Venus Concept Inc. (“Venus Concept” or the “Company”) (NASDAQ:
VERO), a global medical aesthetic technology leader, provided
standalone Venus Concept, Ltd. financial results for the third
quarter and nine months ended September 30, 2019. The Company notes
that the financial results provided do not give effect to the
merger that closed on November 7, 2019 as described below. The
information in this press release reflects the unaudited financial
information for the three and nine months ended September 30, 2019
and September 30, 2018.
Third Quarter 2019 Summary:
- Third quarter total revenue
increased 2.2% year-over-year, to $26.2 million, compared to $25.6
million in third quarter 2018.
- Lease revenue1 (subscriptions)
decreased 8.1% year-over-year to $16.4 million.
- System revenue2 increased 16.8%
year-over-year to approximately $7.1 million.
- Product revenue3 increased 6.8%
year-over-year to $1.2 million.
- Service revenue4 increased 164.5%
year-over-year to $1.5 million.
- Operating loss of $6.6 million,
compared to operating income of $1.1 million in third quarter
2018.
- Net loss attributable to Venus
Concept Ltd. of $8.6 million, compared to net loss attributable to
Venus Concept Ltd. of $1.4 million in third quarter 2018.
- Adjusted EBITDA income of $28
thousand, compared to adjusted EBITDA income $1.7 million in third
quarter 2018.
Third Quarter 2019 Operating Highlights:
- On June 25, 2019, Venus Concept received U.S. Food and Drug
Administration (FDA) 510(k) clearance to market and sell Venus
Bliss™, a medical aesthetic platform that offers a comprehensive
solution to fat reduction and cellulite reduction, with two
technologies in one platform.
- On August 14, 2019, Venus Concept issued $7.2 million in
aggregate principal amount of unsecured senior subordinated
convertible promissory notes to certain investors.
- On August 21, 2019, Venus Concept issued $14.1 million in
aggregate principal amount of unsecured senior subordinated
convertible promissory notes to certain investors.
Merger with Restoration
Robotics:
- On November 7, 2019, Venus Concept announced the completion of
its previously announced merger with Restoration Robotics, Inc.
(“Restoration Robotics”) (NASDAQ: HAIR, through November 7, 2019),
a leader in robotic hair restoration, effective as of November 7,
2019. Immediately following the completion of the merger, the
Company effected a 15-for-1 reverse stock split of its common
stock.
- On November 7, 2019, immediately following the completion of
the merger, Venus Concept completed a $28.0 million equity
financing by EW Healthcare Partners, HealthQuest Capital, SEDCO
Capital and others.
- On November 7, 2019, immediately following the completion of
the merger, the equity financing and the reverse stock split, the
Company had 29,667,622 shares common stock outstanding.
_____________________
1 Includes all system sales with typical lease terms of 36
months.2 Includes all systems sales with payment terms within 12
months.3 Includes skincare, hair and other consumables payable upon
receipt.4 Includes NeoGraft technician services, ad agency services
and extended warranty sales.
“We are pleased with Venus Concept’s revenue
performance over the first nine months of 2019, where we delivered
total revenue growth of 6% year-over-year,” said Domenic Serafino,
Chief Executive Officer of Venus Concept. “Total revenue growth
during the first nine months of the year was driven by 7% growth in
international markets and 6% growth in the United States. Total
products and services revenue increased 41% during the first nine
months of 2019, which more than offset an 8% decline in lease
revenue from systems delivered under our subscription model. Our
third quarter revenue growth was impacted by the protracted period
between the announcement, and closing, of our merger with
Restoration Robotics but we are focused on driving strong
commercial execution in the fourth quarter and we remain confident
in our ability to drive total revenue growth for the legacy Venus
Concept business in the range of 5% to 8% in 2019.”
