SSKN - Earnings call transcript Q2 2022 | STRATA Skin Sciences, Inc.

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Operator

Greetings ladies and gentlemen and welcome to the STRATA Skin Sciences Second Quarter of 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Leigh Salvo, Investor Relations.

Leigh Salvo

afternoon, good and you, everyone. Thank

ended are Joining release and financial is Chief A quarter Officer; available on website. Moccia, Lesovitz, me results of Chief press the released today Chris STRATA Financial Executive today, XXXX. company’s Bob Officer. the XX, June the for copy Earlier

that place made Harbor Private statements, estimates in like Safe performance of call cause or remind to results statements. performance on federal forward-looking the or provisions that that by These involve Any that material various within meaning of management XXXX. forward-looking historical anticipated limitation, we trends results, you include make from expectations of could statements implied Before statements without All our the current to forward-looking statements. begin, actual will laws, relate pursuant Act which are of predictions Reform Litigation Securities of not financial statements securities these and statements fact I’d relating call to this contained reliance to future events, risks our you and not or should statements. those materially to upon including to matters these Accordingly, operating during or assumptions. future based are relate forward-looking this the are those differ undue or uncertainties and events do

the measure. earnings associated or or any otherwise. measure accurate STRATA any financial on website of XX-K contains of financial or we time-sensitive please XXXX. to ended Also our with gross today, that, over this on which events including live to and domestic statements, Securities website information, or For is a billings, the new page of reconciliation financial our with on recurring the Exchange required refer to comparable except the on which of as forward-looking financial projections to business, XX, list only SEC's XX, call second available as with disclaims Factor obligation, of August report update law, XXXX, presentation, non-GAAP during the XX, Form future and by conference information whether GAAP and revise the because release filings broadcast and call A is this our fiscal description company’s for annual of XXXX. non-GAAP intention uncertainties at accessible to and www.strataskinsciences.com. December year quarter recently a the public the most measure Moccia. risks Investor June refer the Risk for the section Commission, posted is I'll ended Relations the Bob STRATA’s turn And is This

Robert Moccia

for Good us Thanks, thank afternoon, second quarter call. everyone, Leigh. earnings you XXXX our and joining for

financial validates on quarter treatment dermatologic record further results and opportunity positive execution growth the revenue conditions. another gained delivered of our our plan for share in-office of in Continued commercial including market

as Our expanded where tremendous team markets than new potential. portfolio entered and more term long energized is see our ever we we've

in growth China. XX% was $X capital sale included a one-time million revenue quarter Second million, a year-over-year equipment $X.X reflecting and

sales, offering revenue placement OUS of discussed our going will follow calls, flexibility continue placement and we model. be sales to capital both have whereas equipment As we expect largely on capital will and from previous come forward that model will a U.S. internationally, equipment customers the

from XTRAC end XXXX. the base installed of devices, QX As to at of the domestic XXX up increased end of XXX QX, our of

address to our advocacy markets product enables recently, FDA to with select industry This strong a allows excited the support substantial in among to for XTRAC acne a launch to gain were equipment noninvasive, us for from we and our TheraClearX, expanded direct contribution continue KOL the users, market procedure. effective, launch focus commercially events particularly highly driven were soft technology at existing opportunity usage in-office and customers, continue knowledge. on dermatologist More market execution, the to marketing. through us portfolio build commercial increased cleared our more high treatment continued Excluding results and in STRATA’s China, sale volume that inventory and by engagement

expect be us a driver We this future. meaningful in for growth to the

the an These that As per as XX% QX we volume they produce our of XXX are commercial update the volume account outlined value recurring primary for of in volume Momentum. domestic customers had volume contributing recurring revenue than XXXX. revenues improvement gross are customers of to strategies roughly on that total we accounts year, that first yielded to our we XXXX, further high as focus more high domestic or XX,XXX on in continued second compared high in high XX% quarter. in for our half STRATA These which contributed targets also total overall QX, accounts of revenues XTRAC receiving In gross accounts revenues. accounts XXX

