Revenue Performance - Total revenues for the three months ended March 31, 2022, were $7,041,000, an increase of 20.8% from $5,827,000 for the same period in 2021[125]. - Recognized recurring treatment revenue for the three months ended March 31, 2022, was $5,067,000, representing approximately 71,000 treatments, compared to $4,679,000 for approximately 67,000 treatments in the same period of 2021[126]. - Dermatology procedures equipment revenues for the three months ended March 31, 2022, were $1,974,000, up from $1,148,000 in the same period of 2021[129]. - Revenues from dermatology recurring procedures rose to $5,067 million in Q1 2022 from $4,679 million in Q1 2021, with a gross profit percentage decrease to 59.9% from 67.9%[133]. - Revenues from dermatology procedures equipment increased to $1,974 million in Q1 2022 from $1,148 million in Q1 2021, with a gross profit percentage increase to 55.4% from 46.6%[134]. Cost and Profitability - The cost of revenues for dermatology recurring procedures was $2,032,000 for the three months ended March 31, 2022, compared to $1,501,000 for the same period in 2021[131]. - Gross profit increased to $4,128 million for the three months ended March 31, 2022, compared to $3,713 million for the same period in 2021, with a gross profit percentage of 58.6% down from 63.7%[132]. - Non-GAAP adjusted EBITDA improved to $(508) million in Q1 2022 from $(811) million in Q1 2021, indicating a reduction in losses[140]. Expenses - Engineering and product development expenses decreased to $163 million in Q1 2022 from $384 million in Q1 2021, primarily due to reduced costs related to the development of XTRAC MomentumTM 1.0[135]. - Selling and marketing expenses increased to $3,616 million in Q1 2022 from $2,932 million in Q1 2021, driven by investments in sales and marketing and increased employee-related expenses[136]. - General and administrative expenses decreased to $2,652 million in Q1 2022 from $2,789 million in Q1 2021, mainly due to higher compensation and severance costs in the prior year[137]. - Interest expense rose significantly to $199 million in Q1 2022 from $30 million in Q1 2021, attributed to a higher interest rate on the Senior Term Facility[138]. Acquisitions and Business Expansion - The company acquired the Pharos U.S. dermatology business for $3.7 million in August 2021, expanding its customer base to 400 dermatology practices[118]. - In January 2022, the company acquired TheraClear Devices for an upfront cash payment of $0.5 million and potential future payments totaling up to $4.5 million based on performance milestones[119]. - As of March 31, 2022, there were 903 XTRAC systems placed in dermatologists' offices in the U.S., an increase from 890 at the end of 2021[111]. Market and Operational Impact - The company estimates that approximately 7.5 million people in the U.S. and up to 125 million people worldwide suffer from psoriasis, with 1% to 2% of the global population affected by vitiligo[111]. - Deferred net revenues as of March 31, 2022, were $1,971,000, compared to $1,769,000 for the same period in 2021, indicating a favorable impact on revenue recognition[128]. - The ongoing COVID-19 pandemic has negatively impacted operational performance, with staffing issues in physician offices affecting business[117]. Cash Flow and Working Capital - As of March 31, 2022, working capital was $4,627 million, down from $7,168 million as of December 31, 2021, primarily due to decreases in cash and accounts receivable[141]. - Net cash used in operating activities was $353 million for Q1 2022, compared to net cash provided of $153 million in Q1 2021, reflecting changes in asset and liability accounts[145].
STRATA Skin Sciences(SSKN) - 2022 Q1 - Quarterly Report