STRATA Skin Sciences, Inc. (NASDAQ:SSKN) Q1 2023 Results Conference Call May 15, 2023 4:30 PM ET Company Participants Bob Moccia - Chief Executive Officer Chris Lesovitz - Chief Financial Officer Conference Call Participants Jeffrey Cohen - Ladenburg Thalmann Operator Greetings. Welcome to the STRATA Skin Sciences First Quarter 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]. Pl ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to ___________ Commission File Number 0-51481 STRATA SKIN SCIENCES, INC. (Exact name of registrant as specified in its charter) Delaware (State or other juris ...

Financial Data and Key Metrics Changes - Revenues for Q4 2022 were $10.6 million, a 17% increase over Q4 2021 and a 13% increase over Q3 2022 [19] - For the full year 2022, revenues were $36.2 million, a 20.6% increase over 2021 [54] - Net loss for Q4 2022 was $160,000 or a loss of $0.05 per share, compared to a net loss of $849,000 in Q4 2021 [43] - Total operating expenses in 2022 were $26.4 million, an increase of 8.9% compared to $24.3 million in 2021 [23] Business Line Data and Key Metrics Changes - Equipment revenues for Q4 2022 were $4.1 million, a 72% increase compared to $2.3 million in Q4 2021 [20] - Recurring revenues in Q4 2022 were $6.5 million, a 12% increase over Q3 2022 [41] - Non-GAAP gross domestic recurring billings for Q4 2022 were $5.8 million, a decrease of 6% compared to Q4 2021 [21] Market Data and Key Metrics Changes - Internationally, 100 systems were sold in 2022, compared to 38 systems in 2021 [17] - The company has signed distribution agreements in multiple countries, including Korea, Japan, China, and Mexico [17] Company Strategy and Development Direction - The company aims to expand its international presence and has appointed a new Head of International Sales to drive this initiative [18] - STRATA is focusing on direct-to-consumer marketing and engaging with high-volume accounts to enhance growth [12] - The recent approval of OPZELURA for vitiligo is expected to complement XTRAC treatment and drive traffic to dermatologists [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in 2023, despite a conservative revenue guidance of $38 million to $40 million [45] - The company is addressing supply chain issues by utilizing parts from existing machines for repairs, mitigating delays [23] - Management highlighted the importance of regulatory approvals for international expansion and new treatment opportunities [27] Other Important Information - The company launched TheraClearX for acne treatment in July 2022 and is focusing on increasing awareness and usage [14] - The new XTRAC website aims to enhance patient education and facilitate finding dermatologists [35] Q&A Session Summary Question: Can you discuss the conservative guidance for 2023? - Management acknowledged the conservative approach due to reliance on international expansion and regulatory approvals [26][57] Question: What is the expected growth rate for international sales? - Management indicated that international growth is expected to be significantly higher than domestic growth, maintaining around 35% of overall revenue [48] Question: Are there treatments for alopecia using XTRAC? - There is off-label use of XTRAC for alopecia, and management sees potential for future indications [49] Question: What are the typical treatment costs and cycles for patients? - Average treatment costs are around $200 per session, with patients typically requiring 10 to 20 treatments for conditions like psoriasis [52][58] Question: Can you provide updates on TheraClear placements and traction? - The company reported 17 placements of TheraClearX by the end of 2022, with significant traction noted in Q1 2023 [59]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 0-11635 STRATA SKIN SCIENCES, INC. (Exact name of registrant as specified in its charter) | Delaware | 13-3986004 | | --- | --- | | (State or Other Jurisdiction of | (I.R.S. Employe ...