more improved even year patients We overall on laser deployed machines in XX dermatologists to the allows deploying and newly XTRAC by XX our our of is machines to Momentum Momentum further with quality over utilization. the XTRAC plan track improve reminder that to a efficiently. goal reach the to end, remain U.S. drive As treat time

further practices. awareness in continued adoption driving also to in dermatology and We and invest patient direct-to-consumer marketing, direct-to-dermatologist product

placements of leverage that with placements months for a and benefits gain potential with more. for or and our non-revenue coupled patients effort removal, This been delivering revenues. in six supply mitigate generating an is cost psoriasis, chain to not and STRATA recurring of in professional and great In force activities message, XTRAC uses more use the expand made eczema. have further risk, prior refined our XTRAC to highlighting allowed increase we refurbishment, efficiencies in of has of to redeployment progress medical vitiligo, continued devices sales Our relations

non-revenue and achieve our We of every base work at customers installed generating have outlined that keeping hard below quarter or a of domestic goal we XX% to level.

market. to the expansion acne into Turning our treatment

on of treatment of face, TheraClearX I'm back. milestone The estimated on we in specifically acne. acne asset an system competitive engineered the market. this was root through U.S. the announced $X.X recently is in-office earlier, confident noted as launch that the noninvasive a commercial based technology and we for of acquired FDA mild-to-moderate cause earlier highly TheraClearX, I exciting targets acquisition cleared patients year us acne billion can an for be and treatment chest, indicated This As

patients combines completed order device in XX broadband enhanced that light, In against treatment vacuum and achieve show has to XX are six free fight are to can intense to best proven sessions recommended Our technology significant and in pain complete acne. been four be the promise to to results, minutes. which

months, our launch the prepare of sales force we Over the worked to past for TheraClearX. several have

preparations for a of meeting Advisory Board these part product. long-term national the As and vision TheraClearX established in a we strategy the discuss held launch June and to

We leaders the conversions that a space our priority support also partner can productive in so dialogue key with actively continued off. paying clinics dermatology these possible. keep as with we We best dermatological to engage plan

we of continue with patients. large initiatives dermatologists populations Additionally, to invest targeted in acne marketing towards

those treatment to efforts, excited partnership program, treatment are an we in-office part in the to purchase dermatology U.S. without acne offer now which practical, expensive need through the practices solutions equipment. As of offers STRATA's well-established

XTRAC team has an target installed commercial excellent our synergies current exist. addition, base the to as many In opportunity

and TheraClearX additional has a we're conditions, pursue number opportunity, XXXX, out of potential beginning by platform the but early the physician and indications Long-term very coming significant years. see dermatologic still contribution competitive in encouraged believe from to expect this advantages, system are excited measurable rolling stages that are in in for we the which early to for interest. We the TheraClearX of

in transition acquisition our factor the XTRAC expire the are in model. that remaining are to own ability in are XX our has maintenance now machines dermatology STRATA the Then Customers that customers opportunity Pharos these and We XX. they our of contracts use the they biggest will total convert Turning to The there's to convert to Pharos were bringing customers XXXX, extract is business. There XX RA second once machines committed XXXX service our timing. new model. to to to XX a the until pleased need occurs, quarter, an to in customers that due XXXX. additional Medical's to partnership date and

on XTRAC. We to and customers positioned expectations our opportunity there on seamless convert Pharos with track more a coming are initial engage offer believe capitalize to is are these to we to transition potential months. users the actively Encouragingly, well and in

international results. to our Turning

joining share us in This Michael models offerings newly to to leadership a customers. successful received Since we sale mid-May, further in as team and task that either in or been has Europe. we greatest will charting strategy international we the STRATA earlier, QX. and $X the to were offer begin key has become using million new capital of for Goodman leader a Sales equipment been in relationships made to possible. can our payment discussions Latin remain placement a far, noted team. thus of this to We has new a grow flexible from purchase continue been capture China. Michael current in in to Asia, one-time decision so business Michael pleased market role, in commercial and America, In in QX As expanding approximately reinforces with This International has plan welcome to countries our sale Head created our distributors our

