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TORONTO, April 01, 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 twelve months ended December 31, 2023.

Fourth Quarter and Fiscal Year 2023 Summary & Recent Progress:

• Company continues to execute against Transformational Plan and achieved primary objective of reducing cash burn by over 50% vs. prior year
  • Cash used in operations for fiscal year 2023 of $12.9 million, down 52% year-over-year, from $27.0 million in the prior year period
  • Cash system revenue for fiscal year 2023 represented approximately 67% of total systems and subscriptions revenue, compared to 58% in the prior year period
• Macroeconomic headwinds and accelerated restructuring in international markets resulted in softer-than-expected system sales; total revenue of $18.1 million, down $6.2 million, or 25%, year-over-year; up $0.5 million, or 3%, quarter-over-quarter
• Operating expenses of $19.7 million, including approximately $0.3 million of costs related to restructuring activities, down $5.0 million, or 20%, year-over-year
• GAAP net loss attributable to stockholders of $11.1 million, up $1.2 million, or 12% year-over-year
• Adjusted EBITDA loss of $5.9 million, down $0.4 million, or 7% year-over-year
• On October 5, 2023, the Company announced that it finalized an agreement with its lenders to restructure its existing debt obligations, improving the Company's overall financial position by deferring certain principal and interest payments under its senior debt and exchanging a portion of its convertible notes for preferred stock.
• On October 17, 2023, the Company announced a company-wide rebranding initiative, introducing Venus Aesthetic Intelligence (or "Venus AI") to reflect the new strategic vision for the Company and an enhanced focus on emerging technologies in aesthetics.
• On November 1, 2023, the Company announced the commercial launch of its new multi-application platform Venus Versa Pro in the United States.
• On January 24, 2024, the Company announced that its Board of Directors is evaluating potential strategic alternatives to maximize shareholder value. As part of the process, the Board is considering a full range of strategic alternatives, which may include one or more financings, mergers, reverse mergers, other business combinations, sales of assets, licensing or other transactions.
• On March 25, 2024, announced that it received a decision from the Nasdaq Hearings Panel granting its request for continued listing on the Nasdaq Capital Market, subject to the Company demonstrating compliance with Nasdaq Listing Rule 5550(b) on or before May 28, 2024, and certain other conditions.

Management Commentary:

“Our fourth quarter revenue results reflect softer-than-expected system sales in the U.S. due to macroeconomic conditions and tighter credit markets, and by the impact of our accelerated restructuring activities in certain international markets,” said Rajiv De Silva, Chief Executive Officer of Venus Concept. “We have successfully executed our strategic turnaround plan, and our efforts to reposition and restructure the business resulted in a 20% reduction in operating expenses. Importantly, we delivered on our primary objective for 2023 to reduce cash burn by 50% or more year over year. We remain in active dialogue with our lenders and investors to find ways to best enable Venus Concept to achieve our strategic objectives and to accelerate the path to long-term, sustainable, profitability and growth. We also continue to explore strategic alternatives with various interested parties to maximize shareholder value.”

Total revenue for the fourth quarter of 2023 decreased $6.1 million, or 25%, to $18.1 million, compared to the fourth quarter of 2022. The decrease in total revenue, by region, was driven by a 40% decrease year-over-year in international revenue and a 14% decrease year-over-year in United States revenue. Our international business was impacted by the Company's decision to exit three unprofitable direct markets in the past year, as well as general macroeconomic headwinds that impacted customer access to capital. The decrease in total revenue, by product category, was driven by a 38% decrease in products – systems revenue and a 30% decrease in products - other revenue, partially offset by a 5% increase in lease revenue and a 4% increase in services revenue. The percentage of total systems revenue derived from the Company’s subscription model was approximately 41% in the fourth quarter of 2023, compared to 29% in the prior year period and 31% in the third quarter of 2023.

Gross profit for the fourth quarter of 2023 decreased $3.7 million, or 24%, to $12.1 million compared to the fourth quarter of 2022. The change in gross profit was primarily due to a decrease in revenue in our international markets driven by the accelerated exit from unprofitable direct markets. Gross margin was 66.5% of revenue, compared to 65.0% of revenue for the fourth quarter of 2022. The change in gross margin was primarily due to improved margin management, and reduced inventory write-offs when compared to the previous period.

Operating expenses for the fourth quarter of 2023 decreased $5.0 million, or 20%, to $19.7 million, compared to the fourth quarter of 2022. The change in total operating expenses was driven by a decrease of $2.7 million, or 21%, in general and administrative expenses, a decrease of $1.4 million, or 15%, in selling and marketing expenses and a decrease of $0.9 million, or 35%, in research and development expenses. Fourth quarter of 2023 general and administrative expenses included approximately $0.3 million of costs related to restructuring activities designed to improve the Company's operations and cost structure.

Operating loss for the fourth quarter of 2023 was $7.6 million, compared to operating loss of $8.9 million for the fourth quarter of 2022.

Net loss attributable to stockholders for the fourth quarter of 2023 was $11.1 million, or $2.01 per share, compared to net loss of $9.9 million, or $2.11 per share for the fourth quarter of 2022. Adjusted EBITDA loss for the fourth quarter of 2023 was $5.9 million, compared to adjusted EBITDA loss of $6.3 million for the fourth quarter of 2022.

As of December 31, 2023, the Company had cash and cash equivalents of $5.4 million and total debt obligations of approximately $74.9 million, compared to $11.6 million and $77.7 million, respectively, as of December 31, 2022.

Total revenue decreased by $23.1 million, or 23.3%, to $76.4 million for the year ended December 31, 2023 from $99.5 million for the year ended December 31, 2022. The decrease in total revenue, by region, was driven by an 31% decrease in international revenue and a 17% decrease in United States revenue. The decrease in total revenue, by product category, was driven by a 42% decrease in lease revenue, a 13% decrease in systems revenue and a 21% decrease in products revenue, offset partially by a 14% increase in services revenue. The percentage of total systems revenue derived from our subscription model was approximately 29%, compared to approximately 42% for the twelve months ended December 31, 2022.

Net loss attributable to stockholders for the twelve months ended December 31, 2023 decreased $6.5 million, or 15%, to $37.3 million, or $6.84 per share. Adjusted EBITDA loss for the twelve months ended December 31, 2023 decreased $5.1 million, or 20%, to $20.3 million.

Fiscal Year 2024 Financial Outlook:

Given the Company’s active dialogue with existing lenders and investors and the ongoing evaluation of strategic alternatives with various interested parties to maximize shareholder value, the Company is not providing full year 2024 financial guidance at this time. The Company expects total revenue for the three months ending March 31, 2024 of at least $16.5 million.

Conference Call Details:

Management will host a conference call at 8:00 a.m. Eastern Time on April 1, 2024 to discuss the results of the quarter and fiscal year 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 13744647. 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 13744647.

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 reaches over 60 countries and 12 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 BlissMAX, Venus Epileve, Venus Viva MD and AI.ME. Venus Concept’s hair restoration systems include NeoGraft^® and the ARTAS iX^® Robotic Hair Restoration system. Venus Concept has been backed by leading healthcare industry growth equity investors including EW Healthcare Partners (formerly Essex Woodlands), HealthQuest Capital, Longitude Capital Management, Aperture Venture Partners, and Masters Special Situations.

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 Venus Versa Pro; the contribution of the Venus Versa Pro to our revenue; the efficacy of the restructuring plan; the identification and efficacy of strategic alternatives to maximize shareholder value; the reduction in our cash burn; and our ability to regain compliance with the continued listing rules of the Nasdaq Capital Market. 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.