skin-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________.

Commission File Number: 001-39565

The Beauty Health Company

(Exact name of registrant as specified in its charter)


Delaware						85-1908962
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


2165 Spring Street Long Beach, CA 90806						(800) 603-4996
(Address of principal executive offices, including zip code)						Registrant's telephone number, including area code


N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, par value $0.0001 per share

SKIN

The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 8, 2024, there were 124,122,158 shares of Class A Common Stock, par value $0.0001 per share issued and outstanding.

THE BEAUTY HEALTH COMPANY

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2024

TABLE OF CONTENTS


		Page
PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets (Unaudited)	3
	Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)	4
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows (Unaudited)	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	33
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
SIGNATURES

PART I— FINANCIAL INFORMATION

Item 1. Financial Statements.

THE BEAUTY HEALTH COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except for share amounts)

(Unaudited)


	September 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash, cash equivalents, and restricted cash	$	358,892	$	523,025
Accounts receivable, net of allowances for estimated credit losses of $11,025 and $6,604 at September 30, 2024 and December 31, 2023, respectively	36,279		54,697
Inventories	73,443		91,321
Income tax receivable	399		332
Prepaid expenses and other current assets	16,034		28,877
Total current assets	485,047		698,252
Property and equipment, net	7,634		14,226
Right-of-use assets, net	14,599		12,120
Intangible assets, net	50,979		62,123
Goodwill	125,455		125,818
Deferred income tax assets, net	1,172		531
Other assets	14,662		16,043
TOTAL ASSETS	$	699,548	$	929,113
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	23,084	$	44,768
Accrued payroll-related expenses	16,543		22,028
Lease liabilities, current	4,827		4,598
Income tax payable	1,401		2,759
Syndeo Program reserves	—		21,009
Other accrued expenses	28,093		19,846
Total current liabilities	73,948		115,008
Lease liabilities, non-current	12,093		9,319
Deferred income tax liabilities, net	1,115		702
Warrant liabilities	558		3,555
Convertible senior notes, net	551,411		738,372
Other long-term liabilities	699		2,767
Total liabilities	639,824		869,723
Commitments (Note 10)
Stockholders’ equity:
Class A Common Stock, $0.0001 par value; 320,000,000 shares authorized; 124,111,434 and 122,899,002 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively	12		12
Additional paid-in capital	561,059		541,281
Accumulated other comprehensive loss	(3,712)		(3,036)
Accumulated deficit	(497,635)		(478,867)
Total stockholders’ equity	59,724		59,390
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	699,548	$	929,113

The accompanying notes are an integral part of these unaudited financial statements.

THE BEAUTY HEALTH COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands, except for share and per share amounts)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net sales	$	78,802	$	97,413	$	250,799	$	301,170
Cost of sales	38,153		109,966		120,849		191,743
Gross profit (loss)	40,649		(12,553)		129,950		109,427
Operating expenses:
Selling and marketing	27,620		30,731		91,786		112,471
Research and development	1,108		1,839		5,074		7,056
General and administrative	33,436		36,978		93,707		102,457
Total operating expenses	62,164		69,548		190,567		221,984
Loss from operations	(21,515)		(82,101)		(60,617)		(112,557)
Interest expense	2,468		3,445		7,949		10,291
Interest income	(4,876)		(6,750)		(14,426)		(16,782)
Other income, net	(69)		(4,872)		(33,475)		(5,337)
Change in fair value of warrant liabilities	(418)		(5,855)		(2,997)		(8,364)

Foreign currency transaction (gain) loss, net	(2,277)		2,270		164		724
Loss before provision for income taxes	(16,343)		(70,339)		(17,832)		(93,089)
Income tax expense (benefit)	1,948		3,479		936		(2,376)
Net loss	$	(

SEC Form 10-Q filed by The Beauty Health Company