Conference call and webcast, today at 8:30 am Eastern Time
HORSHAM, Pa., April 02, 2018 (GLOBE NEWSWIRE) -- STRATA Skin Sciences (NASDAQ:SSKN) (“STRATA”) a medical
technology company in Dermatology and Plastic Surgery dedicated to developing, commercializing, and marketing innovative products
for the treatment of dermatologic conditions, today reported financial results for the fourth quarter and fiscal year ended
December 31, 2017.
Full Year and Recent Corporate Highlights
- Total revenues for the year were $31.4 million, an increase of 2.4% over 2016 revenues.
- Installed base of XTRAC systems in the U.S. was 753 systems at year end, down 3% from 775 at the end of 2016, as a result of
the Company’s strategy to redeploy underperforming XTRAC systems in more productive accounts.
- Non-GAAP Adjusted EBITDA increased by 67% to $4.8 million in 2017 versus $2.9 million in 2016
- Revenues for the first quarter ended March 31, 2018 will be in the range of approximately $6.3 million to $6.6 million, down
7 to 11% over first quarter 2017 revenues.
“We made several important strategic decisions in 2017 that position STRATA for the long term,” stated Frank
McCaney, President and Chief Executive Officer of STRATA. “These include the simplification of our balance sheet with the exchange
of convertible debt for convertible preferred stock, which provides us with greater financial flexibility.”
Full Year 2017 Financial Results
Revenues for the year ended December 31, 2017 were $31.4 million, an increase of 2.4% compared with revenues of
$30.7 million for the year ended December 31, 2016.
Net loss for the year ended December 31, 2017 was $18.8 million or ($2.85) per diluted common share and
($1,061.25) per diluted Series C share (the significant loss reflects in part the conversion of debt to shares), which included
other expense, net of $16.3 million, consisting of $4.6 million in interest expense, net, $0.1 million for the reduction in fair
value of warrant liability, and loss on extinguishment of debentures of $11.8 million. This compares with a net loss for the
year ended December 31, 2016 of $3.3 million or ($3.77) per diluted share, which included other income, net of $0.5 million,
consisting of $4.9 in interest expense, net, $5.4 million for the reduction in fair value of warrant liability, and no loss on the
extinguishment of debentures.
Fourth Quarter 2017 Financial Results
Revenues for the fourth quarter ended December 31, 2017 were $8.6 million, an increase of 3.2% compared with revenues of $8.3
million for the quarter ended December 31, 2016.
Net loss for the quarter ended December 31, 2017 was $1.7 million or ($0.10) per diluted common share and
($36.36) per diluted Series C share, which included other expense, net of $0.3 million, consisting primarily of $0.3 million in
interest expense, net. This compares with a net loss for the quarter ended December 31, 2016 of $0.9 million or ($0.41) per diluted
share, which included other expense, net of $1.2 million, consisting primarily of $1.3 million of interest expense, net.
As of December 31, 2017, the Company had cash and cash equivalents of $4.1 million, compared with $3.9 million
as of December 31, 2016.
Non-GAAP Adjusted EBITDA
To supplement the Company’s consolidated financial statements, prepared in accordance with accounting principles
generally accepted in the United States of America (“GAAP”), the Company provides certain non-GAAP measures of financial
performance. These non-GAAP measures include non-GAAP adjusted EBITDA.
The Company’s reference to these non-GAAP measures should be considered in addition to results prepared under
current accounting standards, but are not a substitute for, nor superior to, GAAP results. These non-GAAP measures are provided to
enhance investors' overall understanding of our current financial performance and to provide further information for comparative
purposes.
Specifically, the Company believes the non-GAAP measures provide useful information to both management and
investors by isolating certain expenses, gains and losses that may not be indicative of the Company’s core operating results and
business outlook. In addition, the Company believes non-GAAP measures enhance the comparability of results against prior periods.
