Venus Concept Inc. (“Venus Concept” or the “Company”) (NASDAQ:
VERO), a global medical aesthetic technology leader, announced
financial results for the three and nine months ended September 30,
2020.
Third Quarter 2020 Financial Summary:
-
Total GAAP revenue for the third quarter of 2020 decreased 21%
year-over-year, to $20.7 million, compared to $26.2 million for the
third quarter 2019, driven by the negative impact on our business
as a result of the COVID-19 global pandemic. Total GAAP revenue for
the third quarter of 2020 increased 22%, compared to $17.0 million
for the second quarter of 2020.• Total GAAP revenue for the third
quarter of 2020 includes $4.8 million of revenue from Venus Concept
Inc. (formerly Restoration Robotics, Inc.) for the three months
ended September 30, 2020. Sales of ARTAS® and ARTAS iX® systems and
procedure-related kits increased 55% and 52% quarter-over-quarter,
respectively, in the third quarter of 2020.
-
GAAP operating loss for the third quarter of 2020 was $5.3 million,
compared to a loss of $6.6 million for the third quarter of
2019.• In the nine months ended September 30, 2020, the
Company realized more than $14.0 million of cost savings from the
new restructuring program announced in response to the challenging
business environment caused by COVID-19 and remains on target to
realize the projected $20.0 million of cost savings for full fiscal
year 2020.
-
GAAP net loss for the third quarter of 2020 of $7.3 million,
compared to a loss of $9.0 million for the third quarter of
2019.
-
Adjusted EBITDA (non-GAAP) loss of $1.4 million for the third
quarter of 2020, compared to Adjusted EBITDA of $28 thousand in the
third quarter of 2019.
-
The Company had $12.8 million and $15.7 million of cash and cash
equivalents as of September 30, 2020 and December 31, 2019,
respectively, and total debt obligations of approximately $74.5
million and $69.0 million as of September 30, 2020 and December 31,
2019, respectively.
Management Commentary:
“While our third quarter revenue performance
continued to be impacted by the COVID-19 global pandemic, we have
many reasons for optimism,” said Domenic Serafino, Chief Executive
Officer of Venus Concept. “We experienced a notable improvement in
the operating environment in our key markets as evidenced by the
strong procedure-related activity in both our aesthetics and hair
restoration businesses during the third quarter. Importantly, while
the recovery in capital equipment demand in the aesthetics and hair
restoration markets remains challenged, our focused commercial
strategy is helping us maximize our opportunities to drive
adoption. Third quarter system sales results benefitted from strong
sales of our Venus Bliss in the U.S. and strong adoption of our
ARTAS iX® in EMEA.”
Mr. Serafino continued: “Our efforts to reduce
the operating expense profile of the combined company are
progressing well. We continue to expect our restructuring program,
combined with previously announced synergies and cost reductions,
to result in cost savings of approximately $38 million in 2020 and
continuing into 2021. We are investing prudently in our R&D
initiatives focused on the compelling opportunity to introduce new
minimally invasive robotic solutions, beyond hair restoration, for
medical aesthetic procedures that are currently treated by surgical
intervention. While the near-term outlook has been challenged by
this global pandemic, we continue to believe the long-term
opportunity remains compelling for us as a leading player in both
the global minimally invasive/non-invasive medical aesthetics
market and the minimally invasive surgical hair restoration
market.”
