Apyx Medical(US:APYX)2023-08-12 16:09Financial Data and Key Metrics Changes - Total revenue for Q2 2023 increased by 32% year-over-year to $13.6 million, driven by Advanced Energy product sales which grew 40% year-over-year to $11.7 million [6][19] - Gross profit for Q2 2023 increased by $2.4 million or 34% year-over-year to $9.3 million, with a gross profit margin of 68.4% compared to 67.2% in the prior year [19] - Net loss attributable to stockholders decreased by $4.4 million or 82% year-over-year to $1 million, or $0.03 per share [21] Business Line Data and Key Metrics Changes - Advanced Energy sales increased 40% year-over-year and 21% quarter-over-quarter, with U.S. sales growing 38% year-over-year [7][8] - OEM sales decreased 4% year-over-year to $1.8 million, but exceeded expectations by approximately $400,000 [6] - The company achieved a $2 million reduction in operating loss year-over-year in Q2, excluding a $2.7 million gain from a sale leaseback transaction [17] Market Data and Key Metrics Changes - International Advanced Energy sales were impacted by safety communications, but there was strong growth in generator sales in Latin America and the Asia-Pacific region [9][10] - U.S. Advanced Energy sales were the primary driver of growth, with strong demand from existing users following the launch of the Apyx One console [8][10] Company Strategy and Development Direction - The company is focused on expanding clinical indications for Renuvion technology and enhancing its product portfolio, including the recent 510(k) clearance for the Renuvion micro handpiece [11][15] - Apyx Medical aims to position itself for sustainable profitability and strong free cash flow generation while expanding its share in the cosmetic surgery market [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving continued growth in Advanced Energy sales, driven by recent regulatory clearances and improved market conditions [28] - The company reaffirmed its 2023 revenue guidance of $59 million to $62 million, representing growth of approximately 33% to 39% year-over-year [23] Other Important Information - The company received an $8.1 million payment from the IRS for cash tax refunds, enhancing its balance sheet condition [18][22] - The limited market release of the Renuvion micro handpiece commenced at the end of July, with a full commercial launch targeted for Q4 2023 [16] Q&A Session Summary Question: What was the magnitude of the international softness in the quarter? - Management noted that international handpiece sales were lower than expected due to timing of distribution orders, but they anticipate these orders in the back half of 2023 [32][34] Question: What lift can be expected from the micro handpiece this year? - The micro handpiece is expected to provide a nice addition to the portfolio, particularly for smaller areas of treatment, with benefits anticipated more significantly in 2024 [35][37] Question: What has been the feedback from customers regarding the Apyx One console? - Initial feedback has been positive, highlighting advanced features such as touchscreen functionality and cloud connectivity, which have resonated well with surgeons [40][42] Question: How did utilization trend with liposuction versus standalone? - Management indicated a notable uptick in U.S. adoption following the FDA safety communication update in May, but specific trend data was not available [46][47] Question: Are there plans for seeking other incremental OUS approvals? - The company is still pursuing approvals in South Korea and China, but no new registrations were obtained in Q2 [58][59]