Reconciliation to the most directly comparable GAAP measure of all non-GAAP measures included in this press release is as
follows:
| |
|
|
|
|
|
| |
|
|
Three Months Ended
December 31, |
|
Year Ended
December 31, |
| |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
| |
|
|
(in thousands)
(Unaudited) |
|
(in thousands)
(Unaudited) |
| |
|
|
|
|
|
| Net loss as reported |
|
($
1,720 |
) |
|
($
887 |
) |
|
($18,831 |
) |
|
($3,335 |
) |
| Adjustments: |
|
|
|
|
|
|
|
|
| |
Depreciation and amortization expense * |
|
|
1,525 |
|
|
|
1,522 |
|
|
|
6,336 |
|
|
|
6,366 |
|
| |
Interest expense, net |
|
|
304 |
|
|
|
623 |
|
|
|
2,056 |
|
|
|
2,226 |
|
| |
Non-cash interest expense |
|
|
44 |
|
|
|
706 |
|
|
|
2,556 |
|
|
|
2,674 |
|
| |
Income taxes |
|
|
(52 |
) |
|
|
64 |
|
|
|
129 |
|
|
|
255 |
|
| |
|
|
|
|
|
|
|
|
|
| |
EBITDA |
|
|
101 |
|
|
|
2,028 |
|
|
|
(7,754 |
) |
|
|
8,186 |
|
| |
|
|
|
|
|
|
|
|
|
| |
Stock-based compensation expense |
|
|
50 |
|
|
|
(288 |
) |
|
|
186 |
|
|
|
113 |
|
| |
Change in fair value of warrants |
|
|
(25 |
) |
|
|
(80 |
) |
|
|
(102 |
) |
|
|
(5,396 |
) |
| |
Impairment of lasers placed –in-service |
|
|
196 |
|
|
|
- |
|
|
|
196 |
|
|
|
- |
|
| |
Impairment of intangible assets |
|
|
523 |
|
|
|
- |
|
|
|
523 |
|
|
|
- |
|
| |
Loss on extinguishment of debentures |
|
|
- |
|
|
|
- |
|
|
|
11,799 |
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
| Non-GAAP adjusted EBITDA |
|
$845 |
|
|
$1,660 |
|
|
$4,848 |
|
|
$2,903 |
|
* Includes depreciation on lasers placed-in-service of $4,247 and $4,410 for the year ended December 31, 2017 and 2016,
respectively.
| Conference Call
Details: |
| Date: |
|
Monday, April 2 |
| Time: |
|
8:30 am Eastern Time |
| Toll Free: |
|
888-394-8218 |
| International: |
|
323-794-2149 |
| Passcode: |
|
6380302 |
| Webcast: |
|
www.strataskinsciences.com |
About STRATA Skin Sciences, Inc. (www.strataskinsciences.com)
STRATA Skin Sciences is a medical technology company in Dermatology and Plastic Surgery dedicated to developing, commercializing
and marketing innovative products for the treatment of dermatologic conditions. Its products include the XTRAC®
excimer laser and VTRAC® lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin
conditions; the STRATAPEN® MicroSystem, marketed specifically for the intended use of micropigmentation; and Nordlys, a
multi-technology aesthetic laser device.
Safe Harbor
This press release includes "forward-looking statements" within the meaning of the Securities Litigation
Reform Act of 1995. These statements include but are not limited to the Company’s plans, objectives, expectations and intentions
and may contain words such as “will,” “may,” “seeks,” and “expects,” that suggest future events or trends. These statements,
including the Company’s ability to generate the anticipated revenue stream, the Company’s ability to generate sufficient cash flow
to fund the Company’s ongoing operations and research and development activities beginning at any time in the future, the public’s
reaction to the Company’s new advertisements and marketing campaigns under development, and the Company’s ability to build a
leading franchise in dermatology and aesthetics, are based on the Company’s current expectations and are inherently subject to
significant uncertainties and changes in circumstances. Actual results may differ materially from the Company’s expectations due to
financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the
medical device industry in general, as well as more specific risks and uncertainties set forth in the Company’s SEC reports on
Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or
unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC
disclosures available at www.sec.gov and www.strataskinsciences.com.
