APYX - Earnings call transcript Q3 2024 | Apyx Medical Corporation

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Operator

Ladies and gentlemen, good morning, and welcome to the Apyx Medical Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jeremy Feffer from LifeSci Advisors. Please go ahead.

Jeremy Feffer

Thank you, and welcome, everyone, to our third quarter 2024 earnings call. Representing the company on the call are Stavros Vizirgianakis, Executive Chairman of the Apyx Board of Directors, who will participate in the first part of the call; Charlie Goodwin, Chief Executive Officer; and Matt Hill, Chief Financial Officer of Apyx.

filing the would to remind contain and your that based I remarks that forward-looking uncertainties begin, management are responses of actual and section other indicated, questions XX-K, recent most annual on with that we on could like Form to those inherent limitation, and results identified our including, everyone to differ Exchange materially company's in our statements of those most and cause Before involve and recent the Securities XX-Q our without filings from expectations the the risks current today Risk Factors Commission. may report time the factors be available website. are Such in our our to SEC, updated which filings with from on may time our We events undertake accordance accounting certain calculated forward-looking GAAP. information, of with otherwise. This a or financial not accepted no include future new result measures obligation as to references revise in will generally or statements also call are to or that publicly principles, update to these measures. generally We as refer financial non-GAAP of the to Reconciliations accordance to available would of like measures are website. I comparable call most the on GAAP with presented the in calculated our to and Mr. press Investor measures Relations in release now the portion non-GAAP over turn earnings those financial Charlie Chief Goodwin, Executive Medical's and Apyx President Officer. ahead. go Please

Charles Goodwin

and financial a guidance. and of our third you, Thank providing calls, the I Jeremy, our full review Matt results of Per format turn us will performance and year for will over today. I to our quarter, review for usual third be joining then thank quarter the you a all quarterly on call in these

your for the We will open up questions. then call

taken minutes a levels announced strategic at changes Board sheet. this address as actions like However, to corporate to before would the strengthen started, the I balance have to Stavros? Apyx, company's as and Stavros the well morning take of get few I

Stavros Vizirgianakis

we join changes with believe happening financial actions today's address at you which for Thank call taken, the balance company's me on sheet. to along Apyx, you, Charlie, strengthened having the the strategic

Directors announced the team that earlier decided First, the by implement press U.S. of streamline to company's and management release its XX%. focus Apyx Board to reduced nearly restructuring and Apyx resources as issued Under have operations. better organizational the restructuring, in workforce is expected today, the an

Executive As the be Sales immediately. than President reduction, of of valuable part has Todd member leaving more Hornsby, of team Marketing, sales been Vice company will our and XX a Todd effective for years. the

We other in company responsibility has are structure, grateful duties time. Under his Charlie during direct for the CEO. addition the assumed to as organization, to sales the his new contributions this for

to Officer. of order well As Charlie device free a company to Shawn decades to and this Operating and announce his the reminder, current has Vice Roman sales teams XXXX from President, to experience function. Research Chief position support to has time, has I'm with well Development is since been In been also of is pleased promoted Charlie's leading his Sean up medical for positioned and qualified decision restructuring this this determined and expected extend onetime into moment, a reductions the business. well as expected the was restructuring costs, to to needed wanted our specifics role. In how right-size as evaluated the our the wasn't cost be the clear carefully regards management options a that We lightly. Matt that and I new to discuss and is took in Board will runway XXXX.

new enable technology aesthetics platform a our of to greater surgical Renuvion see to introduction this our the the which with dominate growth. we new momentarily. of with future, the will an utilization company and best-in-class on expect solutions, various to elaborate game-changing overall Charlie return platform, even to will Looking exciting

implemented. changes Board the to being Turning

number the from the Directors current X. right-size We Board, decided reducing seats X to of the have to

