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 fourth quarter and full year ended December 31,
2022, and introduced financial expectations for the full year
ending December 31, 2023.
Fourth Quarter 2022 Financial
Summary:
- Total revenue of $12.6 million, down 25% year-over-year.
- Advanced Energy revenue of $10.5 million, down 30%
year-over-year.
- OEM revenue of $2.1 million, up 15% year-over-year.
- Net loss attributable to stockholders of $6.0 million, compared
to $2.0 million for the fourth quarter of 2021.
- Adjusted EBITDA loss of $4.1 million, compared to $0.3 million
for the fourth quarter of 2021.
Full Year 2022 Financial
Summary:
- Total revenue of $44.5 million, down 8% year-over-year.
- Advanced Energy revenue of $36.8 million, down 14%
year-over-year.
- OEM revenue of $7.7 million, up 39% year-over-year.
- Net loss attributable to stockholders of $23.2 million,
compared to $15.2 million for 2021.
- Adjusted EBITDA loss of $15.4 million, compared to $8.8 million
for 2021.
Highlights & Developments
Subsequent to Quarter End:
- On January 3, 2023, the Company announced the launch of its
first direct-to-consumer brand campaign. Entitled #ThisIsMe, the
campaign is aimed at U.S. consumers who are interested in a
minimally invasive procedure with the Renuvion technology.
- On January 25, 2023, the Company announced the launch of its
latest-generation Renuvion® generator, the Apyx One Console, in the
United States.
- On February 1, 2023, the Company announced it submitted a
510(k) premarket notification (“510(k) submission”) for the
Renuvion APR Handpiece to the U.S. Food and Drug Administration
(“FDA”), supported by a clinical study and real-world evidence. The
510(k) submission is intended to expand Renuvion’s indications for
use to include a specific indication for the use of the Renuvion
APR Handpiece for the coagulation of subcutaneous soft tissues
where needed, following liposuction.
- On February 21, 2023, the Company announced that it and its
subsidiaries had entered into a new, five-year secured credit
facility with MidCap Financial. The credit agreement provides for
an up to $35 million facility consisting of senior, secured term
loans of up to $25 million and a revolving facility of up to $10
million.
- On February 27, 2023, the Company announced that it received
510(k) clearance from the FDA “for the use of the Renuvion APR
Handpiece 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 revenue performance in the fourth quarter reflected the
continued business disruption related to the Medical Device Safety
Communication,” said Charlie Goodwin, President and Chief Executive
Officer. “While Advanced Energy revenue in the fourth quarter
increased 49% sequentially, our results were ultimately below our
expectations as global sales of our Advanced Energy generators
remained lower than anticipated. In spite of these challenges, our
team remained focused on educating the market about the strong
safety and efficacy profile of our products and the additional
510(k) clearances we secured in 2022. In tandem, we continued to
pursue regulatory clearance for a specific clinical indication
which we believe will directly address the remaining limitations of
the Safety Communication. To this end, we engaged with the FDA to
obtain and incorporate their feedback on our proposed regulatory
submission for this indication during the fourth quarter, and
submitted our request for 510(k) clearance at the end of
January.”
Mr. Goodwin continued: “While 2022 ultimately proved to be a
challenging year, our team made important progress under difficult
circumstances. We believe we are incrementally better positioned in
2023, with an expanding portfolio of 510(k) clearances for our
targeted clinical indications, recently implemented activities to
reduce operating expenses while preserving our capabilities as an
organization, and additional financing secured to strengthen our
balance sheet and enhance our financial flexibility. In 2023, we
expect to grow global sales of our Advanced Energy products in
excess of 35%, fueled by strong execution on our commercial and
regulatory objectives, improving generator demand and handpiece
utilization trends as we move through fiscal 2023. With large and
rapidly growing addressable markets, unique technology supported by
a strong portfolio of clinical evidence, and a dedicated team of
employees, we are excited about our future prospects in 2023 and
the years to come.”
