Apyx Medical Corporation (NASDAQ:APYX) Q3 2023 Earnings Call Transcript

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So we’re very well equipped to be able to handle that as an if it does come up. But for the most part, we’re move past that. And we’re focused on how we make sure that we get more customers that get to see the benefits of Renuvion for their patients.

Matt Hewitt: That’s great. And then separately, maybe any initial feedback on the micro handpieces following your soft launch this past quarter, what are you hearing from the practitioners that are using it, is this something that you expect to ramp quickly upon the full launch? Thank you.

Charles Goodwin: Yes, so the micro hand piece has been having great reviews by our doctors that are using it. We’re in the final stages right now developing the protocols for some of the specific areas. And probably the three specific areas where we’re seeing the most success with the micro handpiece are obviously the face, which that’s not a surprise, we talked about that before, but also the hands and the labia are also areas where they’re getting very good results with the micro handpiece. And so like I said, we’re working through with our clinical team to work through the training, and we would expect that the micro handpiece would have material contribution sometime next year.

Matt Hewitt : Excellent. Thank you.

Operator: Thank you. [Operator Instructions] Our next questions come from the line of George Sellers from Stephens, please proceed with your questions.

George Sellers : Hey, good morning, and thanks for taking the question. Maybe start with the domestic market. I’m just curious if you could give some additional detail on the split between legacy device placements and Apyx One device placement. So how many of the new sales in the U.S in the quarter were Apyx One? And then also, how many are where are you in rolling out the Apyx One to some of your legacy customers that are still using the legacy device?

Charles Goodwin : Yes, so we don’t break down the actual numbers just to make sure that we’re clear from Apyx One, everything else. But the majority of our generator growth in the U.S was from sales to new customers. Okay. We did also have customers who took advantage of the upgrade program to the Apyx One. And so, but the vast majority of growth that happened that 70% growth in the U.S came from sales of new generators, and the vast majority of those were Apyx One, that were sold.

George Sellers: Okay. That’s helpful. And then on the underlying market, have you seen any changes or shifts? And how physicians are using this device, any growth in standalone procedures or any changes and sort of the breakout between in conjunction with liposuction versus standalone skin tightening?

Charles Goodwin: Yes, it’s a very good question. Yes, we have started to see evidence of them using Renuvion just as a standalone modality, instead of following liposuction. And one of the big reasons for that is because of the some of the success that patients are having on these GLP-1 drugs, and they lose weight and then have black skin. And so obviously, they’re going to see plastic or cosmetic surgeons because I believe that they’re going to be the greatest group that is going to benefit from the GLP-1 drugs over time. But then obviously, if they’ve got blacks or loose skin, there’s not a better technology out there to address that minimally invasively then Renuvion and so we are starting to see patients coming in with that issue and doctors being able to provide a solution for them.

George Sellers : Okay, great. Thanks for that color. And I’ll leave it there just there. Thank you all for the time.

Operator: Thank you. Our next questions come from the line of Dave Turkaly with JMP Securities, please proceed with your questions.

David Turkaly : Hey, good morning. Just wondering if you might share your latest sort of market research on aesthetic procedures just broadly, what you’re expecting sort of for the end of this year and then into next year? Recession or not like sort of how are the procedure volumes? What are you expecting? And I guess even more specifically, what are you expecting for liposuction volume?

Charles Goodwin: Yes, so we expect, so the first thing is just as a thing, the market data doesn’t change that quick as far as the research reports go. And so — but we would expect over many, many years for body contouring procedures to expand and at a great rate. We saw liposuction in 2021, that grew 17% worldwide and we would see that procedure keep growing, probably not at that kind of CAGR. But it will still have, I would say a high single digit CAGR for a lot of years to come. And when you look at the need that is going to be in the marketplace for all types of skin laxity. I think the procedure volumes are going to be huge for many, many years to come in this. And as I mentioned in the previous one, I think that plastic and cosmetic surgeons are going to be some of the bigger beneficiaries of these GLP-1 drugs because they create lacks skin when you lose weight and people have been trying to lose weight for years are now going to be motivated to go do something.

And that go do something is to go see a plastic or cosmetic surgeon.

Operator: Thank you. Our next questions come from the line of Matt Hewitt with Craig Hallum. Please proceed with your questions.

Matt Hewitt: Thank you for the follow up here. I just wanted to go back to something you said in your prepared remarks, Charlie. I think you said that revenues from sales your handpieces represented more than half of the $42 million and Advanced Energy generated during the trailing 12 months. Is it your expectation that now that you’ve kind of crossed over that median with the handpiece sales that will continue to be the primary driver that yes, you’re obviously going to continue to sell the boxes? But now it’s really about driving utilization and going forward. Thank you.

Charles Goodwin: Yes, no, thanks, Matt. And thanks for the question. Yes, look, from quarter-to-quarter things could change based on the amount of capital that obviously we sell just from a math perspective. But what won’t change is the vast amount of our business that is from the consumer side of things and driving utilization. As, you know, because you’ve been with the story for a while, we have spent a ton of time on evidence based medicine and our clinical team helping drive utilization. And one of the things that we are very fortunate to have is an incredibly group as an incredible group of users that are incredibly passionate about the technology. And they’re passionate about the technology because of the results they’re able to achieve with it for their patients.

And as we keep bringing in more instruments and allowing them to treat more areas, and they talk amongst themselves and figure out how each are using it in different areas and for different types of patients. Whether it’s lipo patients or GLP-1 patients that is going to keep driving that adoption and utilization of our handpieces. And that has always been a tremendous focus for us as an organization. We certainly do not want to be the company that is selling a piece of capital and having it sit in the doctor’s office for us, the focus is driving that utilization and partnering with the practice and allowing them to provide this great technology for their patients to give them these results. And so that has always been our focus, and we will keep driving that number as high as we possibly can.

Matt Hewitt : Great. Thank you.

Operator: Thank you. We are currently showing no remaining questions at this time. With that that does conclude our conference for today. Thank you for your participation. You may now disconnect.

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