Advanced Energy Sales of $2.1 million in Q3,
up 52.0% year-over-year, driven by strong J-Plasma®
sales.
Bovie Medical Corporation (NYSEMKT:BVX) (the "Company"),
a maker of medical devices and supplies and the developer of
J-Plasma®, a patented new surgical product, today reported
financial results for its third fiscal quarter ended
September 30, 2017.
Third Quarter 2017 Financial
Summary:
- Advanced Energy revenue of $2.1
million, up 52% year-over-year, driven by strong J-Plasma® sales.
- Advanced Energy revenue increased 17%
quarter-over-quarter in Q3.
- Core revenue of approximately $6.7
million, down 3% year-over-year.
- Management believes core segment
revenue was impacted by hurricane-related business disruptions in
Texas and Florida during the third quarter.
- OEM revenue of approximately $0.5
million, down 70.2% year-over-year.
- Total Q3 revenue of approximately $9.3
million, down 7.1% year-over-year.
- Total Q3 adjusted EBITDA loss of
approximately $772,000 versus adjusted EBITDA of approximately
$129,000 in the third quarter of 2016.
- Q3 adjusted EBITDA loss includes
approximately $370,000 of expenses related to an inventory
write-down in the period.
Management
Comments:
“We experienced another quarter of strong growth in sales in our
Advanced Energy segment during the third quarter, with sales
increasing 52% year-over-year and 17% sequentially, fueled by
strong adoption and utilization of our J-Plasma® products,” said
Robert L. Gershon, Chief Executive Officer. “While we remain in the
early stages of driving sales into our target markets of plastic
surgery and surgical oncology, we are encouraged by the
consistently positive feedback that we have received from both new
and existing customers, and continue to believe that the features
and benefits of this innovative technology are resonating well
within these two areas of the surgeon community.”
Mr. Gershon continued: “We believe our third quarter revenue was
impacted by business disruptions related to the hurricanes in Texas
and Florida in August and September. These are important areas of
the U.S. for our Core segment. In addition to the sales disruption
in Texas and Florida during the period, we experienced temporary
disruptions in our business operations.”
Mr. Gershon further stated: “We are updating our 2017 guidance
expectations to account for stronger growth in our Advanced Energy
segment – we now expect growth of 93%–98% year over year in
Advanced Energy sales in 2017, offset by lower expectations from
the Core segment.”
Third Quarter 2017
Results:
The following tables represent revenue by reportable segment and
by product line:
Three Months EndedSeptember
30,
Increase/Decrease
Nine Months EndedSeptember
30,
Increase/Decrease
(In thousands)
2017 2016
$Change
%Change
2017 2016
$Change
%Change
Core $ 6,696 $ 6,902 $ (206 ) (3.0 )% $ 20,959 $ 20,261 $ 698 3.4 %
OEM 525 1,762 (1,237 ) (70.2 )% 2,030 4,351 (2,321 ) (53.3 )%
Advanced Energy 2,126 1,399 727 52.0 % 4,546
2,521 2,025 80.3 % Total $ 9,347 $
10,063 $ (716 ) (7.1 )% $ 27,535 $ 27,133 $
402 1.5 %
Three Months EndedSeptember
30,
Increase/Decrease
Nine Months EndedSeptember
30,
Increase/Decrease
(In thousands)
2017 2016
$Change
%Change
2017 2016
$Change
%Change
Electrosurgical $ 6,205 $ 5,690 $ 515 9.1 % $ 17,741 $ 15,020 $
2,721 18.1 % Cauteries 1,696 1,863 (167 ) (9.0 )% 5,224 5,417 (193
) (3.6 )% Lighting 573 740 (167 ) (22.6 )% 1,966 2,046 (80 ) (3.9
)% Other 873 1,770 (897 ) (50.7 )% 2,604 4,650
(2,046 ) (44.0 )% Total $ 9,347 $ 10,063 $
(716 ) (7.1 )% $ 27,535 $ 27,133 $ 402 1.5 %
Total revenue for third quarter 2017 decreased $0.7 million, or
7.1%, to $9.3 million, compared to $10.1 million in the third
quarter of 2016. Advanced Energy segment sales, nearly all of which
are from sales of J-Plasma products, increased approximately $0.7
million, or 52.0% year-over-year, to $2.1 million, compared to
approximately $1.4 million last year. The strong Advanced Energy
growth in the third quarter was offset by year-over-year declines
in revenue from the OEM and Core segments of 70.2% and 3.0%,
respectively. The decrease in OEM sales year-over-year was in-line
with the Company’s guidance expectations which assumed the impact
of lower production demand from customers compared to last year.
