HORSHAM, Pa., March 27, 2024 (GLOBE NEWSWIRE) — STRATA Skin Sciences, Inc. (NASDAQ:SSKN) (“STRATA” or “the Company”), a medical technology company dedicated to developing, commercializing and marketing innovative products for the treatment of dermatologic conditions, today announced financial results for the fourth quarter and full-year ended December 31, 2023.
Fourth Quarter and Full-Year 2023 and Recent Business Highlights:
Revenue in the fourth quarter of 2023 was $8.7 million
Global recurring revenue was $5.6 million
Gross domestic recurring billings were $5.3 million
Revenue for the full-year 2023 was $33.4 million
Global recurring revenue was $21.5 million
Gross domestic recurring billings were $20.2 million
Increased domestic installed base to 923 XTRAC® devices at December 31, 2023
Launched new TheraClear®X Acne Therapy System in January 2023 and implemented the recurring revenue model in December 2023, which targets clinical dermatology insurance reimbursed procedures – currently 92 devices in operation by year end
Announced leadership transition, in October 2023, with Dr. Dolev Rafaeli appointed as Vice-Chairman, President and Chief Executive Officer
Reimplemented strategic revenue model emphasizing recurring revenue through a Direct-to-Consumer (DTC) approach, providing value add services to its partner clinics
Completed sales and marketing department optimization in July 2023 which directly lead to a reduction of sales and marketing expenditures for the year, with full benefits expected to be realized in 2024
Amended credit facility with MidCap Financial Trust to refinance existing debt and ensure alignment with the Company’s current and future business projections by supporting operational and capital needs
Initiated outreach initiative focused on broadening Current Procedural Terminology (“CPT”) code coverage to increase patient access to advanced treatments and enable higher provider reimbursement rates
Showcased TheraClear®X and XTRAC® products at Maui Derm 2024, demonstrating the TheraClear®X safety and efficacy in significantly reducing cystic and papular acne lesions by over 50% within 1-2 weeks
“2023 was a pivotal year for STRATA, marked by strategic growth, product innovation, and market expansion,” stated Dr. Dolev Rafaeli, Vice-Chairman, President and CEO of STRATA. He continued, “We entered the large acne treatment market with the successful launch of our TheraClear®X device, expanded our terms with our credit facility to further influence growth, and re-invigorated the DTC recurring revenue model that was in place during my previous tenure as CEO, making it more robust than before. As we continue to ramp up this model, we are focused on executing our strategic priorities – driving utilization and placements of our XTRAC® and TheraClear®X systems, pursuing opportunities in new geographies, and leveraging our patient-focused marketing to increase awareness and adoption of our treatments. I am excited to lead STRATA in this next chapter as we work to improve operating results and deliver value to our shareholders.”
Fourth Quarter 2023 Financial Results
Revenues for the fourth quarter of 2023 were $8.7 million, as compared to revenues of $10.6 million for the fourth quarter of 2022. Global recurring revenues for the fourth quarter of 2023 were $5.6 million, as compared to global recurring revenues of $6.5 million for the fourth quarter of 2022. Equipment revenues were $3.1 million for the fourth quarter of 2023, as compared to $4.1 million for the fourth quarter of 2022.
Gross profit for the fourth quarter of 2023 was $4.8 million, or 55% of revenues, as compared to $6.8 million, or 65% of revenues, for the fourth quarter of 2022.
Selling and marketing costs for the fourth quarter of 2023 were $2.8 million, as compared to $3.8 million for the fourth quarter of 2022. General and administrative costs for the fourth quarter of 2023 were $2.8 million, as compared to $2.5 million for the fourth quarter of 2022.
Impairment expense for the fourth quarter of 2023 was $2.3 million, related to goodwill impairment in the dermatology recurring procedures segment. There was no impairment expense in the fourth quarter of 2022.
Other expenses for the fourth quarter of 2023 were $0.4 million, compared to $0.2 million for the fourth quarter of 2022.
Net loss for the fourth quarter of 2023 was $3.8 million, which included the realization of the goodwill impairment of $2.3 million. This resulted in a net loss of $0.11 per basic and diluted common share. Compared to the fourth quarter of 2022, net loss was $0.2 million or a net loss of $0.005 per basic and diluted common share.
Full Year 2023 Financial Results
Revenues for the full year 2023 were $33.4 million, as compared to revenues of $36.2 million for the full year 2022. Global recurring revenues for the full year 2023 were $21.5 million, as compared to global recurring revenues of $23.0 million for the full year 2022. Equipment revenues were $11.8 million for the full year 2023, as compared to $13.1 million for the full year 2022.
