Venus Concept Announces Second Quarter of Fiscal Year 2022 Financial Results; Updates Fiscal Year 2022 Revenue Guidance
TORONTO, Aug. 12, 2022 (GLOBE NEWSWIRE) -- Venus Concept Inc. (“Venus Concept” or the “Company”) (NASDAQ: VERO), a global medical aesthetic technology leader, announced financial results for the three and six months ended June 30, 2022.
Second Quarter 2022 Summary & Operating Highlights:
- Total revenue of $27.3 million, up $1.4 million, or 6%, year-over-year.
- U.S. revenue up 7% year-over-year.
- Total subscription and system revenue up 9% year-over-year.
- GAAP net loss attributable to stockholders of $10.6 million, compared to net income of $0.4 million last year.
- Second quarter 2021 GAAP net loss attributable to stockholders included approximately $6 million of non-cash gain and bad debt recovery which did not benefit GAAP net loss attributable to stockholders in the second quarter of 2022.
- Adjusted EBITDA loss of $5.5 million, compared to Adjusted EBITDA income of $0.5 million last year.
- On April 25, 2022, the Company announced the first patient treatment in a U.S. Investigational Device Exemption (IDE) clinical study evaluating the safety and efficacy of the Company’s Aime™ next generation robotic technology for the treatment of moderate to severe facial wrinkles. Aime is a robotic platform designed to provide micro-coring for medical aesthetic applications.
- On April 28, 2022, the Company announced that it received a 510(k) clearance from the U.S. Food and Drug Administration (“FDA”) to market the Venus BlissMAX device (“BlissMAX”) with an expanded indication for use in new areas of the body and an increase in RF energy output.
Management Commentary:
“Second quarter total revenue results were below expectations driven by significant sales force disruption in a key market in the U.S.,” said Domenic Serafino, Chief Executive Officer of Venus Concept. “We experienced continued strong demand for Bliss and BlissMAX in our ‘Body Franchise’ and our ARTAS iX and Neograft in our ‘Hair Restoration Franchise’, and our sales team in the rest of the U.S. executed our focused sales strategy well, delivering 24% growth in subscription and system sales to U.S. customers in their respective regions in Q2.”
Mr. Serafino continued: “We have implemented a series of strategic initiatives and expect our focused commercial strategy, including prioritizing cash sales, and streamlined global operations to enhance the cash flow profile of our business and accelerate our path to long term profitability. We are also evaluating non-dilutive financing opportunities to enhance our cash position and balance sheet in the near term.”
Second Quarter and First Six Months of 2022 Revenue by Region and by Product Type:
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||
(dollars in thousands) | (dollars in thousands) | |||||||||||||||||||||||||||||
Revenues by region: | ||||||||||||||||||||||||||||||
United States | $ | 13,417 | $ | 12,571 | $ | 26,546 | $ | 23,086 | ||||||||||||||||||||||
International | 13,849 | 13,257 | 27,126 | 25,339 | ||||||||||||||||||||||||||
Total revenue | $ | 27,266 | $ | 25,828 | $ | 53,672 | $ | 48,425 |
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||
(dollars in thousands) | (dollars in thousands) | |||||||||||||||||||||||||||||||
Revenues by product: | ||||||||||||||||||||||||||||||||
Subscription—Systems | $ | 11,874 | $ | 12,787 | $ | 22,297 | $ | 21,324 | ||||||||||||||||||||||||
Products—Systems | 11,548 | 8,694 | 23,422 | 18,504 | ||||||||||||||||||||||||||||
Products—Other (1) | 3,080 | 3,314 | 6,577 | 6,369 | ||||||||||||||||||||||||||||
Services (2) | 764 | 1,033 | 1,376 | 2,228 | ||||||||||||||||||||||||||||
Total revenue | $ | 27,266 | $ | 25,828 | $ | 53,672 | $ | 48,425 |
(1) | Products-Other include ARTAS procedure kits and other consumables. | |
(2) | Services include extended warranty sales and VeroGrafters technician services. VeroGrafters technician services were discontinued in the fourth quarter of 2021. |
Second Quarter 2022 Financial Results:
Three Months Ended June 30, | ||||||||||||||||||||||||
