Licensing of Two New Products Demonstrates Execution on Corporate Strategy
Conference call and webcast, today at 4:30 pm Eastern Time
HORSHAM, Pa., May 11, 2017 (GLOBE NEWSWIRE) -- (NASDAQ:SSKN) STRATA Skin Sciences, Inc. (“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 quarter ended March 31, 2017.
First Quarter and Recent Corporate Highlights
- First quarter total revenues of $7.3 million, which included recurring XTRAC® revenue of $5.7 million, accounting for 78.8% of total revenues
- Recurring XTRAC revenues were $5.7 million, up 3.7% year-over-year
- Installed base of XTRAC systems in the U.S. expands to 791 systems placed, up 8.4% from 730 at the end of the first quarter 2016
“The first quarter saw continued progress on the commercial front as we continue to position STRATA for further growth. Both recurring revenues and XTRAC placements were up year over year. Business development is a key element of our corporate strategy and we were pleased to announce in March that STRATA is now the exclusive U.S. distributor of the differentiated best-in-class Ellipse line of lasers, with the Nordlys representing the latest in non-ablative fractionated laser technology,” stated Frank McCaney, President and Chief Executive Officer of STRATA. “This agreement is consistent with our goal to become The Dermatological and Aesthetic Practice Partner, leveraging our existing infrastructure, including our current group of sales representatives, strong field service group, reimbursement capabilities and call center. We expect that the Nordlys laser will have an immediate positive impact on STRATA’s financials and will contribute to overall sales and non-GAAP adjusted EBITDA for the balance of 2017.”
“We have also added the STRATAPEN Product, which we have licensed from an OEM. This is a highly advantaged aesthetic dermatological product that is specifically developed for micropigmentation,” added Mr. McCaney. “The STRATAPEN utilizes the patent-pending Biolock™ cartridge, which greatly reduces the risk of contamination, and also the patent-pending removable and autoclavable nosecone, further improving safety. Both the Nordlys laser and the STRATAPEN are excellent complements to our XTRAC system, where we continue to fine tune our business with the goal of better serving the needs of our customers and the marketplace.”
Reported Financial Results
Revenues for the first quarter of 2017 were $7.3 million compared with revenues for the first quarter of 2016 of $7.6 million.
Net loss for the first quarter of 2017 was $2.2 million or ($1.03) per diluted share, which included other expense of $0.1 million for the change in fair value of warrant liability, $1.3 million in interest expense, $1.5 million in depreciation and amortization expenses and $0.1 million for income tax expense. This compares with a net loss for the first quarter of 2016 of $1.4 million or ($1.30) per diluted share, which included other income of $2.0 million for the change in fair value of warrant liability, $1.2 million in interest expense and $1.7 million in depreciation and amortization expenses.
As of March 31, 2017, the Company had cash and cash equivalents of $3.8 million, compared with $3.9 million as of December 31, 2016.
Non-GAAP Measures
To supplement the Company’s consolidated financial statements, prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), the Company provides certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP adjusted EBITDA.
The Company’s reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, nor superior to, GAAP results. These non-GAAP measures are provided to enhance investors' overall understanding of our current financial performance and to provide further information for comparative purposes.
Specifically, the Company believes the non-GAAP measures provide useful information to both management and investors by isolating certain expenses, gains and losses that may not be indicative of the Company’s core operating results and business outlook. In addition, the Company believes non-GAAP measures enhance the comparability of results against prior periods. Reconciliation to the most directly comparable GAAP measure of all non-GAAP measures included in this press release is as follows:
| Three Months Ended March 31, | |||||||
| 2017 | 2016 | ||||||
| (in thousands) (Unaudited) | |||||||
| Net loss as reported | ($ 2,235 | ) | ($ 1,437 | ) | |||
| Adjustments: | |||||||
| Depreciation and amortization expense | 1,542 | 1,684 | |||||
| Interest expense, net | 569 | 532 | |||||
| Non-cash interest expense | 777 | 686 | |||||
| Income taxes | 70 | 66 | |||||
| Non-GAAP EBITDA | 723 | 1,531 | |||||
| Stock-based compensation expense | 52 | 170 | |||||
| Change in fair value of warrants | 132 | (1,985 | ) | ||||
| Non-GAAP adjusted EBITDA | $ 907 | ($ 284 | ) | ||||
STRATA previously announced the scheduling of a conference call with investors to review the results of the first quarter. Following is the pertinent information for accessing that call.
Conference Call Detail:
| Date: | Thursday, May 11 | |
| Time: | 4:30 pm Eastern Time | |
| Toll Free: | 888.857.6930 | |
| International: | 719.325.2432 | |
| Passcode: | 3263032 | |
| Webcast: | www.strataskinsciences.com |
Replays available through May 25, 2017:
| Toll Free: | 844.512.2921 | |
| International: | 412.317.6671 | |
| Passcode: | 3263032 | |
| Webcast: | www.strataskinsciences.com |
About STRATA Skin Sciences, Inc.
(www.strataskinsciences.com)
STRATA Skin Sciences is a medical technology company focused on the therapeutic and aesthetic dermatology market. Its products include the XTRAC® laser and VTRAC® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions; the STRATAPEN™ MicroSystem, marketed specifically for the intended use of micropigmentation; and Nordlys, a multi-technology aesthetic laser device.
