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01/10 17:29
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects a challenging environment for Apyx Medical, with a decline in revenue and international sales, and a net loss despite cost-cutting efforts. The company's restructuring and direct offering indicate financial strain. Although there are plans for new product launches and a direct-to-consumer strategy, the uncertain regulatory approval for AYON and market challenges, such as the impact of GLP-1 drugs, pose significant risks. The sentiment in the Q&A was cautious, with unclear guidance updates, contributing to a negative outlook for the stock.
Total Revenue Q4 2024 $14.2 million, a decrease of 3% compared to $14.7 million in Q4 2023.
Advanced Energy Segment Revenue Q4 2024 $12.1 million, essentially flat year-over-year.
OEM Segment Sales Q4 2024 Decreased 16% or approximately $0.3 million compared to Q4 2023.
Domestic Revenue Q4 2024 Increased 1% year-over-year to $10.6 million.
International Revenue Q4 2024 Decreased 8% year-over-year to $3.7 million.
Gross Profit Q4 2024 $9 million, compared to $8.9 million in Q4 2023.
Gross Profit Margin Q4 2024 63.0%, up from 60.9% in Q4 2023.
Operating Expenses Q4 2024 Decreased to $12 million from $14.7 million in Q4 2023.
Loss from Operations Q4 2024 Decreased 47% to $3 million.
Net Loss Attributable to Stockholders Q4 2024 $4.6 million or $0.12 per share, compared to $9.6 million or $0.28 per share in Q4 2023.
Adjusted EBITDA Loss Q4 2024 Decreased 53% to $2.2 million compared to $4.7 million in Q4 2023.
Cash Used in Operating Activities Q4 2024 Increased to $2.9 million from $2.2 million in Q4 2023.
Cash and Cash Equivalents Q4 2024 $31.7 million, down from $43.7 million as of December 31, 2023.
Annualized Future Cost Savings from Workforce Reduction Estimated at approximately $4.3 million.
Total Operating Expenses for 2025 Anticipated to be below $40 million.
Net Proceeds from Registered Direct Offering Q4 2024 Approximately $6.8 million.
AYON Body Contouring System: Recently submitted 510(k) for AYON Body Contouring System to the FDA, ahead of schedule by nearly 90 days. Planned launch in the back half of 2025.
Market Positioning: Positioning Renuvion as the only FDA cleared device for use following liposuction in body contouring procedures, targeting patients who have lost weight due to GLP-1 drugs.
Workforce Reduction: Restructuring program reduced U.S. workforce by nearly 25%, estimated annualized future cost savings of approximately $4.3 million.
Cost Savings: Identified over $4 million of additional cost savings, anticipating operating expenses below $40 million in 2025.
Direct-to-Consumer Marketing: Executed a successful direct-to-consumer marketing strategy, surpassing media placement goals by 187% and impressions by over 13,000%.
Strengthened Balance Sheet: Completed a registered direct offering with net proceeds of approximately $6.8 million and amended credit agreement with Perceptive Credit Holdings.
Market Challenges: The aesthetic space has faced softness over the last 18 months due to macroeconomic factors and the rapid adoption of GLP-1 drugs for weight loss, leading to patients delaying aesthetic treatments.
Regulatory Risks: The company is preparing for the launch of the AYON Body Contouring System, pending FDA clearance, which poses a risk if the clearance is delayed or not granted.
Supply Chain Challenges: There has been a decrease in sales volumes to existing customers in the OEM segment, indicating potential supply chain or demand issues.
Economic Factors: The financial commitment required for GLP-1 drugs has diverted discretionary funds from patients, impacting their ability to afford aesthetic procedures.
Workforce Reduction: A restructuring program reduced the U.S. workforce by nearly 25%, which may impact operational capacity and employee morale.
Financial Performance: Total revenue decreased by 3% year-over-year, indicating potential challenges in maintaining sales growth.
Cost Management: While the company has identified cost savings of over $4 million, ongoing management of operating expenses is critical to achieving financial stability.
Renuvion System Positioning: Apyx Medical believes its Renuvion system is uniquely positioned to help surgeons capitalize on the wave of GLP-1 patients seeking surgical solutions after significant weight loss.
Direct-to-Consumer Marketing Strategy: The company executed a direct-to-consumer marketing strategy that exceeded expectations, achieving 187% of media placement goals and over 13,000% of impressions goals.
AYON Body Contouring System Submission: Apyx submitted its 510(k) for the AYON Body Contouring System to the FDA ahead of schedule, with a planned launch in the back half of 2025.
Restructuring Program: In November 2024, Apyx announced a restructuring program that reduced its U.S. workforce by nearly 25%, aiming for annualized cost savings of approximately $4.3 million.
Strengthened Balance Sheet: The company completed a registered direct offering with net proceeds of approximately $6.8 million and amended its credit agreement to improve financial stability.
2025 Revenue Guidance: Apyx expects total revenue for 2025 to be in the range of $47.6 million to $49.0 million, compared to $48.1 million for 2024.
Advanced Energy Revenue Guidance: Revenue from the Advanced Energy segment is projected to be between $39.6 million and $41.0 million for 2025.
OEM Revenue Guidance: OEM revenue is expected to be approximately $8 million for 2025, down from $9.5 million in 2024.
Gross Margin Expectation: The company anticipates gross margins of approximately 60% for 2025.
Operating Expenses Guidance: Total operating expenses are expected to not exceed $40 million in 2025.
Registered Direct Offering: Completed a registered direct offering with net proceeds of approximately $6.8 million.
Amended Credit Agreement: Amended credit agreement with Perceptive Credit Holdings, reducing revenue covenants and adding maximum operating expense covenants at $40 million for 2025.
Share Issuance: Issued 150,000 shares of common stock associated with the amendment to the credit agreement.
The earnings call highlights a positive outlook with increased revenue guidance and improved financial metrics, such as higher gross margins and reduced net loss. The AYON system launch and international expansion are expected to drive growth. Despite some vague management responses in the Q&A, the overall sentiment is boosted by strong demand and strategic initiatives, leading to a positive stock price prediction.
Despite a year-over-year revenue decline, the company demonstrated improved cost management, reducing losses significantly. The AYON product launch has been well-received, with strong presales and positive feedback, leading to raised guidance. The addition of experienced commercial hires and a promising partnership in China further bolster growth prospects. Although financial results were mixed, the optimistic guidance and strategic moves suggest a positive stock price movement over the next two weeks.
The earnings call reflects a negative sentiment due to several factors: declining revenue guidance for 2024, ongoing net losses, and market challenges, including competitive pressures and regulatory uncertainties. Despite some positive aspects like cost reduction and a slight improvement in gross margins, the lack of clear guidance on key products like AYON and a new secondary offering further weigh down the outlook. The Q&A section did not provide sufficient clarity or optimism to offset these concerns, leading to a negative stock price prediction.
The earnings call reflects a challenging environment for Apyx Medical, with a decline in revenue and international sales, and a net loss despite cost-cutting efforts. The company's restructuring and direct offering indicate financial strain. Although there are plans for new product launches and a direct-to-consumer strategy, the uncertain regulatory approval for AYON and market challenges, such as the impact of GLP-1 drugs, pose significant risks. The sentiment in the Q&A was cautious, with unclear guidance updates, contributing to a negative outlook for the stock.
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