Advanced Energy Sales of $4.4 million in Q1,
up 66% year-over-year
Apyx Medical Corporation (NASDAQ:APYX) (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 first quarter ended
March 31, 2019.
First Quarter 2019 Financial
Summary:
- Total Q1 revenue from continuing
operations of $5.8 million, up 71% year-over-year.
- Advanced Energy revenue of $4.4
million, up 66% year-over-year.
- OEM revenue of $1.4 million, up 89%
year-over-year.
- Total Q1 GAAP net loss from continuing
operations of $4.7 million versus total GAAP net loss from
continuing operations of $2.8 million for the first quarter of
2018.
- Total Q1 adjusted EBITDA loss from
continuing operations of $4.2 million versus adjusted EBITDA loss
from continuing operations of $2.1 million for the first quarter of
2018.
First Quarter 2019
Highlight:
- On January 14th, the Company announced
that Todd Hornsby has been promoted to Executive Vice President,
effective January 2, 2019. Mr. Hornsby joined Apyx Medical in
August, 2014, and held the position of Vice President and General
Manager of Advanced Energy prior to his promotion.
Subsequent to Quarter
End:
- On April 1st, the Company announced it
voluntarily withdrew its application for premarket notification
510(k) regulatory clearance of J-Plasma/Renuvion for use in dermal
resurfacing procedures. The Company will continue to work with the
U.S. Food and Drug Administration relative to the development of a
new 510(k) submission.
Management
Comments:
“Our revenue performance in the first quarter represents a
promising start to 2019,” said Charlie Goodwin, President and Chief
Executive Officer. “We achieved impressive sales growth, which was
driven by global demand for our Renuvion generators and handpieces
in the cosmetic surgery market.”
Mr. Goodwin continued: “We began 2019 under our new corporate
name, Apyx Medical Corporation: a name that illustrates our intent
to become the leading provider of innovative technologies for the
cosmetic surgery market. Our existing clinical indication for
Renuvion represents a $1.5 billion market opportunity in the U.S.
alone, and an even larger opportunity internationally. In recent
months, I’m more proud than ever of the efforts of our team and the
commitment I have seen across our entire organization to improving
cosmetic surgery procedures and outcomes for the benefit of our
clinician customers and their patients. We are raising our fiscal
year revenue and profitability guidance based on our
better-than-expected performance in the first quarter, and we will
continue to focus on driving strong revenue growth, while
positioning our organization for long-term success and
profitability by leveraging our solid balance sheet condition and
investing thoughtfully in our strategic initiatives.”
First Quarter 2019
Results:
The following table represents revenue from continuing
operations by reportable segment:
Three Months EndedMarch
31, Increase/Decrease (In thousands)
2019
2018
$ Change
% Change Advanced Energy $ 4,371 $ 2,629 $
1,742 66.3 % OEM 1,452 768 684 89.1 % Total $
5,823 $ 3,397 $ 2,426 71.4 %
Total revenue from continuing operations for first quarter 2019
increased $2.4 million, or 71.4%, to $5.8 million, compared to $3.4
million in the first quarter of 2018. Sales of the Company’s
Advanced Energy generators and handpieces drove the increase in
total revenue in first quarter 2019, with OEM segment sales
contributing modestly to the year-over-year increase in total
revenue from continuing operations during the first quarter 2019
period. Advanced Energy segment sales increased $1.7 million, or
66.3% year-over-year, to $4.4 million, compared to $2.6 million
last year. OEM segment sales increased $0.7 million, or 89.1%
year-over-year, to $1.4 million, compared to $0.8 million last
year.
Three Months EndedMarch
31, Increase/Decrease (In thousands)
2019
2018
$ Change
% Change Domestic $ 4,104 $ 2,758 $ 1,346 48.8
% International 1,719 639 $ 1,080 169.0 % Total $
5,823 $ 3,397 $ 2,426 71.4 %
Revenue from continuing operations in the United States
increased $1.3 million, or 48.8% year-over-year, to $4.1 million,
and international revenue from continuing operations increased $1.1
million, or 169.0% year-over-year, to $1.7 million. International
sales growth in the first quarter was primarily driven by sales to
international distributors in the Company’s Advanced Energy
segment.
