UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 14, 2023
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification Number)
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(Address of principal executive offices, including Zip Code)
Registrant’s telephone number, including area code: (877 )
848-8430
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange
on which registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of
the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. |
Results of Operations and Financial Condition.
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On November 14, 2023, Venus Concept Inc. issued a press release relating to its financial results for the three and nine months ended September 30,
2023. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Item 2.02 of this Form 8-K and the Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as
shall be expressly set forth by specific reference in such filing.
| Item 9.01. |
Financial Statements and Exhibits.
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Exhibit
No.
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Description
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Press release dated November 14, 2023.
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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VENUS CONCEPT INC.
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Date: November 14, 2023
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By:
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/s/ Domenic Della Penna |
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Domenic Della Penna
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Chief Financial Officer
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Exhibit 99.1
Venus Concept Announces Third Quarter of Fiscal Year 2023 Financial Results
TORONTO, November 14, 2023 (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, 2023.
Third Quarter 2023 Summary & Recent Progress:
| • |
Company continues to execute against Transformational Plan
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| ➢ |
Total revenue of $17.6 million, down $3.9 million, or 18%, year-over-year
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| ➢ |
Cash system revenue represented approximately 69% of total systems and subscriptions revenue, compared to 59% in the prior year period
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| ➢ |
Operating expenses of $18.9 million, including approximately $0.8 million of costs related to restructuring activities, down $5.9 million, or 24%, year-over-year
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| ➢ |
GAAP net loss attributable to stockholders of $9.1 million, down $5.5 million, or 38% year-over-year
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| ➢ |
Adjusted EBITDA loss of $4.6 million, down $3.0 million, or 40% year-over-year
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| ➢ |
Cash used in operations during the first nine-months of 2023 of $12.1 million, down 49% year-over-year
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| • |
On July 13, 2023, the Company announced the establishment of a medical advisory board for AI.ME
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| • |
On September 14, 2023, the Company announced a 510(k) clearance from the U.S. Food and Drug Administration (“FDA”) to market its Venus Versa Pro System, a new multi-application platform, for a
variety of aesthetic and cosmetic procedures.
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| • |
On October 5, 2023, the Company announced that it had finalized an agreement with its lenders to restructure its existing debt obligations, improving the Company's overall financial position by
deferring certain principal and interest payments under its senior debt and exchanging a portion of its convertible notes for preferred stock.
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| • |
On October 12, 2023, the Company announced the promotion of Dr. Hemanth Varghese to the newly created role of President and Chief Operating Officer (COO), reporting to Chief Executive Officer, Rajiv
De Silva, effective October 16, 2023. The Company also announced that Mr. Kirk Gunhus had joined the Company as Vice President & General Manager, International Sales and Marketing.
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| • |
On October 17, 2023, the Company announced a company-wide rebranding initiative, introducing Venus Aesthetic Intelligence (or "Venus AI") to reflect the new strategic vision for the Company and an
enhanced focus on emerging technologies in aesthetics.
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| • |
On November 1, 2023, the Company announced the commercial launch of its new multi-application platform Venus Versa Pro in the United States.
|
Management Commentary:
“As previously announced, our third quarter revenue results reflect better-than-expected performance in the U.S. where sales increased 14% on a quarter-over-quarter
basis, offset by the impacts of our accelerated restructuring activities in certain international markets,” said Rajiv De Silva, Chief Executive Officer of Venus Concept. “We are pleased with the progress we have made in our strategic turnaround plan
in 2023. Our restructuring efforts to reduce expenses are exceeding expectations, and repositioning of the business in the US and internationally supports growth in 2024. Our primary objective for 2023 has been to reduce cash burn by 50% or more year
over year, which we are still on track to achieve due to our cost restructuring efforts. The recently announced debt restructuring activities provide Venus Concept with substantial additional liquidity to support maintenance of ongoing operations,
execution of our near-to-intermediate term strategic turnaround objectives and funding of priority investments in key R&D initiatives. We are committed to our stated priorities in 2023 to re-focusing the business and repositioning Venus Concept
to enhance the cash flow profile of the Company and to accelerate the path to long-term, sustainable, profitability and growth.”
