Bovie Medical Corporation Reports First Quarter 2018 Financial Results; Reaffirms Fiscal Year 2018 Financial Outlook
Advanced Energy Sales of $2.6 million in Q1, up 333% year-over-year
Bovie Medical Corporation (NYSEMKT:BVX) (the “Company”), a maker
of medical devices and supplies and the developer of J-Plasma®,
a patented surgical product marketed and sold under the Renuvion™
Cosmetic Technology brand in the cosmetic surgery market, today reported
financial results for its first quarter ended March 31, 2018.
First Quarter 2018 Financial Summary:
-
Total Q1 revenue of approximately $9.9 million, up 18% year-over-year.
-
Advanced Energy revenue of $2.6 million, up 333% year-over-year,
driven by strong J-Plasma/Renuvion sales.
-
Core & OEM revenue of approximately $7.3 million, down 6.4%
year-over-year.
-
Total Q1 adjusted EBITDA loss of approximately $0.3 million versus
adjusted EBITDA loss of approximately $1.4 million for the first
quarter of 2017.
First Quarter 2018 Operating Highlights:
-
On January 23rd, the Company announced that it had enrolled the first
patient in a U.S. Investigational Device Exemption (IDE) clinical
study of its J-Plasma technology for use in dermal skin resurfacing.
The objective of the study is to demonstrate the safety and efficacy
of J-Plasma technology for use in dermal skin resurfacing.
-
On March 6th, the Company announced the appointment of Dr. Topaz J.
Kirlew as Director of Regulatory Affairs.
-
On March 12th, the Company announced the appointment of Craig A.
Swandal to the Company’s Board of Directors, effective March 9, 2018.
-
On March 27th, the Company announced the appointment of Scott R.
Sanders as Director of Clinical Education and Market Development.
-
On March 29th, the Company announced the launch of a new brand
dedicated to the cosmetic surgery market. Bovie Medical’s J-Plasma
technology is now marketed and sold under the brand name Renuvion
Cosmetic Technology, which was developed as part of the Company’s
commitment to enhancing its ability to commercialize its J-Plasma
technology in the cosmetic surgery market.
Operating Highlights Subsequent to Quarter-End:
-
On May 1st, the Company announced the appointment of Diane I. Duncan,
M.D., FACS, a Board-certified plastic surgeon, to the Company’s
Medical Advisory Board.
-
On May 14th, the Company announced the completion of enrollment in the
U.S. Investigational Device Exemption (IDE) clinical study of its
J-Plasma technology for use in dermal skin resurfacing.
Management Comments:
“In the first quarter, we achieved 18% year-over-year sales growth,
which was fueled by strong sales in our Advanced Energy business,” said
Charlie Goodwin, Chief Executive Officer. “Our Advanced Energy sales
performance represents an exciting start to the year, and reflects
strong global demand for our J-Plasma/Renuvion technology. In the U.S.,
we continued to see strong adoption of our Renuvion Cosmetic Technology
in the cosmetic surgery market, where our sales organization is focused
on marketing and selling to plastic surgeons, cosmetic surgeons and
dermatologists.”
Mr. Goodwin continued: “Encouraged by our recent commercial traction in
the cosmetic surgery market, we remain focused in 2018 on increasing the
awareness and adoption of our Renuvion technology, while establishing
the requisite support to facilitate its broader adoption in the cosmetic
surgery market in future years. We are reaffirming our fiscal year
financial guidance, and look forward to delivering strong operating and
financial performance throughout 2018 for the benefit of our customers
and shareholders.”
First Quarter 2018 Results:
The following table represents revenue by reportable segment:
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Increase/Decrease
|
(In thousands)
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
Core
|
|
$
|
6,519
|
|
$
|
6,775
|
|
$
|
(256
|
)
|
|
(3.8
|
)%
|
Advanced Energy
|
|
|
2,629
|
|
|
607
|
|
|
2,022
|
|
|
333.1
|
%
|
OEM
|
|
|
768
|
|
|
1,007
|
|
|
(239
|
)
|
|
(23.7
|
)%
|
Total
|
|
$
|
9,916
|
|
$
|
8,389
|
|
$
|
1,527
|
|
|
18.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue for first quarter 2018 increased $1.5 million, or 18.2%,
to $9.9 million, compared to $8.4 million in the first quarter of 2017.
