- Q4 2022 Net Revenue Reached an All-Time High of $43.6 Million,
Up 26% from Q4 2021
- Full-Year 2022 Net Revenue of $148.6 Million, Up 49% Over
2021
- Reaffirms Full-Year 2023 Net Revenue Guidance of $180 to $190
Million and Positive Non-GAAP Operating Income1 in Q4 2023
Evolus, Inc. (NASDAQ: EOLS), a performance beauty company with a
customer-centric approach focused on delivering breakthrough
products, today reported financial results for the fourth quarter
and full year ended December 31, 2022 and provided a business
update. The results were consistent with the previously reported
preliminary unaudited results announced on January 18, 2023.
“We are pleased to announce our fourth quarter and full year
results for 2022 highlighted by strong market share gains in the
U.S., the first phase of our expansion into the European market,
and disciplined operating expense management,” said David
Moatazedi, President and Chief Executive Officer. “For the second
year in a row, Jeuveau® was the fastest-growing neurotoxin in the
U.S. aesthetic market, crossing into a double-digit unit share
position. We also completed enrollment in our Phase II
“extra-strength” study of Jeuveau®, leading to the presentation
earlier this year of very encouraging interim data. That data
showed an extra-strength formulation of Jeuveau® demonstrated
effects lasting 26 weeks representing prolonged 6-month performance
compared to 21 weeks in the control arms.”
Moatazedi continued, “Aesthetic neurotoxin market conditions in
the U.S. remain strong and demand continues to grow. In 2023, we
expect to grow at least twice as fast as the U.S. aesthetic
neurotoxin market and are reaffirming our net revenue guidance of
$180 million to $190 million. This aligns to our guidance of total
revenue of $500 million by 2028, a 22% compound annual growth rate.
We remain committed to reaching positive non-GAAP operating income
by the fourth quarter of 2023 without the need for any additional
capital to fund our current operations.”
Fourth Quarter 2022 Highlights and Recent
Developments
- The company’s lead sales and marketing metrics demonstrated
continued strong momentum during the fourth quarter.
- Evolus added more than 700 new customer accounts in the quarter
and more than 2,500 during 2022, bringing the total number of
customers purchasing since launch to more than 9,500. The reorder
rate among customers remains above 70%.2
- Aided by the ‘Switch Your Tox’ promotional campaign launched in
the third quarter, enrollment in the Evolus Rewards consumer
loyalty program grew by more than 75% in 2022 to end the year above
a half million members.3 For the fourth quarter, total redemptions
in Evolus Rewards grew to more than 125,000 consumers with equal
representation of new and existing users returning for repeat
treatments, demonstrating strong loyalty to Jeuveau®.
- As reported in January 2023, the company presented interim
Phase II data from its “extra-strength” 40U Jeuveau® clinical
study, which demonstrated effects lasting 26 weeks or 6 months
across three metrics, including the time it takes for patients to
return to their baseline Glabellar Line Scale (GLS) score after
their treatment, time back to baseline for patients with a response
of none or mild on the GLS, and the duration of effect of at least
a one-point GLS improvement. Results also indicated a favorable
safety profile with 88% of all adverse events reported as mild and
no serious adverse events. In the two active controls, the 20U
Jeuveau® arm lasted 151 days or 21.6 weeks and 20U of Botox® lasted
148 days or 21.1 weeks, which is in line with previous
studies.
- Evolus continued to broaden its international presence beyond
Canada with the recently announced launch of Nuceiva® in Germany
and Austria on the heels of the product’s introduction in Great
Britain in September 2022. The company expects to enter additional
European countries in 2023 and is also actively planning for a
launch in Australia, where it recently received marketing
approval.
Fourth Quarter 2022 Financial Results
- Total net revenues for the fourth quarter of 2022 increased 26%
to $43.6 million from $34.7 million in the fourth quarter of 2021
driven primarily by higher volumes of Jeuveau® and a modestly
higher average selling price. Net revenues for the fourth quarter
of 2022 grew 29% compared to net revenues in the third quarter of
2022.
- Gross profit margin and adjusted gross profit margin were 67.7%
and 69.4%, respectively, both of which reflect a new lower royalty
rate effective September 2022 concurrent with terms of the 2021
legal settlement. Adjusted gross profit margin, which excludes
amortization of intangible assets, was in line with company
guidance.
- Operating expenses for the fourth quarter of 2022 were $54.3
million compared to $51.8 million in the third quarter of
2022.
- Non-GAAP operating expenses for the fourth quarter of 2022 were
$35.7 million compared to $33.7 million in the third quarter of
2022. The increase was related primarily to greater commercial
activities supporting the company’s revenue growth. Non-GAAP
operating expenses exclude product cost of sales, stock-based
compensation expense, revaluation of the contingent royalty
obligation, and depreciation and amortization.
