Strata Skin Sciences, Inc.

Ladies and gentlemen, thank you for standing by. Good afternoon and welcome to the Strata Sciences, Inc. fourth quarter and year end 2024 financial results and corporate update conference call. At this time, all participants are in a listen only mode. Should you need assistance, please signal 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 then one on your telephone keypad. To withdraw your question, please press star then two. Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call through May 13th, 2025. I would now like to turn the call over to Louie Thoma of Core IR, the company's investor relations firm. Please go ahead, sir.

Thank you, operator. Good afternoon and thank you for participating in today's conference call. Earlier this afternoon, the company released its financial results for the quarter and year ended December 31st, 2024. A copy of that press release can be found on the company's website at www.stratuskinsciences.com under the investors tab. Joining me on today's earnings call from Stratuskin Sciences management team are Dr. Dolev Raffaelli, Chief Executive Officer, and John Gillings, Vice President of Finance. During this call, management will be making forward-looking statements, including statements that address Stratiskin Science's expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Stratiskin Sciences' most recently filed annual report on Form 10-K and subsequent periodic reports filed with the SEC and the Stratiskin Sciences press release that accompanies this call, particularly the cautionary statements in it. The content of this call contains time-sensitive information that is accurate only as of today, March 27, 2025, Except as required by law, Stratiskin Sciences disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to CEO, Dr. Dolev Raffaele.

Thanks, Louis, and good afternoon to everyone on the call. We had a strong fourth quarter with continued progress in our corporate turnaround and is highlighted through various metrics in the quarter. One of the primary elements of the strategy is helping our installed base improve the utilization of our machines. During this process, we are removing units from significant underperformance accounts while helping our other higher performing accounts, higher volume customers to better utilize our extract devices. We are expecting this strategy to be helping them understand the benefits of our systems for their patients, as well as the economics and the financial benefits to the clinics themselves. During the fourth quarter, the success of our efforts was underscored by a significant improvement in average net revenue per device, which was up 11% over the previous quarter and up 6% over the prior year period. While our U.S. extract and store base declined from 923 to 864, from Q4 23 to Q4 24, our average gross billing per device increased from $5,359 to $5,637 over the same time period, which is a reflective of the strategy I just mentioned. This quarter represents the highest quarterly average revenue per extract device since the end of 2022. We expect continued progress as we continue to work with clinics to make the better use of our devices. Our gross margin remained elevated at 60%, showing a 480 basis point improvement over the prior year Q4 and getting us closer to the range of roughly 70% gross margin the business enjoyed in the strongest quarters of 2019 and 2021. As a result of higher revenue, strong gross margin, and operating costs controls, we saw significant improvement in operating loss, which adjusted for non-cash impairment charges in both periods, improved 68% as compared to the fourth quarter of 2023. During 2024, our direct-to-consumer advertising ramped up from $0 in 2023 and $25,000 in both 2021 and 2022 to just over $14,000 a week, generating approximately 2,800 patient appointments, surpassing the 2022 numbers of new patient appointments. The efficiencies gained in the DTC campaign now enable us to focus on enhancing in-clinic processes, identifying partner clinics with the greatest opportunities, those with the highest patients based on the number of existing patients in the indication, prescribed extract procedures, and completed procedures. These consulting-like efforts have started in the fourth quarter of 2024, showing very meaningful upside with a small number of partner clinics across the country and are now being expanded to both individual and private equity group-owned clinics. Gross domestic revenue billings in the fourth quarter were 4.9 million versus 4.8 million, 4.7 million, and 4.6 million for the third, second, and first quarters, respectively. This was the third consecutive quarter of sequential increase, highlighting the results of our efforts, and we expect continued improvement in the periods ahead. We reached an installed base of 144 TheraClear X devices in the United States at the end of the fourth quarter, up from 92 devices at the end of 2023. In 2024, we have focused on assisting with the adoption of the insurance reimbursed non-cash billing for acne treatment with the TheraClear Axe device with 108 of the 144 devices now billing insurance. I am happy to report that year to date, we have secured preauthorization for over 3,700 patients with acne in our partner clinics. Our international sales were particularly strong. in the fourth quarter with sales of $4.1 million up 27% over the third quarter and up 41% over Q4 2023. This represents our highest level of international sales to date. Our strong growth in these markets is a result of refocusing our international partners on the technology and the clinical advantage of the extract technology. The market dominance of the extract in our key international market is further demonstrated through multiple peer-reviewed clinical studies being published annually. The most recent one was published just last month in Japan, validating the advantages of the high repetition rate, high dose, coherent collimated narrowband eczema laser technology over other sources of UVB light that are less accurate, lack the repetition rate, and or fluent capabilities for treating vitiligo psoriasis, alopecia areata, and atopic dermatitis. Our Japanese market is growing rapidly with almost 100 extract devices sold or placed since 2019. While we are not providing guidance, we would like to highlight a historical pattern to help you refine your models We tend to have a fairly strong seasonal effect between Q4, typically the strongest quarter of the year, and Q1, typically the weakest quarter of the year. This impact is stronger in years in which the fourth quarter is particularly strong. Looking at the last two years, the difference between Q4 2023 and Q1 2024 was sequential decline of 22%, despite the fact that Q4 2023 was relatively weak, coming below Q3 of 2023. The difference between Q4 2022 and Q1 2023 was a sequential decline of 29%, with Q4 2022 representing the typical pattern of a very strong Q4. Now I'd like to turn the call over to John, who will review our financial results in more detail.