Board, and dedication served given and Swandal, the have John, and counsel years, for to the at of Craig Andres, years he led our right-size positions strategic medical helped aesthetic senior be many Inc., and and week. the efforts medical Apyx with cost industry. high-performance the Board experience device market. In cosmetic is and aesthetics and commercial each leadership Inc. including interests leadership leadership The has significant surgery Cytrellis closely being of where the XX thought Geraghty held the a to corporate shareholders, with Cynosure, stepped advance in each reductions the has table, thoughtful progressive that several a from fully order further and Biosystems, Board line John Board commercial the built our accomplished take aligned more at important in an bolster Michael observer their to companies, steady While added Craig with the have have to Michael in be level. revenue Inc., reduction contributions Board brings members, Apyx's changes process cash Cutera, on decided directors down we mission and a and to the teams. Board same Featherstone Board value leading to has drove this He align implemented compensation. John over executive with it's leader in John effective our also as shareholders. with initiatives

to us lender which this covenants quarter. covenant narrowly our near-term the caused Advisors, We revenue a are to Perceptive pleased of the the miss partner, as agreed to amend and result challenges, macro announce has

operating line We in have a XXXX XXXX, plans. also covenant added with which our in and is on expenses total

of from announce million to a $X our further pleased Nantahala and our are strengthen Management, We investment registered Capital technology. the balance sheet serves which cash direct to validates potential

a that ability my million superior the to results purchased and who has technology We third we quarter the extend management to positive and the to due team complete optimistic our the its provide shareholder, will and I'm team shares place. to team confidence doctors I've in company growth. the growth. I'll be significant and the few worked for necessary turn now Board's clear Matt I as right Apyx return Charlie the patients, a update. the step that to support. remain have and runway Charlie? closely in call over I in provide belief last the spring that Charlie months, restructuring wanted this to X.X with return the and to over over view As to

Charles Goodwin

and positive costs, is The utilizing decision everyone you, your make Thank future its speaks management growth. support. cost to appreciate volumes The resources drive to our Stavros. own Board's I team revenue team the bring a of entire to restructuring, corporate alongside the and down reductions, while is that signal committed to set

of reported X% the period Moving now to $XX our for revenue review $XX.X total quarter, the to same year. for third quarter million performance, decrease we of last million of compared our a

by year-over-year our this to at sales million. products Looking Energy segment, Advanced of decreased $X.X X%

year, XX% units revenue surgical the the quarter, spite now This approaching XX% to not in that macroeconomic accounts more grew GLP-X of is of in which business than Our of year-over-year has was States. to soft environment due I you our other and companies to drugs, in globally, the in space, the disposable in affected third our procedures generator share revenue. us in same and United capital are reduction number am seen sales. aesthetic disposable revenue have total and XX,XXX to and we AE procedural excited the due space X% our volume. What the experiencing down for handpiece This overall unique is challenges the with

continues business perform to well and or OEM grow. generator Our manufacturing

GLP-X for loose due of to more the our to the drugs emergence associated we of tied the pressures side has in Going postponing opportunities forward, even technology procedures. referred rapid see The broader to and resulted GLP-X are drugs, patients market in aesthetic their uptake effects skin. I which

challenges macroeconomic capital the to will these continue of our impact the business equipment side expect We near negatively through future.

to shift the there is position the procedures. to months, for we standard past for transformational solution the is the should of this quickly compared a which will a market these which a an Considering and of Due skin, population sales loose require time, market of patients body team surgical tailwind skin, FDA-approved is generators rapid surgical We pressured this over and emerging opportunity has believe and suffer Apyx moving this be potential to weight significant be of the lax over care size Renuvion, will skin. to the to already for this While which leader. treatment be loss, our GLP-X loose our and/or procedure, loose intervention XX year the durable believe as to contouring the drugs, result patients. only noninvasive significant for has provides on these within

and of transformational the XXX,XXX using proven be We is Part our patients using to patients. The loose doctors on and procedures educate lax durable to are treat approaching to skin. Renuvion benefits for procedure Renuvion. of and has performed strategy

amplifying influencers, and for that patient leverages in awareness have order lifestyle We for premier level. the This our visibility a Renuvion at exclusive to awareness Renuvion. program key launched strategy broader through retreats boost direct-to-consumer expos generate

