NASDAQ:SSKN STRATA Skin Sciences Q2 2023 Earnings Report $2.55 -0.13 (-4.85%) Closing price 03:58 PM EasternExtended Trading$2.59 +0.04 (+1.57%) As of 04:26 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast STRATA Skin Sciences EPS ResultsActual EPS-$0.90Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/ASTRATA Skin Sciences Revenue ResultsActual Revenue$8.25 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/ASTRATA Skin Sciences Announcement DetailsQuarterQ2 2023Date8/9/2023TimeN/AConference Call DateWednesday, August 9, 2023Conference Call Time4:30PM ETUpcoming EarningsSTRATA Skin Sciences' Q1 2025 earnings is scheduled for Wednesday, May 21, 2025, with a conference call scheduled on Wednesday, May 14, 2025 at 4:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by STRATA Skin Sciences Q2 2023 Earnings Call TranscriptProvided by QuartrAugust 9, 2023 ShareLink copied to clipboard.There are 5 speakers on the call. Operator00:00:01Greetings. Welcome to the Stratus Skin Sciences 2Q 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded. Operator00:00:21I will now turn the conference over to your host, Nicole Jones, Investor Relations. You may begin. Speaker 100:00:27Thank you. Joining on today's call will be Bob Moshe, Chief Executive Officer and Chris Lesovic, Chief Financial Officer. Earlier today, Strata released financial results for the quarter ended June 30, 2023. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make Statements during this call that include forward looking statements within the meaning of federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Speaker 100:01:04Any statements contained in this call that do not relate to matters of historical facts or relate to expectations or predictions of future results or performance are forward looking statements. All forward looking statements, including without limitation, those relating to our operating trends and future financial performance are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our public filings with the SEC, including our annual report on Form 10 ks for the year ended December 31, 2022. Speaker 100:01:55This conference call contains time sensitive information and is accurate only as the live broadcast today, August 9, 2023. Strava disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward looking statements, whether because of new information, future events or otherwise. Also during this presentation, we refer to domestic growth recurring billings, which is a non GAAP financial measure. A reconciliation of this non GAAP financial measure to the most directly comparable GAAP financial measure is available in the company's earnings release for the 2nd of Strata's website at www.strataskinsciences.com. And with that, I'll turn the call over to Bob Moscha. Speaker 200:02:50Thank you, Nicole, and thank you all for joining us on today's call. In the Q2, we continue to make progress operationally, Achieving milestones across various aspects of our business, a few notable achievements include our TheraClear X Review and Expert Perspectives publication in the Journal of Clinical and Aesthetic Dermatology, securing a $12,000,000 financing with MidCap Financial, Increasing our TheraClear X installed base to over 70 devices, Doctor. Glynis Ablon initiating and treating patients in the TheraClear X and placing 18 new extract devices domestically. During the Q2 of 2023, We recognized revenues of $8,300,000 versus $9,100,000 in the same period of 2022. When excluding a significant one time order we received from China during the Q2 of 2022 of 1,500,000 Sales increased 8.8% during the period. Speaker 200:03:54There were also approximately 900,000 International sales that were shifted to the second half of twenty twenty three as a result of seasonality and lower capital spending due to higher interest rates and slowed macroeconomic factors. We expect to recover those sales during the second half of twenty twenty three. We continue to see large opportunities on the horizon for X TRAC. As we have previously mentioned, there are new FDA approved We believe that as the level of interest in vitiligo treatment options increases, We expect to see more opportunities to expand the awareness and usage of XTrak. For the remainder of the year, we plan to continue removing non profitable or underutilized devices from our installed base. Speaker 200:04:55We are also evaluating a plan to move lower tiered partners into existing membership programs that would offer them a number of codes commensurate with their usage. These changes would result in a more predictable revenue stream for Strata. Earlier this year, we announced the official broad launch of TheraClear X, which we expect to become one of the key drivers of our business. We have seen tremendous momentum with 73 TheraClear X devices placed as of June 30, 2023. Additionally, as we mentioned in our last earnings call, we have sold over 6,000 TheraClear X treatment codes, showcasing the increasing adoption and effectiveness of our acne solution. Speaker 200:05:39We