Venus Concept Inc. (“Venus Concept” or the “Company”) (NASDAQ:
VERO), a global medical aesthetic technology leader, announced
financial results for the three months and twelve months ended
December 31, 2019 and preliminary revenue results for the three
months ending March 31, 2020. The Company notes that the financial
results provided for the three months and twelve months ended
December 31, 2019 give effect to the merger that closed on November
7, 2019 as described below.
Fiscal Year 2019 Financial Summary:
- Total GAAP revenue for the fiscal
year 2019 increased 8% year-over-year, to $110.4 million, compared
to total GAAP revenue of $102.6 million for the fiscal year 2018.
Total GAAP revenue for the fiscal year 2019 included revenue of
$2.8 million from Venus Concept Inc. (formerly Restoration
Robotics, Inc.) from November 7, 2019 to December 31, 2019.
- Total revenue for the fiscal year
2019, giving effect to the merger as if it had closed on January 1,
2018, decreased 1% year-over-year, to $123.3 million, compared to
total revenue, of $124.6 million for the fiscal year 2018, giving
effect to the merger as it had closed on January 1, 2018. Total
revenue for the fiscal year 2019, giving effect to the merger as it
had closed on January 1, 2018, was comprised of:• Venus
Concept Ltd. (legacy Venus Concept) revenue of $107.6 million,
compared to $102.6 million in 2018, an increase of 5%
year-over-year.• Venus Concept Inc. (formerly Restoration
Robotics, Inc.) revenue of $15.6 million, compared to $22.0 million
in 2018, a decrease of 29% year-over-year.
- GAAP operating loss of $30.3
million for the fiscal year 2019, compared to GAAP operating loss
of $3.4 million for the fiscal year 2018.
- GAAP net loss attributable to Venus
Concept Inc. for the fiscal year 2019 of $40.6 million, compared to
GAAP net loss attributable to Venus Concept Inc. of $15.0 million
for the fiscal year 2018.
- Adjusted EBITDA loss for the fiscal
year 2019 of $12.5 million, compared to adjusted EBITDA income of
$9.8 million for the fiscal year 2018.
Fourth Quarter 2019 Financial Summary:
- Total GAAP revenue for the fourth
quarter of 2019 increased 11% year-over-year, to $31.9 million,
compared to total GAAP revenue of $28.6 million for the fourth
quarter 2018. Total GAAP revenue for the fourth quarter of 2019
includes $2.8 million of revenue from Venus Concept Inc. (formerly
Restoration Robotics, Inc.) from November 7, 2019 to December 31,
2019.
- GAAP operating loss for the fourth
quarter of 2019 of $17.9 million, compared to GAAP operating loss
of $9.1 million for the fourth quarter 2018.
- GAAP net loss attributable to Venus
Concept Inc. for the fourth quarter of 2019 of $20.8 million,
compared to GAAP net loss attributable to Venus Concept Inc. of
$13.2 million for the fourth quarter 2018.
- Adjusted EBITDA loss of $11.5
million, compared to adjusted EBITDA income of $2.4 million in
fourth quarter 2018.
Fourth Quarter 2019 Operating Highlights:
- On November 19, 2019, the Company announced it received a
medical device license issued by Health Canada to market Venus
Bliss™, a medical aesthetic platform that offers a comprehensive
solution to fat reduction and cellulite reduction, with two
technologies in one platform. It is intended for use in
non-invasive lipolysis of the abdomen and flanks in individuals
with a Body Mass Index (BMI) of 30 or less, and is also indicated
for use in temporary skin tightening, circumferential reduction,
and cellulite reduction.
- On November 26, 2019, the Company announced it received a
medical device license issued by Health Canada and CE Mark to
market Venus Epileve. Eplieve is intended as a treatment for
hirsutism, permanent hair reduction and pseudofolliculitis barbae
in Europe, and for hair removal, permanent hair reduction, and the
treatment of pseudofolliculitis barbae in Canada.
