Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $14.2 million, a decrease of 3% compared to $14.7 million in Q4 2023 [7][23] - Gross profit for Q4 2024 increased to $9 million, with a gross profit margin of 63.0%, up from 60.9% in the prior year [25] - Net loss attributable to stockholders was $4.6 million or $0.12 per share for Q4 2024, compared to a net loss of $9.6 million or $0.28 per share in Q4 2023 [28] Business Segment Data and Key Metrics Changes - Advanced Energy segment revenue was flat at approximately $12.1 million, with a 30% increase compared to Q3 2024 [8][24] - OEM segment sales decreased by 16% to approximately $1.6 million in Q4 2024 compared to Q4 2023 [24] - Domestic revenue increased by 1% year-over-year to $10.6 million, while international revenue decreased by 8% to $3.7 million [25] Market Data and Key Metrics Changes - The aesthetic market has faced challenges due to the macroeconomic environment and the adoption of GLP-1 drugs, which have diverted discretionary spending [9][10] - The company believes that patients who have lost weight due to GLP-1 drugs will seek surgical solutions, positioning the Renuvion system favorably [11][12] Company Strategy and Development Direction - The company is focusing on the launch of the AYON Body Contouring System, expected in the second half of 2025, which integrates multiple surgical technologies [16][18] - Apyx Medical aims to capitalize on the growing demand for surgical aesthetics, particularly for patients experiencing skin laxity after significant weight loss [12][60] - A restructuring program was implemented to reduce U.S. workforce by nearly 25%, aiming for annualized cost savings of approximately $4.3 million [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the momentum in the Advanced Energy segment and the potential for growth in 2025 [8][9] - The company anticipates total revenue for 2025 to be in the range of $47.6 million to $49.0 million, reflecting a slight increase from 2024 [30] - Management noted that the aesthetic space is experiencing disruption due to the impact of GLP-1 drugs, which could benefit companies with the right technologies [62] Other Important Information - The company completed a registered direct offering with net proceeds of approximately $6.8 million to strengthen its balance sheet [21] - Cash and cash equivalents as of December 31, 2024, were $31.7 million, down from $43.7 million a year earlier [29] Q&A Session Summary Question: Confirmation of gross margin for 2025 - Management confirmed that they expect gross margins to be around 60% for 2025 [34][35] Question: Timing and revenue expectations for AYON - Management indicated that the guidance for AYON has not been updated despite the earlier submission for FDA approval, and revenue expectations remain conservative [40][41] Question: Changes in direct-to-consumer campaign and future outlook - Management highlighted the success of the DTC campaign and the importance of addressing the needs of patients experiencing skin laxity due to weight loss [50][52] Question: Domestic vs. international market performance - Management noted that the U.S. market is performing better due to early adoption of GLP-1 drugs, with expectations for similar trends internationally [56][58] Question: Adoption of GLP-1s and utilization of Renuvion - Management reported growth in handpiece sales in the U.S. and noted that surgical practices are adapting to treat patients with skin laxity effectively [66][70] Question: Upgrades for the Apyx One Console - Management stated that there is still a significant number of customers who need to upgrade to the Apyx One Console before AYON's launch [72][75]