continue to expand the awareness of TheraClear X through multiple avenues. We have implemented TheraClear X training programs for both our sales force and new TheraClear X providers. The training sessions focus on how to engage patients and promote cash pay services in their respective offices to ultimately drive utilization. In addition to expanding our training program, we have also hosted peer to peer webinars where dermatologists who are experienced with Dericlure X Blonde Skin Institute and Research Center in Manhattan Beach, California initiated and treated the first six patients in her TheraClear X Open label single arm clinical research study. The study titled a 7 week open label study Evaluating the efficacy and safety of TheraClear X on mitigating mild to moderate acne in healthy teenagers and young adults aims to further substantiate the efficacy and safety of TheraCler X as a standalone treatment for mild to moderate acne. Speaker 200:06:54The study will evaluate 30 healthy male and female subjects aged 12 to 40 years and older over the course of 7 weeks. We expect the study to be completed by the end of Q3. As a reminder, acne affects up to 50,000,000 Americans annually and accounts for up to 20% to 25% of dermatology visits. Acne is also prevalent in adolescents with 85% experiencing some degree from the ages of 12 to 24 years old. We believe TheraClip X's FDA cleared technology is well suited to address this need in the market. Speaker 200:07:33In July 2023, we announced that the Journal of Clinical and Aesthetic Dermatology, also known as JCAD, published a review and expert perspective article in the June 2023 supplemental edition titled Photopneumatic Technology for the treatment of mild to moderate acne vulgaris. The Expert Perspectives Roundtable featured dermatologists Ashish Bhatia, Cheryl Burgess, Girish Manavalli And Jason Smith. Some key takeaways from the roundtable were TheraClear X is safe and efficacious, providing visible improvement in acne as soon as the second treatment. Additional benefits include visible improvement of pore size, erythema and skin texture. TheraClear X's settings can be customized to treat all Fitzpatrick skin types. Speaker 200:08:29Treatment sessions are quick and comfortable with no downtime resulting in compliant and satisfied patients. TheraClear X is ideal for a new acne patient wanting to expedite their acne clearance and or an existing patient wanting to enhance their current acne regimen. The review in J Cat authored by Doctor. Girish Manavalli highlighted TheraClear X's mechanism of action, Key features of the device and the outcomes experienced in the clinic. Doctor. Speaker 200:09:02Manavalli mentioned that he often utilizes TheraClarex in his clinic to treat mild to moderate acne. He also described the benefits to patients as they experienced little to no downtime and visible reductions in redness early on in the treatment. The expert perspective article in the roundtable showcased the safety, Efficacy and visible improvements patients experience with Dericlure X. This publication serves as another treatment to the device's efficacy and helps us to continually increase the devices market awareness. Looking ahead, we remain committed to our strategic priorities, advanced sales training and expanding our market presence through virtual events and industry conferences. Speaker 200:09:48These efforts I will now turn the call over to Chris to describe to discuss the financials. Speaker 300:10:03Thank you, Bob. Revenues for the Q2 of 2023 were $8,300,000 as compared to revenues of $9,100,000 in the Q2 of 2022. Global recurring revenues in the Q2 of 2023 were $5,500,000 as compared to recurring revenues of $5,600,000 for the Q2 of 2022. Equipment revenues for the Q2 of 2023 were $2,800,000 as compared to $3,500,000 for the Q2 of 2022. For the Q2 of 2023, non GAAP extract gross domestic recurring billings were $5,100,000 as compared to $6,000,000 in the Q2 of 2022. Speaker 300:10:48Overall gross profit for the Q2 of 2023 was $4,300,000 or 52.3 percent of revenues as compared to $5,000,000 or 54.8 percent of revenues for the Q2 of 2022. The decrease in gross profits during the 3 months ended June 30, 2023 was primarily the result of higher depreciation material costs, lower recognition of Previously deferred service revenue associated with assumed service contracts from Ra Medical acquisition, which is decreasing as the related service contracts expire and an increase in domestic sales with longer warranty periods, leading to a greater amount of deferred revenues for those sales. Looking ahead, we can expect gross margins throughout the remainder of 2023 To be in the mid-50s to low-60s with some quarterly fluctuation based on the mix between recurring revenues from system placements and equipment sales. Operating expenses for the Q2 of 2023 were $6,300,000 as compared to $6,700,000 in the Q2 of 2022. The decrease in operating expenses in the Q2 of 2023 is primarily due to a reduction in sales and marketing costs, offset by a slight