- On December 5, 2019, the Company announced that it received a
CE Mark and Therapeutic Goods Administration (TGA) clearance in
Australia to market NeoGraft 2.0 for hair restoration.
Merger of Venus Concept Ltd. and
Restoration Robotics Inc.:
- On November 7, 2019, the Company (formerly Restoration
Robotics, Inc. “Restoration Robotics”) (NASDAQ: HAIR, through
November 7, 2019), a global leader in robotic hair restoration,
completed its merger with Venus Concept Ltd., effective November 7,
2019.° Immediately following the merger, Restoration Robotics
changed its corporate name to Venus Concept Inc. (the “Company”)
and the business conducted by Venus Concept Ltd. became the primary
business of the Company.° Immediately following the
completion of the merger, the Company effected a 15-for-1 reverse
stock split of its common stock. ° Immediately following
the completion of the merger, the Company completed a $28.1 million
equity financing by EW Healthcare Partners, HealthQuest Capital,
SEDCO Capital and others.
“2019 was a year of significant advancement and
change for Venus Concept,” said Domenic Serafino, Chief Executive
Officer of Venus Concept. “We delivered solid commercial execution,
received new regulatory clearances and launched two new products in
the U.S., and a total of four in international markets; we closed
our merger transaction on November 7, 2019 and we made significant
progress in enhancing our financial condition with multiple
financing transactions. The integration of our two companies is
progressing rapidly and we remain excited by the long-term
prospects of both the combined global commercial team, and the
potentially powerful combination of Venus’ expertise in
non-invasive energy-based technologies for aesthetic applications
and Restoration Robotics’ expertise in robotic technology, 3D
pre-operative planning and software. We ended the year by
delivering fourth quarter revenue, giving effect to the merger for
the full year, at the high-end of our preliminary range, driven by
2% growth in the legacy Venus Concept business, which offset the
expected softer sales performance in the former Restoration
Robotics business compared to the prior year.”
Mr. Serafino continued: “We entered 2020 with an
expectation of driving sales growth in the range of 9% to 13%
year-over-year as we previously announced on January 13, 2020. We
expected this growth to be fueled by compelling new product
introductions, like our Venus Bliss, and improving adoption of the
ARTAS® and ARTAS iX® robotic hair restoration systems. We had a
strategic plan to drive growth with strong commercial execution
across our team of more than 200 direct selling representatives
around the world and by implementing an enhanced go-to-market
strategy for our robotic hair restoration business. We entered 2020
focused on a successful integration of the two companies, with a
specific emphasis on improving the profitability profile of the
combined organization and had identified approximately $18 million
of synergies and cost reductions that we expected to realize over
the course of 2020.”
“Unfortunately, the global pandemic caused by
the novel coronavirus (COVID-19) has significantly impacted our
growth trends during the first three months of 2020, which, while
difficult to predict, is expected to continue to impact our results
in the second quarter of 2020 and possibly beyond. During this
period of unprecedented disruption, we remain focused on supporting
our global customers and on protecting the health and safety of our
employees. Venus Concept is truly a global business, having
established a commercial presence in more than 60 countries over
the course of our ten-year history. A little more than 30% of our
2019 sales came from the APAC and European regions which were
impacted by the pandemic throughout the first quarter, and we have
also seen a pronounced decline in both procedures and system
adoption in the U.S. beginning in March. Given the rapidly evolving
environment and continued uncertainties from the impact of COVID-19
we are withdrawing our full year 2020 revenue guidance and plan to
update the investment community as part of our first quarter
earnings report in May.”
“We raised $22.25 million of gross proceeds
through an equity private placement in early March which further
enhanced our financial condition and, in response to the
challenging sales trends in recent months, we conducted a full
review of our 2020 budget. Importantly, this review has identified
new operating expense reduction opportunities of at least $20
million, which we expect to implement beginning in the second
quarter. We also continue to identify additional expense cuts that
will be made if we experience a prolonged recovery from this
pandemic. While the near-term outlook has been challenged by this
global pandemic, we continue to believe the long-term opportunity
remains extremely compelling as a leading player in both the global
minimally invasive/non-invasive medical aesthetics market and the
minimally invasive surgical hair restoration market.”