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
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|||||||||||||||
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2023
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2022
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2023
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2022
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|||||||||||||
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(dollars in thousands)
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(dollars in thousands)
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|||||||||||||||
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Revenues by region:
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||||||||||||||||
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United States
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$
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11,167
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$
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11,774
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$
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31,665
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$
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38,319
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International
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6,449
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9,765
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26,557
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36,892
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||||||||||||
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Total revenue
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$
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17,616
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$
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21,539
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$
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58,222
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$
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75,211
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||||||||
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Three Months Ended
September 30,
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Nine Months Ended
September 30,
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|||||||||||||||
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2023
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2022
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2023
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2022
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|||||||||||||
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(dollars in thousands)
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(dollars in thousands)
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|||||||||||||||
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Revenues by product:
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||||||||||||||||
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Subscription—Systems
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$
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4,368
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$
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7,193
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$
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14,440
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$
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29,490
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Products—Systems
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9,834
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10,416
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33,212
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33,838
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Products—Other (1)
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2,487
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3,125
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8,019
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9,702
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Services
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927
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805
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2,551
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2,181
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Total revenue
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$
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17,616
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$
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21,539
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$
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58,222
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$
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75,211
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||||||||
(1) Products-Other include ARTAS procedure kits, Viva tips, Glide and other consumables.
Third Quarter 2023 Financial Results:
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Three Months Ended September 30,
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||||||||||||||||||||||||
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2023
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2022
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Change
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||||||||||||||||||||||
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(in thousands, except percentages)
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$ |
% of Total
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$ |
% of Total
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$ |
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%
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|||||||||||||||
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Revenues:
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Subscription—Systems
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$
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4,368
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24.8
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$
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7,193
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33.4
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$
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(2,825
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)
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(39.3
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)
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Products—Systems
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9,834
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55.8
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10,416
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48.4
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(582
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)
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(5.6
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)
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Products—Other
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2,487
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14.1
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3,125
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14.5
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(638
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)
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(20.4
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)
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Services
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927
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5.3
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805
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3.7
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122
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15.2
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||||||||||||||||||
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Total
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$
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17,616
|
100.0
|
$
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21,539
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100.0
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$
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(3,923
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)
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(18.2
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)
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|||||||||||||
Total revenue for the third quarter of 2023 decreased $3.9 million, or 18%, to $17.6 million, compared to the third quarter of 2022. The decrease in total revenue, by
region, was driven by a 34% decrease year-over-year in international revenue and a 5% decrease year-over-year in United States revenue. Our international business was impacted by the Company's decision to exit three unprofitable direct markets in the
past year, as well as general macroeconomic headwinds that impacted customer access to capital. The decrease in total revenue, by product category, was driven by a 39% decrease in lease revenue, a 20% decrease in products - other revenue and a 6%
decrease in products – systems revenue, partially offset by a 15% increase in services revenue. The percentage of total systems revenue derived from the Company’s subscription model was approximately 31% in the third quarter of 2023, compared to 41%
in the prior year period.
Gross profit for the third quarter of 2023 decreased $1.2 million, or 9%, to $12.2 million compared to the third quarter of 2022. The change in gross profit was
primarily due to a decrease in revenue in our international markets driven by the accelerated exit from unprofitable direct markets as discussed above. Gross margin was 69.2% of revenue, compared to 62.1% of revenue for the third quarter of 2022. The
change in gross margin was primarily due to significant inventory write-offs in the third quarter of 2022 which did not repeat this quarter, and a $0.8 million foreign exchange headwind as a result of certain foreign currencies depreciating relative
to the U.S. dollar. Excluding the inventory write-offs in the third quarter of 2022 and the impact of changes in foreign exchange, third quarter gross margin was 73.6%, compared to 72.1% last year, an increase of 150 basis points year-over-year.
