UNITED STATES SECURITIES AND EXCHANGE COMMISSION |
Washington, DC 20549 |
______________________ |
FORM 8-K |
CURRENT REPORT PURSUANT |
TO SECTION 13 OR 15(D) OF THE |
SECURITIES EXCHANGE ACT OF 1934 |
March 13, 2019 |
Date of Report (Date of earliest event reported) |
APYX MEDICAL CORPORATION |
(Exact name of registrant as specified in its Charter) |
Delaware | 12183 | 11-2644611 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
5115 Ulmerton Road Clearwater, Florida 33760 |
(Address of principal executive offices) (Zip Code) |
727 384-2323 |
Registrant's telephone number, including area code |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |||
Emerging growth company o | |||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o |
Item 2.02 | Results of Operation and Financial Condition |
Item 9.01 | Financial Statements and Exhibits |
Exhibit No. | Description |
99.1 |
Date: March 13, 2019 | APYX MEDICAL CORPORATION | |
By: /s/ Tara Semb | ||
Tara Semb | ||
Chief Financial Officer, Secretary and Treasurer |
• | 2018 total revenue from continuing operations of approximately $16.7 million, up 63% year-over-year. |
◦ | Advanced Energy revenue of $13.1 million, up 71% year-over-year. |
◦ | OEM revenue of approximately $3.6 million, up 39% year-over-year. |
• | 2018 total GAAP loss from continuing operations of $9.5 million versus total GAAP loss from continuing operations of $13.7 million in 2017. Excluding the effect of severance and related expenses in both fiscal year periods, 2018 GAAP loss from continuing operations would have been $8.8 million, versus GAAP loss from continuing operations of $12.2 million in 2017. |
• | 2018 total adjusted EBITDA loss from continuing operations of approximately $11.7 million versus adjusted EBITDA loss from continuing operations of approximately $12.3 million in 2017. Excluding the effect of severance and related expenses in both fiscal year periods, 2018 adjusted EBTIDA loss from continuing operations would have been $11 million, versus adjusted EBITDA loss from continuing operations of $10.8 million in 2017. |
• | Total Q4 revenue from continuing operations of approximately $5.9 million, up 62% year-over-year. |
◦ | Advanced Energy revenue of $4.3 million, up 40% year-over-year. |
◦ | OEM revenue of approximately $1.6 million, up 179% year-over-year. |
• | Total Q4 GAAP loss from continuing operations of $3.3 million versus total GAAP loss from continuing operations of $3.0 million for the fourth quarter of 2017. Excluding the effect of severance and related expense in the period, the Q4 2018 GAAP loss from continuing operations would have been $2.6 million. |
• | Total Q4 adjusted EBITDA loss from continuing operations of approximately $4.8 million versus adjusted EBITDA loss from continuing operations of approximately $2.7 million for the fourth quarter of 2017. Excluding the effect of severance and related expense in the period, the Q4 2018 adjusted EBITDA loss from continuing operations would have been $4.1 million. |
• | On October 22nd, the Company announced the appointment of Laura Iversen as Director of Global Operations for Advanced Energy. |
• | On November 13th, the Company announced the planned retirement of Jay D. Ewers, Chief Financial Officer, Treasurer and Secretary, which occurred in the first quarter of 2019. |
• | On December 17th, the Company announced the appointment of Tara H. Semb as Chief Financial Officer, Treasurer and Secretary, effective January 2, 2019. |
• | On December 12th, the Company announced a corporate rebranding and company name change to Apyx Medical Corporation effective January 1, 2019. The Company also announced plans to move its stock exchange listing to the NASDAQ Global Select Market (the “NASDAQ”) from the New York Stock Exchange (the “NYSE”). |
• | On December 21st, the Company announced a Premarket Notification 510(K) submission to the U.S. Food and Drug Administration (FDA) for a new indication for J-Plasma/Renuvion for use in dermal resurfacing procedures. |
Three Months Ended December 31, | Increase/Decrease | Twelve Months Ended December 31, | Increase/Decrease | ||||||||||||||||||||||||||||||||||||||||