- Loss from operations was $10.6 million in the fourth quarter of
2022 compared to $17.9 million in the third quarter of 2022.
Non-GAAP loss from operations in the fourth quarter of 2022 was
$5.4 million compared to $13.3 million in the third quarter of
2022. Non-GAAP loss from operations excludes stock-based
compensation expense, revaluation of the contingent royalty
obligation, and depreciation and amortization.
- Cash and cash equivalents at December 31, 2022 were $53.9
million, compared to $65.6 million at September 30, 2022. For the
fourth quarter of 2022, net cash used for operating activities was
$8.8 million, which was nearly 50% lower than the amount of cash
used in the third quarter of 2022, demonstrating the company’s
continued commitment to carefully managing operating expenses and
keeping it on the path to achieving non-GAAP operating
profitability in the fourth quarter of 2023. Evolus continues to
expect that its existing cash balance will fund current operations
until it achieves cash flow breakeven, eliminating the need for
additional capital.
Full-Year 2022 Financial Results
- Total net revenues for 2022 increased 49% to $148.6 million,
reaching the top end of the company’s guidance of $143 million to
$150 million introduced in January 2022, reflecting continued
consumer demand and market share gains. Total net revenues for
fiscal year 2021 were $99.7 million.
- Gross profit margin and adjusted gross profit margin were 60.4%
and 62.4%, respectively, both of which were impacted by the higher
settlement royalty rates in effect until September 2022. Adjusted
gross profit margin, which excluded amortization of intangibles,
exceeded company guidance of 58% to 61%.
- Operating expenses were $213.9 million in 2022 compared to
$144.1 million in 2021. Non-GAAP operating expenses were $135.7
million in 2022 and in line with company guidance. Non-GAAP
operating expenses for 2021 were $104.6 million. Non-GAAP operating
expenses exclude product cost of sales, settlement payments and
expenses, stock-based compensation expense, revaluation of the
contingent royalty obligation, depreciation and amortization, and
IPR&D expense.
- Loss from operations was $65.3 million for 2022 compared to
$44.4 million in 2021. Non-GAAP loss from operations in 2022
decreased by 11% to $43.0 million from $48.4 million in 2021 driven
by strong sales growth and partially offset by investments to
support the company’s international expansion. Non-GAAP loss from
operations excludes settlement payments and expenses, stock-based
compensation expense, revaluation of the contingent royalty
obligation expense, depreciation and amortization, and IPR&D
expense.
Outlook
- Evolus continues to expect total net revenues for full year
2023 to be between $180 million and $190 million, representing
year-over-year growth of 21% to 28% and more than double the
estimated growth rate of the aesthetic neurotoxin market. The
company also assumes a return to historical seasonal revenue
patterns.
- The company expects its adjusted gross profit margin1 for the
full year 2023 to be between 68% and 71% reflecting the new lower
settlement royalty rate that became effective in September
2022.
- The company continues to expect full-year non-GAAP operating
expenses1 to be between $145 million and $150 million.
- Evolus expects non-GAAP operating income1 to be positive in the
fourth quarter of 2023 and continues to project its existing cash
balance will fund current operations, eliminating the need for
additional capital.
- The company projects its total net revenue1 can reach $500
million by 2028, a 22% compound annual growth rate. This revenue
projection excludes expansion of the label for Jeuveau® and
Nuceiva® or portfolio additions.
Conference Call Information
Management will host a conference call and live webcast to
discuss Evolus’ financial results today at 4:30 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 13736592. 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 evolving
the aesthetic neurotoxin market for the next generation of beauty
consumers through its unique, customer-centric business model and
innovative digital platform. Our mission is to become a global,
multi-product aesthetics company based on our flagship product,
Jeuveau® (prabotulinumtoxinA-xvfs), the first and only neurotoxin
dedicated exclusively to aesthetics and manufactured in a
state-of-the-art facility using Hi-Pure™ technology. 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 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 or current facts are
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, expectations regarding
the company’s cash position and expectations regarding share
growth, market conditions, international product launches and our
ongoing clinical trial.