Gross profit for the full year 2023 was $18.5 million, or 55.3% of revenues, as compared to $21.8 million, or 60.2% of revenues, for the full year 2022.
Selling and marketing costs for the full year 2023 were $13.0 million, as compared to $15.3 million for the full year 2022. General and administrative costs for the full year 2023 were $10.5 million, as compared to $10.1 million for the full year 2022.
Impairment expense for the full year 2023 was $2.3 million, related to goodwill impairment in the dermatology recurring procedures segment. There was no impairment expense in 2022.
Other expenses for the full year 2023 were $2.3 million compared to $0.8 million for the full year 2022.
Net loss for the full year 2023 was $10.8 million, which included the realization of the goodwill impairment of $2.3 million. This resulted in a net loss of $0.31 per basic and diluted common share. Compared to last year, net loss was $5.6 million or a net loss of $0.16 per basic and diluted common share.
Cash, cash equivalents and restricted cash at December 31, 2023, were $8.1 million.
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: 4Q23 & Full Year Earnings Webcast and will be archived for future reference. To listen to the conference call, please dial 877-269-7756 (US/Canada), 201-689-7817 (International), and use the conference ID number 13744189.
Non-GAAP Financial Measures
We have determined to supplement our consolidated financial statements, prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), presented elsewhere within this report, with certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP gross profit, which excludes the non-cash expense of amortization of acquired intangible assets classified as cost of revenues, and non-GAAP adjusted EBITDA, “Earnings Before Interest, Taxes, Depreciation, and Amortization.”
These non-GAAP disclosures have limitations as an analytical tool, should not be viewed as a substitute for Gross Profit or Net Earnings (Loss) determined in accordance with U.S. GAAP, should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. We consider these non-GAAP measures in addition to our results prepared under current accounting standards, but they are not a substitute for, nor superior to, U.S. GAAP measures. These non-GAAP measures are provided to enhance readers’ overall understanding of our current financial performance and to provide further information for comparative purposes. This supplemental presentation should not be construed as an inference that the Company’s future results will be unaffected by similar adjustments to Gross Profit or Net Earnings (Loss) determined in accordance with U.S. GAAP. Specifically, we believe the non-GAAP measures provide useful information to management and investors by isolating certain expenses, gains and losses that may not be indicative of our core operating results and business outlook. In addition, we believe non-GAAP measures enhance the comparability of results against prior periods.
Reconciliation to the most directly comparable U.S. GAAP measure of all non-GAAP measures included in this Annual Report is as follows:
Year Ended December 31,
(in thousands)
2023
2022
Net loss
$
(10,830
)
$
(5,549
)
Adjustments:
Depreciation and amortization
5,553
5,293
Amortization of operating lease right-of-use asset
349
395
Loss on disposal of property and equipment
72
52
(Benefit from) / provision for income taxes
(92
)
63
Interest income
(231
)
(89
)
Interest expense
1,640
926
Non-GAAP EBITDA
(3,539
)
1,091
Impairment of goodwill
2,284
—
Stock-based compensation
1,303
1,466
Loss on debt extinguishment
909
—
Non-GAAP adjusted EBITDA
$
957
$
2,557
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):
Three Months Ended
December 31,
YTD
(in thousands)
2023
2022
2023
2022
Gross domestic recurring billings
$
4,947
$
5,768
$
19,622
$
22,271
Co-Pay adjustments
(87
)
294
(343
)
(268
)
Other discounts
(22
)
(40
)
(110
)
(163
)
Deferred revenue from prior quarters
1,913
2,309
2,170
1,867
Deferral of revenue to future quarters
(1,624
)
(2,170
)
(1,624
)
(2,170
)
GAAP Recorded domestic revenue
$
5,127
$
6,161
$
19,715
$
21,537
About STRATA Skin Sciences, Inc.
STRATA Skin Sciences is a medical technology company dedicated to developing, commercializing and marketing innovative products for the in-office treatment of various dermatologic conditions such as psoriasis, vitiligo, and acne. Its products include the XTRAC® excimer laser, VTRAC® lamp systems, and the TheraClear®X Acne Therapy System.
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 or supply chain interruptions resulting from the coronavirus and political factors or conditions affecting the Company and the medical device industry 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
sskn@cg.capital
STRATA Skin Sciences, Inc. and Subsidiary
Consolidated Balance Sheets
(in thousands, except share and per share data)
December 31,