Consumer (DTC) advertising to generate awareness
and utilizes its in-house call center and insurance advocacy teams
to increase volume for the Company’s partner dermatology
clinics.
The XTRAC business has used this proven DTC
model to grow its domestic dermatology partner network to over 813
clinics, with a worldwide installed base of over 2,000 devices. The
Company is able to offer 90% of DTC patients an introduction to
physicians prescribing a reimbursable solution, using XTRAC, within
a 10-mile radius of their house. The Company is a leader in
dermatology in-clinic business generation for its partners.
Safe HarborThis 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 generate the
growth in its core business, the Company’s ability to develop
social media 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, 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
Leigh Salvo |
|
|
(415) 937-5404 |
|
|
ir@strataskin.com |
|
|
STRATA SKIN SCIENCES, INC. AND
SUBSIDIARYCONDENSED CONSOLIDATED BALANCE SHEETS(In thousands,
except share and per share amounts)
|
September 30, 2020 |
|
December 31, 2019 |
ASSETS |
(unaudited) |
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
11,063 |
|
|
$ |
8,129 |
|
Restricted cash |
|
7,397 |
|
|
|
7,500 |
|
Accounts receivable, net of allowance for doubtful accounts of $249
and $184, respectively |
|
2,510 |
|
|
|
4,386 |
|
Inventories |
|
3,502 |
|
|
|
3,027 |
|
Prepaid expenses and other current assets |
|
464 |
|
|
|
513 |
|
Total current assets |
|
24,936 |
|
|
|
23,555 |
|
|
|
|
|
Property and equipment, net |
|
5,258 |
|
|
|
5,369 |
|
Operating lease right-of-use assets, net |
|
1,072 |
|
|
|
1,314 |
|
Intangible assets, net |
|
6,697 |
|
|
|
7,955 |
|
Goodwill |
|
8,803 |
|
|
|
8,803 |
|
Other assets |
|
298 |
|
|
|
347 |
|
Total assets |
$ |
47,064 |
|
|
$ |
47,343 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Current liabilities: |
|
|
|
Note payable |
$ |
7,275 |
|
|
$ |
7,275 |
|
Current portion of long-term debt |
|
1,134 |
|
|
|
- |
|
Accounts payable |
|
3,488 |
|
|
|
1,880 |
|
Other accrued liabilities |
|
4,558 |
|
|
|
5,134 |
|
Current portion of operating lease liabilities |
|
361 |
|
|
|
313 |
|
Deferred revenues |
|
1,864 |
|
|
|
2,832 |
|
Total current liabilities |
|
18,680 |
|
|
|
17,434 |
|
|
|
|
|
Long-term liabilities: |
|
|
|
Long-term debt, net |
|
1,394 |
|
|
|
- |
|
Deferred tax liability |
|
207 |
|
|
|
- |
|
Long-term operating lease liabilities, net |
|
804 |
|
|
|
1,078 |
|
Other liabilities |
|
52 |
|
|
|
178 |
|
Total liabilities |
|
21,137 |
|
|
|
18,690 |
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
Series C Convertible Preferred Stock, $.10 par value, 10,000,000
shares authorized; 0 and 2,103 shares issued and outstanding at
September 30, 2020 and, December 31, 2019, respectively |
|
- |
|
|
|
1 |
|
Common Stock, $.001 par value, 150,000,000 shares authorized;
33,754,909 and 32,932,273 shares issued and outstanding at