increase in engineering and G and A expenses. Speaker 300:12:08Other expenses for the Q2 of 2023 was $1,200,000 as compared to $200,000 for the Q2 of 2022. The increase in other expense for the Q2 was primarily attributed to a loss on the debt extinguishment of $900,000 for the 3 6 months ended June 30, 2023. Speaker 200:12:29Net loss Speaker 300:12:29for the Q2 of 2023 was $3,100,000 or a loss of $0.09 per basic and diluted common share As compared to net loss for the Q2 of 2022 of $1,900,000 or a loss of $0.05 per basic and diluted common share. As of June 30, 2023, cash and cash equivalents were $10,400,000 The increase in cash and cash equivalents is due to the 12,000,000 Dara Financing with MidCap Financial. The new debt facility consists of a refinancing of the existing $8,000,000 term loan and an additional $7,000,000 tranche funded at closing. Strata also has the option to receive an additional $5,000,000 tranche in 2024. For the fiscal year ending December 31, 2023, we are revising guidance in the range of $35,000,000 to 38 This adjustment is attributed to a slowdown in capital expenditure spending and macroeconomic factors that have impacted our equipment sales. Speaker 300:13:31While we believe sales could improve during the second half of this year, this updated guidance offers a current and conservative perspective on the business. We are pleased with the progress made in Q2 and are looking forward to building upon the strong base in the second half of the year. As Bob mentioned, Sales internationally were pushed into the second half of the year and it is our expectation that these will materialize in subsequent quarters during the balance of the year. With that, Bob and I would like to open the calls for questions. Operator00:14:06At this time, we will be conducting a question and answer session. And our first question comes from the line of Jeff Koolman with Ladenburg Thalmann. Please proceed with your question. Speaker 400:14:39Hi, thank you. This is actually Justin on for Jeff. I guess, can we start Kind of following Chris' comments around those international sales, do you have any additional color To what quarter that will be in? Is it more of a Q4 type of revenue recognition? Or do you think it will be split more Evenly between Q3 and Q4. Speaker 200:15:06Yes, this is Bob. Thanks for your question. Yes, we think it's going to probably Be more into the Q4 quarter. We'll start to see some rebound in Q3, but We're hearing particularly from a couple of our Asian partners that credit issues and interest rates They asked us to push these out. We do expect to recover them, but I think it's going to be later in the year. Speaker 400:15:33Okay, got it. And then could I just transition to Vitiligo for a second? I know with the launch of OXOLERA, There's been a lot more awareness around Vitiligo. So I'm wondering, have you heard anything about it being used in conjunction with Your systems or is there anything else you can discuss really around vitiligo? Speaker 200:15:56Sure. No anecdotally, yes. Obviously, it's not been studied in the combination. So we can't go out and promote it that way. But anecdotally, we have heard from some KOLs who are using our laser alongside Opsalore and getting very good results. Speaker 200:16:15We'd love to be able to promote that, but obviously we're not allowed to do that. So I think the noise level though has really helped overall Just for Xtract and Vitiligo, it's been approved for a number of years for that indication. And I think that patients have enjoyed the repigmentation that they get from using the excimer laser, which is one of the Selling points for it. So I think as more patients start to see the new opportunities with the drugs that are out there like OXELURA, there are Some additional JAKs that are coming and that are going to be approved here shortly. We'll see more patients coming in to get treated and that will help us with the usage of Exelon as well. Speaker 400:17:01Okay, got it. And then I believe you said it accounted or Vitiligo accounted for about 15% of Procedure revenues, if I heard that correctly. So I'm wondering, do you think it will remain consistent at that level? Or based on some of the greater awareness, do you think that could increase going Speaker 200:17:18Yes, that's our hope. We hope it will actually start to increase. Coverage by insurance companies has always One of the things that we face, we have excellent coverage for psoriasis over 80%, 90% of all claims go through. For Vitiligo, It's still 70%, which is really good. But even if you get one rejection, the doctor starts to question it. Speaker 200:17:42So we do have a reimbursement team that's part of Services we provide for Xtrack, which has been very effective in getting coverage for patients. So we utilize that quite a bit with our commercial team and We do hope that Vitiligo will become a bigger overall piece of the pie for extract. Speaker 400:18:01Okay. And then lastly for us, I know you called out some macro level issues Internationally, I'm just