| |
|
|
|
STRATA SKIN SCIENCES, INC. AND
SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts) |
| |
|
|
|
| |
December 31, 2017 |
|
|
December 31, 2016 |
|
| |
|
|
|
|
|
| ASSETS |
|
|
|
|
|
| Current assets: |
|
|
|
|
|
| Cash and cash equivalents |
$ |
4,069 |
|
|
$ |
3,928 |
|
| Accounts receivable, net |
|
3,141 |
|
|
|
3,390 |
|
| Inventories, net |
|
3,009 |
|
|
|
2,817 |
|
| Other current assets |
|
533 |
|
|
|
617 |
|
| Property and equipment, net |
|
7,703 |
|
|
|
10,180 |
|
| Goodwill and other intangible assets |
|
20,128 |
|
|
|
22,215 |
|
| Other non-current assets, net |
|
48 |
|
|
|
46 |
|
| Total assets |
$ |
38,631 |
|
|
$ |
43,193 |
|
| |
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
| Note payable |
$ |
357 |
|
|
$ |
339 |
|
| Current portion of long-term debt |
|
2,387 |
|
|
|
1,714 |
|
| Accounts payable and accrued current liabilities |
|
4,637 |
|
|
|
3,845 |
|
| Current portion of deferred revenues |
|
291 |
|
|
|
235 |
|
| Senior secured convertible debentures, net |
|
- |
|
|
|
12,028 |
|
| Long-term debt, net |
|
7,853 |
|
|
|
9,752 |
|
| Warrant liability |
|
3 |
|
|
|
105 |
|
| Other long-term liabilities |
|
858 |
|
|
|
456 |
|
| Stockholders' equity |
|
22,245 |
|
|
|
14,719 |
|
| Total liabilities and stockholders’ equity |
$ |
38,631 |
|
|
$ |
43,193 |
|
| |
|
|
|
|
|
| |
|
|
|
|
STRATA SKIN SCIENCES, INC. AND
SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts) |
| |
|
|
|
|
| |
|
For the Three Months Ended
December 31, |
|
For the Year Ended
December 31, |
| |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
| |
|
|
|
|
|
|
|
|
| Revenues |
|
$8,596 |
|
|
$8,331 |
|
|
$31,449 |
|
|
$30,707 |
|
| |
|
|
|
|
|
|
|
|
| Cost of revenues |
|
|
4,316 |
|
|
|
3,005 |
|
|
|
13,498 |
|
|
|
12,636 |
|
| |
|
|
|
|
|
|
|
|
| Gross profit |
|
|
4,280 |
|
|
|
5,326 |
|
|
|
17,951 |
|
|
|
18,071 |
|
| |
|
|
|
|
|
|
|
|
| Operating expenses: |
|
|
|
|
|
|
|
|
| Engineering and product development |
|
|
402 |
|
|
|
388 |
|
|
|
1,711 |
|
|
|
1,929 |
|
| Selling and marketing |
|
|
2,936 |
|
|
|
2,779 |
|
|
|
11,249 |
|
|
|
12,102 |
|
| General and administrative |
|
|
2,402 |
|
|
|
1,755 |
|
|
|
7,401 |
|
|
|
7,637 |
|
| |
|
|
5,740 |
|
|
|
4,922 |
|
|
|
20,361 |
|
|
|
21,668 |
|
| |
|
|
|
|
|
|
|
|
| Operating loss before other income (expense), net |
|
|
(1,460 |
) |
|
|
404 |
|
|
|
(2,410 |
) |
|
|
(3,597 |
) |
| |
|
|
|
|
|
|
|
|
| Other income (expense), net: |
|
|
|
|
|
|
|
|
| Interest expense, net |
|
|
(348 |
) |
|
|
(1,329 |
) |
|
|
(4,612 |
) |
|
|
(4,900 |
) |
| Change in fair value of warrant liability |
|
|
25 |
|
|
|
80 |
|
|
|
102 |
|
|
|
5,396 |
|
| Other (expense) income, net |
|
|
11 |
|
|
|
22 |
|
|
|
17 |
|
|
|
21 |
|
| Loss on extinguishment of debentures |
|
|
- |
|
|
|
- |
|
|
|
(11,799 |
) |
|
|
- |
|
| |
|
|
(312 |
) |
|
|
(1,227 |
) |
|
|
(16,292 |
) |
|
|
517 |
|
| |
|
|
|
|
|
|
|
|
| Net loss before income taxes |
|
|
(1,772 |
) |
|
|
(823 |
) |
|
|
(18,702 |
) |
|
|
(3,080 |
) |
| |
|
|
|
|
|
|
|
|
| Income tax (expense) benefit |
|
|
52 |
|
|
|
(64 |
) |
|
|
(129 |
) |
|
|
(255 |
) |
| |
|
|
|
|
|
|
|
|
| Net loss |
|
($1,720 |
) |
|
($887 |
) |
|
($18,831 |
) |
|
($3,335 |
) |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Net loss per common share: |
|
|
|
|
|
|
|
|
| Basic |
|
($0.10 |
) |
|
($ 0.41 |
) |
|
($2.85 |
) |
|
($ 1.57 |
) |
| Diluted |
|
