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, 2022, and updated
financial expectations for the full year ending December 31,
2022.
Second Quarter 2022 Financial
Summary:
- Total revenue of $10.3 million, down 8% year-over-year.
- Advanced Energy revenue of $8.4 million, down 16%
year-over-year.
- OEM revenue of $1.9 million, up 55% year-over-year.
- Net loss attributable to stockholders of $5.4 million, compared
to $4.0 million for the second quarter of 2021.
- Adjusted EBITDA loss of $3.4 million, compared to adjusted
EBITDA loss of $2.4 million for the second quarter of 2021.
Second Quarter 2022 Operating
Summary:
- On April 4, 2022, the Company announced the submission of a
510(k) premarket notification (“510(k) submission”) to the U.S.
Food and Drug Administration (“FDA”). The 510(k) submission was
intended to expand the Company’s general indication to include a
specific indication for the use of the Renuvion APR Handpiece in
subcutaneous dermatological and aesthetic procedures to improve the
appearance of lax (loose) skin in the neck and submental
region.
- On May 26, 2022, the Company announced it received 510(k)
clearance from the FDA for the use of the Renuvion Dermal Handpiece
for specific dermal resurfacing procedures. The Renuvion Dermal
Handpiece is indicated for dermatological procedures for the
treatment of moderate to severe wrinkles and rhytides, limited to
patients with Fitzpatrick skin types I, II or III.
- On June 2, 2022, the FDA updated the Medical Device Safety
Communication (“MDSC”) related to the Company’s Advanced Energy
products to recognize this new 510(k) clearance.
Highlights & Developments
Subsequent to Quarter End:
- On July 8, 2022, the Company announced that the results of the
pivotal Phase II of its Investigational Device Exemption (“IDE”)
study evaluating the safety and effectiveness of the Renuvion
device to improve the appearance of lax skin in the neck and
submental region are now available on ClinicalTrials.gov.
- On July 18, 2022, the Company announced it received 510(k)
clearance from the FDA for the use of the Renuvion APR Handpieces
for certain skin contraction procedures. The Renuvion APR
Handpieces are now indicated for use in subcutaneous dermatological
and aesthetic procedures to improve the appearance of lax (loose)
skin in the neck and submental region.
- On July 21, 2022, the FDA updated the MDSC related to the
Company’s Advanced Energy products to recognize this new 510(k)
clearance.
- On July 27, 2022, the Company announced its first reporting of
environmental, social and governance (“ESG”) data via a newly
released tear sheet. This data provides context to the Company’s
ESG goals and priorities important to its business and
stakeholders.
Management Comments:
“Our total revenue in the second quarter decreased 8%
year-over-year, due to the impact of the Medical Device Safety
Communication on global sales of our Advanced Energy products,”
said Charlie Goodwin, President and Chief Executive Officer.
“Internationally, we saw softer-than-expected Advanced Energy
generator and handpiece demand from distributors in select
countries, which represented the largest contributor to the 16%
year-over-year decrease in global Advanced Energy sales during the
quarter. Specifically, Advanced Energy international generator and
handpiece sales decreased more than 45% and 30% year-over-year,
respectively. In the U.S., we were pleased by our performance
during the quarter, which exceeded our expectations. While we
continued to experience slower U.S. sales of our Advanced Energy
products as anticipated, we saw material improvement in our
business trends during each month of the quarter.”
Mr. Goodwin continued: “We are updating our guidance today to
reflect the domestic and international performance in our Advanced
Energy business during the second quarter, and revised expectations
for the second half of 2022. Our team has made strong progress in
recent months, securing 510(k) clearances for specific indications
related to the use of our Renuvion technology in dermal resurfacing
procedures and to improve the appearance of lax, or loose, skin.
These clearances provide important validation for the safety and
effectiveness of our Renuvion technology and expand our addressable
market opportunity to include approximately 200,000 wrinkle
reduction procedures and 200,000 neck contouring procedures
performed in the U.S. annually. We are also pleased that the FDA
updated the Medical Device Safety Communication to reflect our
receipt of these new 510(k) clearances. We look forward to entering
full commercialization for these new indications by the end of
2022, and continue to believe that the headwinds experienced during
the second quarter will ultimately prove to be transitory.”
