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 first quarter ended March 31, 2023, and updated
financial expectations for the full year ending December 31,
2023.
First Quarter 2023 Financial
Summary:
- Total revenue of $12.1 million, down 3% year-over-year.
- Advanced Energy revenue of $9.7 million, down 10%
year-over-year.
- OEM revenue of $2.5 million, up 46% year-over-year.
- Net loss attributable to stockholders of $3.5 million, compared
to $5.9 million for the first quarter of 2022.
- Adjusted EBITDA loss of $4.0 million, compared to $4.0 million
for the first quarter of 2022.
First Quarter 2023 Operating
Summary:
- 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 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.”
Highlights & Developments
Subsequent to Quarter End:
- On April 28, 2023, the Company announced that it received
510(k) clearance from the FDA “for coagulation of subcutaneous soft
tissues following liposuction for aesthetic body contouring.”
- On May 8, 2023, the Company closed on a Purchase Agreement and
concurrently executed a 10-year agreement to leaseback its
underlying real property in Clearwater, FL with VK Acquisitions VI,
LLC. The Company received net cash proceeds of approximately
$6,600,000, after withholding the security deposit equal to one
years rent, taxes, first months rent, expenses, and fees.
- On May 10, 2023, the FDA posted an update to the Medical Device
Safety Communication (“Safety Communication”) to inform consumers
and healthcare providers about the clearance for the Renuvion APR
handpiece for use under the skin in certain procedures intended to
improve the appearance of the skin, including for coagulation of
subcutaneous soft tissues following liposuction for aesthetic body
contouring. The Company believes that the May 10, 2023 FDA update
to the Safety Communication addresses the issues set forth in the
original Safety Communication from March 14, 2022.
Management Comments:
“While our revenue performance in the first quarter continued to
reflect the business disruption related to the Medical Device
Safety Communication, we were pleased to deliver sales results
which ultimately exceeded our expectations,” said Charlie Goodwin,
President and Chief Executive Officer. “Our Advanced Energy revenue
decreased 10% year-over-year, primarily due to softer sales of
generators and handpieces to our international distributors. In the
U.S., however, we were pleased to see year-over-year growth in
generator revenue of approximately 40% year-over-year, as many of
our users upgraded to our latest-generator Renuvion generator – the
Apyx One Console – following its launch in January. In addition to
introducing the Apyx One Console, we obtained two new 510(k)
clearances for our Advanced Energy products in February and April.
Yesterday, we were pleased to see the FDA issue an update to their
Safety Communication informing consumers and health care providers
that our Renuvion APR Handpiece is now cleared for coagulation of
subcutaneous soft tissues following liposuction for aesthetic body
contouring. We believe this update addresses the issues set forth
in the original Safety Communication from March 14, 2022. Lastly,
we implemented activities to reduce our operating expenses, while
securing additional capital to strengthen our balance sheet and
enhance our financial flexibility.”
Mr. Goodwin continued: “We are raising our 2023 guidance today
to reflect our stronger-than-anticipated performance in the first
quarter, and now expect to drive global sales growth of our
Advanced Energy products in excess of 38% for the full year. With
four new 510(k) clearances secured for our Renuvion technology over
the last 12 months, along with the recent progress made by our
sales, marketing and product development teams, we expect to see
improved global generator and handpiece demand in 2023 as we
leverage our recent achievements and continue our strong pace of
execution with respect to our stated strategic priorities.”
The following tables present revenue by reportable segment and
geography:
Three Months Ended
March 31,
Increase/Decrease
(In thousands)
2023
2022
$ Change
% Change
Advanced Energy
$
9,690
$
10,814
$
(1,124
)
(10.4
)%
OEM
2,452
1,679
773
46.0
%
Total
$
12,142
$
12,493
$
(351
)
(2.8
)%
Three Months Ended March
31,
Increase/Decrease
(In thousands)
2023
2022
$ Change
% Change
Domestic
$
8,871
$
7,548
$
1,323
17.5
%
International
3,271
4,945
(1,674
)
(33.9
)%
Total
$
12,142
$
12,493
$
(351
)
(2.8
)%
First Quarter 2022
Results:
Total revenue for the three months ended March 31, 2023
decreased $0.4 million, or 3% year-over-year, to $12.1 million,
compared to $12.5 million in the prior year period. Advanced Energy
segment sales decreased $1.1 million, or 10% year-over-year, to
$9.7 million. OEM segment sales increased $0.8 million, or 46%
year-over-year to $2.5 million. The decrease in Advanced Energy
revenue was driven by decreased demand for the Company’s generators
in international markets and decreased global demand for handpieces
following the FDA Safety Communication on March 14, 2022. These
decreases were partially offset by generator sales to domestic
customers, as customers upgraded to the Company’s new Apyx One
Console, which was launched in January 2023. The increase in OEM
sales was due to increased sales volume to existing customers, 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 first quarter of
2023, revenue in the United States decreased $1.3 million, or 18%
year-over-year, to $8.9 million, and international revenue
decreased $1.7 million, or 34% year-over-year, to $3.3 million.
Gross profit for the three months ended March 31, 2023,
decreased $0.6 million, or 8% year-over-year, to $7.6 million,
compared to $8.2 million in the prior year period. Gross margin for
the three months ended March 31, 2023, was 62.4%, compared to 65.8%
in the prior year period. The decrease in gross profit margins for
the three months ended March 31, 2023 from the prior year period
was primarily attributable to changes in the sales mix between our
two segments, with our OEM segment comprising a higher percentage
of total sales, and to product mix within our Advanced Energy
segment. These decreases were partially offset by geographic mix
within our Advanced Energy segment, with domestic sales comprising
a higher percentage of total sales.
