STRATA Skin Sciences, Inc. (NASDAQ: SSKN), a medical technology
company dedicated to developing, commercializing, and marketing
innovative products for the treatment of dermatologic conditions,
today announced financial results for the quarter ended March 31,
2021.
Recent Highlights
- Total revenue for the first quarter
of 2021 was $5.8 million, a decrease of 13.4% as compared to the
first quarter of 2020
- Recurring revenue for the first
quarter of 2021 was $4.7 million, a 17.9% decrease over the first
quarter of 2020
- Gross domestic recurring billings
were $4.6 million, a 6.8% decrease over the first quarter 2020 (See
Reconciliation of Non-GAAP measures below)
- Total gross margins in the first
quarter of 2021 were 63.7%, a 1.7% decrease over first quarter
2020
- Cash, cash equivalents and
restricted cash at March 31, 2021 were $17.5 million down from 18.1
million at December 31, 2020
- Concluded the quarter with a global
recurring revenue installed base of 871 XTRAC devices, an increase
of 11 from December 31, 2020
- Results of a study on patients with
refractory vitiligo published in the Journal of the European
Academy of Dermatology and Venerology demonstrated satisfactory
regimentation in five treatments using the XTRAC excimer laser
- Appointed William D. Humphries to
the Company’s Board of Directors
“Our first quarter results reflected the
continued impact of COVID-19 on dermatology offices, where staffing
challenges persisted, patient access remained curtailed and patient
willingness to return to offices for a full treatment regimen was
weak. In addition, we had an unfavorable impact of deferred
revenue. Internationally, certain sales and placements came in too
late to ship in time to be recognized in the first quarter. As a
result, the revenue and placements will be recognized in the second
quarter,” said Robert J. Moccia, Chief Executive Officer of STRATA
Skin Sciences.
“Since joining the Company in March, I have
spent much of my time meeting and speaking with our territory
managers and customers. These meetings have reinforced my belief
that XTRAC delivers one of the safest, most effective treatments
available in the market today for treating psoriasis, vitiligo and
various other skin conditions. With the vaccine rollout well under
way and states easing COVID-19 restrictions, I see an exciting
opportunity to re-engage with dormant accounts and expand
dermatology group placements,” continued Mr. Moccia. “Commercial
execution and pursuing opportunities to drive recurring billing
revenue is our primary focus in 2021. Currently, we are evaluating
our operating profile to develop and promote key strategies that
will enable us to capture the greatest market share and drive
further utilization in our partner clinics.”
First Quarter 2021 Financial
ResultsRevenues for the first quarter of 2021 were $5.8
million, as compared to revenues of $6.7 million for the first
quarter of 2020. Recurring revenues for the first quarter of 2021
were $4.7 million, as compared to recurring revenues of $5.7
million for the first quarter of 2020. Equipment revenues were $1.1
million for the first quarter of 2021, as compared to $1.0 million
for the first quarter of 2020.
Gross profit for the first quarter of 2021 was
$3.7 million, or 63.7% of revenues, as compared to $4.4 million, or
65.4% of revenues, for the first quarter of 2020. Gross profit on
recurring revenues for the first quarter of 2021 was $3.2 million,
or 67.9% of revenues, as compared to $3.9 million, or 68.4% of
revenues, for the first quarter of 2020. The decrease in gross
profit is the result of lower sales and the unfavorable impact of
$0.8 million in deferred revenue, as compared to the first quarter
of 2020, partially offset by lower depreciation expense.
Engineering and product development costs for
the first quarter of 2021 were $0.4 million, as compared to $0.3
million for the first quarter of 2020 as a result of certain
engineering projects. Selling and marketing costs for the first
quarter of 2021 were $2.9 million, as compared to $3.0 million for
the first quarter of 2020, primarily as a result of lower trade
show costs and travel, partially offset by higher compensation and
consulting costs. General and administrative costs for the first
quarter of 2021 were $2.8 million, as compared to $2.1 million for
the first quarter of 2020, as a result of the CEO transition in the
first quarter of 2021 including accruals for severance, recruiting
fees and stock compensation.
Net loss for first quarter 2021 was $2.4
million, or a loss of $0.07 per basic and diluted common share, as
compared to the net loss for the first quarter of 2020 of $1.0
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 4:30 p.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 (877) 451-6152
(US/Canada) or +1 (201)-389-0879 (International) or +1
(809)-406-247 (Israel) and use the conference ID number
13719082.
