Apyx Medical(US:APYX)2024-03-21 14:12Financial Data and Key Metrics Changes - Total revenue in Q4 2023 increased 16% year-over-year to $14.7 million, driven by Advanced Energy products which grew 15% to $12.1 million and OEM products which increased 22% to $2.5 million [7][10] - Gross profit for Q4 2023 increased by $0.7 million or 8% to $8.9 million, with a gross profit margin of 60.9%, down from 65.3% in the prior year [23] - Net loss attributable to stockholders increased 59% to $9.6 million or $0.28 per share in Q4 2023 compared to $6 million or $0.17 per share in Q4 2022 [25] Business Line Data and Key Metrics Changes - Advanced Energy sales growth was driven by over 25% growth in generator sales and over 10% growth in handpiece sales [7][10] - U.S. Advanced Energy sales growth was primarily from handpieces, which increased by more than 35% year-over-year, while generator sales increased by more than 15% [8][9] - International sales of generators increased by over 80% year-over-year, although handpiece sales decreased by more than 15% [9] Market Data and Key Metrics Changes - The capital equipment environment for cosmetic surgery remains challenging, with prospective customers delaying purchases due to macroeconomic uncertainty and high interest rates [11][12] - The cosmetic surgery market is expected to see continued growth, with liposuction procedures increasing by 21% year-over-year to an estimated 2.3 million in 2022 [32] Company Strategy and Development Direction - The company aims to expand its presence in the global cosmetic surgery market by focusing on new clinical indications, enhancing its product portfolio, and managing expenses while driving towards profitability [21][33] - The introduction of the Renuvion Micro Handpiece is expected to enhance the product offering and drive adoption of the Apyx One generator system [15][19] Management's Comments on Operating Environment and Future Outlook - Management noted that while the capital equipment purchasing environment is challenging, customer utilization remains strong, particularly for handpieces [30][31] - The company anticipates a 40% decrease in Advanced Energy revenue in Q1 2024 compared to Q4 2023, with expectations for improvement in the second half of the year [31] Other Important Information - The company secured a new five-year agreement for up to $45 million in senior secured loans, enhancing its financial flexibility [20] - The company has $44 million in cash and equivalents at year-end, which is deemed sufficient to fund its initiatives [21] Q&A Session All Questions and Answers Question: Can you provide more details on the revenue guidance for 2024? - Management indicated that the guidance reflects a challenging capital equipment purchasing environment, with expectations for a sequential ramp in revenue throughout the year [36][37] Question: What are the drivers behind the gross margin headwinds? - Management explained that the decrease in gross margin was primarily due to inventory cleanup and changes in product and customer mix, with expectations for a gross margin of about 61% in 2024 [42][44] Question: How is the company addressing the capital equipment purchasing challenges? - Management mentioned ongoing evaluations of pricing strategies and financing options to encourage new customer adoption of generators [51][52] Question: Are there any new international clearances expected to contribute to revenue? - Management confirmed that the guidance does not assume material contributions from new countries in 2024, although they are working on approvals in Korea and China [53][54] Question: How is the company leveraging its DTC initiatives? - Management stated that the DTC initiatives are aimed at increasing awareness among both consumers and physicians regarding the benefits of Renuvion technology [58][59]