Apyx Medical Corporation Reports Fourth Quarter and Full Year 2023 Financial Results; Introduces Full Year 2024 Financial Outlook
- Advanced Energy sales increased 15% year-over-year in the fourth quarter.
- Total revenue for the fourth quarter was $14.7 million, representing a 16% increase year-over-year.
- Net loss attributable to stockholders increased by $3.6 million, or 59%, year-over-year.
- Adjusted EBITDA loss increased by $0.6 million, or 14%, year-over-year.
- Full year 2023 revenue increased by 18% year-over-year to $52.3 million.
- Net loss attributable to stockholders decreased by $4.5 million, or 19%, year-over-year for 2023.
- Adjusted EBITDA loss decreased by $2.0 million, or 13%, year-over-year for 2023.
- The company secured a new credit agreement with Perceptive Credit Holdings IV, LP, providing a facility of up to $45.0 million.
- Matthew Hill was appointed as the Chief Financial Officer in November 2023.
- The company's 2024 guidance anticipates challenges in the cosmetic surgery market but aims for sustainable growth.
- Total revenue for 2024 is expected to range between $49.7 million to $52.9 million.
- Net loss attributable to stockholders for 2024 is projected to be approximately $26.5 million to $24.3 million.
- Gross profit margin decreased to 60.9% in the fourth quarter.
- Operating expenses increased by 4% year-over-year in the fourth quarter.
- Net loss attributable to stockholders increased by $3.6 million, or 59%, year-over-year in the fourth quarter.
- Adjusted EBITDA loss increased by $0.6 million, or 14%, year-over-year in the fourth quarter.
- Total revenue for 2024 is expected to decrease by approximately 5% to grow by 1% year-over-year.
Insights
An analysis of Apyx Medical Corporation's financial results reveals several key points of interest. The reported 15% year-over-year growth in Advanced Energy sales is a positive sign, indicating robust demand for the company's Renuvion® technology. However, the net loss increase of 59% year-over-year in Q4 2023, alongside the expanded Adjusted EBITDA loss, suggests that the company's profitability is under pressure. This could be due to a variety of factors, including possibly increased operational costs or investments into the business that have not yet yielded returns.
Looking ahead, the 2024 financial guidance indicating a potential revenue decrease of up to 5% year-over-year could be a point of concern for investors, as it may reflect a cautious outlook on market conditions or internal challenges. The projected increase in net loss attributable to stockholders for the full year 2024 further underscores the need for the company to manage its resources effectively and focus on strategic investments that could drive future profitability.
From an investment standpoint, the company's financial health and future prospects will likely be closely monitored. The secured credit facility with Perceptive may provide some financial flexibility, but the terms of the agreement and its impact on the company's debt profile should be considered.
The medical technology industry is characterized by high research and development costs and companies like Apyx Medical are often evaluated on their ability to innovate and capture market share. The introduction of the Renuvion Apyx One Generator and Micro Handpiece and the securing of new 510(k) clearances, indicate that Apyx Medical is actively investing in product development and regulatory approvals to stay competitive.
The growth in global generator and handpiece sales reflects a positive reception in the cosmetic surgery market, yet management's commentary suggests a hesitancy among surgeons to invest in new capital equipment. This could be attributed to broader economic factors or specific industry trends that are causing a shift in purchasing behavior.
Understanding the dynamics of the cosmetic surgery market, including the adoption rates of new technologies and the competitive landscape, will be important for assessing the company's potential to achieve its projected growth and manage the anticipated decrease in OEM revenue.
When examining Apyx Medical's performance, it's important to consider the medical device regulatory environment. The company's ability to secure new 510(k) clearances is a testament to its commitment to compliance and innovation within the regulatory framework. These clearances can be pivotal in opening up new markets and expanding the use of the company's technology.
The domestic and international sales growth suggests that Apyx Medical's Advanced Energy segment is gaining traction, which is encouraging given the competitive nature of the medical device industry. However, the decrease in gross profit margin, attributed to changes in product mix and higher costs, may raise questions about the sustainability of current pricing strategies and cost control measures.
