Safe Harbor Statement

Transcription

1 September 2018

2 Safe Harbor Statement Certain matters discussed in this presentation and oral statements made from time to time by representatives of the Company may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Federal securities laws. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Many of these factors are beyond the Company s ability to control or predict. Important factors that may cause actual results to differ materially and that could impact the Company and the statements contained in this presentation can be found in the Company s filings with the Securities and Exchange Commission including our most recent reports on Form 10-K and Form 10-Q. Copies of these filings are available online from the SEC. For forward-looking statements in this presentation, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of The Company assumes no obligation to update or supplement any forward-looking statements as a result of new information, future events, or otherwise.

3 Investment Highlights Enhanced growth profile and balance sheet fueled by recent strategic transaction $1.5+ Billion potential market opportunity in U.S. cosmetic surgery Renuvion: Cosmetic Technology truly differentiated; unique capabilities in cosmetic surgery procedures Strong early commercial traction and physician feedback for Renuvion Growth inflection from planned expansion of distribution footprint in U.S. Pursuing multiple strategic initiatives to position New-Co (1) for sustainable, long-term growth in the cosmetic surgery market Experienced management team; enhanced with recent hires (1) New-Co refers to the Company s business on a continuing operations basis, following the transaction with Symmetry Surgical, Inc. which closed on 8/30/18 3

4 Experienced Management Team Years of Relevant Mgmt. Team Member Joined Bovie Experience Representative Previous Experience Charlie Goodwin Chief Executive Officer December Jay Ewers Chief Financial Officer June Moshe Citronowicz Senior Vice President October KCR Technologies Sequential Information Systems Todd Hornsby Vice President & General Manager of Advanced Energy August Dr. Topaz Kirlew Exec Director of Regulatory Affairs & Quality Assurance Scott Sanders Director of Clinical Education & Market Development February March Experienced management team; enhanced with recent hires 4

5 Company Snapshot Leading maker of medical devices and supplies Two reportable operating segments: Core Advanced Energy commercializing J-Plasma, a patented plasma-based surgical device for cutting, coagulation and ablation of soft tissue - J-Plasma sold under the Renuvion Cosmetic Technology brand in the cosmetic surgery market OEM original equipment manufacturer for other medical device manufacturers Founded: 1978 Locations: Clearwater, FL Sofia, Bulgaria Full-Time Employees: ~160 (1) Year of IPO: 1982 Ticker (NYSE MKT) : BVX Market Cap : ~$244M (2) Avg. Daily Vol (LTM): ~126,000 (3) (1) As of 8/30/2018 (2) Market cap. based on shares outstanding of 33.2M as of 7/25/2018 from the Company s 10-Q SEC filing on 8/1/18; share price of $7.34 is as of market close on 9/24/2018 (3) As market close on 9/24/18 LTM = Last Twelve Months 5

6 New-Co (1) Enhanced Growth Profile & Balance Sheet Fueled by Recent Strategic Transaction August 30, 2018: Completed divestiture and sale of Core operating segment and the Bovie brand (2) to Symmetry Surgical, Inc. for $97M in gross proceeds. New-Co retained Advanced Energy and OEM operating segments and manufacturing facilities - Transaction allows New-Co to focus on most attractive growth opportunity: Advanced Energy operating segment - New-Co will be OEM-provider of surgical generators to Symmetry Surgical for at least 10-years under generator manufacturing and supply agreement ~$68 million in net after tax proceeds from the transaction significantly enhances balance sheet (1) New-Co refers to the Company s business on a continuing operations basis, following the transaction with Symmetry Surgical, Inc. which closed on 8/30/18 (2) Note, new company name for New-Co expected in early 2019 New-Co : enhanced growth profile and balance sheet; Increased focus on Advanced Energy segment opportunity 6