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Venus
Concept Inc. |
Supplemental
Financial Information – Revenue By Geographic Area* |
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Three Months Ended |
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Twelve Months Ended |
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December 31, |
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Increase/(Decrease) |
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December 31, |
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Increase/(Decrease) |
(Dollars in millions) |
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2019 |
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2018 |
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$ |
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% |
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2019 |
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2018 |
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$ |
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% |
United States |
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$ |
16.4 |
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$ |
16.7 |
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$ |
(0.3 |
) |
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(2 |
)% |
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$ |
47.7 |
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$ |
46.3 |
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$ |
1.4 |
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3 |
% |
International |
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15.5 |
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12.0 |
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3.5 |
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29 |
% |
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62.7 |
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56.3 |
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6.4 |
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11 |
% |
Total Revenue |
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$ |
31.9 |
|
$ |
28.6 |
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$ |
3.2 |
|
|
11 |
% |
|
$ |
110.4 |
|
$ |
102.6 |
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$ |
7.8 |
|
8 |
% |
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*numbers may not
foot due to rounding |
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Venus
Concept Inc. |
Supplemental
Financial Information – Revenue By Type* |
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Three Months Ended |
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Twelve Months Ended |
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December 31, |
|
Increase/(Decrease) |
|
December 31, |
|
Increase/(Decrease) |
(Dollars in millions) |
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2019 |
|
2018 |
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$ |
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% |
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2019 |
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2018 |
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$ |
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% |
Lease revenue |
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$ |
16.4 |
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$ |
18.7 |
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$ |
(2.3 |
) |
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(12 |
)% |
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$ |
65.2 |
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$ |
71.5 |
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$ |
(6.4 |
) |
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(9 |
)% |
System revenue |
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10.5 |
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7.4 |
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3.1 |
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42 |
% |
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31.7 |
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23.5 |
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8.3 |
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35 |
% |
Product revenue |
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1.9 |
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1.2 |
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0.7 |
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57 |
% |
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6.0 |
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4.4 |
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1.6 |
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37 |
% |
Service revenue |
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3.0 |
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1.3 |
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1.7 |
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129 |
% |
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7.5 |
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3.2 |
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4.3 |
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133 |
% |
Total Revenue |
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$ |
31.9 |
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$ |
28.6 |
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$ |
3.2 |
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11 |
% |
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$ |
110.4 |
|
$ |
102.6 |
|
$ |
7.8 |
|
|
8 |
% |
|
*numbers may not
foot due to rounding |
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Fourth Quarter 2019 Financial
Results
Total revenue for the fourth quarter of 2019
increased $3.2 million, or 11%, to $31.9 million, compared to $28.6
million for the fourth quarter of 2018. Total products and services
revenue for the fourth quarter of 2019 increased $5.5 million, or
55%, to $15.5 million, compared to $10.0 million for the fourth
quarter of 2018. Total leases revenue declined $2.3 million, or
12%, to $16.4 million, compared to $18.7 million for the fourth
quarter of 2018.
The increase in total revenue, by geography, for
the fourth quarter of 2019 was primarily attributable to an
increase of $3.5 million, or 29%, in international revenue,
offsetting a decrease of $0.3 million, or 2%, in U.S. revenue,
compared to the prior year period. The increase in international
revenue for the fourth quarter of 2019 was driven primarily by
improved performance in Europe, compared to the prior year
period.
