- Q1 2022 Net Revenue of $33.9 Million, Up 177%
from Q1 2021
- Now Guiding to Upper End of Full-Year 2022 Net
Revenue of $143 to $150 Million
- Reiterating Full-Year non-GAAP Operating
Expense Guidance
- Strong Cash Position of $106.7 Million
Expected to Fund Company to Breakeven
Evolus, Inc. (NASDAQ: EOLS), a performance beauty company with a
customer-centric approach focused on delivering breakthrough
products, today reported financial results for the first quarter
ended March 31, 2022 and provided a business update.
“We are very pleased to report another strong quarter that
demonstrated robust year-over-year growth, increased market share,
and disciplined operating expense management,” said David
Moatazedi, President and Chief Executive Officer. “Our sales for
the first quarter of 2022 were well above the estimated U.S.
neurotoxin market growth rate. Over the past year, we have
accelerated the pace of new account additions and achieved a record
number of patient redemptions in our consumer loyalty rewards
program. These strong trends are fueling increasing demand for
Jeuveau®, validating the effectiveness of our unique
aesthetics-only strategy.”
Moatazedi continued, “The market for aesthetic neurotoxins
remains very strong and did not slow in the first quarter, which
has traditionally seen seasonally lower demand. A strong market,
together with our performance to date, gives us confidence in
achieving the upper end of our full-year sales guidance range of
$143 to $150 million. This equates to a year-over-year growth rate
approaching 50%, which is well above the expected industry average
growth rate.”
First Quarter 2022 Highlights and Recent Developments
- Momentum in the company’s business continues to build with its
lead metrics reaching all-time highs this quarter.
- Evolus added 575 new customer accounts in the first quarter,
the highest quarterly increase in the past two years. This brings
the total base since launch to more than 7,500 purchasing customers
with a reorder rate that continues to run above 70%1.
- Since its inception, more than 335,000 consumers have
registered in the Evolus Rewards loyalty program. In that time,
approximately 475,000 rewards have been redeemed2.
- During the first quarter, Evolus ran a total of nearly 800
individualized co-branded marketing campaigns across the United
States that generated more than 400 million media impressions.
- In March, the company enrolled the first patient in its Phase
II “extra strength” Jeuveau® clinical study. This program provides
Evolus with the opportunity to offer the first multi-strength
neurotoxin, giving customers and consumers increased treatment
options.
First Quarter 2022 Financial Results
- Total net revenues increased 177% to $33.9 million from $12.2
million in the first quarter of 2021 driven primarily by higher
volumes and a slightly higher average selling price. Revenue in the
first quarter of 2022 included $0.7 million of international
service revenue.
- Gross profit margin and adjusted gross profit margin were 58.9%
and 61.0%, respectively, both of which were impacted by the higher
settlement royalty rates in effect until September 2022. Adjusted
gross profit margin excludes amortization of intangibles.
- Operating expenses increased to $49.4 million from $4.2 million
in the first quarter of 2021, primarily due to the receipt of a
$25.5 million one-time settlement payment from Daewoong in the
first quarter of 2021 and $12.7 million higher selling, general and
administrative expenses in the first quarter of 2022 due to
investments in salesforce and corporate infrastructure, and
commercial activities.
- Non-GAAP operating expenses increased 55% to $31.0 million from
$19.9 million in the first quarter of 2021. Non-GAAP operating
expenses exclude product cost of sales, a one-time settlement
payment from Daewoong received in 2021, revaluation of the
contingent royalty obligation expense, stock-based compensation,
and depreciation and amortization.
- Loss from operations was $15.4 million compared to income from
operations of $8.0 million in the first quarter of 2021. Non-GAAP
loss from operations decreased 19% to $10.3 million from $12.6
million in the first quarter of 2021. Non-GAAP loss from operations
excludes a one-time settlement payment from Daewoong received in
2021, revaluation of the contingent royalty obligation expense,
stock-based compensation, and depreciation and amortization.
- Cash and cash equivalents at March 31, 2022 were $106.7
million, compared to $146.3 million at December 31, 2021. Cash used
during the quarter included a milestone payment of $15.0 million,
inventory payments of $12.6 million to support the growth of the
business, and net royalty and interest payments of $9.6 million.
Evolus continues to expect that its existing cash balance will fund
current operations through cash flow breakeven.
Outlook
- Based on a strong neurotoxin market and its performance thus
far in 2022, the company now expects sales to reach the upper end
of its full-year sales guidance range of $143 to $150 million. This
assumes a minimal contribution from international markets.