Investors and stakeholders would benefit from a deeper understanding of the company's manufacturing efficiencies, supply chain management and the potential impact of external factors such as material costs and international trade conditions on the company's operations.
Advanced Energy Sales increased
Fourth Quarter 2023 Financial Summary:
-
Total revenue of
$14.7 million 16% year-over-year.-
Advanced Energy revenue of
$12.1 million 15% year-over-year. -
OEM revenue of
$2.5 million 22% year-over-year.
-
Advanced Energy revenue of
-
Net loss attributable to stockholders of
$9.6 million $3.6 million 59% , year-over-year. -
Adjusted EBITDA loss of
$4.7 million $0.6 million 14% , year-over-year.
Full Year 2023 Financial Summary:
-
Total revenue of
$52.3 million 18% year-over-year.-
Advanced Energy revenue of
$43.4 million 18% year-over-year. -
OEM revenue of
$9.0 million 16% year-over-year.
-
Advanced Energy revenue of
-
Net loss attributable to stockholders of
$18.7 million $4.5 million 19% , year-over-year. -
Adjusted EBITDA loss of
$13.4 million $2.0 million 13% , year-over-year.
Fourth Quarter 2023 Operating Summary:
-
On November 9, 2023, the Company announced a new, five-year credit agreement with Perceptive Credit Holdings IV, LP (“Perceptive”), an affiliate of Perceptive Advisors. The credit agreement provides for a facility of up to
$45.0 million $37.5 million $7.5 million $37.5 million $11.0 million $2.7 million - On November 28, 2023, the Company announced that it had appointed Matthew Hill as its Chief Financial Officer, effective December 4, 2023.
Management Comments:
“We generated double-digit growth in sales of our Advanced Energy products in the fourth quarter, driven by growth in global generator and handpiece sales of more than
Mr. Goodwin continued: “Our 2024 guidance assumes Advanced Energy generator demand in the cosmetic surgery market will continue to be impacted, as prospective surgeon customers remain reticent to purchase new capital equipment, offset fully or partially by growth in handpiece sales this year. We intend to continue managing our resources efficiently while investing strategically, and with
The following tables present revenue by reportable segment and geography:
|
Three Months Ended
|
|
Increase/Decrease |
|
Year Ended
|
|
Increase/Decrease |
||||||||||
(In thousands) |
2023 |
|
2022 |
|
$ Change |
|
% Change |
|
2023 |
|
2022 |
|
$ Change |
|
% Change |
||
Advanced Energy |
|
|
|
|
|
|
15.1 |
% |
|
|
|
|
|
|
|
17.9 |
% |
OEM |
2,528 |
|
2,066 |
|
462 |
|
22.4 |
% |
|
8,967 |
|
7,707 |
|
1,260 |
|
16.3 |
% |
Total |
|
|
|
|
|
|
16.3 |
% |
|
|
|
|
|
|
|
17.6 |
% |
|
Three Months Ended
|
Increase/Decrease |
Year Ended
|
Increase/Decrease |
|||||||||||||
(In thousands) |
2023 |
2022 |
$ Change |
% Change |
2023 |
2022 |
$ Change |
% Change |
|||||||||
Domestic |
|
|
|
22.6 |
% |
|
|
|
22.9 |
% |
|||||||
International |
3,977 |
3,895 |
82 |
2.1 |
% |
14,004 |
13,302 |
702 |
5.3 |
% |
|||||||
Total |
|
|
|
16.3 |
% |
|
|
|
17.6 |
% |
|||||||
Fourth Quarter 2023 Results:
Total revenue for the three months ended December 31, 2023, increased
Gross profit for the three months ended December 31, 2023, increased
Operating expenses for the three months ended December 31, 2023, increased