The increase in total revenue, by product
category, for the fourth quarter of 2019 was attributable to an
increase of $3.1 million, or 42%, in system revenue, an increase of
$1.7 million, or 129%, in service revenue and an increase of $0.7
million, or 57%, in product revenue, which was partially offset by
a decrease of $2.3 million, or 12%, in lease revenue. The increase
in system revenue for the fourth quarter of 2019 was driven by a
21% increase in revenue from systems sold by Venus Concept Ltd. and
the contribution of revenue from the sale of ARTAS® and ARTAS iX®
systems, products and services following the merger closing on
November 7, 2019. The increase in service revenue for the fourth
quarter of 2019 was driven by a 42% in service revenue by Venus
Concept Ltd. and the contribution of service revenue associated
with the ARTAS® and ARTAS iX® systems following the merger closing
on November 7, 2019. The decrease in lease revenue for the fourth
quarter of 2019 was driven primarily by a mix shift of Venus
Concept Ltd. system revenue from leases to purchases as compared to
the prior year period.
Gross profit for the fourth quarter of 2019
decreased $2.3 million, or 10%, to $19.7 million, compared to $22.0
million for the fourth quarter of 2018. The decrease in gross
profit is primarily due to revenue mix by product, service and
geography as compared to the prior year period. Gross margin was
62.0% of revenue for the fourth quarter of 2019, compared to 77.0%
of revenue for the fourth quarter of 2018. The decrease in gross
profit percentage is primarily related to an increase in cost of
goods sold mainly due to revenue mix by product, service and
geography as compared to the prior year period.
Operating expenses for the fourth quarter of
2019 increased $6.4 million, or 21%, to $37.6 million, compared to
$31.2 million for the fourth quarter of 2018. The year-over-year
increase in operating expenses was primarily driven by an increase
of $7.0 million, or 79% year-over-year, in general and
administrative expenses and an increase of $1.4 million, or 13%, in
sales and marketing expenses, partially offset by a decrease of
$2.1 million, or 23%, in provision for bad debt expense. Total
operating expenses, specifically general and administrative
expenses, for the fourth quarter of 2019 include approximately $5.0
million of costs related to the merger, which did not impact
results in the prior year period. Excluding the costs related to
the merger in the period, total general and administrative expenses
increased approximately $2.0 million, or 23%, to $10.8 million,
compared to $8.8 million for the fourth quarter of 2018.
Operating loss for the fourth quarter of 2019
was $17.9 million, compared to operating loss of $9.1 million for
the fourth quarter of 2018.
Net loss attributable to Venus Concept Inc.
stockholders for the fourth quarter of 2019 was $20.8 million, or
$1.07 per share, compared to net loss attributable to Venus Concept
Inc. stockholders of $13.2 million, or $2.77 per share, for the
fourth quarter of 2018. Weighted average shares used to compute net
loss attributable to Venus Concept Inc. stockholders per share were
19.5 million and 4.8 million for the fourth quarters of 2019 and
2018, respectively.
Adjusted EBITDA loss for the fourth quarter of
2019 was $11.5 million, compared to adjusted EBITDA income of $2.4
million for the fourth quarter of 2018.
Fiscal Year 2019 Financial Results:
Total revenue for the fiscal year
2019 increased $7.8 million, or 8%, to $110.4
million, compared to $102.6 million for the fiscal year
2018. The increase in total revenue, by geography, was driven by an
increase of $6.4 million, or 11%, in international sales and
an increase of $1.4 million, or 3%, in U.S. sales. Total product
and services revenue for the fiscal year 2019 increased $14.2
million, or 46%, to $45.4 million, compared to $31.1 million for
the fiscal year 2018. Total lease revenue for the fiscal year 2019
declined $6.4 million, or 9%, to $65.2 million, compared to $71.5
million for the fiscal year 2018. Total revenue for the fiscal year
2019 included revenue of $2.8 million from Venus Concept Inc.
(formerly Restoration Robotics, Inc.) from November 7, 2019 to
December 31, 2019.
Net loss attributable to Venus Concept Inc.
stockholders for the fiscal year 2019 was $40.6
million, or $4.77 per share, compared to net loss attributable
to Venus Concept Inc. stockholders of $15.0 million, or $3.16 per
share, for the fiscal year 2018. Weighted average shares used
to compute net loss attributable to Venus Concept Inc. stockholders
per share were 8.5 million and 4.7 million for the fiscal years
2019 and 2018, respectively.