Management believes Core sales were negatively impacted by
hurricane–related business disruptions in Texas and Florida during
the third quarter.
By product line, sales of electrosurgical, cauteries, lighting
and other products represented 67% 18%, 6% and 9% of total revenue,
respectively, for the three months ended September 30, 2017.
The largest product line contributor to total revenue growth in the
third quarter of 2017 was a 9.1% increase in sales of
electrosurgical products, driven primarily by Advanced Energy
sales.
Three Months EndedSeptember
30,
Increase/Decrease
Nine Months EndedSeptember
30,
Increase/Decrease
(In thousands)
2017 2016
$Change
%Change
2017 2016
$Change
%Change
Domestic $ 7,978 $ 8,730 $ (752 ) (8.6 )% $ 23,678 $ 23,102 $ 576
2.5 % International 1,369 1,333 36 2.7 % 3,857
4,031 (174 ) (4.3 )% Total $ 9,347 $ 10,063
$ (716 ) (7.1 )% $ 27,535 $ 27,133 $ 402
1.5 %
Revenue in the United States decreased $0.8 million, or 8.6%
year-over-year, to $8.0 million, and international revenue
increased approximately $36,000, or 2.7% year-over-year, to $1.4
million.
Gross profit for the third quarter of 2017 decreased $0.5
million, or 9.2% year-over-year, to $4.6 million, compared to $5.1
million for third quarter 2016. Gross margin decreased
approximately 120 basis points year-over-year to 49.1% for the
third quarter of 2017, compared to 50.3% last year. Third quarter
gross margins were negatively impacted due to a write down of
approximately $370,000 for obsolete inventory related to the
Company’s first generation J-Plasma products, which have been
substantially upgraded to the current product generation. The
decrease in gross margin was partially offset by higher margins in
the Advanced Energy segment.
Operating expenses for third quarter 2017 increased $0.4
million, or 8.0% year-over-year, to $5.7 million, compared to $5.3
million for third quarter 2016. The increase in operating expenses
was primarily driven by a $0.5 million increase in selling, general
and administrative expenses over the comparable period last
year.
Loss from operations for the third quarter of 2017 was $1.1
million, compared to a loss from operations of $0.2 million for the
comparable period last year.
Net loss attributed to common shareholders for the third quarter
of 2017 was $1.2 million, or $0.04 per diluted share, compared to a
loss of $1.0 million, or $0.04 per diluted share, for the third
quarter of 2016.
As of September 30, 2017, the Company had cash and
equivalents of $10.2 million as compared to $15.2 million as of
December 31, 2016. The Company had working capital of $17.4
million as of September 30, 2017 as compared to $21.3 million
as of December 31, 2016.
Nine Months 2017
Results:
Total revenue for the nine months ended September 30, 2017
increased $0.4 million, or 1.5%, to $27.5 million, compared to
$27.1 million in the nine months ended September 30, 2016. Total
revenue growth was driven by an 80.3% increase in Advance Energy
sales and a 3.4% increase in Core sales, and was partially offset
by a 53.3% decrease in OEM sales.
Net loss attributed to common shareholders for the nine months
ended September 30, 2017 was $4.2 million, or $0.14 per diluted
share, compared to a loss of $3.4 million, or $0.13 per diluted
share, for nine months ended September 30, 2016.
2017 Outlook:
The Company now expects total revenue in the range of $37.9
million to $38.4 million, representing growth of 4% to 5%
year-over-year, compared to prior guidance which assumed growth in
the range of approximately 5% to 11% year-over-year.
- The Company expects total revenue
growth to be driven by:
- Advanced Energy sales growth in the
range of approximately 93% to 98% year-over-year as compared to
growth in the range of approximately 90% to 95% year-over-year
previously,
- OEM sales decline in the range of
approximately 50% to 55% year-over-year, unchanged from prior
guidance expectations.
- Core sales growth in the range of
approximately 3% to 4% year-over-year, as compared to growth in the
range of approximately 5% to 11% year-over-year previously.
- The Company now expects adjusted EBITDA
loss in a range of $2.8 million to $3.0 million, compared to
adjusted EBITDA loss in a range of $1.2 to $1.4 million in our
prior guidance range.
- The new adjusted EBITDA loss range for
fiscal year 2017 includes the impacts of an inventory write-down in
the third quarter as well as the impacts from lower core sales and
higher operating costs.
