Evolus Reports Third Quarter 2022 Results and Provides Business Update
Evolus reported a 27% increase in sales for Q3 2022, reaching $33.9 million, primarily driven by a successful promotional campaign named ‘Switch Your Tox’. The campaign generated $3.5 million in incremental deferred revenue and reported a record of 100,000 consumer redemptions. Evolus maintains its 2022 revenue guidance of $143 to $150 million, projecting year-over-year growth of around 50%. The company's cash position stood at $65.6 million, expected to fund operations to breakeven, as operating expenses decreased to $51.8 million.
- 27% increase in sales to $33.9 million from Q3 2021.
- Successful ‘Switch Your Tox’ campaign contributed to $3.5 million in deferred revenue.
- Achieved 100,000 consumer redemptions, illustrating strong customer loyalty.
- Maintained revenue guidance for 2022 at $143 to $150 million, with 50% year-over-year growth.
- Operating expenses decreased to $51.8 million from $58.5 million in Q2 2022.
- Cash position of $65.6 million expected to fund operations to breakeven.
- Loss from operations was $17.9 million, although improved from $21.3 million in Q2 2022.
- Cash and cash equivalents decreased from $84.5 million to $65.6 million.
-
Reported Sales Up
27% to ; Success of ‘Switch Your Tox’ Promotion Contributes to$33.9 Million Incremental Increase in Deferred Revenue Over Q2 and Understates Strength of Results$3.5 Million - ‘Switch Your Tox’ Drives Record Consumer Rewards Redemptions and New Purchasing Accounts
-
Reiterates Full-Year 2022 Net Revenue Guidance at Top End of
to$143 $150 Million Range ; Lowers Non-GAAP Operating Expense Guidance toLower Half of Range -
Strong Cash Position of
Expected to$65.6 Million Fund Company to Breakeven
“This quarter we reported strong top-line growth and continued to gain market share while carefully managing our operating expenses as we advance toward profitability,” said
Moatazedi continued, “Perhaps the most significant highlight of the third quarter was the highly successful launch of our ‘Switch Your Tox’ promotional campaign. ‘Switch Your Tox’ helped drive an above-market
Third Quarter 2022 Highlights and Recent Developments
-
Aided by the recently launched ‘Switch Your Tox’ promotional campaign, the company’s lead sales and marketing metrics demonstrated continued momentum in Evolus’ business during the third quarter.
-
Evolus added 650 new customer accounts in the third quarter, bringing the total base since launch to more than 8,800 purchasing customers with a reorder rate that remains steady at above70% .1 - Overall membership in the Evolus Rewards program grew to nearly 450,000 consumers. For the quarter, total redemptions in Evolus Rewards drove a record 100,000 consumers with an equal representation of new and existing users returning for repeat treatments, demonstrating strong loyalty to Jeuveau® and illustrating the power of the program to motivate consumers.
-
-
As previously reported, the company completed patient enrollment in its Phase II “extra strength” Jeuveau® clinical study. A presentation of interim data is planned for early 2023 at one of the largest aesthetics meetings in the world. This study provides
Evolus with the opportunity to offer the first multi-strength neurotoxin, giving customers and consumers increased treatment options. -
During the quarter,
Evolus launched commercial operations inGreat Britain , the single largest market for aesthetic neurotoxins in the European region, and shipped the first customer orders for Nuceiva®. During 2023, the company expects to enter additional countries inEurope and looks forward to broadening its overall geographic presence even further.
Third Quarter 2022 Financial Results
-
Total net revenues for the third quarter of 2022 increased
27% to from$33.9 million in the third quarter of 2021 driven almost entirely by higher volumes of Jeuveau®. Compared to the second quarter, the company deferred an additional$26.7 million of revenue in the third quarter largely attributable to the ‘Switch Your Tox’ promotional campaign, which it believes understated the actual strength of its reported results. The company expects the majority of this additional deferred revenue will be realized in the fourth quarter of this year.$3.5 million -
Gross profit margin and adjusted gross profit margin were
58.0% and60.2% , respectively, both of which were impacted by the higher settlement royalty rates that concluded inmid-September 2022 . Adjusted gross profit margin excludes amortization of intangible assets. -
Operating expenses decreased to
in the third quarter of 2022 from$51.8 million in the second quarter of 2022.$58.5 million -
Non-GAAP operating expenses decreased to
in the third quarter of 2022 from$33.7 million in the second quarter of 2022 primarily due to lower marketing and distribution expenses. Non-GAAP operating expenses exclude product cost of sales, revaluation of the contingent royalty obligation expense, IPR&D expense, stock-based compensation expense, and depreciation and amortization.$35.4 million -
Loss from operations was
in the third quarter of 2022 compared to$17.9 million in the second quarter of 2022. Non-GAAP loss from operations in the third quarter of 2022 was$21.3 million compared to$13.3 million in the second quarter of 2022. Non-GAAP loss from operations excludes revaluation of the contingent royalty obligation expense, IPR&D expense, stock-based compensation expense, and depreciation and amortization.$14.1 million -
Cash and cash equivalents at
September 30, 2022 were , compared to$65.6 million at$84.5 million June 30, 2022 . Cash used during the quarter included inventory payments of to support the growth of the business, and net royalty and interest payments totaling$14.2 million . For the third quarter of 2022, net cash used for operating activities was$10.3 million , which was$17.1 million less than the amount used in the second quarter of 2022, demonstrating the company’s continued commitment to carefully managing operating expenses and keeping it on the path to achieving sustainable positive cash flow.$3.8 million Evolus continues to expect that its existing cash balance will fund current operations through breakeven.