Adjusted EBITDA loss for the fiscal year
2019 was $12.5 million, compared to adjusted EBITDA income of
$9.8 million for the fiscal year 2018.
The Company had $15.7 million and $6.8 million
of cash and cash equivalents as of December 31, 2019 and December
31, 2018, respectively, and total debt obligations of approximately
$69.0 million and $56.5 million as of December 31, 2019 and
December 31, 2018, respectively.
Preliminary First Quarter 2020 Revenue
Summary:
The Company is providing preliminary revenue
expectations for the first quarter of 2020 which reflect the
anticipated impact of the COVID-19 outbreak on its global business
for the first quarter.
- Preliminary total GAAP revenue for
the three months ending March 31, 2020 is expected to be in the
range of $14.0 million to $18.0 million, compared to total GAAP
revenue of $24.6 million for the first quarter of 2019,
representing a decrease of 27% to 43% year-over-year.
Fiscal Year 2020 Revenue Guidance Update:
Due to the rapidly evolving environment and
continued uncertainties from the impact of COVID-19, the Company is
withdrawing its previously announced fiscal year 2020 revenue
guidance which was issued on January 13, 2020. At this date the
Company cannot predict the specific extent or duration, of the
impact of the COVID-19 outbreak on its financial and operating
results for the fiscal year 2020. The Company plans to provide
additional information, to the extent practicable, during its first
quarter of 2020 earnings call in May.
Conference Call Details:Management will host a
conference call at 5:00 p.m. Eastern Time on March 30 to discuss
the results of the quarter and the year 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
13700044. 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 13700044. 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 29
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
Freeze Plus, and Venus Bliss. Venus Concept’s hair restoration
systems includes NeoGraft®, an automated hair restoration system
that facilitates the harvesting of follicles during a FUE process
and the ARTAS® and ARTAS iX® Robotic Hair Restoration Systems,
which harvest follicular units directly from the scalp and create
recipient implant sites using proprietary algorithms. Venus Concept
has been backed by leading healthcare industry growth equity
investors including EW Healthcare Partners (formerly Essex
Woodlands), HealthQuest Capital, Longitude Capital Management, and
Aperture Venture Partners.
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 (the “1933 Act”) and
Section 21E of the Securities Exchange Act of 1934, as amended
(the “1934 Act”). 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 the expected synergies and cost
savings from our merger with Venus Concept Ltd.; 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, 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 we operate 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 herein under “Item 1A - Risk
Factors” contained in our Annual Report on Form 10-K for the fiscal
year ended December 31, 2019. 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, we do not intend to publicly update or revise any
forward-looking statements to reflect new information or future
events or otherwise. You should, however, review the factors and
risks we describe in the reports we will file from time to time
with the Securities and Exchange Commission after the date of our
Annual Report on Form 10-K.
Venus Concept Inc.