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $14.2 million, a slight decrease of 3% compared to $14.7 million in Q4 2023 [7][23] - Gross profit for Q4 2024 increased to $9 million, with a gross profit margin of 63.0%, up from 60.9% in the prior year [25] - Net loss attributable to stockholders was $4.6 million or $0.12 per share for Q4 2024, compared to $9.6 million or $0.28 per share in Q4 2023 [28] Business Segment Data and Key Metrics Changes - Advanced Energy segment revenue was flat at approximately $12.1 million, with a 30% growth compared to Q3 2024 [8][24] - OEM segment sales decreased by 16% to approximately $1.6 million in Q4 2024 compared to Q4 2023 [24] - Domestic revenue increased by 1% year-over-year to $10.6 million, while international revenue decreased by 8% to $3.7 million [25] Market Data and Key Metrics Changes - The aesthetic market has faced softness due to macroeconomic factors and the adoption of GLP-1 drugs, which have diverted discretionary spending [9][10] - The company anticipates a surge in demand for surgical solutions as patients who have lost weight from GLP-1 drugs seek treatments for loose skin [11][12] Company Strategy and Development Direction - The company is focusing on the launch of the AYON Body Contouring System, expected in the second half of 2025, which integrates multiple surgical technologies [16][18] - Apyx Medical aims to position itself as a leader in surgical aesthetics, leveraging its proprietary technology and direct-to-consumer marketing strategies [12][15] Management's Comments on Operating Environment and Future Outlook - Management noted that the aesthetic space is undergoing significant changes due to the impact of GLP-1 drugs, which have disrupted traditional non-invasive procedures [61][62] - The company believes that its Renuvion system is uniquely positioned to meet the needs of patients post-weight loss, and it expects to see growth in surgical procedures as a result [11][12] Other Important Information - A restructuring program was implemented, reducing the U.S. workforce by nearly 25%, expected to yield annualized cost savings of approximately $4.3 million [20][21] - The company completed a registered direct offering with net proceeds of approximately $6.8 million to strengthen its balance sheet [21] Q&A Session Summary Question: Confirmation of gross margin for 2025 - Management confirmed that they expect gross margins to be around 60% for 2025, similar to 2024 [35][37] Question: Timing and revenue expectations for AYON - Management indicated that the guidance for AYON has not been updated despite the earlier submission for FDA approval, and revenue expectations remain conservative [40][42] Question: Success of direct-to-consumer campaign - Management highlighted that the direct-to-consumer campaign has significantly exceeded expectations, driven by the unique needs of patients experiencing skin laxity post-weight loss [52][53] Question: Domestic vs. international market performance - Management noted that the U.S. market is performing better due to early adoption of GLP-1 drugs, and they expect similar trends to emerge internationally [56][58] Question: Adoption of GLP-1s and utilization of Renuvion - Management reported growth in handpiece sales in the U.S. and noted that surgical practices are adapting to meet the needs of patients with skin laxity [67][70] Question: Upgrades for the Apyx One Console - Management stated that there is still a significant number of customers who need to upgrade to the Apyx One Console, and they plan to offer special pricing for existing customers [75]

Financial Results - Apyx Medical Corporation reported preliminary revenue results for Q4 and the year ended December 31, 2024[5] - The press release detailing these results was issued on January 13, 2025[5] Company Information - The company is listed on the Nasdaq Global Select Market under the trading symbol APYX[3] - Apyx Medical Corporation has not elected to use the extended transition period for new financial accounting standards[4] Reporting Format - The report includes a cover page interactive data file embedded within the Inline XBRL document[8]

Core Insights - Apyx Medical Corporation reported financial results for Q4 and the full year 2024, highlighting a decrease in total revenue but improved operational metrics and strategic initiatives [1][5][14]. Financial Performance - Total revenue for Q4 2024 was $14.2 million, a decrease of 3% from $14.7 million in Q4 2023 [8]. - Advanced Energy segment revenue was approximately $12.1 million, remaining flat year-over-year, while OEM segment revenue decreased by 16% to $2.1 million [5][8]. - For the full year 2024, total revenue decreased by 8% to $48.1 million compared to $52.3 million in 2023 [14]. Profitability Metrics - Gross profit for Q4 2024 increased slightly to $9.0 million, with a gross profit margin of 63.0%, up from 60.9% in the prior year [9]. - The net loss attributable to stockholders for Q4 2024 was $4.6 million, a significant reduction of 52% from $9.6 million in Q4 2023 [12]. - Adjusted EBITDA loss for Q4 2024 was $2.2 million, down from $4.7 million in the same period last year [13]. Operational Highlights - The company experienced a 5% increase in single-use handpiece units shipped in Q4 2024, with a notable 20% increase in the U.S. market compared to the previous year [4]. - Apyx Medical submitted a 510(k) premarket notification for the AYON Body Contouring System to the FDA ahead of schedule, with plans for a launch in the latter half of 2025 [4][20]. Cost Management - Operating expenses decreased to $12.0 million in Q4 2024, down from $14.7 million in the prior year, driven by reductions in various expense categories [10][16]. - The company implemented a cost-saving restructuring program, reducing its U.S. workforce by nearly 25%, which is expected to yield annualized savings of approximately $4.3 million [5][10]. Future Outlook - For 2025, the company projects total revenue in the range of $47.6 million to $49.0 million, with Advanced Energy revenue expected between $39.6 million and $41.0 million [20]. - Operating expenses are anticipated to remain below $40.0 million for the year [20].

