TORONTO, Nov. 13, 2024 (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 nine months ended September 30, 2024.
Summary of Financial Results & Recent Progress:
- Company continues to execute against Transformation Plan
- Cash used in operations for the first nine months of 2024 of $7.3 million, down 40% year-over-year
- Total revenue for the third quarter of $15.0 million, down 15% year-over-year, and below third quarter estimate of at "least $17.0 million”.
- Third quarter operating expenses declined 10% year-over-year; limiting GAAP operating loss to 6% year-over-year, despite 15% revenue decline
- Third quarter Adjusted EBITDA loss of $5.9 million, compared to $4.6 million last year
- On July 29, 2024, the Company announced that it received a medical device license issued by Health Canada to market the Venus Bliss MAX system in Canada. The Venus Bliss MAX is the Company's flagship platform that offers a comprehensive, world-class solution for all customers' body treatment needs and is currently available in select markets globally.
- On September 18, 2024, the Company announced that it received clearance from the Therapeutic Goods Administration (TGA) in Australia to market the Venus Bliss MAX system.
- On September 27, 2024, the Company announced that, on September 26, 2024, the Company exchanged $15.0 million of its senior debt held by affiliates of Madryn Asset Management, LP ("Madryn”) for 203,583 shares of its Series Y preferred stock. Following this transaction, the Company had total debt obligations of approximately $34.6 million, down 25% from $46.0 million outstanding as of June 30, 2024 and down 54% from $74.9 million outstanding as of December 31, 2023.
"Third quarter revenue results were softer than the expectations we outlined during our second quarter report,” said Rajiv De Silva, Chief Executive Officer of Venus Concept. "Aesthetic capital equipment sales continue to be challenged by macroeconomic headwinds particularly in the US, as expected. However, importantly, we continue to see evidence that our efforts to reposition the business over the last eighteen months have been proving successful. We are enhancing our cash flow profile - as evidenced by the 40% reduction year-over-year in cash used in operations over the first nine months of 2024 -- and remain focused on enhancing the health of our balance sheet and the Company's foundation to support long-term, sustainable, profitability and growth in the future.”
Third Quarter 2024 Financial Results:
| Three Months Ended September 30, | ||||||||||
| 2024 | 2023 | |||||||||
| (dollars in thousands) | ||||||||||
| Revenues by region: | ||||||||||
| United States | $ | 8,548 | $ | 11,167 | ||||||
| International | 6,459 | 6,449 | ||||||||
| Total revenue | $ | 15,007 | $ | 17,616 | ||||||
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2024 | 2023 | Change | ||||||||||||||||||||||||
| (in thousands, except percentages) | $ | % of Total | $ | % of Total | $ | % | ||||||||||||||||||||
| Revenues by product: | ||||||||||||||||||||||||||
| Venus Prime / Subscription-Systems | $ | 2,684 | 17.9 | $ | 4,368 | 24.8 | $ | (1,684 | ) | (38.6 | ) | |||||||||||||||
| Products-Systems | 8,898 | 59.3 | 9,834 | 55.8 | (936 | ) | (9.5 | ) | ||||||||||||||||||
| Products-Other | 2,741 | 18.3 | 2,487 | 14.1 | 254 | 10.2 | ||||||||||||||||||||
| Services | 684 | 4.5 | 927 | 5.3 | (243 | ) | (26.2 | ) | ||||||||||||||||||
| Total | $ | 15,007 | 100.0 | $ | 17,616 | 100.0 | $ | (2,609 | ) | (14.8 | ) | |||||||||||||||
Gross profit for the third quarter of 2024 decreased $2.3 million, or 19%, to $9.9 million compared to the third quarter of 2023. The decrease in gross profit is primarily due to the effects of tighter third-party lending practices which negatively impacted capital equipment sales in the U.S., and a decrease in revenue in our international markets driven by the accelerated exit from unprofitable direct markets, partially offset by an improvement in third party international distributor revenues. Gross margin was 66.1% of revenue, compared to 69.2% of revenue for the third quarter of 2023.
Operating expenses for the third quarter of 2024 decreased $1.9 million, or 10%, to $17.1 million, compared to the third quarter of 2023. The change in total operating expenses was driven by a decrease of $1.4 million, or 14%, in general and administrative expenses, a decrease of $0.3 million, or 4%, in selling and marketing expenses, and a decrease of $0.2 million, or 12%, in research and development expenses. Third quarter of 2024 general and administrative expenses included approximately $0.1 million of costs related to restructuring activities designed to improve the Company's operations and cost structure.
Operating loss for the third quarter of 2024 was $7.2 million, compared to operating loss of $6.8 million for the third quarter of 2023.
Net loss attributable to stockholders for the third quarter of 2024 was $9.3 million, or $1.28 per share, compared to net loss of $9.1 million, or $1.64 per share for the third quarter of 2023. Third quarter net loss attributable to stockholders included a pre-tax loss on debt extinguishment of $0.5 million related to the debt-to-equity exchange transaction. Adjusted EBITDA loss for the third quarter of 2024 was $5.9 million, compared to adjusted EBITDA loss of $4.6 million for the third quarter of 2023.