increased STRATA in to can revenue a see we are XXXX, giving extract Europe as that leverage Combined that XX% sold first with doors in August, strong results ability to soon on years, presents XXXX. results Acne Additionally, TheraClearX driving several globe, Entering in XTRAC us plan to large to the focus of that cautiously year-over-year. across opportunities. current the range optimism and markets. us Internationally. we an we more system presence in our second international our target to I has opportunity of of distributor remain line the meaningful open those half capacity additional deliver the for capability XX% we in for our year franchise full in growth with in as machine optimistic and an market our renewed guidance the relationships, penetrate us international our and

commercial factors cash necessary monitor preservation. with efficiencies environment will cost and attention and broader continued macroeconomic We impacting adjust as the to strategies

is horizon team more energized we growth the and ever attention customer callus Our gaining. numerous on the are encouraging than the with

our of turn continue customers out for market, internationally, call Chris. commercial strategies. care large the our acne XTRAC I'd key further through With to will to continued our the rolling advertising on We capitalize that, utilization to increase and continue to and over drive DTC execute like support adoption XTRAC presence

Christopher Lesovitz

second a quarter Thank you, the the XXXX. over second of were Bob. $X.X million, for of Revenues XXXX increase quarter XX%

revenue for compared as increase billings an to and of by quarter quarter increase strong quarter revenues the Our equipment second an million international was $X.X driven gross XXXX. the second XX% sales. million, were second in Equipment domestic X.X for

of one-time a previously second asset quarter Recurring Pharos. in compared more margin of in equipment quarter or the concluded XX% As quarter TheraClearX million, the intangible increase X% million the of our communicated in Non-GAAP profit and billings in the to quarter million sale strategy and second in revenues Overall $X due XX% or recurring revenues capital second increase recent X% associated increase to domestic internationally. of amortization million of $X.X lower quarter for quarter revenues acquisitions gross gross reflects XXXX. of was China The a QX quarter for sales XXXX. the expenses Bob to second equipment million as $X were million, our noted, our revenue, as this approximately a primarily $X.X $X gross is second focus to the with the over of compared XXXX. on was $X.X

amortization profit equipment This to gross attributed margin. which in in XXXX. has sales, lower XX% QX, versus QX, XX% gross was margin is Excluding XXXX a

expect from and seek placements on remainder Looking ahead, with recurring to gross equipment historical revenues the between levels the returning XXXX, quarterly to some mix improvement fluctuation sales. we of in continue throughout to mid-sixties, margin based system

the revenues $X.X addition, steps we chain or Gross second million for to of taken XXXX. to quarter recurring some anticipated. second quarter mitigate is have risks, or compared XX% XX% as in while million In revenues of revenues were profit minimal of $X.X still the impact supply in

employee million, due in increase amortization $X.X the of acquisitions As profit of strategy, our TheraClearX the relations compared we related expenses and direct including various an lower activities, This in increase $X.X have quarter investments increased asset launch reflects related margin the XXXX. higher were to in to the of XX% marketing, was increase Pharos. communicated relating dermatologist and gross Operating expenses commercial second million professional expenses. to to TheraClearX an tangible to our expenses of

and million Additionally second in increased and a net shows. share, or we for was of $X.XX XXXX. per to XXXX million share. the on was XX, and per basic diluted international equivalents the compared loss to second quarter March the million XXXX as XX, quarter, of At spend as and or XXXX earnings $XX common common million for $X.X basic Net of June cash $X.XX of loss $X.X trade our business cash quarter earnings compared of at $XX.X diluted

the guidance Turning for to full XXXX. year our of

out we the full we beginning XXXX of As million laid of range $XX in of year $XX the year, at be continue to expect to million XX% to XX%. the revenues representing growth to

We are progress would of finish that goal I XXXX high call a this believe pleased we the that, we made year and that questions. like half on on Bob are with open to for we track note. the the towards the and first in to With

Operator

of The [Operator comes first sir. from Cohen Ladenburg. Jeffrey much, very you Thank question Instructions]

Jeffrey Cohen

how Chris are and you? Bob Hi,

Robert Moccia

how Good, Jeff, you are tonight?

