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Apyx Medical Corporation Reports Second Quarter and First Half of 2019 Financial Results and Updates Fiscal Year 2019 Outlook

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Advanced Energy Sales of $5.3 million in Q2, up 69% year-over-year

Apyx Medical Corporation (NASDAQ:APYX) (the "Company"), a maker of medical devices and supplies and the developer of Helium Plasma Technology, marketed and sold as Renuvion® in the cosmetic surgery market and J-Plasma® in the hospital surgical market, today reported financial results for its second quarter ended June 30, 2019.

Second Quarter 2019 Financial Summary:

  • Total Q2 revenue from continuing operations of $6.6 million, up 78% year-over-year.
    • Advanced Energy revenue of $5.3 million, up 69% year-over-year.
    • OEM revenue of $1.3 million, up 125% year-over-year.
  • Total Q2 GAAP net loss from continuing operations of $4.3 million versus total GAAP net loss from continuing operations of $2.9 million for the second quarter of 2018.
  • Total Q2 adjusted EBITDA loss from continuing operations of $3.7 million versus adjusted EBITDA loss from continuing operations of $2.4 million for 2018.

Highlights Subsequent to Quarter End:

  • On July 1, 2019, the Company announced it has been added to the Russell 3000® and Russell 2000® Indexes. The Company's inclusion in the indexes occurred as part of the annual reconstitution by FTSE Russell of its U.S. equity indexes and became effective on July 1, 2019.
  • On July 15, 2019, the Company announced the appointment of four members to its Medical Advisory Board: Dr. Brian M. Kinney, Dr. Paul G. Ruff, Dr. Richard D. Gentile and Dr. Edward M. Zimmerman.
  • On July 31, 2019, the Company announced it has enhanced its clinical and regulatory affairs teams with the appointment of Kari Larson and Libet Garber, Ph.D. to the positions of Senior Director of Clinical Affairs and Director of Global Regulatory Affairs, respectively.
  • On August 5, 2019, the company announced it had received U.S. Food and Drug Administration (FDA) 510(k) clearance to market and sell its next-generation J-Plasma Precise Handpiece.
  • On August 6, 2019, the Company announced it had appointed Minnie Baylor-Henry to its Board of Directors, effective August 1, 2019, where she will be chairing the newly formed Regulatory and Compliance Committee. Ms. Baylor-Henry brings with her more than 20 years of recognized leadership in Regulatory Affairs, including leadership positions at Johnson & Johnson and the U.S. Food and Drug Administration.

Management Comments:

"Apyx Medical is excited to report another quarter of strong revenue growth driven by global demand for our Renuvion generators and handpieces in the cosmetic surgery market," said Charlie Goodwin, President and Chief Executive Officer. "I am particularly pleased with our operating and financial performance in light of the challenges we faced during the second quarter, which was made possible by the hard work and dedication of our organization. During the quarter, we continued to execute on our strategic growth objectives to increase our share of the $1.5 billion U.S. cosmetic surgery market, penetrate existing international markets and expand into new countries with strong demand from cosmetic surgeons for our highly differentiated Renuvion technology. Importantly, we also made excellent progress in our pursuit of new clinical indications for Renuvion in the U.S., with the submission in late July of an investigational device exemption, or IDE, application for a new study evaluating the use of Renuvion in dermal resurfacing procedures. We remain committed to taking a methodical approach to obtaining new clinical indications for our Renuvion technology, supported by the strategic insight and efforts of our recently enhanced clinical and regulatory affairs teams."

Mr. Goodwin continued: "We are raising our 2019 revenue, net loss and adjusted EBITDA loss guidance range based upon the stronger than expected financial results that we have achieved in the second quarter and outlook for the rest of 2019. As we enter the second half of 2019, we will continue to pursue our strategic initiatives and make targeted investments in order to deliver strong, sustained growth and profitability in the years to come. Looking ahead, with truly innovative technologies, a solid balance sheet and an entire organization dedicated to supporting our surgeon customers and improving patient outcomes, we remain convinced that Apyx Medical is uniquely positioned to reshape the cosmetic surgery market, while delivering attractive returns for our shareholders."

Second Quarter 2019 Results:

The following table represents revenue from continuing operations by reportable segment:

 

Three Months Ended

June 30,

 

Increase/Decrease

 

Six Months Ended

June 30,

 

Increase/Decrease

(In thousands)

2019

 

2018

 

$ Change

 

% Change

 

2019

 

2018

 

$ Change

 

% Change

Advanced Energy

$

5,269

 

$

3,113

 

$

2,156

 

69.3

%

 

$

9,640

 

$

5,742

 

$

3,898

 

67.9

%

OEM

1,299

 

578

 

721

 

124.7

%

 

2,751

 

1,346

 

1,405

 

104.4

%

Total

$

6,568

 

$

3,691

 

$

2,877

 

77.9

%

 

$

12,391

 

$

7,088

 

$

5,303

 

74.8

%

Total revenue from continuing operations for second quarter 2019 increased $2.9 million, or 77.9%, to $6.6 million, compared to $3.7 million in the second quarter of 2018. Sales of the Company's Advanced Energy generators and handpieces drove the increase in total revenue in second quarter 2019, with OEM segment sales contributing modestly to the year-over-year increase in total revenue from continuing operations during the second quarter 2019 period. Advanced Energy segment sales increased $2.2 million, or 69.3% year-over-year, to $5.3 million, compared to $3.1 million last year. OEM segment sales increased $0.7 million, or 124.7% year-over-year, to $1.3 million, compared to $0.6 million last year.

 

Three Months Ended

June 30,

 

Increase/Decrease

 

Six Months Ended

June 30,

 

Increase/Decrease

(In thousands)

2019

 

2018

 

$ Change

 

% Change

 

2019

 

2018

 

$ Change

 

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