Apyx Medical(US:APYX)2023-03-16 15:30Financial Data and Key Metrics Changes - Total revenue in Q4 2022 decreased 25% year-over-year to $12.6 million, approximately $300,000 below the low end of guidance [6][24] - Gross profit for Q4 2022 decreased $3.9 million or 32% year-over-year to $8.2 million, with a gross profit margin of 65.3% compared to 72.2% in the prior year [24][25] - Net loss attributable to stockholders was $6 million or $0.17 per share, compared to $2 million or $0.06 per share for Q4 2021 [27] Business Line Data and Key Metrics Changes - Advanced Energy sales decreased 30% year-over-year to $10.5 million, while OEM sales increased 15% year-over-year to $2.1 million [7][24] - Global generator sales decreased nearly 50% year-over-year, with U.S. generator sales down more than 40% year-over-year [8][9] - International handpiece sales saw year-over-year growth in Q4, particularly in Latin America, Europe, and APAC [10] Market Data and Key Metrics Changes - U.S. Advanced Energy product sales decreased by more than 30% year-over-year, while international generator sales decreased by more than 60% year-over-year [9][10] - The installed base and active installed base in the U.S. grew by 20% year-over-year despite the challenges [9] Company Strategy and Development Direction - The company is focused on advancing its regulatory strategy to secure additional 510(k) clearances and improve marketing capabilities [14][37] - Apyx Medical launched its first direct-to-consumer brand campaign titled "This is Me" to raise awareness of Renuvion technology [18] - The company aims to enhance its product portfolio with the new Apyx One Console, designed for improved functionality and user experience [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue growth of 30% to 37% year-over-year for 2023, driven by Advanced Energy growth [29][35] - The company anticipates improving trends in generator and handpiece sales as it raises awareness of Renuvion technology [36][38] - Management emphasized the importance of driving cash flow from operations as a priority for 2023 [38] Other Important Information - The company expects to end 2023 with at least $18 million in cash and cash equivalents [33] - Apyx Medical has secured a new five-year credit facility of up to $35 million to enhance its financial position [20][22] Q&A Session Summary Question: Can you discuss the guidance for the year, especially in light of Q1 commentary? - Management expressed confidence in achieving at least 36% growth due to multiple tailwinds, including new marketing efforts and product launches [41][42] Question: What is the expected replacement cycle for the Apyx One generator? - The upgrade will be a new revenue source, and the company plans to fully sell the Apyx One by year-end [44][46] Question: What feedback has been received from the new marketing campaigns? - Initial feedback from the "This is Me" campaign has been very positive, resonating well with both consumers and surgeons [48][49] Question: What are the catalysts for recovery in OUS markets? - Management noted that understanding the safety communication has improved distributor confidence, leading to stronger sales in Latin America [51][52] Question: Does the recent 510(k) clearance cover use after liposuction? - The new clearance allows for the contraction of soft tissue, and the company is working with the FDA to clarify its implications [55][56] Question: Is the cash balance sufficient to alleviate going concern issues? - Management believes that the expected cash balance, along with discrete items, will alleviate the risk of going concern [57][59]