Outlook
-
Based on its year-to-date performance and confidence in the resilience of the aesthetic neurotoxin market, the company continues to project full-year 2022 sales at the top end of its guidance range of
to$143 , which includes a minimal contribution from international markets.$150 million -
Evolus continues to expect its full year adjusted gross profit margin to be between58% and61% with a fourth quarter rate of68% to71% reflecting the settlement royalty rate decrease in September. -
The company now expects full-year non-GAAP operating expenses to be in the lower half of its previous guidance range of
to$135 . Non-GAAP operating expenses exclude product cost of sales, revaluation of the contingent royalty obligation expense, IPR&D expense, stock-based compensation expense, and depreciation and amortization.$140 million
Conference Call Information
Management will host a conference call and live webcast to discuss Evolus’ financial results today at
Following the completion of the call, an audio replay can be accessed for 48 hours by dialing (877) 660-6853 (
About
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 based on our current expectations, assumptions, estimates and projections 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 facts may be deemed to be 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 the company’s financial outlook for 2022, expectations regarding the company’s cash position and expectations regarding share growth, market conditions, international product launches and our ongoing clinical trial.
The forward-looking statements included herein 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 Allergan/Medytox Settlement Agreements, our ability to fund our future operations or obtain financing to fund our operations, the continued impact of COVID-19 or other outbreaks of contagious diseases on our business, unfavorable global economic conditions and the impact on consumer discretionary spending, uncertainties related to customer and consumer adoption of Jeuveau®, the efficiency and operability of our digital platform, competition and market dynamics, our ability to successfully launch and commercialize our products in new markets, our ability to maintain regulatory approvals of Jeuveau® or obtain regulatory approvals for new product candidates or indications and other risks described in our filings with 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 2022.
Jeuveau® and Nuceiva® are registered trademarks of
Hi-Pure™ is a trademark of Daewoong Pharmaceutical Co, Ltd.
1 |
|
Represents cumulative statistics from the launch of Jeuveau® in |
|
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||
Product revenue, net |
$ |
33,215 |
|
|
$ |
26,677 |
|
|
$ |
103,604 |
|
|
$ |
64,314 |
|
Service revenue |
|
684 |
|
|
|
— |
|
|
|
1,366 |
|
|
|
702 |
|
Total net revenues |
|
33,899 |
|
|
|
26,677 |
|
|
|
104,970 |
|
|
|
65,016 |
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Product cost of sales (excludes amortization of intangible assets) |
|
13,490 |
|
|
|
11,490 |
|
|
|
42,517 |
|
|
|
27,700 |
|
Settlement payment from Daewoong |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(25,500 |
) |
Selling, general and administrative |
|
34,794 |
|
|
|
31,673 |
|
|
|
105,111 |
|
|
|
78,801 |
|
Research and development |
|
1,376 |
|
|
|
301 |
|
|
|
3,394 |
|
|
|
1,641 |
|
In-process research and development |