STRATA Skin Sciences, Inc. (NASDAQ:SSKN) Q3 2022 Earnings Conference Call November 9, 2022 4:30 PM ET Company Participants Nicole Jones – Investor Relations Bob Moccia – Chief Executive Officer Chris Lesovitz – Chief Financial Officer Conference Call Participants Destiny Hance – Ladenburg Thalmann Operator Greetings, ladies and gentlemen, and welcome to the STRATA Science – STRATA Skin Sciences' Third Quarter 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator I ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to ___________ Commission File Number 0-51481 STRATA SKIN SCIENCES, INC. (Exact name of registrant as specified in its charter) Delaware (State or other j ...

Financial Data and Key Metrics Changes - Second quarter revenue was $9.1 million, reflecting a 23% year-over-year growth, including a one-time capital equipment sale in China of approximately $1 million [9][29] - Equipment revenues for the second quarter were $3.5 million, an 83% increase compared to $1.9 million for the second quarter of 2021 [29] - Recurring revenues in the second quarter were $5.6 million, a 2% increase over the second quarter of 2021 [31] - Overall gross profit for the second quarter was $5 million or 55% of revenues, compared to $4.8 million or 65% of revenues for the second quarter of 2021 [31] - Net loss for the second quarter of 2022 was $1.9 million, compared to net earnings of $1.1 million for the second quarter of 2021 [35] Business Line Data and Key Metrics Changes - Domestic XTRAC installed base increased to 915 devices, up from 903 at the end of Q1 2022 [10] - High volume accounts contributed 54% of total gross domestic recurring revenues in Q2, up from 51% in Q2 2021 [12] - The company plans to deploy 15 to 20 XTRAC Momentum machines by year-end, focusing on high volume customers [13][42] Market Data and Key Metrics Changes - The company is targeting the $5.5 billion acne treatment market with the launch of TheraClearX, a noninvasive in-office procedure [16] - Internationally, the company received a one-time payment of approximately $1 million from a capital equipment sale in China, reinforcing its strategy to offer flexible models to international customers [23] Company Strategy and Development Direction - The company continues to focus on high volume accounts, which are critical for revenue generation [12] - STRATA is expanding its portfolio and entering new markets, with a strong emphasis on direct-to-consumer and direct-to-dermatologist marketing [13][27] - The company aims to improve gross margins throughout the remainder of 2022, returning to historical levels in the mid-sixties [32] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for the second half of 2022, expecting full-year revenue growth in the range of 10% to 17% year-over-year [26] - The company is monitoring macroeconomic factors and adjusting commercial strategies as necessary [26] - Management noted that patient levels have returned to normal, although staffing remains an issue in some offices [50] Other Important Information - The company welcomed a new Head of International Sales to enhance its commercial leadership team [24] - STRATA is actively engaging with key leaders in dermatology to support partner clinics and drive product adoption [18] Q&A Session Summary Question: Should we expect the lump from China to normalize back to previous levels for the back half of the year? - Management confirmed that the one-time capital equipment sale was an anomaly and expects normalization going forward [39] Question: Do you expect the ex-U.S. revenue to occur on the recurring side? - Management indicated that Japan has a good recurring revenue model, but other partners are more focused on equipment sales [40] Question: Can you walk us through some of the differences on the Momentum machine? - Management described the Momentum machine as more efficient and faster, allowing dermatologists to see more patients [41] Question: Any updates on the per system metrics for utilization? - Management stated that average recurring revenue per system is around $5,700, with a trend of increasing quarter-over-quarter [49] Question: Any material COVID or staffing impacts in any of your geographies? - Management noted that patient levels have returned to normal, but staffing remains an issue in some offices [50] Question: Any updates on topical Jack inhibitors and their impacts? - Management mentioned that new approvals for atopic dermatitis and vitiligo could drive more patients seeking treatment [53] Question: Is the conversion rate still in the range of 40% to 45%? - Management confirmed that the conversion rate remains in that range and is expected to improve as older machines begin to break down [55]