Third Quarter and First Nine Months of 2020 Revenue by
Region and by Product Type:
|
|
|
Three MonthsEnded September
30 |
|
|
Nine MonthsEnded September
30 |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
|
(dollars in thousands) |
|
Revenues by region: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
7,784 |
|
|
$ |
10,118 |
|
|
$ |
22,339 |
|
|
$ |
31,337 |
|
International |
|
|
12,896 |
|
|
|
16,036 |
|
|
|
29,845 |
|
|
|
47,215 |
|
Total revenue |
|
$ |
20,680 |
|
|
$ |
26,154 |
|
|
$ |
52,184 |
|
|
$ |
78,552 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three MonthsEnded September
30 |
|
|
Nine MonthsEnded September
30 |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
|
(dollars in thousands) |
|
Revenues by product: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription—Systems |
|
$ |
9,431 |
|
|
$ |
16,427 |
|
|
$ |
23,709 |
|
|
$ |
48,812 |
|
Products—Systems |
|
|
7,503 |
|
|
|
7,105 |
|
|
|
17,758 |
|
|
|
21,188 |
|
Products—Other |
|
|
2,631 |
|
|
|
1,167 |
|
|
|
7,136 |
|
|
|
4,117 |
|
Services |
|
|
1,115 |
|
|
|
1,455 |
|
|
|
3,581 |
|
|
|
4,435 |
|
Total revenue |
|
$ |
20,680 |
|
|
$ |
26,154 |
|
|
$ |
52,184 |
|
|
$ |
78,552 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter 2020 Financial Results:
|
|
|
Three Months Ended September 30, |
|
|
|
|
|
|
|
2020 |
|
|
2019 |
|
|
Change |
|
(in thousands, except
percentages) |
|
$ |
|
|
% of Total |
|
|
$ |
|
|
% of Total |
|
|
$ |
|
|
% |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription—Systems |
|
$ |
9,431 |
|
|
|
45.6 |
|
|
|
$ |
16,427 |
|
|
|
62.8 |
|
|
$ |
(6,996 |
) |
|
|
(42.6 |
) |
Products—Systems |
|
|
7,503 |
|
|
|
36.3 |
|
|
|
|
7,105 |
|
|
|
27.2 |
|
|
|
398 |
|
|
|
5.6 |
|
Products—Other |
|
|
2,631 |
|
|
|
12.7 |
|
|
|
|
1,167 |
|
|
|
4.5 |
|
|
|
1,464 |
|
|
|
125.4 |
|
Services |
|
|
1,115 |
|
|
|
5.4 |
|
|
|
|
1,455 |
|
|
|
5.5 |
|
|
|
(340 |
) |
|
|
(23.4 |
) |
Total |
|
$ |
20,680 |
|
|
|
100.0 |
|
|
|
$ |
26,154 |
|
|
|
100.0 |
|
|
$ |
(5,474 |
) |
|
|
(20.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue for the third quarter of 2020
decreased $5.5 million, or 21%, to $20.7 million, compared to $26.2
million for the third quarter of 2019. Total lease revenue, from
sales of systems via our subscription model, decreased $7.0
million, or 43%, to $9.4 million, compared to $16.4 million for the
third quarter of 2019. Total products and services revenue for the
third quarter of 2020 increased $1.5 million, or 16%, to $11.2
million, compared to $9.7 million for the third quarter of
2019.
The decrease in revenue was a result of
decreased revenue in the United States of $2.3 million, or 23%, and
decreased revenue in international markets of $3.2 million, or 20%.
The decrease in revenue in both the United States and international
markets was driven by COVID-19 related disruptions including
lockdown measures or restrictions imposed by federal and state
governments, a reduction in procedures at the clinic level caused
by additional COVID-19 safety protocols, and a general reluctance
on the part of some consumers to undergo non-essential aesthetic
procedures given the risks presented by COVID-19. These disruptions
and the resultant uncertainty at the clinic level negatively
impacted our ability to sell into our customary channels in both
the United States and international markets.
The decrease in total revenue, by product
category, for the third quarter of 2020 was driven by a decrease of
$7.0 million, or 43%, in lease revenue, a decrease of $0.3 million,
or 23%, in service revenue, offset partially by an increase of $1.5
million, or 125%, in other products revenue, primarily ARTAS® and
ARTAS iX® procedure kits and other consumables, and an increase of
$0.4 million, or 6%, in system revenue. With the exception of the
increase in other products revenue, the declines were attributable
to aforementioned COVID-19 related disruptions that impacted our
ability to sell into our customary U.S. and international markets.
The percentage of systems revenue derived from our
subscription model was approximately 56% in the three months ended
September 30, 2020 compared to 70% in the three months ended
September 30, 2019. The increase in system revenue for the
third quarter of 2020 was driven by a significant contribution of
revenue from the sale of ARTAS® and ARTAS iX® systems which did not
contribute to system revenue in the third quarter of 2019. The
increase in other product revenue was driven by sales of ARTAS
procedure kits, which did not contribute to system revenue in the
third quarter of 2019, partially offset by the aforementioned
COVID-19 related disruptions. The decrease in service revenue for
the third quarter of 2020 was driven by COVID-19 related
restrictions imposed by federal, state, and local governments
resulting in a decline in VeroGrafters™ technician services, along
with the suspension of operations of the 2two5 marketing services,
offset by additional warranty revenue on ARTAS® systems.