Operating expenses for the third quarter of 2023 decreased $5.9 million, or 24%, to $18.9 million, compared to the third quarter of 2022. The change in total operating
expenses was driven by a decrease of $2.5 million, or 26%, in selling and marketing expenses, a decrease of $2.3 million, or 19%, in general and administrative expenses and a decrease of $1.1 million, or 36%, in research and development expenses.
Third quarter of 2023 general and administrative expenses included approximately $0.8 million of costs related to restructuring activities designed to improve the Company's operations and cost structure.
Operating loss for the third quarter of 2023 was $6.8 million, compared to operating loss of $11.4 million for the third quarter of 2022.
Net loss attributable to stockholders for the third quarter of 2023 was $9.1 million, or $1.64 per share, compared to net loss of $14.6 million, or $3.36 per share for
the third quarter of 2022. Adjusted EBITDA loss for the third quarter of 2023 was $4.6 million, compared to adjusted EBITDA loss of $7.7 million for the third quarter of 2022.
As of September 30, 2023, the Company had cash and cash equivalents of $4.9 million and total debt obligations of approximately $79.0 million, compared to $11.6 million
and $77.7 million, respectively, as of December 31, 2022.
Fiscal Year 2023 Revenue Guidance:
The Company continues to expect total revenue for the twelve months ending December 31, 2023 in the range of $80.0 million to $82.0 million, compared to
total revenue of $99.5 million for the twelve months ended December 31, 2022.
Conference Call Details:
Management will host a conference call at 5:00 p.m. Eastern Time on November 14, 2023 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 13741931. 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 13741934. 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 14 direct markets. Venus Concept’s product portfolio consists of aesthetic device platforms, including Venus Versa, Venus Versa Pro, Venus Legacy, Venus Velocity, Venus Fiore, Venus
Viva, Venus Glow, Venus Bliss, Venus BlissMAX, 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, Aperture Venture Partners, and Masters Special Situations.
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, statements about our financial performance; the growth in demand for our systems and other products; the efficacy of the Venus Versa Pro; the contribution of the
Venus Versa Pro to our revenue; the efficacy of the restructuring plan; and the reduction in our cash burn. 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, 2022. 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.
Investor Relations Contact:
ICR Westwicke on behalf of Venus Concept:
Mike Piccinino, CFA
VenusConceptIR@westwicke.com
Venus Concept Inc.
Condensed Consolidated Balance Sheets
(In thousands of U.S. dollars, except share and per share data)
|
September 30,
2023
|
December 31,
2022
|
|||||||
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ASSETS
|
||||||||
|
CURRENT ASSETS:
|
||||||||
|
Cash and cash equivalents
|
$
|
4,926
|
$
|
11,569
|
||||
|
Accounts receivable, net of allowance of $12,811 and $13,619 as of September 30, 2023, and December 31, 2022,
respectively
|
34,178
|
37,262
|
||||||
|
Inventories
|
23,392
|
23,906
|
||||||
|
Prepaid expenses
|
1,161
|
1,688
|
||||||
|
Advances to suppliers
|
5,753
|
5,881
|
||||||
|
Other current assets
|
2,357
|
3,702
|
||||||
|
Total current assets
|
71,767
|
84,008
|
||||||
|
LONG-TERM ASSETS:
|
||||||||
|
Long-term receivables, net
|
10,136
|
20,044
|
||||||
|
Deferred tax assets
|
954
|
