Venus
Concept Announces Third Quarter of Fiscal Year 2024 Financial Results
TORONTO, November 13, 2024 (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, 2024.
Summary of Financial Results & Recent Progress:
|
• |
Company continues to execute against Transformation Plan
|
|
o |
Cash used in operations for the first nine months of 2024 of $7.3 million, down 40% year-over-year
|
|
• |
Total revenue for the third quarter of $15.0 million, down 15% year-over-year, and below third quarter estimate of at “least $17.0 million”.
|
|
o |
Third quarter operating expenses declined 10% year-over-year; limiting GAAP operating loss to 6% year-over-year, despite 15% revenue decline
|
|
o |
Third quarter Adjusted EBITDA loss of $5.9 million, compared to $4.6 million last year
|
|
• |
On July 29, 2024, the Company announced that it received a medical device license issued by Health Canada to market the Venus Bliss MAX system in Canada. The Venus Bliss MAX is the Company’s flagship
platform that offers a comprehensive, world-class solution for all customers’ body treatment needs and is currently available in select markets globally.
|
|
• |
On September 18, 2024, the Company announced that it received clearance from the Therapeutic Goods Administration (TGA) in Australia to market the Venus Bliss MAX system.
|
|
• |
On September 27, 2024, the Company announced that, on September 26, 2024, the Company exchanged $15.0 million of its senior debt held by affiliates of Madryn Asset Management, LP (“Madryn”) for
203,583 shares of its Series Y preferred stock. Following this transaction, the Company had total debt obligations of approximately $34.6 million, down 25% from $46.0 million outstanding as of June 30, 2024 and down 54% from $74.9 million
outstanding as of December 31, 2023.
|
Management Commentary:
“Third quarter revenue results were softer than the expectations we outlined during our second quarter report,” said Rajiv De Silva, Chief Executive Officer of Venus
Concept. “Aesthetic capital equipment sales continue to be challenged by macroeconomic headwinds particularly in the US, as expected. However, importantly, we continue to see evidence that our efforts to reposition the business over the last eighteen
months have been proving successful. We are enhancing our cash flow profile – as evidenced by the 40% reduction year-over-year in cash used in operations over the first nine months of 2024 -- and remain focused on enhancing the health of our balance
sheet and the Company’s foundation to support long-term, sustainable, profitability and growth in the future.”
Third Quarter 2024 Financial Results:
| |
|
Three Months Ended September 30,
|
|
| |
|
2024
|
|
|
2023
|
|
| |
|
(dollars in thousands)
|
|
|
Revenues by region:
|
|
|
|
|
|
|
|
United States
|
|
$
|
8,548
|
|
|
$
|
11,167
|
|
|
International
|
|
|
6,459
|
|
|
|
6,449
|
|
|
Total revenue
|
|
$
|
15,007
|
|
|
$
|
17,616
|
|
| |
|
Three Months Ended September 30,
|
|
|
|
|
|
|
|
| |
|
2024
|
|
|
2023
|
|
|
Change
|
|
|
(in thousands, except percentages)
|
|
$
|
|
|
|
% of Total
|
|
|
$
|
|
|
|
% of Total
|
|
|
|
|
|
$
|
%
|
|
|
Revenues by product:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Venus Prime / Subscription—Systems
|
|
$
|
2,684
|
|
|
|
17.9
|
|
|
$
|
4,368
|
|
|
|
24.8
|
|
|
$
|
(1,684
|
)
|
|
|
(38.6
|
)
|
|
Products—Systems
|
|
|
8,898
|
|
|
|
59.3
|
|
|
|
9,834
|
|
|
|
55.8
|
|
|
|
(936
|
)
|
|
|
(9.5
|
)
|
|
Products—Other
|
|
|
2,741
|
|
|
|
18.3
|
|
|
|
2,487
|
|
|
|
14.1
|
|
|
|
254
|
|
|
|
10.2
|
|
|
Services
|
|
|
684
|
|
|
|
4.5
|
|
|
|
927
|
|
|
|
5.3
|
|
|
|
(243
|
)
|
|
|
(26.2
|
)
|
|
Total
|
|
$
|
15,007
|
|
|
|
100.0
|
|
|
$
|
17,616
|
|
|
|
100.0
|
|
|
$
|
(2,609
|
)
|
|
|
(14.8
|
)
|
Total revenue for the third quarter of 2024 decreased $2.6 million, or 15%, to $15.0 million, compared to the third quarter of 2023. The decrease in total revenue, by
region, was driven by a 23% decrease year-over-year in United States revenue as the change in International revenue year-over-year was nominal. The decrease in total revenue, by product category, was driven primarily by a 39% decrease in lease
revenue and a 10% decrease in products – systems revenue. The percentage of total systems revenue derived from the Company’s internal lease programs (Venus Prime and our legacy subscription model) was approximately 23% in the third quarter of 2024,
compared to 31% in the prior year period.
