BeautyHealth Reports First Quarter 2024 Financial Results
LONG BEACH, Calif. , May 09 /Businesswire/ - The Beauty Health Company (NASDAQ: SKIN) (“BeautyHealth”), home to flagship brand Hydrafacial, today announced financial results for the first quarter ended March 31, 2024. First quarter net sales of $81.4 million decreased (5.7)% relative to the same period in 2023. First quarter results reflect lower equipment sales substantially offset by steady growth in consumables net sales.
"Our first quarter results demonstrate the progress we are making on our near-term strategic priorities, including sales excellence, operational excellence, and financial discipline,” said BeautyHealth Chief Executive Officer Marla Beck. "I am confident that our continued execution of our business transformation strategy will lay the foundation for future growth. By focusing on our providers and the clinically proven efficacy of the Hydrafacial treatment system, we will ensure our flagship brand remains a leading facial treatment in aesthetics while we continue to unlock its potential with providers and consumers across the globe."
Key Operational and Business Metrics
|
Three Months Ended March 31, |
||||||
Unaudited ($ in millions) (2) |
|
2024 |
|
|
2023(1) |
||
Delivery Systems net sales |
$ |
35.8 |
|
|
$ |
45.4 |
|
Consumables net sales |
|
45.6 |
|
|
|
40.9 |
|
Total net sales |
$ |
81.4 |
|
|
$ |
86.3 |
|
Gross profit |
$ |
48.4 |
|
|
$ |
54.1 |
|
Gross margin |
|
59.4 |
% |
|
|
62.7 |
% |
Adjusted gross profit(3) |
$ |
51.6 |
|
|
$ |
60.4 |
|
Adjusted gross margin(3) |
|
63.4 |
% |
|
|
70.0 |
% |
Net loss |
$ |
(0.7 |
) |
|
$ |
(20.3 |
) |
Adjusted EBITDA(3) |
$ |
0.4 |
|
|
$ |
(0.5 |
) |
Adjusted EBITDA margin(3) |
|
0.4 |
% |
|
|
(0.6 |
)% |
|
Three Months Ended March 31, |
||
Unaudited |
2024 |
|
2023 |
Total delivery systems sold |
1,417 |
|
1,774 |
Active install base |
32,530 |
|
27,406 |
| __________________________ | ||
(1) |
Reflects the impact of immaterial revisions to the financial statements. |
|
(2) |
Amounts may not sum due to rounding. |
|
(3) |
See "Non-GAAP Financial Measures" below. |
|
Financial Highlights
- Net sales were $81.4 million for the first quarter of 2024, a decrease of (5.7)%, compared to the prior year period, due to lower delivery systems net sales.
- Gross margin was 59.4% in Q1 2024 compared to 62.7% in Q1 2023. Adjusted gross margin was 63.4% in Q1 2024 compared to 70.0% in Q1 2023. Gross margin and adjusted gross margin for 2024 were adversely impacted by higher indirect product costs and inventory related charges.
- Net loss was $(0.7) million in Q1 2024 compared to net loss of $(20.3) million in Q1 2023. The change compared to the prior year was primarily due to the gain on repurchase of $75.0 million of principal amount of the Company's convertible notes in Q1 2024.
- Adjusted EBITDA was $0.4 in Q1 2024 compared to adjusted EBITDA of $(0.5) in Q1 2023, primarily due to lower operating expenses.
- The Company placed 1,417 delivery systems during the quarter compared to 1,774 in the prior year period, as the Company works to strengthen customer confidence in Syndeo.
Balance Sheet and Cash Flow Highlights
- Cash, cash equivalents, and restricted cash were approximately $444.6 million as of March 31, 2024 compared to approximately $523.0 million as of December 31, 2023. The change was primarily due to the repurchase of convertible notes during Q1 2024.
- The Company had approximately 7 million private placement warrants and approximately 123.5 million shares of Class A common stock outstanding as of March 31, 2024.
- In January 2024, the Company repurchased $75.0 million principal amount of our Notes at a weighted-average price equal to 77% for $57.8 million. In April 2024, the Company repurchased $98.3 million principal amount of our Notes at a weighted average price equal to 84%. In the month of May, through May 8, 2024, the Company repurchased $19.0 million principal amount of our Notes at a weighted-average price equal to 84%.
Financial Guidance as of May 2024
Second Quarter 2024 |
|
Net sales |
$96 – $102 million |
Adjusted EBITDA(1) |
$4 – $7 million |
|
|
Fiscal Year 2024 |
|
Net sales |
Flat to low-single digit % growth |
Adjusted EBITDA(1) |
> $40 million |
| __________________________ | ||
(1) |
See "Non-GAAP Financial Measures" below. |
|
Financial guidance reflects the following assumptions:
- Second quarter financial guidance reflects a challenging year-over-year comparison due to the international launch of Syndeo in the comparable 2023 period.
- Fiscal year financial guidance reflects a return to net sales growth in the second half of 2024, primarily weighted toward the fourth quarter.
- Assumes no material deterioration in general market conditions or other unforeseen circumstances beyond the Company's control, such as foreign currency exchange rates.
- Excludes any unannounced acquisitions, dispositions or financings.
