Apyx Medical Corporation (NASDAQ:APYX) (“Apyx Medical;”
the “Company”), the manufacturer of a proprietary helium plasma and
radiofrequency technology marketed and sold as Renuvion®, today
reported financial results for its first quarter ended March 31,
2024; and reaffirmed its financial expectations for the full year
ending December 31, 2024.
First Quarter 2024 Financial
Summary:
- Total revenue of $10.2 million, a decrease of 16%
year-over-year.
- Advanced Energy revenue of $7.5 million, a decrease of 23%
year-over-year.
- OEM revenue of $2.8 million, an increase of 14%
year-over-year.
- Net loss attributable to stockholders of $7.6 million, an
increase of $4.1 million, or 118%, year-over-year.
- Adjusted EBITDA loss of $5.3 million, an increase of $1.3
million, or 34%, year-over-year.
First Quarter 2024 Operating Summary
and Developments Subsequent to Quarter-End:
- On January 22, 2024, the Company announced the publication of a
peer-reviewed article in the Aesthetic Surgery Journal Open Forum,
which evaluated the use of Renuvion for contracting subcutaneous
soft tissue following liposuction in multiple areas of the
body.
- On February 21, 2024, the Company announced that its Renuvion
technology was featured in three educational sessions at the
American Academy of Cosmetic Surgery’s 40th Annual Scientific
Meeting.
- On April 11, 2024, the Company announced that new data and
treatment insights were showcased at the Company’s Renuvion Users’
Summit.
- On May 9, 2024, the Company announced the retirement of Andrew
Makrides as Chairman of the Board, after serving the Company in
this position since 1982. The Board of Directors has elected
Stavros Vizirgianakis Chairman of the Board, effective May 7,
2024.
Management Comments:
“Our Advanced Energy revenue results in the first quarter were
consistent with our previously stated expectations, as sales
remained impacted by the challenging environment in the cosmetic
surgery market,” said Charlie Goodwin, President and Chief
Executive Officer. “As anticipated, Advanced Energy revenue was
largely impacted by decreased generators sales, given continued
concerns from potential customers about the macroeconomic
environment and high interest rates.”
Mr. Goodwin continued: “We are reaffirming our 2024 financial
guidance today, which continues to assume that Advanced Energy
generator demand will remain impacted by consumer reticence to
purchase new capital equipment, offset in full, or in part, by
growth in handpiece sales. From an operational standpoint, our team
is focused on leveraging our enhanced portfolio of new clinical
indications, new products and clinical evidence by raising
awareness of these developments in the marketplace. We believe our
financial resources enable us to pursue our strategic initiatives,
and are committed to operating efficiently while positioning Apyx
Medical for future growth and value creation when conditions
improve.”
The following tables present revenue by reportable segment and
geography:
Three Months Ended
March 31,
Increase/Decrease
(In thousands)
2024
2023
$ Change
% Change
Advanced Energy
$
7,453
$
9,690
$
(2,237
)
(23.1
)%
OEM
2,791
2,452
339
13.8
%
Total
$
10,244
$
12,142
$
(1,898
)
(15.6
)%
Three Months Ended March
31,
Increase/Decrease
(In thousands)
2024
2023
$ Change
% Change
Domestic
$
6,979
$
8,871
$
(1,892
)
(21.3
)%
International
3,265
3,271
(6
)
(0.2
)%
Total
$
10,244
$
12,142
$
(1,898
)
(15.6
)%
First Quarter 2024
Results:
Total revenue for the three months ended March 31, 2024,
decreased $1.9 million, or 16% year-over-year, to $10.2 million,
compared to $12.1 million in the prior year period. Advanced Energy
segment revenue decreased $2.2 million, or 23% year-over-year, to
$7.5 million. OEM segment revenue increased $0.3 million, or 14%
year-over-year, to $2.8 million, compared to $2.5 million in the
prior year period. The decrease in Advanced Energy revenue was
primarily due to domestic sales, with sales of generators
decreasing as a result of economic uncertainty in the capital
equipment market within the aesthetic space, as well as a decrease
in single-use handpieces over the same period in 2023. The increase
in OEM segment revenue was due to increased sales volume to
Symmetry Surgical under our 10-year generator manufacturing and
supply agreement. Domestic sales decreased $1.9 million, or 21%
year-over-year, to $7.0 million, and international revenue was flat
year-over-year at $3.3 million.
Gross profit for the three months ended March 31, 2024,
decreased $1.6 million, or 21% year-over-year, to $5.9 million,
compared to $7.6 million in the prior year period. Gross profit
margin for the three months ended March 31, 2024, was 58.1%,
compared to 62.4% in the prior year period. The decrease in gross
profit margins was primarily attributable to changes in sales mix
between the OEM and Advanced Energy segments, with the OEM segment
comprising a higher percentage of revenue and geographic mix within
the Advanced Energy segment, with international revenue comprising
a higher percentage of total revenue.
Operating expenses for the three months ended March 31, 2024,
decreased $0.6 million, or 5% year-over-year, to $12.6 million,
compared to $13.2 million in the prior year period. The decrease in
operating expenses was driven by a $0.4 million decrease in
selling, general and administrative expenses, a $0.2 million
decrease in salaries and related costs and a $0.2 million decrease
in professional services expenses. These decreases were partially
offset by a $0.1 million increase in research and development
expenses.