- The company continues to expect its full-year adjusted gross
profit margin to be between 58% and 61% with a fourth quarter step
up to 68% to 71% concurrent with the significant decrease in
settlement royalty rates.
- The company continues to expect full-year non-GAAP operating
expenses to be between $135.0 million and $140.0 million, which
consists mainly of continued investments in the growth of Jeuveau®
in the U.S. plus the Nuceiva® launch expenses in Europe. Non-GAAP
operating expenses exclude product cost of sales, revaluation of
the contingent royalty obligation expense, stock-based
compensation, and depreciation and amortization.
- The company remains on track to launch Nuceiva® in Europe in
the third quarter of 2022.
Conference Call Information
Management will host a conference call and live webcast to
discuss Evolus’ financial results today at 1:30 p.m. ET. To
participate in the conference call, dial (877) 407-6184 (U.S.) or
(201) 389-0877 (international) or connect to the live webcast via
the link on the Investor Relations page of our website at
www.evolus.com.
Following the completion of the call, an audio replay can be
accessed for 48 hours by dialing (877) 660-6853 (U.S.) or (201)
612-7415 (international) and using conference number 13728766. An
archived webcast, which will remain available for 30 days, can also
be accessed on the Investor Relations page of our website at
www.evolus.com.
About Evolus, Inc.
Evolus (Nasdaq: EOLS) is a performance beauty company with a
customer-centric approach to delivering breakthrough products.
Approved in 2019 by the U.S. Food and Drug Administration, Jeuveau®
(prabotulinumtoxinA-xvfs) is the first and only neurotoxin
dedicated exclusively to aesthetics and manufactured in a
state-of-the-art facility using Hi-Pure™ technology. Jeuveau® is
powered by Evolus’ unique technology platform and is designed to
transform the aesthetic market by eliminating the friction points
existing for customers today. Visit us at www.evolus.com and follow
us on LinkedIn, Twitter, Instagram or Facebook.
Forward-Looking Statements
This press release contains forward-looking statements as
defined under the Private Securities Litigation Reform Act of 1995
that involve risks and uncertainties, including statements based on
our current expectations, assumptions, estimates and projections
about future events, our business, financial condition, results of
operations and prospects, our industry and the regulatory
environment in which we operate. Any statements contained herein
that are not statements of historical facts may be deemed to be
forward-looking statements. In some cases, you can identify
forward-looking statements by terms such as “anticipate,”
“believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “should,” “will,” “would” or the
negative of those terms, or other comparable terms intended to
identify statements about the future. The company’s forward-looking
statements include, but are not limited to, statements related to
the company’s financial outlook for 2022 and expectations regarding
market conditions and international sales and commercial product
launches.
The forward-looking statements included herein are subject to
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by the forward-looking
statements. These risks and uncertainties, all of which are
difficult or impossible to predict accurately and many of which are
beyond our control, include, but are not limited to uncertainties
associated with our ability to address all of our losses, costs,
expenses, liabilities and damages resulting from the settlement
agreement with Daewoong and our ability to comply with the terms
and conditions in the Allergan/Medytox Settlement Agreements, our
ability to fund our future operations or obtain financing to fund
our operations, the continued impact of COVID-19 or inflation on
our business and the economy generally, uncertainties related to
customer and consumer adoption of Jeuveau®, the efficiency and
operability of our digital platform, competition and market
dynamics, and our ability to maintain regulatory approvals of
Jeuveau® and other risks described in our filings with the
Securities and Exchange Commission, including in the section
entitled “Risk Factors” in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2021 filed with the Securities and
Exchange Commission on March 3, 2022. These filings can be accessed
online at www.sec.gov. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date hereof. Except as required by law, we undertake no
obligation to update or revise any forward-looking statements to
reflect new information, changed circumstances or unanticipated
events. If we do update or revise one or more of these statements,
investors and others should not conclude that we will make
additional updates or corrections.
