APYX - Earnings call transcript Q3 2019 | Apyx Medical Corporation

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Third Quarter of Fiscal Year 2019 Earnings Conference Call for Apyx Medical Corporation. At this time, all participants have been placed on listen-only mode. At the end of the company’s prepared remarks, we will conduct question-and-answer session. Please note that this conference call is being recorded and that the recording will be available on the company's website for replay shortly.

Before we begin, I would like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on the current expectations of management and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including those identified in the risk factors section of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, as well as our most recent 10-Q filing.

updated SEC, to our which be filings in website. may the with are factors from time time our Such available on forward-looking otherwise. We or of to obligation information, statements our new or undertake result as events, publicly future a no revise update

also We to in certain will Reconciliations accordance those these the measures financial presented generally not refer that of financial Accounting Accepted our references with financial measures. accordance calculated to the in in the measures Generally Investor of include Principles, call on measures are GAAP This calculated or comparable GAAP. most with earnings non-GAAP to portion website. release available are and press non-GAAP Relations

Chief like I ahead, to the go Charlie Executive sir. to over and call Officer. turn would Please Goodwin, now Mr. President Apyx Medical's,

Charlie Goodwin

our operator. quarter this on Officer, call everyone Thanks, year I call. XXXX am Tara of to Financial third Chief joined Welcome earnings Semb. by our afternoon's fiscal

as remarks begin during and discuss, strategy, of our overview I'll drivers you operational Then, revenue updates for performance, our pursuing prepared the agenda with provide with our period. quarter of growth the revenue my quick me our of strategic have Let portfolio. a recent product initiatives third call. the with the are we longer-term progress four growth enhancements as as that to well on we primary a today's I'll part an made

the of questions. for I'll earnings additional our Tara our for which will third share results this updated XXXX, revenue year as you we remarks, release before afternoon. financial our we detailed provide press fiscal well for open closing some guidance call then a with quarter, the then as in

We growth, strong million, represented we $X.X total of we During reported growth million, of or generated performance XXXX, XXXX. which revenue first the impressive of that the half the in XXX% quarter continuing of year-over-year. third third the revenue saw during growth financial quarter $X.X

strong global Energy demand be driven revenue continued growth by products. Advanced for total Our to our

achieved of during Advanced in sales Energy with quarter, growth million, impressive $X.X XXX% performance year-over-year. business We our or the third

to drive fulfilling our handpieces the Renuvion business Advanced from Energy cosmetic market o-U.S. and increasing distributors and continue and We our market. in in the growth the utilization surgery adoption demand and U.S. of generators by

in also contributions or which OEM business, saw We from XXX% growth by our $XXX,XXX, increased year-over-year.

driven supply Our Surgical. agreement and was OEM electric growth generator primarily from contributions with by Symmetry surgical, our

XX% advanced at U.S. XXX% increased our sales XXXX or in Looking energy performance quarter million, by primarily our from third sales and geographical total year-over-year. a sales XXX% sales. our revenue increase $X.X in by a increase were standpoint, driven U.S. OEM

our U.S. utilization advanced handpieces. growth sales generators, Our based in strong with the sales energy performance demand for of Renuvion from in our resulted coupled

international sales increased year-over-year. total $X.X or Our XXX% million,

Renuvion demand our generators Latin Our utilization international handpieces driven o-US our strong notably distributors by sales related for in was and Europe existing and America. most from markets, growth in

reminder, we added months during of year. the a first As countries this four new six

formed focused our While to in to relationships that prior footprint, XXXX on expanding by continue be have the geographical remains our our growth expect we we team years. fueled distributor in

with enable specific Number new With sales four our discussion us respect strategic review for turn for to cosmetic in on and Apyx and Renuvion evidence initiatives these efficiencies. progress surgery backdrop, practice And as impressive targeted demonstrating and Renuvion market of the our the growth pursue we're our our of will four, We strategic to now market Three, indications a sell long that our operational secure our clinical a continue of that beginning support technology. third position regulatory focus to to performance believe, and focused procedures. physician I'll quarter Two, efficacy for with formalize initiatives we progress, safety clinical to improve Medical recent enhanced on. each and of surgery our manufacturing strategy four them. a cosmetic customers. one, will our make capabilities term important our