Revenue Growth - Total revenues for the three months ended June 30, 2022, were $9,105,000, an increase from $7,382,000 in the same period of 2021, representing a growth of approximately 23.3%[140] - Recognized recurring treatment revenue for the three months ended June 30, 2022, was $5,582,000, compared to $5,452,000 for the same period in 2021, reflecting an increase of about 2.4%[142] - The estimated number of treatments for the three months ended June 30, 2022, was approximately 86,000, compared to 78,000 treatments in the same period of 2021, reflecting a growth of about 10.3%[142] - Dermatology procedures equipment revenues for the three months ended June 30, 2022, were $3,523 million, up from $1,930 million in the same period of 2021, representing an increase of 82.6%[145][146] - Total revenues for the three months ended June 30, 2022, were $9,105 million, compared to $7,382 million for the same period in 2021, reflecting a growth of 23.3%[149] Acquisitions - The acquisition of Pharos U.S. dermatology business from Ra Medical Systems, Inc. was completed for an upfront cash payment of $3,700,000, aimed at increasing the recurring revenue base[133] - The acquisition of TheraClear Devices from Theravant Corporation involved an upfront cash payment of $500,000 and potential future earnout payments of up to $3,000,000 based on revenue milestones[134] Market Opportunity - The company estimates that there are approximately 7.5 million people in the U.S. suffering from psoriasis, and up to 125 million people worldwide, indicating a significant market opportunity[127] - The XTRAC system's use for psoriasis is covered by nearly all major insurance companies, including Medicare, enhancing its market accessibility[136] - The company plans to continue executing direct-to-patient advertising programs targeting psoriasis and vitiligo patients to increase market awareness and acceptance[143] Financial Performance - Gross profit for the three months ended June 30, 2022, was $4,993 million, with a gross profit percentage of 54.8%, down from 64.5% in the same period of 2021[149] - Gross profit for the six months ended June 30, 2022, was $9,121 million, with a gross profit percentage of 56.5%, down from 64.2% in the same period of 2021[150] - For the three months ended June 30, 2022, the company reported a net loss of $1,892 million compared to a net income of $1,082 million for the same period in 2021[164] - Non-GAAP adjusted EBITDA for the six months ended June 30, 2022, was $(301) million, a decrease from $(129) million for the same period in 2021[165] Expenses - Selling and marketing expenses for the three months ended June 30, 2022, increased to $4,146 million from $3,160 million in the same period of 2021, marking a rise of 31.0%[157] - Engineering and product development expenses decreased to $209 million for the three months ended June 30, 2022, from $403 million in the same period of 2021, a reduction of 48.2%[156] - Interest expense rose significantly to $208 million for the three months ended June 30, 2022, compared to $26 million in the same period of 2021, an increase of 700%[162] Cash Flow and Working Capital - As of June 30, 2022, the company's working capital was $4,266 million, down from $7,168 million as of December 31, 2021, primarily due to decreases in cash and accounts receivable[165] - Cash and cash equivalents were $10,036 million as of June 30, 2022, compared to $12,586 million as of December 31, 2021[165] - Net cash used in operating activities for the six months ended June 30, 2022, was $409 million, a decline from net cash provided of $387 million for the same period in 2021[169] - Net cash used in investing activities increased to $2,141 million for the six months ended June 30, 2022, compared to $1,466 million for the same period in 2021, primarily due to the asset purchase of TheraClear[170] - The company anticipates that its cash and cash equivalents, along with expected revenues, will be sufficient to meet its working capital needs for at least the next 12 months[168] Credit and Equity Agreements - The company entered into a credit agreement in September 2021, borrowing $8,000 million with a maturity date of September 1, 2026[166] - The company has an equity distribution agreement allowing for the sale of up to $11,000 million of common stock, with no shares sold under this agreement as of June 30, 2022[167] System Placement and Sales - The number of XTRAC systems placed in dermatologists' offices increased to 915 as of June 30, 2022, up from 890 at the end of December 31, 2021, indicating a growth of approximately 2.8%[127] - The company sold 35 systems internationally during the three months ended June 30, 2022, compared to 14 systems in the same period of 2021, indicating a growth in international sales[145][146] Deferred Revenues - As of June 30, 2022, deferred net revenues were $2,501,000, compared to $1,897,000 in the same period of 2021, indicating an increase of approximately 32%[144] - The company recognized approximately $220 million and $620 million of deferred service revenue associated with assumed service contracts from Ra Medical during the three and six months ended June 30, 2022, respectively[145]

| --- | --- | --- | --- | --- | |-------|-------|-------|-------|---------------------------------------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Driving Value to Dermatology Partners | | | | | | Matching Patients with Clinics | | | | | | | | | | | | Investor Presentation April 2022 • | December 2020 Safe Harbor Statement 2 This presentation includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These st ...

