Recurring revenues grew 12.6% in 2019
Total gross margins increased 6.9% in 2019
Global recurring revenue installed base totaled 830 systems at year end 2019Conference call and webcast, today at 8:30 am Eastern TimeHORSHAM, Pa., March 17, 2020 (GLOBE NEWSWIRE) — STRATA Skin Sciences, Inc. (NASDAQ: SSKN) (“STRATA”), 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 financial results for the fourth quarter and year ended December 31, 2019.Full Year and Recent Corporate HighlightsTotal revenues for the year were $31.6 million, an increase of 5.8% over 2018 revenues.Total global XTRAC® recurring revenues for the year were $23.7 million, an increase of 12.6% over 2018 recurring revenues.Global installed base of recurring revenue XTRAC systems was 830 systems (820 domestic and 10 international) at year end, up 84 systems from 746 systems at the end of 2018. Total gross margins and global recurring gross margins in 2019 were 64.2% and 70.3%, an increase of 6.9% and 5.3%, respectively, from 2018.Net loss was $3.8 million, a decrease of 6%, from $4.0 million in 2018. The net loss in 2019 includes $2.0 million in legal and accounting costs associated with the previously announced and resolved delinquent filings.Non-GAAP Adjusted EBITDA was $3.0 million, a decrease of $0.7 million from $3.7 million in 2018. The non-GAAP adjusted EBITDA was impacted by the $2.0 million in legal and accounting costs discussed above.Fourth quarter 2019 Financial HighlightsTotal revenues for the fourth quarter of 2019 were $8.9 million, an increase of 11.2% over fourth quarter 2018 revenues.Total global XTRAC recurring revenues in the fourth quarter of 2019 were $6.6 million up 12.0% over fourth quarter 2018 recurring revenues.Global installed base of recurring revenue XTRAC systems was 830 systems at year end, up 44 systems (36 domestic and 8 international) from 786 at the end of the third quarter of 2019.Average revenue per device in the fourth quarter of 2019 was $7,916, an increase of 0.7% over the fourth quarter of 2018.Total gross margins and global recurring gross margins during the fourth quarter 2019 were 68.8% and 76.5%, an increase of 3.1% and 5.1%, respectively, from fourth quarter of 2018.Cash and cash equivalents and restricted cash as of December 31, 2019 of $15.6 million, a decrease of $0.9 million as compared to December 31, 2018. During 2019 the Company incurred $2.0 million in costs for legal and accounting costs discussed above and in the fourth quarter of 2019, the Company paid $0.7 million, net in connection with its debt refinancing.“Our double-digit recurring revenue growth, strong organic growth, positive margin trends and growing installed system base caps a tremendous year for our team,” said Dr. Dolev Rafaeli, President and CEO of Strata. “Our unique business model and our direct to consumer advertising have driven rapid adoption by U.S. dermatologists, and we are optimistic of seeing our strong trends continue in 2020 having now expanded our recurring revenue model overseas. Additionally, our strong balance sheet has allowed us to refinance our existing debt at a significant reduction in our cost of capital, and we look forward to leveraging our business model as we seek accretive growth opportunities to augment our growing platform.” Reported Financial ResultsFourth Quarter 2019Revenues for the fourth quarter of 2019 were $8.9 million as compared to revenues of $8.0 million for the fourth quarter of 2018. Recurring revenues for the fourth quarter of 2019 were $6.6 million as compared to $5.9 million for the fourth quarter of 2018. Equipment revenues for the fourth quarter of 2019 were $2.3 million as compared to $2.1 million for the fourth quarter of 2018. The increase in recurring revenue was the result of the increase in direct to consumer advertising spend providing increased patient flow to our partner clinics and an increase in the worldwide installed base of 84 placements in 2019.Gross profit for the fourth quarter of 2019 was $6.1 million, or 68.8% of revenues as compared to $5.3 million, or 65.7% of revenues for the fourth quarter of 2018. Gross profit for recurring revenues for the fourth quarter of 2019 was $5.0 million, or 76.5% of revenues, as compared to $4.2 million, or 71.4% of revenues. The increase in gross profit is the result of lower depreciation on placements and increases in utilization which drives incremental margins on the largely fixed costs of the installed base.Selling and marketing costs for the fourth quarter of 2019 were $3.1 million, an increase of $0.2 million as compared to the $2.9 million for the fourth quarter of 2018 as a result of higher headcount and direct to consumer advertising. General and administrative costs for the fourth quarter of 2019 were $2.9 million, an increase of $0.7 million as compared to $2.2 million for the fourth quarter of 2018 as a result of higher legal and accounting costs and stock compensation expense. Research and development costs for the fourth quarter 2019 and 2018 were $0.2 million in each period.Other expense for the fourth quarter of 2019 was $0.5 million as compared to other income of $0.1 for the fourth quarter of 2018 primarily as a result of the loss on extinguishment of debt in the fourth quarter of 2019 and licensing income in the fourth quarter of 2018.Net loss for fourth quarter was of 2019 was $(0.5) million, or $(0.02) per basic and diluted common share as compared to net income for the fourth quarter of 2018 of $0.3 million or $0.01 per diluted common share.Full year 2019
Revenues for 2019 were $31.6 million as compared to revenues of $29.9 million for 2018. Recurring revenues for 2019 were $23.7 million as compared to $21.1 million for 2018. Equipment revenues for 2019 were $7.9 million as compared to $8.8 million for 2018. Gross profit for 2019 was $20.3 million, or 64.2% of revenues as compared to $17.1 million, or 57.3% of revenues for 2018. Gross profit for recurring revenues for 2019 was $16.7 million, or 70.3% of revenues as compared to $13.7 million, or 65.0% of revenues.Selling and marketing costs for 2019 were $12.0 million, an increase of $1.4 million as compared to the $10.6 million for 2018. General and administrative costs for 2019 were $10.3 million, an increase of $1.5 million as compared to $8.8 million for 2018. Research and development costs for 2019 were $1.0 million, a decrease of $0.1 million as compared $1.1 million for 2018.Net loss for 2019 was $(3.8) million, or $(0.11) per basic and diluted common share as compared to $(4.0) million or $(0.15) per diluted common share.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. These non-GAAP measures include non-GAAP adjusted EBITDA.The Company’s reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are 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 measure of net loss to non-GAAP measures included in this press release is as follows:
STRATA management will host a conference call with investors today, Tuesday, March 17, 2020 beginning at 8:30 am ET to review these results and answer questions. Shareholders and other interested parties may participate in the conference call using the dial-in and webcast information as follows: Conference Call Details:About STRATA Skin Sciences, Inc.
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 treatments 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 820 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. Safe Harbor
This 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 corona virus and political factors or conditions affecting the Company and the medical device industry in general, 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:
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