Conference Call
Details:
Management will host a conference call at 4:30 p.m. Eastern Time
on November 2, 2017 to discuss the results of the quarter and
host a question and answer session. To listen to the call by phone,
interested parties within the U.S. may dial 844-507-6493 (or
647-253-8641 for international callers) and provide access code
95898318. Participants should ask for the Bovie Medical Corporation
Call. A live webcast of the call will be accessible via the
Investor Relations section of the Company’s website and at:
https://event.on24.com/wcc/r/1472820/04D7A7087BD18CA1B64C4A121242427B
A telephonic replay will be available approximately two hours
after the end of the call through November 16, 2017. The replay can
be accessed by dialing 800-585-8367 for U.S. callers or
416-621-4642 for International callers and using the replay access
code: 95898318. The webcast will be archived on the Investor
Relations section of the Company's website.
About Bovie Medical
Corporation:
Bovie Medical Corporation is a leading maker of medical devices
and supplies as well as the developer of J-Plasma®, a patented
plasma-based surgical product for cutting, coagulation and ablation
of soft tissue. J-Plasma® utilizes a helium ionization process to
produce a stable, focused beam of plasma that provides surgeons
with greater precision, minimal invasiveness and an absence of
conductive currents through the patient during surgery. The
new J-Plasma® handpieces with Cool-Coag™ technology deliver the
precision of helium plasma energy, the power of traditional
monopolar coagulation and the efficiency of plasma beam coagulation
- enabling thin-layer ablation and dissection and fast coagulation
with a single instrument, minimizing instrument exchange and
allowing a surgeon to focus on their patient and their
procedures. With Cool-Coag technology, the new J-Plasma
handpieces can deliver three distinctly different energy
modalities - further increasing the utility and versatility of the
J-Plasma system. Bovie Medical Corporation is also a leader in the
manufacture of a range of electrosurgical products and
technologies, marketed through both private labels and the
Company’s own well-respected brands (Bovie®, IDS™ and DERM™) to
distributors worldwide. The Company also leverages its expertise
through original equipment manufacturing (OEM) agreements with
other medical device manufacturers. For further information about
the Company’s current and new products, please refer to the
Investor Relations section of Bovie Medical Corporation
at www.boviemed.com.
Cautionary Statement on Forward-Looking
Statements:
Certain matters discussed in this release and oral statements
made from time to time by representatives of the Company may
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 and the Federal
securities laws. Although the Company believes that the
expectations reflected in such forward-looking statements are based
upon reasonable assumptions, it can give no assurance that its
expectations will be achieved.
Forward-looking information is subject to certain risks, trends
and uncertainties that could cause actual results to differ
materially from those projected. Many of these factors are beyond
the Company's ability to control or predict. Important factors that
may cause actual results to differ materially and that could impact
the Company and the statements contained in this release can be
found in the Company's filings with the Securities and Exchange
Commission including the Company's Report on Form 10-K for the year
ended December 31, 2016 and subsequent Form 10-Q filings. For
forward-looking statements in this release, the Company claims the
protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995.
The Company assumes no obligation to update or supplement any
forward-looking statements whether as a result of new information,
future events or otherwise.
BOVIE MEDICAL CORPORATION CONSOLIDATED STATEMENTS
OF OPERATIONS (Unaudited) (In thousands, except per share
data) Three Months EndedSeptember
30, Nine Months EndedSeptember 30, 2017
2016 2017 2016 Sales $ 9,347 $
10,063 $ 27,535 $ 27,133 Cost of sales 4,753 5,002
13,673 14,049
Gross profit 4,594 5,061 13,862
13,084 Other costs and expenses: Research and development 610 681
2,015 1,941 Professional services 421 292 1,291 1,045 Salaries and
related costs 2,080 2,192 6,783 6,492 Selling, general and
administrative 2,617 2,141 7,950 6,354
Total other costs and expenses 5,728 5,306
18,039 15,832
Loss from operations (1,134 )
(245 ) (4,177 ) (2,748 ) Interest expense, net (36 ) (37 ) (103 )
(125 ) Change in fair value of derivative liabilities (69 ) (683 )
