Advanced Energy Sales of $3.0 million in Q3,
up 40% year-over-year and 92% year-to-date
Bovie Medical Corporation (NYSEAMERICAN:BVX) (the
“Company”), a maker of medical devices and supplies and the
developer of J-Plasma®, a patented surgical product marketed and
sold under the Renuvion® Cosmetic Technology brand in the cosmetic
surgery market, today reported financial results for its third
quarter ended September 30, 2018.
Third Quarter 2018 Financial
Summary:
- Total Q3 revenue from continuing
operations of approximately $3.7 million, up 39% year-over-year.
- Advanced Energy revenue of $3.0
million, up 40% year-over-year, driven by strong J-Plasma/Renuvion
sales.
- OEM revenue of approximately $0.7
million, up 31% year-over-year.
- Total Q3 adjusted EBITDA loss from
continuing operations of approximately $2.4 million versus adjusted
EBITDA loss from continuing operations of approximately $2.5
million for the third quarter of 2017.
Third Quarter 2018
Highlights:
- On July 9th, the Company announced that
the Company had entered into a definitive agreement with Specialty
Surgical Instrumentation Inc., a subsidiary of Symmetry Surgical
Inc. (“Symmetry”), pursuant to which the Company divested and sold
its Core business segment including the Bovie® brand to Symmetry
for gross proceeds of $97 million in cash. The Company's
stockholders voted to approve the divestiture and sale transaction
on August 30, 2018 and the transaction closed immediately
thereafter.
Management
Comments:
“Our third quarter revenue results reflect the continued
momentum we are seeing as we focus on commercializing our J-Plasma
technology under the Renuvion® brand in the cosmetic surgery
market,” said Charlie Goodwin, President and Chief Executive
Officer. “Our strategic focus has resulted in Advanced Energy sales
growth of 92% in the first nine months of 2018 - including 40%
growth year-over-year in the third quarter. Feedback on Renuvion
from plastic surgeons, cosmetic surgeons and dermatologists in the
U.S. continues to be very positive; the awareness of our
differentiated technology is growing in the U.S. cosmetic surgery
market as more and more clinicians appreciate Renuvion’s unique
ability to manage heat which allows for improved tissue effect and
treatment time.”
Mr. Goodwin continued: “We closed the sale of our Core segment
in the third quarter, an important strategic transaction which
positions us to aggressively pursue the extremely compelling
opportunity our Advanced Energy business has in serving the
cosmetic surgery market. We will pursue this focused strategy with
a balance sheet that is extremely well positioned to fuel our
longer-term strategy to encourage broad-based adoption, and we
believe ultimately achieves strong, sustained and profitable growth
for the benefit of our stockholders.”
Third Quarter 2018
Results:
The following table represents revenue from continuing
operations by reportable segment:
Three Months EndedSeptember 30,
Increase/Decrease Nine Months
EndedSeptember 30, Increase/Decrease (In
thousands)
2018 2017
$Change
%Change
2018 2017
$Change
%Change
Advanced Energy $ 2,985 $ 2,126 $ 859 40.4 % $ 8,727 $ 4,546 $
4,181 92.0 % OEM 687 525 162 30.9 % 2,033
2,030 3 0.1 % Total $ 3,672 $ 2,651
$ 1,021 38.5 % $ 10,760 $ 6,576 $ 4,184
63.6 %
Total revenue from continuing operations for third quarter 2018
increased $1.0 million, or 38.5%, to $3.7 million, compared to $2.7
million in the third quarter of 2017. Sales of the Company’s
Advanced Energy generators and handpieces drove the increase in
total revenue in third quarter 2018, with OEM segment sales
contributing modestly to the year-over-year increase in total
revenue from continuing operations during the third quarter 2018
period. Advanced Energy segment sales increased approximately $0.9
million, or 40.4% year-over-year, to $3.0 million, compared to
approximately $2.1 million last year. OEM segment sales increased
$0.2 million, or 30.9% year-over-year, to $0.7 million, compared to
$0.5 million last year.
