Apyx Medical Corporation Reports First Quarter 2024 Financial Results; Reaffirms Full Year 2024 Financial Outlook
Apyx Medical reported their first-quarter 2024 financial results with total revenue of $10.2 million, a 16% decrease year-over-year. The company reaffirmed its full-year 2024 financial outlook. The Advanced Energy segment revenue decreased by 23% while OEM segment revenue increased by 14%. Net loss attributable to stockholders increased by 118% year-over-year. The company announced various developments post quarter-end, including new data and treatment insights showcased at the Renuvion Users' Summit. Management reaffirmed the 2024 financial guidance, focusing on leveraging new clinical indications and products to drive market awareness.
The OEM segment revenue increased by 14% year-over-year, reaching $2.8 million.
The company announced the publication of a peer-reviewed article and featured in educational sessions, highlighting the recognition of its Renuvion technology.
The company's strategic initiatives and financial resources are aimed at future growth and value creation.
Advanced Energy segment revenue decreased by 23% year-over-year, totaling $7.5 million.
The net loss attributable to stockholders increased by 118% year-over-year, amounting to $7.6 million.
Gross profit margin for the first quarter decreased to 58.1% compared to 62.4% in the previous year.
Insights
The first quarter financial results of Apyx Medical Corporation exhibit a notable 16% year-over-year decline in total revenue, with a particularly acute 23% drop in Advanced Energy segment revenue. This segment seems to have been adversely affected by macroeconomic pressures, high interest rates and consumer hesitance, all of which have contributed to a reduction in generator sales. In contrast, an uptick in the OEM segment, largely attributed to a supply agreement with Symmetry Surgical, marks a bright spot with a 14% revenue increase.
The gross profit margin contraction to 58.1%, from 62.4% the previous year, suggests a less favorable sales mix and potential pricing pressures in international markets, a trend that warrants close observation for future implications on profitability. Meanwhile, the reduced operating expenses indicate a strategic reduction in overheads, likely in response to the challenging sales environment.
Narrowing in on the net loss widening by a striking 118% year-over-year and the 34% increase in Adjusted EBITDA loss, investors would be prudent to consider the company's reaffirmation of their 2024 financial guidance amidst these results. The indication that the management anticipates continued challenges in generator demand, with some offset from handpiece sales, provides a nuanced view of the path ahead. The criticality lies in whether the intensified focus on operational efficiencies and market awareness of new products and clinical evidence can spur the forecasted recovery in the latter part of 2024.
From a market perspective, Apyx Medical Corporation's operational focus on leveraging new clinical indications and products to stimulate growth is an essential strategy, especially within the competitive landscape of the cosmetic surgery market. However, given the current economic climate's impact on capital equipment investment, the effectiveness of this approach hinges on consumer confidence and broader market stabilization.
While OEM revenue performance offers a semblance of stability through long-term contracts, such as the one with Symmetry Surgical, the segment's overall contribution to total revenue remains significantly smaller compared to the Advanced Energy segment. Thus, the company’s growth is heavily reliant on the Advanced Energy products' market uptake. The pace at which Apyx Medical can innovate and translate clinical evidence into tangible market demand could serve as a bellwether for its future revenue trajectory and market position.
First Quarter 2024 Financial Summary:
-
Total revenue of
$10.2 million 16% year-over-year.-
Advanced Energy revenue of
$7.5 million 23% year-over-year. -
OEM revenue of
$2.8 million 14% year-over-year.
-
Advanced Energy revenue of
-
Net loss attributable to stockholders of
$7.6 million $4.1 million 118% , year-over-year. -
Adjusted EBITDA loss of
$5.3 million $1.3 million 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
Gross profit for the three months ended March 31, 2024, decreased
Operating expenses for the three months ended March 31, 2024, decreased
Other loss, net for the three months ended March 31, 2024 and 2023 was
Income tax expense (benefit) for the three months ended March 31, 2024 and 2023 was
Net loss attributable to stockholders for the three months ended March 31, 2024, was
Adjusted EBITDA loss for the three months ended March 31, 2024 and 2023 was
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 $52.9 million 5% to growth of approximately1% year-over-year, compared to total revenue of$52.3 million -
Total revenue guidance assumes:
-
Advanced Energy revenue in the range of
$41.6 million $44.6 million 4% to growth of approximately3% year-over-year, compared to Advanced Energy revenue of$43.4 million -
OEM revenue in the range of
$8.1 million $8.3 million 10% to7% year-over-year, compared to$9.0 million
-
Advanced Energy revenue in the range of
-
Total revenue guidance assumes:
-
Net loss attributable to stockholders of approximately
$26.5 million $24.3 million $18.7 million
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
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
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,
|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
37,282 |
|
|
$ |
43,652 |
|
Trade accounts receivable, net of allowance of |
|
12,487 |
|
|
|
14,023 |
|
Inventories, net of provision for obsolescence of |
|
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, |
|
— |
|
|
|
— |
|
Common stock, |
|
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
Source: Apyx Medical Corporation
FAQ
What was Apyx Medical 's total revenue for the first quarter of 2024?
Apyx Medical 's total revenue for the first quarter of 2024 was $10.2 million.
What was the net loss attributable to stockholders for the three months ended March 31, 2024?
The net loss attributable to stockholders for the three months ended March 31, 2024, was $7.6 million.
Who was elected as the new Chairman of the Board following Andrew Makrides' retirement?
Stavros Vizirgianakis was elected as the new Chairman of the Board, effective May 7, 2024, following Andrew Makrides' retirement.