Trademarks
Ellipse and Nordlys are trademarks of Ellipse S/A, Horsholm, Denmark
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, including the Company’s ability to generate the anticipated revenue stream, the Company’s ability to generate sufficient cash flow to fund the Company’s ongoing operations beginning at any time in the future, the public’s reaction the Company’s new advertisements and marketing campaign, 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 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 of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.strataskinsciences.com.
| STRATA SKIN SCIENCES, INC. AND SUBSIDIARY | |||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
| (In thousands) | |||||
| March 31, 2017 | December 31, 2016 | ||||
| (unaudited) | |||||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 3,763 | $ | 3,928 | |
| Accounts receivable, net | 3,288 | 3,390 | |||
| Inventories | 2,670 | 2,817 | |||
| Other current assets | 804 | 617 | |||
| Property and equipment, net | 9,975 | 10,180 | |||
| Goodwill and intangible assets, net | 22,661 | 22,215 | |||
| Other non-current assets, net | 46 | 46 | |||
| Total assets | $ | 43,207 | $ | 43,193 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| Current liabilities: | |||||
| Long-term debt and other notes payable | $ | 11,758 | $ | 11,805 | |
| Accounts payable and accrued current liabilities | 4,420 | 3,845 | |||
| Current portion of deferred revenues | 334 | 235 | |||
| Senior secured convertible debentures, net | 12,695 | 12,028 | |||
| Warrant liability | 237 | 105 | |||
| Other long-term liabilities | 1,171 | 456 | |||
| Stockholders' equity | 12,592 | 14,719 | |||
| Total liabilities and stockholders’ equity | $ | 43,207 | $ | 43,193 | |
| STRATA SKIN SCIENCES, INC. AND SUBSIDIARY | ||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||
| (In thousands, except share and per share amounts) | ||||||
| (Unaudited) | ||||||
| For the Three Months Ended March 31, | ||||||
| 2017 | 2016 | |||||
| Revenues | $ 7,272 | $ 7,620 | ||||
| Cost of revenues | 2,733 | 3,422 | ||||
| Gross profit | 4,539 | 4,198 | ||||
| Operating expenses: | ||||||
| Engineering and product development | 475 | 525 | ||||
| Selling and marketing | 3,150 | 3,710 | ||||
| General and administrative | 1,601 | 2,101 | ||||
| 5,226 | 6,336 | |||||
| Operating loss before other income (expense), net | (687 | ) | (2,138 | ) | ||
| Other income (expense), net: | ||||||
| Interest expense, net | (1,346 | ) | (1,218 | ) | ||
| Change in fair value of warrant liability | (132 | ) | 1,985 | |||
| (1,478 | ) | 767 | ||||
| Loss before income taxes | (2,165 | ) | (1,371 | ) | ||
| Income tax expense | (70 | ) | (66 | ) | ||
| Net loss | ($ 2,235 | ) | ($ 1,437 | ) | ||
| Net loss per share: | ||||||
| Basic | ($ 1.03 | ) | ($ 0.70 | ) | ||
| Diluted | ($ 1.03 | ) | ($ 1.30 | ) | ||
| Shares used in computing net loss per share: | ||||||
| Basic | 2,176,731 | 2,067,931 | ||||
| Diluted | 2,176,731 | 2,661,585 | ||||
| STRATA SKIN SCIENCES, INC. AND SUBSIDIARY | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (In thousands, unaudited) | |||||||
| For the Three Months Ended March 31, | |||||||
| 2017 | 2016 | ||||||
| Cash Flows From Operating Activities: | |||||||
| Net loss | ($ 2,235 | ) | ($ 1,437 | ) | |||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
| Depreciation and amortization | 1,543 | 1,684 | |||||
| Stock-based compensation | 52 | 170 | |||||
| Amortization of debt discount | 723 | 639 | |||||
| Amortization of deferred financing costs | 54 | 48 | |||||
| Change in fair value of warrant liability | 132 | (1,985 | ) | ||||
| Other | 60 | 100 | |||||
| Changes in operating assets and liabilities: | |||||||
| Current assets | 61 | 846 | |||||
| Current liabilities | 428 | (1,461 | ) | ||||
| Net cash provided by (used in) operating activities | 818 | (1,396 | ) | ||||
| Cash Flows From Investing Activities: | |||||||
| Lasers placed-in-service, net | (683 | ) | (197 | ) | |||
| Other | (200 | ) | 15 | ||||
| Net cash used in investing activities | (883 | ) | (182 | ) | |||
| Cash Flows From Financing Activities: | |||||||
| Proceeds from term debt | - | 1,500 | |||||
| Other financing activities | (100 | ) | (105 | ) | |||
| Net cash provided by (used in) financing activities | (100 | ) | 1,395 | ||||
| Net decrease in cash and cash equivalents | (165 | ) | (183 | ) | |||
| Cash and cash equivalents, beginning of period | 3,928 | 3,303 | |||||
| Cash and cash equivalents, end of period | $ 3,763 | $ 3,120 | |||||
| Supplemental information: | |||||||
| Cash paid for interest | $ | 540 | $ | 442 | |||
| Supplemental information of non-cash investing and financing activities: | |||||||
| Conversion of senior secured convertible debentures into common stock | $ | 56 | $ | 165 | |||
| Recognition of warrants issued as debt discount | $ | - | $ | 47 | |||
| Acquisition of distributor rights asset and license liability | $ | 900 | $ | - | |||