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)
2022
2021
$ Change
% Change
2022
2021
$ Change
% Change
Advanced Energy
$
8,364
$
9,978
$
(1,614
)
(16.2
) %
$
19,178
$
17,638
$
1,540
8.7
%
OEM
1,928
1,246
682
54.7
%
3,607
2,224
1,383
62.2
%
Total
$
10,292
$
11,224
$
(932
)
(8.3
) %
$
22,785
$
19,862
$
2,923
14.7
%
Three Months Ended June
30,
Increase/Decrease
Six Months Ended June
30,
Increase/Decrease
(In thousands)
2022
2021
$ Change
% Change
2022
2021
$ Change
% Change
Domestic
$
7,947
$
7,383
$
564
7.6
%
$
15,495
$
12,949
$
2,546
19.7
%
International
2,345
3,841
(1,496
)
(38.9
) %
7,290
6,913
377
5.5
%
Total
$
10,292
$
11,224
$
(932
)
(8.3
) %
$
22,785
$
19,862
$
2,923
14.7
%
Second Quarter 2022 Results:
Total revenue for the three months ended June 30, 2022 decreased
$0.9 million, or 8% year-over-year, to $10.3 million, compared to
$11.2 million in the prior year period. Advanced Energy segment
sales decreased $1.6 million, or 16% year-over-year, to $8.4
million, compared to $10.0 million in the prior year period. OEM
segment sales increased $0.7 million, or 55% year-over-year to $1.9
million, compared to $1.2 million in the prior year period. For the
second quarter of 2022, revenue in the United States increased $0.6
million, or 8% year-over-year, to $7.9 million, and international
revenue decreased $1.5 million, or 39% year-over-year, to $2.3
million. The year-over-year decrease in Advanced Energy revenue was
due to decreased global demand for the Company’s handpieces and
generators following the FDA Safety Communication on March 14,
2022. The year-over-year increase in OEM revenue was driven by
higher sales to existing customers, including Symmetry Surgical, as
well as sales related to the completion of the development portion
of some of the Company’s OEM development agreements.
Gross profit for the three months ended June 30, 2022, decreased
$0.6 million, or 8% year-over-year, to $6.9 million, compared to
$7.5 million in the prior year period. Gross margin for the three
months ended June 30, 2022, was 67.2%, compared to 67.1% in the
prior year period. The increase in gross profit margins for the
three months ended June 30, 2022 from the prior year period was
primarily attributable to geographic mix within the Company’s
Advanced Energy segment, with domestic sales comprising a higher
percentage of total sales and the mix of newer product models as
the Company obtains registrations allowing these products to be
introduced into the markets it serves.
Operating expenses for the three months ended June 30, 2022
increased $1.3 million, or 11% year-over-year, to $12.9 million,
compared to $11.6 million in the prior year period. The
year-over-year change in operating expenses was driven by a $0.5
million increase in salaries and related costs, a $0.5 million
increase in professional services and a $0.3 million increase in
selling, general and administrative expenses.
Income tax expense for the three months ended June 30, 2022 and
2021 was $0.1 million.
Net loss attributable to stockholders for the three months ended
June 30, 2022 was $5.4 million, or $0.16 per share, compared to a
net loss of $4.0 million, or $0.12 per share, in the prior year
period.
Adjusted EBITDA loss for the three months ended June 30, 2022
was $3.4 million, compared to adjusted EBITDA loss of $2.4 million
in the prior year period.
First Six Months of 2022 Results:
Total revenue for the six months ended June 30, 2022, increased
$2.9 million, or 15%, to $22.8 million, compared to $19.9 million
in the prior year period. Advanced Energy segment sales increased
$1.5 million, or 9% year-over-year, to $19.2 million, compared to
$17.6 million in the prior year period. OEM segment sales increased
$1.4 million, or 62% year-over-year, to $3.6 million, compared to
$2.2 million in the prior year period. For the first half of 2022,
revenue in the United States increased $2.5 million, or 20%
year-over-year, to $15.5 million, and international revenue
increased $0.4 million, or 6% year-over-year, to $7.3 million.
Net loss attributable to stockholders for the six months ended
June 30, 2022 was $11.4 million, or $0.33 per share, compared to a
net loss of $8.9 million, or $0.26 per share, in the prior year
period.
Full Year 2022 Financial
Outlook:
The Company is updating financial guidance for the year ending
December 31, 2022 to:
- Total revenue in the range of $51.0 million to $56.4 million,
representing growth of approximately 5% to 16% year-over-year,
compared to total revenue of $48.5 million for the year ended
December 31, 2021. The Company’s prior guidance range for total
revenue was $52.5 million to $59.0 million, representing growth of
8% to 22% year-over-year.
- Total revenue guidance assumes:
- Advanced Energy revenue in the range of $44.5 million to $49.4
million, representing growth of approximately 4% to 15%
year-over-year, compared to Advanced Energy revenue of $43.0
million for the year ended December 31, 2021. The Company’s prior
guidance range for Advanced Energy revenue was $46.0 million to
$52.0 million, representing growth of 7% to 21% year-over-year.
- The Advanced Energy revenue range reflects potential negative
impacts on global new customer adoption, and on procedure-related
demand for handpieces, as a result of the FDA Medical Device Safety
Communication on March 14, 2022.
- The Advanced Energy revenue range continues to assume
contributions from the initial commercial launches for new specific
clinical indications for dermal resurfacing procedures and
procedures to improve the appearance of lax skin.
- The Advanced Energy revenue range continues to assume that
international growth is driven by demand in existing international
markets.
- OEM revenue in the range of $6.5 million to $7.0 million, which
is unchanged from the Company's prior guidance, representing growth
of 18% to 27% year-over-year, compared to $5.5 million for the year
ended December 31, 2021.
- Net loss attributable to stockholders in the range of $20.1
million to $16.6 million, compared to net loss attributable to
stockholders of $15.2 million for the year ended December 31, 2021.