Other (expense) income, net for the three months ended December 31, 2023, and 2022 was
Income tax expense for the three months ended December 31, 2023 and 2022 was
Net loss attributable to stockholders for the three months ended December 31, 2023, was
Adjusted EBITDA loss for the three months ended December 31, 2023 and 2022 was
Full Year 2023 Results:
Total revenue for the year ended December 31, 2023, increased
Net loss attributable to stockholders for the year ended December 31, 2023, was
Full Year 2024 Financial Outlook:
The Company is introducing 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 March 21, 2024 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 13744178. 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=KtFzwD3M
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 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 (In thousands, except per share data) |
|||||||||||||||
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Sales |
$ |
14,662 |
|
|
$ |
12,611 |
|
|
$ |
52,349 |
|
|
$ |
44,510 |
|
Cost of sales |
|
5,733 |
|
|
|
4,370 |
|
|
|
18,590 |
|
|
|
15,379 |
|
Gross profit |
|
8,929 |
|
|
|
8,241 |
|
|
|
33,759 |
|
|
|
29,131 |
|
Other costs and expenses: |
|
|
|
|
|
|
|
||||||||
Research and development |
|
1,248 |
|
|
|
1,255 |
|
|
|
4,844 |
|
|
|
4,544 |
|
Professional services |
|
1,866 |
|
|
|
2,433 |
|
|
|
7,031 |
|
|
|
9,044 |
|
Salaries and related costs |
|
4,867 |
|
|
|
4,677 |
|
|
|
19,637 |
|
|
|
18,621 |
|
Selling, general and administrative |
|
6,724 |
|
|
|
5,809 |
|
|
|
22,198 |
|
|
|
20,484 |
|
Total other costs and expenses |
|
14,705 |
|
|
|
14,174 |
|
|
|
53,710 |
|
|
|
52,693 |
|
Gain on sale-leaseback |
|
— |
|
|
|
— |
|
|
|
2,692 |
|
|
|
— |
|
Loss from operations |
|
(5,776 |
) |
|
|
(5,933 |
) |
|
|
(17,259 |
) |
|
|
(23,562 |
) |
Interest income |
|
443 |
|
|
|
64 |
|
|
|
921 |
|
|
|
157 |
|
Interest expense |
|
(1,116 |
) |
|
|
(3 |
) |
|
|
(2,478 |
) |
|
|
(15 |
) |
Other (expense) income, net |
|
— |
|
|
|
(42 |
) |
|
|
622 |
|
|
|
509 |
|
Loss on extinguishment of debt |
|
(3,088 |
) |
|
|
— |
|
|
|
(3,088 |
) |
|
|
— |
|
Total other (expense) income, net |
|
(3,761 |
) |
|
|
19 |
|
|
|
(4,023 |
) |
|
|
651 |
|
Loss before income taxes |
|
(9,537 |
) |
|
|
(5,914 |
) |
|
|
(21,282 |
) |
|
|
(22,911 |
) |
Income tax expense (benefit) |
|
87 |
|
|
|
151 |
|
|
|
(2,432 |
) |
|
|
367 |
|
Net loss |
|
(9,624 |
) |
|
|
(6,065 |
) |
|
|
(18,850 |
) |
|
|
(23,278 |
) |
Net loss attributable to non-controlling interest |
|
(17 |
) |
|
|
(16 |
) |
|
|
(137 |
) |
|
|
(94 |
) |
Net loss attributable to stockholders |
$ |
(9,607 |
) |
|
$ |
(6,049 |
) |
|
$ |
(18,713 |
) |
|
$ |
(23,184 |
) |
|
|
|
|
|
|
|
|
||||||||
Loss per share: |
|
|
|
|
|
|
|
||||||||
Basic and Diluted |
$ |
(0.28 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.54 |
) |
|
$ |
(0.67 |
) |
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares outstanding - basic and diluted |
|
34,644 |
|
|
|
34,597 |
|
|
|
34,622 |
|
|
|
34,516 |
|
APYX MEDICAL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) |
|||||||
December 31,
|
|
December 31,
|
|||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
43,652 |
|
|
$ |
10,192 |
|
Trade accounts receivable, net of allowance of |
|
14,023 |
|
|
|