Three Months EndedSeptember 30,
Increase/Decrease Nine Months
EndedSeptember 30, Increase/Decrease (In
thousands)
2018 2017
$Change
%Change
2018 2017
$Change
%Change
Domestic $ 2,763 $ 2,212 $ 551 24.9 % $ 8,481 $ 5,821 $ 2,660 45.7
% International 909 439 470 107.1 % 2,279
755 1,524 201.9 % Total $ 3,672 $ 2,651
$ 1,021 38.5 % $ 10,760 $ 6,576 $ 4,184
63.6 %
Revenue from continuing operations in the United States
increased approximately $0.6 million, or 24.9% year-over-year, to
$2.8 million, and international revenue from continuing operations
increased approximately $0.5 million, or 107.1% year-over-year, to
$0.9 million. International sales growth in the third quarter was
primarily driven by sales to international distributors in the
Company’s Advanced Energy segment.
Gross profit for the third quarter of 2018 increased
approximately $0.6 million, or 31.8% year-over-year, to $2.5
million, compared to $1.9 million for third quarter of 2017. Gross
margin for the third quarter of 2018 was 68.7%, compared to 72.2%
last year. The primary drivers of the decrease in gross profit
margin were Advanced Energy product mix and Advanced Energy sales
outside the U.S., which represented a higher mix of total sales in
the third quarter of 2018 compared to last year.
Operating expenses from continuing operations for the third
quarter of 2018 increased approximately $0.6 million, or 12.0%
year-over-year, to $5.3 million, compared to $4.7 million for the
third quarter of 2017. The year-over-year change in operating
expenses from continuing operations was primarily driven by a $0.3
million increase in salaries and related costs, a $0.2 million
increase in professional services costs and a $0.1 million increase
in research and development expenses.
Net loss from continuing operations for third quarter 2018 was
$0.4 million, or $0.01 per diluted share, compared to a net loss
from continuing operations of $2.9 million, or $0.09 per diluted
share, for the third quarter of 2017. Total income from
discontinued operations, net of tax, was $69.6 million in the third
quarter of 2018, driven by income from discontinued operations of
$0.5 million and a gain on sale, net of tax, of $69.1 million
related to the disposition of the Core business in the period.
Income from discontinued operations, net of tax, was $1.7 million
in the third quarter of 2017. Net income attributable to common
shareholders for the third quarter of 2018 was $69.2 million, or
$1.98 per diluted share, compared to net loss attributable to
common shareholders of $1.2 million, or $0.04 per diluted share,
last year.
As of September 30, 2018, the Company had cash and
equivalents of $40.7 million and short-term investments of $55.5
million as compared to cash and equivalents of $10.7 million as of
December 31, 2017. The Company had working capital of $85.2
million as of September 30, 2018 as compared to $16.6 million
as of December 31, 2017.
Nine Months 2018
Results:
Total revenue from continuing operations for the nine months
ended September 30, 2018 increased $4.2 million, or 63.6%, to $10.8
million, compared to $6.6 million in the nine months ended
September 30, 2017. Total revenue growth was driven by a 92.0%
increase in Advanced Energy sales and a 0.1% increase in OEM
sales.
Net gain for the nine months ended September 30, 2018 was $68.0
million, or $2.00 per diluted share, compared to a loss of $4.2
million, or $0.14 per diluted share, for the nine months ended
September 30, 2017.
Net loss from continuing operations for the nine months ended
September 30, 2018 was $8.6 million, or $0.19 per diluted share,
compared to a net loss from continuing operations of $10.7 million,
or $0.35 per diluted share, for the third quarter of 2017. Total
income from discontinued operations, net of tax, was $74.1 million
for the nine months ended September 30, 2018, driven by income from
discontinued operations of $5.1 million and a gain on sale, net of
tax, of $69.1 million related to the disposition of the Core
business in the period. Income from discontinued operations, net of
tax, was $6.5 million for the nine months ended September 30, 2017.