Gross profit for the first quarter of 2019 increased $1.5
million, or 68.2% year-over-year, to $3.7 million, compared to $2.2
million for first quarter of 2018. Gross margin for the first
quarter of 2019 was 63.9%, compared to 65.1% 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 first quarter of
2019 compared to last year. OEM gross margins were lower in the
first quarter of 2019 when compared to the prior year period,
driven primarily by revenue related to our new Product,
Manufacturing, and Supply agreements with Symmetry, which did not
contribute to revenue results in the prior period.
Operating expenses from continuing operations for the first
quarter of 2019 increased $4.0 million, or 80.9% year-over-year, to
$8.9 million, compared to $4.9 million for the first quarter of
2018. The year-over-year change in operating expenses from
continuing operations was primarily driven by a $1.4 million
increase in salaries and related costs, a $1.3 million increase in
professional services costs, a $1.0 million increase in selling,
general, and administration, and a $0.3 million increase in
research and development expenses.
Net loss from continuing operations for first quarter 2019 was
$(4.7) million, or $(0.14) per diluted share, compared to a net
loss from continuing operations of $(2.8) million, or $(0.08) per
diluted share, for the first quarter of 2018. Total income from
discontinued operations, net of tax, was $1.9 million in the first
quarter of 2018.
As of March 31, 2019, the Company had cash and equivalents
of $32.4 million and short-term investments of $40.9 million as
compared to cash and equivalents of $16.5 million and short-term
investments of $61.7 million as of December 31, 2018. The
Company had working capital of $77.8 million as of March 31,
2019 as compared to $81.8 million as of December 31, 2018.
2019 Financial
Outlook:
The Company is updating its fiscal year 2019 financial
guidance:
- Total revenue in the range of $25.5
million to $26.5 million, representing growth of 53% to 59%
year-over-year, compared to total revenue from continuing
operations of $16.7 million in fiscal year 2018.
- Total revenue guidance assumes:
- Advanced Energy revenue in the range of
$20.5 million to $21.5 million, representing growth of 56% to 64%
year-over-year, compared to Advanced Energy revenue of $13.1
million in fiscal year 2018. The Company’s prior guidance range for
Advanced Energy revenue was $20.0 million to $21.0 million,
representing growth of 53% to 61% year-over-year.
- The Company continues to expect OEM
revenue of $5.0 million, representing growth of 38% year-over-year,
compared to $3.6 million for fiscal year 2018.
- GAAP net loss in the range of $23.5
million to $22.5 million, compared to GAAP net loss from continuing
operations of $9.5 million in fiscal year 2018.
- Adjusted EBITDA loss in the range of
$19.9 million to $18.9 million, compared to adjusted EBITDA loss
from continuing operations of $11.7 million in fiscal year
2018.
Conference Call
Details:
Management will host a conference call at 4:30 p.m. Eastern Time
on May 8 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 8252538.
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.on24.com/wcc/r/1960685/EA5CE433FA4C050FACEFFFC1DF623FB1.
A telephonic replay will be available approximately two hours
after the end of the call through May 22, 2019. 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:
8252538. The webcast will be archived on the Investor Relations
section of the Company’s website.
About Apyx Medical
Corporation:
Apyx Medical Corporation (formerly Bovie Medical Corporation) is
an advanced energy technology company with a passion for elevating
people’s lives through innovative products in the cosmetic and
surgical markets. Known for its innovative Helium Plasma
Technology, Apyx is solely focused on bringing transformative
solutions to the physicians and patients it serves. The company’s
Helium Plasma Technology is marketed and sold as Renuvion® in the
cosmetic surgery market and J-Plasma® in the hospital surgical
market. Renuvion offers plastic surgeons, fascial plastic surgeons
and cosmetic physicians a unique ability to provide controlled heat
to the tissue to achieve their desired results. The J-Plasma system
allows surgeons to operate with a high level of precision and
virtually eliminating unintended tissue trauma. The Company also
leverages its deep expertise and decades of experience in unique
waveforms through original equipment manufacturing (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.
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, 2018 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.