Group 1 - Apyx Medical Corporation will release its financial results for the fourth quarter and fiscal year 2024 on March 13, 2025, before the market opens [1] - A conference call will be held on the same day at 8:30 a.m. Eastern Time to discuss the financial results and include a question-and-answer session [2] - The company specializes in advanced energy technology, particularly its proprietary helium plasma and radiofrequency technology marketed as Renuvion and J-Plasma [3] Group 2 - Renuvion and J-Plasma provide surgeons with the ability to deliver controlled heat to tissue, supported by over 90 clinical documents [3] - Apyx Medical has established OEM agreements with other medical device manufacturers, leveraging its expertise in unique waveforms [3]

Core Insights - Apyx Medical Corporation reported preliminary revenue results for Q4 and full year 2024, indicating a strong performance in the Advanced Energy segment with over 25% sales growth quarter-over-quarter [2][4] - The company anticipates launching the AYON™ Body Contouring System in the second half of 2025, pending FDA clearance, which is expected to enhance its position in the surgical aesthetics market [4] Preliminary Fourth Quarter 2024 Revenue Summary - Total revenue is expected to be in the range of approximately $14.1 to $14.3 million, representing a decrease of 4% to 3% year-over-year [6] - Advanced Energy revenue is expected to be in the range of approximately $12.0 to $12.2 million, which is relatively flat year-over-year [6] - OEM revenue is expected to be approximately $2.1 million, representing a decrease of 17% year-over-year [6] Preliminary Full Year 2024 Revenue Summary - Total revenue is expected to be in the range of approximately $48.0 to $48.2 million, representing a decrease of 8% year-over-year [6] - Advanced Energy revenue is expected to be in the range of approximately $38.5 to $38.7 million, representing a decrease of 11% year-over-year [6] - OEM revenue is expected to be approximately $9.5 million, representing growth of 6% year-over-year [6] Management Comments - The company expressed satisfaction with its financial performance in Q4 2024, highlighting improved U.S. capital sales and a doubling of generator unit sales compared to the first half of 2024 [4] - There is an increasing demand for treatments addressing loose and lax skin, partly due to significant patient weight loss from GLP-1 drugs, which the company aims to capitalize on [4]

Core Viewpoint - Apyx Medical Corporation has submitted a 510(k) premarket notification to the FDA for its AYON Body Contouring System, which aims to revolutionize body contouring procedures by providing an all-in-one solution for surgeons [1][2][4]. Product Development - The AYON Body Contouring System is designed to be versatile and innovative, integrating multiple advanced modalities to perform functions such as fat removal, tissue contraction, and aesthetic enhancement [2]. - The company plans to expand the indications for AYON with an additional 510(k) submission later in the year to include power-assisted liposuction [3]. Company Positioning - The AYON Body Contouring System is expected to differentiate Apyx Medical in the aesthetic surgical market, positioning the company as a premier provider in this field [4]. - The announcement of the submission was made approximately 90 days earlier than anticipated, highlighting the efficiency of the company's research, development, quality, and regulatory teams [4]. Company Background - Apyx Medical Corporation specializes in advanced energy technology, particularly its Helium Plasma Platform Technology products marketed as Renuvion and J-Plasma, which provide controlled heat to tissue for surgical procedures [5]. - The effectiveness of Renuvion and J-Plasma is supported by over 90 clinical documents, showcasing the company's commitment to innovation and clinical validation [5].

