Apyx Medical (APYX) 8 Aug 24 2024 Q2 Earnings call transcript

In the latest earnings call, Apyx Medical Corporation provided insights into its financial performance and strategic initiatives for the second quarter of fiscal year 2024. Despite facing a challenging environment in the cosmetic surgery market, Apyx Medical has managed to offset some of the headwinds through its handpiece sales, which grew by more than 20% year-over-year, both in the U.S. and internationally. The company's strategy to navigate the challenging market by engaging with prospective customers and educating them about the benefits of its technology has proven effective in driving sales and expanding its market reach.

Revenue Performance and Operational Highlights

The second quarter of 2024 saw a decrease in total revenue by 10% year-over-year to $12.1 million. However, the sales of OEM products increased by 29% year-over-year to $2.4 million, helping to mitigate the impact of the decline in Advanced Energy product sales, which decreased by 17% year-over-year to $9.8 million. The company's focus on cost optimization and efficient cash management has been instrumental in its ability to weather the challenging market conditions.

Strategic Initiatives and Clinical Evidence

Apyx Medical has been actively working on addressing the challenges in the cosmetic surgery market by engaging with prospective customers, educating them about the financing options available through third-party partners, and showcasing the unique benefits of its technology. The company's extensive portfolio of clinical evidence, including more than 90 published clinical papers, abstracts, and posters, as well as 3 multisite IDE clinical studies, underscores the safety and efficacy of its Renuvion technology. Recent studies comparing Renuvion to alternative methods have shown statistically significant improvements in patient outcomes, further highlighting the technology's advantages.

Financial Guidance and Outlook

For the fiscal year 2024, Apyx Medical expects total revenue to range between $50.6 million and $52.1 million, a decrease of approximately 3% to flat compared to the prior guidance. The company anticipates low double-digit growth in global sales of handpieces, which will help offset the impact of slower generator sales. Apyx Medical remains focused on its growth strategy, aiming to establish Renuvion as an integral component following liposuction and body contouring procedures. The company is also exploring opportunities to expand into new geographies, particularly South Korea and China, where it has registrations.

Analyst Questions and Management's Responses

During the Q&A session, analysts focused on handpiece sales, geographical performance, and future growth prospects. Apyx Medical's management emphasized the strong demand for handpieces, both in the U.S. and internationally, and the role of GLP-1 patients in driving handpiece sales. The company's guidance assumes a challenging capital environment to continue throughout the rest of the year, with a stronger year-over-year growth expected in the second half of 2024.

Conclusion

Despite facing challenges in the cosmetic surgery market, Apyx Medical Corporation has shown resilience and adaptability through its strategic initiatives and operational performance. The company's focus on raising awareness of its technology and addressing market challenges has helped drive growth, particularly in handpiece sales. With a robust portfolio of clinical evidence and a strategic expansion plan, Apyx Medical is well-positioned to capitalize on the increasing demand for aesthetic treatments and body contouring procedures as the market recovers.