Earnings call transcript Q2 2023

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Operator

Greetings. Welcome to STRATA Skin Sciences' 2Q 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded.

the to turn Jones, host, now Relations. Investor will conference your over Nicole I

begin. may You

Nicole Jones

you. Thank

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

meaning forward-looking statements like Federal the Before you make the of call remind Reform which I'd laws, Safe made of of Litigation Act will to to during we statements that are include begin, management that this Private the Securities XXXX. within provisions Securities pursuant Harbor

future in matters call or expectations facts results statements do not are of to this forward-looking statements. or of contained performance historical relate to relate Any predictions that or

without All our based are those forward-looking financial our various relating upon future and operating assumptions. including, limitation, statements, trends performance current and estimates to

uncertainties materially or results material actual that risks cause statements these by implied from These differ forward-looking statements. and involve could to those events or anticipated

not Accordingly, reliance statements. undue you place on these should

uncertainties a and of on XXXX. with section the ended SEC, our filings and with our to description Risk the December of public risks please Form Factors annual our XX-K list report including the the business, for For XXst, refer year associated

law, STRATA of conference contains otherwise. any new by or or disclaims update events XXXX. broadcast intention or and because required time-sensitive August is information today, accurate except revise This forward-looking information, Xth, call projections statements, to or live only as any the obligation, whether financial future as

website reconciliation the measure directly a which domestic to financial comparable GAAP measure Also non-GAAP to we growth most during refer non-GAAP presentation, financial A measure. this billings, is of is financial recurring this the second website STRATA company's the for Relations release www.strataskinsciences.com. on posted XXXX, XXth, in available which page and on is of accessible at Investor fiscal quarter, the SEC's the June earnings

Bob I'll call over that, the turn to with Moccia. And

Bob Moccia

today's the business. of securing you domestically. base TheraClearX XX financing expert Glynis make call. us thank treating our achievements achieving aspects we over . our Dermatology, notable all perspectives devices, In increasing the few for operationally, Aesthetic And quarter, on million in our continue to A XX Ablon, joining TheraClearX devices Clinical Journal placing and a second publication various progress Nicole. Financial, you, patients review include MidCap installed to Thank across initiating with clinical Dr. TheraClearX the of new in study and and XTRAC and $XX milestones

of recognized same received quarter million during of a quarter second in significant excluding the million, sales period. the we the one-time When period of revenues during order XXXX. increased $X.X XXXX XXXX, of the $X.X During $X.X we of X.X% second million versus China from

of international seasonality a XXXX were to lower spending sales of There due half factors. also capital expected $XXX,XXX result shifted that second and as of the interest higher rates to approximately macroeconomic were and slowed

recover during XXXX. the sales of We to expect those second half

see We the continue opportunities to large horizon for XTRAC. on

mentioned, have As past vitiligo treatment the there are for year. FDA-approved previously new we emerged that options have over

that believe for XTRAC. of As and of we in treatment increases, domestic awareness of vitiligo a expand more approximately to see options Vitiligo usage We to procedures. the as reminder, XX% accounts opportunities non-segmental level the XTRAC interest expect

or underutilized the removing the base. plan of continue our For we remainder to installed year, nonprofitable from devices

offer partners with We to their programs them commensurate into number existing move lower-tiered usage. are also codes a evaluating would of membership a plan that

expect TheraClearX, a which result broad stream we launch Earlier more in to the of changes of for year, These business. would the key STRATA. one of become announced we drivers revenue this our official predictable

XXXX. placed of as with XXth, We tremendous momentum have devices seen XX TheraClearX June

solution. sold earnings call, of the showcasing increasing codes, effectiveness mentioned our over as in X,XXX acne adoption and treatment last we we our Additionally, have TheraClearX

expand to continue avenues. through multiple of We the awareness TheraClearX

sales our both for programs training TheraClearX new force TheraClearX and providers. implemented have We

The training services drive to their respective and to ultimately engage patients pay utilization. on focused cash sessions in offices how promote

we our have peer-to-peer Institute of to single-arm Dr. of May, best open-label we Ablon training via initiated Research the webinars expanding explain Beach, and addition to X the TheraClearX research also device. In announced in experienced first dermatologists hosted patients This practices that users program, clinical Manhattan California, her with Albon and Glynis treated study. who TheraClearX Skin Center are in

open-label adults on study of in mitigating seven-week a efficacy titled a evaluating as safety young further TheraClearX healthy the of teenagers TheraClearX efficacy substantiate stand-alone mild-to-moderate for mild-to-moderate and aims the The acne. acne and to study safety and treatment

aged to healthy male over seven female older and the XX years and course XX of evaluate will XX study subjects The weeks.

to We QX. by end expect completed be the of study the

for as XX to XX dermatology acne years accounts a reminder, and ages prevalent of Acne to in XX with some XX% the XX% up annually million XX% to degree experiencing of Americans visits. adolescents is to from affects also up old.