Mr. Serafino continued: “The outlook for Venus
Concept is very positive following the closing of our merger with
Restoration Robotics on November 7, 2019 and we have made
significant progress in enhancing our financial condition with our
recent financing activities. The integration of our two companies
is well underway and we are excited by the prospects of the
combined global commercial team in the years to come. Importantly,
our combined R&D team is already collaborating on our strategic
initiative to leverage the potentially powerful combination of
Venus’ expertise in non-invasive energy-based technologies for
aesthetic applications and Restoration Robotics’ expertise in
robotic technology, 3D pre-operative planning and software. We
believe the combined company is well positioned as a leading player
in both the global minimally invasive/non-invasive medical
aesthetics market and the minimally invasive surgical hair
restoration market. We expect the combined company will have an
attractive growth profile and a multi-year profitability
improvement opportunity.”
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Venus
Concept Ltd. |
Supplemental
Financial Information – Revenue By Geographic Area |
(Unaudited) |
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Three Months Ended |
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Nine Months Ended |
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September 30, |
|
Increase/(Decrease) |
|
September 30, |
|
Increase/(Decrease) |
(Dollars in thousands) |
|
2019 |
|
2018 |
|
$ |
|
% |
|
2019 |
|
2018 |
|
$ |
|
% |
United States |
|
$ |
10,118 |
|
$ |
9,653 |
|
$ |
465 |
|
4.8 |
% |
|
$ |
31,337 |
|
$ |
29,643 |
|
$ |
1,694 |
|
5.7 |
% |
International |
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|
16,036 |
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|
15,940 |
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|
96 |
|
0.6 |
% |
|
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47,215 |
|
|
44,324 |
|
|
2,891 |
|
6.5 |
% |
Total Revenue |
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$ |
26,154 |
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$ |
25,593 |
|
$ |
561 |
|
2.2 |
% |
|
$ |
78,552 |
|
$ |
73,967 |
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$ |
4,585 |
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6.2 |
% |
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Venus
Concept Ltd. |
Supplemental
Financial Information – Revenue By Type |
(Unaudited) |
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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Increase/(Decrease) |
|
September 30, |
|
Increase/(Decrease) |
(Dollars in thousands) |
|
2019 |
|
2018 |
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$ |
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% |
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2019 |
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2018 |
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$ |
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% |
Lease revenue |
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$ |
16,427 |
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$ |
17,869 |
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$ |
(1,442) |
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(8.1) |
% |
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$ |
48,812 |
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$ |
52,885 |
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$ |
(4,073 |
) |
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(7.7) |
% |
System revenue |
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|
7,105 |
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|
6,081 |
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|
1,024 |
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16.8 |
% |
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21,189 |
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16,011 |
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5,178 |
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32.3 |
% |
Product revenue |
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1,167 |
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|
1,093 |
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|
74 |
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6.8 |
% |
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4,117 |
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3,193 |
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|
924 |
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28.9 |
% |
Service revenue |
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1,455 |
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|
550 |
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|
905 |
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164.5 |
% |
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4,434 |
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1,878 |
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2,556 |
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136.1 |
% |
Total Revenue |
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$ |
26,154 |
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$ |
25,593 |
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$ |
561 |
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2.2 |
% |
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$ |
78,552 |
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$ |
73,967 |
|
$ |
4,585 |
|
|
6.2 |
% |
Third Quarter 2019 Financial Results
Total revenue for the third quarter of 2019
increased $0.6 million, or 2.2%, to $26.2 million, compared to
$25.6 million for the quarter ended September 30, 2018. Total
products and services revenue for the third quarter of 2019
increased $8.7 million, or 41.1%, to $29.7 million, compared to
$21.1 million for the third quarter of 2018. Total leases revenue
declined $4.1 million, or 7.7%, to $48.8 million, compared to $52.9
million in the prior year period.
The increase in total revenue, by geography, was
primarily attributable to an increase of $0.5 million, or 4.8%, in
U.S. revenue. The increase in revenue in U.S. markets in the third
quarter of 2019 was driven primarily by sales of newer technology
platforms.
The increase in total revenue, by product
category, was attributable to an increase of $1.0 million, or
16.8%, in system revenue, an increase of $0.9 million, or 164.5%,
in service revenue and an increase of $0.1 million, or 6.8%, in
product revenue which was partially offset by a decrease of $1.4
million, or 8.1%, in lease revenue. The increase in system revenue
in the third quarter of 2019 was driven by a 25% increase in the
aggregate number of systems sold compared to the prior year period.