Jeffrey Cohen

fine. Just

our side. questions So a few from

the for half So previous congrats for to normalize expect levels to from that going second the forward? year we lump back the the back on should China and quarter, of

Robert Moccia

Yes, they that over. some was absolutely. That converted leases

it kind to the So was in forward. normalize expect we one of going quarter, second a but time

Jeffrey Cohen

side will expect the mentioned And of recurring that upon your focus to occur but Okay. things? you China, as far equipment be ex-U.S ex-U.S. specifically, on as do predominantly inclusive you the of

Robert Moccia

has partners. good a running other revenue for in we partners still expressed the their that But there. recurring some Japan model of have equipment interest pretty sales

revenue. see think equipment a than I of of will you sales mix So internationally you'll that of more recurring

Jeffrey Cohen

machine differences that out rolling walk Okay, got year? some Momentum you're on the us it. the you And this through of could

Robert Moccia

of are more working Yes, sure. a more machines laser. it is taller footprint. number The the has current The efficient, to a It's momentum a if ground, closer one, machine. faster will. smaller more It's you

that anticipate we faster clinics see it dermatologists what efficiently, some able to that more they'll and the is more fact be So that works will where patients. run laser

we'll of But it's just in driving has think help distributing sleeker these of revenue software. we, us So better I a more as It a interface, better the country. throughout machine.

volume So can. think, high it's around to their all and customers, I hands an them as quickly we our as put we to want upgrade for in certainly try

Jeffrey Cohen

Right.

I older accounts going next to they of volume are most just XXX think is question, my new the are which machines those going or you accounts? answered to high

Robert Moccia

volume Yes, mainly high our no, to customers.

customers year. getting our with and to some as goal is Our to this older will them deploy of be we their And XX the about XX replace machines build Momentums. high volume

Jeffrey Cohen

does That Okay, it Thanks got us. taking the questions. for for it.

Robert Moccia

thanks Great, Jeff.

Operator

Thank from question you. The next and last comes Suraj Kalia of Oppenheimer.

Unidentified Analyst

taking This Chris. for actually Suraj. Mike and Bob afternoon, is Good on for questions. our Thanks

Robert Moccia

doing? Hi, Mike. How you

Unidentified Analyst

utilization, the Hey, are good, Again, to or both system curious to system, per help Good color get trending? are revs. see provide handle system on you Bob, us growth if just can in per recurring us how year-over-year spend per a revs any metrics, and on either you? DTC those how sequential and

Christopher Lesovitz

summer. the pretty bit the spend steady. We part. fall mean, and But changed back a really have but into as Mike, in little break you up because haven't dermatitis to DTC by the It's of a off it quarter-over-quarter. the a tend months. we drop like don't it’s do the of again pick From, know, you cooler then up I system probably it we atopic down we flare middle psoriasis as move diseases in been

patients drive the in. metric behind more to asked? So other I apologize. you What we in months cooler spending it those, put was

Unidentified Analyst

system, levels? revenues to relative per it's Oh, how are trending historic those

Christopher Lesovitz

we're more Yes, X,XXX per putting out in past, domestically there, And is we've machines the hours. we're the the diluting. average so and revenue system more de as recurring noted that around

but kind quarter-over-quarter, of sequentially increases. a it comes So down, that number

Unidentified Analyst

in or down or staffing either impacts XQ And Okay. That's geographies, continuing XQ? thanks. then of your in any material Chris, to COVID any helpful,

Robert Moccia

Yes, partners finding number have matter more number no that And of what of from probably still levels though normal, they're we've a good question. the a fact, our general, is offices. normal from in are bit patients little they're with a they patient heard visits. daily back, issue and above is dermatologist to what a in staffing an of back

So problem the a for that offices. is

much. an as, but out making the help their laser that close get patient patients with it can We We effect there, to sure our as get but can in remains staffing we obviously stay and talk returned them very and to and to an much treatment, haven't as too KOLs normal. us levels have seen appointments issue to

Unidentified Analyst

That's on the hear great Thanks, to patients. Bob.