Gross profit for the third quarter of 2020
decreased $5.3 million, or 28%, to $13.5 million, compared to $18.8
million for the third quarter of 2019. The decrease in gross profit
is primarily due to lower revenues caused by the aforementioned
COVID-19 related disruptions in countries and markets in which the
Company operates. Gross margin was 65.3% of revenue for the third
quarter of 2020, compared to 71.8% of revenue for the third quarter
of 2019. The decrease in gross margin is primarily related to
changes in revenue mix, specifically, the strong sales of our
robotic ARTAS® systems in the third quarter of 2020, which were
sold at slightly lower margins than our other systems.
Operating expenses for the third quarter of 2020
decreased $6.5 million, or 26%, to $18.8 million, compared to $25.3
million for the third quarter of 2019. The year-over-year decrease
in operating expenses was primarily driven by a decrease of $3.5
million, or 39%, in sales and marketing expenses and a decrease of
$3.2 million, or 22%, in general & administrative expenses,
partially offset by a $0.2 million increase in R&D expenses or
10%. In the third quarter of 2020, the Company realized $7.0
million, of the projected $20.0 million for full fiscal year 2020,
in cost savings from the new restructuring program in response to
the challenging business environment from COVID-19, which was
previously announced.
Operating loss for the third quarter of 2020 was
$5.3 million, compared to operating loss of $6.6 million for the
third quarter of 2019.
Net loss attributable to Venus Concept Inc.
stockholders for the third quarter of 2020 was $7.2 million, or
$0.18 per share, compared to net loss attributable to Venus Concept
Inc. stockholders of $8.6 million, or $1.77 per share, for the
third quarter of 2019. Weighted average shares used to compute net
loss attributable to Venus Concept Inc. stockholders per share were
40.5 million and 4.9 million for the third quarters of 2020 and
2019, respectively.
Adjusted EBITDA loss (non-GAAP) for the third
quarter of 2020 was $1.4 million, compared to Adjusted EBITDA of
$28 thousand for the third quarter of 2019.
First Nine Months of 2020 Financial
Results:
|
|
|
Nine Months Ended September 30, |
|
|
|
|
|
|
2020 |
|
|
2019 |
|
|
Change |
|
(in thousands, except
percentages) |
|
$ |
|
|
% of Total |
|
|
$ |
|
|
% of Total |
|
|
$ |
|
|
% |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription—Systems |
|
$ |
23,709 |
|
|
|
45.4 |
|
|
$ |
48,812 |
|
|
|
62.1 |
|
|
$ |
(25,103 |
) |
|
|
(51.4 |
) |
Products—Systems |
|
|
17,758 |
|
|
|
34.0 |
|
|
|
21,188 |
|
|
|
27.0 |
|
|
|
(3,430 |
) |
|
|
(16.2 |
) |
Products other |
|
|
7,136 |
|
|
|
13.7 |
|
|
|
4,117 |
|
|
|
5.2 |
|
|
|
3,019 |
|
|
|
73.3 |
|
Services |
|
|
3,581 |
|
|
|
6.9 |
|
|
|
4,435 |
|
|
|
5.7 |
|
|
|
(854 |
) |
|
|
(19.3 |
) |
Total |
|
$ |
52,184 |
|
|
|
100.0 |
|
|
$ |
78,552 |
|
|
|
100.0 |
|
|
$ |
(26,368 |
) |
|
|
(33.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue for the first nine months of 2020
decreased by $26.4 million, or 34%, to $52.2 million, compared to
$78.6 million for the first nine months of 2019. The decrease in
revenue was a result of decreased revenue in the United States of
$9.0 million, or 29%, and decreased revenue in international
markets of $17.4 million, or 37%. The decrease in revenue in both
the United States and international markets was driven by the
aforementioned COVID-19 related disruptions.
