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Strata Skin Sciences, Inc. Message Board

  • e11ndofwar e11ndofwar Jan 17, 2013 9:31 AM Flag

    A couple of points

    Here are some financial matters that I would like to see some improvement or clarification:
    1) As indicated by Dr. Gulfo yesterday, we need a substantial reduction in the manufacturing cost of the machine.
    2) What is the useful life of the machine? Why are the leasing arrangments for such a short period of two years? Given the cost of the machine, why are the monthly lease payments and down payment so low? Yes, it is a razor/razor blade scenario but we are not dealing here with inexpensive to manufacture razors. If the useful life is substantially longer then 2 years, shouldn't the initial lease term be longer. If not, is that a function of low demand?? What happens at the end of 2 years, does the lease automatically renew for a specified period? Does the monthly rental remain the same?
    3) What is the gross profit margin on the sale of cards?
    regards endo

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • #1: Yup. There are economies of scale that haven't been hit yet.
      #2: The machines are pretty durable, but they want to manage the upgrade cycle. The next generation of machines will be better and cheaper, and they'd prefer to get them out into the field sooner; likewise, the derms don't want to be locked into a physical machine when the next one has a newer and better one.
      #3: High, and will improve with scale.

      Basically, the company is focusing on cautiously building out a long-term business with an incredible brand, not maximizing short-term profits. The worst thing that could happen is that the product or company gets a bad rep.

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