(In thousands) | 2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | |||||||||||||||||||||||||||||||||||
Advanced Energy | $ | 4,341 | $ | 3,090 | $ | 1,251 | 40.5 | % | $ | 13,068 | $ | 7,636 | $ | 5,432 | 71.1 | % | |||||||||||||||||||||||||||
OEM | 1,585 | 568 | 1,017 | 179.0 | % | 3,618 | 2,598 | 1,020 | 39.3 | % | |||||||||||||||||||||||||||||||||
Total | $ | 5,926 | $ | 3,658 | $ | 2,268 | 62.0 | % | $ | 16,686 | $ | 10,234 | $ | 6,452 | 63.0 | % |
Three Months Ended December 31, | Increase/Decrease | Twelve Months Ended December 31, | Increase/Decrease | ||||||||||||||||||||||||||||||||||||||||
(In thousands) | 2018 | 2017 | $ Change | % Change | 2018 | 2017 | $ Change | % Change | |||||||||||||||||||||||||||||||||||
Domestic | $ | 4,377 | $ | 3,066 | $ | 1,311 | 42.8 | % | $ | 12,858 | $ | 8,887 | $ | 3,971 | 44.7 | % | |||||||||||||||||||||||||||
International | 1,549 | 592 | 957 | 161.7 | % | 3,828 | 1,347 | 2,481 | 184.2 | % | |||||||||||||||||||||||||||||||||
Total | $ | 5,926 | $ | 3,658 | $ | 2,268 | 62.0 | % | $ | 16,686 | $ | 10,234 | $ | 6,452 | 63.0 | % |
• | Total revenue in the range of $25.0 million to $26.0 million, representing growth of 50% to 56% year-over-year, compared to total revenue from continuing operations of $16.7 million in fiscal year 2018. |
▪ | Total revenue guidance assumes: |
◦ | Advanced Energy revenue in the range of approximately $20.0 million to $21.0 million, representing growth of 53% to 61% year-over-year, compared to Advanced Energy revenue of $13.7 million in fiscal year 2018. The Advanced Energy revenue range assumes that US growth is only driven by contributions from Renuvion sales related to its use as a sub-dermal coagulator following liposuction procedures and that international growth is driven primarily by utilization-related demand, in existing international markets only. |
◦ | OEM revenue of approximately $5.0 million, representing growth of 38% year-over-year, compared to $3.6 million for fiscal year 2018. The OEM revenue range assumes contributions from the Company’s electrosurgical disposables and accessories supply agreement with Symmetry Surgical of approximately $2.5 million for the full year 2019 period, compared to approximately $0.6 million in fiscal year 2018. |
▪ | GAAP net loss in the range of $24.0 million to $23.0 million, compared to GAAP net loss from continuing operations of $9.5 million in fiscal year 2018. |
▪ | Adjusted EBITDA loss in the range of $20.4 million to $19.4 million, compared to adjusted EBITDA loss from continuing operations of $11.7 million in fiscal year 2018. |
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Sales | $ | 5,926 | $ | 3,658 | $ | 16,686 | $ | 10,234 | |||||||
Cost of sales | 2,403 | 962 | 5,893 | 3,276 | |||||||||||
Gross profit | 3,523 | 2,696 | 10,793 | 6,958 | |||||||||||
Other costs and expenses: | |||||||||||||||
Research and development | 579 | 341 | 2,469 | 1,941 | |||||||||||
Professional services | 1,257 | 478 | 3,072 | 1,769 | |||||||||||
Salaries and related costs | 2,939 | 904 | 8,673 | 6,920 | |||||||||||
Selling, general and administrative | 3,158 | 2,686 | 9,438 | 8,689 | |||||||||||
Severance and related expense | 741 | 1,524 | 741 | 1,524 | |||||||||||
Total other costs and expenses | 8,674 | 5,933 | 24,393 | 20,843 | |||||||||||
Loss from operations | (5,151 | ) | (3,237 | ) | (13,600 | ) | (13,885 | ) | |||||||
Interest expense, net | 479 | (33 | ) | 512 | (136 | ) | |||||||||
Other losses | (48 | ) | — | (203 | ) | — | |||||||||
Change in fair value of derivative liabilities | — | 126 | 20 | 183 | |||||||||||
Total other income (loss), net | 431 | 93 | 329 | 47 | |||||||||||
Loss before income taxes | (4,720 | ) | (3,144 | ) | (13,271 | ) | (13,838 | ) | |||||||
Income tax (benefit) expense | (1,393 | ) | (171 | ) | (3,777 | ) | (156 | ) | |||||||
Net loss from continuing operations | (3,327 | ) | (2,973 | ) | (9,494 | ) | (13,682 | ) | |||||||
Income from discontinued operations, net of tax | 37 | 2,149 | 5,099 | 8,620 | |||||||||||
Gain on sale of the Core Business, net of tax | (668 | ) | — | 68,404 | — | ||||||||||