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 March 31, |
|
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
Net
Loss |
|
$(2,418 |
) |
|
$(1,035 |
) |
Adjustments: |
|
|
|
|
Depreciation/amortization |
|
|
919 |
|
|
|
1,117 |
|
|
Income taxes |
|
|
4 |
|
|
|
88 |
|
|
Interest expense (income),
net |
|
|
22 |
|
|
|
(1 |
) |
|
|
|
|
|
Non-GAAP
EBITDA |
|
|
(1,473 |
) |
|
|
169 |
|
|
Stock compensation |
|
|
662 |
|
|
|
430 |
|
|
|
|
|
|
Non-GAAP
adjusted EBITDA |
|
$(811 |
) |
|
$599 |
|
|
|
|
|
|
|
|
|
|
Gross Domestic Recurring
Billings 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 total gross domestic recurring billings for
the first quarter of 2021 was $4.6 million, compared to $5.0
million for the first quarter of 2020.
The following is a reconciliation of non-GAAP
gross domestic billings to recorded revenue for the first quarter
of 2021 and 2020 (in thousands):
|
|
2021 |
|
|
|
2020 |
|
Gross domestic recurring billings |
$4,619 |
|
|
$4,955 |
|
Co-Pay adjustments |
|
(157 |
) |
|
|
(168 |
) |
Other discounts |
|
(32 |
) |
|
|
(18 |
) |
Deferred revenue from prior quarters |
|
1,765 |
|
|
|
2,286 |
|
Deferral of revenue to future quarters |
|
(1,769 |
) |
|
|
(1,458 |
) |
GAAP Recorded revenue |
$4,426 |
|
|
$5,597 |
|
|
|
|
|
|
|
|
|
About STRATA Skin Sciences,
Inc.STRATA Skin Sciences is a medical technology company
in dermatology 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 31 million patients in the United States
alone. The technology is covered by multiple patents.
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.
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 including the
distribution and effectiveness of the COVID-19 vaccines, 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)
|
March 31, 2021 |
|
December 31, 2020 |
ASSETS |
(unaudited) |
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$10,043 |
|
|
$10,604 |
|
Restricted cash |
|
7,482 |
|
|
|
7,508 |
|
Accounts receivable, net of allowance for doubtful accounts of $220
and $274, respectively |
|
2,853 |
|
|
|
2,944 |
|
Inventories |
|
3,312 |
|
|
|
3,444 |
|
Prepaid expenses and other current assets |
|
413 |
|
|
|
331 |
|
Total current assets |
|
24,103 |
|
|
|
24,831 |
|
|
|
|
|
Property and equipment, net |
|
5,788 |
|
|
|
5,529 |
|
Operating lease right-of-use assets, net |
|
902 |
|
|
|
988 |
|
Intangible assets, net |
|
5,993 |
|
|
|
6,345 |
|
Goodwill |
|
8,803 |
|
|
|
8,803 |
|
Other assets |
|
265 |
|
|
|
282 |
|
Total assets |
$45,854 |
|
|
$46,778 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Note payable |
$7,275 |
|
|
$7,275 |
|
Current portion of long-term debt |
|
1,811 |
|
|
|
1,478 |
|
Accounts payable |
|
3,151 |
|
|
|
2,764 |
|
Other accrued liabilities |
|
5,286 |
|
|
|
4,690 |
|
Current portion of operating lease liabilities |
|
375 |
|
|
|
369 |
|
Deferred revenues |
|
2,208 |
|
|
|
2,262 |
|
Total current liabilities |
|
20,106 |
|
|
|
18,838 |
|
|
|
|
|
Long-term liabilities: |
|
|
|
Long-term debt, net |
|
717 |
|
|
|
1,050 |
|
Deferred tax liability |
|
258 |
|
|
|
254 |
|
Long-term operating lease liabilities, net |
|
613 |
|
|
|
710 |
|
Other liabilities |
|
24 |
|
|
|
34 |
|
Total liabilities |
|
21,718 |
|
|
|
20,886 |
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
Series C Convertible Preferred Stock, $.10 par value, 10,000,000
shares authorized; 0 shares issued and outstanding at March 31,
2021 and, December 31, 2020 |
|
- |
|
|
|
- |
|
Common Stock, $.001 par value, 150,000,000 shares authorized;
33,817,305 and 33,801,045 shares issued and outstanding at March
