Evolus Reports Second Quarter 2023 Results and Provides Business Update
- None.
- None.
-
Q2 2023 Net Revenue of
, Up$49.3 Million 33% from Q2 2022 -
Raises Full-Year 2023 Net Revenue Guidance to
to$185 $195 Million - On Track to Achieving Sustained Profitability with Existing Cash
“The results of our second quarter clearly demonstrate an acceleration of trends and consistent execution of our long-term growth strategy,” said David Moatazedi, President and Chief Executive Officer. “With record quarterly revenue as well as all-time highs across several leading indicators, we are generating very strong momentum and significantly outpacing the underlying growth of our markets. Our continued success gave us the confidence to increase our 2023 sales guidance to between
“From a financial standpoint, once again this quarter we continued to exercise disciplined operating expense management and we remain committed to reaching sustained profitability1 in 2025. While we are very excited about the continued momentum in our toxin line, we expect the addition of our portfolio of dermal fillers will expand our total addressable market by
Second Quarter 2023 Highlights and Recent Developments
-
The company’s key performance indicators demonstrated continued strong momentum reaching record levels during the second quarter.
-
Evolus added nearly 800 new customer accounts in the quarter, the highest amount since the launch year, bringing the total number of customers purchasing since launch to approximately 11,000. The reorder rate among customers remains above
70% .3 - Enrollment in the Evolus Rewards™ consumer loyalty program grew by 64,000 members to 638,0004.
-
Total treatments for the quarter hit an all-time high of more than 147,000 as existing users continued to return for repeat treatments of Jeuveau® at a rate of nearly
60% , demonstrating sustained brand loyalty. During the quarter, the company completed the one-millionth treatment in its easy-to-use, text-based Evolus Rewards™ program.
-
Evolus added nearly 800 new customer accounts in the quarter, the highest amount since the launch year, bringing the total number of customers purchasing since launch to approximately 11,000. The reorder rate among customers remains above
- Evolus completed its Phase 2 clinical study evaluating an “extra-strength” dose for an extended duration of Jeuveau®. Presentation of the final dataset is planned for a medical meeting in the fourth quarter of 2023.
-
The company continued to expand its presence in
Europe with the launch of Nuceiva® inItaly , one of the largest aesthetic toxin markets in the region.
Second Quarter 2023 Financial Results
-
Total net revenues for the second quarter of 2023 increased
33% to from$49.3 million in the second quarter of 2022 driven primarily by higher volumes of Jeuveau®.$37.2 million -
Gross profit margin and adjusted gross profit margin were
68.7% and70.2% , respectively. Adjusted gross profit margin, which excludes amortization of intangible assets, was in line with company guidance. -
Operating expenses for the second quarter of 2023 were
, which included a$64.5 million milestone payment to Symatese for the$4.4 million U.S. filler license, compared to in the first quarter of 2023.$53.8 million -
Non-GAAP operating expenses for the second quarter of 2023 were
, which included a$42.7 million milestone payment to Symatese for the$4.4 million U.S. filler license, compared to in the first quarter of 2023. Non-GAAP operating expenses exclude product cost of sales, stock-based compensation expense, revaluation of the contingent royalty obligation, and depreciation and amortization.$35.5 million -
Loss from operations for the second quarter of 2023 was
, which included the$15.1 million license milestone expense, compared to$4.4 million in the first quarter of 2023. Non-GAAP loss from operations in the second quarter of 2023 was$12.0 million , which included the$8.0 million license milestone expense. Excluding the milestone expense, non-GAAP loss from operations in the second quarter of 2023 declined compared to the$4.4 million non-GAAP loss from operations recorded in the first quarter of 2023. Non-GAAP loss from operations excludes stock-based compensation expense, revaluation of the contingent royalty obligation, and depreciation and amortization.$5.9 million -
Cash and cash equivalents at June 30, 2023 were
compared to$41.7 million at March 31, 2023. The cash balance at June 30, 2023 included additional borrowings of$31.5 million under the company’s credit facility with Pharmakon. For the second quarter of 2023, net cash used for operating activities was$25 million , which included the$13.3 million license milestone expense. Net cash used for operating activities in the second quarter of 2023 was lower than the first quarter of 2023, representing continued progress toward cash flow breakeven. Evolus continues to expect its existing cash will fully fund it to sustained profitability1 in 2025.$4.4 million
Outlook
-
Evolus now expects total net revenues for the full year 2023 to be between
and$185 million , representing year-over-year growth of over$195 million 30% at the upper end of the range and more than three times the estimated growth rate of the aesthetic neurotoxin market. The company also assumes a return to industry seasonal revenue patterns. -
The company continues to expect its adjusted gross profit margin for the full year 2023 to be between
68% and71% . -
Evolus continues to expect its full-year non-GAAP operating expenses to be between
and$153 million .$158 million - The company continues to expect to achieve sustained positive non-GAAP operating income on a consolidated basis in 2025 and remains fully funded to profitability1 without the need to raise additional capital.
