- Q2 2023 Net Revenue of $49.3 Million, Up 33% from Q2 2022
- Raises Full-Year 2023 Net Revenue Guidance to $185 to $195
Million
- On Track to Achieving Sustained Profitability with Existing
Cash
Evolus, Inc. (NASDAQ: EOLS), a performance beauty company with a
focus on building an aesthetic portfolio of consumer brands, today
reported financial results for the second quarter ended June 30,
2023 and provided a business update.
“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 $185 and $195
million, which equates to over 30% growth at the upper end of our
range.
“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 70%2 over the next five
years driving us to $700 million of revenue by 2028 – a 29% CAGR on
the top line. Evolus has a clear path to exceptional growth, we are
fully funded to achieve that growth through expected profitability,
and we have an experienced team in place to execute our growth
plan.”
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 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® in Italy, 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 $49.3 million from $37.2 million in the second quarter of 2022
driven primarily by higher volumes of Jeuveau®.
- Gross profit margin and adjusted gross profit margin were 68.7%
and 70.2%, 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 $64.5
million, which included a $4.4 million milestone payment to
Symatese for the U.S. filler license, compared to $53.8 million in
the first quarter of 2023.
- Non-GAAP operating expenses for the second quarter of 2023 were
$42.7 million, which included a $4.4 million milestone payment to
Symatese for the U.S. filler license, compared to $35.5 million 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.
- Loss from operations for the second quarter of 2023 was $15.1
million, which included the $4.4 million license milestone expense,
compared to $12.0 million in the first quarter of 2023. Non-GAAP
loss from operations in the second quarter of 2023 was $8.0
million, which included the $4.4 million license milestone expense.
Excluding the milestone expense, non-GAAP loss from operations in
the second quarter of 2023 declined compared to the $5.9 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.
- Cash and cash equivalents at June 30, 2023 were $41.7 million
compared to $31.5 million at March 31, 2023. The cash balance at
June 30, 2023 included additional borrowings of $25 million under
the company’s credit facility with Pharmakon. For the second
quarter of 2023, net cash used for operating activities was $13.3
million, which included the $4.4 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.
Outlook
- Evolus now expects total net revenues for the full year 2023 to
be between $185 million and $195 million, representing
year-over-year growth of over 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% and 71%.
- Evolus continues to expect its full-year non-GAAP operating
expenses to be between $153 million and $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 $700
million by 2028, a compound annual growth rate of 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 (U.S.) or
(201) 389-0877 (international) or connect to the live webcast via
the link on the Investor Relations page of our website at
www.evolus.com.
Following the completion of the call, an audio replay can be
accessed for 48 hours by dialing (877) 660-6853 (U.S.) or (201)
612-7415 (international) and using conference number 13739952. An
archived webcast, which will remain available for 30 days, can also
be accessed on the Investor Relations page of our website at
www.evolus.com.
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 U.S. distributor of Evolysse™, a line
of five unique dermal fillers currently in late-stage development.
Visit us at www.evolus.com, and follow us on LinkedIn, Twitter,
Instagram or Facebook.
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 U.S. distribution rights for the
Evolysse™ HA dermal filler product line; the company’s long-term
revenue outlook and its financial outlook for 2023; and the
company’s cash position and expectations for reaching profitability
and funding the company’s operations.
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 U.S.,
our ability to maintain regulatory approvals of Jeuveau® or obtain
regulatory approvals for new product candidates or indications, our
reliance on Symatese to achieve regulatory approval for the
EvolysseTM dermal filler product line in the U.S., and other risks
described in our filings with the Securities and Exchange
Commission, including in the section entitled “Risk Factors” in our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2023
filed with the Securities and Exchange Commission (“SEC”) on May 9,
2023 and our Quarterly Report on Form 10-Q for the quarter ended
June 30, 2023 expected to be filed with the SEC on or about August
2, 2023. These filings can be accessed online at www.sec.gov.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
Except as required by law, we undertake no obligation to update or
revise any forward-looking statements to reflect new information,
changed circumstances or unanticipated events. If we do update or
revise one or more of these statements, investors and others should
not conclude that we will make additional updates or
corrections.
Use of Non-GAAP Financial Measures
Evolus’ financial results are prepared in accordance with
accounting principles generally accepted in the United States of
America (“GAAP”). This press release and the reconciliation tables
included in the financial schedules below include adjusted gross
profit, adjusted gross profit margin, non-GAAP operating expenses
and non-GAAP loss from operations. Adjusted gross profit is
calculated as gross profit excluding amortization of an intangible
asset. Adjusted gross profit margin is defined as adjusted gross
profit as a percentage of total net revenues. Non-GAAP operating
expenses and non-GAAP loss from operations exclude (i) product cost
of sales, in the case of non-GAAP operating expenses only, (ii) the
revaluation of contingent royalty obligations, (iii) stock-based
compensation expense, and (iv) depreciation and amortization.
Management believes that adjusted gross profit margin is an
important measure for investors because management uses adjusted
gross profit margin as a key performance indicator to evaluate the
profitability of sales without giving effect to costs that are not
core to our cost of sales, such as the amortization of an
intangible asset. Management believes that non-GAAP operating
expenses and non-GAAP loss from operations are useful in helping to
identify the company’s core operating performance and enables
management to consistently analyze the period-to-period financial
performance of the core business operations. Management also
believes that non-GAAP operating expenses and non-GAAP loss from
operations will enable investors to assess the company in the same
way that management has historically assessed the company’s
operating expenses against comparable companies with conventional
accounting methodologies. The company’s definitions of adjusted
gross profit, adjusted gross profit margin, non-GAAP operating
expenses and non-GAAP loss from operations have limitations as
analytical tools and may differ from other companies reporting
similarly named measures. Non-GAAP measures should not be
considered measures of financial performance under GAAP, and the
items excluded from such non-GAAP measures should not be considered
in isolation or as alternatives to financial statement data
presented in the financial statements as an indicator of financial
performance or liquidity. Non-GAAP measures should be considered in
addition to results prepared in accordance with GAAP but should not
be considered a substitute for or superior to GAAP results.
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 June
30,
Six Months Ended June
30,
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 $5.0
million and $15.0 million to Allergan/Medytox in the six months
ended June 30, 2023 and 2022, respectively.
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 June
30,
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 June
30,
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
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