Condensed Consolidated Balance
Sheets(In thousands of U.S. dollars, except share
and per share data)
|
Year Ended, December 31, |
|
|
2019 |
|
|
2018 |
|
ASSETS |
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|
|
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|
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CURRENT ASSETS: |
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|
|
|
|
|
|
Cash and cash equivalents |
$ |
15,666 |
|
|
$ |
6,739 |
|
Restricted cash |
|
83 |
|
|
|
19 |
|
Accounts receivable, net of allowance of $10,494 and $4,408 as of
December 31, 2019, and 2018 |
|
58,977 |
|
|
|
42,663 |
|
Inventories |
|
18,844 |
|
|
|
20,261 |
|
Deferred expenses |
|
59 |
|
|
|
620 |
|
Prepaid expenses |
|
2,523 |
|
|
|
1,148 |
|
Advances to suppliers |
|
450 |
|
|
|
1,732 |
|
Other current assets |
|
3,101 |
|
|
|
1,423 |
|
Total current assets |
|
99,703 |
|
|
|
74,605 |
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LONG-TERM ASSETS: |
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|
|
|
|
|
|
Long-term receivables |
|
35,656 |
|
|
|
38,201 |
|
Deferred tax assets |
|
622 |
|
|
|
297 |
|
Severance pay funds |
|
710 |
|
|
|
791 |
|
Property and equipment, net |
|
4,648 |
|
|
|
3,381 |
|
Intangible assets |
|
22,338 |
|
|
|
5,252 |
|
Goodwill |
|
27,450 |
|
|
|
2,603 |
|
Total long-term assets |
|
91,424 |
|
|
|
50,525 |
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TOTAL ASSETS |
$ |
191,127 |
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$ |
125,130 |
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LIABILITIES AND
STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES: |
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|
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Line of credit |
$ |
7,789 |
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$ |
5,655 |
|
Trade payables |
|
9,401 |
|
|
|
8,625 |
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Accrued expenses and other current liabilities |
|
21,120 |
|
|
|
10,880 |
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Taxes payable |
|
2,172 |
|
|
|
407 |
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Unearned interest income |
|
3,942 |
|
|
|
3,849 |
|
Warranty accrual |
|
1,254 |
|
|
|
495 |
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Deferred revenues |
|
2,495 |
|
|
|
163 |
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Total current liabilities |
|
48,173 |
|
|
|
30,074 |
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LONG-TERM LIABILITIES: |
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|
|
|
|
|
|
Long-term debt |
|
61,229 |
|
|
|
50,892 |
|
Accrued severance pay |
|
827 |
|
|
|
835 |
|
Deferred tax liabilities |
|
1,017 |
|
|
|
1,893 |
|
Unearned interest income |
|
1,681 |
|
|
|
1,752 |
|
Warranty accrual |
|
723 |
|
|
|
841 |
|
Other long-term liabilities |
|
799 |
|
|
|
2,388 |
|
Total long-term liabilities |
|
66,276 |
|
|
|
58,601 |
|
TOTAL LIABILITIES |
|
114,449 |
|
|
|
88,675 |
|
Commitments and Contingencies (Note 9) |
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STOCKHOLDERS’ EQUITY (Note 1): |
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Series A preferred shares, $0.0003 par value: 1,264,565 shares
authorized, none and 1,264,565 issued and outstanding as of
December 31, 2019 and 2018, respectively |
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— |
|
Series B preferred shares, $0.0003 par value: 2,632,109 shares
authorized, none and 2,632,109 issued and outstanding as of
December 31, 2019 and 2018, respectively |
|
— |
|
|
|
— |
|
Series C preferred shares, $0.0003 par value: 4,615,567 shares
authorized, none and 4,615,567 issued and outstanding as of