-
The company projects its total net revenue can reach
by 2028, a compound annual growth rate of$700 million 29% , based on the combination of its existing aesthetic neurotoxin business and anticipated launch of the Evolysse™ HA dermal filler product line beginning in 2025.
Conference Call Information
Management will host a conference call and live webcast to discuss Evolus’ financial results today at 4:30 p.m. ET. To participate in the conference call, dial (877) 407-6184 (
Following the completion of the call, an audio replay can be accessed for 48 hours by dialing (877) 660-6853 (
About Evolus, Inc.
Evolus (Nasdaq: EOLS) is a performance beauty company evolving the aesthetic neurotoxin market for the next generation of beauty consumers through its unique, customer-centric business model and innovative digital platform. Our mission is to become a global, multi-product aesthetics company based on our flagship product, Jeuveau® (prabotulinumtoxinA-xvfs), the first and only neurotoxin dedicated exclusively to aesthetics and manufactured in a state-of-the-art facility using Hi-Pure™ technology. Evolus is expanding its product portfolio having entered into a definitive agreement to be the exclusive
1 Within this press release, “profitability” is defined as achieving positive non-GAAP operating income.
2 Source: Medical Insights Dermal Filler Market Study, March 2023 (www.miinews.com), BCG Aesthetic Research presented at IMCAS 2023 and company estimates.
3 Represents cumulative statistics from the launch of Jeuveau® in May 2019 through June 30, 2023.
4 Represents cumulative statistics from the launch of Evolus Rewards in May 2020 through June 30, 2023.
Forward-Looking Statements
This press release contains forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, including statements about future events, our business, financial condition, results of operations and prospects, our industry and the regulatory environment in which we operate. Any statements contained herein that are not statements of historical or current facts are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or the negative of those terms, or other comparable terms intended to identify statements about the future. The company’s forward-looking statements include, but are not limited to, statements related to market conditions and consumer demand; financial and other benefits expected from the exclusive
The forward-looking statements included herein are based on our current expectations, assumptions, estimates and projections, which we believe to be reasonable, and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements. These risks and uncertainties, all of which are difficult or impossible to predict accurately and many of which are beyond our control, include, but are not limited to uncertainties associated with our ability to comply with the terms and conditions in the Medytox Settlement Agreements, our ability to fund our future operations or obtain financing to fund our operations, unfavorable global economic conditions and the impact on consumer discretionary spending, uncertainties related to customer and consumer adoption of Jeuveau® and EvolysseTM, the efficiency and operability of our digital platform, competition and market dynamics, our ability to successfully launch and commercialize our products in new markets, including the EvolysseTM dermal filler product line in the
Use of Non-GAAP Financial Measures
Evolus’ financial results are prepared in accordance with accounting principles generally accepted in
For a reconciliation of our historical adjusted gross profit margin, non-GAAP operating expenses and non-GAAP loss from operations presented herein to gross profit margin, GAAP operating expenses and GAAP loss from operations, the most directly comparable GAAP financial measures, please see “Reconciliation of Gross Profit Margin to Adjusted Gross Profit Margin,” “Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses” and “Reconciliation of GAAP (Loss) from Operations to Non-GAAP (Loss) from Operations” in the financial schedules below. In addition, this press release includes information regarding the company’s expected adjusted gross profit margin and non-GAAP operating expenses for full year 2023. Evolus has not provided a reconciliation of such forward-looking non-GAAP adjusted gross profit margin, non-GAAP operating expenses or non-GAAP operating income because a reconciliation of such measures to GAAP gross profit margin, GAAP operating expenses and GAAP operating income, respectively, the most directly comparable GAAP financial measures, is not available without unreasonable efforts. This is due to the inherent difficulty of forecasting the timing or amount of various reconciling items that would impact the forward-looking outlook for these non-GAAP financial measures that have not yet occurred and/or cannot be reasonably predicted. Such unavailable information could have a significant impact on Evolus’ GAAP financial results.