Sales of the Company’s J-Plasma/Renuvion generators and handpieces were
the primary driver of total revenue growth in first quarter 2018. The
year-over-year change in total revenue by business segment was driven by
Advanced Energy segment sales, offset partially by a decline in Core and
OEM segment sales during the first quarter 2018 period. Advanced Energy
segment sales increased approximately $2.0 million, or 333.1%
year-over-year, to $2.6 million, compared to approximately $0.6 million
last year. Core segment sales decreased approximately $0.3 million, or
3.8% year-over-year, to $6.5 million, compared to approximately $6.8
million last year. OEM segment sales decreased $0.2 million, or 23.7%
year-over-year, to $0.8 million, compared to $1.0 million last year.
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Increase/Decrease
|
(In thousands)
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
Domestic
|
|
$
|
7,973
|
|
$
|
6,992
|
|
$
|
981
|
|
14.0
|
%
|
International
|
|
|
1,943
|
|
|
1,397
|
|
|
546
|
|
39.1
|
%
|
Total
|
|
$
|
9,916
|
|
$
|
8,389
|
|
$
|
1,527
|
|
18.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue in the United States increased approximately $1.0 million, or
14.0% year-over-year, to $8.0 million, and international revenue
increased approximately $0.5 million, or 39.1% year-over-year, to $1.9
million. International sales growth in the first quarter was primarily
driven by sales to international distributors in the Company's Advanced
Energy segment.
Gross profit for the first quarter of 2018 increased $0.8 million, or
18.1% year-over-year, to $5.0 million, compared to $4.2 million for
first quarter of 2017. The increase in first quarter 2018 gross profit
was driven by strong sales in the Company’s Advanced Energy segment.
Gross margin for the first quarter of 2018 was 50.3%, compared to 50.4%
last year. The year-over-year change in gross margin was driven by
strong Advanced Energy sales, offset by lower margins in the Company’s
OEM and Core segments.
Operating expenses for the first quarter of 2018 decreased approximately
$0.1 million, or 1.8% year-over-year, to $5.9 million, compared to $6.0
million for the first quarter of 2017. The year-over-year change in
operating expenses was primarily driven by a $0.3 million increase in
selling, general and administrative expenses and a $0.1 million increase
in professional services expense, offset by a $0.3 million decrease in
salaries and related expense and a $0.1 million decrease in research and
development expenses.
Loss from operations for first quarter 2018 was $0.9 million, compared
to a loss from operations of $1.7 million for the comparable period last
year.
Net loss attributed to common shareholders for first quarter 2018 was
$0.9 million, or $0.03 per diluted share, compared to a loss of $1.7
million, or $0.06 per diluted share, for the first quarter of 2017.
As of March 31, 2018, the Company had cash and equivalents of $9.4
million as compared to $10.7 million as of December 31, 2017. The
Company had working capital of $16.0 million as of March 31, 2018 as
compared to $16.6 million as of December 31, 2017.
2018 Outlook:
The Company is reaffirming its financial guidance, which was introduced
on March 12, 2018.
For the fiscal year 2018, the Company continues to expect:
-
Total revenue in the range of $41.0 million to $42.5 million,
representing growth of 5% to 9% year-over-year. The Company expects
total revenue growth to be driven by Advanced Energy sales growth in
the range of approximately 40% to 45% year-over-year.
-
The Company expects adjusted EBITDA in a range of $1.0 million to $1.5
million.
Conference Call Details:
Management will host a conference call at 4:30 p.m. Eastern Time on
May 14, 2018 to discuss the results of the quarter and to host a
question and answer session. To listen to the call by phone, interested
parties within the U.S. may dial 844-507-6493 (or 647-253-8641 for
international callers) and provide access code 1784708. Participants
should ask for the Bovie Medical Corporation Call. A live webcast of the
call will be accessible via the Investor Relations section of the
Company’s website and at:
https://event.on24.com/wcc/r/1626820/F9B173E1969EC13E6FEA692F9E0E032A.
A telephonic replay will be available approximately two hours after the
end of the call through May 28, 2018. The replay can be accessed by
dialing 800-585-8367 for U.S. callers or 416-621-4642 for International
callers and using the replay access code: 1784708. The webcast will be
archived on the Investor Relations section of the Company's website.