2022 | 2021 | Change | ||||||||||||||||||||||
(in thousands, except percentages) | $ | % of Total | $ | % of Total | $ | % | ||||||||||||||||||
Revenues: | ||||||||||||||||||||||||
Subscription—Systems | $ | 11,874 | 43.5 | $ | 12,787 | 49.5 | $ | (913 | ) | (7.1 | ) | |||||||||||||
Products—Systems | 11,548 | 42.4 | 8,694 | 33.7 | 2,854 | 32.8 | ||||||||||||||||||
Products—Other | 3,080 | 11.3 | 3,314 | 12.8 | (234 | ) | (7.1 | ) | ||||||||||||||||
Services | 764 | 2.8 | 1,033 | 4.0 | (269 | ) | (26.0 | ) | ||||||||||||||||
Total | $ | 27,266 | 100.0 | $ | 25,828 | 100.0 | $ | 1,438 | 5.6 |
Total revenue for the second quarter of 2022 increased $1.4 million, or 5.6%, to $27.3 million, compared to the second quarter of 2021. The increase in total revenue, by region, was driven by a 7% increase year-over-year in United States revenue and a 5% year-over-year increase in international revenue. The increase in total revenue, by product category, was driven by a 33% increase in systems revenue, partially offset by a 7% decrease in lease revenue, a 26% decrease in services revenue and a 7% decrease in products revenue. The percentage of total systems revenue derived from the Company’s subscription model was approximately 51% this quarter, compared to 60% in the prior year period.
Gross profit for the second quarter of 2022 increased $0.3 million, or 2%, to $19.0 million compared to the second quarter of 2021. Gross margin was 69.9%, compared to 72.5% of revenue for the second quarter of 2021. The change in gross profit was primarily driven by an increase in revenue in the United States driven by the Company’s hair restoration business. The change in gross margin was driven by changes in foreign currencies which depreciated relative to the U.S. dollar in the period.
Operating expenses for the second quarter of 2022 were $26.2 million, compared to $17.2 million for the second quarter of 2021. The change in total operating expenses was driven by an increase of $6.4 million, or 82%, in general and administrative expenses and an increase of $0.4 million, or 20%, in research and development expenses, offset partially by a decrease of $0.6 million, or 6%, in sales and marketing expenses. In addition, in the three months ended June 30, 2021, operating expenses included a bad debt recovery of $3.2 million due to a reactivation of accounts impacted by COVID-19 which did not repeat in the three months ended June 30, 2022. The prior year period also included a $2.8 million non-cash gain on forgiveness of government assistance loans which did not repeat in the three months ended June 30, 2022.
Operating loss for the second quarter of 2022 was $7.1 million, compared to operating income of $1.5 million for the second quarter of 2021.
Net loss attributable to stockholders for the second quarter of 2022 was $10.6 million, or $0.16 per share, compared to net income of $0.4 million for the second quarter of 2021. Adjusted EBITDA loss for the second quarter of 2022 was $5.5 million, compared to adjusted EBITDA income of $0.5 million for the second quarter of 2021.
Fiscal Year 2022 Revenue Guidance:
The Company now expects total revenue for the twelve months ending December 31, 2022 in the range of $110 million to $113 million, representing an increase of approximately 4% to 7%, year-over-year, compared to total revenue of $105.6 million for the twelve months ended December 31, 2021.
Conference Call Details:
Management will host a conference call at 8:00 a.m. Eastern Time on August 12, 2022, to discuss the results of the quarter with a question and answer session. Those who would like to participate may dial 877-407-2991 (201-389-0925 for international callers) and provide access code 13731063. A live webcast of the call will also be provided on the investor relations section of the Company's website at ir.venusconcept.com.
For those unable to participate, a replay of the call will be available for two weeks at 877-660-6853 (201-612-7415 for international callers); access code 13731063. The webcast will be archived at ir.venusconcept.com.
