Apyx Medical(US:APYX)2019-08-10 15:53Financial Data and Key Metrics Changes - Total revenue for Q2 2019 was reported at $6.6 million, representing a 78% increase year-over-year from $3.7 million [6][29] - Gross profit increased by approximately $1.9 million or 76% year-over-year to $4.5 million, with a gross margin of 68.1% compared to 68.7% last year [32] - Operating expenses rose by $3.5 million or 63% year-over-year to $8.9 million, primarily due to increases in salaries, professional services, and selling expenses [33] - Net loss from continuing operations for Q2 2019 was $4.3 million or $0.13 per diluted share, compared to a net loss of $2.9 million or $0.09 per diluted share in Q2 2018 [34] Business Line Data and Key Metrics Changes - Advanced Energy segment sales increased by $2.2 million or 69% year-over-year to $5.3 million, accounting for approximately 80% of total revenue [6][30] - OEM segment sales increased by $721,000 or 125% year-over-year to $1.3 million, driven by a manufacturing and supply agreement with Symmetry Surgical [8][30] Market Data and Key Metrics Changes - US sales increased by $1.6 million or 53% year-over-year to $4.5 million, with Advanced Energy sales growing by 33% and OEM sales by 147% [9][32] - International sales increased by $1.3 million or 177% year-over-year to $2 million, representing approximately 31% of total sales compared to 20% in Q2 2018 [10][32] Company Strategy and Development Direction - The company is focused on four strategic initiatives: formalizing regulatory strategy, securing clinical evidence for Renuvion technology, enhancing physician support, and improving manufacturing capabilities [11][12] - The company aims to penetrate existing markets and expand into new countries, particularly those with large cosmetic surgery markets [16][17] - Recent appointments to the regulatory team are expected to bolster the company's long-term regulatory strategy [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the company's performance despite challenges faced early in Q2, highlighting strong execution in May and June [9][28] - The company raised its fiscal 2019 revenue guidance to a range of $26.5 million to $27.5 million, reflecting stronger-than-expected performance [35] - Management remains committed to achieving long-term profitability and believes current cash reserves are sufficient to support growth initiatives [57] Other Important Information - The company received FDA 510(k) clearance for a next-generation laparoscopic handpiece, which is expected to enhance its product offerings [26][27] - The company is focused on improving manufacturing efficiencies, which are anticipated to positively impact financial results [25][36] Q&A Session Summary Question: Update on the size of the sales team - The sales team consists of 29 direct sales reps and six independent agencies, totaling approximately 40 [42][43] Question: Anticipated R&D expense changes - The company plans to maintain total operating expenses at approximately $40 million to $41 million, with most expenses expected in the second half of the year [44][45] Question: Future gross margin expectations - Management anticipates expanding gross margins over the next 3 to 5 years, although specific targets were not provided [46][47] Question: Details on the skin laxity trial - The trial will involve 20 patients, and there is no anticipated overlap with the dermal resurfacing trial sites [49][50] Question: Market entry hurdles for larger cosmetic markets - The company is working through regulatory requirements for each market, which varies by country [61][62] Question: Long-term financial strategy - The company is committed to long-term profitability and believes current cash reserves are adequate for growth [57]