Venus Concept Inc. (“Venus Concept” or the “Company”) (NASDAQ:
VERO), a global medical aesthetic technology leader, announced
financial results for the three and six months ended June 30, 2020.
Second Quarter 2020 Financial Summary:
|
• |
Total GAAP revenue for the second quarter of 2020 decreased 39%
year-over-year, to $17.0 million, compared to $27.8 million for the
second quarter 2019, driven by the negative impact on our business
as a result of the global pandemic caused by COVID-19. |
|
|
|
• |
Total GAAP revenue for the second quarter of 2020 includes $3.3
million of revenue from Venus Concept Inc. (formerly Restoration
Robotics, Inc.) for the three months ended June 30, 2020. |
|
• |
GAAP operating loss for the second quarter of 2020 of $9.2 million,
compared to $3.9 million for the second quarter 2019. |
|
|
|
• |
The Company realized more than $7.0 million, of the projected $20.0
million for full year 2020, in cost savings from the new
restructuring program announced in response to the challenging
business environment caused by COVID-19. |
|
• |
GAAP net loss attributable to Venus Concept Inc. for the second
quarter of 2020 of $13.2 million, compared to $5.9 million for the
second quarter 2019. |
|
|
|
• |
Net loss attributable to Venus Concept Inc. for the second quarter
of 2020 included a deemed dividend beneficial conversion feature of
$3.6 million (non-cash), related to the Series A Preferred Stock
conversion which occurred on June 16, 2020. |
|
• |
Adjusted EBITDA loss of $2.6 million, compared to adjusted EBITDA
of $0.2 million in the second quarter 2019. |
|
• |
The Company had $14.0 million and $15.7 million of cash and cash
equivalents as of June 30, 2020 and December 31, 2019,
respectively, and total debt obligations of approximately $73.3
million and $69.0 million as of June 30, 2020 and December 31,
2019, respectively. |
Second Quarter 2020 Highlights:
|
• |
On June 15, 2020, the Company announced that it received FDA 510(k)
clearance to market and sell Venus Epileve, a device intended for
treatment of hair removal, permanent hair reduction and
pseudofolliculitis barbae. Venus Epileve represents a new product
introduction to the U.S. aesthetics market that expands the
Company’s diode laser hair removal offering beyond the Venus
Velocity which was introduced to the medical aesthetics market in
2017. |
|
• |
On June 16, 2020, the Company announced that it entered into a
common stock purchase agreement for the sale of up to $31.0 million
of shares of common stock to Lincoln Park Capital Fund, LLC
(“Lincoln Park”), a Chicago-based institutional investor. Upon
execution of the purchase agreement, Lincoln Park made an initial
purchase of $1.0 million of common stock. |
|
• |
On June 26, 2020, the Company announced that it was added to the
Russell 2000®, Russell 3000® and Russell Microcap® Indexes. |
|
• |
On July 1, 2020, the Company announced that it had received FDA
510(k) clearance to market and sell Venus Viva MD, a non-invasive
device intended to be used by aesthetic-related physicians or
dermatologists. Venus Viva MD expands the Company’s skin
rejuvenation offerings beyond the Venus Viva™ and Venus Versa™,
which were introduced to the medical aesthetics market in 2015 and
2016, respectively. |
Management Commentary:
“We delivered second quarter revenue results at
the high-end of our preliminary revenue range announced on July
15th,” said Domenic Serafino, Chief Executive Officer of Venus
Concept. “As expected, our second quarter revenue performance was
significantly impacted by the COVID-19 global pandemic, but we were
encouraged by the improving business trends in key markets
beginning in May, which resulted in a significant improvement in
sales trends in the month of June, particularly in the U.S. and
EMEA. Our new commercial targeting strategy, enhanced messaging for
key product lines, including our Venus Bliss, and leveraging our
unique pricing and payment options via our subscription model are
providing us with early evidence that our strategic focus-areas
represent multiple drivers of improving sales performance in the
future. The strong second quarter results for our ARTAS iX® and
NeoGraft hair restoration systems, including strong adoption of our
ARTAS iX® by new customers, and, improving year-over-year procedure
growth from existing customers, give us confidence that the new
commercial strategy in the hair restoration market is on track as
well.”