Use of Non-GAAP Financial Measures
Evolus’ financial results are prepared in accordance with
accounting principles generally accepted in the United States of
America (“GAAP”). This press release and the reconciliation tables
included in the financial schedules below include adjusted gross
profit, adjusted gross profit margin, non-GAAP operating expenses
and non-GAAP loss from operations. Adjusted gross profit is
calculated as gross profit excluding amortization of an intangible
asset and, as applicable, the one-time settlement payment from
Daewoong. Adjusted gross profit margin is defined as adjusted gross
profit as a percentage of total net revenues. Non-GAAP operating
expenses and non-GAAP loss from operations exclude (i) product cost
of sales, in the case of non-GAAP operating expenses only, (ii)
one-time settlement payment from Daewoong, (iii) the revaluation of
contingent royalty obligations, (iv) stock-based compensation
expense and (v) depreciation and amortization. Beginning in the
fourth quarter of 2021, Evolus began excluding product cost of
sales from its presentation of non-GAAP operating expenses; prior
period amounts have been revised to conform to the current
presentation. Management believes that adjusted gross profit margin
is an important measure for investors because management uses
adjusted gross profit margin as a key performance indicator to
evaluate the profitability of sales without giving effect to costs
that are not core to our cost of sales, such as the settlement
payment from Daewoong, and the amortization of an intangible asset.
Management believes that non-GAAP operating expenses and non-GAAP
loss from operations are useful in helping to identify the
company’s core operating performance and enables management to
consistently analyze the period-to-period financial performance of
the core business operations. Management also believes that
non-GAAP operating expenses and non-GAAP loss from operations will
enable investors to assess the company in the same way that
management has historically assessed the company’s operating
expenses against comparable companies with conventional accounting
methodologies. The company’s definitions of adjusted gross profit,
adjusted gross profit margin, non-GAAP operating expenses and
non-GAAP loss from operations have limitations as analytical tools
and may differ from other companies reporting similarly named
measures. Non-GAAP measures should not be considered measures of
financial performance under GAAP, and the items excluded from such
non-GAAP measures should not be considered in isolation or as
alternatives to financial statement data presented in the financial
statements as an indicator of financial performance or liquidity.
Non-GAAP measures should be considered in addition to results
prepared in accordance with GAAP but should not be considered a
substitute for or superior to GAAP results.
For a reconciliation of our historical adjusted gross profit
margin, non-GAAP operating expenses and non-GAAP loss from
operations presented herein to gross profit margin, GAAP operating
expenses and GAAP loss from operations, the most directly
comparable GAAP financial measures, please see “Reconciliation of
Gross Profit Margin to Adjusted Gross Profit Margin,”
“Reconciliation of GAAP Operating Expenses to Non-GAAP Operating
Expenses” and “Reconciliation of GAAP (Loss) Income from Operations
to Non-GAAP (Loss) from Operations” in the financial schedules
below. In addition, this press release includes information
regarding the company’s expected adjusted gross profit margin and
non-GAAP operating expenses for full year 2022. Evolus has not
provided a reconciliation of such forward-looking non-GAAP adjusted
gross profit margin or non-GAAP operating expenses because a
reconciliation of such measures to GAAP gross profit margin and
GAAP operating expenses, respectively, the most directly comparable
GAAP financial measures, is not available without unreasonable
efforts. This is due to the inherent difficulty of forecasting the
timing or amount of various reconciling items that would impact the
forward-looking adjusted gross profit margin and non-GAAP operating
expenses outlook that have not yet occurred and/or cannot be
reasonably predicted. Such unavailable information could have a
significant impact on Evolus’ GAAP financial results.
Jeuveau® and Nuceiva® are registered trademarks of Evolus, Inc.
Hi-Pure™ is a trademark of Daewoong Pharmaceutical Co, Ltd.
1 Represents cumulative statistics from the launch of Jeuveau®
in May 2019 through March 31, 2022. 2 Represents cumulative
statistics from the launch of Evolus Rewards in May 2020 through
March 31, 2022.
Evolus, Inc.
Consolidated Statements of
Operations and Comprehensive (Loss) Income
(Unaudited, in thousands,
except (loss) income per share data)
Three Months Ended
March 31,
2022
2021
Revenue:
Product revenue, net
$
33,226
$
12,241
Service revenue
682
—
Total net revenues
33,908
12,241
Operating expenses:
Product cost of sales (excludes
amortization of intangible assets)
13,208
4,908
Settlement payment from Daewoong
—
(25,500
)
Selling, general and administrative
33,442
20,665
Research and development
468
841
Revaluation of contingent royalty
obligation payable to Evolus Founders
1,316
1,268
Depreciation and amortization
922
2,033
Total operating expenses
49,356
4,215
(Loss) income from operations
(15,448
)
8,026
Other income (expense):
Interest expense
(2,048
)
(645
)
Loss from extinguishment of debts, net
—
(968
)
Other expense, net
(7
)
—
(Loss) income before income taxes:
(17,503
)
6,413
Income tax (benefit) expense
(2
)
12
Net (loss) income
$
(17,501
)
$
6,401
Other comprehensive gain (loss):
Unrealized gain
103
—
Comprehensive (loss) income
$
(17,398
)
$
6,401
Net (loss) income per share, basic
$
(0.31
)
$
0.17
Net (loss) income per share, diluted
$
(0.31
)
$
0.16
Weighted-average shares outstanding used
to compute basic net (loss) income per share
55,731
37,101
Weighted-average shares outstanding used
to compute diluted net (loss) income per share
55,731
41,105
Evolus, Inc.