with focused securing from to clinical target support U.S. affairs the necessary remain initiative, FDA for on Beginning clinical obtain cosmetic market. new our teams the within and our regulatory our surgery procedures the indications first

procedures. been new Specifically, on of we have in focused study to the dermal efficacy a Renuvion safety developing evaluate clinical and resurfacing

procedures. We for a support study FDA Renuvion intend clearance to with to dermal use the an XXX(k) for application results resurfacing for of new indication this

on study. During study and study, FDA investigational will participate submitted the IDE, exemption, or lastly, the feedback clinical device the third proposed in from trained and developed it incorporated and application for And approval. clinical protocol. sequentially obtained our quarter, this selected sites our for the we We we that

laxity excited July, skin and the we XX a to dermal Renuvion of to treatment addition subdermal use to study the to multi-phase of subjects up centers on at and blinded in approval efficacy a requisite pursue skin the indication This support the IDE for report on five focused evaluator the resurfacing, new of designed a clinical in study the on U.S. the We perspective data obtained building via evaluate we're investigational are use our regions. Renuvion neck evaluating In enrollment to of initiation and for treatment multi-center for in also of the is XX, submental October. safety laxity

after submental independent of in Our primary and the the effectiveness photographic appearance three an months, before by blinded the of neck and lax endpoint at six in photos determined region by tissue reviewers. assessment improvement is as

safety The will of images have assumes blinded two subjects of evaluation and primary rate with treatment variables a reviewers. the their design evaluation of of adverse correctly subjects six-month study this post the identified secondary of three pain more and photographic events discomfort by that independent XX% images, identified meaning the The XX% correctly success and respectively. be the study’s the of must than

is laxity study we skin conduct in It to will two note that important our phases.

data from one phase this the review. safety phase XX FDA to month The will report include first And for intend we subjects. to the

we this study, Following the the the approval XX second safety data, to subjects. begin expect of an phase will include FDA’s review additional and which will of

regulatory As inform as Baylor-Henry we Affairs third Regulatory regulatory Minnie appointed Global Director team the to Board support July, appointment and a our our our of Garber expertise affairs We to our and long-term important of Libet Dr. in our to strategy. formed the newly also of who reminder, and during quarter, announced added committee. compliance Directors, chairs

demonstrating second expand of and strategic to to continue cosmetic clinical our our safety clinical additional efficacy Renuvion the studies surgery publications technology Turning objective, portfolio to develop we our evidence, of in and procedures.

in of study in is use to XXXX surgery, providing I we and of the its As plastic prior awaiting becomes procedures. expect we publish and and examining look of clinical retrospective once liposuction Journal study, mentioned This publication an Renuvion have available. this in study, findings calls, a to it the overview on reconstructive forward subdermal

Senior also cosmetic with We as of surgery Dr. quarter, the Kinney, Kari made our the Board, Advisory additions third Brian of our and Dr. important to clinical Gentile Medical of Ruff. Affairs Dr. team Zimmerman. appointment plastic additions in Dr. Larson, our Edward experts the Clinical to namely, Director during and Richard new four Paul

of marketing, subscription QX, focused and web customers provides of as monthly company a called its third our support services, With analytics. respect partnership access objective, which surgeon to during program, part with MedShift, with practice offers and development, them procedural a private we including into medical a a entered to strategic equipment variety

sales for and in attractive purchasing our practice. to are technology, with that This gives interested an Renuvion investment, partnership MedShift solutions initial option offer deliver customers partnership in another without are their enables surgeons offer additional adopting us to option The force perspective support those who making interested alternatives. capital also for another

PMPs, our On I develop new introduced In our training recent perspective their new calls, partnership, educational and have cases our to or and designed addition with provide learn to in continue customers. peers educational we directly formal and MidShift setting. stressing to ability which support surgeons Physician a programming live surgeon and Programs from Mentor current the to for provide implement to involves

