SkinHealth Systems Inc.

Good afternoon, everyone, and welcome to the Beauty Health Company's fourth quarter and full year 2023 conference call. All participants will be in a listen-only mode. Should you need assistance, please send to a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one using a touch-tone telephone. To withdraw your questions, you may press star and two. Please also note this event is being recorded, and I'd like to turn the floor over to Roberto Aja, Investor Relations. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Thank you for joining us today to discuss the Beauty Health Company's fourth quarter and full year 2023 financial results, which were released earlier this afternoon and can be found on our website at beautyhealth.com. Joining us on the call today are Beauty Health Chief Executive Officer, Marla Beck, along with Chief Financial Officer, Mike Monahan. Before we begin, I would like to remind you of the company's safe harbor language. Management may make forward-looking statements, including guidance and underlying assumptions. Forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially. Listeners are cautioned not to place undue reliance on any forward-looking statements. For further discussion of risks related to our business, please see the company's filings with the SEC. This call will present non-GAAP financial measures. Reconciliation of these non-GAAP financial measures to the most comparable GAAP measures are in the earnings press release furnished to the SEC and available on our website. Following management's prepared remarks, we will open the call for a question and answer session. With that, I would now like to turn the call over to Beauty Health CEO, Marla Beck. Please go ahead, Marla.

Thank you, Norberto, and thank you, everyone, for joining us on the call today. I want to start by thanking our Board of Directors for their trust and support as I formally take on the role of CEO of Beauty Health. I'm excited about the opportunity and I'm confident about the future of the company. I joined Beauty Health Board of Directors in 2022 because I saw a much loved brand in an under-penetrated market, the space where beauty meets aesthetics. I built my career in this space and bring significant experience in sales, operations, and new product development to the role. I founded Blue Mercury in 1999 as a specialty beauty retailer featuring a selection of curated products alongside in-store aesthetic treatments. It is a common format today, but it was novel when we started. We grew Blue Mercury to nearly 200 stores with two private label skincare brands, a healthy e-commerce business, and strong loyalty penetration before a strategic sale to Macy's in 2015. While my passion for the sector and knowledge of products and formulations served me well, It was operational excellence, financial rigor, and a clear commitment to the consumer that made Blue Mercury a success. I can see clearly how to put these elements in play for beauty health. Over the last few months, I've spent my time meeting with our providers, getting to know our sales team, testing our products, and gaining a deep understanding of our operational capabilities. During this time, I've come to understand the unique proposition of our brand and products, the engagement of our providers and consumers, and the wide-open opportunity ahead. I also understand the careful work that will be required for Beauty Health to meet our ambitions and growth potential. The board, the executive management team, and I are fully aligned to deliver against three key priorities over the near term. We will drive sales excellence, operational excellence, and financial discipline. Our first priority is sales excellence. The treatment room is the center of our business, and providers and our sales teams are the face of the brand in many ways. I learned early in my career the importance of staying close to the customer from helping estheticians turn rooms at our Blue Mercury store in Georgetown because they were so busy with treatments, or helping to sell on the retail floor during the busiest holiday periods. And so that's how I asked the Beauty Health Executive Committee to start the year, in the treatment rooms with providers. We fanned out across the globe with our frontline sales teams to meet more than 50 providers in the past 50 days. The feedback was insightful and grounding. I will share just a few themes we heard. First, providers know and appreciate that we put them front and center. Second, they agree that despite the issues with the early versions of Findeo, Findeo 3.0 is a better platform. Third, they recognize and value the unmatched efficacy of our treatment and the power of the Hydrafacial brand to bring consumers through their doors. Importantly, the challenges providers experience with Cindea 1.0 and 2.0 have not impacted the consumer experience. We hear repeatedly from providers that Hydrafacial is a brand clients ask for by name. We see this in the steady consumables revenue growth in the Americas, and in indicator metrics like Google search trends, which show an uptick in interest globally of 21% in 2023 versus 2022. We are fortunate to have an experienced and tenured sales team who have developed deep relationships with our providers. It is incredible to see their connections and willingness to go above and beyond. Our training and education team is best in class, supporting providers in their craft and helping them to build profitable revenue streams for their businesses. And our marketing team is thoughtfully building on a brand loved by providers and consumers alike, an incredibly unique and valuable element of our business in an industry that is largely driven by brand-less treatment modalities. We will continue to hold ourselves to high-performance standards expected from Hydrafacial and always put our providers and consumers first. Our second priority is operational excellence. We will tighten our operations, prioritizing our focus on our strongest growth opportunities and establishing accountability across our supply chain. We are undertaking a total review of our full manufacturing and operations footprint, and we'll provide an update on our findings later this year. Much of the recent focus has been on executing the Cindeo program announced last quarter, ensuring all CINDAOs globally meet our latest 3.0 standard and that we protect our valuable provider relationships. The early feedback regarding CINDAO 3.0 is positive. While we still hear some concerns regarding the 3.0 system, the level is consistent with industry standards and we are addressing issues that come up quickly. We will continue to prioritize operational excellence and always with the provider in mind. Finally, our third near-term priority is financial discipline. We will be cost-conscious in everything we do, balancing our cost structure with revenue and opportunity. We will bring increased transparency and consistency to our financial results through improved forecasting. Mike and I are aligned on this point, which you can see clearly in our fourth quarter results with revenue and adjusted EBITDA in line with guidance. Mike will share these details shortly. These three near-term priorities, sales excellence, operational excellence, and financial discipline, are foundational and necessary to operate from a position of strength and leverage the opportunities in front of us. Since joining the board in June of 2022, a few things have become very clear to me about the significant growth runway, which we will see begin to take shape in the second half of 2024 and beyond. We see an attractive opportunity around consumables to drive further penetration. This is a focus of mine. We will have more to report on our plans and progress later this year. We also see a clearer opportunity to grow our device install base by leveraging the specific value we bring to each provider channel, whether in medical practices, med spas, hospitality locations, retail, or with single room SDs. We are in the early innings of addressing the opportunity across the vast majority of markets where we operate. Increasing penetration in existing markets to achieve scale is something we are confident we can execute on. I will emphasize, however, that our focus for now is squarely on implementing a transformation of the company. This entails driving sales excellence globally, keeping our provider at the center of everything we do. investing the necessary resources to drive operational excellence, and operating with added financial discipline and with a more strategic and optimal deployment of our resources. As we continue to build and rebuild the foundation of beauty health, I'm confident we will soon be able to leverage the opportunities ahead of us to deliver long-term value to our employees, partners, and shareholders. We have a magnificent brand, terrific products, strong partner and customer relationships, healthy underlying market trends, and ample resources. There is no reason why we shouldn't count on better times ahead. With that, I will now turn the call over to Mike to share details of our Q4 and full year 23 performance.