31, 2021 and, December 31, 2020, respectively |
|
34 |
|
|
|
34 |
|
Additional paid-in capital |
|
245,493 |
|
|
|
244,831 |
|
Accumulated deficit |
|
(221,391 |
) |
|
|
(218,973 |
) |
Total stockholders' equity |
|
24,136 |
|
|
|
25,892 |
|
Total liabilities and
stockholders’ equity |
$45,854 |
|
|
$46,778 |
|
|
|
|
|
|
|
|
|
STRATA SKIN SCIENCES, INC. AND
SUBSIDIARYCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In
thousands, except share and per share amounts)(unaudited)
|
|
For the Three Months EndedMarch 31, |
|
|
|
2021 |
|
|
|
2020 |
|
Revenues, net |
|
$5,827 |
|
|
$6,730 |
|
|
|
|
|
|
Cost of revenues |
|
|
2,114 |
|
|
|
2,331 |
|
|
|
|
|
|
Gross profit |
|
|
3,713 |
|
|
|
4,399 |
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
Engineering and product development |
|
|
384 |
|
|
|
292 |
|
Selling and marketing |
|
|
2,932 |
|
|
|
2,953 |
|
General and administrative |
|
|
2,789 |
|
|
|
2,102 |
|
|
|
|
6,105 |
|
|
|
5,347 |
|
|
|
|
|
|
Loss from operations |
|
|
(2,392 |
) |
|
|
(948 |
) |
|
|
|
|
|
Other (expense) income,
net: |
|
|
|
|
Interest (expense) income, net |
|
|
(22 |
) |
|
|
1 |
|
|
|
|
(22 |
) |
|
|
1 |
|
|
|
|
|
|
Loss before income taxes |
|
|
(2,414 |
) |
|
|
(947 |
) |
Income tax expense |
|
|
(4 |
) |
|
|
(88 |
) |
Net loss |
|
$(2,418 |
) |
|
$(1,035 |
) |
|
|
|
|
|
Loss attributable to common
shares |
|
$(2,418 |
) |
|
$(1,018 |
) |
Loss attributable to Preferred
Series C shares |
|
|
$- |
|
|
$(17 |
) |
Loss per common share: |
|
|
|
|
Basic |
|
$(0.07 |
) |
|
$(0.03 |
) |
Diluted |
|
$(0.07 |
) |
|
$(0.03 |
) |
Shares used in computing loss
per common share: |
|
|
|
|
Basic |
|
|
33,802,129 |
|
|
|
33,164,321 |
|
Diluted |
|
|
33,802,129 |
|
|
|
33,164,321 |
|
|
|
|
|
|
Loss per Preferred Series C
share - basic and diluted |
|
|
$- |
|
|
$(11.42 |
) |
Shares used in computing loss
per basic and diluted Preferred Series C Shares |
|
|
- |
|
|
|
1,480 |
|
|
|
|
|
|
|
|
|
|
STRATA SKIN SCIENCES, INC. AND
SUBSIDIARYCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In
thousands, unaudited)
|
For the Three Months EndedMarch 31, |
|
|
2021 |
|
|
|
2020 |
|
Cash Flows From Operating Activities: |
|
|
|
Net loss |
$(2,418 |
) |
|
$(1,035 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
|
833 |
|
|
|
1,038 |
|
Amortization of right-of-use asset |
|
86 |
|
|
|
79 |
|
Provision for doubtful accounts |
|
(54 |
) |
|
|
2 |
|
Stock-based compensation |
|
662 |
|
|
|
430 |
|
Deferred taxes |
|
4 |
|
|
|
88 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
145 |
|
|
|
1,176 |
|
Inventories |
|
132 |
|
|
|
(444 |
) |
Prepaid expenses and other assets |
|
(65 |
) |
|
|
43 |
|
Accounts payable |
|
387 |
|
|
|
222 |
|
Other accrued liabilities |
|
596 |
|
|
|
16 |
|
Other liabilities |
|
(10 |
) |
|
|
(59 |
) |
Operating lease liabilities |
|
(91 |
) |
|
|
(60 |
) |
Deferred revenues |
|
(54 |
) |
|
|
(898 |
) |
Net cash provided by operating activities |
|
153 |
|
|
|
598 |
|
|
|
|
|
Cash Flows From Investing Activities: |
|
|
|
Lasers placed-in-service |
|
(654 |
) |
|
|
(596 |
) |
Purchases of property and equipment |
|
(86 |
) |
|
|
- |
|
Net cash used in investing activities |
|
(740 |
) |
|
|
(596 |
) |
|
|
|
|
Net (decrease) increase in
cash and cash equivalents and restricted cash |
|
(587 |
) |
|
|
2 |
|
Cash,
cash equivalents and restricted cash, beginning of period |
|
18,112 |
|
|
|
15,629 |
|
|
|
|
|
Cash,
cash equivalents and restricted cash, end of period |
$17,525 |
|
|
$15,631 |
|
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