December 31, 2019 and 2018, respectively |
|
— |
|
|
|
— |
|
Series C-1 preferred shares, $0.0003 par value: 56,983 shares
authorized, none and 56,983 issued and outstanding as of December
31, 2019 and 2018, respectively |
|
— |
|
|
|
— |
|
Series D preferred shares, $0.0003 par value: 647,189 shares
authorized, none and 647,189 issued and outstanding as of December
31, 2019 and 2018, respectively |
|
— |
|
|
|
— |
|
Common Stock, $0.0001 par value: 300,000,000 shares authorized
as of December 31, 2019; 28,686,116 and 4,772,956 issued and
outstanding as of December 31, 2019 and 2018, respectively |
|
24 |
|
|
|
5 |
|
Additional paid-in capital (Note 1) |
|
149,840 |
|
|
|
67,495 |
|
Accumulated deficit |
|
(75,686 |
) |
|
|
(35,067 |
) |
TOTAL STOCKHOLDERS’ EQUITY |
|
74,178 |
|
|
|
32,433 |
|
Non-controlling interests |
|
2,500 |
|
|
|
4,022 |
|
|
|
76,678 |
|
|
|
36,455 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
191,127 |
|
|
$ |
125,130 |
|
|
Venus Concept
Inc.Condensed Consolidated Statements of
Operations(In thousands of U.S. dollars, except
per share data)
|
Three Months Ended, December 31, |
|
|
Year Ended, December 31, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leases |
$ |
16,358 |
|
|
$ |
18,655 |
|
|
$ |
65,170 |
|
|
$ |
71,540 |
|
Products and services |
|
15,496 |
|
|
|
9,992 |
|
|
|
45,236 |
|
|
|
31,074 |
|
|
|
31,854 |
|
|
|
28,647 |
|
|
|
110,406 |
|
|
|
102,614 |
|
Cost of goods sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leases |
|
3,147 |
|
|
|
2,971 |
|
|
|
13,411 |
|
|
|
13,091 |
|
Products and services |
|
8,961 |
|
|
|
3,628 |
|
|
|
20,342 |
|
|
|
10,168 |
|
|
|
12,108 |
|
|
|
6,599 |
|
|
|
33,753 |
|
|
|
23,259 |
|
Gross profit |
|
19,746 |
|
|
|
22,048 |
|
|
|
76,653 |
|
|
|
79,355 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing |
|
12,426 |
|
|
|
11,004 |
|
|
|
41,409 |
|
|
|
37,315 |
|
General and administrative |
|
15,766 |
|
|
|
8,801 |
|
|
|
47,497 |
|
|
|
27,432 |
|
Research and development |
|
2,367 |
|
|
|
2,191 |
|
|
|
8,034 |
|
|
|
7,047 |
|
Bad debt expense |
|
7,085 |
|
|
|
9,201 |
|
|
|
9,991 |
|
|
|
10,928 |
|
Total operating expenses |
|
37,644 |
|
|
|
31,197 |
|
|
|
106,931 |
|
|
|
82,722 |
|
Loss from operations |
|
(17,898 |
) |
|
|
(9,149 |
) |
|
|
(30,278 |
) |
|
|
(3,367 |
) |
Foreign exchange loss |
|
2,202 |
|
|
|
1,591 |
|
|
|
2,611 |
|
|
|
3,266 |
|
Finance expenses |
|
1,645 |
|
|
|
1,121 |
|
|
|
7,549 |
|
|
|
5,361 |
|
Loss before income taxes |
|
(21,745 |
) |
|
|
(11,861 |
) |
|
|
(40,438 |
) |
|
|
(11,994 |
) |
Income tax expense |
|
990 |
|
|
|
1,188 |
|
|
|
1,857 |
|
|
|
2,215 |
|
Net loss |
|
(22,735 |
) |
|
|
(13,049 |
) |
|
|
(42,295 |
) |
|
|
(14,209 |
) |
Loss attributable to stockholders
of the Company |
|
(20,796 |
) |
|
|
(13,223 |
) |
|
|
(40,619 |
) |
|
|
(14,959 |
) |
(Loss) income attributable to
non-controlling interest |
|
(1,939 |
) |
|
|
174 |
|
|
|
(1,676 |
) |
|
|
750 |
|
|
$ |
(22,735 |
) |
|
$ |
(13,049 |
) |
|
$ |
(42,295 |
) |
|
$ |
(14,209 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(1.07 |
) |
|
$ |
(2.77 |
) |
|
$ |
(4.77 |
) |
|
$ |
(3.16 |
) |
Diluted |
$ |
(1.07 |
) |
|
$ |
(2.77 |
) |
|
$ |
(4.77 |
) |
|
$ |
(3.16 |
) |
Weighted-average number of shares
used in per share calculation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
19,510 |
|
|
|
4,773 |
|
|
|
8,517 |
|
|
|
4,733 |
|
Diluted |
|
19,510 |
|
|
|
4,773 |
|
|
|
8,517 |
|
|
|
4,733 |
|
Use of Non-GAAP Financial Measures
Adjusted EBITDA is a non-GAAP measure defined as
net loss income before foreign exchange loss, financial expenses,
income tax expense, depreciation and amortization, stock-based
compensation and non-recurring items for a given period. Adjusted