947
|
||||||
|
Severance pay funds
|
593
|
741
|
||||||
|
Property and equipment, net
|
1,503
|
1,857
|
||||||
|
Operating right-of-use assets, net
|
4,647
|
5,862
|
||||||
|
Intangible assets
|
9,321
|
11,919
|
||||||
|
Total long-term assets
|
27,154
|
41,370
|
||||||
|
TOTAL ASSETS
|
$
|
98,921
|
$
|
125,378
|
||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
|
CURRENT LIABILITIES:
|
||||||||
|
Trade payables
|
$
|
7,120
|
$
|
8,033
|
||||
|
Accrued expenses and other current liabilities
|
12,982
|
16,667
|
||||||
|
Current portion of long-term debt
|
—
|
7,735
|
||||||
|
Income taxes payable
|
488
|
117
|
||||||
|
Unearned interest income
|
1,854
|
2,397
|
||||||
|
Warranty accrual
|
909
|
1,074
|
||||||
|
Deferred revenues
|
1,133
|
1,765
|
||||||
|
Operating lease liabilities
|
1,515
|
1,807
|
||||||
|
Total current liabilities
|
26,001
|
39,595
|
||||||
|
LONG-TERM LIABILITIES:
|
||||||||
|
Long-term debt
|
79,049
|
70,003
|
||||||
|
Income tax payable
|
—
|
374
|
||||||
|
Deferred tax liabilities
|
20
|
—
|
||||||
|
Accrued severance pay
|
693
|
867
|
||||||
|
Unearned interest revenue
|
540
|
957
|
||||||
|
Warranty accrual
|
356
|
408
|
||||||
|
Operating lease liabilities
|
3,304
|
4,221
|
||||||
|
Other long-term liabilities
|
336
|
215
|
||||||
|
Total long-term liabilities
|
84,298
|
77,045
|
||||||
|
TOTAL LIABILITIES
|
110,299
|
116,640
|
||||||
|
Commitments and Contingencies (Note 9)
|
||||||||
|
STOCKHOLDERS’ EQUITY (DEFICIT) (Note 14):
|
||||||||
|
Common Stock, $0.0001 par value: 300,000,000 shares authorized as of September 30, 2023 and December 31, 2022;
5,529,149 and 5,161,374 issued and outstanding as of September 30, 2023, and December 31, 2022, respectively
|
30
|
29
|
||||||
|
Additional paid-in capital
|
238,587
|
232,169
|
||||||
|
Accumulated deficit
|
(250,787
|
)
|
(224,105
|
)
|
||||
|
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)
|
(12,170
|
)
|
8,093
|
|||||
|
Non-controlling interests
|
792
|
645
|
||||||
|
(11,378
|
)
|
8,738
|
||||||
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
$
|
98,921
|
$
|
125,378
|
||||
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,
|
|||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
|||||||||||||
|
Revenue
|
||||||||||||||||
|
Leases
|
$
|
4,368
|
$
|
7,193
|
$
|
14,440
|
$
|
29,490
|
||||||||
|
Products and services
|
13,248
|
14,346
|
43,782
|
45,721
|
||||||||||||
|
17,616
|
21,539
|
58,222
|
75,211
|
|||||||||||||
|
Cost of goods sold:
|
||||||||||||||||
|
Leases
|
1,183
|
2,608
|
3,633
|
8,069
|
||||||||||||
|
Products and services
|
4,248
|
5,558
|
14,485
|
16,960
|
||||||||||||
|
5,431
|
8,166
|
18,118
|
25,029
|
|||||||||||||
|
Gross profit
|
12,185
|
13,373
|
40,104
|
50,182
|
||||||||||||
|
Operating expenses:
|
||||||||||||||||
|
Selling and marketing
|
6,907
|
9,369
|
23,319
|
30,976
|
||||||||||||
|
General and administrative
|
10,115
|
12,405
|
30,933
|
36,814
|
||||||||||||
|
Research and development
|
1,925
|
3,024
|
6,527
|
8,379
|
||||||||||||
|
Total operating expenses
|
18,947
|
24,798
|
60,779
|
76,169
|
||||||||||||
|
Loss from operations
|
(6,762
|
)
|
(11,425
|
)
|
(20,675
|
)
|
(25,987
|
)
|
||||||||
|
Other expenses:
|
||||||||||||||||
|
Foreign exchange loss
|
909
|
2,014
|
379
|
4,389
|
||||||||||||
|
Finance expenses
|
1,605
|
1,219
|
4,666
|
3,176
|
||||||||||||
|
Loss on disposal of subsidiaries
|
1
|
—
|
77
|
—
|
||||||||||||
|
Loss before income taxes
|
(9,277
|
)
|
(14,658
|
)
|
(25,797
|
)
|
(33,552
|
)
|
||||||||
|
Income tax (benefit) expense
|
(321
|
)
|
(162
|
)
|
103
|
92
|
||||||||||
|
Net loss
|
(8,956
|
)
|
(14,496
|