7 New-Co : Attractive Market Opportunity Primary Market Opportunity: Selling Renuvion (powered by J-Plasma Technology) in the U.S. cosmetic surgery market ~15,000 (1) plastic surgeons, cosmetic surgeons & dermatologists Generators: ~$1.3 billion potential market opportunity (2) Strong annual addressable market opportunity with initial clinical indication Renuvion as a subdermal coagulator following liposuction procedures: ~$170M (3) Pursuing additional clinical indications to expand annual addressable market in the U.S. Dermal skin resurfacing procedures: ~$85M (4) Handpieces: ~$255 million potential annual market opportunity (1) Source: American Society of Plastic Surgeons (ASPS) database 2016 (2) Assumes 15,000 physicians x ~$85,000 generator list price (3) Assumes ~400,000 annual procedures x ~$425 handpiece list price (4) Assumes ~200,000 annual procedures x ~$425 handpiece list price $1.5+ Billion potential market opportunity in U.S. cosmetic surgery 7

8 : Revolutionary Technology for the Cosmetic Surgery Market Ionizes helium to create a stream of plasma for cutting, coagulating and ablating soft tissue Offers ability to deliver heat to tissue in a way never before thought possible: 1. Unique heating with helium plasma and proprietary RF energy and near instantaneous cooling - Allows Renuvion to quickly heat the subdermal tissue to maximum contraction temperatures, while minimizing thermal diffusion to the skin surface 2. Ability to deliver full power to all soft tissues (1) - Allows for faster and more efficient heating of the subdermal tissue 3. Non-contact energy delivery - Allows for 360 energy application to all desired tissues in the subdermal space (1) Bovie Ultimate Electrosurgical Generator User s Guide Renuvion s unique ability to manage heat allows for improved tissue effect & treatment time 8

9 : Solving the Tissue Temperature Dilemma Traditional mono- and bipolar RF technologies: - Rely on full thickness heating, which results in inefficient and slow heat delivery - Difficult to achieve ideal treatment temperature range for subdermal tissue contraction while maintaining safe skin surface temperature - Struggle between desired immediate tissue effect (internal >65 O C) and safety (external at <~47 O C) Renuvion Cosmetic Technology: - Able to quickly deliver maximum contraction temperatures to subdermal tissue, while maintaining safe skin surface temperature - Allows for improved tissue effect and time efficiency Renuvion s unique ability to manage heat solves the internal-external tissue temperature dilemma 9

10 Physician Feedback [ ] The thermal characteristics of this energy-based device are unlike any devices currently available. -Richard Gentile, M.D., MBA Plastic Surgeon Using the Renuvion device has allowed me to expand the types of procedures I can offer to my patients. I now have a more predictable and effective option to chose from. -Ryan Neinstein, MD Plastic Surgeon There is an incredible amount of control in terms of depth-ofpenetration; because it s not delivering a burning energy [ ] -Joseph B. DeLozier III, MD, FACS Plastic Surgeon Strong feedback from physicians in the cosmetic surgery market 10

11 Commercial Strategy U.S. Commercial Strategy: Marketing and selling Renuvion to early adopters in the U.S. cosmetic surgery market Employing a hybrid selling model comprised of: (1) - 17 direct sales reps & 3 sales management professionals - 14 independent agents Investing proceeds from recent transaction to enhance & expand field sales team - Milestone: add 8-10 direct sales reps and 2-3 independent sales agencies by end of 2018 Driving growth by expanding customer base and increasing utilization from existing accounts International Commercial Strategy: Utilizing a network of distributors, who market and sell into the hospital surgical suite - Current distributor network consists of 23 distribution partners Growth fueled by penetrating existing markets and expanding distributor relationships (1) As of 6/30/18 Expanding U.S. sales and distribution network to drive growth 11

12 Establishing Foundation for Long-term Growth Focused on building support to facilitate broad-based adoption of Renuvion by: 1. Enhancing physician and practice support for cosmetic surgery customers 2. Expanding clinical support for Renuvion in cosmetic surgery procedures 3. Formulizing regulatory strategy in the cosmetic surgery market 4. Improving manufacturing capabilities and efficiencies Pursuing multiple strategic initiatives to position New-Co for sustainable, long-term growth in the cosmetic surgery market 12