Mr. Serafino continued: “While the near-term
outlook has been challenged by this global pandemic, we continue to
believe the long-term opportunity remains extremely 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. Importantly, 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. Finally, the recently announced common stock
purchase agreement with Lincoln Park Capital Fund, LLC for up to
$31 million is available to continue to enhance our balance sheet
and financial condition to support our future growth
initiatives.”
Second Quarter and First Six Months of 2020 Revenue by
Region and by Product Type:
|
Three Months |
|
Six Months |
|
Ended June 30 |
|
Ended June 30 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
(dollars in thousands) |
Revenues by region: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
$ |
8,915 |
|
|
$ |
11,682 |
|
|
$ |
14,555 |
|
|
$ |
21,221 |
|
International |
|
8,081 |
|
|
|
16,136 |
|
|
|
16,949 |
|
|
|
31,177 |
|
Total revenue |
$ |
16,996 |
|
|
$ |
27,818 |
|
|
$ |
31,504 |
|
|
$ |
52,398 |
|
|
Three Months |
|
Six Months |
|
Ended June 30 |
|
Ended June 30 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
(dollars in thousands) |
Revenues by product: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription—Systems |
$ |
7,465 |
|
|
$ |
16,643 |
|
|
$ |
14,278 |
|
|
$ |
32,385 |
|
Products—Systems |
|
6,757 |
|
|
|
7,769 |
|
|
|
10,255 |
|
|
|
14,084 |
|
Products—Other1 |
|
1,787 |
|
|
|
1,622 |
|
|
|
4,504 |
|
|
|
2,950 |
|
Services2 |
|
987 |
|
|
|
1,784 |
|
|
|
2,467 |
|
|
|
2,979 |
|
Total revenue |
$ |
16,996 |
|
|
$ |
27,818 |
|
|
$ |
31,504 |
|
|
$ |
52,398 |
|
___________________________1 Products other include ARTAS
procedure kits, Venus Concept’s Venus Skin and hair products, and
other consumables.2 Services include VeroGrafters™ technician
services, 2two5 ad agency services and extended warranty sales.
Second Quarter 2020 Financial Results:
|
Three Months Ended June 30, |
|
|
|
|
2020 |
|
2019 |
|
Change |
(in thousands, except
percentages) |
$ |
|
% of Total |
|
$ |
|
% of Total |
|
$ |
|
% |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription—Systems |
$ |
7,465 |
|
|
|
43.9 |
|
|
$ |
16,643 |
|
|
|
59.8 |
|
|
$ |
(9,178 |
) |
|
|
(55.1 |
) |
Products—Systems |
|
6,757 |
|
|
|
39.8 |
|
|
|
7,769 |
|
|
|
27.9 |
|
|
|
(1,012 |
) |
|
|
(13.0 |
) |
Products—Other |
|
1,787 |
|
|
|
10.5 |
|
|
|
1,622 |
|
|
|
5.9 |
|
|
|
165 |
|
|
|
10.2 |
|
Services |
|
987 |
|
|
|
5.8 |
|
|
|
1,784 |
|
|
|
6.4 |
|
|
|
(797 |
) |
|
|
(44.7 |
) |
Total |
$ |
16,996 |
|
|
|
100.0 |
|
|
$ |
27,818 |
|
|
|
100.0 |
|
|
$ |
(10,822 |
) |
|
|
(38.9 |
) |
Total revenue for the second quarter of 2020
decreased $10.8 million, or 39%, to $17.0 million, compared to
$27.8 million for the second quarter of 2019. Total leases revenue
decreased $9.2 million, or 55%, to $7.5 million, compared to $16.6
million for the second quarter of 2019. Total products and services
revenue for the second quarter of 2020 decreased $1.6 million, or
15%, to $9.5 million, compared to $11.2 million for the second
quarter of 2019.
The decrease in total revenue, by geography, for
the second quarter of 2020 was driven by a decrease of $8.0
million, or 50%, in international revenue and a decrease of $2.8
million, or 24%, in the U.S. revenue, compared to the prior year
period. The decrease in revenue in the United States and
international markets was driven by COVID-19 related lockdown
restrictions and shelter-in-place orders imposed by federal, state,
and local governments in most countries and markets in which we
operate. In both the United States and international markets, these
business closures and the resultant uncertainty negatively impacted
our ability to access and sell into our customary channels. Where
accessibility was possible, selling efforts were hampered by target
customer concerns over economic uncertainty.
