What happened
Shares of The Beauty Health Company (SKIN 3.19%) (BHC) are running 10.7% higher at 10:39 a.m. ET on Tuesday morning after the skin care company reported fourth-quarter earnings that beat analyst expectations on the top and bottom lines.
The BHC also announced it was making an acquisition: that it would be buying, for an undisclosed amount, SkinStylus, a manufacturer of a Food & Drug Administration-approved microneedling device.
Image source: Getty Images.
So what
BHC describes Hydrafacial as a "a patented vortex-fusion delivery system to cleanse, extract, and hydrate the skin with proprietary solutions and serums," or something similar to a microdermabrasion, but pairs it with hydrating serums. It reportedly provides brighter skin after treatment without the redness and "downtime" associated with microdermabrasions.
Revenue in the fourth quarter rose 26% to $98.1 million, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $16.3 million for the fourth quarter, or $0.05 per share, a 92% increase compared to the year-ago period. Wall Street had been looking for $94.6 million in revenue and $0.04 per share in profits.
Now what
The Beauty Health Company is looking to expand by creating a platform of related products and services. The SkinStyle acquisition is part of that strategy. Microneedling is a nonsurgical procedure that uses an array of tiny needles to create microscopic punctures in the skin that reportedly stimulate the body to produce collagen that results in firmer, smoother skin.
The device is currently approved for use on surgical or traumatic hypertrophic scars on the abdomen in adults aged 22 years and older. BHC wants to eventually earn clearance for additional indications and to take it international.