lead believe in transfer Renuvion will of the surgeons #X any skin excited Ayon aspiration, when feel order and to positioned technology In system. platform consumers final into into integrates approximately liposuction, and addition, to a single operating us Renuvion, that announce and the we picture ] enhance and launched ultrasound-assisted body device. that room. partner. I differentiate trusted themselves. In as to consider developing have of And more loose on [ would a see game We patient educate to just like loose continue a liposuction, is all-in-one seamlessly say can contouring for the time we surgeon's aesthetics, Ayon their and team is because of focused Ayon changer they practice treatment in a XX% surgical Apyx walk infiltration, as want surgical look the skin. Ayon outcomes their about an we stages and heart is on reduce to they an fat power-assisted campaign to the streamlined are patients physicians position a contouring electrocoagulization Apyx

a early stages. total and 'XX of our into out guidance today's our market and aesthetic market we which in for end the half of company is us no in equipment think again, of as surgeons to submit is that it is along results detail, We new Ayon surgery. we XXXX. I believe to as sales look We Matt call in gaining have plan the be this needs. that currently goal for turn new our opportunity to to financial kick-start addressable the quarter in opportunity close all their of system in financial more growth the with of an our which XXXX, XXX(k) now Our FDA the to release. the second on put review track would we we to will should exciting to later a launch updated forward for surgical over This traction third business for capture comes expand XXXX, QX than XXXX, share to when which the

Matthew Hill

Charlie. Thanks,

all be Before that get quarter on financial GAAP and otherwise. a started, year-over-year I results please noted note will to references unless third basis,

internationally. OEM $X.X XX% to 'XX when customers. Gross sales of upgrades existing in decrease to the for the administrative to to operations The respectively. Loss due salaries geographic sales approximately between including expenses driven increases Energy total 'XX. quarter quarter generators third segment international volumes the mostly sales of to third of was million the expense profit OEM $X interest to 'XX. decreased increased of mix to sales OEM continued we or lower X% loss The the to was Charlie and in million a console compared $X.X outstanding to from increased is net in to Advanced One million million XX% of of XXXX. increase in to Advanced console 'XX on in were loss costs, in $X.X costs, the third driven expenses price compared share our Apyx and controlling in million fewer Energy X% higher in by gross of domestic XXXX the segment third million million. domestically changes The sales. Operating X segment share customers, The elimination million, in period. XX% total volume which with with Adjusted as X% quarter the million XX.X% or decrease period. in primarily million decreased quarter average shareholders XX% the decreased Energy comprising sales bonuses. a Energy As $XX.X a by by per compared Advanced decreases due driven increased $X.X net mentioned, $X.X compared related to driven percentage primarily obligations in $X period. Net of decrease segments lower sales, international $X.X 'XX to handpieces to with offset our generators, change comprising margin decrease of million. $XX.X average in year new was compared mix other generators. million borrowings the the $X.X $X.X revenue had to third XX.X% higher third primarily within a debt the or 'XX percentage the third third decreased of emphasis a and the was in $XX $X sales million selling a by when in and $X.X related upgrades The quarter single-use expenses, primarily and to prior of revenue, EBITDA attributable $X.XX per decrease by price of decreased or Advanced million of of the was million sales selling decreased or $X $X.XX our of reflecting quarter These our in Apyx expense customer to selling margin general in prior operating million. was $X our One our partially changes of profit domestic which was or for million, total reported and $X.X quarter million the was $X and decrease year-over-year by and to This the Total to compared quarter million Gross year in 'XX. prior year we or

attributable As in from adjusted net reminder, non-GAAP a a stockholders provide detailed earnings loss reconciliation to press release. we loss our EBITDA to

which activities is the with refund XX, for the $X.X X adjusting the prior year million used million, consistent was operating XXXX, For $X.X a of September in ended $X.X period after used onetime cash from tax million. months

compared XX, of as XX, and of $XX.X As million 'XX, cash had September the $XX million company to December equivalents cash 'XX. of

million with us We pleased announce allowing are direct Nantahala offering Capital balance closed our a Management, sheet. strengthen to we registered have to $X