The following tables present revenue by reportable segment and
geography:
Three Months Ended
December 31,
Increase/Decrease
Year Ended
December 31,
Increase/Decrease
(In thousands)
2022
2021
$ Change
% Change
2022
2021
$ Change
% Change
Advanced Energy
$
10,545
$
15,034
$
(4,489
)
(29.9
)%
$
36,803
$
42,985
$
(6,182
)
(14.4
)%
OEM
2,066
1,790
276
15.4
%
7,707
5,532
2,175
39.3
%
Total
$
12,611
$
16,824
$
(4,213
)
(25.0
)%
$
44,510
$
48,517
$
(4,007
)
(8.3
)%
Three Months Ended
December 31,
Increase/Decrease
Year Ended
December 31,
Increase/Decrease
(In thousands)
2022
2021
$ Change
% Change
2022
2021
$ Change
% Change
Domestic
$
8,716
$
12,120
$
(3,404
)
(28.1
)%
$
31,208
$
32,980
$
(1,772
)
(5.4
)%
International
3,895
4,704
(809
)
(17.2
)%
13,302
15,537
(2,235
)
(14.4
)%
Total
$
12,611
$
16,824
$
(4,213
)
(25.0
)%
$
44,510
$
48,517
$
(4,007
)
(8.3
)%
Fourth Quarter 2022 Results:
Total revenue for the three months ended December 31, 2022
decreased $4.2 million, or 25% year-over-year, to $12.6 million,
compared to $16.8 million in the prior year period. Advanced Energy
segment sales decreased $4.5 million, or 30% year-over-year, to
$10.5 million. OEM segment sales increased $0.3 million, or 15%
year-over-year to $2.1 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 increase in OEM sales was due
to increases in sales volume to existing customers, including
Symmetry Surgical, under our 10-year generator manufacturing and
supply agreement, as well as incremental new sales upon the
commencement of the supply arrangement related to the completion of
the development portion of some of our OEM development agreements.
For the fourth quarter of 2022, revenue in the United States
decreased $3.4 million, or 28% year-over-year, to $8.7 million, and
international revenue decreased $0.8 million, or 17%
year-over-year, to $3.9 million.
Gross profit for the three months ended December 31, 2022,
decreased $3.9 million, or 32% year-over-year, to $8.2 million.
Gross margin for the three months ended December 31, 2022, was
65.3%, compared to 72.2% in the prior year period. The decrease in
gross profit margins for the three months ended December 31, 2022
from the prior year period was primarily attributable to changes in
the sales mix between our two segments, product mix within our
Advanced Energy Segment and higher material and inbound shipping
costs to manufacture our inventory. These decreases were partially
offset by geographic mix within our Advanced Energy segment, with
higher margin direct domestic sales comprising a higher percentage
of total sales, and by the increased mix of newer product
models.
Operating expenses for the three months ended December 31, 2022
increased $0.3 million, or 2% year-over-year, to $14.2 million. The
year-over-year change in operating expenses was driven by a $0.3
million increase in research and development and a $0.3 million
increase in professional services. These increases were partially
offset by a $0.2 million decrease in selling, general and
administrative expenses and a $0.1 million decrease in salaries and
related costs.
Income tax expense for the three months ended December 31, 2022
and 2021 was $0.2 million and $0.1 million, respectively.
Net loss attributable to stockholders for the three months ended
December 31, 2022 was $6.0 million, or $0.17 per share, compared to
$2.0 million, or $0.06 per share, in the prior year period.
Adjusted EBITDA loss for the three months ended December 31,
2022 was $4.1 million, compared to $0.3 million in the prior year
period.
Full Year 2022 Results:
Total revenue for the year ended December 31, 2022, decreased
$4.0 million, or 8%, to $44.5 million. Advanced Energy segment
sales decreased $6.2 million, or 14% year-over-year, to $36.8
million. OEM segment sales increased $2.2 million, or 39%
year-over-year, to $7.7 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 increase in OEM sales was due
to increases in sales volume to existing customers, including
Symmetry Surgical, under our 10-year generator manufacturing and
supply agreement, as well as incremental new sales upon the
commencement of the supply arrangement related to the completion of
the development portion of some of our OEM development agreements.
For 2022, revenue in the United States decreased $1.8 million, or
5% year-over-year, to $31.2 million, and international revenue
decreased $2.2 million, or 14% year-over-year, to $13.3
million.
Net loss attributable to stockholders for the year ended
December 31, 2022 was $23.2 million, or $0.67 per share, compared
to $15.2 million, or $0.44 per share, in the prior year period.
Full Year 2023 Financial
Outlook:
The Company is introducing financial guidance for the year
ending December 31, 2023 to:
- Total revenue in the range of $58.0 million to $61.0 million,
representing growth of approximately 30% to 37% 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 $50.0 million to $53.0
million, representing growth of approximately 36% to 44%
year-over-year, compared to Advanced Energy revenue of $36.8
million for the year ended December 31, 2022.
- OEM revenue of approximately $8 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 $14.0
million, compared to $23.2 million for the year ended December 31,
2022.