In We June FDA-cleared announced July XXXX, of article acne published Dermatology and believe treatment we in supplemental vulgaris. addition known market. prospective is Clinical address XXXX of Journal that review suited also photo-pneumatic mild-to-moderate as TheraClearX JCAD need the the technology in for the a the titled Aesthetic expert this well and to technology

The expert perspectives [Indiscernible], featured roundtable Jason Girish Smith. Bhatia, dermatologists, and Munavalli Ashish

the and as visible as Some acne efficacious, treatment. takeaways from roundtable soon TheraClearX key improvement the providing were second safe is in

of size, improvement texture. Additional erythema skin benefits include pore and visible

are to resulting ideal patient is acne customized acne Treatment can an to expedite and a for Fitzpatrick existing and clearance and/or patient quick their patients. settings no compliant be their in treat sessions TheraClearX to wanting types. current new with all regimen. wanting comfortable satisfied acne skin downtime enhance TheraClearX'

in experienced features Munavalli clinic. device key Dr. by that audit and and visible little-to-no they action, in TheraClearX outcomes treatment. JCAD to downtime highlighted in clinic mentioned redness TheraClearX' early acne. also on to in of Munavalli reductions patients often experience his he review mild-to-moderate benefits utilizes the the described the of mechanism of as the Girish treat the Dr. The He

efficacy, treatment the as efficacy device's safety, showcased and us the helps increase market awareness. the and roundtable devices the visible patients to This serves TheraClearX. The with expert improvements to prospective another continually experience article publication in

market expanding efforts position our innovative through providing sales in a Looking our ahead, will worldwide. solutions and care to as priorities, leader our These events and presence we to committed solidify strategic further phototherapy patients health providers conferences. remain virtual training industry and advanced

the will call Chris over now to I describe discuss to turn -- to financials. the

Chris Lesovitz

the quarter Thank the second you, $X.X for of revenues Bob. to were quarter for XXXX revenues million to million quarter XXXX. recurring second compared quarter XXXX in compared Revenues of were million Global the of revenues million $X.X XXXX. in as of of $X.X the as second $X.X recurring global second of

the $X.X $X.X to million XXXX. of second the were as million for second Equipment XXXX of compared for revenues quarter quarter

quarter the $X.X For the domestic of quarter to second compared million gross in recurring XXXX, billings as XXXX. of $X second non-GAAP were XTRAC million

quarter profit revenues or of XXXX second for for second the million XX.X% gross compared XXXX. the was or $X $X.X million revenues of Overall XX.X% quarter of to of as

as periods, sales. in with amount the of The June for Ra associated and contracts deferred higher previously from greater assumed material gross profits XXth, the acquisition, depreciation ended deferred in to decreasing recognition warranty decrease service three costs, primarily of leading revenue the those during Medical months result lower an which increase related XXXX, revenues was of service a with longer domestic sales service expire contracts is

between from quarterly be Looking the in placements XXXX revenues fluctuation XXs ahead, margins throughout the sales. some and mix on gross mid-XXs we the with to based recurring equipment can expect remainder to system low of

second to for of costs, expenses marketing decrease The a expenses sales XXXX operating quarter Operating XXXX the compared in slight were expenses. and in second and quarter million by $X.X the quarter the in in in of second as primarily million $X.X to is a increase due engineering offset of G&A XXXX. reduction

$X.X for the for debt in compared of $XXX,XXX a second on XXth, other XXXX. The three expenses $XXX,XXX XXXX. for to second was months of million to primarily the quarter XXXX for loss Other second ended and the expense the extinguishment six the as June of attributed quarter quarter was increase

of or Net quarter and XXXX was share loss quarter million $X.XX basic or XXXX compared the loss second per loss $X.X per of of loss second to of basic share. common common net diluted diluted the as a $X.XX a and for million for $X.X of

increase cash MidCap tranche cash The a the the existing million. consists and June of at receive to XXth, Financial. were refinancing closing. cash of As million million equivalents option The also is million $XX the of XXXX. with tranche facility to funded STRATA debt XXXX, $X has $X $X in term million and financing an additional additional and loan due new $XX.X equivalents cash in an

in XXst, macroeconomic million impacted $XX to For This XXXX, a of factors range sales. the adjustment to spending our attributed guidance have year capital $XX equipment is ending December the expenditure we in revising fiscal million. and that slowdown are

on of this half and during While guidance we sales a perspective this could believe business. offers conservative current the second improve year, updated the

made base progress looking in the and forward strong to second of the in with the year. pleased half QX building are are upon We the

mentioned, into expectation Bob of balance were year, year. sales materialize is half these As of internationally our the during that the second it subsequent the in the and quarters pushed will