Jeuveau® and Nuceiva® are registered trademarks of Evolus, Inc.
Evolysse™ is a trademark of Evolus, Inc.
Hi-Pure™ is a trademark of Daewoong Pharmaceutical Co, Ltd.
Evolus, Inc. Consolidated Statements of Operations and Comprehensive Loss (Unaudited, in thousands, except loss per share data) |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenue: |
|
|
|
|
|
|
|
||||||||
Product revenue, net |
$ |
48,680 |
|
|
$ |
37,163 |
|
|
$ |
89,727 |
|
|
$ |
70,389 |
|
Service revenue |
|
666 |
|
|
|
— |
|
|
|
1,340 |
|
|
|
682 |
|
Total net revenues |
|
49,346 |
|
|
|
37,163 |
|
|
|
91,067 |
|
|
|
71,071 |
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Product cost of sales (excludes amortization of intangible assets) |
|
14,712 |
|
|
|
15,819 |
|
|
|
26,858 |
|
|
|
29,027 |
|
Selling, general and administrative |
|
41,174 |
|
|
|
36,875 |
|
|
|
78,558 |
|
|
|
70,317 |
|
Research and development |
|
1,208 |
|
|
|
1,550 |
|
|
|
2,589 |
|
|
|
2,018 |
|
In-process research and development |
|
4,441 |
|
|
|
2,000 |
|
|
|
4,441 |
|
|
|
2,000 |
|
Revaluation of contingent royalty obligation payable to Evolus Founders |
|
1,682 |
|
|
|
1,414 |
|
|
|
3,330 |
|
|
|
2,730 |
|
Depreciation and amortization |
|
1,247 |
|
|
|
853 |
|
|
|
2,449 |
|
|
|
1,775 |
|
Total operating expenses |
|
64,464 |
|
|
|
58,511 |
|
|
|
118,225 |
|
|
|
107,867 |
|
Loss from operations |
|
(15,118 |
) |
|
|
(21,348 |
) |
|
|
(27,158 |
) |
|
|
(36,796 |
) |
Other income (expense): |
|
|
|
|
|
|
|
||||||||
Interest income |
|
164 |
|
|
|
4 |
|
|
|
263 |
|
|
|
4 |
|
Interest expense |
|
(3,182 |
) |
|
|
(2,075 |
) |
|
|
(5,971 |
) |
|
|
(4,123 |
) |
Other income (expense), net |
|
19 |
|
|
|
(24 |
) |
|
|
(19 |
) |
|
|
(31 |
) |
Loss before income taxes: |
|
(18,117 |
) |
|
|
(23,443 |
) |
|
|
(32,885 |
) |
|
|
(40,946 |
) |
Income tax expense |
|
23 |
|
|
|
28 |
|
|
|
46 |
|
|
|
26 |
|
Net loss |
$ |
(18,140 |
) |
|
$ |
(23,471 |
) |
|
$ |
(32,931 |
) |
|
$ |
(40,972 |
) |
Other comprehensive loss: |
|
|
|
|
|
|
|
||||||||
Unrealized loss, net of tax |
|
(52 |
) |
|
|
(62 |
) |
|
|
(131 |
) |
|
|
(165 |
) |
Comprehensive loss |
$ |
(18,192 |
) |
|
$ |
(23,533 |
) |
|
$ |
(33,062 |
) |
|
$ |
(41,137 |
) |
Net loss per share, basic and diluted |
$ |
(0.32 |
) |
|
$ |
(0.42 |
) |
|
$ |
(0.58 |
) |
|
$ |
(0.73 |
) |
Weighted-average shares outstanding used to compute basic and diluted net loss per share |
|
56,920 |
|
|
|
56,080 |
|
|
|
56,699 |
|
|
|
55,906 |
|
Evolus, Inc. Summary of Consolidated Balance Sheet Data (Unaudited, in thousands) |
||||||
|
June 30, 2023 |
|
December 31, 2022 |
