Advanced Energy Sales increased 40%
year-over-year in Q2
Apyx Medical Corporation (NASDAQ:APYX) (the “Company”),
the manufacturer of a proprietary helium plasma and radiofrequency
technology marketed and sold as Renuvion®, today reported financial
results for its second quarter ended June 30, 2023, and reaffirms
financial expectations for the full year ending December 31,
2023.
Second Quarter 2023 Financial
Summary:
- Total revenue of $13.6 million, up 32% year-over-year.
- Advanced Energy revenue of $11.7 million, up 40%
year-over-year.
- OEM revenue of $1.8 million, down 4% year-over-year.
- Net loss attributable to stockholders of $1.0 million, down
$4.4 million, or 82%, year-over-year.
- Adjusted EBITDA loss of $1.6 million, down $1.8 million, or
52%, year-over-year.
Second Quarter 2023 Operating
Summary:
- On April 28, 2023, the Company announced that it received
510(k) clearance from the U.S. Food and Drug Administration (“FDA”)
“for the use of its Renuvion technology for coagulation of
subcutaneous soft tissues following liposuction for aesthetic body
contouring.”
- On May 8, 2023, the Company closed on a Purchase Agreement and
concurrently executed a 10-year agreement to leaseback its
underlying real property for its Clearwater, FL facility with VK
Acquisitions VI, LLC. The Company received net cash proceeds of
approximately $6.6 million, after withholding the security deposit
equal to one years rent, taxes, first months rent, expenses, and
fees.
- On May 10, 2023, the FDA posted an update to the Medical Device
Safety Communication (“Safety Communication”) to inform consumers
and healthcare providers about the clearance for the Renuvion APR
handpiece for use under the skin in certain procedures intended to
improve the appearance of the skin, including for coagulation of
subcutaneous soft tissues following liposuction for aesthetic body
contouring. The Company believes that the May 10, 2023 FDA update
to the Safety Communication addresses the remaining issues set
forth in the original Safety Communication from March 14,
2022.
- On June 14, 2023, the Company announced that it received 510(k)
clearance from the FDA for the Renuvion Micro Handpiece, a new
addition to the Renuvion product family. The Renuvion Micro
Handpiece is cleared with an indication “for the delivery of
radiofrequency energy and/or helium plasma where
coagulation/contraction of soft tissue is needed.” Soft tissue
includes subcutaneous tissue.
Management Comments:
“Our total revenue performance in the second quarter was driven
by strong sales of our Advanced Energy products, which increased
40% on a year-over-year basis and 21% on a quarter-over-quarter
basis,” said Charlie Goodwin, President and Chief Executive
Officer. “Our Advanced Energy sales performance in the U.S. was
consistent with our expectations, increasing 38% year-over-year and
benefiting, in part, from our recently obtained 510(k) clearances
for new clinical indications. Meanwhile, sales to our international
distributors were softer than expected, which we largely attribute
to the timing of orders from certain distributor partners.
Importantly, we delivered significant year-over-year reductions in
our net loss attributable to stockholders and adjusted EBITDA of
82% and 52%, respectively, while securing additional capital to
further strengthen our balance sheet.”
Mr. Goodwin continued: “Our team made important progress during
the second quarter in addressing the FDA Safety Communication,
which was initially posted in March of last year. Specifically, we
secured FDA 510(k) clearance for a new clinical indication related
to our Advanced Energy products – our fourth new clinical
indication in 12 months. This was followed by a related update to
the FDA Safety Communication on May 10th which we believe satisfied
all remaining issues in the Agency’s original communication, and we
have been pleased to see subsequent improvements in the U.S. sales
environment for our Advanced Energy generators. We anticipate
continued improvement globally over the balance of the year and
remain confident in our ability to achieve Advanced Energy sales
growth in excess of 40%, coupled with significant reductions in our
net loss.”
