Business and Geographical Reporting Segments

12 Months Ended

Dec. 31, 2022

Business and Geographical Reporting Segments [Abstract]

Business and Geographical Reporting Segments

16. Business and Geographical Reporting Segments

The Company organized its business into two operating segments to better align its organization based upon the Company’s management structure, products and services offered, markets served and types of customers, as follows. The Dermatology Recurring Procedures segment derives its revenues from the usage of its equipment by dermatologists to perform XTRAC procedures. The Dermatology Procedures Equipment segment generates revenues from the sale of equipment, such as lasers and lamp products. Management reviews financial information presented on an operating segment basis for the purposes of making certain operating decisions and assessing financial performance.

Unallocated operating expenses include costs that are not specific to a particular segment but are general to the group; included are expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees and other similar corporate expenses. Interest and other financing income (expense) is also not allocated to the operating segments.

The following tables reflect results of operations from our business segments for the periods indicated below (in thousands, except gross profit %):

Year Ended December 31, 2022	Dermatology Recurring Procedures			Dermatology Procedures Equipment			Total
Revenues	$	23,025		$	13,136		$	36,161
Cost of revenues		8,371			6,022			14,393
Gross profit		14,654			7,114			21,768
Gross profit %		63.6	%		54.2	%		60.2	%
Allocated expenses:
Engineering and product development		672			357			1,029
Selling and marketing		13,503			1,798			15,301
Unallocated expenses		—			—			10,087
		14,175			2,155			26,417
Income (loss) from operations		479			4,959			(4,649	)
Interest expense		—			—			(926	)
Interest income		—			—			89
Income (loss) before income tax expense	$	479		$	4,959		$	(5,486	)

Year Ended December 31, 2021	Dermatology Recurring Procedures			Dermatology Procedures Equipment			Total
Revenues	$	22,528		$	7,449		$	29,977
Cost of revenues		6,418			3,709			10,127
Gross profit		16,110			3,740			19,850
Gross profit %		71.5	%		50.2	%		66.2	%
Allocated expenses:
Engineering and product development		1,251			183			1,434
Selling and marketing		12,257			849			13,106
Unallocated expenses		—			—			9,712
		13,508			1,032			24,252
Income (loss) from operations		2,602			2,708			(4,402	)
Interest expense		—			—			(314	)
Interest income		—			—			15
Gain on debt extinguishment		—			—			2,029
Income (loss) before income tax expense	$	2,602		$	2,708		$	(2,672	)

For the years ended December 31, 2022 and 2021, depreciation and amortization by reportable segment were as follows (in thousands):

	Year Ended December 31,
	2022		2021
Dermatology recurring procedures	$	4,421	$	3,334
Dermatology procedures equipment		857		384
Unallocated expenses		15		18
Consolidated total	$	5,293	$	3,736

The following tables present the Company’s revenue disaggregated by geographical region for the years ended December 31, 2022 and 2021 (in thousands). Domestic refers to revenue from customers based in the United States, and foreign revenue is derived from the Company’s distributors primarily in Asia.

Year Ended December 31, 2022	Dermatology Recurring Procedures		Dermatology Procedures Equipment		Total
Domestic	$	21,585	$	2,396	$	23,981
China		195		4,556		4,751
Korea		888		2,828		3,716
Other foreign		357		3,356		3,713
Total	$	23,025	$	13,136	$	36,161

Year Ended December 31, 2021	Dermatology Recurring Procedures		Dermatology Procedures Equipment		Total
Domestic	$	21,215	$	1,982	$	23,197
China		—		931		931
Korea		941		2,412		3,353
Other foreign		372		2,124		2,496
Total	$	22,528	$	7,449	$	29,977

As of December 31, 2022 and 2021, total assets by reportable segment were as follows (in thousands):

	December 31,
	2022		2021
Dermatology recurring procedures	$	37,230	$	30,897
Dermatology procedures equipment		7,890		2,662
Other unallocated assets		7,152		13,034
Consolidated total	$	52,272	$	46,593

Long-lived assets of $0.6 million and $1.0 million were located in international markets, primarily Korea and Japan, as of December 31, 2022 and 2021, respectively, with the remainder located in domestic markets.