SSKN - Earnings call transcript Q2 2018 | STRATA Skin Sciences, Inc.

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Operator

Good day, everyone and welcome to the STRATA Skin Sciences Second Quarter 2018 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Jeremy Feffer. Please go ahead, sir.

Jeremy Feffer

Thank you, everyone, and good afternoon.

of would include remind meaning forward-looking Securities Reform I comments that of begin, Litigation may today statements Act we like you to management’s the Before XXXX. within the trends, expressions not further and These statements and do and matter. words variations but plan, as of statements other intend, to events such similar plans, contain words contemplates, objectives, such intentions the to limited that that expects, relate include, indicate this expectations our believes, or predict are or but anticipate, not assumes, or predicts historic are These beyond in are expectations known circumstances, subject on and statements are significant which of our based or control. our current to changes many and beliefs unknown and uncertainties inherently be There achieved. can no expectations that be assurance our beliefs will or our conditions affecting in Company device differ expectations competitive, general. results or business, economic, medical materially due the or regulatory financial, Actual and factors industry market, from beliefs and the political to may

or the or uncertainties the rely companies medical statements in any Company’s should the Given industry, affecting statements. prove factors be such you incorrect. all on forward-looking not Therefore, of forward-looking may to any device

XX-Q STRATA’s call to With Company’s in remarks, found over www.sec.gov Dolev at and it’s turn the Rafaeli. SEC’s STRATA more XX-K Securities review uncertainties specific risks Officer, filings, Forms Company with those disclosures Dr. prepared website. the the set filed pleasure and available in on urges Commission. you addition, the the the to Chief which and Dolev? reports and consider are on my facing Exchange forth Executive the Company’s to In are and and carefully President

Dr. Dolev Rafaeli

the quarter update STRATA Skin conference of Welcome XXXX. you, Thank call earnings Sciences to everyone. and morning, Jeremy. corporate second for Good

STRATA is Chief Joining Financial Hill, me Matthew Officer. today

delighted outcomes. of advantaged, dermatology and opportunity. STRATA to to business products first our revenue is earnings every we CEO offerings best-in-class at their choice, discussed, and best-in-class that both, while you present We my patient have highly offering vision the and believe have we outstanding medicine our helping STRATA. share will grow partner with As customers continue I’m of aesthetic become opportunities quarterly be as to to have report able for

quarter, number along high-quality million led other Partners, financing, investors. a a myself, with which Growth we the included of During by completed $XX Accelmed

We to and direct-to-consumer or in are better well-capitalized are more actively now advertising invest positioned DTC our program.

this a of previously quarter value and The higher form already improved quarter. one add substantial to Just margins, compared already results partner the into has of focus in as reboot, in business recurring turnaround the generating in clinics tangible revenues for resulted we’re first gross second the seeing quarter. announced our

We achieved sequential recurring our the domestic increase quarter progress second in the XXXX. This have in strategic as stemmed revenue of dermatology the XX% grew increase the part the six of we total first in driven a tide noticeable strong XX% through growth focusing expect on markets, to and consecutive with were year. We our this quarters base, pleased in And quarter base. accounts, end revenues by a revenues. see specific our of with in our XX% the and international versus decline by installed groups was

gross $X,XXX from the margin XTRAC domestic to quarter. $X,XXX in an the saw quarter per revenue significant in due in average We consigned to also quarterly in system improvement first increase mainly second

gross significantly As margin. helping higher, drive recurring revenue margin you recall, the is might contribution treatment to overall the

the clinical anticipate and growth fourth appointments delayed investment grew XXX and we over to dramatically trajectory current strategically. This in corresponding quarter differentiates revenues between partner of entity. patient the help XTRAC to recurring strategic quarters. further Scheduled us from expect that margins. the of availability. generate the second year, STRATA to continued awareness clinics, STRATA’s took quarter quarter we of in of Based STRATA’s subsequent to entity revenue, campaign, of improve our expect the investment driven in to gross patient lines MelaFind. sheet, agreement DTC digital the through fruits provides de-identified and awareness XXXX is balance achieve discontinued we our strategic appointments we comparable the that XXXX, to with with STRATA investment perpetual expand announced with patient flow license product carry into with of Recently, end and and advertising growth half revenue to second XXXX, creation XXXX further expect exclusive We This fully second the the in quarter by our continue and as by Throughout DTC will we outcomes, in and clinics improve X,XXX of agreement Carrying to that treatment awareness rights DTC the third the first images domestic through action on to our the a XXXX, patient a future double and the partner XXX appointments. paid exclusive strengthen appointment efficiencies. what the sequentially related results building patient quarter,

