Apyx Medical Corporation (NASDAQ:APYX) Q4 2023 Earnings Call Transcript

Charles D. Goodwin: So we are pleased with the progress that we’ve made this past year in upgrading existing users. Our recently launched Micro Handpiece represents another benefit to adopting Apyx One and for practices though, that are focused on those procedures. And we still see significant room to expand adoption across our existing user base in 2024. That said, our guidance still implies that our generator sales will be slower due to the challenging environment because, obviously, those doctors have to have a capital purchase also. And remember, it’s only going to be the doctors that want to use the Micro Handpiece that will be the ones that we’ll be adopting first, the ones that are doing a lot of body work, they don’t — and not going to use the Micro right away, they wouldn’t need to adopt right away. So we still see these trends as being a little bit slower in 2024 also.

George Sellers: Okay. Okay. Got it. And then as you think about the rest of 2024 and into 2025 as well, is the Micro Handpiece and the other new technologies that you all have in the pipeline are those sort of the key drivers to getting existing customers and then also new customers to adopt the Apyx One or is the improved technology of the Apyx One driving new user adoption as well?

Charles D. Goodwin: Yes, the new user adoption will be primarily Apyx One for new users, but the growth in our handpieces as a whole is going to be a driver for us in 2024 and 2025 and beyond. Remember, there’s 2.3 million liposuction procedures that are done on a worldwide basis every single year. And we’ve got a long ways to go to make Renuvion the standard of care for liposuction. So the handpieces whether they’re Micro, whether they’re for the body, whether they’re for everything else, that still remains a huge driver of our business as we move forward from 2024 and for many years to come.

George Sellers: Okay, great. I will leave it there. And thanks again for taking the questions.

Operator: Thank you. Our next question comes from the line of Matt Hewitt with Craig-Hallum Capital Group. Please proceed with your question.

Matthew Hewitt: Good morning, thank you for taking the questions. Maybe just a follow-up on your last response there, Charlie. Given the tough macro environment, particularly with the higher interest rates, is there anything that you could do from a pricing perspective that would drive generator sales over the near term? Obviously, you’re seeing the utilization grow, but getting those generators into the practices hands, I think, is the key here. And I’m just wondering if there’s something you could do from a pricing perspective to encourage and kind of motivate the purchase and get those boxes in place?

Charles D. Goodwin: Yes. Look, we’ve obviously talked about programs that we’ve had to buy down the interest rates for leases and things like that, and we’re constantly evaluating what we’re doing from a capital perspective in order to make it as easy as possible for new adoption of our generators. And obviously, it’s something that we will continue to look out and monitor and drive. And it’s obviously a huge focus of the entire organization globally for new customer adoption in 2024. So it’s always something that we’re evaluating and always something that we’re looking at.

Matthew Hewitt: Got it. And then I believe at least historically, you have not factored in additional international clearances in to your forecast. Is that still the case and are there still a few countries out there that you think you’re hopeful that you could garner approvals in that could be incremental to your guidance?

Charles D. Goodwin: Yes, our guidance just like always, does not assume any material contributions from any new countries in 2024. As we’ve talked in the past, the two big ones that we’re working on are Korea and China. And I think they’re the third and fifth largest cosmetic markets depending on how you look at them or what things you look at. But obviously, until we get those, it doesn’t make any sense to talk about them, quite frankly.

Matthew Hewitt: Got it, right, thank you.

Operator: Thank you. [Operator Instructions]. Our next question comes from the line of Matt O’Brien with Piper Sandler. Please proceed with your question.

Unidentified Analyst: Hi, this is Samantha on for Matt. Thanks so much for taking our questions. So you provided a bunch of color on the sales guidance for the year. We were just wondering, what is the higher end of that range you expect and what would it take for you to reach that?

Charles D. Goodwin: So the delta between the high end and the low end of our guidance basically assumes increased generator sales. So it’s just us being more successful with generator sales.

Unidentified Analyst: Okay. Got it. Thank you. And then one more on the DTC initiative, I know this has been a really big focus recently, how do you expect this to be a contributor throughout the year?

Charles D. Goodwin: Yes, I think that we will continue to drive awareness, both from a consumer point of view and a customer point of view, physician point of view to the benefits of Renuvion, what they can do for their practice, not only in traditional body contouring with liposuction, but also to help treat the patient population that is going to be coming through their doors that are on the GLP-1 drugs. And that will be something that you will see from a DTC perspective as we start to talk and to educate both groups.