Other loss, net for the three months ended March 31, 2024 and
2023 was $0.9 million and $0.2 million, respectively. The change
was driven primarily by increased interest expense on higher
outstanding borrowings compared to the prior year period.
Income tax expense (benefit) for the three months ended March
31, 2024 and 2023 was $0.1 million and $(2.3) million,
respectively.
Net loss attributable to stockholders for the three months ended
March 31, 2024, was $7.6 million, or $0.22 per share, compared to
$3.5 million, or $0.10 per share, in the prior year period.
Adjusted EBITDA loss for the three months ended March 31, 2024
and 2023 was $5.3 million and $4.0 million, respectively.
Full Year 2024 Financial
Outlook:
The Company is reaffirming its financial guidance for the year
ending December 31, 2024:
- Total revenue in the range of $49.7 million to $52.9 million,
representing a decrease of approximately 5% to growth of
approximately 1% year-over-year, compared to total revenue of $52.3
million for the year ended December 31, 2023.
- Total revenue guidance assumes:
- Advanced Energy revenue in the range of $41.6 million to $44.6
million, representing a decrease of approximately 4% to growth of
approximately 3% year-over-year, compared to Advanced Energy
revenue of $43.4 million for the year ended December 31, 2023.
- OEM revenue in the range of $8.1 million to $8.3 million,
representing a decrease of 10% to 7% year-over-year, compared to
$9.0 million for the year ended December 31, 2023.
- Net loss attributable to stockholders of approximately $26.5
million to $24.3 million, compared to $18.7 million for the year
ended December 31, 2023.
Conference Call Details:
Management will host a conference call at 8:00 a.m. Eastern Time
on May 9, 2024 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 888-645-4404 (or 862-298-0702 for
international callers) and provide access code 13745889.
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=uSHCiuNG
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: 13745889. 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 effectiveness of
Renuvion and J-Plasma are supported by more than 90 clinical
documents. 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, 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 March 14, 2022
FDA Safety Communication on our business and operations; 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, 2023 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
(Unaudited) (In thousands,
except per share data)
Three Months Ended
March 31,
2024
2023
Sales
$
10,244
$
12,142
Cost of sales
4,295
4,569
Gross profit
5,949
7,573
Other costs and expenses:
Research and development
1,397
1,271
Professional services
1,574
1,740
Salaries and related costs
4,696
4,918
Selling, general and administrative
4,897
5,255
Total other costs and expenses
12,564
13,184
Loss from operations
(6,615
)
(5,611
)
Interest income
495
51
Interest expense
(1,396
)
(234
)
Other loss, net
(21
)
(5
)
Total other loss, net
(922
)
(188
)
Loss before income taxes
(7,537
)
(5,799
)
Income tax expense (benefit)
53
(2,267
)
Net loss
(7,590
)
(3,532
)
Net loss attributable to non-controlling
interest
(14
)
(49
)
Net loss attributable to
stockholders
$
(7,576
)
$
(3,483
)
Loss per share:
Basic and Diluted
$
(0.22
)
$
(0.10
)
Weighted average number of shares
outstanding - basic and diluted
34,644
34,598
APYX MEDICAL
CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share data)
March 31, 2024
(Unaudited)
December 31,
2023
ASSETS
Current assets:
Cash and cash equivalents
$
37,282
$
43,652
Trade accounts receivable, net of
allowance of $605 and $608
12,487
14,023
Inventories, net of provision for
obsolescence of $880 and $875
9,795
9,923
Prepaid expenses and other current
assets
2,362
2,764
Total current assets
61,926
70,362
Property and equipment, net
1,779
1,915
Operating lease right-of-use assets
5,049
5,162
Finance lease right-of-use assets
64
69
Other assets
1,893
1,732
Total assets
$
70,711
$
79,240
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
2,103
$
2,712
Accrued expenses and other current
liabilities
8,077
9,661
Current portion of operating lease
liabilities
356
347
Current portion of finance lease
liabilities
20
20
Total current liabilities
10,556
12,740
Long-term debt, net of debt discounts and
issuance costs
33,406
33,185
Long-term operating lease liabilities
4,795
4,896
Long-term finance lease liabilities
48
53
Long-term contract liabilities
1,252
1,246
Other liabilities
194
198
Total liabilities
50,251
52,318
EQUITY
Preferred Stock, $0.001 par value;
10,000,000 shares authorized; 0 issued and outstanding as of March
31, 2024 and December 31, 2023
—
—
Common stock, $0.001 par value; 75,000,000
shares authorized; 34,643,926 issued and outstanding as of March
31, 2024 and 34,643,888 issued and outstanding as of December 31,
2023
35
35
Additional paid-in capital
82,242
81,114
Accumulated deficit
(62,024
)
(54,448
)
Total stockholders' equity
20,253
26,701
Non-controlling interest
207
221
Total equity
20,460
26,922
Total liabilities and equity
$
70,711
$
79,240
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
March 31,
2024
2023
Net loss attributable to stockholders
$
(7,576
)
$
(3,483
)
Interest income
(495
)
(51
)
Interest expense
1,396
234
Income tax expense (benefit)
53
(2,267
)
Depreciation and amortization
157
203
Stock based compensation
1,128
1,367
Adjusted EBITDA
$
(5,337
)
$
(3,997
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240509799204/en/
Investor Relations Contact:
ICR Westwicke on behalf of Apyx Medical Corporation Mike Piccinino,
CFA investor.relations@apyxmedical.com
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