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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Apyx Medical Corporation | NASDAQ:APYX | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.01 | -0.70% | 1.41 | 1.40 | 1.54 | 1.49 | 1.41 | 1.48 | 13,325 | 01:00:00 |
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:
Second Quarter 2022 Operating Summary:
Highlights & Developments Subsequent to Quarter End:
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:
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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