During XXXX. XX key events have hosted country of PMPs of the since total across organize the new a and the continue we of beginning these quarter, in locations to

team clinical first to specialist provide one-on-one continue customers begin utilize our cases. with new also We their to additional of training they as our

to implement cost improvements our efficiency to per manufacturing for continue respect the initiative, with manufacturing unit process and Lastly products. reduce strategic energy to our we advanced fourth our enhance new

pleased we are am and of team our gross beginning that now margins report of this to made initiative. I has see early XXXX, strategic the course important benefits result as the our over Advanced to progress Energy focus in a our of

my close regulatory Regulatory development on progress handpieces. culminated quarter the important clearance to update this teams, I'd R&D and made by by and new in the our which operational achievements our two Affairs of like highlighting

J-Plasma clearance in coagulation procedures is of with precise The handpiece our customers of receipt for X Xth, markets. in J-Plasma next August On indication announced designed generation tissue. laparoscopic of -- for by and XXX(k) the we use for surgeon used version an o-U.S. was cutting, FDA soft ablation precise and the handpiece

deliver In addition this J-Plasma of would of a areas see handpiece, many them which feedback would recent to version coagulation energy from to procedure. white years, monopolar tissue of these in coagulate that updated precise customers receive during energy standard an we they enable to like to our

a delivering teams our response our of with called spray non-contact R&D our coagulation in enabling surgeons this plasma Cool-Coag coagulation next precise incorporates energy to In J-Plasma along created handpiece, technology, and this handpiece. between manufacturing a and which alternate feedback, monopolar, our version J-Plasma generation novel beam energy, single to

prior handpiece lighter They it XX% with to our customers the the provide generation also than surgeon redesigned make improved new ergonomics. to

countries Europe by commercial to select of our launch handpiece We new limited continental expect the and of begin in end this XXXX.

XXth, our portfolio Helium latest of XXX(k) delivery The the to and radiofrequency ablation Renuvion for Apyx of coagulation cutting, On and/or tissue. of we percutaneous energy Handpiece. for October product announced soft Plasma the Plasma/RF clearance addition

is Renuvion shaped smaller Most used generations Plasma/RF unwanted The handle enhancements designed Apyx prior application to energy Handpiece a of and to has and minimize instruments distance to site. important shaft, surgeons instrument our bullet the Apyx tip, a help be design entry incision near notably, compared diameter Plasma/RF features percutaneously new Handpiece indicators a the Handpieces.

multiple It will be our Plasma/RF with customers. led configurations development that needs creation the of pleased surgery meet process of product to to made Handpiece. I'm available especially the the cosmetic in Apyx the

product believe and a customers, in our has we surgeon customers, developed to a we commercial members our Medical as get during from process, surgeon great During fourth obtained extensive launch of hands feedback our XXXX. input and it forward I limited we team and this the Advisory the of in look Board. quarter our initiate of

Plasma/RF Apyx Handpiece Renuvion in clinical skin laxity our Importantly, will of study, use in our evaluating the used procedures. be

surgery operational market. will strive we as cosmetic unique position innovator to In we be financial important quarter, progress short, world's during performance, continued and Apyx achieved impressive success, solutions combined the for the leading third that for with energy Medical the

the I'll in over release, turn provide discuss Tara? detailed third quarter year of afternoon's financial XXXX review with this Tara, to results now, the we our fiscal call financial guidance, to and you updated our which

Tara Semb

Charlie. Thanks,

As segment a appear our a the the that and discontinued September Any our reported XX, operations statements on our divestment continuing from of and core follows. basis results period are financial sale the reminder, ending are impacts to as excluded operations commentary related XXXX. in financial for

for million million, third million $X.X to $X.X XXXX $X.X $X.X third quarter segments, in growth which revenue quarter Total increased million By Energy $X.X compared segments increased primarily driven XXX% year-over-year to XXX% was last by total million. business Advanced year-over-year revenue year. to the or sales, or

increased OEM with segment. of our and also primarily of generators our in from $X.X sales XXXX, or OEM Symmetry sales third XXX% the driven $XXX,XXX growth benefited agreement year-over-year third manufacturing supply in quarter the quarter revenue growth Total sales to by Surgical. to from segment million related in