Net loss attributable to Venus Concept Inc.
stockholders for the first nine months of 2020 was $70.6 million,
or $2.04 per share, compared to net loss attributable to Venus
Concept Inc. stockholders of $19.8 million, or $4.12 per share, for
the first nine months of 2019. Weighted average shares used to
compute net loss attributable to Venus Concept Inc. stockholders
per share were 34.6 million and 4.8 million for the first nine
months of 2020 and 2019, respectively.
Adjusted EBITDA (non-GAAP) loss for the first
nine months of 2020 was $17.7 million, compared to adjusted EBITDA
loss of $1.0 million for the first nine months of 2019.
Fiscal Year 2020 Revenue Guidance:
On March 30, 2020, due to the rapidly evolving
market conditions and continued uncertainties from the impact of
COVID-19, the Company withdrew its previously announced fiscal year
2020 revenue guidance which was issued on January 13, 2020. At this
date the Company cannot predict the specific extent or duration of
the impact of the COVID-19 outbreak on its financial and operating
results for the fiscal year 2020.
Conference Call Details:
Management will host a conference call at 8:00
a.m. Eastern Time on November 16, 2020 to discuss the results of
the quarter with a question and answer session. Those who would
like to participate may dial 877-407-2991 (201-389-0925 for
international callers) and provide access code 13711300. A live
webcast of the call will also be provided on the investor relations
section of the Company's website at ir.venusconcept.com.
For those unable to participate, a replay of the
call will be available for two weeks at 877-660-6853 (201-612-7415
for international callers); access code 13711300. The webcast will
be archived at ir.venusconcept.com.
About Venus Concept
Venus Concept is an innovative global medical
aesthetic technology leader with a broad product portfolio of
minimally invasive and non-invasive medical aesthetic and hair
restoration technologies and reach in over 60 countries and 25
direct markets. Venus Concept focuses its product sales strategy on
a subscription-based business model in North America and in its
well-established direct global markets. Venus Concept’s product
portfolio consists of aesthetic device platforms, including Venus
Versa, Venus Legacy, Venus Velocity, Venus Fiore, Venus Viva, Venus
Freeze Plus, Venus Heal, Venus Glow, Venus Bliss, Venus Epileve and
Venus Viva MD. Venus Concept’s hair restoration systems includes
NeoGraft®, an automated hair restoration system that facilitates
the harvesting of follicles during a FUE process and the ARTAS® and
ARTAS iX® Robotic Hair Restoration systems, which harvest
follicular units directly from the scalp and create recipient
implant sites using proprietary algorithms. Venus Concept has been
backed by leading healthcare industry growth equity investors
including EW Healthcare Partners (formerly Essex Woodlands),
HealthQuest Capital, Longitude Capital Management, and Aperture
Venture Partners.
Cautionary Statement Regarding
Forward-Looking Statements
This communication contains contains
“forward-looking” statements within the meaning of Section 27A
of the Securities Act of 1933, as amended (the “1933 Act”) and
Section 21E of the Securities Exchange Act of 1934, as amended
(the “1934 Act”). Any statements contained herein that are not of
historical facts may be deemed to be forward-looking statements. In
some cases, you can identify these statements by words such as such
as “anticipates,” “believes,” “plans,” “expects,” “projects,”
“future,” “intends,” “may,” “should,” “could,” “estimates,”
“predicts,” “potential,” “continue,” “guidance,” and other similar
expressions that are predictions of or indicate future events and
future trends. These forward-looking statements include, but are
not limited to, statements about the expected synergies and cost
savings from our merger with Venus Concept Ltd.; our financial
performance; the growth in demand for our systems and other
products; and general economic conditions, including the global
economic impact of COVID-19, involve risks and uncertainties that
may cause results to differ materially from those set forth in the
statements. These forward-looking statements are based on current
expectations, estimates, forecasts, and projections about our
business and the industry in which the Company operates and
management's beliefs and assumptions and are not guarantees of
future performance or developments and involve known and unknown
risks, uncertainties, and other factors that are in some cases
beyond our control. As a result, any or all of our forward-looking
statements in this communication may turn out to be inaccurate.