13 Establishing Foundation for Long-term Growth 1. Enhancing physician and practice support for cosmetic surgery customers March, 2018 Launched Renuvion Cosmetic Technology brand: Channel-specific branding for the cosmetic surgery market - - New Co s J-Plasma technology is marketed and sold in the cosmetic surgery market under the Renuvion brand name Created for physicians, with their input - Physician feedback from early adopters of J-Plasma technology instrumental in creating a brand/campaign that will resonate with cosmetic surgery customers Designed to: - Enhance physician practice-based marketing - Leverage the increasing awareness of Renuvion in the cosmetic surgery market 13

14 Establishing Foundation for Long-term Growth 2. Expanding clinical support for Renuvion in cosmetic surgery procedures Conducting IDE clinical study evaluating the use of Renuvion in dermal skin resurfacing, a new target procedure Completed study enrollment on May 14, Currently focused on patient follow-up and data evaluation IDE Clinical Study Overview - Multi-center, single arm, evaluator-blind prospective study - Designed to evaluate the safety and efficacy of Renuvion in the improvement of facial appearance by reducing facial wrinkles and rhytides - 55 study subjects - Primary outcome measures: - Improvement in Fitzpatrick Wrinkle and Elastosis Scale Score - Adverse Event Rate and Duration 14

15 Establishing Foundation for Long-term Growth 3. Formulizing regulatory strategy in the cosmetic surgery market Initial focus: pursuing specific clinical indication for the use of Renuvion in dermal skin resurfacing procedures - IDE clinical study data expected to be used to support 510(k) submission - Milestone: Expect to submit for FDA 510(k) clearance in November, 2018 Long-term focus: Developing multi-year strategy to secure specific clinical indications for target cosmetic surgery procedures - March, 2018 Appointed Dr. Topaz Kirlew as Director of Regulatory Affairs, a new position, to oversee development of strategy 15

16 Establishing Foundation for Long-term Growth 4. Improving manufacturing capabilities and efficiencies Focused on identifying new ways to improve manufacturing capabilities and accommodate anticipated strong future demand for generators and handpieces - March, Appointed Craig Swandal to the Board of Directors yrs. of experience; strong background in manufacturing strategy & execution - Advising effort to identify and pursue improvements Manufacturing Overview: Facility location: Clearwater, FL Sofia, Bulgaria China Size: 60,000 sq. ft. 16,000 sq. ft. 70,000 sq. ft. Owned / Contracted: Owned Owned Contracted Capabilities: Assembly Integration Final Testing Packaging Sterilization Management Manufacturing Complex Component Assembly Initial Testing Component Manufacturing Sub-Assemblies Finished Medical Devices (Electrodes) 16

17 Historical Pro Forma Financial Summary Adjusted for Divestiture and Sale of Core Operating Segment (1) Cash and equivalents at 6/30/18: $8.5 million No debt obligations or outstanding borrowings Retired remaining mortgage balance of $2.5 million in conjunction with the Symmetry deal closing on 8/30/18 Expected net after tax cash proceeds from the divestiture and sale of the Core business: ~$68 million. (1) Pro forma financial summary has been prepared assuming the Asset Sale Transaction occurred as of 1/1/16, the first day of the first year presented. For additional information, see appendix and exhibit 99.2 of the Company s 8-K filed with the SEC on 8/30/18 17