With to call that, Bob and for the questions. I like would open

Operator

question-and-answer time, this conducting a At be we [Operator will session. Instructions]

Thalmann. the And with Jeff your our Please from first Cohen proceed with comes line question. Ladenburg question of

Destiny Hance

revenue more is have will around Is to Or do recognition? kind start quarter QX will This following that you guess any it QX actually international QX? you type of color Destiny between Jeff. you. a sales. additional of and more Thank in? comments be of for we Do can evenly on Hi. it Chris' those think what I split be

Bob Moccia

Yes, to ask to We some I hearing more asked issues be Bob. recover but see QX a partners Asian going these year. for couple Yes, Thanks and this of credit from do expect is they your the in going QX, to into it's that it's probably start later think rates us in but be -- to quarter. we're to the push them them, We'll particularly think interest out. rebound we question. our

Destiny Hance

vitiligo. just vitiligo second? it. of launch lot transition got more a for there's And the I a around I with OPZELURA, been then to awareness know Okay, could

heard being else anything vitiligo. So, is conjunction about around your used you discuss systems? can in it with I'm wondering, really have Or there anything you

Bob Moccia

Sure.

yes. studied anecdotally, combination. Obviously, not the Now, in been it's

So it good from very laser But and results. go anecdotally, OPZELURA we way. we getting out have who heard and can't promote alongside KOLs using are that our some

to love that, to So, but that. obviously, do allowed we'd be we're able to not promote

really just It's vitiligo. helped those the noise approved years of overall So, has for think number that been indication. and XTRAC for for level, a I

one patients I excimer get they re-pigmentation is that selling laser, which the from points have And using the think that of it. the key enjoyed for

will I to the in here help approved us be opportunities coming shortly, as drugs that there OPZELURA, more excimer that with and as coming patients that think usage there's going see JAKs see the we'll some new are to get well. like with of the are additional out patients are So, start treated, that to and more

Destiny Hance

got correctly. I it you about XX% And revenues, of then accounted heard for believe vitiligo it. that Okay, I said accounted if or procedure

So, wondering, do at think forward? will of remain level consistent that you increase you or do awareness based could think that greater it on the going I'm some

Bob Moccia

that's start actually Coverage always our will to been of companies We the hope insurance things has we it increase. one Yes, face. hope. by that

We XX%, psoriasis, over all coverage XX% excellent for have through. of claims go

which really XX%, still it's is vitiligo, good. For

even which getting But to for effective has reimbursement we rejection, you in starts XTRAC, a patients. We one get part do of the that's for very itself. the team question services have if been coverage doctor provide

bigger pie do utilized team. the overall a And a XTRAC. commercial our we will quite that we bit become of piece hope with for that vitiligo So

Destiny Hance

as Okay. know the out wondering we topline else rest lastly the if out and internationally. I year? that level should there's us, of you just And impacted that issues we I'm then anything call macro that you considering the can called model be some for

Chris Lesovitz

I we're international out, international don't take did the think out China sale as mean discussed pretty -- business, we year-over-year, in drop there we've we had I big see orders. didn't of as XXXX. the the we much No, what grow mainly revenue. We because grow is. the When of to, you'll onetime much push was we but that wanted

Destiny Hance

questions. our for That Thank taking does it perfect. you Okay, us. for

Chris Lesovitz

Sure. Thank you.

Operator

the looks remarks. over CEO, back of the session. turn end like have we call I'll now it the And reached Moccia, for question-and-answer Bob to closing

Bob Moccia

thank you. all again for Thank And all your you of continued support.

would include webcast XXth. like will and STRATA their I provide get STRATA's conclude hosting be more I will perspectives who and on closer look September key call, with the opinion leader look clinic. the Thank on to we that out you our Please inside for event. achievements. will a as devices mention XTRAC TheraClearX forward we The event experience to the the and experts details community keeping Before updated to

Operator

you and disconnect conference your Thank may concludes this for your time. lines you And today's at this participation.

STRATA Skin Sciences (SSKN) 9 Aug 232023 Q2 Earnings call transcript