Gross profit for the third quarter of 2024 decreased $2.3 million, or 19%, to $9.9 million compared to the third quarter of 2023. The decrease in gross profit is
primarily due to the effects of tighter third-party lending practices which negatively impacted capital equipment sales in the U.S., and a decrease in revenue in our international markets driven by the accelerated exit from unprofitable direct
markets, partially offset by an improvement in third party international distributor revenues. Gross margin was 66.1% of revenue, compared to 69.2% of revenue for the third quarter of 2023.
Operating expenses for the third quarter of 2024 decreased $1.9 million, or 10%, to $17.1 million, compared to the third quarter of 2023. The change in total operating
expenses was driven by a decrease of $1.4 million, or 14%, in general and administrative expenses, a decrease of $0.3 million, or 4%, in selling and marketing expenses, and a decrease of $0.2 million, or 12%, in research and development expenses.
Third quarter of 2024 general and administrative expenses included approximately $0.1 million of costs related to restructuring activities designed to improve the Company's operations and cost structure.
Operating loss for the third quarter of 2024 was $7.2 million, compared to operating loss of $6.8 million for the third quarter of 2023.
Net loss attributable to stockholders for the third quarter of 2024 was $9.3 million, or $1.28 per share, compared to net loss of $9.1 million, or $1.64 per share for
the third quarter of 2023. Third quarter net loss attributable to stockholders included a pre-tax loss on debt extinguishment of $0.5 million related to the debt-to-equity exchange transaction. Adjusted EBITDA loss for the third quarter of 2024 was
$5.9 million, compared to adjusted EBITDA loss of $4.6 million for the third quarter of 2023.
As of September 30, 2024, the Company had cash and cash equivalents of $4.5 million and total debt obligations of approximately $34.6 million, compared to $5.4 million
and $74.9 million, respectively, as of December 31, 2023.
Fiscal Year 2024 Financial Outlook:
The Company expects total revenue for the three months ending December 31, 2024 of at least $17.0 million, representing a 6% decline year-over-year and a
13% increase quarter-over-quarter.
Conference Call Details:
Management will host a conference call at 8:00 a.m. Eastern Time on November 13, 2024 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 13749236. 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 13749236. 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 10 direct markets. Venus Concept's product portfolio consists of aesthetic device platforms, including Venus Versa, Venus Versa Pro, Venus Legacy, Venus Velocity, Venus Viva, Venus
Glow, Venus Bliss, Venus Bliss MAX, 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 and Aperture Venture Partners.
Cautionary Statement Regarding Forward-Looking Statements
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, but are not limited to, statements about our financial performance and metrics; the growth in
demand for our systems and other products; the efficacy of the restructuring plan; the identification and efficacy of strategic alternatives to maximize shareholder value; the reduction in our cash burn; and the continued implementation of turnaround plans, including debt restructurings and financings. 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, 2023. 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,
