Advanced Energy Sales increased 88%
year-over-year in Q3
Apyx Medical Corporation (NASDAQ:APYX) (the “Company”), a
maker of medical devices and supplies and the developer of Helium
Plasma Technology, marketed and sold as Renuvion® in the cosmetic
surgery market and J-Plasma® in the hospital surgical market, today
reported financial results for its third quarter ended September
30, 2021 and updated its financial outlook for the full year ending
December 31, 2021.
Third Quarter 2021 Financial
Summary:
- Total revenue of $11.8 million, up 70% year-over-year.
- Advanced Energy revenue of $10.3 million, up 88%
year-over-year.
- OEM revenue of $1.5 million, up 3% year-over-year.
- Net loss attributable to stockholders of $4.2 million, compared
to net loss attributable to stockholders of $3.7 million for the
third quarter of 2020. Net loss attributable to stockholders in the
third quarter of 2020 included an income tax benefit of $0.7
million.
- Adjusted EBITDA loss of $2.7 million, compared to adjusted
EBITDA loss of $3.1 million for the third quarter of 2020.
- At September 30, 2021, the Company had cash and cash
equivalents of $30.9 million, compared to $41.9 million as of
December 31, 2020. At September 30, 2021, the Company had working
capital of $48.2 million, including expected cash tax refunds of
approximately $7.5 million the Company expects to receive during
2021 or 2022 related to the net operating loss carrybacks resulting
from the 2020 CARES Act.
Third Quarter 2021 Operating
Highlights:
- On August 30, 2021, the Company announced the appointment of
Wendy Levine to the Board of Directors, effective August 25, 2021.
Ms. Levine serves as a Director and member of the Regulatory
Compliance Committee.
Management Comments:
“We are excited by our team’s impressive execution during the
third quarter, which enabled us to achieve 88% growth
year-over-year in sales of our Advanced Energy products. Our
Advanced Energy sales growth was driven primarily by strong, global
utilization of our Advanced Energy handpieces, with global
handpiece sales increasing more than 100% year-over-year. We also
saw global Advanced Energy generator sales increase by more than
70% year-over-year, primarily reflecting healthy adoption of our
Renuvion® technology in the U.S. cosmetic surgery market.”
Mr. Goodwin continued: “We are raising our 2021 financial
outlook today in light of our stronger-than-anticipated performance
that we achieved in the third quarter. Looking ahead, our financial
outlook continues to reflect our expectations for continued
improvement in the global capital equipment environment, coupled
with strong utilization trends from our existing customers, during
the fourth quarter. We expect to bring 2021 to a strong close as we
continue to raise awareness of our innovative Helium Plasma
Technology, expand our share of the multi-billion global cosmetic
surgery market and enhance the foundation for strong, sustainable
growth in the years ahead."
The following tables present revenue by reportable segment and
geography:
Three Months Ended
September 30,
Increase/Decrease
Nine Months Ended September
30,
Increase/Decrease
(In thousands)
2021
2020
$ Change
% Change
2021
2020
$ Change
% Change
Advanced Energy
$
10,313
$
5,479
$
4,834
88.2
%
$
27,951
$
12,332
$
15,619
126.7
%
OEM
1,518
1,475
43
2.9
%
3,742
3,915
(173
)
(4.4
)%
Total
$
11,831
$
6,954
$
4,877
70.1
%
$
31,693
$
16,247
$
15,446
95.1
%
Three Months Ended September
30,
Increase/Decrease
Nine Months Ended September
30,
Increase/Decrease
(In thousands)
2020
2019
$ Change
% Change
2020
2019
$ Change
% Change
Domestic
$
7,911
$
5,214
$
2,697
51.7
%
$
20,860
$
12,225
$
8,635
70.6
%
International
3,920
1,740
2,180
125.3
%
10,833
4,022
6,811
169.3
%
Total
$
11,831
$
6,954
$
4,877
70.1
%
$
31,693
$
16,247
$
15,446
95.1
%
Third Quarter 2021
Results:
Total revenue for the three months ended September 30, 2021
increased $4.9 million, or 70%, to $11.8 million, compared to $7.0
million in the prior year period. Advanced Energy segment sales
increased $4.8 million, or 88% year-over-year, to $10.3 million,
compared to $5.5 million in the prior year period. OEM segment
sales increased 3% year-over-year. For the third quarter 2021,
revenue in the United States increased $2.7 million, or 52%
year-over-year, to $7.9 million, and international revenue
increased $2.2 million, or 125% year-over-year, to $3.9 million. In
the third quarter of 2021, total revenue growth was primarily
driven by increased global utilization-based demand for handpieces
and adoption of generators, despite continued headwinds related to
the COVID-19 pandemic in certain geographic regions. COVID-19
related headwinds were relatively less severe on a global basis in
the third quarter of 2021, compared to the prior year period.