Financial Data and Key Metrics Changes - Revenues for Q1 2022 were $7 million, a 21% increase compared to Q1 2021 [34] - Recurring revenues in Q1 2022 were $5.1 million, an 8% increase over Q1 2021 [35] - Equipment revenues for Q1 2022 were $1.9 million, a 72% increase compared to $1.1 million in Q1 2021 [36] - Overall gross profit for Q1 2022 was $4.1 million, or 59% of revenues, down from 64% in Q1 2021 [37] - Net loss for Q1 2022 was $2.5 million, consistent with a loss of $2.4 million in Q1 2021 [41] - Cash and cash equivalents at March 31, 2022, were $10.9 million, down from $12.6 million at December 31, 2021 [41] - Full year 2022 revenue guidance is expected to be in the range of $33 million to $35 million, indicating strong double-digit growth [42] Business Line Data and Key Metrics Changes - Domestic XTRAC installed base increased to 903 devices, up from 890 at the end of Q4 2021 [13] - High volume accounts contributed $2.4 million or 48% of total gross domestic recurring revenues in Q1 2022, consistent with the previous year [18] - The introduction of the XTRAC Momentum laser is expected to enhance treatment efficiency and improve recurring revenue streams [20] Market Data and Key Metrics Changes - International equipment sales grew 45% in Q1 2022 compared to Q1 2021, reflecting a renewed focus on key regions outside the U.S. [29] - The company plans to leverage the TheraClear acne system in international markets, particularly in Latin America [30] Company Strategy and Development Direction - STRATA is focused on expanding its global footprint in dermatology through commercial execution, partnerships, and acquisitions [11] - The company aims to launch the TheraClear acne system in Q3 2022, targeting the $5.5 billion acne market [26] - Strategies include reengaging high volume accounts and improving marketing campaigns to drive usage among dermatologists [22][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong results for 2022 despite pandemic-related challenges [10] - The company anticipates continued growth in recurring revenues and equipment sales, driven by effective marketing and customer engagement strategies [31] - Management is optimistic about the upcoming TheraClear launch and its potential to drive further adoption of XTRAC treatments [32] Other Important Information - The company is actively pursuing strategies to mitigate supply chain risks and improve cost efficiencies [21] - Management highlighted the importance of customer service and marketing efforts to retain patients and encourage them to complete their treatment regimens [65] Q&A Session Summary Question: Can you discuss the marketing efforts ahead of the TheraClear launch? - Management is preparing for a July launch, conducting market research, and training the sales force [46] Question: What other indications do you think TheraClear would be appropriate for? - TheraClear may be used for hair removal, redness from rosacea, fine lines, and tattoo removals [50] Question: What strategies are being utilized to determine which accounts the sales organization is focusing on? - The focus is on Pharos owners coming off service contracts, with high volume accounts prioritized [51] Question: Can you discuss additional territories for international expansion? - The company is looking to expand in Asia, Australia, and Latin America, with a focus on TheraClear [53][54] Question: Is there an appetite for M&A in the near future? - While focusing on TheraClear and XTRAC growth, the company remains open to opportunistic acquisitions in dermatology [56]