About Venus Concept
Venus Concept is an innovative global medical aesthetic technology leader with a broad product portfolio of minimally invasive and non-invasive medical aesthetic and hair restoration technologies and reach in over 60 countries and 18 direct markets. Venus Concept focuses its product sales strategy on a subscription-based business model in North America and in its well-established direct global markets. Venus Concept’s product portfolio consists of aesthetic device platforms, including Venus Versa, Venus Legacy, Venus Velocity, Venus Fiore, Venus Viva, Venus Glow, Venus Bliss, Venus BlissMAX, Venus Epileve and Venus Viva MD. Venus Concept’s hair restoration systems include NeoGraft® and the ARTAS® and ARTAS iX® Robotic Hair Restoration systems. Venus Concept has been backed by leading healthcare industry growth equity investors including EW Healthcare Partners (formerly Essex Woodlands), HealthQuest Capital, Longitude Capital Management, Aperture Venture Partners, and Masters Special Situations.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Any statements contained herein that are not of historical facts may be deemed to be forward-looking statements. In some cases, you can identify these statements by words such as such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “guidance,” and other similar expressions that are predictions of or indicate future events and future trends. These forward-looking statements include, but are not limited to, statements about our financial performance; the growth in demand for our systems and other products; and general economic conditions, including the global economic impact of COVID-19, and involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. These forward-looking statements are based on current expectations, estimates, forecasts, and projections about our business and the industry in which the Company operates and management's beliefs and assumptions and are not guarantees of future performance or developments and involve known and unknown risks, uncertainties, and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this communication may turn out to be inaccurate. Factors that could materially affect our business operations and financial performance and condition include, but are not limited to, those risks and uncertainties described under Part II Item 1A—“Risk Factors” in our Quarterly Reports on Form 10-Q and Part I Item 1A—“Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. You are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on the forward-looking statements. The forward-looking statements are based on information available to us as of the date of this communication. Unless required by law, the Company does not intend to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise.
Venus Concept Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands of U.S. dollars, except share and per share data)
June 30, | December 31, | |||||||
2022 | 2021 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 10,540 | $ | 30,876 | ||||
Accounts receivable, net of allowance of $14,100 and $11,997 as of June 30, 2022, and December 31, 2021 | 46,754 | 46,918 | ||||||
Inventories | 22,363 | 20,543 | ||||||
Prepaid expenses | 2,169 | 2,737 | ||||||
Advances to suppliers | 2,869 | 2,162 | ||||||
Other current assets | 3,873 | 3,758 | ||||||
Total current assets | 88,568 | 106,994 | ||||||
LONG-TERM ASSETS: | ||||||||
Long-term receivables | 26,724 | 27,710 | ||||||
Deferred tax assets | 579 | 284 | ||||||
Severance pay funds | 815 | 817 | ||||||
Property and equipment, net | 2,395 | 2,669 | ||||||
Intangible assets | 13,670 | 15,393 | ||||||
Total long-term assets | 44,183 | 46,873 | ||||||
TOTAL ASSETS | $ | 132,751 | $ | 153,867 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Trade payables | $ | 4,184 | $ | 4,913 | ||||
Accrued expenses and other current liabilities | 17,449 | 19,512 | ||||||
Income taxes payable | 690 | 294 | ||||||
Unearned interest income | 2,884 | 2,678 | ||||||
Warranty accrual | 1,173 | 1,245 | ||||||
Deferred revenues | 1,800 | 2,030 | ||||||
Current portion of government assistance loans | — | 543 | ||||||
Total current liabilities | 28,180 | 31,215 | ||||||
LONG-TERM LIABILITIES: | ||||||||
Long-term debt | 77,507 | 77,325 | ||||||
Income tax payable | 582 | 563 | ||||||
Accrued severance pay | 931 | 911 | ||||||
Deferred tax liabilities | 58 | 46 | ||||||
Unearned interest income | 1,433 | 1,355 | ||||||
Warranty accrual | 437 | 508 | ||||||
Other long-term liabilities | 227 | 348 | ||||||
Total long-term liabilities | 81,175 | 81,056 | ||||||
TOTAL LIABILITIES | 109,355 | 112,271 | ||||||
Commitments and Contingencies | ||||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Common Stock, $0.0001 par value: 300,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 64,399,044 and 63,982,580 issued and outstanding as of June 30, 2022, and December 31, 2021, respectively | 27 | 27 | ||||||
Additional paid-in capital | 222,393 | 221,321 | ||||||
Accumulated deficit | (199,583 | ) | (180,405 | ) | ||||
TOTAL STOCKHOLDERS’ EQUITY | 22,837 | 40,943 | ||||||
Non-controlling interests | 559 | 653 | ||||||
23,396 | 41,596 | |||||||
By: GlobeNewswire
- 12 Aug 2022
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