Regional Operational and Business Metrics
|
Three Months Ended March 31, |
||||
Unaudited ($ in millions) (1) |
|
2024 |
|
|
2023 |
Delivery Systems net sales |
|
|
|
||
Americas |
$ |
18.3 |
|
$ |
24.4 |
Asia-Pacific (“APAC”) |
|
7.5 |
|
|
9.8 |
Europe, the Middle East and Africa (“EMEA”) |
|
10.0 |
|
|
11.2 |
Total Delivery Systems net sales |
$ |
35.8 |
|
$ |
45.4 |
|
|
|
|
||
Consumables net sales |
|
|
|
||
Americas |
$ |
32.0 |
|
$ |
28.6 |
APAC |
|
4.5 |
|
|
3.8 |
EMEA |
|
9.1 |
|
|
8.5 |
Total Consumables net sales |
$ |
45.6 |
|
$ |
40.9 |
|
|
|
|
||
Total net sales |
|
|
|
||
Americas |
$ |
50.3 |
|
$ |
53.0 |
APAC |
|
12.0 |
|
|
13.6 |
EMEA |
|
19.1 |
|
|
19.7 |
Total net sales |
$ |
81.4 |
|
$ |
86.3 |
|
|
|
|
||
Total delivery systems sold |
|
|
|
||
Americas |
|
708 |
|
|
902 |
APAC |
|
327 |
|
|
401 |
EMEA |
|
382 |
|
|
471 |
Total delivery systems sold |
|
1,417 |
|
|
1,774 |
| __________________________ | ||
(1) |
Amounts may not sum due to rounding. |
|
Conference Call
BeautyHealth will host a conference call on Thursday, May 9, 2024, at 4:30 p.m. ET to review its first quarter 2024 financial results. The call may be accessed via live webcast through the Events & Presentations page on our Investor Relations website at https://investors.beautyhealth.com. A replay of the conference call will be available approximately three hours after the conclusion of the call and can be accessed online at https://investors.beautyhealth.com.
Non-GAAP Financial Measures
In addition to results determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"), management utilizes certain non-GAAP financial measures such as adjusted gross profit, adjusted gross margin, adjusted EBITDA, and adjusted EBITDA margin for purposes of evaluating ongoing operations and for internal planning and forecasting purposes.
Management believes that these non-GAAP financial measures, when reviewed collectively with the Company’s GAAP financial information, provide useful supplemental information to investors in assessing the Company's operating performance. These non-GAAP financial measures should not be considered as an alternative to GAAP financial information or as an indication of operating performance or any other measure of performance derived in accordance with GAAP, and may not provide information that is directly comparable to that provided by other companies in its industry, as these other companies may calculate non-GAAP financial measures differently, particularly related to unusual items.
Adjusted gross profit is gross profit excluding the effects of depreciation expense, amortization expense, stock-based compensation expense and other items such as the write-off of discontinued, excess and obsolete product. Adjusted gross margin represents adjusted gross profit as a percentage of net sales.
Adjusted EBITDA is calculated as net loss excluding the effects of expense (benefit) for income taxes; depreciation expense; amortization expense; stock-based compensation expense; interest expense; interest income; other expense (income), net; change in fair value of warrant liability; foreign currency (gain) loss, net; loss on disposal of assets; transaction related costs; write-off of discontinued, excess and obsolete product; litigation related costs; and severance, restructuring and other. Adjusted EBITDA margin represents adjusted EBITDA as a percentage of net sales.
The Company does not provide a reconciliation of its fiscal 2024 adjusted EBITDA margin guidance to net loss, the most directly comparable forward looking GAAP financial measures, due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, which cannot be done without unreasonable efforts, including adjustments that could be made for changes in fair value of warrant liabilities, integration and acquisition-related expenses, amortization expenses, non-cash stock-based compensation, gains/losses on foreign currency, and other charges reflected in our reconciliation of historic numbers, the amount of which, based on historical experience, could be significant. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. The Company's fiscal 2024 adjusted EBITDA margin guidance is merely an outlook and is not a guarantee of future performance. Stockholders should not rely or place an undue reliance on such forward-looking statements. See “Forward-Looking Statements” for additional information.
The Beauty Health Company Condensed Consolidated Statements of Comprehensive Income (Loss) (1) ($ in millions, except share and per share amounts) (Unaudited) |
|||||||
|
Three Months Ended March 31, |
||||||
|
|
2024 |
|
|
|
2023(2) |
|
Net sales |
$ |
81.4 |
|
|
$ |
86.3 |
|
Cost of sales |
|
33.0 |
|
|
|
32.2 |
|
Gross profit |
|
48.4 |
|
|
|
54.1 |
|
Operating expenses: |
|
|
|
||||
Selling and marketing |
|
33.7 |
|
|
|
38.7 |
|
Research and development |
|
2.8 |
|
|
|
2.3 |
|
General and administrative |
|
28.9 |
|
|
|
30.4 |
|
Total operating expenses |
|
65.4 |
|
|
|
71.4 |
|
Loss from operations |
|
(17.0 |
) |
|
|
(17.3 |
) |
Interest expense |
|
3.0 |
|
|
|
3.4 |
|
Interest income |
|
(5.4 |
) |
|
|
(4.3 |
) |
Other income, net |
|
(16.1 |
) |
|
|
(0.4 |
) |
Change in fair value of warrant liabilities |
|
1.5 |
|
|
|
9.1 |
|
Foreign currency transaction loss (gain), net |
|
1.3 |
|
|
|
(1.1 |
) |
Loss before provision for income taxes |
|
(1.3 |
) |
|
|
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