The increase in service revenue in the third quarter of 2019 was
driven by the addition of the NeoGrafter technician services as
part of the NeoGraft acquisition and the Company’s 2two5 ad agency
services that commenced operation in the second quarter of 2018.
The decrease in lease revenue in the third quarter of 2019 was
driven primarily by a mix shift of systems revenue from leases to
purchases as compared to the prior year period.
Gross profit for the third quarter of 2019
decreased $0.9 million, or 4.8%, to $18.8 million, compared to
$19.7 million in the third quarter of 2018. The decrease in gross
profit is primarily due to lower average selling prices on systems
sales and increased services revenue at lower margins. Gross margin
was 71.8% of revenue in the third quarter of 2019, compared to
77.0% of revenue in the third quarter of 2018. The decrease in
gross profit percentage is primarily related to an increase in cost
of goods sold mainly due to a large chain account sale in Asia at a
lower margin and lower selling prices on sales of certain certified
pre-owned systems.
Operating expenses for the third quarter of 2019
increased $6.7 million, or 36.1%, to $25.3 million, compared to
$18.6 million in the third quarter of 2018. The increase in
operating expenses was primarily driven by an increase of $7.0
million, or 105.2% year-over-year, in general and administrative
expenses, partially offset by a decrease of $0.6 million, or 5.8%,
in sales and marketing expenses. Total operating expenses,
specifically general and administrative expenses, in the third
quarter of 2019 include approximately $5.0 million of costs related
to the merger with Restoration Robotics which did not exist in the
prior year period. Excluding the costs related to the merger with
Restoration Robotics in the period, total general and
administrative expenses increased approximately $2.0 million, or
30.3%, to $8.6 million, compared to $6.6 million in the third
quarter of 2018. The increase in general and administrative
expenses, excluding the unusual and non-recurring costs and
expenses, was primarily due to continued investment in corporate
infrastructure including expanded infrastructure in Asia-Pacific,
Latin America and Europe, the related general and administrative
expenses resulting from the NeoGraft acquisition and the launch of
the 2two5 internal advertising in mid-2018.
Operating loss for the third quarter of 2019 was
$6.6 million, compared to operating income of $1.1 million in the
third quarter of 2018.
Net loss attributable to Venus Concept Ltd.
holders for the third quarter of 2019 was $8.6 million, or $1.02
per share, compared to net loss attributable to Venus Concept Ltd.
holders of approximately $1.4 million, or $0.17 per share, in the
third quarter of 2018. Weighted average shares used to compute net
loss attributable to Venus Concept Ltd. holders per share were 8.5
million and 8.2 million for the third quarters of 2019 and 2018,
respectively.
Adjusted EBITDA income for the third quarter of
2019, was $28 thousand, compared to adjusted EBITDA income of $1.7
million in the third quarter of 2018.
First Nine Months of 2019 Financial
Results:
Total revenue for the nine months
ended September 30, 2019 increased $4.6 million, or
6.2%, to $78.6 million, compared to $74.0
million for the nine months ended September 30, 2018. The
increase in total revenue, by geography, was driven by an increase
of approximately $2.2 million, or 5.4%, in international sales
and an increase of $1.7 million, or 5.7%, in U.S. sales. The
increase in total revenue, by product category, was driven
primarily by an increase of approximately $5.2 million, or
32.3%, in system revenue, an increase of $2.6 million, or 136.2%,
in service revenue and an increase of $0.9 million, or 29.0%, in
product revenue which was partially offset by a decrease of $4.1
million, or 7.7%, in lease revenue compared to the prior year
period.
Net loss attributable to Venus Concept Ltd.
holders for the nine months ended September 30, 2019 was
$19.8 million, or $2.38 per share, compared to net loss
attributable to Venus Concept Ltd. holders of $1.7 million, or
$0.21 per share, for the nine months ended September 30,
2018. Weighted average shares used to compute net loss attributable
to Venus Concept Ltd. holders per share were 8.3 million and 8.2
million for the nine months ended September 30, 2019 and
2018, respectively.
