Venus Concept Inc. (“Venus Concept” or the “Company”) (NASDAQ:
VERO), a global medical aesthetic technology leader, today
announced a restructuring plan, workforce reduction, management
transition and reported preliminary unaudited revenue results for
the three months and twelve months ended December 31, 2022.
“We recently completed the first phase of the
comprehensive strategic review and assessment of the Company
outlined on our third quarter earnings call,” said Rajiv De Silva,
Chief Executive Officer of Venus Concept. “The assessment, once
completed, will inform the development of a transformational plan
focused on repositioning Venus Concept to enhance the cash flow
profile of the business and to accelerate the path to long-term,
sustainable, profitability and growth.”
Mr. De Silva continued: “This month, the Company
will begin the first phase of the transformational plan by
undertaking a series of restructuring activities designed to
improve its operations and cost structure. Restructuring plan
activities will include discontinuing operations in unprofitable
markets, consolidating functions, eliminating or reducing
investments in non-core areas and prioritizing the allocation of
resources to our most promising growth opportunities. The
restructuring plan also includes targeted reductions in our
workforce which, while unfortunate for those impacted by these
difficult strategic decisions, are necessary to accelerate the
process of generating positive, sustainable, operating cash flow. I
am thankful for the service provided to the Company by those
employees impacted by this workforce reduction. We look forward to
providing more detail on both our transformational plan and our
strategic priorities for 2023 on our fourth quarter earnings call
on March 27, 2023.”
Executive Leadership Transitions:
On February 6, 2023, President & Chief
Business Officer, Hemanth Varghese was appointed to a newly created
executive role, President & Chief Innovation and Business
Officer. In addition to his continuing responsibilities as Chief
Business Officer, Dr. Varghese will lead the Company’s global
research and development activities including continued development
of our novel energy-based device technologies in Yokneam, Israel
and our leading medical robotics center of excellence located in
San Jose, California.
On February 6, 2023, William (“Bill”) McGrail,
the Company’s Vice President, Global Regulatory Affairs and Quality
Assurance, was appointed to a newly created role, Senior Vice
President, Technical Operations and Compliance. In addition to his
current responsibilities, Mr. McGrail will have oversight over all
technical operations of the Company including manufacturing and
supply chain, regulatory affairs, quality and technical
services.
On February 6, 2023, Søren Maor Sinay, the
Company’s Chief Operating Officer, announced his decision to leave
the Company for personal reasons through mutual agreement with the
Company. Mr. Sinay will continue his employment with the Company in
the capacity of a Senior Advisor until March 6, 2023.
“I want to take this opportunity to thank Maor
for his 5 plus years of service to the Company and wish him well in
his future endeavors,” said Mr. De Silva. “I am excited at the
appointment of Hemanth and Bill to their respective new roles.
Hemanth has extensive experience in driving organic and inorganic
growth and his background is ideal for this newly created executive
role, President & Chief Innovation and Business Officer. The
creation of this executive role provides the benefit of enhanced
collaboration across our product development, manufacturing and
commercial teams and is consistent with the Company's continued
commitment to bringing new, innovative products and capabilities to
the market, while achieving a profitable and sustainable growth
profile for the Company going forward. Bill has more than 25 years
of experience in the medical device industry which will be
invaluable to the Company as we continue to improve the efficiency
of our technical operations. As Venus Concept executes our
transformational plan it is imperative that we have the
organizational structure, and experienced leadership, to improve
profitability, and ensure long-term success.”
Restructuring Plan and Reduction in
Workforce:
On January 27, 2023, the Board of Directors of
Venus Concept approved a restructuring plan to reduce the Company’s
cost structure and improve its operational efficiency. The plan
includes a reduction in the Company’s employee base by up to 70
employees, which constitutes a reduction of approximately 18% in
the Company’s global workforce as of December 31, 2022. The first
phase of the reduction in workforce impacted employees in Israel
and North America and was completed on February 6, 2023.
