• Total Revenue: $11.5 million, a decrease of 4% compared to $12 million in the same period last year.
• Advanced Energy Products Revenue: Decreased 6% year over year to $9.3 million.
• Disposable Handpiece Revenue: Grew 9% overall and 15% in the United States.
• OEM Segment Sales: Increased 3% to approximately $0.1 million.
• Gross Profit: Decreased 13% to $7 million.
• Gross Margin: 60.5%, down from 66.6% in the prior year period.
• Operating Expenses: Decreased 16% to $10.6 million.
• Net Loss Attributable to Shareholders: $4.7 million or 14 per share.
• Adjusted EBITDA Loss: Decreased 20% to $2.4 million.
• Cash and Cash Equivalents: $28 million as of September 30, 2024.
• 2024 Revenue Guidance: $46.6 million to $47.6 million, a decrease of 11% to 9% year over year.
• 2025 Revenue Guidance: $47.6 million to $49.5 million, growth of 2% to 6% year over year.

• Warning! GuruFocus has detected 4 Warning Signs with APYX.

Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Apyx Medical Corp (NASDAQ:APYX) announced a strategic restructuring to streamline operations and focus resources, which is expected to extend their financial runway into 2027.
• The company reported a 9% growth in disposable handpiece revenue overall and 15% growth in the United States, indicating strong demand for their consumable products.
• Apyx Medical Corp (NASDAQ:APYX) is in the final stages of developing the Aon body contouring system, which integrates multiple technologies into a single device, potentially positioning the company as a leader in surgical aesthetics.
• The company received a $7 million direct cash investment from Manta Harla Capital Management, strengthening its balance sheet and validating the potential of its technology.
• Apyx Medical Corp (NASDAQ:APYX) has launched a direct-to-consumer strategy to increase awareness of its Renuvion technology, leveraging key influencers and lifestyle expos to boost visibility.

Negative Points

• Total revenue for the third quarter decreased by 4% year-over-year, primarily due to a 6% decline in sales of advanced energy products.
• The company reduced its US workforce by nearly 25% as part of its restructuring efforts, indicating significant operational changes and potential impacts on employee morale.
• Apyx Medical Corp (NASDAQ:APYX) reported a net loss attributable to shareholders of $4.7 million, slightly higher than the previous year's loss of $4.6 million.
• The company is facing macroeconomic challenges, including the impact of GLP-1 drugs on procedural volumes, which is expected to continue affecting capital equipment sales.
• Gross profit margin decreased to 60.5% from 66.6% in the prior year period, driven by a decrease in the average selling price of generators and changes in sales mix.

Q & A Highlights

Q: Where is the growth in Advanced Energy expected to come from in 2025? A: Charles D. Goodwin, President and CEO, stated that the growth is expected to come from continued handpiece sales and a little from the Aon platform in the back half of the year. The budget assumes the capital equipment market remains the same as it is currently.

Q: Can you elaborate on the development and impact of the Aon body contouring system? A: Charles D. Goodwin explained that Aon is a comprehensive platform integrating multiple technologies into one device. It is expected to be a game-changer for surgeons, enhancing efficiency and patient outcomes. The system is designed to be the centerpiece of surgical practices, and a 510(k) submission to the FDA is planned for early 2025.

Q: How is Apyx Medical positioning for growth in 2025 amid expectations of falling interest rates? A: Charles D. Goodwin mentioned that the company is focusing on direct-to-consumer campaigns to educate patients about their options for loose skin treatment. Despite a 25% workforce reduction, they are increasing spending on these campaigns to drive growth.

Q: Will the Aon system replace Renuvion, and is there a risk of market cannibalization? A: Charles D. Goodwin clarified that the Aon system will not replace Renuvion. The Aon system requires the APX one generator, which was designed with this integration in mind. The system enhances existing technologies and procedures, offering a comprehensive solution without cannibalizing the Renuvion market.

Q: What are the details and expected impact of the recent workforce reduction? A: Charles D. Goodwin stated that the 25% reduction was across the U.S. operations to right-size the organization and focus on profitability. The Bulgaria facility remains unchanged. The reduction is part of broader cost-saving measures aimed at achieving cash flow break-even.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.