Adjusted EBITDA loss for the nine months ended
September 30, 2019 was $984 thousand, compared to adjusted EBITDA
income of $7.4 million for the nine months ended September 30,
2018.
The Company had $15.7 million and $6.8 million
of cash and cash equivalents as of September 30, 2019 and December
31, 2018, respectively. During the nine months ended September 30,
2019, the Company drew $10.0 million on a term loan facility with
Madryn Health Partners, LP, $1.9 million on a credit facility with
City National Bank of Florida and issued an aggregate principal
amount of $29.1 million unsecured senior subordinated convertible
promissory notes to certain existing investors. The Company had
total debt obligations of approximately $98.0 million as of
September 30, 2019, including line of credit borrowings of $7.6
million and convertible promissory notes of $29.4 million, compared
to total debt obligations of approximately $56.5 million at
December 31, 2018, including line of credit borrowings of $5.6
million.
Combined Company 2019 Revenue Outlook:
The Company continues to expect total revenue for the combined
company in the range of $123.0 million to $126.0 million for the
twelve months ending December 31, 2019.
Restoration Robotics, Inc. / Merger Update:
Restoration Robotics today filed with the Securities and
Exchange Commission its financial results for the three and nine
months ended September 30, 2019 on Form 10-Q, which is available at
sec.gov.
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 technologies
and reach in over 60 countries and 29 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, and Venus
Bliss. Venus Concept’s hair restoration division 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 “forward-looking”
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
These statements, as they relate to Venus Concept, including the
expected revenue, operating results and other financial
information, involve risks and uncertainties that may cause results
to differ materially from those set forth in the statements. These
statements are based on current plans, estimates and projections,
and therefore, you are cautioned not to place undue reliance on
them. No forward-looking statement can be guaranteed, and actual
results may differ materially from those projected. Venus Concept
undertakes no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or
otherwise, except to the extent required by law. Forward-looking
statements are not historical facts, but rather are based on
current expectations, estimates, assumptions and projections about
the business and future financial results of the medical device
industry, and other legal, regulatory and economic developments. We
use words such as “anticipates,” “believes,” “plans,” “expects,”
“projects,” “future,” “intends,” “may,” “should,” “could,”
“estimates,” “predicts,” “potential,” “continue,” “guidance,” and
similar expressions which are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. Actual results could differ materially
from the results contemplated by these forward-looking statements.
Material factors that could cause actual results to differ
materially from current expectations include, without limitation,
the following: the progress of the commercialization, marketing and
manufacturing capabilities for the combined company’s products; the
number of Venus Concept systems that are sold; the success of the
commercial launch of Venus Bliss; the timing or likelihood of
regulatory filings and approvals for products; the expected
synergies from the merger; and the expected revenue for the
combined company. Venus Concept cannot give any assurances that the
combined company will achieve its expectations.
The foregoing list of factors is not exhaustive.
You should carefully consider the foregoing factors and the other
risks and uncertainties that affect the business of Venus Concept
described in the “Risk Factors” section contained in the
Registration Statement on Form S-4 and the prospectus and
definitive proxy statement contained therein for the merger of
Restoration Robotics and Venus and described in the “Risk Factors”
section of Restoration Robotics Annual Report on Form 10-K for the
year ended 2018 filed on March 20, 2019 and as amended on April 29,
2019, the Restoration Robotics’ Quarterly Report on Form 10-Q for
the quarter ended September 30, 2019 filed on November 14, 2019, as
well as any reports that Venus Concept may filed with the SEC in
the future. All forward-looking statements included in this press
release are based upon information available to Venus Concept as of
the date hereof, and Venus Concept assumes no obligation to update
or revise such forward-looking statements to reflect events or
circumstances that subsequently occur or of which Venus Concept
hereafter becomes aware.