Robert Moccia

Absolutely.

Unidentified Analyst

Jack or there, then that out any on any know, inhibitors you share that topical of finally, the, your of markets? And updates impacts you seeing effects you're in any are can some

Robert Moccia

for eczema vitiligo there therapy. Because [indiscernible] six and of haven't by number with therapies that past given of patients And but seeking mainly in, do approved hoping to conjunctive lot approval was real will, going the good length who that's know, therapy, is Yes. they of right feeling were driven are you be have anecdotal, that because something some us probably to patients help the to dermatitis of good dermatitis, atopic -- originally information heard, there. you says a treatment for as was because been as in has going some And of now get a who in that got They is news some will my patients drive [indiscernible], think they atopic months as make actually you we for in drug. there which just vitiligo, use sought shorten legs, we the noise recently, I which lack it's time the KOLs using to help out treatment. if that a if new and of the anticipating because, us on label

the we might long combine that So can laser it's shorten and with that excimer patient that if therapy therapy. the a track for patient for

Unidentified Analyst

that another quarter, is that disclosing hear even XX% to then finally that update, at the contract can hear. you the you're time? of fluctuate that And or that round sure in or That's Thanks rate still, XX obviously overall it to in for XX%, this last quarter-to-quarter Bob. range good conversion the great if to kind said conversions tip, I'm

Christopher Lesovitz

customers in about kind of We've that is this would of biggest a pipeline the at target that, still we we range. be We're Yes. think the we're mean, I talked point. Pharos Timing hope got number to it. on for I where here. issue in

a are and the breakdown can they they think to practices lot under such, breakdown, these long partnership. onto I that's circumstances over and when can inflation as as the for best environment the until they our of in the with finally to, machines opportunity, extract convert holding them

I So to on. think it's better going as get goes time

for about And there we'll at these where as have improve think good some machines on. that only and going it's been been to to start and but successful we've that out feel a of time have while, pretty issues, goes we're

Unidentified Analyst

That's question. a our great. does That lot for it guys. Thanks

Christopher Lesovitz

Thanks, Mike.

Operator

Cohen Jeffrey from question up Ladenburg. follow of a have We

Jeffrey Cohen

quick be equipment just anticipated you the Hey with as Is a recurring no Second fall and right? will far if one, comment associated on Bob, revenue TheraClear the that TheraClear rollout? side could as placements. under

Robert Moccia

revenue. Yes, recurring current going so do be extract. we'll selling his we as rentals and We'll codes be through our will TheraClear with as same as

Christopher Lesovitz

they with model usage, be that XTRAC. our us per a to like practice and then monthly is charge to will Jeff, Yes, the just code, per going pay there's

Jeffrey Cohen

Got it.

Okay, perfect. taking for Thanks that.

Christopher Lesovitz

problem. No

Operator

for we question-and-answer call a and session. the reached Moccia Ladies will turn Bob closing of gentlemen, to I have over remarks. now end the

Robert Moccia

Operator. you, Thank

with Ben interest and growing Ladenburg markets. look Thank of Cohen Clinical Dermatology all discussion you evening. Director Dr. on forward in XX, on focus Trial we good of vitiligo week, at in-depth and a hosted featured will for Thalmann. Lockshin, U.S. webcast August our XTRAC STRATA the The Center laser your psoriasis in to discussion Jeff Partners, by Next live eczema

Operator

you and now for concludes and Thank disconnect you. gentleman, may Ladies conference. today's your Thank you your lines. this participation

STRATA Skin Sciences (SSKN) 10 Aug 222022 Q2 Earnings call transcript