Gross profit for the three months ended September 30, 2021,
increased $3.3 million, or 70% year-over-year, to $8.1 million,
compared to $4.7 million in the prior year period. Gross margin for
the three months ended September 30, 2021, was 68.1%, compared to
67.9% for the same period in 2020. The increase in profit margins
for the three months ended September 30, 2021 from the prior year
period is primarily attributable to sales mix between the Advanced
Energy and OEM segments, partially offset by product and geographic
mix within the Advanced Energy segment and higher inbound shipping
costs.
Operating expenses for the third quarter of 2021 increased $2.9
million, or 32% year-over-year, to $12.0 million, compared to $9.1
million for the third quarter of 2020. The year-over-year change in
operating expenses was driven by a $1.9 million increase in
selling, general and administrative expenses, a $0.7 million
increase in salaries and related costs, a $0.2 million increase in
professional services and a $0.1 million increase in research and
development expenses.
Income tax expense for the third quarter of 2021 was $0.1
million, compared to an income tax benefit of $0.7 million for the
third quarter of 2020. The year-over-year change in income tax
expense (benefit) was primarily due to the net operating loss
carryback recognized in the third quarter of 2020, which did not
impact income tax expense in the third quarter of 2021.
Net loss attributable to stockholders for third quarter of 2021
was $4.2 million, or $0.12 per share, compared to a net loss of
$3.7 million, or $0.11 per share, for the third quarter of 2020.
Net loss attributable to stockholders in the third quarter of 2020
included an income tax benefit of $0.7 million.
First Nine Months of 2021
Results:
Total revenue for the nine months ended September 30, 2021
increased $15.4 million, or 95%, to $31.7 million, compared to
$16.2 million in the prior year period. Advanced Energy segment
sales increased $15.6 million, or 127% year-over-year, to $28.0
million, compared to $12.3 million in the prior year period. OEM
segment sales decreased $0.2 million, or 4% year-over-year, to $3.7
million, compared to $3.9 million in the prior year period. For the
nine months ended September 30, 2021, revenue in the United States
increased $8.6 million, or 71% year-over-year, to $20.9 million,
and international revenue increased $6.8 million, or 169%
year-over-year, to $10.8 million.
Net loss attributable to stockholders for the nine months ended
September 30, 2021 was $13.2 million, or $0.38 per share, compared
to a net loss of $10.4 million, or $0.30 per share, for the nine
months ended September 30, 2020. Net loss attributable to
stockholders for the nine months ended September 30, 2020 included
an income tax benefit of $7.1 million.
Full Year 2021 Financial
Outlook:
The Company is updating financial guidance for the year ending
December 31, 2021 to:
- Total revenue in the range of $44.0 million to $45.0 million,
representing growth of 59% to 62% year-over-year, compared to total
revenue of $27.7 million for the year ended December 31, 2020. The
Company’s prior guidance range for total revenue was $40.6 million
to $42.6 million, representing growth of 46% to 54% year-over-year.
- Total revenue guidance assumes:
- Advanced Energy revenue in the range of approximately $39.0
million to $40.0 million, representing growth of 76% to 80%
year-over-year, compared to Advanced Energy revenue of $22.2
million for the year ended December 31, 2020. The Company’s prior
guidance range for Advanced Energy revenue was $36.0 million to
$38.0 million, representing growth of 62% to 71% year-over-year.
- The Advanced Energy revenue range assumes that U.S. growth is
only driven by contributions from Renuvion® sales related to its
use as a sub-dermal coagulator following liposuction procedures and
that international growth is driven primarily by demand in existing
international markets.
- OEM revenue of approximately $5.0 million, representing a
decline of 9% year-over-year, compared to $5.5 million for the year
ended December 31, 2020. The Company’s prior guidance for OEM
revenue was approximately $4.6 million, representing a decline of
16% year-over-year.
- Net loss attributable to stockholders in the range of $17.8
million to $17.2 million, compared to net loss attributable to
stockholders of $11.9 million for the year ended December 31, 2020.
Net loss attributable to stockholders for the year ended December
31, 2020 included an income tax benefit of $7.7 million. The
Company’s prior guidance range for net loss attributable to
stockholders was $19.3 million to $18.0 million.
- Adjusted EBITDA loss in the range of $11.6 million to $10.7
million, compared to adjusted EBITDA loss of $14.5 million for the
year ended December 31, 2020. The Company’s prior guidance range
for Adjusted EBITDA loss was $13.1 million to $11.5 million.
Conference Call Details:
Management will host a conference call at 5:00 p.m. Eastern Time
on November 11, 2021 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 13723897.
