Modeling Guide
Gross Revenue
Our net revenue derives mainly from the sale of laser hair removal packages, sold by body part.
Revenue recognition is calculated based on the estimated time it takes for the client to conclude the hair removal sessions, and is always done in the same manner regardless of the client’s payment form. After analyzing our client base, we have concluded the client is satisfied and the treatment of that specific body part can be considered concluded after 5 to 6 sessions on average. This number can be broken into 4 treatment sessions with an interval of 45 days (carried out in 6 months) and up to 3 maintenance sessions (carried out with a more spaced out time frame, in 5 months). In this way, we recognize 90% of the revenue in linear installments throughout 6 months (15% per month) and the remaining 10% in linear installments throughout 5 months (2% per month). This criteria was defined in conjunction with the independent auditors.
In the case of franchises, our revenue derives from the payment of the franchise fee (due when the contract is signed or renewed) and 10% on sales as royalties. This is true for both brazilian and international Espaçolaser franchises.
Taxes
Taxes due are PIS, Cofins and ISS
Cancellations
This line is directly related to the provision for expected credit losses line. We have a provisioning rule, as detailed below, and cancel any contract with unpaid installments for over 90 days, as well as contracts requested by clients, following the cancellation rules provided for in these contracts.
Personnel
[Cost of a mainly fixed nature]
Our standard store structure varies from 6 to 8 employees, including one store manager, 2 to 3 consultants and 2 to 4 physiotherapists
In addition, we have field managers, responsible for managing 8 to 10 stores each
Rent
[Cost of a mainly fixed nature] – Occupation cost (fixed and variable rent, fees and condominium)
Direct Costs
[Cost of a mainly variable nature, following the level of service]
Includes Criogen Gas, Cleaning, Maintenance, PPE, Uniforms, etc.
Credit Card Fees
[Cost of a mainly variable nature, following the level of service]
Includes expenses with consulting and advisory services, corporate rent, phone expenses, travel, consumables, contingencies, etc.
Personnel
Expenses with corporate personnel
Marketing
Expenses of the Promotion and Propaganda Fund paid by own stores, as well as other expenses related to advertising and marketing
Provision for expected credit losses
Our provisioning rule for receivables in the recurrence mode is as follows:
Due: 2%
Overdue until 30 days: 87%
Overdue from 31 to 60 days: 94%
Overdue from 61 to 90 days: 98%
Overdue for more than 90 days: 100%
Mainly related to the Argentina operations.
Mainly related to the depreciatio of laser machines, with depreciation occuring in linear installments over 10 years, fixed assets and computers.
Mainly related to expenses with interest and charges on indebtedness, income on financial investments and monetary restatement.