The decrease in total revenue, by product
category, for the second quarter of 2020 was driven by a decrease
of $9.2 million, or 55%, in lease revenue, a decrease of $1.0
million, or 13%, in system revenue and a decrease of $0.8 million,
or 45%, in service revenue, offset partially by an increase of $0.2
million, or 10%, in other products revenue, which includes ARTAS®
and ARTAS iX® procedure kits, Venus Concept’s Venus Skin and hair
products, and other consumables. The decrease in lease revenue for
the second quarter of 2020 was driven primarily by COVID-19 related
disruptions, lockdown restrictions and shelter-in-place orders
imposed by federal and local governments. The percentage of systems
revenue derived from our subscription model was approximately 52%
in the three months ended June 30, 2020 compared to 68% in the
three months ended June 30, 2019. The decrease in system
revenue for the second quarter of 2020 was driven by a 40% decrease
in revenue from Venus Concept systems, offset partially by the
contribution of revenue from the sale of ARTAS® and ARTAS iX®
systems which did not contribute to system revenue in the second
quarter of 2019. The decrease in service revenue for the second
quarter of 2020 was driven by COVID-19 related lockdown
restrictions and shelter-in-place orders imposed by federal, state,
and local governments and a corresponding decline in VeroGrafters™
technician services, offset by the contribution of warranty revenue
on ARTAS® systems which did not contribute to service revenue in
the second quarter of 2019.
Gross profit for the second quarter of 2020
decreased $8.2 million, or 41%, to $11.9 million, compared to $20.1
million for the second quarter of 2019. The decrease in gross
profit is primarily due to lower revenues caused by COVID-19
related disruptions, lockdown restrictions and shelter-in-place
orders imposed by federal and local governments in countries and
markets in which we operate. Gross margin was 70.0% of revenue for
the second quarter of 2020, compared to 72.2% of revenue for the
second quarter of 2019. The decrease in gross margin is primarily
due to sales of ARTAS® systems in 2020, which have lower margins
than our other systems, and inventory fair value adjustments
recognized on the business combination with Venus Concept Ltd.
expensed through cost of goods sold during the three months ended
June 30, 2020.
Operating expenses for the second quarter of
2020 decreased $2.9 million, or 12%, to $21.1 million, compared to
$24.0 million for the second quarter of 2019. The year-over-year
decrease in operating expenses was primarily driven by a decrease
of $5.7 million, or 56%, in sales and marketing expenses and a
decrease of $0.4 million, or 18%, in R&D expenses, partially
offset by a $3.1 million increase in general & administrative
expenses or 26%. The year-over-year increase in general and
administrative expenses was driven primarily by increased costs
related to public company reporting obligations, a $3.0 million
increase in COVID-related bad debt expense and additional
amortization of intangible assets recognized on the business
combination with Venus Concept Ltd. The Company realized more than
$7.0 million, of the projected $20.0 million for full 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 second quarter of 2020
was $9.2 million, compared to operating loss of $3.9 million for
the second quarter of 2019.
Net loss attributable to Venus Concept Inc.
stockholders for the second quarter of 2020 was $13.2 million, or
$0.39 per share, compared to net loss attributable to Venus Concept
Inc. stockholders of $5.9 million, or $1.24 per share, for the
second quarter of 2019. Weighted average shares used to compute net
loss attributable to Venus Concept Inc. stockholders per share were
33.3 million and 4.8 million for the second quarters of 2020 and
2019, respectively.
Adjusted EBITDA loss for the second quarter of
2020 was $2.6 million, compared to adjusted EBITDA of $0.2 million
for the second quarter of 2019.
