8-K: Apyx Medical Reports Q4 and Full Year 2024 Results, Exceeds Expectations in Single-Use Handpiece Shipments

Apyx Medical Corporation announced its Q4 and full year 2024 financial results, highlighting increased single-use handpiece shipments and the submission of a 510(k) premarket notification to the FDA for the AYON Body Contouring System.

Summary

• Apyx Medical Corporation reported its financial results for the fourth quarter and full year ended December 31, 2024.
• Total revenue for Q4 2024 was $14.2 million, driven by growth in U.S. capital equipment and single-use handpiece sales.
• Advanced Energy revenue in Q4 2024 reached $12.1 million, roughly flat year-over-year but up over 30% compared to Q3 2024.
• OEM revenue was approximately $2.1 million, a 16% decrease year-over-year.
• The net loss attributable to stockholders decreased by $5.0 million, or 52%, in Q4 2024 to $4.6 million.
• Adjusted EBITDA loss decreased by $2.5 million, or 53%, to $2.2 million for Q4 2024.
• The company closed a $7.0 million registered direct offering and amended its credit agreement with Perceptive Credit Holdings IV, LP.
• A cost-saving restructuring program was implemented, reducing the U.S. workforce by nearly 25%, with an estimated annualized future cost savings of approximately $4.3 million.
• Apyx Medical submitted a 510(k) premarket notification to the FDA for the AYON Body Contouring System ahead of schedule.
• Total revenue for the full year 2024 decreased 8% to $48.1 million, compared to $52.3 million for 2023.
• The company expects total revenue for 2025 to be in the range of $47.6 million to $49.0 million.
• Operating expenses are expected to be less than $40.0 million for the year ended December 31, 2025.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the company reported a decrease in full-year revenue, there were positive developments in Q4, including increased handpiece shipments, reduced losses, and the early submission of the AYON system to the FDA. The cost-saving measures and future guidance suggest a focus on improving financial performance.

Positives

• Single-use handpiece shipments increased in Q4 2024, especially in the U.S.
• The AYON Body Contouring System 510(k) submission to the FDA was ahead of schedule.
• Advanced Energy revenue increased significantly from Q3 to Q4 2024.
• Net loss and Adjusted EBITDA loss decreased in Q4 2024 compared to Q4 2023.
• The company strengthened its balance sheet with a $7.0 million registered direct offering.
• Cost-saving measures are expected to reduce operating expenses in 2025.
• Gross profit for the three months ended December 31, 2024, increased to $9.0 million, compared with $8.9 million in the prior year period.
• Gross profit margin for the three months ended December 31, 2024, was 63.0%, compared to 60.9% in the prior year period.

Negatives

• OEM revenue decreased by 16% year-over-year in Q4 2024.
• Total revenue for the full year 2024 decreased by 8% compared to 2023.
• Advanced Energy segment sales decreased 11% for the full year ended December 31, 2024.
• Gross profit for the year ended December 31, 2024, decreased to $29.4 million, compared with $33.8 million in the prior year period.
• Gross profit margin for the year ended December 31, 2024, was 61.0%, compared to 64.5% in the prior year.
• Net loss attributable to stockholders was $23.5 million, or $0.66 per share, for the year ended December 31, 2024, compared with $18.7 million, or $0.54 per share, in the prior year.
• Adjusted EBITDA loss for the years ended December 31, 2024 and 2023 was $14.3 million and $13.4 million, respectively.

Risks

• The company's future performance depends on receiving FDA clearance for the AYON system.
• Economic uncertainty in the capital equipment market could impact future sales.
• The company is subject to risks related to regulatory approvals, supply chain disruptions, and macroeconomic conditions.
• The company's ability to achieve its financial guidance targets for 2025 is subject to various risks and uncertainties.

Future Outlook

The company expects total revenue for 2025 to be in the range of $47.6 million to $49.0 million, with Advanced Energy revenue between $39.6 million and $41.0 million and OEM revenue around $8.0 million. Operating expenses are expected to be less than $40.0 million.

Management Comments

• 'We are pleased with our financial performance in the fourth quarter of 2024, which was partially driven by increased demand in the U.S. for our generators and single-use handpieces over the course of the past six months,' said Charlie Goodwin, President and Chief Executive Officer.
• Mr. Goodwin continued, 'We are excited to have submitted the 510(k) for the AYON Body Contouring System to the FDA, which our team accomplished months ahead of schedule.'

Industry Context

Apyx Medical operates in the advanced energy technology sector, specifically within the cosmetic surgery and hospital surgical markets. The company's focus on Renuvion and J-Plasma technologies positions it within the broader trend of minimally invasive surgical and aesthetic procedures. The company is also targeting the growing patient population using GLP-1's and the physicians treating loose skin post-weight loss.

Comparison to Industry Standards

• Comparing Apyx Medical to companies like InMode or Cutera, which also operate in the aesthetic device market, Apyx's revenue growth is lagging behind some of its peers.
• InMode, for example, has demonstrated significant revenue growth in recent years, driven by its portfolio of energy-based aesthetic solutions.
• Apyx's focus on cost reduction and the upcoming launch of the AYON system could help improve its competitive position.
• The company's success will depend on its ability to gain market share in the competitive aesthetics market and effectively commercialize its products.

Stakeholder Impact

• Shareholders may be concerned about the decrease in full-year revenue but encouraged by the cost-saving measures and potential for future growth.
• Employees were impacted by the workforce reduction, but the restructuring aims to improve the company's long-term financial stability.
• Customers may benefit from the launch of the AYON system and the company's focus on innovation.
• Creditors are impacted by the amendment to the credit agreement.

Next Steps

• The company plans to launch the AYON system in the back half of 2025, pending FDA clearance.
• Management will host a conference call on March 13, 2025, to discuss the results and answer questions.
• The company aims to build on the early traction its commercial team has made addressing the potential new opportunity with the rapidly growing patient population using GLP-1's and the physicians treating loose skin post-weight loss.

Key Dates