The Company’s prior guidance range for net loss attributable to
stockholders was $19.0 million to $14.7 million.
- Adjusted EBITDA loss in the range of $11.8 million to $8.2
million, compared to adjusted EBITDA loss of $8.8 million for the
year ended December 31, 2021. The Company’s prior guidance range
for Adjusted EBITDA loss was $10.1 million to $6.4 million.
Conference Call Details:
Management will host a conference call at 5:00 p.m. Eastern Time
on August 11, 2022 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 13731067.
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=4ztO7TPi
A telephonic replay will be available approximately two 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: 13731067. 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, 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 U.S. Food and Drug Administration 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, 2021 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,
2022
2021
2022
2021
Sales
$
10,292
$
11,224
$
22,785
$
19,862
Cost of sales
3,378
3,690
7,652
6,468
Gross profit
6,914
7,534
15,133
13,394
Other costs and expenses:
Research and development
1,070
1,084
2,228
2,199
Professional services
2,389
1,889
4,675
3,410
Salaries and related costs
4,892
4,343
10,073
8,588
Selling, general and administrative
4,539
4,261
10,004
7,985
Total other costs and expenses
12,890
11,577
26,980
22,182
Loss from operations
(5,976
)
(4,043
)
(11,847
)
(8,788
)
Interest income
18
4
20
7
Interest expense
(3
)
(2
)
(11
)
(6
)
Other loss, net
607
97
586
4
Total other loss, net
622
99
595
5
Loss before income taxes
(5,354
)
(3,944
)
(11,252
)
(8,783
)
Income tax expense
96
107
166
173
Net loss
(5,450
)
(4,051
)
(11,418
)
(8,956
)
Net loss attributable to
non-controlling interest
(24
)
(5
)
(47
)
(9
)
Net loss attributable to
stockholders
$
(5,426
)
$
(4,046
)
$
(11,371
)
$
(8,947
)
Loss per share
Basic and Diluted
$
(0.16
)
$
(0.12
)
$
(0.33
)
$
(0.26
)
Weighted average number of shares
outstanding - basic and diluted
34,464
34,321
34,447
34,312
APYX MEDICAL
CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share data)
June 30,
2022
(Unaudited)
December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents
$
20,063
$
30,870
Trade accounts receivable, net of
allowance of $629 and $430
10,340
13,038
Income tax receivables
7,642
7,642
Other receivables
33
483
Inventories, net of provision for
obsolescence of $360 and $263
9,677
6,778
Prepaid expenses and other current
assets
2,770
1,926
Total current assets
50,525
60,737
Property and equipment, net
6,842
6,575
Operating lease right-of-use assets
659
121
Finance lease right-of-use assets
176
178
Other assets
1,269
1,110
Total assets
$
59,471
$
68,721
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
2,587
$
2,631
Accrued expenses and other liabilities
8,570
10,287
Current portion of operating lease
liabilities
110
122
Current portion of finance lease
liabilities
85
165
Total current liabilities
11,352
13,205
Long-term operating lease liabilities
514
—
Long-term finance lease liabilities
93
18
Long-term contract liabilities
1,207
1,323
Other liabilities
142
166
Total liabilities
13,308
14,712
EQUITY
Common stock, $0.001 par value; 75,000,000
shares authorized; 34,493,085 issued and outstanding as of June 30,
2022, and 34,409,912 issued and outstanding as of December 31,
2021
34
34
Additional paid-in capital
69,793
66,221
Accumulated deficit
(23,922
)
(12,551
)
Total stockholders' equity
45,905
53,704
Non-controlling interest
258
305
Total equity
46,163
54,009
Total liabilities and equity
$
59,471
$
68,721
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, and stock-based compensation
expense.
(In thousands)
Three Months Ended
June 30,
Six Months Ended
June 30,
2022
2021
2022
2021
Net loss attributable to stockholders
$
(5,426
)
$
(4,046
)
$
(11,371
)
$
(8,947
)
Interest income
(18
)
(4
)
(20
)
(7
)
Interest expense
3
2
11
6
Income tax expense
96
107
166
173
Depreciation and amortization
247
213
472
440
Stock based compensation
1,714
1,369
3,364
2,563
Adjusted EBITDA
$
(3,384
)
$
(2,359
)
$
(7,378
)
$
(5,772
)
The following unaudited table presents a reconciliation of net
loss attributable to stockholders to Adjusted EBITDA loss for the
year ending December 31, 2022. 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 $20.1 million to
$16.6 million for the year ending December 31, 2022.
(In millions)
Year Ending December 31,
2022
Net loss attributable to stockholders
$
(18.4
)
Interest income
—
Interest expense
—
Income tax expense
0.4
Depreciation and amortization
1.0
Stock based compensation
7.0
Adjusted EBITDA
$
(10.0
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220811005510/en/
Investor Relations
Contact:
ICR Westwicke on behalf of Apyx Medical Corporation Mike
Piccinino, CFA investor.relations@apyxmedical.com
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