|||
Cash and cash equivalents |
$ |
41,705 |
|
|
$ |
53,922 |
Accounts receivable, net |
|
28,996 |
|
|
|
22,448 |
Inventories |
|
19,859 |
|
|
|
18,852 |
Prepaid expenses and other current assets |
|
5,900 |
|
|
|
5,580 |
Total current assets |
|
96,460 |
|
|
|
100,802 |
Noncurrent assets |
|
72,523 |
|
|
|
77,181 |
Total assets |
$ |
168,983 |
|
|
$ |
177,983 |
Accounts payable and accrued expenses |
$ |
32,019 |
|
|
$ |
33,729 |
Accrued litigation settlement |
|
— |
|
|
|
5,000 |
Other current liabilities |
|
9,330 |
|
|
|
7,780 |
Total current liabilities |
|
41,349 |
|
|
|
46,509 |
Term loan, net of discount and issuance costs |
|
94,829 |
|
|
|
71,879 |
Other noncurrent liabilities |
|
39,768 |
|
|
|
41,096 |
Total liabilities |
$ |
175,946 |
|
|
$ |
159,484 |
Total stockholders’ equity (deficit) |
$ |
(6,963 |
) |
|
$ |
18,499 |
Evolus, Inc. Summary of Consolidated Cash Flows (Unaudited, in thousands) |
|||||||||||
|
Six Months Ended June 30, |
|
Three Months Ended June 30, |
||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
Net cash (used in) provided by: |
|
|
|
|
|
||||||
Operating activities |
$ |
(33,897 |
) |
* |
$ |
(59,087 |
) |
* |
$ |
(13,310 |
) |
Investing activities |
|
(727 |
) |
|
|
(649 |
) |
|
|
(216 |
) |
Financing activities |
|
22,538 |
|
|
|
(1,871 |
) |
|
|
23,820 |
|
Effect of exchange rates on cash |
|
(131 |
) |
|
|
(165 |
) |
|
|
(52 |
) |
Change in cash and cash equivalents |
|
(12,217 |
) |
|
|
(61,772 |
) |
|
|
10,242 |
|
Cash and cash equivalents, beginning of period |
|
53,922 |
|
|
|
146,256 |
|
|
|
31,463 |
|
Cash and cash equivalents, end of period |
$ |
41,705 |
|
|
$ |
84,484 |
|
|
$ |
41,705 |
|
*Includes a settlement payment of |
Evolus, Inc. Reconciliation of Gross Profit Margin to Adjusted Gross Profit Margin (Unaudited, in thousands) |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Total net revenues |
$ |
49,346 |
|
|
$ |
37,163 |
|
|
$ |
91,067 |
|
|
$ |
71,071 |
|
Cost of sales: |
|
|
|
|
|
|
|
||||||||
Product cost of sales (excludes amortization of intangible assets) |
|
14,712 |
|
|
|
15,819 |
|
|
|
26,858 |
|
|
|
29,027 |
|
Amortization of distribution right intangible asset |
|
739 |
|
|
|
739 |
|
|
|
1,477 |
|
|
|
1,478 |
|
Total cost of sales |
|
15,451 |
|
|
|
16,558 |
|
|
|
28,335 |
|
|
|
30,505 |
|
Gross profit |
|
33,895 |
|
|
|
20,605 |
|
|
|
62,732 |
|
|
|
40,566 |
|
Gross profit margin |
|
68.7 |
% |
|
|
55.4 |
% |
|
|
68.9 |
% |
|
|
57.1 |
% |
Add: Amortization of distribution right intangible asset |
|
739 |
|
|
|
739 |
|
|
|
1,477 |
|
|
|
1,478 |
|
Adjusted gross profit |