wondering if there's anything else that you can call out that impacted the top line and that we should be considering as we model the rest of the year? Speaker 300:18:22No, I don't think there is. I mean, you'll see Year over year, the big drop was international revenue. We had the one time China sale in 2022. When we take that out, we're pretty much we did grow the business, but we didn't grow as much as we wanted to, mainly because of what we discussed the international push out of orders. Speaker 400:18:50Okay, perfect. That does it for us. Thank you for taking our questions. Speaker 200:18:54Sure. Thank you. Operator00:18:58And it looks like we have reached the end of the question and answer session. I'll now turn the call back over to CEO, Bob Moshe for closing remarks. Speaker 200:19:06Thank you. And thank you all again for all of your continued support. Before I conclude the call, I would like to mention that Strata will be hosting a key opinion leader event On September 20, the webcast will include X TRAC and TheraClear experts who will provide Their perspectives and experience with Strata's devices inside the clinic. Please look out for more details as we get closer to the event. Thank you, and we look forward to keeping the community updated on our achievements. Operator00:19:35And this concludes today's conference and you may disconnect your lines at this time. Thank you for yourRead morePowered by Conference Call Audio Live Call not available Earnings Conference CallSTRATA Skin Sciences Q2 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) STRATA Skin Sciences Earnings HeadlinesStrata Skin Sciences price target lowered to $14 from $16 at LadenburgMarch 31, 2025 | markets.businessinsider.comEarnings call transcript: STRATA Skin Sciences Q4 2024 revenue rises 10%March 29, 2025 | uk.investing.comThis Is The Moment You Betray Trump (Or Prove Them Wrong)They said you wouldn’t last—that Bidenflation, Wall Street selloffs, and DEI funds would break your loyalty to Trump’s economic plan. But now there’s a way to protect your retirement without backing down. This free 2025 Wealth Protection Guide reveals how you can use a legal IRS loophole—nicknamed “Piggy Bank”—to shield your savings.May 6, 2025 | Colonial Metals (Ad)STRATA Skin Sciences Full Year 2024 Earnings: Revenues Beat Expectations, EPS LagsMarch 29, 2025 | finance.yahoo.comSTRATA SKIN SCIENCES Earnings Results: $SSKN Reports Quarterly EarningsMarch 29, 2025 | nasdaq.comStrata Skin Sciences (SSKN) Gets a Buy from Maxim GroupMarch 29, 2025 | markets.businessinsider.comSee More STRATA Skin Sciences Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like STRATA Skin Sciences? Sign up for Earnings360's daily newsletter to receive timely earnings updates on STRATA Skin Sciences and other key companies, straight to your email. Email Address About STRATA Skin SciencesSTRATA Skin Sciences (NASDAQ:SSKN), a medical technology company, develops, commercializes, and markets products for the treatment of dermatologic conditions in the United States, Europe, the Middle East, Asia, Australia, South Africa, and Central and South America. The company operates in two segments, Dermatology Recurring Procedures and Dermatology Procedures Equipment. The company products include XTRAC and Pharos excimer lasers, and VTRAC lamp systems for the treatment systems that are used for the treatment of psoriasis, vitiligo, and other skin conditions. It also offers TheraClear Acne Therapy System for the treatment of mild to moderate inflammatory, comedonal, and pustular acne. The company was formerly known as MELA Sciences, Inc and changed its name to STRATA Skin Sciences, Inc. in January 2016. STRATA Skin Sciences, Inc. was incorporated in 1989 and is based in Horsham, Pennsylvania.View STRATA Skin Sciences ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Palantir Stock Drops Despite Stellar Earnings: What's Next?Is Eli Lilly a Buy After Weak Earnings and CVS-Novo Partnership?Is Reddit Stock a Buy, Sell, or Hold After Earnings Release?Warning or Opportunity After Super Micro Computer's EarningsAmazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousRocket Lab Braces for Q1 Earnings Amid Soaring ExpectationsMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2 Upcoming Earnings ARM (5/7/2025)AppLovin (5/7/2025)Fortinet (5/7/2025)MercadoLibre (5/7/2025)Cencora (5/7/2025)Carvana (5/7/2025)Walt Disney (5/7/2025)Emerson Electric (5/7/2025)Johnson Controls International (5/7/2025)Lloyds Banking Group (5/7/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 5 speakers on the call. Operator00:00:01Greetings. Welcome to the Stratus Skin Sciences 2Q 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded. Operator00:00:21I will now turn the conference over to your host, Nicole Jones, Investor Relations. You may begin. Speaker 100:00:27Thank you. Joining on today's call will be Bob Moshe, Chief Executive Officer and Chris Lesovic, Chief Financial Officer. Earlier today, Strata released financial results for the quarter ended June 30, 2023. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make Statements during this call that include forward looking statements within the meaning of federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Speaker 100:01:04Any statements contained in this call that do not relate to matters of historical facts or relate to expectations or predictions of future results or performance are forward looking statements. All forward looking statements, including without limitation, those relating to our operating trends and future financial performance are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our public filings with the SEC, including our annual report on Form 10 ks for the year ended December 31, 2022. Speaker 100:01:55This conference call contains time sensitive information and is accurate only as the live broadcast today, August 9, 2023. Strava disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward looking statements, whether because of new information, future events or otherwise. Also during this presentation, we refer to domestic growth recurring billings, which is a non GAAP financial measure. A reconciliation of this non GAAP financial measure to the most directly comparable GAAP financial measure is available in the company's earnings release for the 2nd of Strata's website at www.strataskinsciences.com. And with that, I'll turn the call over to Bob Moscha. Speaker 200:02:50Thank you, Nicole, and thank you all for joining us on today's call. In the Q2, we continue to make progress operationally, Achieving milestones across various aspects of our business, a few notable achievements include our TheraClear X Review and Expert Perspectives publication in the Journal of Clinical and Aesthetic Dermatology, securing a $12,000,000 financing with MidCap Financial, Increasing our TheraClear X installed base to over 70 devices, Doctor. Glynis Ablon initiating and treating patients in the TheraClear X and placing 18 new extract devices domestically. During the Q2 of 2023, We recognized revenues of $8,300,000 versus $9,100,000 in the same period of 2022. When excluding a significant one time order we received from China during the Q2 of 2022 of 1,500,000 Sales increased 8.8% during the period. Speaker 200:03:54There were also approximately 900,000 International sales that were shifted to the second half of twenty twenty three as a result of seasonality and lower capital spending due to higher interest rates and slowed macroeconomic factors. We expect to recover those sales during the second half of twenty twenty three. We continue to see large opportunities on the horizon for X TRAC. As we have previously mentioned, there are new FDA approved We believe that as the level of interest in vitiligo treatment options increases, We expect to see more opportunities to expand the awareness and usage of XTrak. For the remainder of the year, we plan to continue removing non profitable or underutilized devices from our installed base. Speaker 200:04:55We are also evaluating a plan to move lower tiered partners into existing membership programs that would offer them a number of codes commensurate with their usage. These changes would result in a more predictable revenue stream for Strata. Earlier this year, we announced the official broad launch of TheraClear X, which we expect to become one of the key drivers of our business. We have seen tremendous momentum with 73 TheraClear X devices placed as of June 30, 2023. Additionally, as we mentioned in our last earnings call, we have sold over 6,000 TheraClear X treatment codes, showcasing the increasing adoption and effectiveness of our acne solution. Speaker 200:05:39We continue to expand the awareness of TheraClear X through multiple avenues. We have implemented TheraClear X training programs for both our sales force and new TheraClear X providers. The training sessions focus on how to engage patients and promote cash pay services in their respective offices to ultimately drive utilization. In addition to expanding our training program, we have also hosted peer to peer webinars where dermatologists who are experienced with Dericlure X Blonde Skin Institute and Research Center in Manhattan Beach, California initiated and treated the first six patients in her TheraClear X Open label single arm clinical research study. The study titled a 7 week open label study Evaluating the efficacy and safety of TheraClear X on mitigating mild to moderate acne in healthy teenagers and young adults aims to further substantiate the efficacy and safety of TheraCler X as a standalone treatment for mild to moderate acne. Speaker 200:06:54The study will evaluate 30 healthy male and female subjects aged 12 to 40 years and older over the course of 7 weeks. We expect the study to be completed by the end of Q3. As a reminder, acne affects up to 50,000,000 Americans annually and accounts for up to 20% to 25% of dermatology visits. Acne is also prevalent in adolescents with 85% experiencing some degree from the ages of 12 to 24 years old. We believe TheraClip X's FDA cleared technology is well