EBITDA is not a measure of the Company’s financial performance
under U.S. GAAP and should not be considered an alternative to net
income or any other performance measures derived in accordance with
U.S. GAAP. Accordingly, you should consider Adjusted EBITDA along
with other financial performance measures, including net income,
and the Company’s financial results presented in accordance with
U.S. GAAP. Other companies, including companies in our industry,
may calculate Adjusted EBITDA differently or not at all, which
reduces its usefulness as a comparative measure. We understand that
although Adjusted EBITDA is frequently used by securities analysts,
lenders and others in their evaluation of companies, Adjusted
EBITDA has limitations as an analytical tool, and you should not
consider it in isolation, or as a substitute for analysis of our
results as reported under U.S. GAAP. Some of these limitations are:
Adjusted EBITDA does not reflect our cash expenditures or future
requirements for capital expenditures or contractual commitments;
Adjusted EBITDA does not reflect changes in, or cash requirements
for, our working capital needs; and although depreciation and
amortization are a non-cash charges, the assets being depreciated
and amortized will often have to be replaced in the future, and
Adjusted EBITDA does not reflect any cash requirements for such
replacements.
We believe that Adjusted EBITDA is a useful
measure for analyzing the performance of our core business because
it facilitates operating performance comparisons from period to
period and company to company by backing out potential differences
caused by changes in foreign exchange rates that impact financial
assets and liabilities denominated in currencies other than the
U.S. dollar, tax positions (such as the impact on periods or
companies of changes in effective tax rates), the age and book
depreciation of fixed assets (affecting relative depreciation
expense), amortization of intangible assets (affecting relative
amortization expense), stock-based compensation expense (because it
is a non-cash expense) and non-recurring items as explained
above.
Venus Concept Inc. Reconciliation of Net
Loss to Non-GAAP Adjusted EBITDA Income/(Loss) (In
thousands of U.S. dollars) |
|
Three Months Ended, December 31, |
|
|
Year Ended, December 31, |
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
Net Loss |
$ |
(22,735 |
) |
|
$ |
(13,049 |
) |
|
$ |
(42,295 |
) |
|
$ |
(14,209 |
) |
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss |
|
2,202 |
|
|
|
1,591 |
|
|
|
2,611 |
|
|
|
3,266 |
|
Finance expenses |
|
1,645 |
|
|
|
1,121 |
|
|
|
7,549 |
|
|
|
5,361 |
|
Income tax expense |
|
990 |
|
|
|
1,188 |
|
|
|
1,857 |
|
|
|
2,215 |
|
Depreciation and amortization |
|
976 |
|
|
|
606 |
|
|
|
2,040 |
|
|
|
1,340 |
|
Stock-based compensation |
|
426 |
|
|
|
366 |
|
|
|
2,158 |
|
|
|
1,257 |
|
Company bankruptcy included in provision for bad debts |
|
— |
|
|
|
8,256 |
|
|
|
— |
|
|
|
8,256 |
|
Other adjustments (1) |
|
4,953 |
|
|
|
2,283 |
|
|
|
13,553 |
|
|
|
2,283 |
|
Adjusted EBITDA
Income/(Loss) |
$ |
(11,543 |
) |
|
$ |
2,362 |
|
|
$ |
(12,527 |
) |
|
$ |
9,769 |
|
|
(1) For the three and twelve months ended December 31,
2019, the other adjustments to net income/(loss) are mainly
represented by professional fees related to the merger and costs
from a patent infringement case. For the year ended December 31,
2018, the other adjustments are mainly represented by professional
fees incurred in 2018 related to a transaction that was not
completed. |
Investor Relations Contact:
Westwicke Partners on behalf of Venus Concept:
Mike Piccinino, CFA
VenusConceptIR@westwicke.com
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