AirSculpt Technologies(AIRS) - 2024 Q3 - Quarterly Report

Financial Performance - Revenue for the three months ended September 30, 2024, was $42.548 million, a decrease of 9.6% compared to $46.793 million for the same period in 2023[8] - Operating expenses for the three months ended September 30, 2024, totaled $46.264 million, an increase of 0.9% from $45.838 million in the prior year[8] - Net loss for the three months ended September 30, 2024, was $6.040 million, compared to a net loss of $1.667 million for the same period in 2023[8] - Basic loss per share for the three months ended September 30, 2024, was $(0.10), compared to $(0.03) for the same period in 2023[8] - Comprehensive loss for the three months ended September 30, 2024, was $5.834 million, compared to a comprehensive loss of $1.773 million for the same period in 2023[11] - For the nine months ended September 30, 2024, the net loss was $3,217,000, while the previous year showed a net income of $95,000[16] - Cash flows from operating activities for the nine months ended September 30, 2024, provided $8,637,000, down from $19,090,000 in the prior year[16] Assets and Liabilities - Total current assets decreased to $12.892 million as of September 30, 2024, from $15.961 million as of December 31, 2023[7] - Total liabilities increased to $125.708 million as of September 30, 2024, compared to $120.027 million as of December 31, 2023[7] - Cash and cash equivalents decreased to $5.972 million as of September 30, 2024, from $10.262 million as of December 31, 2023[7] - Total assets increased to $208.245 million as of September 30, 2024, compared to $204.019 million as of December 31, 2023[7] - Total debt, net as of September 30, 2024, was $70.1 million, a decrease from $71.6 million as of December 31, 2023[53] Equity and Compensation - The company recorded a cumulative reversal of stock compensation expense of $10.4 million during the first quarter of fiscal year 2024[8] - The total equity-based compensation for the nine months ended September 30, 2024, was $1,522,000, significantly lower than $13,483,000 in the prior year[16] - The Company recognized equity-based compensation expenses of $3.4 million for the three months ended September 30, 2024, down from $4.5 million in 2023, and $1.5 million for the nine months ended September 30, 2024, compared to $13.5 million in 2023[63] - The Company granted 515,804 restricted stock units (RSUs) during the nine months ended September 30, 2024, compared to 767,261 RSUs in the same period of 2023, representing a decrease of 32.8%[60] Expenses - Advertising expenses for the three months ended September 30, 2024, were approximately $6.9 million, compared to $6.5 million for the same period in 2023, reflecting a 6.2% increase[39] - The Company incurred rent expenses of $1.8 million and $5.0 million for the three and nine months ended September 30, 2024, respectively, compared to $1.5 million and $4.4 million for the same periods in 2023, indicating a year-over-year increase of 20% and 13.6%[55] - The company reported depreciation and amortization of $8,693,000 for the nine months ended September 30, 2024, compared to $7,479,000 in the previous year[16] - Depreciation expense for the three months ended September 30, 2024, was approximately $1.8 million, compared to $1.4 million for the same period in 2023, representing a 28.6% increase[49] Tax and Compliance - The effective tax rate for the three months ended September 30, 2024, was approximately (13.8)%, a significant improvement from (89.2)% in the same period of 2023[43] - The income tax expense for the three months ended September 30, 2024, was $0.7 million, down from $0.8 million in 2023, while the nine-month tax expense decreased from $2.5 million in 2023 to $0.9 million in 2024[68] - The Company is in compliance with all covenants under its Credit Agreement and has no letters of credit outstanding as of September 30, 2024[54] Future Outlook - The company anticipates potential impacts from rising interest rates and increased competition in the weight loss market[4] - Total future minimum rental payments under non-cancellable operating lease agreements amount to $45.981 million, with $1.777 million due in 2024 and $7.445 million in 2025[59] - Amortization of intangible assets will be $4.8 million per year for each of the next five fiscal years[46]