STRATA Skin Sciences(SSKN) - 2020 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q1 2020, the company's revenue was $6.7 million, a decrease of 10.1% compared to $7.5 million in Q1 2019, primarily due to the impact of COVID-19 on the overseas capital equipment business [28] - Recurring revenues increased by 7.3% to $5.7 million from $5.3 million in Q1 2019, driven by an increase in patient flow to partner clinics [28] - Gross profit for Q1 2020 was $4.4 million, representing 65.4% of revenues, compared to $4.6 million or 61.6% of revenues in Q1 2019 [29] - The net loss for Q1 2020 was $1 million, or $0.3 per share, compared to a net loss of $1.3 million, or $0.04 per share, in Q1 2019 [31] Business Line Data and Key Metrics Changes - Equipment revenue for Q1 2020 was down 52.6%, amounting to $1 million compared to $2.2 million in Q1 2019 [28] - The company experienced a growth in recurring revenue margins by 2.2% despite losing momentum in the last three weeks of March [25] Market Data and Key Metrics Changes - Up to mid-March 2020, reimbursement requests were up 117% compared to the same period in 2019, but dropped to approximately 50% of the same period in 2019 from mid-March to the end of April [11] - The company has reached out to over 350 physician partners across 31 states as part of its patient outreach program [18] Company Strategy and Development Direction - The company is focused on executing its strategy and planning for a return to normal operations while managing through the COVID-19 pandemic [9] - STRATA is leveraging its unique recurring revenue business model and resources to support partner clinics in rebuilding patient referrals [17] - The company is conducting online clinical training and webinars to engage with physician partners [22] Management's Comments on Operating Environment and Future Outlook - Management expressed that the pandemic has created significant uncertainties, but they believe they have sufficient funding to navigate the next four quarters [24] - The company anticipates that as states begin to reopen, there will be a pent-up demand for treatments, and they are preparing to support clinics in managing this demand [56] Other Important Information - As of March 31, 2020, the company had $15.6 million in cash and cash equivalents, with an additional $2 million received from the Paycheck Protection Program [32] - The company has implemented cash preservation measures, including employee leave of absence and reduced discretionary spending, expected to save approximately $3 million per quarter [23] Q&A Session Summary Question: How is the company evaluating accounts and physician partners during the pandemic? - The company is in contact with clinics to assess their operational status and patient volume, allowing them to identify the right targets for re-engagement [39] Question: Has there been increased interest from physicians based on AAD guidelines? - The company has seen significant participation in clinical webinars and communication from physicians regarding the guidelines, indicating heightened interest [47] Question: How is the company leveraging patient volumes from previous quarters? - The company has developed a patient outreach program to re-engage patients who were in treatment prior to COVID-19, utilizing their resources to assist clinics [49] Question: What is the company's outlook on cash preservation and top-line performance? - The company has projected a runway of four quarters based on current cash reserves and anticipated business recovery, with a focus on managing expenses [81]