In connection with these actions, the Company
estimates that it will incur aggregate pre-tax restructuring
charges of $2.0 million to $2.5 million, a portion of which were
recognized in the fourth quarter of fiscal year 2022 with the
balance of the aggregate pre-tax charges expected to be incurred
prior to June 30, 2023. These charges will be substantially settled
in cash and include consulting expenses, one-time termination
charges arising from severance obligations and other customary
employee benefit payments in connection with a reduction in force.
While the Company expects to begin realizing restructuring
plan-related expense savings immediately, the majority of savings
will be realized in the second half of 2023. The Company expects
this restructuring plan to result in total annual pre-tax savings
of $13 million to $15 million beginning in 2024. The Company may
incur additional expenses not currently contemplated due to events
associated with the restructuring plan and reduction in force. The
annualized cost savings are estimates and subject to a number of
assumptions, and actual results may differ materially.
Preliminary Fourth Quarter 2022 Revenue
Summary:
Preliminary total GAAP revenue for the three
months ended December 31, 2022 is expected to be in the range of
$23.5 million to $24.5 million, compared to total GAAP revenue of
$32.6 million for the three months ended December 31, 2021,
representing a decrease of 25% to 28% year-over-year and an
increase of 9% to 14% quarter-over-quarter. These preliminary
results are consistent with the Company’s expectations and reflect
a continued successful shift to prioritize cash system sales, which
represented approximately 72% of total systems and subscriptions
revenue in the three months ended December 31, 2022, compared to
approximately 59% in the three months ended September 30, 2022.
Preliminary Fiscal Year 2022 Revenue
Summary:
Preliminary total GAAP revenue for the twelve
months ended December 31, 2022 is expected to be in the range of
$98.7 million to $99.7 million, compared to total GAAP revenue of
$105.6 million for the twelve months ended December 31, 2021,
representing a decrease of 6% to 7% year-over-year.
The preliminary revenue results announced today
are based solely upon information available to management as of the
date of this press release. The Company’s actual results may differ
from these estimates due to the completion of its quarter-end
closing procedures, final adjustments and developments that may
arise or information that may become available between now and the
time the Company’s financial results for the fourth quarter ended
December 31, 2022 are finalized.
Fourth Quarter 2022 Conference Call
Information:
The Company plans to report financial results
for the three and twelve-months ended December 31, 2022 before the
market opens on Monday, March 27, 2023. Management will host a
conference call beginning at 8:00 a.m. Eastern Time to discuss
fourth quarter financial results, recent business developments and
the Company’s 2023 financial outlook. Those who would like to
participate may dial 877-407-2991 (201-389-0925 for international
callers) and provide access code 13736286. 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 13736286. 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 16
direct markets. Venus Concept’s product portfolio consists of
aesthetic device platforms, including Venus Versa, Venus Legacy,
Venus Velocity, Venus Fiore, Venus Viva, Venus Glow, Venus Bliss,
Venus BlissMAX, Venus Epileve, Venus Viva MD and AI.ME. Venus
Concept’s hair restoration systems include NeoGraft and the ARTAS
iX Robotic Hair Restoration system. Venus Concept has been backed
by leading healthcare industry growth equity investors including EW
Healthcare Partners (formerly Essex Woodlands), HealthQuest
Capital, Longitude Capital Management, Aperture Venture Partners,
and Masters Special Situations.
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 and Section 21E of
the Securities Exchange Act of 1934, as amended. 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 our financial performance; the growth in demand
for our systems and other products and sustainability thereof; and
the efficacy of the restructuring plan, workforce reduction and
management transition. These forward-looking statements are based
on current expectations, estimates, forecasts, and projections
about our business and the industry in which the Company operates
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, general economic conditions, including the global economic
impact of COVID-19, and involve risks and uncertainties that may
cause results to differ materially from those set forth in the
statements and those risks and uncertainties described under Part
II Item 1A—“Risk Factors” in our Quarterly Reports on Form 10-Q and
Part I Item 1A—“Risk Factors” in our Annual Report on
Form 10-K for the fiscal year ended December 31, 2021. 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, the Company does not
intend to publicly update or revise any forward-looking statements
to reflect new information or future events or otherwise.
Investor Relations Contact:
ICR Westwicke on behalf of Venus Concept:
Mike Piccinino, CFA
VenusConceptIR@westwicke.com
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