|
|
|
December 31,
|
|
| |
|
2024
|
|
|
2023
|
|
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
4,489
|
|
|
$
|
5,396
|
|
|
Accounts receivable, net of allowance of $4,133 and $7,415 as of September 30, 2024, and December 31, 2023, respectively
|
|
|
21,102
|
|
|
|
29,151
|
|
|
Inventories
|
|
|
18,904
|
|
|
|
23,072
|
|
|
Prepaid expenses
|
|
|
1,002
|
|
|
|
1,298
|
|
|
Advances to suppliers
|
|
|
4,508
|
|
|
|
5,604
|
|
|
Other current assets
|
|
|
1,213
|
|
|
|
1,925
|
|
|
Total current assets
|
|
|
51,218
|
|
|
|
66,446
|
|
|
LONG-TERM ASSETS:
|
|
|
|
|
|
|
|
|
|
Long-term receivables, net
|
|
|
8,865
|
|
|
|
11,318
|
|
|
Deferred tax assets
|
|
|
1,292
|
|
|
|
1,032
|
|
|
Severance pay funds
|
|
|
426
|
|
|
|
573
|
|
|
Property and equipment, net
|
|
|
1,038
|
|
|
|
1,322
|
|
|
Operating right-of-use assets, net
|
|
|
3,591
|
|
|
|
4,517
|
|
|
Intangible assets
|
|
|
5,846
|
|
|
|
8,446
|
|
|
Total long-term assets
|
|
|
21,058
|
|
|
|
27,208
|
|
|
TOTAL ASSETS
|
|
$
|
72,276
|
|
|
$
|
93,654
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
|
Trade payables
|
|
$
|
7,120
|
|
|
|
9,038
|
|
|
Accrued expenses and other current liabilities
|
|
|
10,674
|
|
|
|
12,437
|
|
|
Note payable
|
|
|
4,389
|
|
|
|
—
|
|
|
Current portion of long-term debt
|
|
|
200
|
|
|
|
4,155
|
|
|
Income taxes payable
|
|
|
663
|
|
|
|
366
|
|
|
Unearned interest income
|
|
|
1,027
|
|
|
|
1,468
|
|
|
Warranty accrual
|
|
|
1,072
|
|
|
|
1,029
|
|
|
Deferred revenues
|
|
|
915
|
|
|
|
1,076
|
|
|
Operating lease liabilities
|
|
|
1,407
|
|
|
|
1,590
|
|
|
Total current liabilities
|
|
|
27,467
|
|
|
|
31,159
|
|
|
LONG-TERM LIABILITIES:
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
30,025
|
|
|
|
70,790
|
|
|
Accrued severance pay
|
|
|
464
|
|
|
|
634
|
|
|
Deferred tax liabilities
|
|
|
—
|
|
|
|
15
|
|
|
Unearned interest revenue
|
|
|
394
|
|
|
|
671
|
|
|
Warranty accrual
|
|
|
269
|
|
|
|
334
|
|
|
Operating lease liabilities
|
|
|
2,333
|
|
|
|
3,162
|
|
|
Other long-term liabilities
|
|
|
696
|
|
|
|
338
|
|
|
Total long-term liabilities
|
|
|
34,181
|
|
|
|
75,944
|
|
|
TOTAL LIABILITIES
|
|
|
61,648
|
|
|
|
107,103
|
|
|
Commitments and Contingencies (Note 9)
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY (DEFICIT) (Note 15):
|
|
|
|
|
|
|
|
|
|
Common Stock, $0.0001 par value: 300,000,000 shares authorized as of September 30, 2024 and December 31, 2023; 7,255,277 and 5,529,149 issued and outstanding as
of September 30, 2024, and December 31, 2023, respectively
|
|
|
30
|
|
|
|
30
|
|
|
Additional paid-in capital
|
|
|
311,012
|
|
|
|
247,854
|
|
|
Accumulated deficit
|
|
|
(300,934
|
)
|
|
|
(261,903
|
)
|
|
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
10,108
|
|
|
|
(14,019
|
)
|
|
Non-controlling interests
|
|
|
520
|
|
|
|
570
|
|
| |
|
|
10,628
|
|
|
|
(13,449
|
)
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
$
|
72,276
|
|
|
$
|
93,654
|
|
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,
|
|
| |
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leases
|
|
$
|
2,684
|
|
|
$
|
4,368
|
|
|
$
|
10,732
|
|
|
$
|
14,440
|
|
|
Products and services
|
|
|
12,323
|
|
|
|
13,248
|
|
|
|
38,336
|
|
|
|
43,782
|
|
| |
|
|
15,007
|
|
|
|
17,616
|
|
|
|
49,068
|
|
|
|
58,222
|
|
|
Cost of goods sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leases
|
|
|
651
|
|
|
|
1,183
|
|
|
|
2,538
|
|
|
|
3,633
|
|