The following tables present revenue by reportable segment and
geography:
Three Months Ended June
30,
Increase/Decrease
Six Months Ended June
30,
Increase/Decrease
(In thousands)
2023
2022
$ Change
% Change
2023
2022
$ Change
% Change
Advanced Energy
$
11,722
$
8,364
$
3,358
40.1
%
$
21,412
$
19,178
$
2,234
11.6
%
OEM
1,847
1,928
(81
)
(4.2
)%
4,299
3,607
692
19.2
%
Total
$
13,569
$
10,292
$
3,277
31.8
%
$
25,711
$
22,785
$
2,926
12.8
%
Three Months Ended June
30,
Increase/Decrease
Six Months Ended June
30,
Increase/Decrease
(In thousands)
2023
2022
$ Change
% Change
2023
2022
$ Change
% Change
Domestic
$
10,137
$
7,947
$
2,190
27.6
%
$
19,008
$
15,495
$
3,513
22.7
%
International
3,432
2,345
1,087
46.4
%
6,703
7,290
(587
)
(8.1
)%
Total
$
13,569
$
10,292
$
3,277
31.8
%
$
25,711
$
22,785
$
2,926
12.8
%
Second Quarter 2023
Results:
Total revenue for the three months ended June 30, 2023 increased
$3.3 million, or 32% year-over-year, to $13.6 million, compared to
$10.3 million in the prior year period. Advanced Energy segment
sales increased $3.4 million, or 40% year-over-year, to $11.7
million. OEM segment sales decreased $0.1 million, or 4%
year-over-year to $1.8 million. The increase in Advanced Energy
sales was primarily due to growth in domestic sales, which was
driven by sales of the Company's recently launched Apyx One Console
to both new and existing customers, along with contributions from
increased sales of our handpieces. Advanced Energy sales also
benefited from growth in international sales, driven primary by an
increase in sales of generators. The decrease in OEM sales was due
to decreased sales volume to existing customers. For the second
quarter of 2023, revenue in the United States increased $2.2
million, or 28% year-over-year, to $10.1 million, and international
revenue increased $1.1 million, or 46% year-over-year, to $3.4
million.
Gross profit for the three months ended June 30, 2023, increased
$2.4 million, or 34% year-over-year, to $9.3 million, compared to
$6.9 million in the prior year period. Gross margin for the three
months ended June 30, 2023, was 68.4%, compared to 67.2% in the
prior year period. The increase in gross profit margins for the
three months ended June 30, 2023 from the prior year period is
primarily attributable to changes in the sales mix between the
Company's two segments, with the Advanced Energy segment comprising
a higher percentage of total sales. These increases were partially
offset by geographic mix within the Advanced Energy segment, with
international sales comprising a higher percentage of total sales
and product mix.
Operating expenses for the three months ended June 30, 2023
increased $0.3 million, or 2% year-over-year, to $13.2 million,
compared to $12.9 million in the prior year period. The
year-over-year change in operating expenses was driven by a $0.8
million increase in selling, general and administrative expenses, a
$0.1 million increase in salaries and related costs and a $0.1
million increase in research and development expenses. These
increases were partially offset by a $0.8 million decrease in
professional services.
Income tax expense for the three months ended June 30, 2023 and
2022 was $0.1 million.
Net loss attributable to stockholders for the three months ended
June 30, 2023 was $1.0 million, or $0.03 per share, compared to
$5.4 million, or $0.16 per share, in the prior year period.
Included in net loss for the three months ended June 30, 2023 was a
$2.7 million gain on the sale-leaseback of our Clearwater, FL
facility.
Adjusted EBITDA loss for the three months ended June 30, 2023
and 2022 was approximately $1.6 million and $3.4 million,
respectively.
First Six Months of 2023
Results:
Total revenue for the six months ended June 30, 2023, increased
$2.9 million, or 13%, to $25.7 million, compared to $22.8 million
in the prior year period. Advanced Energy segment sales increased
$2.2 million, or 12% year-over-year, to $21.4 million, compared to
$19.2 million in the prior year period. OEM segment sales increased
$0.7 million, or 19% year-over-year, to $4.3 million, compared to
$3.6 million in the prior year period. For the first six months of
2023, revenue in the United States increased $3.5 million, or 23%
year-over-year, to $19.0 million, and international revenue
decreased $0.6 million, or 8% year-over-year, to $6.7 million. The
increase in Advanced Energy sales was driven by domestic sales of
the Company’s recently launched Apyx One Console to both new and
existing customers. Growth in domestic sales was partially offset
by decreased international sales of generators and handpieces due
to continued business disruption related to the FDA Safety
Communication. The increase in OEM sales was due to increased sales
volume to existing customers, as well as incremental new sales upon
the commencement of the supply arrangement related to the
completion of the development portion of some of the Company’s OEM
development agreements.
Net loss attributable to stockholders for the six months ended
June 30, 2023 was $4.5 million, or $0.13 per share, compared to
$11.4 million, or $0.33 per share, in the prior year period.