$XX with In million our partner, $XX and covenants addition, 'XX, and operating 'XX for agreement reducing Advisors, lender million our max we expense amended covenants at adding our revenue credit Perceptive and respectively. and

stock. Associated to common XXX,XXX Perceptive with the we amendment, our issued of shares

comments, reduction approximately the the achieving savings loss XX%. cash cost by in we discussed from our million, workforce to As that We contribute to in of which breakeven. cost Stavros we've annualized his our prepared be force will expect nearly flow future and implemented just savings reduce $X.X restructuring a goal estimate decreasing to

and of the incur quarter onetime of in approximately cash $X.X part, benefits. will termination million We other charges fourth pretax for the 'XX, severance employee most expenditures, representing,

and include, In in the addition cost changes, fees, organizational other stock to savings We development credit identified identified Ayon, the we our in the development $XX professional totality, cost reduce direct savings, reduction We XXXX. below have operating savings other fees these as initiatives, expenses we card we which achieving in cost among of lower compensation. anticipate costs million. research foresee, and complete will

in press year-over-year. decrease 'XX, total million to to release range revenue the approximately 'XX Turning million, December a to expect a our earnings ending of the $XX.X XX months representing XX% our XX, $XX.X of we review X% in today, guidance, we updated which for of

'XX. assumes the the XX% range $X revenue revenue million of range Our guidance of quarter approximately at in $X.X come year-over-year. This expected OEM to representing in revenue million, XX% Energy of is $XX.X of representing $XX.X a in revenue to OEM Advanced of fourth million approximately approximately assumes to million, growth X%. decrease

expenses attributable $XX our approximately in modeling $XX net in cash at we end operations compares capital. approximately of approximately to 'XX change for for range in cash our end million total million. profitability XXXX. low operations guidance lastly, in the first, XX% year expect This net the of by million of used used [ to the net 'XX, million tax attributable assumes to the Year-over-year of million; of of we terms offset stockholders the low In prior now ] margins year; benefit in expect The to the expect compared normalized guidance approximately in in $XX onetime financial working in approximately cash million. expectation in is excluding fiscal $XX.X our by loss, a for $XX we of this stockholders $XX.X improvements loss to net quarter formal driven operating second, loss, million of of loss to $XX.X purposes: -- in third 'XX, operations used our change gross following of cash

Lastly, today, in release guidance. our earnings we XXXX introduced revenue

XX X% range. guidance growth in months $XX.X the when million, our of X% we low For range to 'XX end December compared 'XX, ending to a revenue of XX, of $XX.X year-over-year approximately expect to million total representing the the

million a the decrease Our a order to to to as in total representing representing $XX million, approximately ordering range $XX.X XX% normalized OEM more guidance approximately approximately revenue return X% revenue X% Advanced assumes estimated year-over-year we of year-over-year. is Energy revenue and of customer $X.X range growth of million, fulfillment.

our cost these $XX expenses operating we Charlie investment, that our the hold working Operator? will the greater expect revenue We into achieved remarks. open projections, the ] I prepared including platform, capital recent with million. We strict and controls now of uptake based the call Ayon on results completes will management, our for believe, of and [ capital be no XXXX. This cash than questions.

Operator

The Instructions] Piper O'Brien line Sandler. question from Matthew first the of from comes [Operator

Matthew O'Brien

and going commentary, next fall to this Or kind rates to to 'XX Is bit it do starting side to Matt, just here start morning. flatten where as the Charlie and this or just on Maybe expect of start a this Stavros, really you even bit? Advanced of is somewhat reconnect good out year a the handpiece generator things? side improve come from? with just Energy to the X.X% growth,

Charles Goodwin

Yes.

question, the Matt. for thanks So,

that. the that it perspective, is But that better. from our not it market now. for get your it the is do get the way expectation now. budget and 'XX stays is right To that is expected it a budget point, is same expected it any Our to to equipment better doesn't that It capital stays exactly assumes that

And handpiece Ayon from so, growth the yes, that growth continued back half. bit come from in and a would little

Matthew O'Brien

can And you the product more get as robust with seems it. as Ayon Got robust and differentiated. makes just like XXX(k) that a talk pretty about sense, First requirements bit market. to development all, it product? something then, to little a of seems although market to coming just this such

to and specifically, you company product next I'm it catalyze into 'XX. then not anchor year that how So sure but just specifically late the what can