Participating win-win-win presentations and will of in the payers, scientific methods improve multiple treatments additional panel MMD doctors safe, our therapy familiar addition of visibility received regimen remains going Sciences to to Increasing quick XTRAC medical the are in order a optimal maintain to as to level engagement in opportunities treatment XXX for Company accessory Skin prove and Dose offering treatment current plaque the as therapeutic a participated light investors With and during for recurring psoriasis nanometer conferences our meet Company. a goal and the to were investment that for keeping first in for goal resulting of awareness the sheet. optimal and we clearance effort in Band protocol. in major of improving the a patented, forward. leading conferences the patients, of dose XXX(k) This of tip protocol dermatological banking their payers, effective have balance taken has increased STRATA. STRATA the dose first community treatment introduce psoriasis, treating the quarter, superior tool and optimize the STRATA look line patient patient treatment step will potential initiating the the community and week, our important accessory strategic guidelines of similar pleased has in defense diagnostic physicians shorter treatment Multi-Micro excimer of outcomes. clinical to enables to our XTRAC including Last In a to be an to an licensing with expect story. well discussion with and -UVB continue method as Company patient a investor a enables We through We laser. the and treatment proprietary Narrow high a plan to outcomes, with strengthen of

and more please past has A During and stock. going the to by quarter, been are funds. two helped shares hedge institutional we in were preferred held With a the Matthew successful on by which quarter over nearly to view investors long-term million increasing turn the provide majority those overhang in common have preferred XX financial. this of that now shares Hill of to held detailed Matt, liquidity shareholders vast eliminating it shares I into am converted

Matthew Hill

stated, the everyone. be a metrics that, color basis Please provide upcoming unless quarter basic explicitly on quarter first metrics against afternoon, compared sequential Dolev. all note provide Thanks, Good financial Q&A. for the of the I’ll will during XXXX. quarter and additional

our the making quarter significant most that Recurring to revenue we quarter the program, quarter changes comparing have more year, representation to XX% $X.X revenue of in the second believe during the respect increase that commercial of this rebooted the Given was million, we’re million, second occurred quarter rebuilding accurate XXXX. of is up first operation. XX% of progress our with XXXX representing STRATA In notably $X.X sequentially. direct-to-consumer the of advertising an the quarter first versus generated

performance outside as We are pleased revenue sequentially XX% international United grew million. with also to States $X.X the our

be the the imposed being tariffs We’re August, to at into experiencing be future in certain impact of increase currently market. might to plan China, Such on imposed of in activity by potential market. that driven end be that performance products tariffs sold purchasing might which

units XTRAC similar systems XXXX, at quarter. U.S. recurring installed XX, XXX June of first base of the Our revenue as to stabilized was

mentioned, quarter, in resulting a XTRAC or operational quarter. $X,XXX at system Dolev the significant sequential the quarterly the we $XXX average in efficiencies treatment at realized consigned of domestic increase end during XX% As per revenue

recurring a XX.X%. and procedures basis XXX As gross quarter result, primarily margin dermatology per to to XXX improvement on basis or $X.XX points we by improved GAAP driven XX%. margin gross during diluted deep $X.X basis a share. was in million basic the common loss Net points was This by

the X.X still the ended were subsequently, issued financials quarters DTC and series further X.X to without the we margins the issued declining of to There conversions. three quarter, and reduction comparable driving of the which ended the XXXX revenue the recurring margins can are in led of spend incurring impact be the million experienced six recurring XX, shares. shares million During we XX, XXXX, during C was six revenue, from XXXX. with where XXXX. spending the later three shares months common When compare see quarters stock the of upon preferred XXXX, conversions to of June expenses June and Financials on months highest for that in and reduced, associated revenue