Factors that could materially affect our business operations and
financial performance and condition include, but are not limited
to, those risks and uncertainties described under Part I Item
1A—“Risk Factors” in our most recent Annual Report on
Form 10-K, Part II Item 1A—“Risk Factors” in our Form 10-Q for
the quarter ended September 30, 2020, and in other documents the
Company may file with the SEC. You are urged to consider these
factors carefully in evaluating the forward-looking statements and
are cautioned not to place undue reliance on the forward-looking
statements. The forward-looking statements are based on information
available to us as of the date of this communication. Unless
required by law, the Company does not intend to publicly update or
revise any forward-looking statements to reflect new information or
future events or otherwise.
|
Venus Concept Inc. |
|
Condensed Consolidated Balance Sheets(In thousands
of U.S. dollars, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
September 30, 2020 |
|
|
December 31, 2019 |
|
ASSETS |
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
12,778 |
|
|
$ |
15,666 |
|
Restricted cash |
|
|
83 |
|
|
|
83 |
|
Accounts receivable, net of allowance of $15,141 and $10,494 as of
September 30, 2020, and December 31, 2019 |
|
|
57,920 |
|
|
|
58,977 |
|
Inventories |
|
|
19,493 |
|
|
|
18,844 |
|
Deferred expenses |
|
|
2 |
|
|
|
59 |
|
Prepaid expenses |
|
|
2,018 |
|
|
|
2,523 |
|
Advances to suppliers |
|
|
3,730 |
|
|
|
450 |
|
Other current assets |
|
|
4,106 |
|
|
|
3,101 |
|
Total current assets |
|
|
100,130 |
|
|
|
99,703 |
|
LONG-TERM ASSETS: |
|
|
|
|
|
|
|
|
Long-term receivables |
|
|
21,816 |
|
|
|
35,656 |
|
Deferred tax assets |
|
|
1,036 |
|
|
|
622 |
|
Severance pay funds |
|
|
568 |
|
|
|
710 |
|
Property and equipment, net |
|
|
3,727 |
|
|
|
4,648 |
|
Intangible assets |
|
|
19,738 |
|
|
|
22,338 |
|
Goodwill |
|
|
— |
|
|
|
27,450 |
|
Total long-term assets |
|
|
46,885 |
|
|
|
91,424 |
|
TOTAL ASSETS |
|
$ |
147,015 |
|
|
$ |
191,127 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
Line of credit |
|
$ |
3,876 |
|
|
$ |
7,789 |
|
Trade payables |
|
|
9,972 |
|
|
|
9,401 |
|
Accrued expenses and other current liabilities |
|
|
15,178 |
|
|
|
21,120 |
|
Taxes payable |
|
|
1,594 |
|
|
|
2,172 |
|
Unearned interest income |
|
|
2,675 |
|
|
|
3,942 |
|
Warranty accrual |
|
|
1,278 |
|
|
|
1,254 |
|
Deferred revenues |
|
|
2,006 |
|
|
|
2,495 |
|
Total current liabilities |
|
|
36,579 |
|
|
|
48,173 |
|
LONG-TERM LIABILITIES: |
|
|
|
|
|
|
|
|
Long-term debt |
|
|
66,516 |
|
|
|
61,229 |
|
Government assistance loans |
|
|
4,110 |
|
|
|
— |
|
Accrued severance pay |
|
|
675 |
|
|
|
827 |
|
Deferred tax liabilities |
|
|
186 |
|
|
|
1,017 |
|
Unearned interest income |
|
|
1,295 |
|
|
|
1,681 |
|
Warranty accrual |
|
|
446 |
|
|
|
723 |
|
Other long-term liabilities |
|
|
559 |
|
|
|
799 |
|
Total long-term liabilities |
|
|
73,787 |
|
|
|
66,276 |
|
TOTAL LIABILITIES |
|
|
110,366 |
|
|
|
114,449 |
|
Commitments and Contingencies (Note 8) |
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY (Note 1): |
|
|
|
|
|
|
|
|
Common Stock, $0.0001 par value: 300,000,000 shares authorized
as of September 30, 2020 and December 31, 2019; 40,873,588 and
28,686,116 issued and outstanding as of September 30, 2020 and
December 31, 2019, respectively |
|
|
25 |
|
|
|
24 |
|
Additional paid-in capital (Note 2) |
|
|
178,258 |
|
|
|
149,840 |
|
Accumulated deficit |
|
|
(142,707 |
) |
|
|
(75,686 |
) |
TOTAL STOCKHOLDERS’ EQUITY |
|
|
35,576 |
|
|
|
74,178 |
|
Non-controlling interests |
|
|
1,073 |
|
|
|
2,500 |
|
|
|
|
36,649 |
|
|
|
76,678 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
147,015 |
|
|
$ |
191,127 |
|
|
|
|
|
|
|
|
|
|
|
Venus Concept Inc.Condensed Consolidated
Statements of Operations(In thousands of U.S.
