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 second quarter ended June 30, 2018.
Second Quarter 2018 Financial Summary:
Second Quarter 2018 Operating Highlights:
Operating Highlights Subsequent to Quarter-End:
Annual Stockholders’ Meeting:
Management Comments:
“Bovie Medical is pleased to report another quarter of impressive
financial performance and exciting operational progress,” said Charlie
Goodwin, Chief Executive Officer. “We experienced strong growth in our
Advanced Energy business, which was marked by continued strength in both
adoption and utilization of our J-Plasma/Renuvion technology. The trends
we saw in our Advanced Energy business continue to confirm our strategic
focus on the U.S. cosmetic surgery market, where our hybrid sales force
is driving adoption of our Renuvion Cosmetic Technology. Building on the
strong Advanced Energy growth in the U.S., we also saw strong demand for
our J-Plasma/Renuvion technology from our network of distribution
partners outside the U.S. in the second quarter.”
Mr. Goodwin continued: “We complemented our second quarter financial
performance by achieving a number of important operational milestones
related to our longer-term growth strategy to create a foundation of
support for our Renuvion technology that will encourage its broader
adoption in the cosmetic surgery market going forward. Specifically, we
completed enrollment in our U.S. IDE clinical study evaluating the use
of Renuvion Technology for dermal resurfacing procedures. This study
represents an exciting first step in our efforts to establish strong
clinical support demonstrating the positive outcomes that can be
achieved by using Renuvion technology. Furthermore, the results from the
dermal resurfacing U.S. IDE clinical study will support our 510(k)
submission to the FDA for a new indication to market and sell Renuvion
for dermal resurfacing procedures.”
“We also made progress towards our strategic goal of enhancing physician
and practice support for our cosmetic surgery customers with the launch
of Renuvion Cosmetic Technology, a new dedicated brand for our J-Plasma
generators and hand pieces in the cosmetic surgery market. This
represents an important launch for our Company, as Renuvion Cosmetic
Technology demonstrates our strong commitment to physician customers in
the cosmetic surgery market by providing them with a brand that was
specifically designed to resonate with their patients. Simply stated,
the early market response to the Renuvion launch has exceeded our
expectations and we could not be happier with positive feedback we have
received from our physician customers. Finally, we enhanced our Medical
Advisory Board with the appointment of Dr. Diane Duncan, the second
expert from the cosmetic surgery market to join our MAB, who along with
Dr. Jack Zamora will provide advice and guidance on our long-term
clinical and commercial strategies.”
“In addition to the strong operating and financial results we achieved
over the first six months of 2018, on July 9th, we announced the
divestment and sale of our Core business segment to Specialty Surgical
Instrumentation, Inc., a subsidiary of Symmetry Surgical, Inc. We
believe this announcement represents a watershed event for our Company;
one that we believe is beneficial for all Bovie Medical constituents:
our Core business segment customers, our employees and our stockholders.
This transaction allows us to focus on our largest, fastest growing
market opportunity by leveraging our highly-differentiated
J-Plasma/Renuvion technology with the potential to achieve attractive
outcomes for physicians and their patients in the cosmetic surgery
market. The proceeds from this transaction will significantly enhance
our balance sheet, allowing us to pursue this strategy and ultimately
achieve strong, sustained and profitable growth for the benefit of our
stockholders.”
“As we enter the second half of 2018, we remain focused on executing
against our strategic objectives in our Advanced Energy business and
expect continued strong adoption of our Renuvion Technology to be the
primary driver of growth this year. The transaction with Symmetry is
expected to close during the third quarter and following the closing, we
plan to host a call with the investment community to update our fiscal
year 2018 financial guidance and to share more details about the growth
and profitability profile of the remaining Advanced Energy and OEM
businesses going forward.”
Second Quarter 2018 Results:
The following table represents revenue by reportable segment:
%Change
$Change
%Change
Total
Total revenue for second quarter 2018 increased $1.7 million, or 17.1%,
to $11.5 million, compared to $9.8 million in the second quarter of
2017. Sales of the Company’s J-Plasma/Renuvion generators and handpieces
were the primary driver of the increase in total revenue in second
quarter 2018, with growth in Core and OEM segment sales contributing
modestly to the year-over-year increase in total revenue as well during
the second quarter 2018 period. Advanced Energy segment sales increased
approximately $1.3 million, or 71.7% year-over-year, to $3.1 million,
compared to approximately $1.8 million last year. Core segment sales
increased approximately $0.3 million, or 4.0% year-over-year, to $7.8
million, compared to approximately $7.5 million last year. OEM segment
sales increased $0.1 million, or 16.1% year-over-year, to $0.6 million,
compared to $0.5 million last year.
$Change
%Change
$Change
%Change
Revenue in the United States increased approximately $1.0 million, or
11.4% year-over-year, to $9.7 million, and international revenue
increased approximately $0.7 million, or 62.7% year-over-year, to $1.8
million. International sales growth in the second quarter was primarily
driven by sales to international distributors in the Company’s Advanced
Energy segment.
Gross profit for the second quarter of 2018 increased approximately $1.2
million, or 24.5% year-over-year, to $6.3 million, compared to $5.0
million for second quarter of 2017. The primary drivers of the increase
were favorable manufacturing variances partially offset by lower margins
in the Advanced Energy segment attributable to product mix.
Operating expenses for the second quarter of 2018 increased
approximately $0.2 million, or 3.1% year-over-year, to $6.5 million,
compared to $6.3 million for the second quarter of 2017. The
year-over-year change in operating expenses was primarily driven by a
$0.2 million increase in professional services expense and a $0.1
million increase in research and development expenses, offset partially
by a $0.1 million decrease in salaries and related expense.
Loss from operations for second quarter 2018 was $0.3 million, compared
to a loss from operations of $1.3 million for the comparable period last
year.
Net loss for second quarter 2018 was $0.3 million, or $0.01 per diluted
share, compared to a loss of $1.3 million, or $0.04 per diluted share,
for the second quarter of 2017.
As of June 30, 2018, the Company had cash and equivalents of $8.5
million as compared to $10.7 million as of December 31, 2017. The
Company had working capital of $16.0 million as of June 30, 2018 as
compared to $16.6 million as of December 31, 2017.
Six Months 2018 Results:
Total revenue for the six months ended June 30, 2018 increased $3.2
million, or 17.6%, to $21.4 million, compared to $18.2 million in the
six months ended June 30, 2017. Total revenue growth was driven by a
137.3% increase in Advance Energy sales and a 0.3% increase in Core
sales, and was partially offset by a 10.6% decrease in OEM sales.
Net loss for the six months ended June 30, 2018 was $1.2 million, or
$0.04 per diluted share, compared to a loss of $3.0 million, or $0.10
per diluted share, for the six months ended June 30, 2017.
2018 Outlook:
The Company plans to update its financial guidance for fiscal year 2018
following the close of the divestment and sale of the Core business
segment to Specialty Surgical Instrumentation, Inc., a subsidiary of
Symmetry Surgical, Inc. which is expected to occur in the third quarter
of 2018.
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.
(Unaudited) (In thousands, except per share data)
BOVIE MEDICAL CORPORATION
CONSOLIDATED BALANCE SHEETS
June 30, 2018
December 31, 2017
BOVIE MEDICAL CORPORATION
RECONCILIATION OF GAAP NET INCOME/(LOSS) RESULTS TO NON-GAAP
ADJUSTED EBITDA/(LOSS)
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.
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