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Beauty Health Provider Posts 118% Increase in FY22 Sales
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Shares of Beauty Health Co. traded 32% higher after the company that is credited with creating the category of hydradermabrasion reported Q4/21 and FY/21 financial results outlining significant improvements in sales, margins and adjusted earnings.

After U.S. markets closed yesterday, beauty health products firm Beauty Health Co. (SKIN:NASDAQ), which operates a global beauty health platform featuring its flagship brand HydraFacial™, announced financial results for the fourth quarter and full year 2021 ended December 31, 2021.

BeautyHealth's Executive Chairman Brent Saunders commented, "We are extremely pleased with our accomplishments this quarter and for the full year 2021, exceeding our guidance. Importantly, we navigated through macro challenges and COVID, delivering strong results by executing against our key strategic initiatives. Our performance is proof of the compelling opportunity we have to capture the convergence of medical aesthetics and skincare."

The company's President and CEO Andrew Stanleick stated, "I am pleased to share that for 2022, we expect net sales in the range of $320 million to $330 million and adjusted EBITDA of approximately $50 million, barring any adverse COVID-related headwinds. 2022 will be our final year of elevated investments. In 2023, we plan to leverage our operating infrastructure to accelerate our profitability, climbing towards our historical adjusted EBITDA margin levels."

"We are at a pivotal point in the company's growth trajectory, and I am thrilled to execute on our dynamic strategy," Stanleick added.

The company reported that for FY/21 total net sales increased by 118.3% to $260.1 million, compared to $119.1 million in FY/20. The firm indicated that it sold a total of 6,191 Delivery Systems in FY/21 and now has a total install base of 20,399 systems.

The company highlighted that adjusted gross margin in FY/21 improved to 74.0%, versus 65.5% during FY/20.

The firm stated that it had adjusted EBITDA of $32.7 million in FY/21, compared to $7.7 million in FY/20. The company noted that the adjusted EBITDA margin in FY/21 increased to 12.6%, versus 6.5% in FY/20.

BeautyHealth reported that in Q4/21 total net sales increased by 105.6% to $77.9 million, compared to $37.9 million in Q4/20. The company stated that despite the negative effects from COVID-19, net sales continued to exhibit strength in U.S. and Europe-Middle East-Africa (EMEA) markets and also showed significant growth in Asia-Pacific (APAC) region.

During Q4/21, Delivery Systems net sales increased to $42.7 million, up from $17.4 million in Q4/20 and Consumables net sales rose to $35.2 million, compared to $20.5 million in Q4/20.

The firm advised that in Q4/21, net sales in the Americas increased to $50.4 million, up from $26.9 million in Q4/20 due to robust growth trends in the U.S. and Mexico. The company added that APAC net sales grew to $12.0 million, versus $4.8 million in Q4/20 driven by continued strength in both Australia and China. In addition, net sales in the EMEA region increased to $15.5 million in Q4/21, up substantially from $6.1 million in Q4/20.

The company enjoyed significant gains in gross margins which increased from 60.8% in Q4/20 to 72.9% in Q4/21. The firm stated that the improvements were attributed to "higher sales volumes, fixed cost leverage and margin accretion from distributor acquisitions, partially offset by higher supply chain and logistics costs."

BeautyHealth posted a net loss of $17.311 million, or a net loss of $0.12 per diluted share in Q4/21, compared to a net loss of $7.4930 million, or a net loss of $0.22 per diluted share in Q4/20.

The company noted that as of December 31, 2021, it had cash and cash equivalents of $901.9 million on its balance sheet, which was greatly higher than the $9.5 million held as of December 31, 2020. The firm noted that in FY/21 it raised $750 million from the issuance of a 1.25% convertible senior notes due 2026. The company advised that it plans to use the net proceeds to finance potential future acquisitions, working capital, a capped call purchase agreement and general corporate expenses. The firm added that it also secured a $50 million line of credit which it intends to use to fund U.S. short-term working capital needs.

BeautyHealth offered some forward guidance and advised that for FY/22 it expects net sales will be in the range of $320.0-330.0 million. The company indicated that it estimates that for FY/22, adjusted EBITDA will come in at around $50.0 million, which it said reflects the continued momentum in health and wellness and BeautyHealth's management's ability to execute on its growth initiatives.

BeautyHealth added that the forward outlook estimates take into account its plans to launch its next generation Syndeo HydraFacial Delivery System in H1/22. The Syndeo system includes Wi-Fi-enabled RFID technology that the firm stated will allow it to build a connected platform and gain greater understanding of provider and customer behavior.

BeautyHealth is based in Long Beach, Calif. and described its business as "a global category-creating company focused on delivering beauty health experiences by reinventing our consumer's relationship with their skin, their bodies and their self-confidence." The firm claimed that "its flagship brand, HydraFacial, created the category of hydradermabrasion by using a patented Vortex-Fusion Delivery System to cleanse, peel, exfoliate, extract, infuse, and hydrate the skin with proprietary solutions and serums." The HydraFacial system is presently available in more than 90 countries.

BeautyHealth started the day with a market cap of around $1.9 billion with approximately 149.6 million shares outstanding and a short interest of about 10.3%. SKIN shares opened 16% higher today at $14.90 (+$2.06, +16.04%) over yesterday's $12.84 closing price. The stock has traded today between $14.85 and $18.18 per share and is currently trading at $16.96 (+$4.12, +32.09%).


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