As of September 30, 2024, the Company had cash and cash equivalents of $4.5 million and total debt obligations of approximately $34.6 million, compared to $5.4 million and $74.9 million, respectively, as of December 31, 2023.
Fiscal Year 2024 Financial Outlook:
The Company expects total revenue for the three months ending December 31, 2024 of at least $17.0 million, representing a 6% decline year-over-year and a 13% increase quarter-over-quarter.
Conference Call Details:
Management will host a conference call at 8:00 a.m. Eastern Time on November 13, 2024 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 13749236. 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 13749236. 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 10 direct markets. Venus Concept's product portfolio consists of aesthetic device platforms, including Venus Versa, Venus Versa Pro, Venus Legacy, Venus Velocity, Venus Viva, Venus Glow, Venus Bliss, Venus Bliss MAX, Venus Epileve, Venus Viva MD and AI.ME. Venus Concept's hair restoration systems include NeoGraft® and the ARTAS iX® Robotic Hair Restoration system. 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 "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, but are not limited to, statements about our financial performance and metrics; the growth in demand for our systems and other products; the efficacy of the restructuring plan; the identification and efficacy of strategic alternatives to maximize shareholder value; the reduction in our cash burn; and the continued implementation of turnaround plans, including debt restructurings and financings. 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, 2023. 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 (In thousands of U.S. dollars, except share and per share data) | ||||||||
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 4,489 | $ | 5,396 | ||||
| Accounts receivable, net of allowance of $4,133 and $7,415 as of September 30, 2024, and December 31, 2023, respectively | 21,102 | 29,151 | ||||||
| Inventories | 18,904 | 23,072 | ||||||
| Prepaid expenses | 1,002 | 1,298 | ||||||
| Advances to suppliers | 4,508 | 5,604 | ||||||
| Other current assets | 1,213 | 1,925 | ||||||
| Total current assets | 51,218 | 66,446 | ||||||
| LONG-TERM ASSETS: | ||||||||
| Long-term receivables, net | 8,865 | 11,318 | ||||||
| Deferred tax assets | 1,292 | 1,032 | ||||||
| Severance pay funds | 426 | 573 | ||||||
| Property and equipment, net | 1,038 | 1,322 | ||||||
| Operating right-of-use assets, net | 3,591 | 4,517 | ||||||
| Intangible assets | 5,846 | 8,446 | ||||||
| Total long-term assets | 21,058 | 27,208 | ||||||
| TOTAL ASSETS | $ | 72,276 | $ | 93,654 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Trade payables | $ | 7,120 | 9,038 | |||||
| Accrued expenses and other current liabilities | 10,674 | 12,437 | ||||||
| Note payable | 4,389 | - | ||||||
| Current portion of long-term debt | 200 | 4,155 | ||||||
| Income taxes payable | 663 | 366 | ||||||
| Unearned interest income | 1,027 | 1,468 | ||||||
| Warranty accrual | 1,072 | 1,029 | ||||||
| Deferred revenues | 915 | 1,076 | ||||||
| Operating lease liabilities | 1,407 | 1,590 | ||||||
| Total current liabilities | 27,467 | 31,159 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Long-term debt | 30,025 | 70,790 | ||||||
| Accrued severance pay | 464 | 634 | ||||||
| Deferred tax liabilities | - | 15 | ||||||
| Unearned interest revenue | 394 | 671 | ||||||
| Warranty accrual | 269 | 334 | ||||||
| Operating lease liabilities | 2,333 | 3,162 | ||||||
| Other long-term liabilities | 696 | 338 | ||||||
| Total long-term liabilities | 34,181 | 75,944 | ||||||
| TOTAL LIABILITIES | 61,648 | 107,103 | ||||||
| Commitments and Contingencies (Note 9) | ||||||||
| STOCKHOLDERS' EQUITY (DEFICIT) (Note 15): | ||||||||
| Common Stock, $0.0001 par value: 300,000,000 shares authorized as of September 30, 2024 and December 31, 2023; 7,255,277 and 5,529,149 issued and outstanding as of September 30, 2024, and December 31, 2023, respectively | 30 | 30 | ||||||
| Additional paid-in capital | 311,012 | 247,854 | ||||||
| Accumulated deficit | (300,934 | ) | (261,903 | ) | ||||
| TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | 10,108 | (14,019 | ) | |||||
| Non-controlling interests | 520 | 570 | ||||||
| 10,628 | (13,449 | ) | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ | 72,276 | $ | 93,654 | ||||
| Venus Concept Inc. Condensed Consolidated Statements of Operations (In thousands of U.S. dollars, except per share data) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue | ||||||||||||||||
| Leases | $ | 2,684 | $ | 4,368 | $ | 10,732 |
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