|
Products and services
|
|
|
4,435
|
|
|
|
4,248
|
|
|
|
13,113
|
|
|
|
14,485
|
|
| |
|
|
5,086
|
|
|
|
5,431
|
|
|
|
15,651
|
|
|
|
18,118
|
|
|
Gross profit
|
|
|
9,921
|
|
|
|
12,185
|
|
|
|
33,417
|
|
|
|
40,104
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
|
|
|
6,654
|
|
|
|
6,907
|
|
|
|
21,076
|
|
|
|
23,319
|
|
|
General and administrative
|
|
|
8,732
|
|
|
|
10,115
|
|
|
|
27,640
|
|
|
|
30,933
|
|
|
Research and development
|
|
|
1,692
|
|
|
|
1,925
|
|
|
|
5,214
|
|
|
|
6,527
|
|
|
Total operating expenses
|
|
|
17,078
|
|
|
|
18,947
|
|
|
|
53,930
|
|
|
|
60,779
|
|
|
Loss from operations
|
|
|
(7,157
|
)
|
|
|
(6,762
|
)
|
|
|
(20,513
|
)
|
|
|
(20,675
|
)
|
|
Other expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss
|
|
|
57
|
|
|
|
909
|
|
|
|
1,155
|
|
|
|
379
|
|
|
Finance expenses
|
|
|
1,665
|
|
|
|
1,605
|
|
|
|
5,785
|
|
|
|
4,666
|
|
|
Loss on disposal of subsidiaries
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
77
|
|
|
Loss on debt extinguishment
|
|
|
454
|
|
|
|
—
|
|
|
|
11,355
|
|
|
|
—
|
|
|
Loss before income taxes
|
|
|
(9,333
|
)
|
|
|
(9,277
|
)
|
|
|
(38,808
|
)
|
|
|
(25,797
|
)
|
|
Income tax (benefit) expense
|
|
|
(31
|
)
|
|
|
(321
|
)
|
|
|
147
|
|
|
|
103
|
|
|
Net loss
|
|
$
|
(9,302
|
)
|
|
$
|
(8,956
|
)
|
|
$
|
(38,955
|
)
|
|
$
|
(25,900
|
)
|
|
Net loss attributable to stockholders of the Company
|
|
$
|
(9,286
|
)
|
|
$
|
(9,068
|
)
|
|
$
|
(39,031
|
)
|
|
$
|
(26,134
|
)
|
|
Net (loss) income attributable to non-controlling interest
|
|
$
|
(16
|
)
|
|
$
|
112
|
|
|
$
|
76
|
|
|
$
|
234
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(1.28
|
)
|
|
$
|
(1.64
|
)
|
|
$
|
(5.96
|
)
|
|
$
|
(4.83
|
)
|
|
Diluted
|
|
$
|
(1.28
|
)
|
|
$
|
(1.64
|
)
|
|
$
|
(5.96
|
)
|
|
$
|
(4.83
|
)
|
|
Weighted-average number of shares used in per share calculation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
7,255
|
|
|
|
5,527
|
|
|
|
6,547
|
|
|
|
5,413
|
|
|
Diluted
|
|
|
7,255
|
|
|
|
5,527
|
|
|
|
6,547
|
|
|
|
5,413
|
|
Venus Concept Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
| |
|
Nine Months Ended September 30,
|
|
| |
|
2024
|
|
|
2023
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(38,955
|
)
|
|
$
|
(25,900
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
2,924
|
|
|
|
3,042
|
|
|
Stock-based compensation
|
|
|
817
|
|
|
|
1,214
|
|
|
Provision for expected credit losses
|
|
|
869
|
|
|
|
1,263
|
|
|
Provision for inventory obsolescence
|
|
|
950
|
|
|
|
760
|
|
|
Finance expenses and accretion
|
|
|
4,150
|
|
|
|
1,310
|
|
|
Deferred tax expense (recovery)
|
|
|
(275
|
)
|
|
|
14
|
|
|
Loss on sale of subsidiary
|
|
|
—
|
|
|
|
77
|
|
|
Loss on extinguishment of debt
|
|
|
11,355
|
|
|
|
—
|
|
|
Loss (gain) on disposal of property and equipment
|
|
|
2
|
|
|
|
(1
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable short-term and long-term
|
|
|
9,914
|
|
|
|
11,146
|
|
|
Inventories
|
|
|
3,218
|
|
|
|
(246
|
)
|
|
Prepaid expenses
|
|
|
296
|
|
|
|
527
|
|
|
Advances to suppliers
|
|
|
1,096
|
|
|
|
128
|
|
|
Other current assets
|
|
|
712
|
|
|
|
1,268
|
|
|
Operating right-of-use assets, net
|
|
|
926
|
|
|
|
1,215
|
|
|
Other long-term assets
|
|
|
(281
|
)
|
|
|
(380
|
)
|
|
Trade payables
|
|
|
(1,607
|
)
|
|
|
(913
|
)
|
|
Accrued expenses and other current liabilities
|
|
|
(1,583
|
)
|
|
|
(4,483
|
)
|
|
Current operating lease liabilities
|
|
|
(183
|
)
|
|
|
(292
|
)
|
|
Severance pay funds