57 (555 )
Total other loss, net (105 ) (720 ) (46 )
(680 )
Loss before income taxes (1,239 ) (965 ) (4,223 )
(3,428 ) Income tax expense 6 — 15 —
Net loss $ (1,245 ) $ (965 ) $ (4,238 ) $ (3,428 )
Loss per share Basic $ (0.04 ) $ (0.04 ) $ (0.14 ) $ (0.13 )
Diluted $ (0.04 ) $ (0.04 ) $ (0.14 ) $ (0.13 ) Weighted
average number of shares outstanding - basic 31,078 27,075 30,932
27,059 Weighted average number of shares outstanding - dilutive
31,078 27,075 30,932 27,059
BOVIE MEDICAL
CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share and per share data)
September 30, 2017
December 31, 2016
ASSETS Current assets: Cash and cash equivalents $
9,411 $ 14,456 Restricted cash 779 779 Trade accounts receivable,
net of allowance of $154 and $118 4,077 4,733 Inventories, net
7,335 6,158 Prepaid expenses and other current assets 634
413
Total current assets 22,236 26,539 Property and
equipment, net 6,376 6,449 Brand name and trademark 1,510 1,510
Purchased technology and license rights, net 189 215 Goodwill 185
185 Deposits 84 109 Other assets 119 103
Total
assets $ 30,699 $ 35,110
LIABILITIES
AND STOCKHOLDERS' EQUITY Current liabilities: Accounts
payable $ 1,387 $ 1,606 Accrued payroll 193 419 Accrued vacation
330 404 Current portion of mortgage note payable 239 239 Accrued
and other liabilities 2,657 2,604
Total current
liabilities 4,806 5,272 Mortgage note payable, net of current
portion 2,515 2,694 Note payable 140 140 Deferred rents 11 14
Deferred tax liability 564 564 Derivative liabilities 146
203
Total liabilities 8,182 8,887
STOCKHOLDERS'
EQUITY Series B convertible preferred stock, $0.001 par value;
3,588,139 authorized and zero issued and outstanding as of
September 30, 2017 and 3,588,139 authorized and 975,639 issued and
outstanding as of December 31, 2016, respectively — 1 Common stock,
$0.001 par value; 75,000,000 shares authorized; 32,975,174 issued
and 32,832,095 outstanding as of September 30, 2017 and 40,000,000
shares authorized; 31,002,832 issued and 30,859,753 outstanding as
of December 31, 2016, respectively 33 31 Additional paid-in capital
50,156 49,625 Accumulated deficit (27,672 ) (23,434 )
Total
stockholders' equity 22,517 26,223
Total
liabilities and stockholders' equity $ 30,699 $ 35,110
BOVIE MEDICAL
CORPORATIONRECONCILIATION OF GAAP NET INCOME/(LOSS) RESULTS
TO NON-GAAP ADJUSTED EBITDA/(LOSS)(Unaudited) (In
thousands)
Use of Non-GAAP Financial Measures
We present these non-GAAP measures because we believe these
measures are useful indicators of our operating performance. Our
management uses these non-GAAP measures principally as a measure of
our operating performance and believes that these measures are
useful to investors because they are frequently used by analysts,
investors and other interested parties to evaluate companies in our
industry. We also believe that these measures are useful to our
management and investors as a measure of comparative operating
performance from period to period.
The Company has presented the following non-GAAP financial
measures in this press release: adjusted EBITDA. The Company
defines adjusted EBITDA as its reported net income/(loss) (GAAP)
plus income tax expense, interest expense, net, depreciation and
amortization, stock-compensation expense, and changes in value of
derivative liabilities.
Three Months EndedSeptember
30,
Nine Months EndedSeptember
30,
2017 2016 2017 2016 Net
loss GAAP Basis $ (1,245 ) $ (965 ) $ (4,238 ) $ (1,944 ) Interest
expense, net 36 37 103 125 Income tax expense 6 — 15 — Depreciation
and amortization 171 201 527 556 Stock based compensation 191 173
532 533 Change in fair value of derivative liabilities 69
683 (57 ) 555 Adjusted EBITDA (772 ) 129
(2,748 ) (175 )
The following unaudited table presents a reconciliation of net
loss to Adjusted EBITDA for our 2017 guidance:
Year Ended 2017 Net loss GAAP Basis $ (4,500 )
Interest expense, net 140 Income tax expense — Depreciation and
amortization 720 Stock based compensation 740 Change in fair value
of derivative liabilities — Adjusted EBITDA (2,900 )
The reconciliation assumes the mid-point of the Adjusted EBITDA
loss range and the midpoint of each component of the
reconciliation, corresponding to guidance of $2.8 million to $3.0
million for 2017.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171102006335/en/
Investor Relations
Contact:Westwicke Partners on behalf of Bovie
Medical CorporationMike Piccinino,
CFA443-213-0500investor.relations@boviemed.com
Bovie (AMEX:BVX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Bovie (AMEX:BVX)
Historical Stock Chart
From Apr 2023 to Apr 2024