Summary of Consolidated
Balance Sheet Data
(Unaudited, in
thousands)
March 31, 2022
December 31, 2021
Balance Sheet Data:
Cash and cash equivalents
$
106,671
$
146,256
Total cash and cash equivalents
$
106,671
$
146,256
Term loan, net of discount and issuance
costs
$
71,381
$
71,222
Total debt
$
71,381
$
71,222
Working capital
$
102,228
$
121,136
Total assets
$
220,662
$
257,483
Total current liabilities
$
40,700
$
57,663
Total liabilities
$
153,414
$
175,607
Accumulated deficit
$
(440,383
)
$
(422,882
)
Total stockholders’ equity
$
67,248
$
81,876
Evolus, Inc.
Summary of Consolidated Cash
Flows
(Unaudited, in
thousands)
Three Months Ended March
31,
2022
2021
Net cash (used in) provided by:
Operating activities
$
(38,199
)
*
$
(8,335
)
Investing activities
(261
)
4,785
Financing activities
(1,022
)
(76,841
)
Effect of exchange rates on cash
(103
)
—
Change in cash and cash equivalents
(39,585
)
(80,391
)
Cash and cash equivalents, beginning of
period
146,256
102,562
Cash and cash equivalents, end of
period
$
106,671
$
22,171
*includes a settlement payment of $15.0 million to
Allergan/Medytox.
Evolus, Inc.
Reconciliation of Gross Profit
Margin to Adjusted Gross Profit Margin
(Unaudited, in
thousands)
Three Months Ended
March 31,
2022
2021
Total net revenues
$
33,908
$
12,241
Cost of sales:
Product cost of sales (excludes
amortization of intangible assets)
13,208
4,908
Settlement payment from Daewoong
—
(25,500
)
Amortization of distribution right
intangible asset
739
723
Total cost of sales
13,947
(19,869
)
Gross profit
19,961
32,110
Gross profit margin
58.9
%
262.3
%
Add: Settlement payment from Daewoong
—
(25,500
)
Add: Amortization of distribution right
intangible asset
739
723
Adjusted gross profit
$
20,700
$
7,333
Adjusted gross profit margin
61.0
%
59.9
%
Evolus, Inc.
Reconciliation of GAAP
Operating Expenses to
Non-GAAP Operating
Expenses
(Unaudited, in
thousands)
Three Months Ended
March 31,
2022
2021
GAAP operating expense
$
49,356
$
4,215
Adjustments:
Product cost of sales (excludes
amortization of intangible assets)
13,208
4,908
Settlement payment from Daewoong
—
(25,500
)
Revaluation of contingent royalty
obligation
1,316
1,268
Stock-based compensation:
Included in selling, general and
administrative
2,914
1,576
Included in research and development
45
14
Depreciation and amortization
922
2,033
Non-GAAP operating expense
$
30,951
$
19,916
Evolus, Inc.
Reconciliation of GAAP (Loss)
Income from Operations to
Non-GAAP (Loss) from
Operations
(Unaudited, in
thousands)
Three Months Ended
March 31,
2022
2021
GAAP (loss) income from
operations
$
(15,448
)
$
8,026
Adjustments:
Settlement payment from Daewoong
—
(25,500
)
Revaluation of contingent royalty
obligation
1,316
1,268
Stock-based compensation:
Included in selling, general and
administrative
2,914
1,576
Included in research and development
45
14
Depreciation and amortization
922
2,033
Non-GAAP (loss) from operations
$
(10,251
)
$
(12,583
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220510006273/en/
Investor/Media Contact: David K.
Erickson, Evolus, Inc. Vice President, Investor Relations Tel:
949-966-1798 Email: david.erickson@evolus.com
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