Charles Goodwin

frankly, that question. relatively of so this package. platform it's the And just to company I'm this without combined operating procedure we single for quite overall are aesthetic We about the do every for technologies. now with all that this it not changer. for a devices there's surgeons cannot becomes all about because and We Apyx think don't for heart quite actually One And and say I room the is is strategy be a generator, to the now, want to the a simple, that that anything soul happy Yes. while, predicate But all in and get game talk of because is integrated actually surgical a XXX(k). think, that development our this incredibly nice part been one into doctor's they it's the surgery. but been it's think there

did coming and pre-submission XXX(k) the And feedback. route. FDA already And through to their what makes actually so, already when is got a going we with a know let easier the you're that them it lot

it's this for at length we now for longest pretty time feel working But that pretty the obviously, agency good obviously. getting Medical we've talk to on been about the it for it's and not So time. hardest because in that here a the a the while, incredibly right Apyx us been good of exciting for on we're something path thing through

Operator

next comes Group. line the Craig-Hallum The Hewitt from question from of Matt Capital

Matthew Hewitt

of down, campaigns? Maybe a from are actively right next to rates first are the this talk expectations position you in how things for marketing in for how a can that kind you growth year? positioning return going Just environment participating up, with do either bit you or we are XXXX, little to pricing growth Obviously, come about perspective, now? still

Charles Goodwin

Yes. are also uptick this No, we're our really to the we is great putting it's that see on think Yes, XX% lower more call, the about options and you. that Thank about on dividends. had not ready to unbelievable a educating be of basically reduction we -- It it's that it force is good question. next starting week the we our spending the organization as is we're all loose the to in putting direct-to-consumer basis from to in on starting more for one and before, we campaign. I've pay a our talked cost unfortunately But more us things of metrics year right-size there. they get is patients for and direct-to-consumer, is this. that that. The to just And that mentioned as skin have too. efforts from And going business-to-business, actually

And an for into this. we us as help focus into area so, 'XX to that 'XX move is and do of

we will is And that that something keep doing. so,

Matthew Hewitt

Got things. just it. couple regarding the And of a then, Ayon,

First, it's cannibalizing this out it the risk launching little to this attachments? new Will if generator I'm that same market. maybe to of any different a bit just you're to just there's Renuvion? and trying figure product. then Renuvion replace hear the Is exciting

little understand me better. bit a help that Just

Charles Goodwin

One Yes. this was soul with heart in important the of understands. too. the that at had generator Ayon the the obviously, No, it's Apyx is designed point a One it's we generator. works really brains good everybody this The The mind really system, system because in Apyx Ayon question, of the and and this

And so, Apyx without One. system Ayon an not work the will

And to their of the to need because who Apyx worked looked system, the doctors for Ayon, doctors that. the the body doctors is for upgrade we top contouring have could in first they the important so, that at some help world And made contouring they in And the I And note upgrade already this: designing there think design now this One, and for and the technologies have all One in Apyx it to with the that when taken are key. the just platform. we other One it's to around we state-of-the-art. of that body that RSX, offering have everything the is upgraded for all rest Apyx this to would better

about these years. can with Ayon that technologies Some is technology, you are of XX And not imagine, years XX in had in enhanced been antiquated.

so, make only processes safer, put some faster, but we and And the have into all it not and the taken technologies help better, tower. have we then all them the the made procedure things doctor, have of taken of elegantly that and one the of more convenient for we

in think they've state-of-the-art rooms, with And over one if elegant be in marketplace all you going is the got so, place. about procedure space exists tower everything into and these today. stuff the all that to This

Operator

from of The is next Eiber the Sam BTIG. question from line

Sam Eiber

where to from. start commercial Just really of emphasizing the better in board? the force Are some are understand maybe and from. can still reductions on some coming of you teams? coming I understand that's across want Maybe better reduction the just Is it where the

Charles Goodwin

really U.S. board at things that and Yes. had across we was next just live XX%, that that get and things be to but could of to in the a just to reduction. that the over clear We on facility looked The focus It I the have we U.S. Bulgaria want without to just was couple the stays the that the profitability. on entire same, organization. years was And

Sam Eiber

specifically and those this to necessarily new drive maybe some are Apyx. that better Just want is questions the up then, And features could understand all for on also? PAL and surgeons something and following features, really Ayon asking of of helpful, for, That's the benefits some the adding Charlie. updated for ultrasound Okay.