suited to address this need in the market. Speaker 200:07:33In July 2023, we announced that the Journal of Clinical and Aesthetic Dermatology, also known as JCAD, published a review and expert perspective article in the June 2023 supplemental edition titled Photopneumatic Technology for the treatment of mild to moderate acne vulgaris. The Expert Perspectives Roundtable featured dermatologists Ashish Bhatia, Cheryl Burgess, Girish Manavalli And Jason Smith. Some key takeaways from the roundtable were TheraClear X is safe and efficacious, providing visible improvement in acne as soon as the second treatment. Additional benefits include visible improvement of pore size, erythema and skin texture. TheraClear X's settings can be customized to treat all Fitzpatrick skin types. Speaker 200:08:29Treatment sessions are quick and comfortable with no downtime resulting in compliant and satisfied patients. TheraClear X is ideal for a new acne patient wanting to expedite their acne clearance and or an existing patient wanting to enhance their current acne regimen. The review in J Cat authored by Doctor. Girish Manavalli highlighted TheraClear X's mechanism of action, Key features of the device and the outcomes experienced in the clinic. Doctor. Speaker 200:09:02Manavalli mentioned that he often utilizes TheraClarex in his clinic to treat mild to moderate acne. He also described the benefits to patients as they experienced little to no downtime and visible reductions in redness early on in the treatment. The expert perspective article in the roundtable showcased the safety, Efficacy and visible improvements patients experience with Dericlure X. This publication serves as another treatment to the device's efficacy and helps us to continually increase the devices market awareness. Looking ahead, we remain committed to our strategic priorities, advanced sales training and expanding our market presence through virtual events and industry conferences. Speaker 200:09:48These efforts I will now turn the call over to Chris to describe to discuss the financials. Speaker 300:10:03Thank you, Bob. Revenues for the Q2 of 2023 were $8,300,000 as compared to revenues of $9,100,000 in the Q2 of 2022. Global recurring revenues in the Q2 of 2023 were $5,500,000 as compared to recurring revenues of $5,600,000 for the Q2 of 2022. Equipment revenues for the Q2 of 2023 were $2,800,000 as compared to $3,500,000 for the Q2 of 2022. For the Q2 of 2023, non GAAP extract gross domestic recurring billings were $5,100,000 as compared to $6,000,000 in the Q2 of 2022. Speaker 300:10:48Overall gross profit for the Q2 of 2023 was $4,300,000 or 52.3 percent of revenues as compared to $5,000,000 or 54.8 percent of revenues for the Q2 of 2022. The decrease in gross profits during the 3 months ended June 30, 2023 was primarily the result of higher depreciation material costs, lower recognition of Previously deferred service revenue associated with assumed service contracts from Ra Medical acquisition, which is decreasing as the related service contracts expire and an increase in domestic sales with longer warranty periods, leading to a greater amount of deferred revenues for those sales. Looking ahead, we can expect gross margins throughout the remainder of 2023 To be in the mid-50s to low-60s with some quarterly fluctuation based on the mix between recurring revenues from system placements and equipment sales. Operating expenses for the Q2 of 2023 were $6,300,000 as compared to $6,700,000 in the Q2 of 2022. The decrease in operating expenses in the Q2 of 2023 is primarily due to a reduction in sales and marketing costs, offset by a slight increase in engineering and G and A expenses. Speaker 300:12:08Other expenses for the Q2 of 2023 was $1,200,000 as compared to $200,000 for the Q2 of 2022. The increase in other expense for the Q2 was primarily attributed to a loss on the debt extinguishment of $900,000 for the 3 6 months ended June 30, 2023. Speaker 200:12:29Net loss Speaker 300:12:29for the Q2 of 2023 was $3,100,000 or a loss of $0.09 per basic and diluted common share As compared to net loss for the Q2 of 2022 of $1,900,000 or a loss of $0.05 per basic and diluted common share. As of June 30, 2023, cash and cash equivalents were $10,400,000 The increase in cash and cash equivalents is due to the 12,000,000 Dara Financing with MidCap Financial. The new debt facility consists of a refinancing of the existing $8,000,000 term loan and an additional $7,000,000 tranche funded at closing. Strata also has the option to receive an additional $5,000,000 tranche in 2024. For the fiscal year ending December 31, 2023, we are revising guidance in the range of $35,000,000 to 38 This adjustment is attributed to a slowdown in capital expenditure spending and macroeconomic factors that have impacted our equipment sales. Speaker 300:13:31While we believe sales could improve during the second half of this year, this updated guidance offers a current and conservative perspective on the business. We are pleased with the progress made in Q2 and are looking