dollars, except per share data) |
|
|
|
Three MonthsEnded September
30 |
|
|
Nine MonthsEnded September
30 |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leases |
|
$ |
9,431 |
|
|
$ |
16,427 |
|
|
$ |
23,709 |
|
|
$ |
48,812 |
|
Products and services |
|
|
11,249 |
|
|
|
9,727 |
|
|
|
28,475 |
|
|
|
29,740 |
|
|
|
|
20,680 |
|
|
|
26,154 |
|
|
|
52,184 |
|
|
|
78,552 |
|
Cost of goods sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leases |
|
|
2,303 |
|
|
|
3,502 |
|
|
|
5,296 |
|
|
|
10,264 |
|
Products and services |
|
|
4,874 |
|
|
|
3,884 |
|
|
|
12,208 |
|
|
|
11,381 |
|
|
|
|
7,177 |
|
|
|
7,386 |
|
|
|
17,504 |
|
|
|
21,645 |
|
Gross profit |
|
|
13,503 |
|
|
|
18,768 |
|
|
|
34,680 |
|
|
|
56,907 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing |
|
|
5,657 |
|
|
|
9,201 |
|
|
|
18,813 |
|
|
|
28,983 |
|
General and administrative |
|
|
11,291 |
|
|
|
14,445 |
|
|
|
40,442 |
|
|
|
34,637 |
|
Research and development |
|
|
1,849 |
|
|
|
1,686 |
|
|
|
6,043 |
|
|
|
5,667 |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
27,450 |
|
|
|
— |
|
Total operating expenses |
|
|
18,797 |
|
|
|
25,332 |
|
|
|
92,748 |
|
|
|
69,287 |
|
Loss from operations |
|
|
(5,294 |
) |
|
|
(6,564 |
) |
|
|
(58,068 |
) |
|
|
(12,380 |
) |
Other expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss |
|
|
1,096 |
|
|
|
396 |
|
|
|
4,209 |
|
|
|
409 |
|
Finance expenses |
|
|
1,897 |
|
|
|
2,097 |
|
|
|
6,522 |
|
|
|
5,904 |
|
Loss before income taxes |
|
|
(8,287 |
) |
|
|
(9,057 |
) |
|
|
(68,799 |
) |
|
|
(18,693 |
) |
Income tax (benefit) expense |
|
|
(966 |
) |
|
|
(80 |
) |
|
|
(1,010 |
) |
|
|
867 |
|
Net loss |
|
|
(7,321 |
) |
|
|
(8,977 |
) |
|
|
(67,789 |
) |
|
|
(19,560 |
) |
Deemed dividend (Note 13) |
|
|
- |
|
|
|
- |
|
|
|
(3,564 |
) |
|
|
- |
|
Loss attributable to stockholders
of the Company |
|
|
(7,243 |
) |
|
|
(8,640 |
) |
|
|
(70,585 |
) |
|
|
(19,823 |
) |
(Loss) income attributable to
non-controlling interest |
|
|
(78 |
) |
|
|
(337 |
) |
|
|
(768 |
) |
|
|
263 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.18 |
) |
|
$ |
(1.77 |
) |
|
$ |
(2.04 |
) |
|
$ |
(4.12 |
) |
Diluted |
|
$ |
(0.18 |
) |
|
$ |
(1.77 |
) |
|
$ |
(2.04 |
) |
|
$ |
(4.12 |
) |
Weighted-average number of
shares used in per share calculation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
40,466 |
|
|
|
4,884 |
|
|
|
34,553 |
|
|
|
4,812 |
|
Diluted |
|
|
40,466 |
|
|
|
4,884 |
|
|
|
34,553 |
|
|
|
4,812 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Use of Non-GAAP Financial Measures
Adjusted EBITDA is a non-GAAP measure defined as net loss income
before foreign exchange loss, financial expenses, income tax
expense, depreciation and amortization, stock-based compensation
and non-recurring items for a given period. Adjusted EBITDA is not
a measure of our financial performance under U.S. GAAP and should
not be considered an alternative to net income or any other
performance measures derived in accordance with U.S. GAAP.