Venus
Concept Ltd. |
Condensed
Consolidated Balance Sheets |
(In
thousands, except share data) |
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As of |
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|
September 30, 2019 |
|
December 31, 2018 |
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(unaudited) |
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Assets |
|
|
|
|
Current assets |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
15,732 |
|
|
$ |
6,758 |
|
|
Trade receivables, net of allowance for doubtful |
|
|
|
|
|
|
accounts of $3,406 ($4,408 as of December 31, 2018) |
|
|
59,144 |
|
|
|
42,663 |
|
|
Notes receivable |
|
|
4,500 |
|
|
|
— |
|
|
Inventories |
|
|
15,777 |
|
|
|
20,261 |
|
|
Prepaid expenses |
|
|
777 |
|
|
|
1,148 |
|
|
Other current assets |
|
|
6,641 |
|
|
|
3,775 |
|
|
|
Total current assets |
|
|
102,571 |
|
|
|
74,605 |
|
|
|
|
|
|
|
|
|
Long-term assets |
|
|
|
|
|
Long-term portion of trade receivables |
|
|
38,074 |
|
|
|
38,201 |
|
|
Property and equipment, net |
|
|
3,335 |
|
|
|
3,381 |
|
|
Deferred tax assets |
|
|
269 |
|
|
|
297 |
|
|
Intangible assets |
|
|
4,851 |
|
|
|
5,252 |
|
|
Goodwill |
|
|
2,603 |
|
|
|
2,603 |
|
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Severance pay funds |
|
|
849 |
|
|
|
791 |
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Total non-current assets |
|
|
49,981 |
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|
|
50,525 |
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Total assets |
|
|
152,552 |
|
|
|
125,130 |
|
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|
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Liabilities |
|
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|
|
Current liabilities |
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|
|
Trade payables |
|
$ |
7,766 |
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$ |
8,625 |
|
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Line of credit |
|
|
7,572 |
|
|
|
5,655 |
|
|
Unearned interest income |
|
|
3,965 |
|
|
|
3,849 |
|
|
Convertible promissory notes |
|
|
29,420 |
|
|
|
- |
|
|
Accrued expenses and other current liabilities |
|
|
16,138 |
|
|
|
11,945 |
|
|
|
Total current liabilities |
|
|
64,861 |
|
|
|
30,074 |
|
|
|
|
|
|
|
|
|
Long-term liabilities |
|
|
|
|
|
Long-term debt |
|
|
60,981 |
|
|
|
50,892 |
|
|
Deferred tax liabilities |
|
|
2,332 |
|
|
|
1,893 |
|
|
Unearned interest income |
|
|
1,794 |
|
|
|
1,752 |
|
|
Other long-term liabilities |
|
|
3,725 |
|
|
|
4,064 |
|
|
|
Total non-current liabilities |
|
|
68,832 |
|
|
|
58,601 |
|
|
|
|
Total
liabilities |
|
|
133,693 |
|
|
|
88,675 |
|
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Commitments and contingencies (Note 11) |
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Shareholders’ equity |
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Share capital |
|
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Series A preferred shares of 0.0003 par value: |
|
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|
|
2,192,736 shares authorized, issued and |
|
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|
|
outstanding at September 30, 2019 and December 31, 2018 |
|
|
- |
|
|
|
- |
|
|
Series B preferred shares of 0.0003 par value: |
|
|
|
|
|
|
4,714,034 shares authorized, 4,564,034 shares |
|
|
|
|
|
|
