CURRENT REPORT |
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Date of Report (Date of earliest event reported) |
November 2, 2017 |
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BOVIE MEDICAL CORPORATION |
(Exact name of registrant as specified in its charter) |
Delaware | 0-12183 | 11-2644611 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
(Former name or former address, if changed since last report) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | |
99.1 |
Date: November 2, 2017 | By: | /s/ Robert L. Gershon | |
Robert L. Gershon | |||
Chief Executive Officer |
![]() | EXHIBIT 99.1 |
• | Advanced Energy revenue of $2.1 million, up 52% year-over-year, driven by strong J-Plasma® sales. |
• | Advanced Energy revenue increased 17% quarter-over-quarter in Q3. |
• | Core revenue of approximately $6.7 million, down 3% year-over-year. |
• | Management believes core segment revenue was impacted by hurricane-related business disruptions in Texas and Florida during the third quarter. |
• | OEM revenue of approximately $0.5 million, down 70.2% year-over-year. |
• | Total Q3 revenue of approximately $9.3 million, down 7.1% year-over-year. |
• | Total Q3 adjusted EBITDA loss of approximately $772,000 versus adjusted EBITDA of approximately $129,000 in the third quarter of 2016. |
• | Q3 adjusted EBITDA loss includes approximately $370,000 of expenses related to an inventory write-down in the period. |
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Three Months Ended September 30, | Increase/Decrease | Nine Months Ended September 30, | Increase/Decrease | ||||||||||||||||||||||||||
(In thousands) | 2017 | 2016 | $ Change | % Change | 2017 | 2016 | $ Change | % Change | |||||||||||||||||||||
Core | $ | 6,696 | $ | 6,902 | $ | (206 | ) | (3.0 | )% | $ | 20,959 | $ | 20,261 | $ | 698 | 3.4 | % | ||||||||||||
OEM | 525 | 1,762 | (1,237 | ) | (70.2 | )% | 2,030 | 4,351 | (2,321 | ) | (53.3 | )% | |||||||||||||||||
Advanced Energy | 2,126 | 1,399 | 727 | 52.0 | % | 4,546 | 2,521 | 2,025 | 80.3 | % | |||||||||||||||||||
Total | $ | 9,347 | $ | 10,063 | $ | (716 | ) | (7.1 | )% | $ | 27,535 | $ | 27,133 | $ | 402 | 1.5 | % |
Three Months Ended September 30, | Increase/Decrease | Nine Months Ended September 30, | Increase/Decrease | ||||||||||||||||||||||||||
(In thousands) | 2017 | 2016 | $ Change | % Change | 2017 | 2016 | $ Change | % Change | |||||||||||||||||||||
Electrosurgical | $ | 6,205 | $ | 5,690 | $ | 515 | 9.1 | % | $ | 17,741 | $ | 15,020 | $ | 2,721 | 18.1 | % | |||||||||||||
Cauteries | 1,696 | 1,863 | (167 | ) | (9.0 | )% | 5,224 | 5,417 | (193 | ) | (3.6 | )% | |||||||||||||||||
Lighting | 573 | 740 | (167 | ) | (22.6 | )% | 1,966 | 2,046 | (80 | ) | (3.9 | )% | |||||||||||||||||
Other | 873 | 1,770 | (897 | ) | (50.7 | )% | 2,604 | 4,650 | (2,046 | ) | (44.0 | )% | |||||||||||||||||
Total | $ | 9,347 | $ | 10,063 | $ | (716 | ) | (7.1 | )% | $ | 27,535 | $ | 27,133 | $ | 402 | 1.5 | % |
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Three Months Ended September 30, | Increase/Decrease | Nine Months Ended September 30, | Increase/Decrease | ||||||||||||||||||||||||||
(In thousands) | 2017 | 2016 | $ Change | % Change | 2017 | 2016 | $ Change | % Change | |||||||||||||||||||||
Domestic | $ | 7,978 | $ | 8,730 | $ | (752 | ) | (8.6 | )% | $ | 23,678 | $ | 23,102 | $ | 576 | 2.5 | % | ||||||||||||
International | 1,369 | 1,333 | 36 | 2.7 | % | 3,857 | 4,031 | (174 | ) | (4.3 | )% | ||||||||||||||||||
Total | $ | 9,347 | $ | 10,063 | $ | (716 | ) | (7.1 | )% | $ | 27,535 | $ | 27,133 | $ | 402 | 1.5 | % |
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• | The Company expects total revenue growth to be driven by: |
◦ | Advanced Energy sales growth in the range of approximately 93% to 98% year-over-year as compared to growth in the range of approximately 90% to 95% year-over-year previously, |
◦ | OEM sales decline in the range of approximately 50% to 55% year-over-year, unchanged from prior guidance expectations. |
◦ | Core sales growth in the range of approximately 3% to 4% year-over-year, as compared to growth in the range of approximately 5% to 11% year-over-year previously. |
• | The Company now expects adjusted EBITDA loss in a range of $2.8 million to $3.0 million, compared to adjusted EBITDA loss in a range of $1.2 to $1.4 million in our prior guidance range. |
◦ | The new adjusted EBITDA loss range for fiscal year 2017 includes the impacts of an inventory write-down in the third quarter as well as the impacts from lower core sales and higher operating costs. |
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BOVIE MEDICAL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Sales | $ | 9,347 | $ | 10,063 | $ | 27,535 | $ | 27,133 | |||||||
