STRATA Skin Sciences(SSKN) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenues for Q1 2022 were $7 million, a 21% increase compared to Q1 2021 [34] - Recurring revenues in Q1 2022 were $5.1 million, an 8% increase over Q1 2021 [35] - Equipment revenues for Q1 2022 were $1.9 million, a 72% increase compared to $1.1 million in Q1 2021 [36] - Overall gross profit for Q1 2022 was $4.1 million, or 59% of revenues, down from 64% in Q1 2021 [37] - Net loss for Q1 2022 was $2.5 million, consistent with a loss of $2.4 million in Q1 2021 [41] - Cash and cash equivalents at March 31, 2022, were $10.9 million, down from $12.6 million at December 31, 2021 [41] - Full year 2022 revenue guidance is expected to be in the range of $33 million to $35 million, indicating strong double-digit growth [42] Business Line Data and Key Metrics Changes - Domestic XTRAC installed base increased to 903 devices, up from 890 at the end of Q4 2021 [13] - High volume accounts contributed $2.4 million or 48% of total gross domestic recurring revenues in Q1 2022, consistent with the previous year [18] - The introduction of the XTRAC Momentum laser is expected to enhance treatment efficiency and improve recurring revenue streams [20] Market Data and Key Metrics Changes - International equipment sales grew 45% in Q1 2022 compared to Q1 2021, reflecting a renewed focus on key regions outside the U.S. [29] - The company plans to leverage the TheraClear acne system in international markets, particularly in Latin America [30] Company Strategy and Development Direction - STRATA is focused on expanding its global footprint in dermatology through commercial execution, partnerships, and acquisitions [11] - The company aims to launch the TheraClear acne system in Q3 2022, targeting the $5.5 billion acne market [26] - Strategies include reengaging high volume accounts and improving marketing campaigns to drive usage among dermatologists [22][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong results for 2022 despite pandemic-related challenges [10] - The company anticipates continued growth in recurring revenues and equipment sales, driven by effective marketing and customer engagement strategies [31] - Management is optimistic about the upcoming TheraClear launch and its potential to drive further adoption of XTRAC treatments [32] Other Important Information - The company is actively pursuing strategies to mitigate supply chain risks and improve cost efficiencies [21] - Management highlighted the importance of customer service and marketing efforts to retain patients and encourage them to complete their treatment regimens [65] Q&A Session Summary Question: Can you discuss the marketing efforts ahead of the TheraClear launch? - Management is preparing for a July launch, conducting market research, and training the sales force [46] Question: What other indications do you think TheraClear would be appropriate for? - TheraClear may be used for hair removal, redness from rosacea, fine lines, and tattoo removals [50] Question: What strategies are being utilized to determine which accounts the sales organization is focusing on? - The focus is on Pharos owners coming off service contracts, with high volume accounts prioritized [51] Question: Can you discuss additional territories for international expansion? - The company is looking to expand in Asia, Australia, and Latin America, with a focus on TheraClear [53][54] Question: Is there an appetite for M&A in the near future? - While focusing on TheraClear and XTRAC growth, the company remains open to opportunistic acquisitions in dermatology [56]