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://78449.themediaframe.com/dataconf/productusers/apyx/mediaframe/46871/indexl.html
A telephonic replay will be available approximately two hours
after the end of the call through November 25, 2021. 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: 13723897. 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 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 surgeons and 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, 2020. 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
September 30,
Nine months ended September
30,
2021
2020
2021
2020
Sales
$
11,831
$
6,954
$
31,693
$
16,247
Cost of sales
3,775
2,229
10,243
6,444
Gross profit
8,056
4,725
21,450
9,803
Other costs and expenses:
Research and development
1,175
1,047
3,374
3,002
Professional services
2,032
1,835
5,442
5,882
Salaries and related costs
4,206
3,508
12,794
10,258
Selling, general and administrative
4,611
2,706
12,596
8,691
Total other costs and expenses
12,024
9,096
34,206
27,833
Loss from operations
(3,968
)
(4,371
)
(12,756
)
(18,030
)
Interest income
2
10
9
233
Interest expense
(3
)
(25
)
(9
)
(39
)
Other (loss) income, net
(192
)
(63
)
(188
)
349
Total other (loss) income, net
(193
)
(78
)
(188
)
543
Loss before income taxes
(4,161
)
(4,449
)
(12,944
)
(17,487
)
Income tax expense (benefit)
73
(715
)
246
(7,112
)
Net loss
(4,234
)
(3,734
)
(13,190
)
(10,375
)
Net loss attributable to
non-controlling interest
(12
)
(6
)
(21
)
(6
)
Net loss attributable to
stockholders
$
(4,222
)
$
(3,728
)
$
(13,169
)
$
(10,369
)
Loss per share
Basic and Diluted
$
(0.12
)
$
(0.11
)
$
(0.38
)
$
(0.30
)
Weighted average number of shares
outstanding - basic and diluted
34,330
34,216
34,318
34,193
APYX MEDICAL
CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share data)
September 30, 2021
(Unaudited)
December 31,
2020
ASSETS
Current assets:
Cash and cash equivalents
$
30,898
$
41,915
Trade accounts receivable, net of
allowance of $360 and $300
11,444
8,399
Income tax receivables
7,654
7,654
Other receivables
873
1,275
Inventories, net of provision for
obsolescence of $303 and $388
6,040
4,051
Prepaid expenses and other current
assets
2,967
2,795
Total current assets
59,876
66,089
Property and equipment, net
6,412
6,541
Operating lease right-of-use assets
152
237
Finance lease right-of-use assets
274
437
Other assets
1,055
807
Total assets
$
67,769
$
74,111
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
3,044
$
1,511
Accrued expenses and other liabilities
8,324
7,278
Current portion of operating lease
liabilities
125
126
Current portion of finance lease
liabilities
218
238
Total current liabilities
11,711
9,153
Long-term operating lease liabilities
30
129
Long-term finance lease liabilities
22
183
Contract liabilities
1,200
621
Other liabilities
146
166
Total liabilities
13,109
10,252
EQUITY
Common stock, $0.001 par value; 75,000,000
shares authorized; 34,339,533 issued and outstanding as of
September 30, 2021, and 34,289,222 outstanding as of December 31,
2020
34
34
Additional paid-in capital
64,862
61,066
(Accumulated deficit) retained
earnings
(10,548
)
2,621
Total stockholders' equity
54,348
63,721
Non-controlling interest
312
138
Total equity
54,660
63,859
Total liabilities and equity
$
67,769
$
74,111
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 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, and stock-based compensation
expense.
(In thousands)
Three Months Ended
September 30,
Nine months ended September
30,
2021
2020
2021
2020
Net loss attributable to stockholders
$
(4,222
)
$
(3,728
)
$
(13,169
)
$
(10,369
)
Interest income
(2
)
(10
)
(9
)
(233
)
Interest expense
3
25
9
39
Income tax expense (benefit)
73
(715
)
246
(7,112
)
Depreciation and amortization
234
223
674
662
Stock based compensation
1,184
1,063
3,747
3,209
Adjusted EBITDA
$
(2,730
)
$
(3,142
)
$
(8,502
)
$
(13,804
)
The following unaudited table presents a reconciliation of net
loss attributable to stockholders to Adjusted EBITDA loss for the
year ending December 31, 2021. 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 attributable to stockholders of $17.8 million to
$17.2 million for the year ending December 31, 2021.
(In millions)
Year Ending December 31,
2021
Net loss attributable to stockholders
$
(17.5
)
Interest income
—
Interest expense
—
Income tax expense
0.3
Depreciation and amortization
0.9
Stock based compensation
5.2
Adjusted EBITDA
$
(11.2
)
Note: figures may not sum to totals due to
rounding
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211111006043/en/
Investor Relations:
Westwicke Partners on behalf of Apyx Medical Corporation Mike
Piccinino, CFA investor.relations@apyxmedical.com
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