The Beauty Health Company (NASDAQ: SKIN) shares exhibited an upward trajectory on Monday, registering an 8.33% increase to conclude the trading session at $3.90. This surge in the Beauty Health stock occurred in anticipation of the release of its quarterly results, which were made public after the close of the regular session.
On Monday, Beauty Health (SKIN) disclosed its financial outcomes for the third quarter concluding on September 30, 2023. In the third quarter, SKIN reported a 10% rise in year-over-year net sales, reaching $97.4 million. The growth was fueled by strong performance in the Asia-Pacific region, specifically in China, and in EMEA.
The company faced $63.1 million in restructuring charges linked to upgrading early-generation Syndeo devices during the quarter, somewhat overshadowing lower-than-expected U.S. revenue. As of December 31, 2022, the company held nearly $568 million in cash and cash equivalents which rose to $559 million at the end of reported period.
In Q3 2023, SKIN incurred a net loss of $(73.8) million, compared to $(0.1) million in Q3 2022. This change from the previous year was primarily attributable to costs associated with the Syndeo Program. In order to maintain its commitment to customers and safeguard brand reputation, the management of Beauty Health decided that, concerning Syndeo devices, only Syndeo 3.0 devices will be marketed and sold due to issues with the provider experience with earlier generation Syndeo devices.
SKIN will offer, at no charge to the customer, the option of a technician upgrade to Syndeo 1.0 or 2.0 devices to meet 3.0 standards in the field, or a replacement Syndeo 3.0 device for their existing one. As a gesture of gratitude to providers, Beauty Health will also extend all Syndeo warranties by one year.
The decision to declare all Syndeo 1.0 and 2.0 devices obsolete led to a $18.8 million write-down in cost of sales for the three months ending September 30, 2023, classified as an inventory writedown. As part of the Syndeo Program, SKIN also faced $12.3 million in costs, along with an estimated $32.1 million for remediating, upgrading, or exchanging the remaining Syndeo 1.0 and 2.0 devices.