First Six Months of 2020 Financial Results:
|
Six Months Ended June 30, |
|
|
|
|
2020 |
|
2019 |
|
Change |
(in thousands, except
percentages) |
$ |
|
% of Total |
|
$ |
|
% of Total |
|
$ |
|
% |
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription—Systems |
$ |
14,278 |
|
|
|
45.3 |
|
|
$ |
32,385 |
|
|
|
61.8 |
|
|
$ |
(18,107 |
) |
|
|
(55.9 |
) |
Products—Systems |
|
10,255 |
|
|
|
32.6 |
|
|
|
14,084 |
|
|
|
26.9 |
|
|
|
(3,829 |
) |
|
|
(27.2 |
) |
Products other |
|
4,504 |
|
|
|
14.3 |
|
|
|
2,950 |
|
|
|
5.6 |
|
|
|
1,554 |
|
|
|
52.7 |
|
Services |
|
2,467 |
|
|
|
7.8 |
|
|
|
2,979 |
|
|
|
5.7 |
|
|
|
(512 |
) |
|
|
(17.2 |
) |
Total |
$ |
31,504 |
|
|
|
100.0 |
|
|
$ |
52,398 |
|
|
|
100.0 |
|
|
$ |
(20,894 |
) |
|
|
(39.9 |
) |
Total revenue for the first six months of 2020
decreased $20.9 million, or 40%, to $31.5 million, compared to
$52.4 million for the first six months of 2019. Total leases
revenue decreased $18.1 million, or 56%, to $14.3 million, compared
to $32.4 million for the first six months of 2019. Total products
and services revenue for the first six months of 2020 decreased
$2.8 million, or 14%, to $17.2 million, compared to $20.0 million
for the first six months of 2019. The decrease in total revenue, by
geography, for the first six months of 2020 was driven by a
decrease of $14.2 million, or 46%, in international revenue and a
decrease of $6.7 million, or 31%, in the U.S. revenue, compared to
the prior year period. The decrease in revenue in the United States
was driven by COVID-19 related lockdown restrictions and
shelter-in-place orders imposed by federal, state and local
governments. The decrease in revenue in international markets is
largely due to disruptions in supply chain caused by restrictions
imposed by the Chinese government due to the COVID-19 pandemic in
January and February of 2020 followed by lockdown restrictions and
shelter-in-place orders imposed subsequently by federal, state and
local governments in other countries and markets in which we
operate.
Net loss attributable to Venus Concept Inc.
stockholders for the first six months of 2020 was $63.3 million, or
$2.01 per share, compared to net loss attributable to Venus Concept
Inc. stockholders of $11.2 million, or $2.34 per share, for the
first six months of 2019. Weighted average shares used to compute
net loss attributable to Venus Concept Inc. stockholders per share
were 31.6 million and 4.8 million for the first six months of 2020
and 2019, respectively.
Adjusted EBITDA loss for the first six months of
2020 was $16.4 million, compared to adjusted EBITDA loss of $1.0
million for the first six 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. The Company plans to provide
additional information, to the extent practicable, during its third
quarter of 2020 earnings call in November.
Conference Call Details:
Management will host a conference call at 5:00
p.m. Eastern Time on August 13, 2020 to discuss the results of the
second 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 13706095. 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 13706095. 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 26
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 we operate 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