September 30, 2020 and, December 31, 2019, respectively |
|
34 |
|
|
|
33 |
|
Additional paid-in capital |
|
244,423 |
|
|
|
243,180 |
|
Accumulated deficit |
|
(218,530 |
) |
|
|
(214,561 |
) |
Total stockholders’ equity |
|
25,927 |
|
|
|
28,653 |
|
Total liabilities and
stockholders’ equity |
$ |
47,064 |
|
|
$ |
47,343 |
|
STRATA SKIN SCIENCES, INC. AND
SUBSIDIARYCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In
thousands, except share and per share amounts)(unaudited)
|
|
For the Three Months EndedSeptember 30, |
|
|
|
2020 |
|
|
|
2019 |
|
Revenues, net |
|
$ |
5,613 |
|
|
$ |
7,480 |
|
Cost of revenues |
|
|
2,383 |
|
|
|
2,855 |
|
Gross profit |
|
|
3,230 |
|
|
|
4,625 |
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
Engineering and product development |
|
|
411 |
|
|
|
249 |
|
Selling and marketing |
|
|
2,051 |
|
|
|
2,887 |
|
General and administrative |
|
|
1,929 |
|
|
|
2,218 |
|
|
|
|
4,391 |
|
|
|
5,354 |
|
|
|
|
|
|
Loss from operations |
|
|
(1,161 |
) |
|
|
(729 |
) |
|
|
|
|
|
Other expense, net: |
|
|
|
|
Interest expense, net |
|
|
(21 |
) |
|
|
(153 |
) |
|
|
|
(21 |
) |
|
|
(153 |
) |
|
|
|
|
|
Loss before income taxes |
|
|
(1,182 |
) |
|
|
(882 |
) |
Income tax (expense) benefit |
|
|
(72 |
) |
|
|
22 |
|
Net loss |
|
$ |
(1,254 |
) |
|
$ |
(860 |
) |
|
|
|
|
|
Loss attributable to common shares |
|
$ |
(1,254 |
) |
|
$ |
(840 |
) |
Loss attributable to Series C Convertible Preferred shares |
|
$ |
- |
|
|
$ |
(20 |
) |
Loss per common share: |
|
|
|
|
Basic |
|
$ |
(0.04 |
) |
|
$ |
(0.03 |
) |
Diluted |
|
$ |
(0.04 |
) |
|
$ |
(0.03 |
) |
Shares used in computing loss per common share: |
|
|
|
|
Basic |
|
|
33,754,909 |
|
|
|
32,903,287 |
|
Diluted |
|
|
33,754,909 |
|
|
|
32,903,287 |
|
Loss per Series C Convertible Preferred share basic and
diluted |
|
$ |
- |
|
|
$ |
(9.58 |
) |
Shares used in computing loss per basic and diluted Series C
Convertible Preferred shares |
|
|
- |
|
|
|
2,103 |
|
STRATA SKIN SCIENCES, INC. AND
SUBSIDIARYCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In
thousands, except share and per share amounts)(unaudited)
|
|
For the Nine Months EndedSeptember 30, |
|
|
|
2020 |
|
|
|
2019 |
|
Revenues, net |
|
$ |
16,373 |
|
|
$ |
22,688 |
|
Cost of revenues |
|
|
6,780 |
|
|
|
8,544 |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
9,593 |
|
|
|
14,144 |
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
Engineering and product development |
|
|
950 |
|
|
|
788 |
|
Selling and marketing |
|
|
6,446 |
|
|
|
8,911 |
|
General and administrative |
|
|
5,921 |
|
|
|
7,398 |
|
|
|
|
13,317 |
|
|
|
17,097 |
|
|
|
|
|
|
Loss from operations |
|
|
(3,724 |
) |
|
|
(2,953 |
) |
|
|
|
|
|
Other expense, net: |
|
|
|
|
Interest expense, net |
|
|
(38 |
) |
|
|
(433 |
) |
|
|
|
(38 |
) |
|
|
(433 |
) |
Loss before income taxes |
|
|
(3,762 |
) |
|
|
(3,386 |
) |
Income tax (expense) benefit |
|
|
(207 |
) |
|
|
111 |
|
Net loss |
|
$ |
(3,969 |
) |
|
$ |
(3,275 |
) |
|
|
|
|
|
