Apyx Medical(US:APYX)2019-05-11 06:56Financial Data and Key Metrics Changes - Total revenue for Q1 2019 was $5.8 million, representing a 71% year-over-year growth compared to $3.4 million in Q1 2018 [7][26] - Gross profit increased by $1.5 million or 68% year-over-year to $3.7 million, with a gross margin of 63.9% compared to 65.1% in the prior year [28][29] - Operating expenses rose by $4 million or 81% year-over-year to $8.9 million, leading to a loss from operations of $5.2 million compared to a loss of $2.7 million in Q1 2018 [30][31] - Net loss from continuing operations was $4.7 million or $0.14 per diluted share, compared to a net loss of $2.8 million or $0.08 per diluted share in the prior year [30][31] - Adjusted EBITDA for Q1 2019 was $4.2 million, compared to an adjusted EBITDA loss of $2.1 million in Q1 2018 [30] Business Line Data and Key Metrics Changes - Advanced Energy segment sales increased by $1.7 million or 66% year-over-year to $4.4 million, accounting for approximately 75% of total revenue [26][27] - OEM segment sales increased by $684,000 or 89% year-over-year to $1.4 million, representing 25% of total revenue [26][27] Market Data and Key Metrics Changes - U.S. sales increased by $1.3 million or 49% year-over-year to $4.1 million, while international sales increased by $1.1 million or 169% year-over-year to $1.7 million [27] - International revenue represented approximately 30% of total sales in Q1 2019, compared to 19% in Q1 2018 [27] Company Strategy and Development Direction - The company is focused on four strategic initiatives: formalizing regulatory strategy, securing new clinical evidence, enhancing physician support, and improving manufacturing capabilities [18][20] - The company aims to expand its geographic footprint by obtaining regulatory clearance in new countries, particularly those with growing cosmetic surgery markets [19] - The company plans to develop and submit a new investigational device exemption (IDE) application for Renuvion, focusing on improving clinical outcomes [17][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the Advanced Energy business, driven by generator adoption and handpiece utilization in the U.S. and international markets [35][36] - The company anticipates total revenue for 2019 in the range of $25.5 million to $26.5 million, representing growth of 53% to 59% year-over-year [31][32] - Management acknowledged disappointment regarding the FDA submission setback but remains committed to pursuing 510(k) clearance for dermal resurfacing [16][17] Other Important Information - The company had cash and cash equivalents of $32.4 million and short-term investments of $40.9 million as of March 31, 2019 [31] - The company is focused on a $1.5 billion addressable market in the U.S. for its Renuvion technology, with an annual recurring revenue component of over $170 million [36] Q&A Session Summary Question: What is the timeline for submitting new applications for international markets? - Management indicated that the timeline varies by country and confirmed that Mexico and Canada have been registered for their cosmetic technology [40][41] Question: Do you have distributors in place for Mexico and Canada? - Management confirmed that distributors are already established in those countries and that orders were received in Q1 [42] Question: What are the expectations for gross margins moving forward? - Management stated that they do not provide quarterly guidance on gross margins, emphasizing annual expectations instead [44] Question: How many sales reps are needed to target key practices in the U.S.? - Management noted an increase in the sales force to 28 and expressed satisfaction with the current number for 2019 [46] Question: Will there be more clinical data generated for Renuvion? - Management confirmed ongoing efforts to generate clinical data and indicated that this will be a continuous focus [48] Question: What is the expected cash loss based on the forecasted net loss? - Management indicated that the cash loss would be close to the adjusted EBITDA figure, estimated around $19 million [55]