June 30,, 2020, and in other documents we 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, we do 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)
|
|
|
|
|
|
|
|
|
June 30, 2020 |
|
December 31, 2019 |
ASSETS |
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
14,033 |
|
|
$ |
15,666 |
|
Restricted cash |
|
83 |
|
|
|
83 |
|
Accounts receivable, net of allowance of $14,277 and $10,494 as of
June 30, 2020, and December 31, 2019 |
|
57,539 |
|
|
|
58,977 |
|
Inventories |
|
19,030 |
|
|
|
18,844 |
|
Deferred expenses |
|
10 |
|
|
|
59 |
|
Prepaid expenses |
|
2,422 |
|
|
|
2,523 |
|
Advances to suppliers |
|
2,769 |
|
|
|
450 |
|
Other current assets |
|
4,217 |
|
|
|
3,101 |
|
Total current assets |
|
100,103 |
|
|
|
99,703 |
|
LONG-TERM ASSETS: |
|
|
|
|
|
|
|
Long-term receivables |
|
24,343 |
|
|
|
35,656 |
|
Deferred tax assets |
|
1,265 |
|
|
|
622 |
|
Severance pay funds |
|
638 |
|
|
|
710 |
|
Property and equipment,
net |
|
3,971 |
|
|
|
4,648 |
|
Intangible assets |
|
20,602 |
|
|
|
22,338 |
|
Goodwill |
|
— |
|
|
|
27,450 |
|
Total long-term assets |
|
50,819 |
|
|
|
91,424 |
|
TOTAL ASSETS |
$ |
150,922 |
|
|
$ |
191,127 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
Line of credit |
$ |
3,861 |
|
|
$ |
7,789 |
|
Trade payables |
|
9,139 |
|
|
|
9,401 |
|
Accrued expenses and other current liabilities |
|
15,967 |
|
|
|
21,120 |
|
Taxes payable |
|
2,579 |
|
|
|
2,172 |
|
Unearned interest income |
|
2,937 |
|
|
|
3,942 |
|
Warranty accrual |
|
1,160 |
|
|
|
1,254 |
|
Deferred revenues |
|
1,915 |
|
|
|
2,495 |
|
Total current liabilities |
|
37,558 |
|
|
|
48,173 |
|
LONG-TERM LIABILITIES: |
|
|
|
|
|
|
|
Long-term debt |
|
65,364 |
|
|
|
61,229 |
|
Government assistance
loans |
|
4,110 |
|
|
|
— |
|
Accrued severance pay |
|
858 |
|
|
|
827 |
|
Deferred tax liabilities |
|
423 |
|
|
|
1,017 |
|
Unearned interest income |
|
1,246 |
|
|
|
1,681 |
|
Warranty accrual |
|
499 |
|
|
|
723 |
|
Other long-term
liabilities |
|
530 |
|
|
|
799 |
|
Total long-term liabilities |
|
73,030 |
|
|
|
66,276 |
|
TOTAL LIABILITIES |
|
110,588 |
|
|
|
114,449 |
|
Commitments and Contingencies
(Note 8) |
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY (Note
1): |
|
|
|
|
|
|
|
Common Stock, $0.0001 par
value: 300,000,000 shares authorized as of June 30, 2020 and
December 31, 2019; 39,830,122 and 28,686,116 issued and outstanding
as of June 30, 2020 and December 31, 2019, respectively |
|
25 |
|
|
|
24 |
|
Additional paid-in capital
(Note 2) |
|
174,622 |
|
|
|
149,840 |
|
Accumulated deficit |
|
(135,464 |
) |
|
|
(75,686 |
) |
TOTAL STOCKHOLDERS’
EQUITY |
|
39,183 |
|
|
|
74,178 |
|
Non-controlling interests |
|
1,151 |
|
|
|
2,500 |
|
|
|
40,334 |
|
|
|
76,678 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
$ |
150,922 |
|
|
$ |
191,127 |
|
|
Venus Concept
Inc.Condensed Consolidated Statements of
Operations(In thousands of U.S. dollars, except
per share data)
|
|
|
|
|
Three Months |
|
Six Months |
|
Ended June 30 |
|
Ended June 30 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leases |
$ |
7,465 |
|
|
$ |
16,643 |
|
|
$ |
14,278 |
|
|
$ |
32,385 |
|
Products and services |
|
9,531 |
|
|
|
11,175 |
|
|
|
17,226 |
|
|
|
20,013 |
|
|
|
16,996 |
|
|
|
27,818 |
|
|
|
31,504 |
|
|
|
52,398 |
|
Cost of goods sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leases |
|
1,541 |
|
|
|
3,283 |
|
|
|
2,993 |
|
|
|
6,762 |
|
Products and services |
|
3,558 |