The forward-looking statements included herein are based on our
current expectations, assumptions, estimates and projections, which
we believe to be reasonable, and 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 comply with the terms and conditions in the
Medytox Settlement Agreements, our ability to fund our future
operations or obtain financing to fund our operations, the
continued impact of COVID-19 or other outbreaks of contagious
diseases on our business, unfavorable global economic conditions
and the impact on consumer discretionary spending, uncertainties
related to customer and consumer adoption of Jeuveau®, the
efficiency and operability of our digital platform, competition and
market dynamics, our ability to successfully launch and
commercialize our products in new markets, our ability to maintain
regulatory approvals of Jeuveau® or obtain regulatory approvals for
new product candidates or indications and other risks described in
our filings with the Securities and Exchange Commission, including
in the section entitled “Risk Factors” in our Quarterly Report on
Form 10-Q for the quarter ended September 30, 2022 filed with the
Securities and Exchange Commission on November 8, 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)
in-process research and development, (iii) one-time settlement
payment from Daewoong, (iv) the revaluation of contingent royalty
obligations, (v) stock-based compensation expense, and (vi)
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) 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, non-GAAP operating
expenses, and non-GAAP operating income for full year 2023. Evolus
has not provided a reconciliation of such forward-looking non-GAAP
adjusted gross profit margin, non-GAAP operating expenses, or
non-GAAP operating income because a reconciliation of such measures
to GAAP gross profit margin, and GAAP operating expenses, and GAAP
operating income (loss), 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 outlook for these non-GAAP financial measures 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. BOTOX®
is a registered trademark of Allergan, Inc.
1
Within this press release, “profitability”
is defined as achieving positive non-GAAP operating income. This
press release includes references to adjusted gross profit margin,
non-GAAP operating income and non-GAAP operating expenses.
“Adjusted gross profit margin” is defined as adjusted gross profit
as a percentage of total net revenues. “Non-GAAP operating income”
excludes the revaluation of contingent royalty obligations,
stock-based compensation expense, and depreciation and
amortization. “Non-GAAP operating expenses” are operating expenses
excluding product cost of sales, revaluation of contingent royalty
obligations, stock-based compensation expense, and depreciation and
amortization. Management believes that non-GAAP operating expenses
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 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 non-GAAP
operating income and non-GAAP operating expenses have limitations
as analytical tools and may differ from other companies reporting
similarly named measures. Non-GAAP measures should not be
considered superior to and are not intended to be considered in
isolation or as a substitute for GAAP financial measures. Due to
the forward-looking nature of the outlook disclosed in this press
release, no reconciliation of such non-GAAP measures to the
comparable GAAP financial measures is 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 outlook for these non-GAAP
financial measures, that have not yet occurred and/or cannot be
reasonably predicted. Such unavailable information could have
a significant impact on the company’s GAAP financial results.
2
Represents cumulative statistics from the
launch of Jeuveau® in May 2019 through December 31, 2022.
3
Represents cumulative statistics from the
launch of Evolus Rewards in May 2020 through December 31, 2022.
Evolus, Inc. Consolidated
Statements of Operations and Comprehensive Loss (in thousands,
except loss per share data)
Three Months Ended
December 31,
Year Ended December
31,
2022
2021
2022
2021
Revenue:
Product revenue, net
$
42,988
$
34,657
$
146,592
$
98,971
Service revenue
658
—
2,024
702
Total net revenues
43,646
34,657
148,616
99,673
Operating expenses:
Product cost of sales (excludes
amortization of intangible assets)
13,370
15,834
55,887
43,534
Settlement payment from
Daewoong
—
—
—
(25,500
)
Selling, general and
administrative
36,729
33,279
141,840
112,068
Research and development
1,348
423
4,742
2,064
In-process research and
development
—
—
2,000
—
Revaluation of contingent
royalty obligation payable to Evolus Founders
1,809
2,241
5,755
6,290
Depreciation and
amortization
1,027
920
3,722
5,622
Total operating expenses
54,283
52,697
213,946
144,078
Loss from operations
(10,637
)
(18,040
)
(65,330
)
(44,405
)
Other income (expense):
Interest income
77
—
119
1
Interest expense
(2,631
)
(140
)
(9,097
)
(1,396
)
Loss from extinguishment of
debts, net
—
—
—
(968
)
Other income (expense), net
84
—
(9
)
—
Loss before income taxes:
(13,107
)
(18,180
)
(74,317
)
(46,768
)
Income tax (benefit)
expense
57
(3
)
95
42
Net loss
$
(13,164
)
$
(18,177
)
$
(74,412
)
$
(46,810
)
Other comprehensive loss:
Unrealized gain (loss), net of
tax
31
—
(337
)
—
Comprehensive loss
$
(13,133
)
$
(18,177
)
$
(74,749
)
$
(46,810
)
Net loss per share, basic and diluted
$
(0.23
)
$
(0.33
)
$
(1.33
)
$
(0.94
)
Weighted-average shares outstanding used
to compute basic and diluted net loss per share
56,266
55,574
56,065
49,773
Evolus, Inc. Summary of
Consolidated Balance Sheet Data (in thousands)
December 31, 2022
December 31, 2021
Cash and cash equivalents
$
53,922
$
146,256
Accounts receivable, net
22,448
14,657
Inventories
18,852
1,762
Prepaid expenses and other current
assets
5,580
16,124
Total current assets
100,802
178,799
Noncurrent assets
77,181
78,684
Total assets
$
177,983
$
257,483
Accounts payable and accrued expenses
$
33,729
$
36,084
Accrued litigation settlement
5,000
15,000
Other current liabilities
7,780
6,579
Total current
liabilities
46,509
57,663
Accrued litigation settlement
—
5,000
Term loan, net of discount and issuance
costs
71,879
71,222
Other noncurrent liabilities
41,096
41,722
Total liabilities
$
159,484
$
175,607
Total stockholders’
equity
$
18,499
$
81,876
Evolus, Inc. Summary of
Consolidated Cash Flows (in thousands)
Year Ended December
31,
Three Months Ended December
31,
Three Months Ended
September 30,
2022
2021
2022
2022
Net cash (used in) provided by:
Operating activities
$
(84,912
)
*
$
(33,388
)
*
$
(8,774
)
$
(17,051
)
Investing activities
(2,939
)
4,030
(1,391
)
(899
)
Financing activities
(4,146
)
73,052
(1,516
)
(759
)
Effect of exchange rates on cash
(337
)
—
31
(203
)
Change in cash and cash equivalents
(92,334
)
43,694
(11,650
)
(18,912
)
Cash and cash equivalents, beginning of
period
146,256
102,562
65,572
84,484
Cash and cash equivalents, end of
period
$
53,922
$
146,256
$
53,922
$
65,572
*
includes a settlement payment of $15.0
million to Allergan/Medytox.