10,602 |
|
Income tax receivables |
|
— |
|
|
|
7,545 |
|
Other receivables |
|
30 |
|
|
|
99 |
|
Inventories, net of provision for obsolescence of |
|
9,923 |
|
|
|
11,797 |
|
Prepaid expenses and other current assets |
|
2,734 |
|
|
|
2,737 |
|
Total current assets |
|
70,362 |
|
|
|
42,972 |
|
Property and equipment, net |
|
1,915 |
|
|
|
6,761 |
|
Operating lease right-of-use assets |
|
5,162 |
|
|
|
710 |
|
Finance lease right-of-use assets |
|
69 |
|
|
|
115 |
|
Other assets |
|
1,732 |
|
|
|
1,217 |
|
Total assets |
$ |
79,240 |
|
|
$ |
51,775 |
|
|
|
|
|
||||
LIABILITIES AND EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
2,712 |
|
|
$ |
2,669 |
|
Accrued expenses and other current liabilities |
|
9,661 |
|
|
|
8,928 |
|
Current portion of operating lease liabilities |
|
347 |
|
|
|
216 |
|
Current portion of finance lease liabilities |
|
20 |
|
|
|
37 |
|
Total current liabilities |
|
12,740 |
|
|
|
11,850 |
|
Long-term debt, net of debt discounts and issuance costs |
|
33,185 |
|
|
|
— |
|
Long-term operating lease liabilities |
|
4,896 |
|
|
|
470 |
|
Long-term finance lease liabilities |
|
53 |
|
|
|
73 |
|
Long-term contract liabilities |
|
1,246 |
|
|
|
1,408 |
|
Other liabilities |
|
198 |
|
|
|
181 |
|
Total liabilities |
|
52,318 |
|
|
|
13,982 |
|
EQUITY |
|
|
|
||||
Preferred Stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
35 |
|
|
|
35 |
|
Additional paid-in capital |
|
81,114 |
|
|
|
73,282 |
|
Accumulated deficit |
|
(54,448 |
) |
|
|
(35,735 |
) |
Total stockholders' equity |
|
26,701 |
|
|
|
37,582 |
|
Non-controlling interest |
|
221 |
|
|
|
211 |
|
Total equity |
|
26,922 |
|
|
|
37,793 |
|
Total liabilities and equity |
$ |
79,240 |
|
|
$ |
51,775 |
|
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
|
|
Year Ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Net loss attributable to stockholders |
$ |
(9,607 |
) |
|
$ |
(6,049 |
) |
|
$ |
(18,713 |
) |
|
$ |
(23,184 |
) |
Interest income |
|
(443 |
) |
|
|
(64 |
) |
|
|
(921 |
) |
|
|
(157 |
) |
Interest expense |
|
1,116 |
|
|
|
3 |
|
|
|
2,478 |
|
|
|
15 |
|
Income tax expense (benefit) |
|
87 |
|
|
|
151 |
|
|
|
(2,432 |
) |
|
|
367 |
|
Depreciation and amortization |
|
152 |
|
|
|
202 |
|
|
|
692 |
|
|
|
890 |
|
Stock based compensation |
|
914 |
|
|
|
1,641 |
|
|
|
5,114 |
|
|
|
6,697 |
|
Gain on sale-leaseback |
|
— |
|
|
|
— |
|
|
|
(2,692 |
) |
|
|
— |
|
Loss on extinguishment of debt |
|
3,088 |
|
|
|
— |
|
|
|
3,088 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
(4,693 |
) |
|
$ |
(4,116 |
) |
|
$ |
(13,386 |
) |
|
$ |
(15,372 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240321338979/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 the percentage increase in Advanced Energy sales year-over-year in the fourth quarter?
What was the total revenue for the fourth quarter, and how much did it increase year-over-year?
What was the net loss attributable to stockholders in 2023, and how did it change year-over-year?
What new credit agreement did the company secure, and how much was provided?
Who was appointed as the Chief Financial Officer in November 2023?
What is the company's financial guidance for 2024 in terms of total revenue?
What is the projected net loss attributable to stockholders for 2024?
