Apyx Medical Corporation — FY2021 Form 10-K
Business context and period: This annual report covers the fiscal year ended December 31, 2021; it does not provide standalone fourth-quarter results. Apyx develops and sells helium-plasma medical devices, marketed as Renuvion in cosmetic surgery and J-Plasma in hospital surgery, and supplies equipment through OEM agreements. Advanced Energy contributed 88.6% of revenue; OEM contributed 11.4%.
Financial performance
| Metric | 2021 | 2020 |
|---|---|---|
| Revenue | $48.5 million | $27.7 million |
| Gross profit / margin | $33.6 million / 69.3% | $17.5 million / 63.2% |
| Operating loss | $14.4 million | $20.1 million |
| Net loss | $15.2 million | $11.9 million |
| Loss per share, basic and diluted | $0.44 | $0.35 |
| Cash used in operating activities | $10.4 million | $16.1 million |
| Cash and cash equivalents at year-end | $30.9 million | $41.9 million |
| Working capital at year-end | $47.5 million | $56.9 million |
Advanced Energy revenue rose 93.5% to $43.0 million; OEM revenue was nearly flat at $5.5 million. Domestic and international revenue increased 75.3% and 74.6%, respectively. Improved product and segment mix, higher production volumes, and manufacturing efficiencies lifted gross margin by 6.1 percentage points. Higher operating expenses—including sales commissions, payroll, and selling and marketing costs—continued to contribute to losses. Net loss increased partly because 2020 included a $7.5 million income tax benefit; 2021 recorded $0.4 million of tax expense.
At year-end, total assets were $68.7 million and total liabilities were $14.7 million. The balance sheet reports no conventional borrowing balance; lease liabilities totaled approximately $0.3 million. Inventory purchase commitments were approximately $4.9 million, expected to be purchased by the end of 2022.
Changes, outlook, and key risks
- Operating progress: Management reported greater Renuvion handpiece utilization and improved domestic demand for capital equipment, despite continuing COVID-19 effects. International generator adoption remained in an earlier recovery stage.
- Liquidity and investment: Management said available cash was adequate to support operations for the next 12–18 months. It expects to invest approximately 7%–10% of revenue in R&D in 2022 and cautioned that substantial product development and marketing investment could weigh on short-term results and cash flows.
- FDA communication after year-end: On March 14, 2022, the FDA warned consumers and healthcare providers against using Advanced Energy products outside their FDA-cleared indications for general soft-tissue cutting, coagulation, and ablation. Apyx said it was pursuing additional 510(k) clearances and evaluating the communication’s effects; the financial impact was not yet clear.
- Other risks and contingencies: The filing cites supply-chain delays and inflationary pressure on materials, freight, and labor; dependence on suppliers and sterilization services; regulatory and product-liability exposure; and competition. Apyx is involved in legal actions relating to its technology and disclosed a dispute with one insurer over total coverage available. Management considers its defenses meritorious and does not expect the claims to have a material adverse effect, but notes uninsured or excess losses could be material.
- Other unusual items: The 2020 comparison included inventory write-downs and a CARES Act-related tax benefit. Apyx reported no off-balance-sheet arrangements. Its auditor issued an unqualified opinion and reported no critical audit matters.
Investor verification priorities
- Track the FDA communication, any new clearances or restrictions, and resulting changes in procedure use, revenue, or cash flow.
- Assess whether Advanced Energy growth and gross-margin improvement continue, and whether expense growth allows progress toward profitability.
- Monitor cash usage, working capital, and the stated 12–18-month liquidity outlook against actual operating performance.
- Review developments in the technology-related litigation and insurance-coverage dispute, including any potential uninsured exposure.
- Check whether supply-chain, inflation, and $4.9 million of inventory commitments affect production, margins, or order fulfillment.