Accordingly, you should consider Adjusted EBITDA along with other
financial performance measures, including net income, and our
financial results presented in accordance with U.S. GAAP. Other
companies, including companies in our industry, may calculate
Adjusted EBITDA differently or not at all, which reduces its
usefulness as a comparative measure. We understand that although
Adjusted EBITDA is frequently used by securities analysts, lenders
and others in their evaluation of companies, Adjusted EBITDA has
limitations as an analytical tool, and you should not consider it
in isolation, or as a substitute for analysis of our results as
reported under U.S. GAAP. Some of these limitations are: Adjusted
EBITDA does not reflect our cash expenditures or future
requirements for capital expenditures or contractual commitments;
Adjusted EBITDA does not reflect changes in, or cash requirements
for, our working capital needs; and although depreciation and
amortization are a non-cash charges, the assets being depreciated
will often have to be replaced in the future, and Adjusted EBITDA
does not reflect any cash requirements for such replacements.
We believe that Adjusted EBITDA is a useful measure for
analyzing the performance of our core business because it
facilitates operating performance comparisons from period to period
and company to company by backing out potential differences caused
by changes in foreign exchange rates that impact financial assets
and liabilities denominated in currencies other than the U.S.
dollar, tax positions (such as the impact on periods or companies
of changes in effective tax rates), the age and book depreciation
of fixed assets (affecting relative depreciation expense),
amortization of intangible assets, stock-based compensation expense
(because it is a non-cash expense) and non-recurring items as
explained below.
The following reconciliation of net loss to Adjusted EBITDA for
the periods presented:
|
|
|
Three MonthsEnded September
30 |
|
|
Nine MonthsEnded September
30 |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
Reconciliation of net
loss to Adjusted EBITDA |
|
(in thousands) |
|
|
(in thousands) |
|
Net loss |
|
$ |
(7,321 |
) |
|
$ |
(8,977 |
) |
|
$ |
(67,789 |
) |
|
$ |
(19,560 |
) |
Foreign exchange loss |
|
|
1,096 |
|
|
|
396 |
|
|
|
4,209 |
|
|
|
409 |
|
Finance expenses |
|
|
1,897 |
|
|
|
2,097 |
|
|
|
6,522 |
|
|
|
5,904 |
|
Income tax expense (benefit) |
|
|
(966 |
) |
|
|
(80 |
) |
|
|
(1,010 |
) |
|
|
867 |
|
Depreciation and
amortization |
|
|
1,181 |
|
|
|
329 |
|
|
|
3,695 |
|
|
|
1,064 |
|
Stock-based compensation
expense |
|
|
547 |
|
|
|
313 |
|
|
|
1,603 |
|
|
|
1,732 |
|
Goodwill impairment charge |
|
|
— |
|
|
|
— |
|
|
|
27,450 |
|
|
|
— |
|
Other adjustments (1) |
|
|
2,178 |
|
|
|
5,950 |
|
|
|
7,572 |
|
|
|
8,600 |
|
Adjusted EBITDA |
|
$ |
(1,388 |
) |
|
$ |
28 |
|
|
$ |
(17,748 |
) |
|
$ |
(984 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the three and nine months ended September 30, 2020, the
other adjustments are mainly represented by severance and retention
payments ($nil and $1.5 million, respectively), additional bad debt
provision due to COVID-19 ($2.2 million and $5.7 million,
respectively) as well as a loss on sale of subsidiary in Bulgaria
($nil and $0.4 million, respectively). For the three and nine
months ended September 30, 2019, the other adjustments are mainly
represented by professional fees related to the Merger.
Investor Relations Contact:
Westwicke Partners on behalf of Venus Concept:
Mike Piccinino, CFA
VenusConceptIR@westwicke.com
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