Operating expenses for the three months ended March 31, 2023
decreased $0.9 million, or 6% year-over-year, to $13.2 million,
compared to $14.1 million in the prior year period. The
year-over-year change in operating expenses was driven by a $0.5
million decrease in professional services, a $0.2 million decrease
in selling, general and administrative expenses and a $0.1 million
decrease in salaries and related costs.
Income tax (benefit) expense for the three months ended March
31, 2023 and 2022 was $(2.3) million and $0.1 million,
respectively.
Net loss attributable to stockholders for the three months ended
March 31, 2023 was $3.5 million, or $0.10 per share, compared to
$5.9 million, or $0.17 per share, in the prior year period.
Adjusted EBITDA loss for the three months ended March 31, 2023
and 2022 was approximately $4.0 million.
Full Year 2023 Financial
Outlook:
The Company is updating financial guidance for the year ending
December 31, 2023 to:
- Total revenue in the range of $59.0 million to $62.0 million,
representing growth of approximately 33% to 39% year-over-year,
compared to total revenue of $44.5 million for the year ended
December 31, 2022. The Company’s prior guidance range for total
revenue was $58.0 million to $61.0 million, representing growth of
30% to 37% year-over-year.
- Total revenue guidance assumes:
- Advanced Energy revenue in the range of $51.0 million to $54.0
million, representing growth of approximately 39% to 47%
year-over-year, compared to Advanced Energy revenue of $36.8
million for the year ended December 31, 2022. The Company’s prior
guidance range for Advanced Energy revenue was $50.0 million to
$53.0 million, representing growth of approximately 36% to 44%
year-over-year.
- 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. This is unchanged versus the
Company’s prior guidance assumptions.
- Net loss attributable to stockholders of approximately $10.5
million, compared to $23.2 million for the year ended December 31,
2022. The Company’s prior guidance for net loss attributable to
stockholders was approximately $14.0 million.
Conference Call Details:
Management will host a conference call at 8:00 a.m. Eastern Time
on May 11, 2023 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 13737575.
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=gfBZBEow
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: 13737575. 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)
(Unaudited)
Three Months Ended
March31,
2023
2022
Sales
$
12,142
$
12,493
Cost of sales
4,569
4,274
Gross profit
7,573
8,219
Other costs and expenses:
Research and development
1,121
1,158
Professional services
1,740
2,286
Salaries and related costs
5,068
5,181
Selling, general and administrative
5,255
5,465
Total other costs and expenses
13,184
14,090
Loss from operations
(5,611
)
(5,871
)
Interest income
51
2
Interest expense
(234
)
(8
)
Other loss, net
(5
)
(21
)
Total other loss, net
(188
)
(27
)
Loss before income taxes
(5,799
)
(5,898
)
Income tax (benefit) expense
(2,267
)
70
Net loss
(3,532
)
(5,968
)
Net loss attributable to
non-controlling interest
(49
)
(23
)
Net loss attributable to
stockholders
$
(3,483
)
$
(5,945
)
Loss per share
Basic and Diluted
$
(0.10
)
$
(0.17
)
Weighted average number of shares
outstanding - basic and diluted
34,598
34,429
APYX MEDICAL
CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share data)
March 31, 2023
(Unaudited)
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
16,255
$
10,192
Trade accounts receivable, net of
allowance of $359 and $668
9,966
10,602
Income tax receivables
7,752
7,545
Other receivables
417
99
Inventories, net of provision for
obsolescence of $428 and $457
10,946
11,797
Assets held for sale
4,569
—
Prepaid expenses and other current
assets
2,779
2,737
Total current assets
52,684
42,972
Property and equipment, net
2,109
6,761
Operating lease right-of-use assets
646
710
Finance lease right-of-use assets
106
115
Other assets
1,239
1,217
Total assets
$
56,784
$
51,775
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
1,905
$
2,669
Accrued expenses and other liabilities
7,626
8,928
Current portion of operating lease
liabilities
184
216
Current portion of finance lease
liabilities
33
37
Term loan, net
8,778
—
Total current liabilities
18,526
11,850
Long-term operating lease liabilities
448
470
Long-term finance lease liabilities
68
73
Long-term contract liabilities
1,343
1,408
Other liabilities
185
181
Total liabilities
20,570
13,982
EQUITY
Preferred Stock, $0.001 par value;
10,000,000 shares authorized; 0 issued and outstanding as of March
31, 2023 and December 31, 2022
—
—
Common stock, $0.001 par value; 75,000,000
shares authorized; 34,597,822 issued and outstanding as of March
31, 2023 and December 31, 2022
35
35
Additional paid-in capital
75,235
73,282
Accumulated deficit
(39,218
)
(35,735
)
Total stockholders' equity
36,052
37,582
Non-controlling interest
162
211
Total equity
36,214
37,793
Total liabilities and equity
$
56,784
$
51,775
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.
APYX MEDICAL
CORPORATION
RECONCILIATION OF GAAP NET
LOSS RESULTS TO NON-GAAP ADJUSTED EBITDA
(Unaudited)
(In thousands)
Three Months Ended
March 31,
2023
2022
Net loss attributable to stockholders
$
(3,483
)
$
(5,945
)
Interest income
(51
)
(2
)
Interest expense
234
8
Income tax (benefit) expense
(2,267
)
70
Depreciation and amortization
203
225
Stock based compensation
1,367
1,650
Adjusted EBITDA
$
(3,997
)
$
(3,994
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230511005317/en/
Investor Relations:
ICR Westwicke on behalf of Apyx Medical Corporation Mike
Piccinino, CFA investor.relations@apyxmedical.com
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