About Bovie Medical Corporation:
Bovie Medical Corporation is a leading maker of medical devices and
supplies as well as the developer of J-Plasma® (marketed and
sold under the Renuvion™ Cosmetic Technology brand in the cosmetic
surgery market), a patented plasma-based surgical product for cutting,
coagulation and ablation of soft tissue. J-Plasma/Renuvion technology
utilizes a helium ionization process to produce a stable, focused beam
of plasma that provides surgeons with greater precision, and minimal
invasiveness. The new J-Plasma/Renuvion handpieces with Cool-Coag™
technology deliver the precision of helium plasma energy, the power of
traditional monopolar coagulation and the efficiency of plasma beam
coagulation - enabling thin-layer ablation and dissection and fast
coagulation with a single instrument, minimizing instrument exchange and
allowing a surgeon to focus on their patient and their procedures. With
Cool-Coag technology, the new J-Plasma/Renuvion handpieces can deliver
three distinctly different energy modalities - further increasing the
utility and versatility of the system. Bovie Medical Corporation is also
a leader in the manufacture of a range of electrosurgical products and
technologies, marketed through both private labels and the Company’s own
well-respected brands (Bovie®, IDS™ and DERM™) to
distributors worldwide. The Company also leverages its expertise through
original equipment manufacturing (OEM) agreements with other medical
device manufacturers. For further information about the Company and its
products, please refer to the Bovie Medical Corporation website at www.boviemedical.com.
Cautionary Statement on Forward-Looking
Statements:
Certain matters discussed in this release and oral statements made from
time to time by representatives of the Company may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and the Federal securities laws. Although
the Company believes that the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, it can
give no assurance that its expectations will be achieved.
Forward-looking information is subject to certain risks, trends and
uncertainties that could cause actual results to differ materially from
those projected. Many of these factors are beyond the Company's ability
to control or predict. Important factors that may cause actual results
to differ materially and that could impact the Company and the
statements contained in this release can be found in the Company's
filings with the Securities and Exchange Commission including the
Company's Report on Form 10-K for the year ended December 31, 2017 and
subsequent Form 10-Q filings. For forward-looking statements in this
release, the Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. The Company assumes no obligation to
update or supplement any forward-looking statements whether as a result
of new information, future events or otherwise.
|
BOVIE MEDICAL CORPORATION
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited) (In thousands, except per share data)
|
|
|
|
Three Months Ended March 31,
|
|
|
2018
|
|
2017
|
Sales
|
|
$
|
9,916
|
|
|
$
|
8,389
|
|
Cost of sales
|
|
|
4,926
|
|
|
|
4,163
|
|
Gross profit
|
|
|
4,990
|
|
|
|
4,226
|
|
Other costs and expenses:
|
|
|
|
|
Research and development
|
|
|
562
|
|
|
|
709
|
|
Professional services
|
|
|
506
|
|
|
|
390
|
|
Salaries and related costs
|
|
|
2,116
|
|
|
|
2,460
|
|
Selling, general and administrative
|
|
|
2,670
|
|
|
|
2,404
|
|
Total other costs and expenses
|
|
|
5,854
|
|
|
|
5,963
|
|
Loss from operations
|
|
|
(864
|
)
|
|
|
(1,737
|
)
|
Interest expense, net
|
|
|
(34
|
)
|
|
|
(31
|
)
|
Change in fair value of derivative liabilities
|
|
|
(26
|
)
|
|
|
88
|
|
Total other (loss) income, net
|
|
|
(60
|
)
|
|
|
57
|
|
Loss before income taxes
|
|
|
(924
|
)
|
|
|
(1,680
|
)
|
Income tax expense
|
|
|
11
|
|
|
|
5
|
|
Net loss
|
|
$
|
(935
|
)
|
|
$
|
(1,685
|
)
|
|
|
|
|
|
Loss per share
|
|
|
|
|
Basic
|
|
$
|
(0.03
|
)
|
|
$
|
(0.05
|
)
|
Diluted
|
|
$
|
(0.03
|
)
|
|
$
|
(0.06
|
)
|
|
|
|
|
|
Weighted average number of shares outstanding - basic
|
|
|
32,878
|
|
|
|
30,860
|
|
Weighted average number of shares outstanding - dilutive
|
|
|
32,878
|
|
|
|
30,887
|
|
|
|
|
|
|
|
|