$ |
34,634 |
|
|
$ |
21,344 |
|
|
$ |
64,209 |
|
|
$ |
42,044 |
|
Adjusted gross profit margin |
|
70.2 |
% |
|
|
57.4 |
% |
|
|
70.5 |
% |
|
|
59.2 |
% |
Evolus, Inc. Reconciliation of GAAP Operating Expenses to Non-GAAP Operating Expenses (Unaudited, in thousands) |
||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended
|
|
Three Months Ended March 31, |
|||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
GAAP operating expense |
$ |
64,464 |
|
$ |
58,511 |
|
$ |
118,225 |
|
$ |
107,867 |
|
$ |
53,761 |
Adjustments: |
|
|
|
|
|
|
|
|
|
|||||
Product cost of sales (excludes amortization of intangible assets) |
|
14,712 |
|
|
15,819 |
|
|
26,858 |
|
|
29,027 |
|
|
12,146 |
Revaluation of contingent royalty obligation |
|
1,682 |
|
|
1,414 |
|
|
3,330 |
|
|
2,730 |
|
|
1,648 |
Stock-based compensation: |
|
|
|
|
|
|
|
|
|
|||||
Included in selling, general and administrative |
|
3,983 |
|
|
2,924 |
|
|
7,150 |
|
|
5,838 |
|
|
3,167 |
Included in research and development |
|
188 |
|
|
55 |
|
|
315 |
|
|
100 |
|
|
127 |
Depreciation and amortization |
|
1,247 |
|
|
853 |
|
|
2,449 |
|
|
1,775 |
|
|
1,202 |
Non-GAAP operating expense |
$ |
42,652 |
|
$ |
37,446 |
|
$ |
78,123 |
|
$ |
68,397 |
|
$ |
35,471 |
Evolus, Inc. Reconciliation of GAAP (Loss) from Operations to Non-GAAP (Loss) from Operations (Unaudited, in thousands) |
||||||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended
|
Three Months Ended March 31, |
||||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
2023 |
|
GAAP (loss) from operations |
$ |
(15,118 |
) |
|
$ |
(21,348 |
) |
|
$ |
(27,158 |
) |
|
$ |
(36,796 |
) |
$ |
(12,040 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
||||||||||
Revaluation of contingent royalty obligation |
|
1,682 |
|
|
|
1,414 |
|
|
|
3,330 |
|
|
|
2,730 |
|
|
1,648 |
|
Stock-based compensation: |
|
|
|
|
|
|
|
|
||||||||||
Included in selling, general and administrative |
|
3,983 |
|
|
|
2,924 |
|
|
|
7,150 |
|
|
|
5,838 |
|
|
3,167 |
|
Included in research and development |
|
188 |
|
|
|
55 |
|
|
|
315 |
|
|
|
100 |
|
|
127 |
|
Depreciation and amortization |
|
1,247 |
|
|
|
853 |
|
|
|
2,449 |
|
|
|
1,775 |
|
|
1,202 |
|
Non-GAAP (loss) from operations |
$ |
(8,018 |
) |
|
$ |
(16,102 |
) |
|
$ |
(13,914 |
) |
|
$ |
(26,353 |
) |
$ |
(5,896 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230802193718/en/
Investor Contact:
David K. Erickson
Vice President, Investor Relations
Tel: 949-966-1798
Email: david.erickson@evolus.com
Media Contact:
Email: media@evolus.com
Source: Evolus
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