of the EBITDA around million cash $XX.X the for we was that the financing, after $XX net due of equivalents transaction of $XX.X adjusted million, We’re to equity ended of repayment Dolev cash now debt. costs turning quarter XXXX. with million largely quarter Further, million earlier, referenced that and $X $XXX,XXX,

cash treatments prudently our patient throughout our spend efficiencies managing available DTC appointments create new to clinics. closely dermatologist advertising awareness and our driving while to partner the for be will We drive organization increasing of

financial open filed Operator? tomorrow XXth. our call questions, will let With be the Form to XX-Q August that me go we Before for statements on questions.

Operator

Our go Joe will with your Instructions] Pantginis Wainwright. H.C. question with question. from ahead come [Operator first Please

Joe Pantginis

for question. on taking the guys. turnaround. congrats And Good afternoon. the Hey, Thanks early

question, logistical if So, mind. you first, a don’t

real increase sequential So, international see nice in revenue. to the

coming percentage impacted. So, from of might was curious, what just that be China that

Dr. Dolev Rafaeli

and for China installed our don’t fourth base But, for one of thank represents question, you Joe, breakdown. the installed compliments. We thank base. international the the roughly provide

So, help the potential you I’m sure that impact. understand might

Joe Pantginis

does. certainly Thank the it XXX(k) then, No, to And real see that. nice also, outside clearance. it you for was

feedback forms or two to just then, And from you regard also, So, it’s provide early are you data, medical or anecdotes getting regard this yet you any to of to to to curious, looking doc was other? data approval. say, tip? obviously, any start new that provide with sort in Are as I compiled particular, accumulate treating any able with things, patients

Dr. Dolev Rafaeli

because study question. -- this that before, Great it that’s would anecdotal but includes The studies there, clinical can two, -- before existing existing and references, four you -- investor weeks. from not as comes and see the cleared out two are call that clinical patients sorry say after Thank could treatments is presentation what study basically you. investor -- we these that from four and you presentation where are on coming to in three

end in this treatments before published with ability results we write the them, show an the And is your compile of process of needed. being to year, the all are the second to presentation. a the And clinics. question, of and type clinical part and be were aggressive these past, same on very their of paper new that the with was doctor a very will call, per patients over conducted they’re to procedure. for need institution in show. very treatment drive But, done is just year. it very patient As results. other a down anecdotal and into I were the the three good that the studies second hand, if are done updated encouraging need both very, patients, But, part psoriasis of the previous fast, of as results go These the well doctor number very is, treating One the that that to through the terms have UCSF, investor known your the -- clinical study adopts in another over again, now vetting compiled a in we

Operator

you. Thank

question next go with sir. ahead, Please come Our Larry HMTC. will from Haimovitch

Larry Haimovitch

My on strategy. is DTC your working question afternoon. your Good relates It appears very, to very that well. spending

on you you’re cash? have how versus to to the You versus the are drive side? understand losses the you How obvious upward cash that the the obviously with and losing money to don’t spend the spending right now. I’m manage going business infinite DTC trying the opportunity fact extra balance

Dr. Dolev Rafaeli

of what get all awareness sent advocacy well clinic a this a insurance call -- Company very, me they Larry, with a that for thank advertisement support, The our we the of we clinics charge that of outlines let patient halo you And XXXX. has per device perspective. STRATA’s of and have sake can perspective treatment very not margin clinics’ inside from device is high contribution it do It try because way a fee release, previous charge, for as table the they of to from if from performance the connect through but of directly patient The you a technology the contribution margin. today And and all them free get and the did And the the purpose, effect. and is we patients of the the DTC provided as of to free dots. a indirectly press we question. XTRAC the charge a that wants, in has support that XX% getting for use. they over beginning is which we one go It the space. get back place do additional quarters, we clinic, same in