|
|
|
BOVIE MEDICAL CORPORATION
|
CONSOLIDATED BALANCE SHEETS
|
(Unaudited) (In thousands, except share and per share data)
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
8,701
|
|
|
$
|
9,949
|
|
Restricted cash
|
|
|
660
|
|
|
|
719
|
|
Trade accounts receivable, net of allowance of $147 and $204
|
|
|
5,143
|
|
|
|
4,857
|
|
Inventories, net
|
|
|
6,709
|
|
|
|
6,526
|
|
Prepaid expenses and other current assets
|
|
|
522
|
|
|
|
496
|
|
Total current assets
|
|
|
21,735
|
|
|
|
22,547
|
|
Property and equipment, net
|
|
|
6,338
|
|
|
|
6,408
|
|
Brand name and trademark
|
|
|
1,510
|
|
|
|
1,510
|
|
Purchased technology and license rights, net
|
|
|
189
|
|
|
|
179
|
|
Goodwill
|
|
|
185
|
|
|
|
185
|
|
Deposits
|
|
|
91
|
|
|
|
92
|
|
Other assets
|
|
|
64
|
|
|
|
67
|
|
Total assets
|
|
$
|
30,112
|
|
|
$
|
30,988
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
2,097
|
|
|
$
|
1,583
|
|
Accrued severance and related
|
|
|
948
|
|
|
|
1,242
|
|
Accrued payroll
|
|
|
198
|
|
|
|
447
|
|
Current portion of mortgage note payable
|
|
|
239
|
|
|
|
239
|
|
Accrued and other liabilities
|
|
|
2,212
|
|
|
|
2,462
|
|
Total current liabilities
|
|
|
5,694
|
|
|
|
5,973
|
|
Mortgage note payable, net of current portion
|
|
|
2,395
|
|
|
|
2,455
|
|
Note payable
|
|
|
140
|
|
|
|
140
|
|
Deferred tax liability
|
|
|
368
|
|
|
|
368
|
|
Derivative liabilities
|
|
|
46
|
|
|
|
20
|
|
Total liabilities
|
|
|
8,643
|
|
|
|
8,956
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
Common stock, $0.001 par value; 75,000,000 shares authorized;
33,021,170 issued and 32,878,091 outstanding as of March 31, 2018
and December 31, 2017
|
|
|
33
|
|
|
|
33
|
|
Additional paid-in capital
|
|
|
50,867
|
|
|
|
50,495
|
|
Accumulated deficit
|
|
|
(29,431
|
)
|
|
|
(28,496
|
)
|
Total stockholders' equity
|
|
|
21,469
|
|
|
|
22,032
|
|
Total liabilities and stockholders' equity
|
|
$
|
30,112
|
|
|
$
|
30,988
|
|
|
|
|
|
|
|
|
|
|
|
BOVIE MEDICAL CORPORATION
|
RECONCILIATION OF GAAP NET INCOME/(LOSS) RESULTS TO NON-GAAP
ADJUSTED EBITDA/(LOSS)
|
(Unaudited) (In thousands)
|
|
Use of Non-GAAP Financial Measures
We present these non-GAAP measures because we believe these measures are
useful indicators of our operating performance. Our management uses
these non-GAAP measures principally as a measure of our operating
performance and believes that these measures are useful to investors
because they are frequently used by analysts, investors and other
interested parties to evaluate companies in our industry. We also
believe that these measures are useful to our management and investors
as a measure of comparative operating performance from period to period.
The Company has presented the following non-GAAP financial measures in
this press release: adjusted EBITDA. The Company defines adjusted EBITDA
as its reported net income/(loss) (GAAP) plus income tax expense,
interest expense, net, depreciation and amortization, stock-compensation
expense, and changes in value of derivative liabilities.
|
|
|
|
|
Three Months Ended March 31,
|
|
|
2018
|
|
2017
|
Net loss GAAP Basis
|
|
$
|
(935
|
)
|
|
$
|
(1,685
|
)
|
Interest expense, net
|
|
|
34
|
|
|
|
31
|
|
Income tax expense
|
|
|
11
|
|
|
|
5
|
|
Depreciation and amortization
|
|
|
199
|
|
|
|
178
|
|
Stock based compensation
|
|
|
372
|
|
|
|
159
|
|
Change in fair value of derivative liabilities
|
|
|
26
|
|
|
|
(88
|
)
|
Adjusted EBITDA
|
|
|
(293
|
)
|
|
|
(1,400
|
)
|
|
|
|
|
|
|
|
|
|
The following unaudited table presents a reconciliation of net loss to
Adjusted EBITDA for our 2018 guidance:
|
|
|
|
|
Year Ended 2018
|
Net loss GAAP Basis
|
|
$
|
(1,100
|
)
|
Interest expense, net
|
|
|
150
|
|
Income tax expense
|
|
|
—
|
|
Depreciation and amortization
|
|
|
700
|
|
Stock based compensation
|
|
|
1,500
|
|
Change in fair value of derivative liabilities
|
|
|
—
|
|
Adjusted EBITDA
|
|
|
1,250
|
|
|
|
|
|
|
The reconciliation assumes the mid-point of the Adjusted EBITDA loss
range and the midpoint of each component of the reconciliation,
corresponding to guidance of $1.0 million to $1.5 million for 2018.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180514006046/en/
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