STRATA Skin Sciences, Inc. (NASDAQ: SSKN) a medical technology
company in dermatology and plastic surgery dedicated to developing,
commercializing, and marketing innovative products for the
treatment of dermatologic conditions, today reported preliminary,
unaudited fourth quarter 2020 financial results and key operational
metrics.
Fourth Quarter Financial
Highlights
- Preliminary, unaudited total
revenue is expected to range from $6.6 million to $6.8 million,
compared to $8.9 million in the fourth quarter of 2019 and $5.6
million in the third quarter of 2020
- Preliminary, unaudited recurring
revenue is expected to range from $5.0 million to $5.2 million,
compared to $6.6 million in the fourth quarter of 2019 and $3.8
million in the third quarter of 2020
- Preliminary unaudited gross
domestic recurring billings are expected to range from $5.2 million
to $5.4 million, compared to $6.9 million in the fourth quarter of
2019 and $4.7 million in the third quarter of 2020. (Reference this
Non-GAAP measure below)
- Cash and cash equivalents,
including restricted cash was $18.0 million as of December 31,
2020, compared to $15.6 million as of December 31, 2019
Fourth Quarter Operational
Highlights
- Placed 33 domestic XTRAC systems
and removed 14, resulting in net systems placed in domestic
dermatologists’ offices of 19, of which 12 are comebacks from
previous excimer device owners
- Placed 4 additional XTRAC systems
in international markets, including the first recurring revenue
system in Japan
- Total XTRAC systems placed
domestically reached 832 as of December 31, 2020, compared to 820
systems as of December 31, 2019
- Total XTRAC systems placed
internationally reached 28 as of December 31, 2020, compared to 10
as of December 31, 2019
- Renewed cash secured note payable
through December 30, 2021
Dr. Dolev Rafaeli, STRATA Skin Sciences’
President and CEO stated, “Our fourth quarter started very strong
with October 2020 gross domestic recurring billings at 97% of the
same period in 2019. However, we saw this trend begin to taper off
in the second half of November due to the continued escalation of
COVID-19 and the subsequent renewed stay at home orders.
Encouragingly, our December results ultimately reflected the
highest gross domestic billing month of 2020. Overall, we are
pleased with the sequential revenue growth we experienced over the
third quarter, as this provides us with a strong base to enter
2021.”
The preliminary unaudited results described in
this press release are estimates only and are subject to revision
until the Company reports its full financial results for the year
ended December 31, 2020 which is anticipated in late March.
Non-GAAP Measure
To 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 the non-GAAP measure of
financial performance, Gross Domestic Recurring 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 revenue and deferred revenue impacts 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.
Gross Domestic Recurring
Billings
Gross domestic recurring billings represent the
amount invoiced to partner clinics in the United States 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 reconciliation to non-GAAP gross domestic
recurring billings to expected domestic recurring recorded revenue
for the fourth quarter consists of the following: expected gross
domestic recurring billings of between $5.2 million and $5.4
million, reduced by expected co-pay and credits of between $50
thousand and $150 thousand, increased by deferred revenue from the
third quarter of $1.4 million, and reduced by expected deferral of
revenue to future quarters of between $1.6 million and $1.8
million, resulting in expected domestic recurring recorded revenue
of between $4.8 million and $5.0 million.
About STRATA Skin Sciences,
Inc.
(www.strataskinsciences.com) STRATA
Skin Sciences is a medical technology company in dermatology and
plastic surgery 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 35 million patients in the United States
alone. The technology is covered by multiple patents, including
exclusive rights for patents for the delivery of treatment to
vitiligo patients.
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.
The XTRAC business has used this proven DTC
model to grow its domestic dermatology partner network to over 832
clinics, with a worldwide installed base of over 2,000 devices. The
Company is able to offer 90% of DTC patients an introduction to
physicians prescribing a reimbursable solution, using XTRAC, within
a 10-mile radius of their house. The Company is a leader in
dermatology in-clinic business generation for its partners.
The Company has now introduced its Home by
XTRAC™ business leveraging in-house resources including DTC
advertising, in-house call center and its insurance reimbursement
team to provide an at-home, insurance-reimbursed treatment option
for patients with certain skin diseases that do not qualify for
in-office treatments.
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, the Company’s ability to build a
leading franchise in dermatology and aesthetics, the Company’s
ability to develop a business for home-based treatment of skin
diseases, 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, 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 Contacts:
Leigh Salvo |
(415) 937-5404 |
ir@strataskin.com |
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