|
|
|
147
|
|
|
|
148
|
|
|
Unearned interest income
|
|
|
(718
|
)
|
|
|
(960
|
)
|
|
Long-term operating lease liabilities
|
|
|
(829
|
)
|
|
|
(917
|
)
|
|
Other long-term liabilities
|
|
|
(204
|
)
|
|
|
(105
|
)
|
|
Net cash used in operating activities
|
|
|
(7,259
|
)
|
|
|
(12,085
|
)
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(43
|
)
|
|
|
(89
|
)
|
|
Net cash used in investing activities
|
|
|
(43
|
)
|
|
|
(89
|
)
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
|
|
10
|
|
|
|
1,109
|
|
|
2023 Multi-Tranche Private Placement, net of costs of $491
|
|
|
—
|
|
|
|
4,509
|
|
|
2024 Registered Direct Offering shares and warrants, net of costs of $222
|
|
|
976
|
|
|
|
—
|
|
|
Dividends from subsidiaries paid to non-controlling interest
|
|
|
(126
|
)
|
|
|
(87
|
)
|
|
Proceeds from Short-Term Bridge Financing from Madryn, net of costs of $310
|
|
|
3,928
|
|
|
|
—
|
|
|
2024 Convertible Notes issued to EW, net of costs of $393
|
|
|
1,607
|
|
|
|
—
|
|
|
Net cash provided by financing activities
|
|
|
6,395
|
|
|
|
5,531
|
|
|
NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
|
|
|
(907
|
)
|
|
|
(6,643
|
)
|
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period
|
|
|
5,396
|
|
|
|
11,569
|
|
|
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH — End of period
|
|
$
|
4,489
|
|
|
$
|
4,926
|
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
|
Cash paid for income taxes
|
|
$
|
98
|
|
|
$
|
90
|
|
|
Cash paid for interest
|
|
$
|
1,633
|
|
|
$
|
3,356
|
|
Use of Non-GAAP Financial Measures
Adjusted EBITDA is a non-GAAP measure defined as net income (loss) before foreign exchange (gain) 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 is a reconciliation of net loss 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,
|
|
| |
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
|
Reconciliation of net loss to adjusted EBITDA
|
|
(in thousands)
|
|
|
(in thousands)
|
|
|
Net loss
|
|
$
|
(9,302
|
)
|
|
$
|
(8,956
|
)
|
|
$
|
(38,955
|
)
|
|
$
|
(25,900
|
)
|
|
Foreign exchange loss
|
|
|
57
|
|
|
|
909
|
|
|
|
1,155
|
|
|
|
379
|
|
|
Loss on disposal of subsidiaries
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
77
|
|
|
Loss on debt extinguishment
|
|
|
454
|
|
|
|
—
|
|
|
|
11,355
|
|
|
|
—
|
|
|
Finance expenses
|
|
|
1,665
|
|
|
|
1,605
|
|
|
|
5,785
|
|
|
|
4,666
|
|
|
Income tax (benefit) expense
|
|
|
(31
|
)
|
|
|
(321
|
)
|
|
|
147
|
|
|
|
103
|
|
|
Depreciation and amortization
|
|
|
971
|
|
|
|
1,010
|
|
|
|
2,924
|
|
|
|
3,042
|
|
|
Stock-based compensation expense
|
|
|
239
|
|
|
|
364
|
|
|
|
817
|
|
|
|
1,214
|
|
|
CEWS (1)
|
|
|
—
|
|
|
|
—
|
|
|
|
418
|
|
|
|
—
|
|
|
Other adjustments (2)
|
|
|
73
|
|
|
|
752
|
|
|
|
1,220
|
|
|
|
2,082
|
|
|
Adjusted EBITDA
|
|
$
|
(5,874
|
)
|
|
$
|
(4,636
|
)
|
|
$
|
(15,134
|
)
|
|
$
|
(14,337
|
)
|
(1) In April 2022, the Canada Revenue Agency (“CRA”) initiated an audit of the Canada Emergency Wage Subsidy Claim (“CEWS”) that the Company filed
between 2020-2021. The CRA has currently assessed a denial of CEWS claims made by the Company in 2020 and requesting repayment of $418. The Company disputes the CRA assessment and intends to challenge this matter through the Tax Court or Judicial
Review.
(2) For the three and nine months ended September 30, 2024 and September 30, 2023 the other adjustments are represented by restructuring activities
designed to improve the Company's operations and cost structure.