Total income from discontinued operations, net of tax | (631 | ) | 2,149 | 73,503 | 8,620 | ||||||||||
Net income (loss) from all operations | $ | (3,958 | ) | $ | (824 | ) | $ | 64,009 | $ | (5,062 | ) | ||||
Loss per share from continuing operations Basic | $ | (0.10 | ) | $ | (0.09 | ) | $ | (0.29 | ) | $ | (0.44 | ) | |||
Loss per share discontinued operations | |||||||||||||||
Basic | (0.02 | ) | 0.07 | 2.21 | 0.27 | ||||||||||
Diluted | (0.02 | ) | 0.07 | 2.14 | 0.27 | ||||||||||
Loss per share all operations | |||||||||||||||
Basic | (0.12 | ) | (0.03 | ) | 1.93 | (0.16 | ) | ||||||||
Diluted | (0.12 | ) | (0.03 | ) | 1.86 | (0.17 | ) | ||||||||
Weighted average number of shares outstanding basic | 33,694 | 32,864 | 33,185 | 31,420 | |||||||||||
Weighted average number of shares outstanding dilutive | 33,694 | 32,864 | 34,366 | 31,427 |
December 31, 2018 | December 31, 2017 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 16,466 | $ | 9,949 | ||||
Restricted cash | — | 719 | ||||||
Short term investments | 61,678 | — | ||||||
Trade accounts receivable, net of allowance of $428 and $204 | 5,015 | 4,857 | ||||||
Inventories, net of provision for obsolescence of $439 and $1,913 | 5,212 | 4,274 | ||||||
Prepaid expenses and other current assets | 1,146 | 433 | ||||||
Current assets of discontinued operations | — | 2,315 | ||||||
Total current assets | 89,517 | 22,547 | ||||||
Property and equipment, net | 5,788 | 6,033 | ||||||
Purchased technology and license rights, net | 6 | 67 | ||||||
Goodwill | 185 | 185 | ||||||
Deposits | 73 | 92 | ||||||
Other assets | 41 | 67 | ||||||
Non-current assets of discontinued operations | — | 1,997 | ||||||
Total assets | $ | 95,610 | $ | 30,988 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,423 | $ | 1,583 | ||||
Accrued severance and related | 727 | 1,242 | ||||||
Accrued payroll | 418 | 447 | ||||||
Current portion of mortgage note payable | — | 239 | ||||||
Accrued taxes and other liabilities | — | 214 | ||||||
Accrued bonus | 972 | — | ||||||
Accrued expenses | 2,505 | — | ||||||
Accrued warranty expense | 348 | — | ||||||
Other liabilities | 1,309 | — | ||||||
Current liabilities of discontinued operations | — | 2,248 | ||||||
Total current liabilities | 7,702 | 5,973 | ||||||
Mortgage note payable, net of current portion | — | 2,455 | ||||||
Note payable | 140 | 140 | ||||||
Deferred tax liability | — | 368 | ||||||
Derivative liabilities | — | 20 | ||||||
Total liabilities | $ | 7,842 | $ | 8,956 | ||||
Common stock, $0.001 par value; 75,000,000 shares authorized; 33,847,100 issued and 33,704,525 outstanding as of December 31, 2018 and 75,000,000 shares authorized; 33,021,170 issued and 32,878,091 outstanding as of December 31, 2017, respectively | 34 | 33 | ||||||
Additional paid-in capital | 52,222 | 50,495 | ||||||
Retained Earnings (accumulated deficit) | 35,512 | (28,496 | ) | |||||
Total stockholders’ equity | 87,768 | 22,032 | ||||||
Total liabilities and stockholders’ equity | $ | 95,610 | $ | 30,988 |
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net loss continuing operations GAAP Basis | $ | (3,327 | ) | $ | (2,973 | ) | $ | (9,494 | ) | $ | (13,682 | ) | |||
Interest income (expense), net | (479 | ) | 33 | (512 | ) | 136 | |||||||||
Income tax (benefit) expense | (1,393 | ) | (171 | ) | (3,777 | ) | (156 | ) | |||||||
Depreciation and amortization | 113 | 169 | 543 | 696 | |||||||||||
Stock based compensation | 287 | 357 | 1,528 | 871 | |||||||||||
Change in fair value of derivative liabilities | — | (126 | ) | (20 | ) | (183 | ) | ||||||||
Adjusted EBITDA | $ | (4,799 | ) | $ | (2,711 | ) | $ | (11,735 | ) | $ | (12,318 | ) | |||
Severance and related | 741 | 1,524 | 741 | 1,524 | |||||||||||
Adjusted EBITDA, excluding non-recurring items | $ | (4,058 | ) | $ | (1,187 | ) | $ | (10,994 | ) | $ | (10,794 | ) |
Year Ended | |||
2019 | |||
Net loss GAAP Basis | $ | (23,500 | ) |
Interest (income) expense, net | (1,100 | ||
Income tax (benefit) expense | — | ||
Depreciation and amortization | 700 | ||
Stock based compensation | 4,000 | ||
Change in fair value of derivative liabilities | — | ||
Adjusted EBITDA | $ | (19,900 | ) |