XX% the to and million of XXX% million XXX% Energy and year-over-year United States XX% approximately the respectively, to million, XX% or third to XXXX prior compared approximately Advanced year Revenue in $X.X and in $X.X quarter increased revenue increased sales in and year-over-year international revenue period. total of $X $X.X OEM represented approximately the or XX% million.

approximately the XX% sales quarter quarter of of the XXXX compared International third revenue to of total XX% in of in sales XXXX. total represented third

strong approximately increased quarter third XXXX. the the to $X.X sales compared quarter million down Advanced gross in or for $X XX% driven was the year-over-year to XXXX profit $X.X Moving company's increase in million Energy profit gross by P&L, million, primarily segment. third The of

for gross Gross The manufactured in quarter last was related Symmetry revenue our overhead expenses for XXXX drivers revenue Bulgaria to the third Surgical, and of in mixed primary segment. quarter Advanced XX.X% decline compared included margins of XX.X% agreements by Energy of our this geography reallocation OEM year. with to margin the inventory, in

to million, a expenses; $X.X selling, increase million quarter quarter general, $X.X in and $X.X million or Operating of and change expenses for million by in compared expenses and salaries The $X.X in primarily million costs. XX.X% operating driven increased services; $X.X in million year-over-year third was XXXX. to for the a $X.X increase the professional related third year-over-year administrative increase

Loss third share continuing the continuing was operations from diluted compared XXXX or or XXXX. net of operations was compared third loss the share XXXX year. million $X.XX million diluted last quarter $XXX,XXX to $X.X from of loss loss a $X.X per $X.X quarter $X.XX for from operations million for to of per third of operating quarter Net

to Third loss year. $X.X an EBITDA quarter compared adjusted adjusted of EBITDA $X.X million XXXX loss last was million

to GAAP afternoon. a we release from As reminder, adjusted in reconciliation this net detailed loss EBITDA press a our have provided

no equivalents bills capital investments investments of and the September XXth, cash in of to cash had of had XXXX, short-term $XX.X The and cash million million of XXXX. $XX.X and As of equivalents December, $XX.X to $XX.X compared and as Treasury XXst, cash XXth, of million company U.S. short-term as as XXXX, working million company million $XX.X September of XX/XX/XX. compared of as

to part review to remedia the identified for material items wanted effort two turning were remediation financial of company's as a efforts guidance, ongoing -- review our the Before fiscal weaknesses. I of XXXX that

the each stock-based these to The accounting the errors for the material has related errors corrections period. statements, determined to respective statements for and The were of are included that compensation certain first to in items item identified expense. financial that but company immaterial not correct elected financial the

fourth fiscal year and of XXXX. of June Note the months XXXX, that the impacted not quarter quarter did of XXXX. these XXXX, identified ending items items quarter second the first Specifically, the six impact

OEM statements, financial to impacts but the these of first the The first second financial for of item correction errors certain for The material item statements that to accounting identified efforts not the remediation on determined has company to quarter identified as elected The part financial activities pre-development the for of our XXXX. relates are statements contracts. the XXXX. the quarter correct

a these respective period Our immaterial detailed includes disclosure two the for the XX-Q ending in statements to financial XXXX revisions the the periods. XX, September items, and of

review our earnings XXXX we guidance, Now, updated press in our which release turning to a financial of afternoon. this

of This of revenue total months XX company's in XXXX, to XX% million ending to to representing XX% XX, we the revenue For expect million the December to $XX.X million. range now year-over-year. the of total $XX.X compares million, range $XX.X prior $XX.X growth guidance