APYX MEDICAL CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited) (In thousands, except per
share data)
Three Months EndedMarch 31, 2019
2018 Sales $ 5,823 $ 3,397 Cost of sales 2,103
1,185
Gross profit 3,720 2,212 Other costs and
expenses: Research and development 810 514 Professional services
1,791 506 Salaries and related costs 3,221 1,802 Selling, general
and administrative 3,101 2,110
Total
other costs and expenses 8,923 4,932
Loss from operations (5,203 ) (2,720 ) Interest
income 423 — Interest expense — (34 ) Other losses (25 ) — Fee
associated with refinance — (26 )
Total
other income (expense), net 398 (60 )
Loss before income taxes (4,805 ) (2,780 ) Income tax
(benefit) expense (124 ) 11
Income from
continuing operations (4,681 ) (2,791 ) Income from
discontinued operations, net of tax — 1,856 Total income from
discontinued operations, net of tax — 1,856
Net income (loss)
$
(4,681 ) $ (935 )
EPS from continuing operations:
Basic $ (0.14 )
$
(0.08 ) Diluted (0.14 ) (0.08 )
EPS from discontinued
operations: Basic — 0.05 Diluted — 0.05
EPS from
total operations: Basic
(0.14 ) (0.03 ) Diluted
(0.14 ) (0.03 ) Weighted average number of shares
outstanding - basic 33,343 32,878 Weighted average number of shares
outstanding - dilutive 33,343 32,878
APYX MEDICAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands, except share
and per share data)
March 31, 2019 December 31,
2018 ASSETS Current assets: Cash and cash
equivalents $ 32,415 $ 16,466 Short term investments 40,885 61,678
Trade accounts receivable, net of allowance of $196 and $428 4,931
5,015 Inventories, net of provision for obsolescence of $398 and
$439 5,598 5,212 Prepaid expenses and other current assets
1,411 1,146
Total current assets 85,240 89,517
Property and equipment, net 6,031 5,788 Intangibles 190 191
Deposits 80 73 Other assets 162 41
Total
assets $ 91,703 $ 95,610
LIABILITIES AND
STOCKHOLDERS’ EQUITY Current liabilities: Accounts
payable $ 1,504 $ 1,423 Accrued expenses 5,460 5,552 Accrued
severance and related 511 727
Total current
liabilities 7,475 7,702 Note payable 140 140 Long term lease
liability 75 —
Total liabilities 7,690 7,842
STOCKHOLDERS' EQUITY Common stock, $0.001 par value;
75,000,000 shares authorized; 34,033,255 issued and 33,891,255
outstanding as of March 31, 2019 and 33,847,100 issued and
33,704,525 outstanding as of December 31, 2018 34 34 Additional
paid-in capital 53,147 52,221 Retained earnings $ 31,332 $ 35,513
Total stockholders' equity 84,013 87,768
Total liabilities and stockholders' equity 91,703
95,610
APYX 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 EndedMarch
31, 2019 2018 Net loss from continuing operations
GAAP Basis $ (4,681 ) $ (2,791 ) Interest (income) expense, net
(423 ) 34 Income tax (benefit) expense (124 ) 11 Depreciation and
amortization 194 199 Stock based compensation 859 372 Change in
value of derivative liabilities — 26
Adjusted EBITDA (4,175 ) (2,149 )
The following unaudited table presents a reconciliation of net
loss to Adjusted EBITDA for our 2019 guidance. The reconciliation
assumes the mid-point of the Adjusted EBITDA loss range and the
midpoint of each component of the reconciliation, corresponding to
guidance for GAAP net loss of $23.5 million to $22.5 million for
2019.
Year 2019 Net loss GAAP Basis $ (23,000 )
Interest (income) expense, net (1,100 ) Income tax (benefit)
expense — Depreciation and amortization 700 Stock based
compensation 4,000 Change in fair value of derivative liabilities
— Adjusted EBITDA $ (19,400 )
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190508005661/en/
Investor Relations
Contact:Westwicke Partners on behalf of Apyx
Medical CorporationMike Piccinino,
CFAinvestor.relations@apyxmedical.com
Apyx Medical (NASDAQ:APYX)
Historical Stock Chart
From Aug 2024 to Sep 2024
Apyx Medical (NASDAQ:APYX)
Historical Stock Chart
From Sep 2023 to Sep 2024