Core Viewpoint - Apyx Medical Corporation is actively engaging with investors by attending the 15th Annual Craig-Hallum Alpha Select Conference on November 19, 2024, in New York City, highlighting its commitment to investor relations and market presence [1]. Company Overview - Apyx Medical Corporation specializes in advanced energy technology, focusing on innovative products such as the Helium Plasma Platform Technology, marketed as Renuvion in the cosmetic surgery market and J-Plasma in the hospital surgical market [2]. - The Renuvion and J-Plasma technologies provide surgeons with the capability to deliver controlled heat to tissue, enhancing surgical outcomes, supported by over 90 clinical documents [2]. - The company also engages in OEM agreements with other medical device manufacturers, leveraging its expertise in unique waveforms [2].

Workforce Reduction and Cost Savings - The company reduced its US workforce by nearly 25% and expects annualized future cost savings of approximately $4.3 million from this reduction[70]. - The company plans to reduce annual operating expenses below $40 million in 2025 through identified cost savings[71]. - The company incurred pre-tax charges of approximately $0.6 million in the fourth quarter of 2024 due to the organizational changes[70]. Revenue and Sales Performance - Total revenue decreased by 4.1%, or approximately $0.5 million, for the three months ended September 30, 2024, compared to the same period in 2023[75]. - Advanced Energy segment sales decreased by 15.2%, or approximately $4.7 million, for the nine months ended September 30, 2024, compared to the same period in 2023[76]. - The OEM segment sales increased by 14.5%, or approximately $0.9 million, for the nine months ended September 30, 2024, compared to the same period in 2023[76]. - International sales represented approximately 32.2% of total revenues for the three months ended September 30, 2024, compared to 27.8% for the same period in the prior year[77]. Profitability and Expenses - Gross profit for the three months ended September 30, 2024, decreased 12.8% to $6.95 million, with a gross margin of 60.5%[79]. - Research and development expenses decreased 18.9% for the three months ended September 30, 2024, primarily due to lower compensation and benefits costs[81]. - Research and development expenses decreased by 1.8% for the nine months ended September 30, 2024, primarily due to lower compensation and benefits costs of $0.1 million[82]. - Professional services expense decreased by 10.0% for the three months ended September 30, 2024, primarily due to decreases in accounting and audit fees, board of director's stock-based compensation, and recruiting expenses totaling $0.4 million[82]. - Salaries and related expenses decreased by 22.6% for the three months ended September 30, 2024, primarily due to a decrease in bonus expense of $0.8 million[85]. - Selling, general and administrative (SG&A) expenses decreased by 11.4% for the three months ended September 30, 2024, primarily due to decreases in commissions and advertising expenses totaling $0.4 million[87]. Cash Flow and Financing - Net cash used in operating activities for the nine months ended September 30, 2024, was approximately $15.1 million, primarily funding a loss from operations of $15.8 million[97]. - At September 30, 2024, the company had approximately $28.0 million in cash and cash equivalents, down from approximately $43.7 million at December 31, 2023[96]. - The company plans to continue funding operations through existing cash, product sales, and potentially additional equity or debt financing, but there is uncertainty regarding the availability of such financing[100]. - The company closed a $7.0 million registered direct offering, issuing 3,000,000 shares of common stock and 2,934,690 prefunded warrants with an exercise price of $0.001 per share[105]. - The company issued 150,000 shares of common stock in connection with the amendment to the Perceptive Credit Agreement[103]. Financial Covenants and Agreements - The amendment to the Perceptive Credit Agreement reduced the financial covenant trailing twelve-month revenue targets for the Advanced Energy segment to $34.4 million for 2024, $37.0 million for 2025, $52.4 million for 2026, and $60.3 million for 2027[102]. - A maximum operating expense financial covenant was introduced with full year targets of $40.0 million for 2025 and $45.0 million for 2026[102]. - As of September 30, 2024, the company was in compliance with the financial covenants of the Perceptive Credit Agreement, as amended[102]. Inventory and Receivables Management - The company maintains a reserve for uncollectible accounts receivable, analyzing historical bad debt experience and the composition of outstanding receivables[111]. - A reserve for excess and obsolete inventory is maintained, reflecting the potential inability to sell products at prices exceeding current carrying costs[112]. - The company recorded a valuation allowance on net deferred tax assets due to historical losses and expectations of continued losses in the near future[115]. Market Conditions and Challenges - Inflation and global supply chain instability are being addressed through initiatives such as finding alternative suppliers and streamlining the supplier network[117]. Interest Income and Expense - Interest income increased by approximately $0.1 million and $0.8 million for the three and nine months ended September 30, 2024, respectively, due to a higher average balance in investments[91]. - Interest expense increased by approximately $0.8 million and $2.9 million for the three and nine months ended September 30, 2024, respectively, due to cash and noncash interest expense on the Perceptive Credit Agreement[92]. Other Financial Highlights - Gain on sale-leaseback for the nine months ended September 30, 2023, was approximately $2.7 million, resulting from the sale and leaseback of the Clearwater, FL facility[89]. - Purchase commitments totaled approximately $2.7 million, expected to be purchased within the next twelve months[105].