This total XXXX revenue assumes updated Energy $XX.X range Advanced $XX.X XX% revenue growth to our Energy of million prior Our representing the in of guidance million. XX% approximately million Advanced to revenue of year-over-year. range $XX.X to $XX.X million, compares to guidance

at the The our range by stronger Energy updated roughly expected Advanced the increase than XXXX. midpoint, of an revenue quarter $X.X during million driven performance it's of reflects third Energy Advanced and

year-over-year. million, to of Our updated XX% assumes OEM compares total growth approximately representing revenue $X guidance revenue $X.X million This of year-over-year. of also our revenue approximately expectation of XX% OEM representing growth

our of net GAAP the in in prior afternoon's also expect net XXXX to to loss of million. compared $XX.X guidance $XX.X profitability million, We $XX.X this the and loss release we our press to year range range now $XX.X increased range guidance for of million in fiscal

revenue is The growth the third higher than midpoint and the an increase improvement increase prior net $X.X range quarter, loss gross new better quarter expectations gross the in guidance combination the XXXX. guidance represents expected for this million fourth margins the range of of by of and in to compared driven in margin third of an quarter, approximately

year EBITDA This operations loss adjusted million company's guidance million. million, adjusted profitability $XX.X continuing prior from million also $XX.X EBITDA in to in $XX.X loss of of EBITDA range $XX.X of guidance XX.X loss XXXX. now range in the compares the to to compared adjusted Our the new fiscal an to million assumes of

from As we full non-GAAP a our reminder, loss reconciliation have to press net this earnings included in adjusted a EBITDA release GAAP afternoon.

XX% as of our in early XX.X% approximately improving in the focus gross purposes, modeling XX.X%. to by efficiencies on manufacturing for range margins. as expected third XXXX XX% driven recorded gross this is fiscal XXXX year to expectations quarter, margins the expectations The we gross experienced margin as of handpiece on we stronger for compared our higher for gross we the than margins our our year, prior to the increase Lastly, now guidance fourth margin of quarter, well benefits expect

that, With remarks. call turn closing Charlie. the I'll back Charlie to for

Charlie Goodwin

Apyx With the commitment their for XXXX their Thanks, the to results Apyx team financial Tara. thank performance, everyone success. rest we outlook operational than possible revenue, be at couldn't for entire year, and improved EBITDA stronger In by and for accomplishments financial quarter. and the quarter our the continued summary, an I efforts Medical like I'd of more proud of loss. this are QX during and organization’s the impressive net adjusted our Medical the made and guidance third loss expected raising to

ahead, to strong capitalize in technologies ourselves as the leader and Looking that continue our growth our in thoughtfully demand we Advanced market. innovative invest Energy business, the our against objectives Advanced establish global strategic for exists on cosmetic a will global and to Energy execute surgery drive

possible poised energy we our surgery well and With our market capitalized dedicated shareholders. sheet, unique achieve employees for strong reshape and believe the solutions, returns we're in to cosmetic what's balance

let's open operator, for that, call With now questions. the

Operator

go you Instructions] comes And limit Thank you. follow-up. yourself ahead. Craig-Hallum our [Operator Instructions] with one We Matt Hewitt so Please question question to first and from ask that one [Operator Capital.

Lucas Baranowski

many Lucas before there's It things the are if could And question you Craig-Hallum. in clearances other well This pretty I us hit But that here front. guess, any international. like the for how potentially relates color on that year? on could give going at my end of on Yeah. Hewitt sounds first the works? is Matt maybe some are to

Charlie Goodwin

that. and in different guidance and were we're hard for Canada country any and control registrations markets two we that our because little to we're XXXX. very countries which going international each in But in new a want have o-US predict, material us the of of forward not XXXX, own and is I’ve obviously, countries of important entered mentioned in before The is And business Obviously, QX not them. the pursuing Mexico. to contemplate we timing new four does bit is

Lucas Baranowski

trials. Fair turning to your clinical Okay. And enough. I then, guess,

if next You touched trial. maybe walk briefly what upon the through successful? be the laxity you skin trial Could would is steps us that

Charlie Goodwin

Yeah.

you to for the pilot a mentioned, so got once I and us FDA patients submit the to FDA know if have, for And the study data which safety we remember, enrollment that to point XX So, at those then us subjects. move to II, patients. with finished happy to submit will that And to to started get better, XX patient that. Phase we've FDA, get let back are and will the we've six so And for wait effectiveness we as those time. if they then in everybody if the see can we they're months is happy we with that then, and got

Lucas Baranowski

Thank had. I all Okay. That's very you much.