issued and outstanding at September 30, 2019 |
|
|
|
|
|
|
and December 31, 2018 |
|
|
- |
|
|
|
- |
|
|
Series C preferred shares of 0.0003 par value: |
|
|
|
|
|
|
8,015,320 shares authorized, 8,003,319 shares issued |
|
|
|
|
|
|
outstanding at September 30, 2019 and December 31, 2018 |
|
|
- |
|
|
|
- |
|
|
Series C-1 preferred shares of 0.0003 par value: |
|
|
|
|
|
|
98,807 shares authorized and issued |
|
|
|
|
|
|
outstanding at September 30, 2019 and December 31, 2018 |
|
|
- |
|
|
|
- |
|
|
Series D preferred shares of 0.0003 par value: |
|
|
|
|
|
|
1,122,216 shares authorized, issued and |
|
|
|
|
|
|
outstanding at September 30, 2019 and December 31, 2018 |
|
|
- |
|
|
|
- |
|
|
Ordinary shares of 0.0003 par value: |
|
|
|
|
|
|
83,856,887 and 84,979,103 shares authorized at |
|
|
|
|
|
|
September 30, 2019 and December 31, 2018; |
|
|
|
|
|
|
8,580,959 and 8,276,229 shares issued and |
|
|
|
|
|
|
outstanding at September 30, 2019 and December 31, 2018, |
|
|
|
|
|
|
respectively |
|
|
57,459 |
|
|
|
57,101 |
|
|
Additional paid-in capital |
|
|
11,937 |
|
|
|
10,399 |
|
|
Accumulated deficit |
|
|
(54,890 |
) |
|
|
(35,067 |
) |
|
Treasury shares, at cost; 1,800 shares as at |
|
|
|
|
|
|
September 30, 2019 and December 31, 2018 |
|
|
- |
|
|
|
- |
|
|
|
Total Venus Concept Ltd. shareholders' equity |
|
|
14,506 |
|
|
|
32,433 |
|
|
Non-controlling interest |
|
|
4,353 |
|
|
|
4,022 |
|
|
|
|
Total
shareholders' equity |
|
|
18,859 |
|
|
|
36,455 |
|
|
|
|
Total
liabilities and shareholders' equity |
|
$ |
152,552 |
|
|
$ |
125,130 |
|
|
|
|
|
|
|
|
|
Venus
Concept Ltd. |
Condensed
Consolidated Statements of Operations |
(In
thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
|
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
Leases |
|
|
|
|
$ |
16,427 |
|
|
$ |
17,869 |
|
|
$ |
48,812 |
|
|
$ |
52,885 |
|
|
Products and services |
|
|
|
|
|
9,727 |
|
|
|
7,724 |
|
|
|
29,740 |
|
|
|
21,082 |
|
|
|
Total revenue |
|
|
|
|
|
26,154 |
|
|
|
25,593 |
|
|
|
78,552 |
|
|
|
73,967 |
|
Cost of goods sold |
|
|
|
|
|
|
|
|
|
|
|
|
Leases |
|
|
|
|
|
3,502 |
|
|
|
3,726 |
|
|
|
14,148 |
|
|
|
10,120 |
|
|
Products and services |
|
|
|
|
|
3,884 |
|
|
|
2,152 |
|
|
|
7,497 |
|
|
|
6,540 |
|
|
|
Total cost of goods sold |
|
|
|
|
|
7,386 |
|
|
|
5,878 |
|
|
|
21,645 |
|
|
|
16,660 |
|
Gross profit |
|
|
|
|
|
18,768 |
|
|
|
19,715 |
|
|
|
56,907 |
|
|
|
57,307 |
|
Selling and marketing |
|
|
|
|
|
9,201 |
|
|
|
9,770 |
|
|
|
28,983 |
|
|
|
26,311 |
|
General and administrative |
|
|
|
|
|
13,556 |
|
|
|
6,605 |
|
|
|
31,731 |
|
|
|
18,631 |
|
Research and development |
|
|
|
|
|
1,686 |
|
|
|
1,713 |
|
|
|
5,667 |
|
|
|
4,856 |
|
Provision for bad debts |
|
|
|
|
|
889 |
|
|
|
530 |
|
|
|
2,906 |
|
|
|
1,727 |
|
|
|
Total operating expenses |
|
|
|
|
|
25,332 |
|
|
|
18,618 |
|
|
|
69,287 |
|
|
|
51,525 |
|
(Loss) income from operations |
|
|
|
|
|
(6,564 |
) |
|
|
1,097 |
|
|
|
(12,380 |
) |
|
|
5,782 |
|
Foreign exchange loss |
|
|
|
|
|
396 |
|
|
|
886 |
|
|
|
409 |
|
|
|
1,675 |
|
Finance expenses |
|
|
|
|
|
2,097 |
|
|
|
1,438 |
|
|
|
5,904 |
|
|
|
4,240 |
|
|
Total other expense, net |
|
|
|
|
|
2,493 |
|
|
|
2,324 |
|
|
|
6,313 |
|
|
|
5,915 |
|
Loss before income taxes |
|
|
|
|
|
(9,057 |
) |
|
|
(1,227 |
) |
|
|
(18,693 |
) |
|
|
(133 |
) |
Income tax (benefit) expense |
|
|
|
|
|
(80 |
) |