|
— |
|
|
|
— |
|
|
|
2,000 |
|
|
|
— |
|
Revaluation of contingent royalty obligation payable to
|
|
1,216 |
|
|
|
1,400 |
|
|
|
3,946 |
|
|
|
4,049 |
|
Depreciation and amortization |
|
920 |
|
|
|
923 |
|
|
|
2,695 |
|
|
|
4,702 |
|
Total operating expenses |
|
51,796 |
|
|
|
45,787 |
|
|
|
159,663 |
|
|
|
91,393 |
|
Loss from operations |
|
(17,897 |
) |
|
|
(19,110 |
) |
|
|
(54,693 |
) |
|
|
(26,377 |
) |
Other income (expense): |
|
|
|
|
|
|
|
||||||||
Interest income |
|
38 |
|
|
|
— |
|
|
|
42 |
|
|
|
1 |
|
Interest expense |
|
(2,343 |
) |
|
|
(311 |
) |
|
|
(6,466 |
) |
|
|
(1,256 |
) |
Loss from extinguishment of debts, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(968 |
) |
Other expense, net |
|
(62 |
) |
|
|
— |
|
|
|
(93 |
) |
|
|
— |
|
Loss before income taxes: |
|
(20,264 |
) |
|
|
(19,421 |
) |
|
|
(61,210 |
) |
|
|
(28,600 |
) |
Income tax expense |
|
12 |
|
|
|
12 |
|
|
|
38 |
|
|
|
33 |
|
Net loss |
$ |
(20,276 |
) |
|
$ |
(19,433 |
) |
|
$ |
(61,248 |
) |
|
$ |
(28,633 |
) |
Other comprehensive gain (loss): |
|
|
|
|
|
|
|
||||||||
Unrealized loss, net of tax |
|
(203 |
) |
|
|
— |
|
|
|
(368 |
) |
|
|
— |
|
Comprehensive loss |
$ |
(20,479 |
) |
|
$ |
(19,433 |
) |
|
$ |
(61,616 |
) |
|
$ |
(28,633 |
) |
Net loss per share, basic and diluted |
$ |
(0.36 |
) |
|
$ |
(0.35 |
) |
|
$ |
(1.09 |
) |
|
$ |
(0.60 |
) |
Weighted-average shares outstanding used to compute basic and
|
|
56,177 |
|
|
|
55,007 |
|
|
|
55,998 |
|
|
|
47,818 |
|
|
|||||
|
|
|
|
||
Cash and cash equivalents |
$ |
65,572 |
|
$ |
146,256 |
Accounts receivable, net |
|
20,920 |
|
|
14,657 |
Inventories |
|
21,565 |
|
|
1,762 |
Prepaid expenses and other current assets |
|
7,889 |
|
|
16,124 |
Total current assets |
|
115,946 |
|
|
178,799 |
Noncurrent assets |
|
76,773 |
|
|
78,684 |
Total assets |
$ |
192,719 |
|
$ |
257,483 |
Accounts payable and accrued expenses |
$ |
38,447 |
|
$ |
36,084 |
Accrued litigation settlement |
|
5,000 |
|
|
15,000 |
Other current liabilities |
|
7,824 |
|
|
6,579 |
Total current liabilities |
|
51,271 |
|
|
57,663 |
Accrued litigation settlement |
|
— |
|
|
5,000 |
Term loan, net of discount and issuance costs |
|
71,712 |
|
|
71,222 |
Other noncurrent liabilities |
|
40,516 |
|
|
41,722 |
Total liabilities |
$ |
163,499 |
|
$ |
175,607 |
Total stockholders’ equity |
$ |
29,220 |
|
$ |
81,876 |
|
|||||||||
|
Nine Months Ended |
||||||||
|
2022 |
2021 |
|||||||
Net cash (used in) provided by: |
|
|
|
|
|||||
Operating activities |
$ |
(76,138 |
) |
* |
$ |
(24,344 |
) |
* |
|
Investing activities |
|
(1,548 |
) |
|
|
4,420 |
|
|
|
Financing activities |
|
(2,630 |
) |
|
|
25,158 |
|
|
|
Effect of exchange rates on cash |
|
(368 |
) |
|
|
— |
|
|
|
Change in cash and cash equivalents |
|
(80,684 |
) |
|
|
5,234 |
|
|
|
Cash and cash equivalents, beginning of period |
|
146,256 |
|
|
|
102,562 |
|
|
|
Cash and cash equivalents, end of period |
$ |
65,572 |
|
|
$ |
107,796 |
|
|
* |
|
includes a settlement payment of |
|
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Total net revenues |
$ |
33,899 |
|
|
$ |
26,677 |
|
|
$ |
104,970 |
|
|
$ |
65,016 |
|
Cost of sales: |
|
|
|
|
|
|
|
||||||||
Product cost of sales (excludes amortization of intangible
|
|
13,490 |
|
|
|
11,490 |
|
|
|
42,517 |
|
|
|
27,700 |
|
Settlement payment from Daewoong |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(25,500 |