Cost of sales | 4,753 | 5,002 | 13,673 | 14,049 | |||||||||||
Gross profit | 4,594 | 5,061 | 13,862 | 13,084 | |||||||||||
Other costs and expenses: | |||||||||||||||
Research and development | 610 | 681 | 2,015 | 1,941 | |||||||||||
Professional services | 421 | 292 | 1,291 | 1,045 | |||||||||||
Salaries and related costs | 2,080 | 2,192 | 6,783 | 6,492 | |||||||||||
Selling, general and administrative | 2,617 | 2,141 | 7,950 | 6,354 | |||||||||||
Total other costs and expenses | 5,728 | 5,306 | 18,039 | 15,832 | |||||||||||
Loss from operations | (1,134 | ) | (245 | ) | (4,177 | ) | (2,748 | ) | |||||||
Interest expense, net | (36 | ) | (37 | ) | (103 | ) | (125 | ) | |||||||
Change in fair value of derivative liabilities | (69 | ) | (683 | ) | 57 | (555 | ) | ||||||||
Total other loss, net | (105 | ) | (720 | ) | (46 | ) | (680 | ) | |||||||
Loss before income taxes | (1,239 | ) | (965 | ) | (4,223 | ) | (3,428 | ) | |||||||
Income tax expense | 6 | — | 15 | — | |||||||||||
Net loss | $ | (1,245 | ) | $ | (965 | ) | $ | (4,238 | ) | $ | (3,428 | ) | |||
Loss per share | |||||||||||||||
Basic | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.14 | ) | $ | (0.13 | ) | |||
Diluted | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.14 | ) | $ | (0.13 | ) | |||
Weighted average number of shares outstanding - basic | 31,078 | 27,075 | 30,932 | 27,059 | |||||||||||
Weighted average number of shares outstanding - dilutive | 31,078 | 27,075 | 30,932 | 27,059 |
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BOVIE MEDICAL CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share data) |
September 30, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 9,411 | $ | 14,456 | |||
Restricted cash | 779 | 779 | |||||
Trade accounts receivable, net of allowance of $154 and $118 | 4,077 | 4,733 | |||||
Inventories, net | 7,335 | 6,158 | |||||
Prepaid expenses and other current assets | 634 | 413 | |||||
Total current assets | 22,236 | 26,539 | |||||
Property and equipment, net | 6,376 | 6,449 | |||||
Brand name and trademark | 1,510 | 1,510 | |||||
Purchased technology and license rights, net | 189 | 215 | |||||
Goodwill | 185 | 185 | |||||
Deposits | 84 | 109 | |||||
Other assets | 119 | 103 | |||||
Total assets | $ | 30,699 | $ | 35,110 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 1,387 | $ | 1,606 | |||
Accrued payroll | 193 | 419 | |||||
Accrued vacation | 330 | 404 | |||||
Current portion of mortgage note payable | 239 | 239 | |||||
Accrued and other liabilities | 2,657 | 2,604 | |||||
Total current liabilities | 4,806 | 5,272 | |||||
Mortgage note payable, net of current portion | 2,515 | 2,694 | |||||
Note payable | 140 | 140 | |||||
Deferred rents | 11 | 14 | |||||
Deferred tax liability | 564 | 564 | |||||
Derivative liabilities | 146 | 203 | |||||
Total liabilities | 8,182 | 8,887 | |||||
STOCKHOLDERS' EQUITY | |||||||
Series B convertible preferred stock, $0.001 par value; 3,588,139 authorized and zero issued and outstanding as of September 30, 2017 and 3,588,139 authorized and 975,639 issued and outstanding as of December 31, 2016, respectively | — | 1 | |||||
Common stock, $0.001 par value; 75,000,000 shares authorized; 32,975,174 issued and 32,832,095 outstanding as of September 30, 2017 and 40,000,000 shares authorized; 31,002,832 issued and 30,859,753 outstanding as of December 31, 2016, respectively | 33 | 31 | |||||
Additional paid-in capital | 50,156 | 49,625 | |||||
Accumulated deficit | (27,672 | ) | (23,434 | ) | |||
Total stockholders' equity | 22,517 | 26,223 | |||||
Total liabilities and stockholders' equity | $ | 30,699 | $ | 35,110 |
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BOVIE MEDICAL CORPORATION RECONCILIATION OF GAAP NET INCOME/(LOSS) RESULTS TO NON-GAAP ADJUSTED EBITDA/(LOSS) (Unaudited) (In thousands) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net loss GAAP Basis | $ | (1,245 | ) | $ | (965 | ) | $ | (4,238 | ) | $ | (1,944 | ) | |||
Interest expense, net | 36 | 37 | 103 | 125 | |||||||||||
Income tax expense | 6 | — | 15 | — | |||||||||||
Depreciation and amortization | 171 | 201 | 527 | 556 | |||||||||||
Stock based compensation | 191 | 173 | 532 | 533 | |||||||||||
Change in fair value of derivative liabilities | 69 | 683 | (57 | ) | 555 | ||||||||||
Adjusted EBITDA | (772 | ) | 129 | (2,748 | ) | (175 | ) |
Year Ended | |||
2017 | |||
Net loss GAAP Basis | $ | (4,500 | ) |
Interest expense, net | 140 | ||
Income tax expense | — | ||
Depreciation and amortization | 720 | ||
Stock based compensation | 740 | ||
Change in fair value of derivative liabilities | — | ||
Adjusted EBITDA | (2,900 | ) |
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