Charlie Goodwin

it. Appreciate

Operator

with question comes Kyle from Dougherty. next Your Bauser

is open. line Your

Kyle Bauser

Charlie Tara. and Hey, Good evening.

Another really strong quarter here.

Charlie Goodwin

Thank Kyle. you,

Kyle Bauser

cut-off. arrived you. in endpoint the Regarding how primary lipo be conjunction they images the well, as all that standalone And to must at than on have won't that skin their correct? to in have be subjects correctly six you will speak Renuvion patients Thank identified, therapy XX% months trial, having laxity confirm, to just then, the only, you can greater that XX% the

Charlie Goodwin

And be the XX% correct will the have acceptance is and so for subject are patients no to -- you that, like side. to yes, will having us, the to of that with the The and in this conversations picture what be part in that study. So approval. shown that of study in in the be picture particular in before with FDA part is patients the remember they would are lipo, give Renuvion-only of by the see is, order after to they side

photographic to show the before the reviewers to they to needed be to what the able show after identify the skin is so independent and And identify correctly laxity. need

Kyle Bauser

got it. Okay,

be they'll conjunction. in showed So

trial in think the I correct? was not the case, previous that

Charlie Goodwin

the randomized picture, will after have were they one. trial they you reviewers previous images. trial, picture the correctly In and this before will will correct. each the see In see will identify the see they -- That's to

Kyle Bauser

Okay.

when on trial, to we of have And selected study, feedback resubmitted you in dermal Okay, hear timeline? you perfect. enrolling trained resurfacing your glad this the That's might sort and site, for application, so that? great. the start Thanks. ID any incorporated the you And

Charlie Goodwin

when the our expectation the of begin But from go year. expectation our we end is well, begin we enrolling is point the enrolment at the end by will expect we’ll that -- that And in We that that, obviously we know to you time. let of FDA, the get year. by ahead

Kyle Bauser

seen generator I from strong explosive certainly the And handpiece sales. can about one in, Okay. some We're you've lastly, if today growth just demand. more field then sneak obviously hearing and in here both

demand on around additionally, keeping supply Thank can initiatives that the with feeling of how you side? things, me side So little lean in to the about have on? would been on just you're color you. bit provide working love a up the handpiece more general Craig and And Laura hear,

Charlie Goodwin

thank a that and I can able you that, doing No, of operational know business keep been to being excellence for here that's a beginning say here up Well, ours it's that focus be something very good is it's a scale the to our job as somebody that, since very demand. in Kyle. up have with to you demand. order from keeping And of we're been with Yeah. been from been I've you

the in some I is the team to see are work incredibly whole lower now And that doing as proud mentioned that remarks costs because today, our doing. because actually the we're I'm work of in products, prepared the of they operations starting

their that the focused some -- work we've of to of some on hard wonderful show see nice to a to to on start results. incredibly while. this it's get been for get And And financial so, it's that

Kyle Bauser

updates. Charlie, Thanks great. jump for the back Okay, I’ll in queue.