)
|
(25,900
|
)
|
(33,644
|
)
|
||||||||
|
Net loss attributable to stockholders of the Company
|
(9,068
|
)
|
(14,605
|
)
|
(26,134
|
)
|
(33,783
|
)
|
||||||||
|
Net income attributable to non-controlling interest
|
112
|
109
|
234
|
139
|
||||||||||||
|
Net loss per share:
|
||||||||||||||||
|
Basic
|
$
|
(1.64
|
)
|
$
|
(3.36
|
)
|
$
|
(4.83
|
)
|
$
|
(7.86
|
)
|
||||
|
Diluted
|
$
|
(1.64
|
)
|
$
|
(3.36
|
)
|
$
|
(4.83
|
)
|
$
|
(7.86
|
)
|
||||
|
Weighted-average number of shares used in per share calculation:
|
||||||||||||||||
|
Basic
|
5,527
|
4,351
|
5,413
|
4,298
|
||||||||||||
|
Diluted
|
5,527
|
4,351
|
5,413
|
4,298
|
||||||||||||
Venus Concept Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
|
Nine Months Ended September 30,
|
||||||||
|
2023
|
2022
|
|||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
|
Net loss
|
$
|
(25,900
|
)
|
$
|
(33,644
|
)
|
||
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
|
Depreciation and amortization
|
3,042
|
3,293
|
||||||
|
Stock-based compensation
|
1,214
|
1,552
|
||||||
|
Provision for expected credit losses
|
1,263
|
5,912
|
||||||
|
Provision for inventory obsolescence
|
760
|
1,753
|
||||||
|
Finance expenses and accretion
|
1,310
|
291
|
||||||
|
Deferred tax expense (recovery)
|
14
|
(620
|
)
|
|||||
|
Loss on disposal of subsidiary
|
77
|
-
|
||||||
|
Loss (gain) on disposal of property and equipment
|
(1
|
)
|
82
|
|||||
|
Changes in operating assets and liabilities:
|
||||||||
|
Accounts receivable short-term and long-term
|
11,146
|
4,493
|
||||||
|
Inventories
|
(246
|
)
|
(5,451
|
)
|
||||
|
Prepaid expenses
|
527
|
825
|
||||||
|
Advances to suppliers
|
128
|
(124
|
)
|
|||||
|
Other current assets
|
1,268
|
407
|
||||||
|
Operating right-of-use assets, net
|
1,215
|
5,714
|
||||||
|
Other long-term assets
|
(380
|
)
|
327
|
|||||
|
Trade payables
|
(913
|
)
|
(139
|
)
|
||||
|
Accrued expenses and other current liabilities
|
(4,483
|
)
|
(2,237
|
)
|
||||
|
Current operating lease liabilities
|
(292
|
)
|
(1,743
|
)
|
||||
|
Severance pay funds
|
148
|
93
|
||||||
|
Unearned interest income
|
(960
|
)
|
(103
|
)
|
||||
|
Long-term operating lease liabilities
|
(917
|
)
|
(3,971
|
)
|
||||
|
Other long-term liabilities
|
(105
|
)
|
(283
|
)
|
||||
|
Net cash used in operating activities
|
(12,085
|
)
|
(23,573
|
)
|
||||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
|
Purchases of property and equipment
|
(89
|
)
|
(297
|
)
|
||||
|
Net cash used in investing activities
|
(89
|
)
|
(297
|
)
|
||||
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
|
Proceeds from issuance of common stock, net of costs
|
1,109
|
415
|
||||||
|
2023 Multi-Tranche Private Placement, net of costs of $491
|
4,509
|
—
|
||||||
|
Proceeds from exercise of options
|
—
|
23
|
||||||
|
Repayment of government assistance loans
|
—
|
(543
|
)
|
|||||
|
Dividends from subsidiaries paid to non-controlling interest
|
(87
|
)
|
(124
|
)
|
||||
|
Net cash (used in) provided by financing activities
|
5,531
|
(229
|
)
|
|||||
|
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
|
(6,643
|
)
|
(24,099
|
)
|
||||
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period
|
11,569
|
30,876
|
||||||
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH — End of period
|
$
|
4,926
|
$
|
6,777
|
||||
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||
|
Cash paid for income taxes
|
$
|
90
|
$
|
152
|
||||
|
Cash paid for interest
|
$
|
3,356
|
$
|
2,885
|
||||
Use of Non-GAAP Financial Measures
Adjusted EBITDA is a non-GAAP measure defined as net income (loss) before foreign exchange loss, financial expenses, income tax expense (benefit), depreciation and