|
|
|
4,461 |
|
|
|
7,334 |
|
|
|
7,497 |
|
|
|
5,099 |
|
|
|
7,744 |
|
|
|
10,327 |
|
|
|
14,259 |
|
Gross profit |
|
11,897 |
|
|
|
20,074 |
|
|
|
21,177 |
|
|
|
38,139 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing |
|
4,545 |
|
|
|
10,250 |
|
|
|
13,156 |
|
|
|
19,782 |
|
General and administrative |
|
14,975 |
|
|
|
11,853 |
|
|
|
29,151 |
|
|
|
20,192 |
|
Research and development |
|
1,570 |
|
|
|
1,920 |
|
|
|
4,194 |
|
|
|
3,981 |
|
Goodwill impairment |
|
— |
|
|
|
— |
|
|
|
27,450 |
|
|
|
— |
|
Total operating expenses |
|
21,090 |
|
|
|
24,023 |
|
|
|
73,951 |
|
|
|
43,955 |
|
Loss from operations |
|
(9,193 |
) |
|
|
(3,949 |
) |
|
|
(52,774 |
) |
|
|
(5,816 |
) |
Other expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss (income) |
|
(1,166 |
) |
|
|
(684 |
) |
|
|
3,113 |
|
|
|
13 |
|
Finance expenses |
|
2,371 |
|
|
|
2,152 |
|
|
|
4,625 |
|
|
|
3,807 |
|
Loss before income taxes |
|
(10,398 |
) |
|
|
(5,417 |
) |
|
|
(60,512 |
) |
|
|
(9,636 |
) |
Income tax (benefit)
expense |
|
(633 |
) |
|
|
61 |
|
|
|
(44 |
) |
|
|
947 |
|
Net loss |
|
(9,765 |
) |
|
|
(5,478 |
) |
|
|
(60,468 |
) |
|
|
(10,583 |
) |
Deemed dividend (Note 13) |
|
(3,564 |
) |
|
|
- |
|
|
|
(3,564 |
) |
|
|
- |
|
Loss attributable to
stockholders of the Company |
|
(13,152 |
) |
|
|
(5,910 |
) |
|
|
(63,342 |
) |
|
|
(11,183 |
) |
(Loss) income attributable to
non-controlling interest |
|
(177 |
) |
|
|
432 |
|
|
|
(690 |
) |
|
|
600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.39 |
) |
|
$ |
(1.24 |
) |
|
$ |
(2.01 |
) |
|
$ |
(2.34 |
) |
Diluted |
$ |
(0.39 |
) |
|
$ |
(1.24 |
) |
|
$ |
(2.01 |
) |
|
$ |
(2.34 |
) |
Weighted-average number of
shares used in per share calculation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
33,315 |
|
|
|
4,776 |
|
|
|
31,564 |
|
|
|
4,776 |
|
Diluted |
|
33,315 |
|
|
|
4,776 |
|
|
|
31,564 |
|
|
|
4,776 |
|
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 Months |
|
Six Months |
|
Ended June 30 |
|
Ended June 30 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net
loss to adjusted EBITDA |
(in thousands) |
|
|
(in thousands) |
|
Net loss |
$ |
(9,765 |
) |
|
$ |
(5,478 |
) |
|
$ |
(60,468 |
) |
|
$ |
(10,583 |
) |
Foreign exchange loss |
|
(1,166 |
) |
|
|
(684 |
) |
|
|
3,113 |
|
|
|
13 |
|
Finance expenses |
|
2,371 |
|
|
|
2,152 |
|
|
|
4,625 |
|
|
|
3,807 |
|
Income tax expense
(benefit) |
|
(633 |
) |
|
|
61 |
|
|
|
(44 |
) |
|
|
947 |
|
Depreciation and
amortization |
|
1,269 |
|
|
|
410 |
|
|
|
2,514 |
|
|
|
735 |
|
Stock-based compensation
expense |
|
539 |
|
|
|
1,044 |
|
|
|
1,056 |
|
|
|
1,419 |
|
Goodwill impairment
charge |
|
— |
|
|
|
— |
|
|
|
27,450 |
|
|
|
— |
|
Other adjustments (1) |
|
4,756 |
|
|
|
2,650 |
|
|
|
5,394 |
|
|
|
2,650 |
|
Adjusted EBITDA |
$ |
(2,629 |
) |
|
$ |
155 |
|
|
$ |
(16,360 |
) |
|
$ |
(1,012 |
) |
(1) For the three and six months ended June 30, 2020, the other
adjustments are mainly represented by severance and retention
payments ($0.8 million and $1.5 million, respectively), additional
bad debt provision due to COVID-19 ($3.0 million and $3.5 million,
respectively) as well as a loss on sale of subsidiary in Bulgaria
($0.4 million and $0.4 million, respectively). For the three and
six months ended June 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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