Venus Concept Announces Third Quarter and First Nine Months of 2020 Financial Results
Venus Concept (NASDAQ: VERO) reported a 21% decrease in Q3 2020 revenue, totaling $20.7 million, attributed to COVID-19 disruptions. However, it saw a 22% increase from Q2 2020. The operating loss was $5.3 million, improved from $6.6 million in Q3 2019. The company anticipates achieving $20 million in cost savings by year-end due to restructuring. Net loss for the quarter was $7.3 million, down from $9.0 million in Q3 2019. Total cash as of September 30, 2020, was $12.8 million, with total debt of $74.5 million.
- Increased sales of ARTAS® and ARTAS iX® systems by 55% and 52% respectively, quarter-over-quarter.
- Achieved $14 million in cost savings from restructuring, on track for $20 million by year-end.
- 21% decrease in total GAAP revenue year-over-year, primarily due to COVID-19.
- Adjusted EBITDA loss of $1.4 million compared to $28 thousand profit in Q3 2019.
- Net loss of $7.3 million, an increase from the $9.0 million loss in Q3 2019.
TORONTO, Nov. 16, 2020 (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, 2020.
Third Quarter 2020 Financial Summary:
- Total GAAP revenue for the third quarter of 2020 decreased
21% year-over-year, to$20.7 million , compared to$26.2 million for the third quarter 2019, driven by the negative impact on our business as a result of the COVID-19 global pandemic. Total GAAP revenue for the third quarter of 2020 increased22% , compared to$17.0 million for the second quarter of 2020.
• Total GAAP revenue for the third quarter of 2020 includes$4.8 million of revenue from Venus Concept Inc. (formerly Restoration Robotics, Inc.) for the three months ended September 30, 2020. Sales of ARTAS® and ARTAS iX® systems and procedure-related kits increased55% and52% quarter-over-quarter, respectively, in the third quarter of 2020. - GAAP operating loss for the third quarter of 2020 was
$5.3 million , compared to a loss of$6.6 million for the third quarter of 2019.
• In the nine months ended September 30, 2020, the Company realized more than$14.0 million of cost savings from the new restructuring program announced in response to the challenging business environment caused by COVID-19 and remains on target to realize the projected$20.0 million of cost savings for full fiscal year 2020. - GAAP net loss for the third quarter of 2020 of
$7.3 million , compared to a loss of$9.0 million for the third quarter of 2019. - Adjusted EBITDA (non-GAAP) loss of
$1.4 million for the third quarter of 2020, compared to Adjusted EBITDA of$28 thousand in the third quarter of 2019. - The Company had
$12.8 million and$15.7 million of cash and cash equivalents as of September 30, 2020 and December 31, 2019, respectively, and total debt obligations of approximately$74.5 million and$69.0 million as of September 30, 2020 and December 31, 2019, respectively.
Management Commentary:
“While our third quarter revenue performance continued to be impacted by the COVID-19 global pandemic, we have many reasons for optimism,” said Domenic Serafino, Chief Executive Officer of Venus Concept. “We experienced a notable improvement in the operating environment in our key markets as evidenced by the strong procedure-related activity in both our aesthetics and hair restoration businesses during the third quarter. Importantly, while the recovery in capital equipment demand in the aesthetics and hair restoration markets remains challenged, our focused commercial strategy is helping us maximize our opportunities to drive adoption. Third quarter system sales results benefitted from strong sales of our Venus Bliss in the U.S. and strong adoption of our ARTAS iX® in EMEA.”
Mr. Serafino continued: “Our efforts to reduce the operating expense profile of the combined company are progressing well. We continue to expect our restructuring program, combined with previously announced synergies and cost reductions, to result in cost savings of approximately
Third Quarter and First Nine Months of 2020 Revenue by Region and by Product Type:
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| (dollars in thousands) | (dollars in thousands) | |||||||||||||||
| Revenues by region: | ||||||||||||||||
| United States | $ | 7,784 | $ | 10,118 | $ | 22,339 | $ | 31,337 | ||||||||
| International | 12,896 | 16,036 | 29,845 | 47,215 | ||||||||||||
| Total revenue | $ | 20,680 | $ | 26,154 | $ | 52,184 | $ | 78,552 | ||||||||
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| (dollars in thousands) | (dollars in thousands) | |||||||||||||||
| Revenues by product: | ||||||||||||||||
| Subscription—Systems | $ | 9,431 | $ | 16,427 | $ | 23,709 | $ | 48,812 | ||||||||
| Products—Systems | 7,503 | 7,105 | 17,758 | 21,188 | ||||||||||||
| Products—Other | 2,631 | 1,167 | 7,136 | 4,117 | ||||||||||||
| Services | 1,115 | 1,455 | 3,581 | 4,435 | ||||||||||||
| Total revenue | $ | 20,680 | $ | 26,154 | $ | 52,184 | $ | 78,552 | ||||||||
Third Quarter 2020 Financial Results:
| Three Months Ended September 30, | ||||||||||||||||||||||||||||||
| 2020 | 2019 | Change | ||||||||||||||||||||||||||||
| (in thousands, except percentages) | $ | % of Total | $ | % of Total | $ | % | ||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||
| Subscription—Systems | $ | 9,431 | 45.6 | $ | 16,427 | 62.8 | $ | (6,996 | ) | (42.6 | ) | |||||||||||||||||||
| Products—Systems | 7,503 | 36.3 | 7,105 | 27.2 | 398 | 5.6 | ||||||||||||||||||||||||
| Products—Other | 2,631 | 12.7 | 1,167 | 4.5 | 1,464 | 125.4 | ||||||||||||||||||||||||
| Services | 1,115 | 5.4 | 1,455 | 5.5 | (340 | ) | (23.4 | ) | ||||||||||||||||||||||
| Total | $ | 20,680 | 100.0 | $ | 26,154 | 100.0 | $ | (5,474 | ) | (20.9 | ) | |||||||||||||||||||
Total revenue for the third quarter of 2020 decreased
The decrease in revenue was a result of decreased revenue in the United States of
The decrease in total revenue, by product category, for the third quarter of 2020 was driven by a decrease of
Gross profit for the third quarter of 2020 decreased
Operating expenses for the third quarter of 2020 decreased
Operating loss for the third quarter of 2020 was
Net loss attributable to Venus Concept Inc. stockholders for the third quarter of 2020 was
Adjusted EBITDA loss (non-GAAP) for the third quarter of 2020 was
First Nine Months of 2020 Financial Results:
| Nine Months Ended September 30, | ||||||||||||||||||||||||
| 2020 | 2019 | Change | ||||||||||||||||||||||
| (in thousands, except percentages) | $ | % of Total | $ | % of Total | $ | % | ||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||
| Subscription—Systems | $ | 23,709 | 45.4 | $ | 48,812 | 62.1 | $ | (25,103 | ) | (51.4 | ) | |||||||||||||
| Products—Systems | 17,758 | 34.0 | 21,188 | 27.0 | (3,430 | ) | (16.2 | ) | ||||||||||||||||
| Products other | 7,136 | 13.7 | 4,117 | 5.2 | 3,019 | 73.3 | ||||||||||||||||||
| Services | 3,581 | 6.9 | 4,435 | 5.7 | (854 | ) | (19.3 | ) | ||||||||||||||||
| Total | $ | 52,184 | 100.0 | $ | 78,552 | 100.0 | $ | (26,368 | ) | (33.6 | ) | |||||||||||||
Total revenue for the first nine months of 2020 decreased by
Net loss attributable to Venus Concept Inc. stockholders for the first nine months of 2020 was
Adjusted EBITDA (non-GAAP) loss for the first nine months of 2020 was
Fiscal Year 2020 Revenue Guidance:
On March 30, 2020, due to the rapidly evolving market conditions and continued uncertainties from the impact of COVID-19, the Company withdrew 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.
Conference Call Details:
Management will host a conference call at 8:00 a.m. Eastern Time on November 16, 2020 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 13711300. 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 13711300. 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 25 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, Venus Heal, Venus Glow, Venus Bliss, Venus Epileve and Venus Viva MD. 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 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 I Item 1A—“Risk Factors” in our most recent Annual Report on Form 10-K, Part II Item 1A—“Risk Factors” in our Form 10-Q for the quarter ended September 30, 2020, and in other documents the Company may file with the SEC. 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, 2020 | December 31, 2019 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 12,778 | $ | 15,666 | ||||
| Restricted cash | 83 | 83 | ||||||
| Accounts receivable, net of allowance of | 57,920 | 58,977 | ||||||
| Inventories | 19,493 | 18,844 | ||||||
| Deferred expenses | 2 | 59 | ||||||
| Prepaid expenses | 2,018 | 2,523 | ||||||
| Advances to suppliers | 3,730 | 450 | ||||||
| Other current assets | 4,106 | 3,101 | ||||||
| Total current assets | 100,130 | 99,703 | ||||||
| LONG-TERM ASSETS: | ||||||||
| Long-term receivables | 21,816 | 35,656 | ||||||
| Deferred tax assets | 1,036 | 622 | ||||||
| Severance pay funds | 568 | 710 | ||||||
| Property and equipment, net | 3,727 | 4,648 | ||||||
| Intangible assets | 19,738 | 22,338 | ||||||
| Goodwill | — | 27,450 | ||||||
| Total long-term assets | 46,885 | 91,424 | ||||||
| TOTAL ASSETS | $ | 147,015 | $ |
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FAQ
What were Venus Concept's Q3 2020 financial results?
Venus Concept reported Q3 2020 revenue of $20.7 million, a 21% decrease year-over-year, with a net loss of $7.3 million.
How has COVID-19 impacted Venus Concept's revenue?
The company experienced a decrease in revenue due to COVID-19 disruptions, leading to a 21% decline compared to Q3 2019.
What is the outlook for Venus Concept in 2020?
Venus Concept anticipates achieving $20 million in cost savings from its restructuring program by the end of 2020, despite ongoing challenges.
Venus Concept Inc.
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Medical Devices
Surgical & Medical Instruments & Apparatus
United States of America
TORONTO
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