Evolus, Inc. Reconciliation of
Gross Profit Margin to Adjusted Gross Profit Margin (in
thousands)
Three Months Ended
December 31,
Year Ended December
31,
Three Months Ended September
30,
2022
2021
2022
2021
2022
Total net revenues
$
43,646
$
34,657
$
148,616
$
99,673
$
33,899
Cost of sales:
Product cost of sales (excludes
amortization of intangible assets)
13,370
15,834
55,887
43,534
13,490
Settlement payment from
Daewoong
—
—
—
(25,500
)
—
Amortization of distribution
right intangible asset
739
739
2,955
2,939
739
Total cost of sales
14,109
16,573
58,842
20,973
14,229
Gross profit
29,537
18,084
89,774
78,700
19,670
Gross profit margin
67.7
%
52.2
%
60.4
%
79.0
%
58.0
%
Add: Settlement payment from
Daewoong
—
—
—
(25,500
)
—
Add: Amortization of
distribution right intangible asset
739
739
2,955
2,939
739
Adjusted gross profit
$
30,276
$
18,823
$
92,729
$
56,139
$
20,409
Adjusted gross profit margin
69.4
%
54.3
%
62.4
%
56.3
%
60.2
%
Evolus, Inc. Reconciliation of
GAAP Operating Expenses to Non-GAAP Operating Expenses (in
thousands)
Three Months Ended
December 31,
Year Ended December
31,
Three Months Ended September
30,
2022
2021
2022
2021
2022
GAAP operating expenses
$
54,283
$
52,697
$
213,946
$
144,078
$
51,796
Adjustments:
Product cost of sales (excludes
amortization of intangible assets)
13,370
15,834
55,887
43,534
13,490
Settlement payment from
Daewoong
—
—
—
(25,500
)
—
In-process research and
development
—
—
2,000
—
—
Revaluation of contingent
royalty obligation payable
1,809
2,241
5,755
6,290
1,216
Stock-based compensation
Included in selling, general
and administrative
2,329
2,588
10,565
9,372
2,398
Included in research and
development
83
61
268
204
85
Depreciation and
amortization
1,027
920
3,722
5,622
920
Non-GAAP operating expenses
$
35,665
$
31,053
$
135,749
$
104,556
$
33,687
Evolus, Inc. Reconciliation of
GAAP (Loss) from Operations to Non-GAAP (Loss) from Operations (in
thousands)
Three Months Ended
December 31,
Year Ended December
31,
Three Months Ended September
30,
2022
2021
2022
2021
2022
GAAP (loss) from operations
$
(10,637
)
$
(18,040
)
$
(65,330
)
$
(44,405
)
$
(17,897
)
Adjustments:
Settlement payment from
Daewoong
—
—
—
(25,500
)
—
Revaluation of contingent
royalty obligation payable
1,809
2,241
5,755
6,290
1,216
In-process research and
development
—
—
2,000
—
—
Stock-based compensation
Included in selling, general
and administrative
2,329
2,588
10,565
9,372
2,398
Included in research and
development
83
61
268
204
85
Depreciation and
amortization
1,027
920
3,722
5,622
920
Non-GAAP (loss) from operations
$
(5,389
)
$
(12,230
)
$
(43,020
)
$
(48,417
)
$
(13,278
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230308005691/en/
Investor Contact: David K.
Erickson, Evolus, Inc. Vice President, Investor Relations Tel:
949-966-1798 Email: david.erickson@evolus.com
Media Contact: Email:
media@evolus.com
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