Financial Data and Key Metrics Changes - The company reported total revenue of $11.5 million for Q3 2024, a decrease of 4% compared to $12 million in Q3 2023 [16][22] - Advanced Energy products sales decreased 6% year-over-year to $9.3 million, primarily due to soft generator capital sales [16][22] - Gross profit for Q3 2024 decreased by $1 million or 13% to $7 million, with a gross profit margin of 60.5% compared to 66.6% in the prior year [23] - Net loss attributable to shareholders was $4.7 million or $0.14 per share, compared to $4.6 million or $0.13 per share in the prior year [25] Business Line Data and Key Metrics Changes - Disposable handpiece revenue grew 9% overall and 15% in the United States, now accounting for more than 60% of total Advanced Energy revenue [17][19] - OEM segment sales increased by 3% to approximately $0.1 million in Q3 2024 compared to Q3 2023, driven by increased sales volumes to existing customers [22] Market Data and Key Metrics Changes - The company noted that the macroeconomic environment and the introduction of GLP-1 drugs have negatively impacted procedural volumes, leading to a postponement of aesthetic procedures [16][18] - The company anticipates that the growing population on GLP-1 drugs will create a significant tailwind for Renuvion, the only FDA-approved solution for loose skin [19] Company Strategy and Development Direction - Apyx Medical is implementing an organizational restructuring, reducing its US workforce by nearly 25% to streamline operations and focus resources [7][9] - The company is developing the Ayon body contouring system, which integrates multiple technologies into a single device, aiming for FDA submission by the end of Q1 2025 and a launch in the second half of 2025 [20][31] - Apyx Medical plans to enhance its direct-to-consumer marketing strategy to increase awareness of Renuvion and educate patients on treatment options [19][38] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to growth, citing the potential of the Ayon platform and the expected recovery in the capital equipment market [10][28] - The company anticipates total revenue for 2024 to be in the range of $46.6 million to $47.6 million, representing a decrease of approximately 11% to 9% year-over-year [28][31] Other Important Information - The company announced a $7 million registered direct cash investment from Nantahala Capital Management to strengthen its balance sheet [13][26] - Apyx Medical has amended its credit agreement with Perceptive Advisors, reducing revenue covenants and adding operating expense covenants for 2025 and 2026 [13][26] Q&A Session Summary Question: Where will the growth for Advanced Energy come from in 2025? - Management indicated that growth is expected to come from continued handpiece growth and some contribution from Ayon in the latter half of the year [33] Question: Can you elaborate on the Ayon product and its market potential? - Management described Ayon as a game changer that integrates various technologies, with a focus on making surgical procedures safer and more efficient [34][40] Question: How is the company positioning for growth in 2025 amidst changing market conditions? - Management highlighted an increase in direct-to-consumer marketing efforts and a focus on educating patients about treatment options [38] Question: What are the implications of the reduction in force? - The reduction was across the board, aimed at right-sizing the organization to focus on profitability [44] Question: Will Ayon cannibalize the Renuvion market? - Management clarified that Ayon will not replace Renuvion but will enhance the offerings for existing customers who have the Apyx One generator [39][40] Question: How quickly will the identified cost savings be implemented? - Management confirmed that the cost savings will be realized in the current quarter, with no additional one-time charges expected [49]