|
|
(43 |
) |
|
|
867 |
|
|
|
1,027 |
|
Net loss |
|
|
|
|
|
(8,977 |
) |
|
|
(1,184 |
) |
|
|
(19,560 |
) |
|
|
(1,160 |
) |
Allocation of net (loss) income |
|
|
|
|
|
|
|
|
|
|
|
Loss attributable to Venus Concept Ltd. |
|
|
|
|
|
(8,640 |
) |
|
|
(1,363 |
) |
|
|
(19,823 |
) |
|
|
(1,736 |
) |
(Loss) income attributable to non-controlling interest |
|
|
|
|
(337 |
) |
|
|
179 |
|
|
|
263 |
|
|
|
576 |
|
|
|
|
|
|
|
|
|
$ |
(8,977 |
) |
|
$ |
(1,184 |
) |
|
$ |
(19,560 |
) |
|
$ |
(1,160 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
$ |
(1.02 |
) |
|
$ |
(0.17 |
) |
|
$ |
(2.38 |
) |
|
$ |
(0.21 |
) |
Weighted-average number of shares used in per share
calculation: |
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
8,472 |
|
|
|
8,233 |
|
|
|
8,345 |
|
|
|
8,184 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Venus Concept’s 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 Venus
Concept’s financial results presented in accordance with U.S. GAAP.
Other companies, including companies in Venus Concept’s industry,
may calculate Adjusted EBITDA differently or not at all, which
reduces its usefulness as a comparative measure. Venus Concept
understands 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 Venus Concept’s results as reported under U.S. GAAP.
Some of these limitations are: Adjusted EBITDA does not reflect
Venus Concept’s cash expenditures or future requirements for
capital expenditures or contractual commitments; Adjusted EBITDA
does not reflect changes in, or cash requirements for, Venus
Concept’s working capital needs; and although depreciation is a
non-cash charge, 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.
Venus Concept believes that Adjusted EBITDA is a useful measure
for analyzing the performance of Venus Concept’s 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), stock-based compensation expense (because it is a
non-cash expense) and non-recurring items as explained above.
Venus
Concept Ltd. Reconciliation of Net Income to
Non-GAAP Adjusted EBITDA(Unaudited) |
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Net loss |
|
$ |
(8,977 |
) |
|
$ |
(1,184 |
) |
|
$ |
(19,560 |
) |
|
$ |
(1,160 |
) |
Add
back: |
|
|
|
|
|
|
|
|
Foreign exchange loss |
|
|
396 |
|
|
|
886 |
|
|
|
409 |
|
|
|
1,675 |
|
Finance expenses |
|
|
2,097 |
|
|
|
1,438 |
|
|
|
5,904 |
|
|
|
4,240 |
|
Income tax expense |
|
|
(80 |
) |
|
|
(43 |
) |
|
|
867 |
|
|
|
1,027 |
|
Depreciation and amortization |
|
|
329 |
|
|
|
241 |
|
|
|
1,064 |
|
|
|
734 |
|
Stock-based compensation expense |
|
|
313 |
|
|
|
328 |
|
|
|
1,732 |
|
|
|
891 |
|
Non-recurring items (1) |
|
|
5,950 |
|
|
|
- |
|
|
|
8,600 |
|
|
|
- |
|
Adjusted EBITDA |
|
$ |
28 |
|
|
$ |
1,666 |
|
|
$ |
(984 |
) |
|
$ |
7,407 |
|
|
|
|
|
|
|
|
|
|
(1) For the three and nine months ended September 30, 2019,
Venus Concept had two non-recurring items:
- The expenses related to the merger with Restoration Robotics
Inc., mainly presented by professional fees related to a business
combination transaction.
- The expenses related to a patent infringement case (mainly
professional fees).
Both items are considered unusual, and
therefore, non-recurring in nature.
Investor Relations Contact:
Westwicke Partners on behalf of Venus Concept
Mike Piccinino, CFA
VenusConceptIR@westwicke.com
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