Apyx Medical Corporation

Ladies and gentlemen, good morning and welcome to the APEX Medical first quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jeremy Pfeffer from LifeSci Advisors. Please go ahead.

Thank you, and welcome everyone to our first quarter 2025 earnings call. Representing the company on the call are Charlie Goodwin, Chief Executive Officer, and Matt Hill, Chief Financial Officer of APEX. Before we begin, I would like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on the current expectations of management and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including, without limitation, those identified in the risk factor section of our most recent annual report on Form 10-K, our most recent 10-Q filing, and the company's other filings with the Securities and Exchange Commission. Such factors may be updated from time to time in our filings with the SEC, which are available on our website. We undertake no obligation to publicly update or revise our forward-looking statements as a result of new information, future events, or otherwise. This call will also include references to certain financial measures that are not calculated in accordance with generally accepted accounting principles, or GAAP. We generally refer to these as non-GAAP financial measures. Reconciliations of those non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in the earnings press release on the investor relations portion of our website. I would now like to turn the call over to Mr. Charlie Goodwin, Apex Medical's President and Chief Executive Officer. Please go ahead.

Thank you, Jeremy, and thank you all for joining us today. Per our usual format on these quarterly calls, I will be providing a review of our performance in the first quarter of 2025, and then I will turn the call over to Matt for a review of our first quarter financial results, as well as our full year 2025 guidance. We will then open the call for your questions. Let me start with a review of our first quarter performance. We reported total revenue of $9.4 million for the quarter, a decrease of 8% compared to $10.2 million for the same period last year. While sales of our OEM products decreased as expected, sales of our advanced energy products increased 6% to $7.9 million for the first quarter of 2025 compared with last year's period. This reflects a building trend we have seen over the past year with stronger sales of single-use handpieces in the United States. We also continue to see demand for capital equipment stabilize with increases year over year for two consecutive quarters in the U.S. We believe this speaks to the benefits offered by Renuvion as the only FDA-cleared device for use after liposuction as well as its ability to treat loose and lax skin. Digging further into our financial performance for the quarter, I want to point out that our team delivered these solid top-line results, somewhat defying the industry. We also implemented significant cost-cutting measures and a restructuring program that right-sized our operations just six months ago. I think these initial results show this program is achieving its intended outcomes of reducing cost, reducing cash burn, and speaks to the dedication of our commercial strategy and vision for APEX. Matt and I are very appreciative of everyone's effort, and I am truly excited about the direction we are heading. We've laid a strong foundation that is energizing and setting the stage for meaningful growth, innovation, and impact. There are persistent macroeconomic headwinds impacting the global aesthetic space. At the same time, we believe the primary impact on the market is coming from the explosive growth of GLP-1s. We estimate that over 15 million patients are currently using GLP-1 drugs many of which we believe will seek treatment for loose and lax skin due to the associated rapid weight loss. As I have mentioned previously, we are still in the early innings of this market when it comes to our role in serving these patients' needs as they meet their goal weight. In fact, Dr. Randy Boyatt, in her podcast, cited a study of 1,028 GLP-1 patients across 424 clinics examining the top 10 aesthetic treatments after medical weight loss. Number one was skin tightening treatments at 63%, and number two was body contouring fat reduction at 52%. As the only true surgical aesthetics company, we believe we are uniquely positioned to take advantage of this burgeoning tailwind. This brings me to our Renuvion offering. We believe this minimally invasive surgical procedure is the best treatment option to address loose and lax skin, providing a durable and transformational result. It is our belief that Renuvion should be the standard of care for all patients including those who have lost significant weight as a result of GLP-1 drugs. Our results are supported by long-term data. Just last month, we announced the publication of two peer-reviewed articles on two separate clinical studies that evaluated the use of Renuvion during body contouring procedures, including lipoabdominoplasty following significant weight loss. In these studies, the authors reported that patients in the Renuvion group demonstrated improvements in abdominal skin laxity and excess skin, along with higher satisfaction scores. These papers highlight the use of Renuvion in combination with lift procedures, which are growing more than 20%. And please keep in mind that these newly published data simply reinforce a larger and growing body of evidence supporting the safety and utility of Renuvion in aesthetic body contouring. For further validation, we are excited to announce just a few weeks ago that Renuvion won the 2025 New Beauty Award for Best Minimally Invasive Skin Tightener. As part of this process, New Beauty editors tested thousands of products leading up to the 15th annual awards issue with a goal of selecting the most innovative beauty products, treatments, and trends. They also collaborate with board-certified doctors and medical experts to determine the most effective, results-driven, in-office treatments, and post-procedure essentials. And so we are honored to have our game-changing technology receive this accolade by such a trusted authority in the aesthetic space. Regarding our direct-to-consumer marketing strategy, our program continues to deliver outstanding results, generating significant reach, views, and PR beyond our expectations. As I have mentioned previously, as part of this program, we have successfully leveraged several influencers who each bringing a unique voice and engaged audience to our campaign. Most recently, we announced the appointment of Dolores Cantina as the Chief of Confidence for the brand's Renew You consumer marketing campaign, which exemplifies the brand's ability to reshape bodies and lives. As a beloved personality of the Real Housewives of New Jersey, Dolores provides a real take on the problem patients face with loose skin and the power of our body contouring technology. She is a powerful advocate for choosing board-certified plastic or cosmetic surgeons for treatments and procedures. This overlaps really well with our messaging that Renuvion is the number one trusted body contouring technology among these doctors, along with clinical data, and we believe she will be a valuable member of the APICS team. Turning to our development pipeline, we are very excited to have introduced our Aon body contouring on our third quarter call following the submission of the 510K to the FDA in December. This all-in-one platform seamlessly integrates Renuvion, ultrasound-assisted liposuction, power-assisted liposuction, infiltration, aspiration, electrocoagulation, and fat transfer into a single streamlined device. Considering the major shifts in the market with rapid adoption of GLP-1s, we believe Aon is a game changer for surgeons that will differentiate us and position Apex as their surgical partner. Our goal for the next few years is to be able to walk into almost any surgeon's practice and see Aon position in the heart of their operating room, pending clearance. In late March, we offered an early look at Aon's system to board-certified plastic and cosmetic surgeons during the Aesthetic Meet in Austin, Texas, which is considered the premier event in aesthetics. I am excited to report that the feedback exceeded all expectations as many of the physicians we spoke with confirmed that the Aon would be a welcome addition to many of their practices and provided for all of their surgical needs. Regarding timing, we are preparing for a planned launch of Aon in the back half of 2025 pending clearance. We expect the introduction of the Aon system to the market will help kickstart our equipment sales growth as we have an opportunity to capture new market share and expand our total addressable market in aesthetic surgery. I will now turn the call over to Matt for a review of our first quarter 2025 financial results in more detail, along with our financial guidance for 2025.