Conference Call Details:
Management will host a conference call at 8:00 a.m. Eastern Time
on March 16, 2023 to discuss the results of the quarter and year,
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 13736530.
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=RDPQw6xg.
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: 13736530. 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, 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)
Three Months Ended
December 31,
(Unaudited)
Year Ended
December 31,
2022
2021
2022
2021
Sales
$
12,611
$
16,824
$
44,510
$
48,517
Cost of sales
4,370
4,673
15,379
14,916
Gross profit
8,241
12,151
29,131
33,601
Other costs and expenses:
Research and development
1,255
947
4,544
4,321
Professional services
2,433
2,147
9,044
7,589
Salaries and related costs
4,677
4,728
18,621
17,522
Selling, general and administrative
5,809
6,021
20,484
18,617
Total other costs and expenses
14,174
13,843
52,693
48,049
Loss from operations
(5,933
)
(1,692
)
(23,562
)
(14,448
)
Interest income
64
2
157
11
Interest expense
(3
)
(1
)
(15
)
(10
)
Other (loss) income, net
(42
)
(185
)
509
(373
)
Total other income (loss), net
19
(184
)
651
(372
)
Loss before income taxes
(5,914
)
(1,876
)
(22,911
)
(14,820
)
Income tax expense
151
134
367
380
Net loss
(6,065
)
(2,010
)
(23,278
)
(15,200
)
Net loss attributable to
non-controlling interest
(16
)
(7
)
(94
)
(28
)
Net loss attributable to
stockholders
$
(6,049
)
$
(2,003
)
$
(23,184
)
$
(15,172
)
Loss per share
Basic and Diluted
$
(0.17
)
$
(0.06
)
$
(0.67
)
$
(0.44
)
Weighted average number of shares
outstanding - basic and diluted
34,597
34,373
34,516
34,332
APYX MEDICAL
CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share data)
December 31,
2022
December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents
$
10,192
$
30,870
Trade accounts receivable, net of
allowance of $668 and $430
10,602
13,038
Income tax receivables
7,545
7,642
Other receivables
99
483
Inventories, net of provision for
obsolescence of $457 and $263
11,797
6,778
Prepaid expenses and other current
assets
2,737
1,926
Total current assets
42,972
60,737
Property and equipment, net
6,761
6,575
Operating lease right-of-use assets
710
121
Finance lease right-of-use assets
115
178
Other assets
1,217
1,110
Total assets
$
51,775
$
68,721
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
2,669
$
2,631
Accrued expenses and other liabilities
8,928
10,287
Current portion of operating lease
liabilities
216
122
Current portion of finance lease
liabilities
37
165
Total current liabilities
11,850
13,205
Long-term operating lease liabilities
470
—
Long-term finance lease liabilities
73
18
Long-term contract liabilities
1,408
1,323
Other liabilities
181
166
Total liabilities
13,982
14,712
EQUITY
Preferred Stock, $0.001 par value;
10,000,000 shares authorized; 0 issued and outstanding as of
December 31, 2022 and 2021
—
—
Common stock, $0.001 par value; 75,000,000
shares authorized; 34,597,822 issued and outstanding as of December
31, 2022, and 34,409,912 issued and outstanding as of December 31,
2021
35
34
Additional paid-in capital
73,282
66,221
Accumulated deficit
(35,735
)
(12,551
)
Total stockholders' equity
37,582
53,704
Non-controlling interest
211
305
Total equity
37,793
54,009
Total liabilities and equity
$
51,775
$
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
December 31,
Year Ended
December 31,
2022
2021
2022
2021
Net loss attributable to stockholders
$
(6,049
)
$
(2,003
)
$
(23,184
)
$
(15,172
)
Interest income
(64
)
(2
)
(157
)
(11
)
Interest expense
3
1
15
10
Income tax expense
151
134
367
380
Depreciation and amortization
202
229
890
903
Stock based compensation
1,641
1,341
6,697
5,088
Adjusted EBITDA
$
(4,116
)
$
(300
)
$
(15,372
)
$
(8,802
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230316005226/en/
Investor Relations:
ICR Westwicke on behalf of Apyx Medical Corporation Mike
Piccinino, CFA investor.relations@apyxmedical.com
Apyx Medical (NASDAQ:APYX)
Historical Stock Chart
From May 2023 to Jun 2023
Apyx Medical (NASDAQ:APYX)
Historical Stock Chart
From Jun 2022 to Jun 2023
