The Beauty Health pany(SKIN) - 2021 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported net sales of $68.1 million, an increase of almost 100% from the previous year's COVID-impacted sales and up 72% from $39.6 million in Q3 2019 [46] - Adjusted EBITDA was $5.8 million, driven by strong net sales growth and gross margin expansion despite challenges related to the Delta variant [15][62] - Gross margin was 67.6%, up from 60.6% last year, with an adjusted gross margin of 71.5%, reflecting fixed cost leveraging and improved selling prices [53] Business Line Data and Key Metrics Changes - The Americas region saw net sales increase to $45 million, compared to $21.2 million a year ago, and over 50% growth from 2019 levels [47] - EMEA net sales grew to $12.6 million from $8.1 million in the prior year, expanding over 90% from Q3 2019 [49] - APAC net sales increased to $10.5 million, almost doubling from the prior year and over 200% from Q3 2019, driven by growth in China and Australia [50] Market Data and Key Metrics Changes - International sales were up over 105% this quarter, with significant growth in the APAC region despite COVID-related challenges [28] - The company noted strong trends in the U.S. and EMEA businesses, with continued demand for HydraFacial products [52] Company Strategy and Development Direction - The company is focused on building brand awareness, accelerating innovation, and expanding international presence as part of its strategic growth initiatives [19][34] - Plans to launch new products, including the Glow and Go at-home device, are on track, with a broader rollout expected in 2022 [38][39] - The company aims to leverage its strong financial position to pursue strategic acquisitions in a disciplined manner [31][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model and raised the full-year 2021 guidance for net sales to $245 million to $255 million and adjusted EBITDA to approximately $30 million [32][68] - The company remains cautiously optimistic while monitoring potential risks related to COVID-19, global supply chain challenges, and inflationary pressures [70] Other Important Information - The company completed a convertible senior notes offering, raising approximately $900 million to support strategic investments [16][66] - The delivery system install base grew to over 19,000 units, reflecting strong consumer demand [71] Q&A Session All Questions and Answers Question: Insights on the connected device and revenue guidance - Management highlighted strong organic growth in consumables and the transition from analogue to digital technology with the Glow and Go device [75][76] - The company is excited about the upcoming product launches and remains on track for significant growth [77] Question: Impact of Delta variant and supply chain on guidance - Management acknowledged the Delta variant's impact on certain regions, particularly APAC, and indicated that supply chain pressures would continue to affect operations [79][101] Question: Growth drivers and international opportunities - Management emphasized the importance of international markets as a significant growth opportunity, particularly in Asia, despite ongoing challenges [88] Question: Pricing power amid inflationary pressures - The company indicated a natural increase in average selling prices due to strong demand and historical ability to pass on costs [90] Question: Delivery systems growth and channel contributions - Management noted that all channels are growing, with emerging partnerships contributing positively, while retail channels are still recovering from pandemic-related restrictions [95]