The Beauty Health pany(SKIN) - 2025 Q1 - Quarterly Report

Financial Performance - Total net sales for the three months ended March 31, 2025, decreased by $11.8 million, or 14.5%, compared to the same period in 2024, with Delivery Systems net sales down by $15.6 million, or 43.5%[106] - Consumables net sales increased by $3.7 million, or 8.2%, for the three months ended March 31, 2025, primarily due to increased placements of Delivery Systems[107] - Gross profit for the three months ended March 31, 2025, was $48.6 million, with a gross margin of 69.8%, up from 59.4% in the same period of 2024[108] - The Company recognized a loss from operations of $12.0 million for the three months ended March 31, 2025, compared to a loss of $17.0 million in the same period of 2024[105] - The company reported a net loss of $10.1 million for the three months ended March 31, 2025, compared to a net loss of $0.7 million in the same period of 2024[128] Expenses - Selling and marketing expenses decreased by $7.6 million, or 22.7%, for the three months ended March 31, 2025, primarily due to lower personnel-related expenses[109] - Research and development expenses decreased by $1.8 million, or 64.4%, for the three months ended March 31, 2025, driven by lower personnel-related expenses[110] - General and administrative expenses increased by $4.7 million, or 16.3%, for the three months ended March 31, 2025, primarily due to higher legal fees and severance expenses[111] Cash Flow and Liquidity - As of March 31, 2025, the company had cash, cash equivalents, and restricted cash totaling $373.0 million[116] - For the three months ended March 31, 2025, net cash provided by operating activities was $3.0 million, a significant improvement from net cash used of $16.9 million in the same period of 2024[129] - Net cash used for investing activities was $1.1 million for the three months ended March 31, 2025, compared to $1.8 million in the same period of 2024, indicating lower capital expenditures[130] - Cash, cash equivalents, and restricted cash at the end of the period increased to $373.0 million from $370.1 million at the beginning of the period[128] - The company believes it has sufficient liquidity to meet anticipated working capital requirements for at least the next 12 months[119] Market and Strategic Outlook - The Company expects to transition sales in the China market to a distributor partner during the second quarter of 2025, incurring approximately $3 million in severance and restructuring charges[102] - The company may seek additional debt or equity financing for potential acquisitions, which could require substantial capital resources[118] - The company faces macroeconomic challenges, including potential recession and financial market instability, which could adversely impact revenues and earnings[125] - The company continues to monitor risks that may affect its business, including economic conditions and industry consolidations[126] Interest and Financing - Interest income decreased by $2.3 million, or 43.5%, for the three months ended March 31, 2025, primarily due to lower average invested balances[113] - The company repurchased $75.0 million principal amount of its Notes for $57.8 million during the three months ended March 31, 2024, but no repurchases occurred in the same period of 2025[123] - The gross margin increase to 69.8% was primarily due to lower inventory-related charges and a favorable shift towards consumable net sales[108]