Included in net loss for the six months ended June 30, 2023 was a
$2.7 million gain on the sale-leaseback of our Clearwater, FL
facility.
Full Year 2023 Financial
Outlook:
The Company is reaffirming its financial guidance for the year
ending December 31, 2023:
- Total revenue in the range of $59.0 million to $62.0 million,
representing growth of approximately 33% to 39% year-over-year,
compared to total revenue of $44.5 million for the year ended
December 31, 2022.
- Total revenue guidance assumes:
- Advanced Energy revenue in the range of $51.0 million to $54.0
million, representing growth of approximately 39% to 47%
year-over-year, compared to Advanced Energy revenue of $36.8
million for the year ended December 31, 2022.
- OEM revenue of approximately $8.0 million, representing growth
of approximately 4% year-over-year, compared to $7.7 million for
the year ended December 31, 2022.
- Net loss attributable to stockholders of approximately $10.5
million, compared to $23.2 million for the year ended December 31,
2022.
Conference Call Details:
Management will host a conference call at 5:00 p.m. Eastern Time
on August 10, 2023 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 877-407-8289 (or 201-689-8341 for
international callers) and provide access code 13739728.
Participants should ask for the Apyx 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.choruscall.com/mediaframe/webcast.html?webcastid=q73Cu5g0
A telephonic replay will be available approximately three hours
after the end of the call through the following two weeks. The
replay can be accessed by dialing 877-660-6853 for U.S. callers or
201-612-7415 for international callers and using the replay access
code: 13739728. The webcast will be archived on the Investor
Relations section of the Company’s website.
About Apyx Medical
Corporation:
Apyx Medical Corporation is an advanced energy technology
company with a passion for elevating people’s lives through
innovative products, including its Helium Plasma Technology
products marketed and sold as Renuvion® in the cosmetic surgery
market and J-Plasma® in the hospital surgical market. Renuvion® and
J-Plasma® offer surgeons a unique ability to provide controlled
heat to tissue to achieve their desired results. The Company also
leverages its deep expertise and decades of experience in unique
waveforms through OEM agreements with other medical device
manufacturers. For further information about the Company and its
products, please refer to the Apyx Medical Corporation website at
www.ApyxMedical.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.
All statements other than statements of historical fact are
statements that could be deemed forward-looking statements,
including but not limited to, any statements regarding the
potential impact of the COVID-19 pandemic and the actions by
governments, businesses and individuals in response to the
situation; projections of net revenue, margins, expenses, net
earnings, net earnings per share, or other financial items;
projections or assumptions concerning the possible receipt by the
Company of any regulatory approvals from any government agency or
instrumentality including but not limited to the U.S. Food and Drug
Administration (the “FDA”), supply chain disruptions, component
shortages, manufacturing disruptions or logistics challenges; or
macroeconomic or geopolitical matters and the impact of those
matters on the Company’s financial performance.
Forward-looking statements and information are 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 the Company’s actual results to
differ materially and that could impact the Company and the
statements contained in this release include but are not limited to
risks, uncertainties and assumptions relating to the regulatory
environment in which the Company is subject to, including the
Company’s ability to gain requisite approvals for its products from
the FDA and other governmental and regulatory bodies, both
domestically and internationally; the impact of the recent FDA
Safety Communication on our business and operations; factors
relating to the effects of the COVID-19 pandemic; sudden or extreme
volatility in commodity prices and availability, including supply
chain disruptions; changes in general economic, business or
demographic conditions or trends; changes in and effects of the
geopolitical environment; liabilities and costs which the Company
may incur from pending or threatened litigations, claims, disputes
or investigations; and other risks that are described in the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2022 and the Company’s other filings with the
Securities and Exchange Commission. 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.