($0.10 |
) |
|
($ 0.41 |
) |
|
($2.85 |
) |
|
($ 3.77 |
) |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Shares used in computing net loss per share: |
|
|
|
|
|
|
|
|
| Basic |
|
|
3,857,736 |
|
|
|
2,153,707 |
|
|
|
2,713,782 |
|
|
|
2,119,014 |
|
| Diluted |
|
|
3,857,736 |
|
|
|
2,153,707 |
|
|
|
2,713,782 |
|
|
|
2,315,715 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Net loss per Preferred C Share
Basic and diluted |
|
($36.36 |
) |
|
|
|
($1,061.25 |
) |
|
|
Shares used in computing net loss per
Basic and diluted Preferred C Share |
|
|
37,035 |
|
|
|
|
|
10,444 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
STRATA SKIN SCIENCES, INC. AND
SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) |
| |
|
|
| |
For the Year Ended |
|
| |
December 31, |
|
| |
|
2017 |
|
|
2016 |
|
|
| Cash Flows From Operating Activities: |
|
|
|
|
|
| Net loss |
|
($18,831 |
) |
|
($3,335 |
) |
|
| Adjustments to reconcile net loss to net cash used in
operating activities: |
|
|
|
|
|
| Depreciation and amortization |
|
6,336 |
|
|
6,366 |
|
|
| Stock-based compensation |
|
186 |
|
|
113 |
|
|
| Amortization of debt discount |
|
2,360 |
|
|
2,473 |
|
|
| Amortization of deferred financing
costs |
|
188 |
|
|
200 |
|
|
| Change in fair value of warrant
liability |
|
(102 |
) |
|
(5,396 |
) |
|
| Loss on extinguishment of debentures |
|
11,799 |
|
|
- |
|
|
| Other |
|
843 |
|
|
484 |
|
|
| Changes in operating assets and
liabilities: |
|
|
|
|
|
| Current assets |
|
466 |
|
|
2,093 |
|
|
| Current liabilities |
|
895 |
|
|
(2,676 |
) |
|
| Net cash provided by (used in) operating
activities |
|
4,140 |
|
|
322 |
|
|
| |
|
|
|
|
|
| Cash Flows From Investing Activities: |
|
|
|
|
|
| Lasers placed-in-service, net |
|
(1,739 |
) |
|
(1,008 |
) |
|
| Other |
|
(455 |
) |
|
140 |
|
|
| Net cash used in investing activities |
|
(2,194 |
) |
|
(868 |
) |
|
| |
|
|
|
|
|
| Cash Flows From Financing Activities: |
|
|
|
|
|
| Repayment of term debt |
|
(1,429 |
) |
|
- |
|
|
| Proceeds from term debt |
|
- |
|
|
1,500 |
|
|
| Other financing activities |
|
(374 |
) |
|
(333 |
) |
|
| Net cash (used in) provided by financing
activities |
|
(1,803 |
) |
|
1,167 |
|
|
| |
|
|
|
|
|
| Effect of exchange rate changes on cash |
|
(2 |
) |
|
4 |
|
|
| |
|
|
|
|
|
| Net decrease in cash and cash equivalents |
|
141 |
|
|
625 |
|
|
| Cash and cash equivalents, beginning of period |
|
3,928 |
|
|
3,303 |
|
|
| |
|
|
|
|
|
| Cash and cash equivalents, end of period |
|
$4,069 |
|
|
$3,928 |
|
|
| |
|
|
|
|
|
| Supplemental information: |
|
|
|
|
|
| Cash paid for interest |
|
$ |
2,215 |
|
|
$ |
2,054 |
|
|
| Cash paid for income taxes |
|
$ |
28 |
|
|
$ |
15 |
|
|
| Supplemental information of non-cash investing and financing
activities: |
|
|
|
|
|
| Conversion of senior secured convertible debentures into
common stock |
|
$ |
262 |
|
|
$ |
265 |
|
|
| Reclassification of warrant liability to (from) stockholders’
equity |
|
$ |
- |
|
|
$ |
1,541 |
|
|
| Recognition of warrants issued with term note credit facility
as debt discount |
|
$ |
- |
|
|
$ |
47 |
|
|
| Prepaid insurance financed with notes payable |
|
$ |
392 |
|
|
$ |
372 |
|
|
| Acquisition of distributor rights asset and license
liability |
|
$ |
286 |
|
|
$ |
- |
|
|
| Issuance of convertible Preferred C stock in exchange for
convertible notes. |
|
$ |
25,910 |
|
|
|
|
| |
|
|
|
|
|