forward to building upon the strong base in the second half of the year. As Bob mentioned, Sales internationally were pushed into the second half of the year and it is our expectation that these will materialize in subsequent quarters during the balance of the year. With that, Bob and I would like to open the calls for questions. Operator00:14:06At this time, we will be conducting a question and answer session. And our first question comes from the line of Jeff Koolman with Ladenburg Thalmann. Please proceed with your question. Speaker 400:14:39Hi, thank you. This is actually Justin on for Jeff. I guess, can we start Kind of following Chris' comments around those international sales, do you have any additional color To what quarter that will be in? Is it more of a Q4 type of revenue recognition? Or do you think it will be split more Evenly between Q3 and Q4. Speaker 200:15:06Yes, this is Bob. Thanks for your question. Yes, we think it's going to probably Be more into the Q4 quarter. We'll start to see some rebound in Q3, but We're hearing particularly from a couple of our Asian partners that credit issues and interest rates They asked us to push these out. We do expect to recover them, but I think it's going to be later in the year. Speaker 400:15:33Okay, got it. And then could I just transition to Vitiligo for a second? I know with the launch of OXOLERA, There's been a lot more awareness around Vitiligo. So I'm wondering, have you heard anything about it being used in conjunction with Your systems or is there anything else you can discuss really around vitiligo? Speaker 200:15:56Sure. No anecdotally, yes. Obviously, it's not been studied in the combination. So we can't go out and promote it that way. But anecdotally, we have heard from some KOLs who are using our laser alongside Opsalore and getting very good results. Speaker 200:16:15We'd love to be able to promote that, but obviously we're not allowed to do that. So I think the noise level though has really helped overall Just for Xtract and Vitiligo, it's been approved for a number of years for that indication. And I think that patients have enjoyed the repigmentation that they get from using the excimer laser, which is one of the Selling points for it. So I think as more patients start to see the new opportunities with the drugs that are out there like OXELURA, there are Some additional JAKs that are coming and that are going to be approved here shortly. We'll see more patients coming in to get treated and that will help us with the usage of Exelon as well. Speaker 400:17:01Okay, got it. And then I believe you said it accounted or Vitiligo accounted for about 15% of Procedure revenues, if I heard that correctly. So I'm wondering, do you think it will remain consistent at that level? Or based on some of the greater awareness, do you think that could increase going Speaker 200:17:18Yes, that's our hope. We hope it will actually start to increase. Coverage by insurance companies has always One of the things that we face, we have excellent coverage for psoriasis over 80%, 90% of all claims go through. For Vitiligo, It's still 70%, which is really good. But even if you get one rejection, the doctor starts to question it. Speaker 200:17:42So we do have a reimbursement team that's part of Services we provide for Xtrack, which has been very effective in getting coverage for patients. So we utilize that quite a bit with our commercial team and We do hope that Vitiligo will become a bigger overall piece of the pie for extract. Speaker 400:18:01Okay. And then lastly for us, I know you called out some macro level issues Internationally, I'm just wondering if there's anything else that you can call out that impacted the top line and that we should be considering as we model the rest of the year? Speaker 300:18:22No, I don't think there is. I mean, you'll see Year over year, the big drop was international revenue. We had the one time China sale in 2022. When we take that out, we're pretty much we did grow the business, but we didn't grow as much as we wanted to, mainly because of what we discussed the international push out of orders. Speaker 400:18:50Okay, perfect. That does it for us. Thank you for taking our questions. Speaker 200:18:54Sure. Thank you. Operator00:18:58And it looks like we have reached the end of the question and answer session. I'll now turn the call back over to CEO, Bob Moshe for closing remarks. Speaker 200:19:06Thank you. And thank you all again for all of your continued support. Before I conclude the call, I would like to mention that Strata will be hosting a key opinion leader event On September 20, the webcast will include X TRAC and TheraClear experts who will provide Their perspectives and experience with Strata's devices inside the clinic. Please look out for more details as we get closer to the event. Thank you, and we look forward to keeping the community updated on our achievements. Operator00:19:35And this concludes today's conference and you may disconnect your lines at this time. Thank you for yourRead morePowered by