Now, $X,XXX the the every time money, being see XXXX was every the said more device to margin margin $XX,XXX And the in of show and having financial very company at STRATA $XX,XXX at quarter. goes this per of of turned devices XXXX, the by quarter, in makes performance data, up second utilization the margins are the the was table, acquired that, of in or net top the -- it on to that are margin quarter XXXX. consignment, discussed as why company at It the Then, deteriorating When XXXX -- XX%. business look and to and beginning around the the usage, pushes gross up. treated range and devices for growing in up fast. for Matt, numbers. you that a net when in average income. these gross and growing the placed range went the utilization as the two of when this margin from between it was could these reached when utilization of by This and low stressed starts down XX%, started were gross a company fast. us late level the the was single of is contribution per of he that XXXX $X,XXX $X,XXX additional is pushes line was in $XX,XXX of per gross This very gross this clinic, down the these When the patients devices or treatments company up margin $XX,XXX going productivity $X,XXX as you’ll

and today’s this you laser, million ‘XX, as with and that average. and there was a an there in XXXX QX is were to the just top the XX% over million you between contribution utilization today, $X million a the comparison, of to per in down in which $X million take X a So, if a investment $X at on That difference was get on to $XX,XXX installed $X just quarterly is with base, line were million margin flows -- sales. advertisement

flows down line. to So, the that EBITDA

So, having net the performance, our is our slightly of be negative, said XXXX to today we money, going devices by EBITDA utilization profit. that, EBITDA advertisement with making back positive adjusted if will and just XXXX the is

month our than much last said are were and the our in update they advertising efficiencies that updates our following today XXXX. were you If a in half, better

push last an patient XXXX my patients And $XXX XXX. into vitiligo, acquisition additional our patient the way strategic -- patient update to faster. last clinics. first actually is faster, treatment our We accounts them indication, is managing acquisition mix and treatment understand now faster, patient this on our is when accept patients. was, to where the the group that need accounts focusing remarks top in getting patient. are their getting have we appointment that and remission accounts getting of as the per clinic, So, they accounts, need at mind, my able so patients We advertisement more management between right $XXX we’re XXX. prepared why pointed happens our added into in of acquisition I ran need into of treatment vitiligo this that our Today, be reacquire our that a business these and we is and clinics that our to to sub come back patients don’t these into faster gets treatment sub in the And them into again and faster, them to these out work

takes started to quarters that to for All to It be of of that happen. has all happen, this manifested.

remarks, could first press higher turnaround of more in this is my the release And of quarter XXXX. this in at what X,XXX an we went no and the run the mentioned rate We So, almost appointments. year. by is patient of end -- over in from appointments patient we get see of we the utilization We you XXXX we will as earlier appointments which the of patient from got devices. be first quarter

STRATA, will results I So, up work so full strategic clinics. is gave the need improve the them we the understand in result from clinic’s that to why go doctor, with this that a they giving patients and business practice, into patients need hope inside by right convenience. we outcomes by the you force the them within an getting the diagnosed We quarters, I dermatology schedule them need to and to practice their help for answer. zero an groups right prescribed. they with faster to to at the appointment, We the clinics. business groups the be of three the into right these And don’t benefits appointment, clinical better full doctors be giving the pushing shows for patient When do. medicine patients in them

Larry Haimovitch

Thank me gave more than a You answer. That’s great. full you.

back hope go you and at disappointed with feel Was were there we there’s through So, quarter, to a or obviously lot anything you completely the when half? good happy second about. as look improve that you to very the weren’t

Dr. Dolev Rafaeli

ends Sometimes you are unsatisfied that days. XX after the quarter

Larry Haimovitch

Okay.