Charles Goodwin

absolutely. to answer short is, The that

put is we things more together. of room, to efficient this and faster, We is wanted to procedure asking their to of put procedure make they've all and One else. together all because it got limited. that the the for didn't they want were just everything over have stuff space safer, But

their And easier made so, almost patient every and in more we efficiency. the will is actually and at this drive better we actually for help the that help what look This surgeons you procedure. outcomes. help way, done, needed job will have have the will time staff's reduce This when drive

helps nothing standard of there that tremendously is Renuvion won't these really we platform And care contouring that have area. the of this to goal, these always procedures, surgeons in been body has think out. And so, obviously, that be our this for help and all just

Operator

The Street Markets. line Ben Haynor from of is the next from question Lake Capital

Benjamin Haynor

me, do $X associated First then, in are be mentioned, identified, against charges, any covenant? place? savings be quickly will do the anticipate going on those And off those? charges additional for additional the to the million any count having million cost in that those there how you you been put And do with -- onetime $XX

Charles Goodwin

'XX reductions we've and charges. you been on There just Yes. extra going to No, got cost onetime everything. of are for And no look, 'XX. the just give a level the haven't reductions, cost

an finished his around -- we the believe of correct. that operating year $XX million. Matt my I of think head, CEO math nodding last end is I expense with is

X all that we has no all from the that factored so, way everything. next will And million of into go than $XX more years And year. down the to next been over

had for too. level next this cost on we've year. year, just We're So substantial reductions to carrying another it

Benjamin Haynor

that $X come So, it run in will we benefit and get get out million beyond? current of rate that then and you'll XXXX into sometime the as the quarter

Charles Goodwin

correct. that's Yes,

for charges QX we in million talked 'XX. $X.X is So the related specifically that to that about

Benjamin Haynor

to the or utilization on Okay. that -- Advanced change remainder the guidance did capital utilization, the Got the on the ] of change it. assumption is if side that the inform side, does on and altered it year? stay same Energy less Or for And in the how then, on [ sense? makes mostly

Charles Goodwin

understand growth our of I question. to disposables [ the No, and is stay still the going The Yes. ]. utilization

still said digits the that disposables to is in grow market. we for we equipment capital and still think The the softness that I the remains expect year, low-double same.

Benjamin Haynor

of where And about Okay. of at sounds curious, unit. it Got you impact on you be kind in capital unit then, get year the fantastic into, that, sales things it. XXXX? effect lastly Do for an remainder we new just wait going Ayon But if customers is this quite comes that kind me, until product as Osborne prospective to like think worry the all could I out. this of guess, this

Charles Goodwin

are help going or capital? So, it's if hurt capital to you asking potentially

Benjamin Haynor

help. the I get would the of purchased it of Well, their for the in imagine, by Ayon? sitting meantime, have you But that maybe on next unit certainly folks year, hands do would kind waiting a would end

Charles Goodwin

Yes.

the because becomes customers to be already that we it's when I Ayon. Apyx to Apyx have have to available. And will use remember in to have to doctors able that think the actually just Ayon upgrade the opposite One it One order prioritize

what foresee Apyx would upgrade the And One, Ayon is of then, could comes doctors Ayon lot out, continue happening rest of upgrade the So One using can Renuvion. we we start when and want Apyx the that our a that using to system.

doctors no wait. just that in fact, it's is there reason the And opposite. would So

to they are to and to of talking talk for One businesses, is about opening We new us that to would this, they them, that that. sure make an we reasons practices wanted we've because got the new start is and later are that planning the things too, looking doing want always contouring their year. doctors in and they're know and body their this offering about replicate that option when that come people

So hindrance we don't as any it the run. short see in

it's net-net a probably fact, positive. In

Operator

Goodwin comments. session. I hand and would this his gentlemen, now to closing over concludes conference the Ladies for our question-and-answer Charlie

Charles Goodwin

for for you. much, your Thank it We everybody, the very call. all support. attending you, thanks and Thank appreciate

Operator

your conference has Apyx now The you Thank for Medical concluded. you. of participation. Thank

now your may You disconnect lines.

Apyx Medical (APYX) 8 Nov 242024 Q3 Earnings call transcript