Net income attributable to common shareholders for the nine months
ended September 30, 2018 was $68.0 million, or $2.00 per diluted
share, compared to net loss attributable to common shareholders of
$4.2 million, or $0.14 per diluted share, last year.
2018 Financial
Outlook:
The Company is updating fiscal year 2018 financial guidance on a
continuing operations basis, which continues to reflect the
consummation of the Core segment sale transaction which closed on
August 30, 2018.
- Total revenue from continuing
operations in the range of $15.8 million to $16.2 million,
representing growth of 55% to 58% year-over-year, compared to total
revenue from continuing operations of $10.2 million in fiscal year
2017. The Company’s prior guidance range was $15.2 million to $15.6
million.
- Total revenue from continuing
operations guidance assumes:
- Advanced Energy revenue in the range of
approximately $12.4 million to $12.8 million, representing growth
of 63% to 67% year-over-year, compared to Advanced Energy revenue
of $7.6 million in fiscal year 2017. The Company’s prior guidance
range for Advanced Energy revenue was $11.8 million to $12.2
million, representing growth of 55% to 60% year-over-year.
- The Company continues to expect OEM
revenue of approximately $3.4 million, representing growth of 31%
year-over-year, compared to $2.6 million for fiscal year 2017.
- GAAP net loss from continuing
operations in the range of $9.2 million to $8.8 million, compared
to GAAP net loss from continuing operations of $11.9 million in
fiscal year 2017.
- Adjusted EBITDA loss from continuing
operations in the range of $10.4 million to $10.0 million, compared
to adjusted EBITDA loss from continuing operations of $12.0 million
in fiscal year 2017.
Conference Call Details:
Management will host a conference call at 4:30 p.m. Eastern Time
on November 1 to discuss the results of the quarter and to host a
question and answer session. To listen to the call by phone,
interested parties may dial 844-507-6493 (or 647-253-8641 for
international callers) and provide access code 6375776.
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/1822306/45823D187A3462B4AEEA8EC718B8449B.
A telephonic replay will be available approximately two hours
after the end of the call through November 15, 2018. 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: 6375776. 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® (marketed and
sold under the Renuvion® Cosmetic Technology brand in the cosmetic
surgery market), a patented plasma-based surgical product for
cutting, coagulation and ablation of soft tissue. J-Plasma
technology utilizes a helium ionization process to produce a
stable, focused beam of plasma that provides surgeons with greater
precision, and minimal invasiveness. 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 system. The Company also
leverages its expertise through original equipment manufacturing
(OEM) agreements with other medical device manufacturers. For
further information about the Company and its products, please
refer to the Bovie Medical Corporation website
at www.boviemedical.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, 2017 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, 2018 2017
2018 2017 Sales $ 3,672 $ 2,651 $ 10,760 $
6,576 Cost of sales 1,151 738 3,490 2,314
Gross profit 2,521 1,913 7,270 4,262 Other costs and
expenses: Research and development 613 487 1,890 1,600 Professional
services 628 421 1,815 1,291 Salaries and related costs 2,119 1,826
5,734 6,016 Selling, general and administrative 1,957 2,012
6,280 6,003
Total other costs and
expenses 5,317 4,746 15,719 14,910
Loss from operations (2,796 ) (2,833 ) (8,449 ) (10,648 )
Interest income (expense), net 105 (36 ) 33 (103 ) Other losses