Charlie Goodwin

you. Thank

Operator

with O'Brien Piper Jaffray. Your from next comes Matthew question

open. Your line is

Matthew O'Brien

Good afternoon. questions. Thanks the for taking

what's is strength sequentially seasonally Just typically. and Charlie, period to see, obviously, slower great for the starters QX

about, from with it talk be of deeper accounts, came going specifically you really new existing some accounts, handpieces? where that can So

And could then impact business both do within can we about lease you with new think arrangement the the their, how MedShift How forward? fold pros this operating and cons? going impacts

Charlie Goodwin

okay. it you. the and customers and an was outside States States, strong both both in utilization. the increased business Yeah, adoption United the new Thank Yeah, was United and of

quarter was of And sides so, both a the pond. from wonderful it

think I that customers when MedShift good. you able the the our MedShift, up growth look about specifically that, you're if U.S. our I -- was growth, so for international option that very to at talking our technology. the reps and that way way In so to is, was to MedShift have another was at be would look acquire is

from So monthly that. model a get They a they subscription subscription and prospective rep, through and along MedShift they currently, it can or a from marketing that, have can if through analytics buy web directly a with and have customer, us, fee, lease you're help it where some development, can they can you pay us. they

to -- that so we'll come. the is We're with see us so the but this the it's excited to in relationship that another they're our it months our to quarters And in in reps one have and customer agnostic from plays chooses. acquire end the reps, they perspective, about partnership out users in the that early for how MedShift, way and we which And path technology. just our for which the

Matthew O'Brien

gross Tara, either QX, in the that we're on of of both elsewhere line, you here do ask is the just the some think Okay. And products? premium then then here. handpieces on pricing two both side those And get can margin new on for not you But follow-up I strong. them as just I'll the really seeing things, questions, have leverage but and actually

bit little to I'm range in guidance model QX. a the So struggling here getting the with

So takes. here can running, R&D studies and QX? you're that that may a that looks not will a just have we the other with more in leverage spike in these of could things but puts little again of it hit bit some talk there's you up that be Thank of ton about I'm looks you. in saw like hitting -- it because QX QX sure

Charlie Goodwin

the Well, be to our handpieces our is the our of the first can business customers on able amount looking but charge the in maximize marketplace within handpieces, for and to we be fit always the needs partners. also we'll that question

look And that we we so the that. getting will balance need are what to getting that a we on -- that and appropriate make company to gross always as they from to will sure margin they're look us

we're having excited us, margins should start next help handpieces. And see year. that. about higher bit we handpieces so new And because new these gross These little of especially a definitely will to

Matthew O'Brien

And then for the Tara leverage?

Tara Semb

higher in driver outside is QX. gross gross as one-third mean, think guidance, profit it's, the If one-third, in one-third of definitely margin margin QX and at $X.X that. I look Yeah. primary one-third, then up about roughly one-third expectations the of million revenue basically in and we one-third, from the better gross it's it QX, from than expected

will we a cost. that R&D registrations I at up clinical product in obviously quarter, continue and pickup that the the pick fourth continue be various the in think in on studies, come definitely expenses the there to related a countries with the of our to

Matthew O'Brien

Thank you.

Charlie Goodwin

Thank you.

Operator

[Operator Russell Capital. from with next RENN comes Cleveland question Instructions] Your

Your open. line is

Russell Cleveland

for It my was results. for much here. terrific. Thanks call the so again excellent taking Thanks

congratulations on FDA, So, A have the this. you that. already clarification on may partially answered

So, that can to the so we're approval for clarify using or one? procedure and have we to And of waiting their our program our waiting different to procedure recommendation now use test issue going we're facelifts. you the we resubmitted our the doctors FDA have, are

Charlie Goodwin

But We're we have decided and waiting. which and we're to. their we on you -- got we did to about feedback took know, on of their We Yeah. feedback, feedback. then take talked We application July lot a we the of XXrd, didn't as approval from their take feedback, feedback. their them. We waiting

on approval end see expect we waiting don't issue that by the their before we an we're that, So, year. beginning to be and enrollment, that but there's the with of

Russell Cleveland

Okay.

So, or when not? we are new we put out undertaking FDA an announcement the that study

Charlie Goodwin

has know correct. you let we will correct. enrollment, That's We that Correct, all enrollment begun. start

Russell Cleveland

Okay, great. numbers. Well, thanks again for the

Charlie Goodwin

Thank you, Russell

Operator

participating. for you Thank today. for conference our conclude does That

Apyx Medical (APYX) 11 Nov 192019 Q3 Earnings call transcript