Dr. Dolev Rafaeli

and week many The first business not in of middle with end this just for at the as or or -- and I involved -- knew remind the the the business, know was you, at a Evidently announced I stepped second the I March, through April. since transaction we’ve quarter, XXXX evidently, years. of CEO and this XXXX. I the

we’re did this at fast. it this, us back took do I this was that CEO I a and of and here in I’m quarters two mean, with a April. We So, value provide know allow telling the lot transaction, more, time in business not us and were when here, financing but six in of are this we’re make on side. as stepping the back But, XXXX We Stopping of I bring doing messages closed them, progress progress to the stepped the time, communicating to We dime. here has and here lasted we lot Last not business This May. and to changes. basically the years. sales in middle here the that the transaction of that we’re at a lot the we done. deterioration installed this changes the did to them money half base to very, make of if happy it in see a right and to where very ourselves, see a to on with we’re least accounts. end

cautioned running provide beginning getting clinics but patients are and in here perspective of the now of XXXX, to XXXX perspective utilization faster for numbers. the you in XXXX. of time advertise relate of these to of it revenue available for did fast, takes up time part XXXX, the they’re From running, -- until the not the time I the my to where disclosures are early prepared getting our and on the start first for And the moving perform today comparison XXXX then all If their scheduled up beginning as be realized the previous up is in it the and numbers that anticipated. their of up through we in moving the until But, appointments scheduled the the publicly they than remarks, side. patients we show where as devices, We treatment the are for you want timeline, we from DTC is getting as what to showing and appointment. a I then, from to PhotoMedex it

Larry Haimovitch

talk board. you since and selling get in just queue. little then, And about your on you’ve have bit the your then, progress a and back back tactics, I’ll more sales made come one force, question the And

Dr. Dolev Rafaeli

They the what We have the they have know an very And is the is accounts. message amazing sales organized reason force. simple. is And to message the that very process.

going look us. wish, We payable them here complicated, partners of there challenge not The different growing visits accounts geographic these And help to and And of these up at them these them. quarter are converting through are is if is help one as franchises help receivable. you of XXXX. to there a looking franchise run we sales capital sales selling And we in these team are equipment. with And the you. us Each And network provide you’re one clinics businesses, second a of as to We help my very to each has business. them as area. looking you, if my accounts XXX to getting us business each the from practices. running. support accounts at one at we They of always team been has different

we the campaign, to this a provide year, of clinics, clinics. team partner I forward the largest that the partner providing strategic -- was that think these by DTC could this was because value this that was we -- this And to ourselves. looking the renewal the differentiate missed

as partners We these are the and providers, as only as to clinics way clinics. these in suppliers

help And look for plan. their the the do we in that we We if checks. We’re if they look And them clinical outcome help participation for in their can not no the grow. and better grow can plan, economic make in with participate only ones and them get outcome patients no with more retain better money. get payers process, the the patients doctors competition, enough competition,

Operator

Instructions] Fitter with [Operator you. go go next We’ll Aegis Thank Capital. Mitch to Please ahead.

Mitch Fitter

my up It or I for around fairly we obvious shares the there to went arms preferred count. be dramatically be share reasons. there warrants just looking should get that are at? to Are have more wanted converted outstanding that

Dr. Dolev Rafaeli

Matt, of of would the table cap as second provide the description see we you a it quarter? today end at the

Matthew Hill

Absolutely.

So, of XX.X we right financing million that of now, we’ve as that got and about from a mostly shares outstanding, XX shares little north was million the transaction. the issued part

C shares In still X.X have issued convertible shares. we addition, series under to be million

As far would I XX million shares. shares on C a weighted will what tomorrow, which those the there’s the say Q including in shares, convertible average approximately filed as basis, be including looking at to another -- related series

got we’ve -- So, million shares as basis, end average a issued be June. to of weighted we’ve on got in XX of all, the

Operator

will question-and-answer time, for any everyone. session conclude or to the back I’d you closing turn Rafaeli to this At over Thank additional remarks. for conference That our like today’s call.

Dr. Dolev Rafaeli

everyone for face have or update call for Thank and great look to in meet Thank hope you, near call today’s you your to I interest face in STRATA. in. for a an Thank on and to again in future, -- the operator. joining Thank you you. day. you joining

Operator

for you you Thank may now participation, all conference. and will that conclude your disconnect. Again, today’s

STRATA Skin Sciences (SSKN) 13 Aug 182018 Q2 Earnings call transcript