(155 ) — (155 ) — Change in fair value of derivative liabilities —
(69 ) 20 57
Total other expense, net
(50 ) (105 ) (102 ) (46 )
Loss from continuing operations before
income taxes (2,846 ) (2,938 ) (8,551 ) (10,694 ) Income tax
(benefit) expense (2,408 ) 6 (2,384 ) 15
Net loss
from continuing operations $ (438 ) $ (2,944 ) $ (6,167 ) $
(10,709 ) Income from discontinued operations, net of tax 540 1,699
5,062 6,471 Gain on sale of the Core Business, net of tax 69,072
— 69,072 — Total income from
discontinued operations, net of tax 69,612 1,699
74,134 6,471
Net income (loss) $ 69,174
$ (1,245 ) $ 67,967 $ (4,238 ) Loss per share from
continuing operations Basic $ (0.01 ) $ (0.09 ) $ (0.19 ) $ (0.35 )
Diluted $ (0.01 ) $ (0.09 ) $ (0.19 ) $ (0.35 ) Income per
share from discontinued operations Basic 2.09 0.05 2.25 0.21
Diluted 1.99 0.05 2.19 0.21 Income (loss) per share Basic $
2.08 $ (0.04 ) $ 2.06 $ (0.14 ) Diluted $ 1.98 $ (0.04 ) $ 2.00 $
(0.14 ) Weighted average number of shares outstanding -
basic 33,275 31,078 33,014 30,932 Weighted average number of shares
outstanding - dilutive 34,934 31,078 33,952 30,932
BOVIE MEDICAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands, except share
and per share data)
September 30, 2018 December 31,
2017 ASSETS Current assets: Cash and cash
equivalents $ 40,663 $ 9,949 Restricted cash — 719 Short term
investments 55,480 — Trade accounts receivable, net of allowance of
$311 and $204 4,080 4,857 Inventories, net 6,037 4,274 Prepaid
expenses and other current assets 627 433 Current assets of
discontinued operations — 2,315
Total current
assets 106,887 22,547 Property and equipment, net 5,842 6,033
Purchased technology and license rights, net 32 67 Goodwill 185 185
Deposits 46 92 Other assets 122 67 Non-current assets of
discontinued operations — 1,997
Total assets $
113,114 $ 30,988
LIABILITIES AND
STOCKHOLDERS’ EQUITY Current liabilities: Accounts
payable $ 2,348 $ 1,583 Accrued severance and related 95 1,242
Accrued payroll 163 447 Current portion of mortgage note payable —
239 Accrued taxes and other liabilities 19,066 214 Current
liabilities of discontinued operations — 2,248
Total current liabilities 21,672 5,973 Mortgage note
payable, net of current portion — 2,455 Note payable 140 140
Deferred tax liability — 368 Derivative liabilities — 20
Total liabilities $ 21,812 $ 8,956
STOCKHOLDERS’
EQUITY Common stock, $0.001 par value; 75,000,000 shares
authorized; 33,763,019 issued and 33,620,444 outstanding as of
September 30, 2018 and 75,000,000 shares authorized; 33,021,170
issued and 32,878,091 outstanding as of December 31, 2017,
respectively 33 33 Additional paid-in capital 51,798 50,495
Retained earnings (accumulated deficit) 39,471 (28,496 )
Total stockholders’ equity 91,302 22,032
Total liabilities and stockholders’ equity $ 113,114
$ 30,988
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, depreciation and amortization,
stock-compensation expense, and changes in value of derivative
liabilities.
Three Months EndedSeptember 30, Nine
Months EndedSeptember 30, 2018 2017
2018 2017 Net loss GAAP Basis $ (438 ) $
(2,944 ) $ (6,167 ) $ (10,709 ) Interest income (expense), net (105
) 36 (33 ) 103 Income tax (benefit) expense (2,408 ) 6 (2,384 ) 15
Depreciation and amortization 58 171 429 527 Stock based
compensation 489 191 1,238 532 Change in fair value of derivative
liabilities — 69 (20 ) (57 ) Adjusted EBITDA (2,404 )
(2,471 ) (6,937 ) (9,589 )
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181101006100/en/
Investor Relations
Contact:Westwicke Partners on behalf of Bovie
Medical CorporationMike Piccinino,
CFA443-213-0500investor.relations@boviemed.com
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