Loss attributable to common shares |
|
$ |
(3,947 |
) |
|
$ |
(3,079 |
) |
Loss attributable to Series C Convertible Preferred shares |
|
$ |
(22 |
) |
|
$ |
(196 |
) |
Loss per common share: |
|
|
|
|
Basic |
|
$ |
(0.12 |
) |
|
$ |
(0.10 |
) |
Diluted |
|
$ |
(0.12 |
) |
|
$ |
(0.10 |
) |
|
|
|
|
|
Shares used in computing loss per common share: |
|
|
|
|
Basic |
|
|
33,551,070 |
|
|
|
31,663,355 |
|
Diluted |
|
|
33,551,070 |
|
|
|
31,663,355 |
|
Loss per Series C Convertible Preferred share basic and
diluted |
|
$ |
(43.73 |
) |
|
$ |
(36.14 |
) |
|
|
|
|
|
Shares used in computing loss per basic and diluted Series C
Convertible Preferred shares |
|
|
491 |
|
|
|
5,412 |
|
STRATA SKIN SCIENCES, INC. AND
SUBSIDIARYCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In
thousands, unaudited)
|
For the Nine Months EndedSeptember 30, |
|
|
2020 |
|
|
|
2019 |
|
Cash Flows From Operating Activities: |
|
|
|
Net loss |
$ |
(3,969 |
) |
|
$ |
(3,275 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
|
2,793 |
|
|
|
3,437 |
|
Amortization of right-of-use asset |
|
242 |
|
|
|
240 |
|
Provision for doubtful accounts |
|
65 |
|
|
|
9 |
|
Loss on disposal of property and equipment and lasers placed in
service |
|
23 |
|
|
|
29 |
|
Stock-based compensation |
|
1,243 |
|
|
|
883 |
|
Deferred taxes |
|
207 |
|
|
|
(111 |
) |
Amortization of debt discount |
|
- |
|
|
|
43 |
|
Amortization of deferred financing costs |
|
- |
|
|
|
64 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
1,811 |
|
|
|
(261 |
) |
Inventories |
|
(475 |
) |
|
|
(792 |
) |
Prepaid expenses and other assets |
|
98 |
|
|
|
76 |
|
Accounts payable |
|
1,608 |
|
|
|
233 |
|
Other accrued liabilities |
|
(576 |
) |
|
|
437 |
|
Other liabilities |
|
(126 |
) |
|
|
(61 |
) |
Operating lease liabilities |
|
(226 |
) |
|
|
(219 |
) |
Deferred revenues |
|
(968 |
) |
|
|
384 |
|
Net cash provided by operating activities |
|
1,750 |
|
|
|
1,116 |
|
|
|
|
|
Cash Flows From Investing Activities: |
|
|
|
Lasers placed-in-service |
|
(1,430 |
) |
|
|
(1,370 |
) |
Purchases of property and equipment |
|
(17 |
) |
|
|
(5 |
) |
Net cash used in investing activities |
|
(1,447 |
) |
|
|
(1,375 |
) |
|
|
|
|
Cash Flows From Financing Activities: |
|
|
|
Proceeds from note payable and long-term debt |
|
2,528 |
|
|
|
- |
|
Net cash provided by financing activities |
|
2,528 |
|
|
|
- |
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents and restricted
cash |
|
2,831 |
|
|
|
(259 |
) |
Cash, cash equivalents and restricted cash, beginning of
period |
|
15,629 |
|
|
|
16,487 |
|
Cash, cash equivalents and restricted cash, end of period |
$ |
18,460 |
|
|
$ |
16,228 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
11,063 |
|
|
$ |
16,228 |
|
Restricted cash |
|
7,397 |
|
|
|
- |
|
|
$ |
18,460 |
|
|
$ |
16,228 |
|
Strata Skin Sciences (NASDAQ:SSKN)
Historical Stock Chart
From Apr 2024 to May 2024
Strata Skin Sciences (NASDAQ:SSKN)
Historical Stock Chart
From May 2023 to May 2024