The Beauty Health pany(SKIN) - 2024 Q3 - Quarterly Results

Financial Performance - Net sales for Q3 2024 were $78.8 million, a decrease of 19.1% compared to Q3 2023, primarily due to lower delivery systems net sales[5] - Gross margin improved to 51.6% in Q3 2024 from (12.9)% in Q3 2023, driven by the absence of prior year charges and lower inventory-related costs[5] - Adjusted gross margin increased to 69.5% in Q3 2024 from 62.5% in Q3 2023, attributed to lower product costs and a favorable shift towards consumable net sales[5] - The company reported a net loss of $(18.3) million in Q3 2024, significantly improved from a net loss of $(73.8) million in Q3 2023[5] - Adjusted EBITDA for Q3 2024 was $8.1 million, down from $9.1 million in Q3 2023, reflecting lower net sales but higher gross margin[5] - Net sales for the three months ended September 30, 2024, were $78.8 million, a decrease of 19.2% compared to $97.4 million for the same period in 2023[17] - Gross profit for the three months ended September 30, 2024, was $40.6 million, with a gross margin of 51.6%, compared to a gross loss of $12.6 million in 2023[21] - The net loss for the three months ended September 30, 2024, was $(18.3) million, compared to a net loss of $(73.8) million for the same period in 2023[22] - Adjusted EBITDA for the three months ended September 30, 2024, was $8.1 million, with an adjusted EBITDA margin of 10.2%, compared to $9.1 million and 9.3% margin for the same period in 2023[22] Sales and Market Dynamics - The company revised its full-year net sales guidance to $322 million – $332 million, reflecting continued pressure on delivery systems sales[7] - Total delivery systems sold in Q3 2024 were 1,118, down from 2,140 in the prior year period, indicating a challenging macroeconomic environment[5] - Active install base increased to 34,162 as of September 30, 2024, compared to 30,074 in the same period last year[4] - The company successfully launched the Hydralock HA Booster, contributing to growth in consumables sales[2] Operational Changes - The company centralized its global manufacturing footprint in Long Beach, California, concluding its relationship with a third-party manufacturer in China[2] - Total operating expenses for the three months ended September 30, 2024, were $62.2 million, down from $69.5 million in the same period last year[17] - The company incurred manufacturing optimization costs of $7.6 million during the three months ended September 30, 2024[22] Cash Flow and Assets - Cash, cash equivalents, and restricted cash at the end of the period were $358.9 million, down from $523.0 million at the beginning of the period[19] - Total assets decreased to $699.5 million as of September 30, 2024, from $929.1 million as of December 31, 2023[19] - Total liabilities decreased to $639.8 million as of September 30, 2024, from $869.7 million as of December 31, 2023[19] - The company reported a net cash used for operating activities of $0.3 million for the nine months ended September 30, 2024, compared to $26.9 million provided in 2023[20] Expenses and Financial Adjustments - Adjusted gross profit for the three months ended September 30, 2024, was $54.7 million, with an adjusted gross margin of 69.5%[21] - The company reported a significant increase in stock-based compensation expense, totaling $7.7 million for the three months ended September 30, 2024, compared to $8.2 million for the same period in 2023[22] - Interest expense for the three months ended September 30, 2024, was $2.5 million, down from $3.4 million in the same period in 2023[22] - The company experienced a foreign currency loss of $(2.3) million for the three months ended September 30, 2024[22] - The write-off of discontinued, excess, and obsolete products amounted to $2.0 million for the three months ended September 30, 2024[22] Strategic Focus - The company is focused on expanding its product offerings and enhancing its market presence through innovative skin health solutions[24] - The Beauty Health Company emphasizes its commitment to sustainability and positive community impact as part of its business strategy[24]