APYX MEDICAL
CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Sales
$
13,569
$
10,292
$
25,711
$
22,785
Cost of sales
4,290
3,378
8,859
7,652
Gross profit
9,279
6,914
16,852
15,133
Other costs and expenses:
Research and development
1,199
1,070
2,320
2,228
Professional services
1,594
2,389
3,334
4,675
Salaries and related costs
5,035
4,892
10,103
10,073
Selling, general and administrative
5,378
4,539
10,633
10,004
Total other costs and expenses
13,206
12,890
26,390
26,980
Gain on sale-leaseback
2,692
—
2,692
—
Loss from operations
(1,235
)
(5,976
)
(6,846
)
(11,847
)
Interest income
179
18
230
20
Interest expense
(543
)
(3
)
(777
)
(11
)
Other income, net
646
607
641
586
Total other income, net
282
622
94
595
Loss before income taxes
(953
)
(5,354
)
(6,752
)
(11,252
)
Income tax expense (benefit)
66
96
(2,201
)
166
Net loss
(1,019
)
(5,450
)
(4,551
)
(11,418
)
Net loss attributable to
non-controlling interest
(25
)
(24
)
(74
)
(47
)
Net loss attributable to
stockholders
$
(994
)
$
(5,426
)
$
(4,477
)
$
(11,371
)
Loss per share
Basic and Diluted
$
(0.03
)
$
(0.16
)
$
(0.13
)
$
(0.33
)
Weighted average number of shares
outstanding - basic and diluted
34,603
34,464
34,600
34,447
APYX MEDICAL
CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share data)
June 30, 2023
(Unaudited)
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
18,479
$
10,192
Trade accounts receivable, net of
allowance of $555 and $668
12,072
10,602
Income tax receivables
7,752
7,545
Other receivables
315
99
Inventories, net of provision for
obsolescence of $579 and $457
11,167
11,797
Prepaid expenses and other current
assets
3,100
2,737
Total current assets
52,885
42,972
Property and equipment, net
2,118
6,761
Operating lease right-of-use assets
5,421
710
Finance lease right-of-use assets
97
115
Other assets
1,908
1,217
Total assets
$
62,429
$
51,775
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
2,658
$
2,669
Accrued expenses and other liabilities
7,114
8,928
Current portion of operating lease
liabilities
337
216
Current portion of finance lease
liabilities
28
37
Term loan, net
8,892
—
Total current liabilities
19,029
11,850
Long-term operating lease liabilities
5,093
470
Long-term finance lease liabilities
63
73
Long-term contract liabilities
1,326
1,408
Other liabilities
185
181
Total liabilities
25,696
13,982
EQUITY
Preferred Stock, $0.001 par value;
10,000,000 shares authorized; 0 issued and outstanding as of June
30, 2023 and December 31, 2022
—
—
Common stock, $0.001 par value; 75,000,000
shares authorized; 34,628,517 issued and outstanding as of June 30,
2023 and 34,597,822 issued and outstanding as of December 31,
2022
35
35
Additional paid-in capital
76,773
73,282
Accumulated deficit
(40,212
)
(35,735
)
Total stockholders' equity
36,596
37,582
Non-controlling interest
137
211
Total equity
36,733
37,793
Total liabilities and equity
$
62,429
$
51,775
APYX MEDICAL CORPORATION
RECONCILIATION OF GAAP NET LOSS RESULTS TO NON-GAAP ADJUSTED
EBITDA (Unaudited)
Use of Non-GAAP Financial Measure
We present the following non-GAAP measure because we believe
such measure is a useful indicator of our operating performance.
Our management uses this non-GAAP measure principally as a measure
of our operating performance and believes that this measure is
useful to investors because it is frequently used by analysts,
investors and other interested parties to evaluate companies in our
industry. We also believe that this measure is useful to our
management and investors as a measure of comparative operating
performance from period to period. The non-GAAP financial measure
presented in this release should not be considered as a substitute
for, or preferable to, the measures of financial performance
prepared in accordance with GAAP.
The Company has presented the following non-GAAP financial
measure in this press release: adjusted EBITDA. The Company defines
adjusted EBITDA as its reported net income (loss) attributable to
stockholders (GAAP) plus income tax expense (benefit), interest,
depreciation and amortization, stock-based compensation expense and
other significant non-recurring items.
(In thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net loss attributable to stockholders
$
(994
)
$
(5,426
)
$
(4,477
)
$
(11,371
)
Interest income
(179
)
(18
)
(230
)
(20
)
Interest expense
543
3
777
11
Income tax expense (benefit)
66
96
(2,201
)
166
Depreciation and amortization
151
247
354
472
Stock based compensation
1,482
1,714
2,849
3,364
Gain on sale-leaseback
(2,692
)
—
(2,692
)
—
Adjusted EBITDA
$
(1,623
)
$
(3,384
)
$
(5,620
)
$
(7,378
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230810740848/en/
Investor Relations: ICR
Westwicke on behalf of Apyx Medical Corporation Mike Piccinino, CFA
investor.relations@apyxmedical.com
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