) |
Amortization of distribution right intangible asset |
|
739 |
|
|
|
739 |
|
|
|
2,216 |
|
|
|
2,200 |
|
Total cost of sales |
|
14,229 |
|
|
|
12,229 |
|
|
|
44,733 |
|
|
|
4,400 |
|
Gross profit |
|
19,670 |
|
|
|
14,448 |
|
|
|
60,237 |
|
|
|
60,616 |
|
Gross profit margin |
|
58.0 |
% |
|
|
54.2 |
% |
|
|
57.4 |
% |
|
|
93.2 |
% |
Add: Settlement payment from Daewoong |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(25,500 |
) |
Add: Amortization of distribution right intangible asset |
|
739 |
|
|
|
739 |
|
|
|
2,216 |
|
|
|
2,200 |
|
Adjusted gross profit |
$ |
20,409 |
|
|
$ |
15,187 |
|
|
$ |
62,453 |
|
|
$ |
37,316 |
|
Adjusted gross profit margin |
|
60.2 |
% |
|
|
56.9 |
% |
|
|
59.5 |
% |
|
|
57.4 |
% |
|
|||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|
Three
|
||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
2022 |
||||||
GAAP operating expense |
$ |
51,796 |
|
$ |
45,787 |
|
$ |
159,663 |
|
$ |
91,393 |
|
|
$ |
58,511 |
Adjustments: |
|
|
|
|
|
|
|
|
|
||||||
Product cost of sales (excludes amortization of
|
|
13,490 |
|
|
11,490 |
|
|
42,517 |
|
|
27,700 |
|
|
|
15,819 |
Settlement payment from Daewoong |
|
— |
|
|
— |
|
|
— |
|
|
(25,500 |
) |
|
|
— |
In-process research and development |
|
— |
|
|
— |
|
|
2,000 |
|
|
— |
|
|
|
2,000 |
Revaluation of contingent royalty obligation |
|
1,216 |
|
|
1,400 |
|
|
3,946 |
|
|
4,049 |
|
|
|
1,414 |
Stock-based compensation: |
|
|
|
|
|
|
|
|
|
||||||
Included in selling, general and administrative |
|
2,398 |
|
|
2,399 |
|
|
8,236 |
|
|
6,784 |
|
|
|
2,924 |
Included in research and development |
|
85 |
|
|
77 |
|
|
185 |
|
|
143 |
|
|
|
55 |
Depreciation and amortization |
|
920 |
|
|
923 |
|
|
2,695 |
|
|
4,702 |
|
|
|
853 |
Non-GAAP operating expense |
$ |
33,687 |
|
$ |
29,498 |
|
$ |
100,084 |
|
$ |
73,515 |
|
|
$ |
35,446 |
|
|||||||||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
|
Three
|
||||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
2022 |
||||||||||
GAAP (loss) from operations |
$ |
(17,897 |
) |
|
$ |
(19,110 |
) |
|
$ |
(54,693 |
) |
|
$ |
(26,377 |
) |
|
$ |
(21,348 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
||||||||||
Settlement payment from Daewoong |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(25,500 |
) |
|
|
— |
|
Revaluation of contingent royalty obligation |
|
1,216 |
|
|
|
1,400 |
|
|
|
3,946 |
|
|
|
4,049 |
|
|
|
1,414 |
|
In-process research and development |
|
— |
|
|
|
— |
|
|
|
2,000 |
|
|
|
— |
|
|
|
2,000 |
|
Stock-based compensation: |
|
|
|
|
|
|
|
|
|
||||||||||
Included in selling, general and administrative |
|
2,398 |
|
|
|
2,399 |
|
|
|
8,236 |
|
|
|
6,784 |
|
|
|
2,924 |
|
Included in research and development |
|
85 |
|
|
|
77 |
|
|
|
185 |
|
|
|
143 |
|
|
|
55 |
|
Depreciation and amortization |
|
920 |
|
|
|
923 |
|
|
|
2,695 |
|
|
|
4,702 |
|
|
|
853 |
|
Non-GAAP (loss) from operations |
$ |
(13,278 |
) |
|
$ |
(14,311 |
) |
|
$ |
(37,631 |
) |
|
$ |
(36,199 |
) |
|
$ |
(14,102 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221108006039/en/
Investor/Media Contact:
Vice President, Investor Relations
Tel: 949-966-1798
Email: david.erickson@evolus.com
Source:
FAQ
What were Evolus' sales figures for Q3 2022?
How did the 'Switch Your Tox' campaign impact Evolus' revenue?
What is the revenue guidance for Evolus for the year 2022?
What is Evolus' cash position as of September 30, 2022?