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]
STRATA Skin Sciences(SSKN) - 2022 Q2 - Quarterly Report