amortization, stock-based compensation and non-recurring items for a given period. Adjusted EBITDA is not a measure of our financial performance under U.S. GAAP and should not be considered an alternative to net income or any other performance
measures derived in accordance with U.S. GAAP. Accordingly, you should consider Adjusted EBITDA along with other financial performance measures, including net income, and our financial results presented in accordance with U.S. GAAP. Other
companies, including companies in our industry, may calculate Adjusted EBITDA differently or not at all, which reduces its usefulness as a comparative measure. We understand that although Adjusted EBITDA is frequently used by securities analysts,
lenders and others in their evaluation of companies, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these
limitations are: Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
and although depreciation and amortization are non-cash charges, the assets being depreciated will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.
We believe that Adjusted EBITDA is a useful measure for analyzing the performance of our core business because it facilitates operating performance comparisons from
period to period and company to company by backing out potential differences caused by changes in foreign exchange rates that impact financial assets and liabilities denominated in currencies other than the U.S. dollar, tax positions (such as the
impact on periods or companies of changes in effective tax rates), the age and book depreciation of fixed assets (affecting relative depreciation expense), amortization of intangible assets, stock-based compensation expense (because it is a
non-cash expense) and non-recurring items as explained below.
The following reconciliation of net (loss) income to Adjusted EBITDA for the periods presented:
Venus Concept Inc.
Reconciliation of Net loss to Non-GAAP Adjusted EBITDA
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
|||||||||||||
|
Reconciliation of net loss to adjusted EBITDA
|
(in thousands)
|
(in thousands)
|
||||||||||||||
|
Net loss
|
$
|
(8,956
|
)
|
$
|
(14,496
|
)
|
$
|
(25,900
|
)
|
$
|
(33,644
|
)
|
||||
|
Foreign exchange loss
|
909
|
2,014
|
379
|
4,389
|
||||||||||||
|
Loss on disposal of subsidiaries
|
1
|
—
|
77
|
—
|
||||||||||||
|
Finance expenses
|
1,605
|
1,219
|
4,666
|
3,176
|
||||||||||||
|
Income tax (benefit) expense
|
(321
|
)
|
(162
|
)
|
103
|
92
|
||||||||||
|
Depreciation and amortization
|
1,010
|
1,081
|
3,042
|
3,293
|
||||||||||||
|
Stock-based compensation expense
|
364
|
551
|
1,214
|
1,552
|
||||||||||||
|
Inventory Provision (1)
|
—
|
1,388
|
—
|
1,388
|
||||||||||||
|
Other adjustments (2)
|
752
|
726
|
2,082
|
726
|
||||||||||||
|
Adjusted EBITDA
|
$
|
(4,636
|
)
|
$
|
(7,679
|
)
|
$
|
(14,337
|
)
|
$
|
(19,028
|
)
|
||||
(1) For the three and nine months ended September 30, 2022, the inventory provision represents a strategic review of our product offerings which
culminated in a decision to discontinue production and sale of certain models and component parts, resulting in an inventory adjustment of $1.4 million.
(2) For the three and nine months ended September 30, 2023, the other adjustments primarily represent restructuring activities designed to improve the
Company's operations and cost structure. For the three and nine months ended September 30, 2022, the other adjustments are represented by severance payments associated with a workforce reduction in Venus Concept S.L. (Spain) and Venus Canada of
$0.7 million.