The Beauty Health Company (SKIN) on Q1 2021 Results - Earnings Call Transcript

Operator: Greetings and welcome to The Beauty Health Company’s call to discuss the HydraFacial Company’s First Quarter Results. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host today, Dawn Francfort, Managing Director at ICR. Please go ahead. Dawn Francfort: Good afternoon, everyone. Thank you for joining The Beauty Health Company’s call to discuss the HydraFacial Company's first quarter results, which we released this afternoon and can be found on our website at investors.beautyhealth.com. With me on the call is Brent Saunders, Executive Chairman of The Beauty Health Company; Clint Carnell, Chief Executive Officer; and Liyuan Woo, Chief Financial Officer. Brent Saunders: Thank you, Dawn, and thank you for joining our very first earnings calls as a public company. Last week, we successfully closed our business combination and became The Beauty Health Company. This was not only an important corporate milestone for the company, but also a significant event in beauty health, which is a category we have pioneered. The capital and strategic resources from this transaction position as well to expand our footprint globally and deliver sustainable growth. In addition, beauty health is the ideal platform towards achieving our goal of building an enduring and premier company in the beauty health category. I would like to extend my congratulations and appreciation to the team that made this combination and our success possible. Between our management and Board of Directors with a diverse range of expertise, we are confident that we have assembled an accomplished team with significant experience to appropriately fuel and guide the growth of beauty health. Turning now to the business. As you will hear later from Clint and Liyuan, this is a very resilient business, as evidenced by the financial performance in the first quarter. And we believe we have plenty of growth opportunities ahead as we begin to emerge from the global pandemic. My objective is to ensure that this new public company has the appropriate resources and team to deploy the right strategies in order to unleash growth. Over the minimum long-term, I believe this is the ideal platform to create an enduring growth company in the category of beauty health. I'm excited about our next chapter’s beauty health and the significant growth opportunity we have ahead. Clint Carnell: Thank you, Brent, and hello, everyone. It is great to be speaking with you today on our first earnings call as a public company. I will begin by discussing an overview of who we are at beauty health and why we are uniquely positioned for sustainable long-term growth. After which I will touch on some highlights from our first quarter and share our outlook and growth strategies. I'll then turn the call to Liyuan to discuss our first quarter financial performance in detail. Over the past few months, we have shared with you our vision of creating a powerful consumer brand and platform business that redefined the emerging category, we created beauty health. With delivery systems of over 17,000 and millions of consumers treated worldwide today, we are the clear leaders in the category. We are bridging the gap in the skin health continuum by connecting consumers across the medical professional and retail skincare markets, as well as enhancing outcomes for both skin correction and skin care. We are providing all of this beauty health for everyone across ages, genders, and races as we transform the beauty category. Our flagship brand HydraFacial is a highly effective, non-invasive and approachable game-changing treatment. It is an accessible skin treatment that’s utilized in an innovative approach to cleanse, extract and hydrate skin, offering an immediate outcome and an instantly gratifying glow. In three steps and 30 minutes, we simply deliver you the best skin of your life. We’re a platform business with the objective of building an enduring company of beauty health. We will continue to leverage our infrastructure, powerful technology and data as well as passionate community in the HydraFacial nation. These initiatives will allow us to accelerate our global expansion and our product innovation efforts. We are uniquely positioned for five key reasons. First, we operate in a large and growing market with favorable demographic trends. We have a first mover industry advantage in the beauty health category, where we are clearly the leaders. Second, we have a technologically advanced offering with high consumer and provider satisfaction. We are excited about the support from our customers and our high NPS suggest customer approval ratings are strong. Our flagship brand HydraFacial ranked the highest across branded esthetician and medtech peers as score of 80 among estheticians and 40 among consumers. And third, through our partnership with estheticians, we have created a passionate community of loyal and highly influential providers that is powering the success of our company. We invest in estheticians by providing clinical training, professional development and a holistic business education program called HydraFacial CONNECT. We aim to be the world's largest university and deployer of estheticians worldwide. Liyuan Woo: Thank you, Clint and hello everyone. Before I begin, I'd like to thank our team for their continued dedication throughout this unprecedented period. The hard work and commitment of our people drove our impressive growth this quarter in a still challenging environment, demonstrating the unique flexibility of our team and our business model. We did see outsized performance in this quarter, despite the continued select global market closures related to COVID-19 government mandate restrictions. With that in mind, I will make select comparisons to our first quarter of 2019 in my prepared remarks, as it removes anomaly created by the COVID-19 related market closures, which also impacted 2020. We believe this comparison will provide you with a more comprehensive understanding of our growth profile. Starting with our first quarter results net sales of 47.5 million, increased 46% from 2020 and 37% from 2019, our increase in revenue was primarily driven by significant expansion in our delivery systems with over 16,000 globally and strength in our predictable recurring consumable revenue streams. For the first quarter, delivery systems revenue increased 82% and 51% and consumables were up 19% and 23% from the same period in 2020 and 2019 respectively. Net sales in the Americas region increased 31% to 31.3 million compared to a 23.9 million in the prior year or increased 18% compared to 26.5 million in 2019. The strength was driven by continued traction in the U.S. as well as accelerating consumer demand. It's important to note that with the second wave of COVID-19, we had significant location closures in the first half of Q1 2021. Although the market did reopened once vaccines were available, we still had our non-medical channels in select States, such as retail partners, gyms, hotels, casinos and spa with many closed locations. Clint Carnell: Thank you, Liyuan. Our team's performance in the first quarter shows excellent execution. We continue to deliver on the guidance we provided in November during a highly uncertain environment. We remained focused on creating exceptional customer experiences and are seeing strong results from our investments in growth and innovation. As our markets reopen, we are encouraged by the demand for our services as consumer interest in health and wellness continues to accelerate. Looking ahead, we are focused on building our strong community, executing our growth strategy and creating long-term shareholder value. Thank you for your time and for joining today's call. And we look forward to continuing to update you on our future progress. Operator? Operator: Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day. Q - :
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The Beauty Health Shares Plunge 60% on Disappointing Q3

Shares of The Beauty Health Company (NASDAQ:SKIN) tumbled over 60% intra-day today following its significant miss on third-quarter estimates.

The company announced a Q3 loss of $0.56 per share, substantially below the analyst prediction of a $0.07 per share profit. Additionally, its revenue for the quarter was $97.4 million, falling short of the expected $116.23 million.

SKIN, the parent company of the Hydrafacial brand, adjusted its fiscal year 2023 sales forecast to between $385 and $400 million. It also revised its fiscal year adjusted EBITDA margin guidance to 5% to 6% and decided to suspend its long-term financial projections for 2025.

In a separate announcement, the company revealed that Andrew Stanleick will step down as president and CEO effective November 19. Marla Beck, a current director at BeautyHealth, will serve as interim CEO while the company searches for a permanent replacement.