18 FY 18 Revenue Guidance Summary The Company introduced fiscal year 2018 financial guidance on a continuing operations basis as adjusted, which reflects the consummation of the Core segment sale transaction which closed on August 30, Total revenue from continuing operations in the range of $15.2 million to $15.6 million, representing growth of 49% to 53% year-over-year, driven by: - Advanced Energy revenue in the range of approximately $11.8 million to $12.2 million, representing growth of 55% to 60% year-over-year, compared to Advanced Energy revenue of $7.6 million in fiscal year OEM revenue of approximately $3.4 million, representing growth of 31% year-over-year, compared to $2.6 million for fiscal year Mid-point of total revenue guidance range increased ~$2.0 million vs prior revenue guidance range driven by: - Stronger-than-expected Advanced Energy sales in 1H 18 - $800,000 of new OEM revenue expected over the last four months of 2018 related to manufacturing and supply agreement with Symmetry Surgical FY 18 revenue guidance increased following recent strategic transaction; +55% to 60% Advanced Energy revenue growth expected in

19 FY 18 P&L Guidance Summary The Company introduced fiscal year 2018 financial guidance on a continuing operations basis as adjusted, which reflects the consummation of the Core segment sale transaction which closed on August 30, GAAP Net loss from continuing operations in the range of $12.7 million to $12.3 million, compared to GAAP net loss from continuing operations of $11.9 million in fiscal year Adjusted EBITDA loss from continuing operations in the range of $11.7 million to $11.3 million, compared to adjusted EBITDA loss from continuing operations of $12.0 million in fiscal year The Company s prior fiscal year 2018 guidance ranges for GAAP net loss and adjusted EBITDA were on an as reported basis and included contributions from the Core segment of: GAAP net income in the range of approximately $7.5 million to $8.0 million, Adjusted EBITDA income in the range of approximately $9.0 million to $9.5 million FY 18 GAAP and Non-GAAP profitability impacted by the Core segment sale; long term path to profitability fueled by strong growth in high-margin AE segment 19

20 Appendix

21 GAAP to Non-GAAP Reconciliation for FY 18 Financial Guidance from Continuing Operations (Unaudited) (In thousands) The following table presents a reconciliation of GAAP Net Income/(Loss) from Continuing Operations to Non-GAAP Adjusted EBITDA/(Loss) from Continuing Operations for the Company s 2018 guidance: Year Ended 2018 GAAP Net loss from continuing operations $ (12,500) Interest, net (400) Income tax expense (900) Depreciation and amortization 750 Stock based compensation 1,550 Change in fair value of derivative liabilities Adjusted EBITDA, From continuing operations (11,500) The reconciliation assumes the mid-point of the Adjusted EBITDA loss from continuing operations range and the midpoint of each component of the reconciliation, corresponding to guidance of $11.7 million to $11.3 million for

22 Pro Forma Income Statement Adjusted for Divestiture and Sale of Core Operating Segment (1) (Unaudited) (In thousands) PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Six Months Ended June 30, 2018 Twelve Months Ended December 31, 2017 Twelve Months Ended December 31, 2016 As Reported Pro Forma Pro Forma Pro Forma As Adjusted As Reported As Adjusted As Reported Adjustments (b) Adjustments (b) Adjustments (b) As Adjusted Sales 21,391 (14,303) 7,088 38,883 (28,649) 10,234 36,627 (27,808) 8,819 Cost of sales 10,124 (7,785) 2,339 19,122 (15,846) 3,276 18,712 (15,009) 3,703 Gross profit 11,267 (6,518) 4,749 19,761 (12,803) 6,958 17,915 (12,799) 5,116 Other costs and expenses: Research and development 1,378 (101) 1,277 2,455 (514) 1,941 2,618 (1,585) 1,033 Professional services 1,187-1,187 1,771 (2) 1,769 1,486 (13) 1,473 Salaries and related costs 4,234 (619) 3,615 7,906 (986) 6,920 9,038 (1,221) 7,817 Selling, general and administrative 5,599 (1,276) 4,323 11,370 (2,681) 8,689 8,565 (2,380) 6,185 Severance and related expense ,524-1, Total other costs and expenses 12,398 (1,996) 10,402 25,026 (4,183) 20,843 21,707 (5,199) 16,508 Loss from operations (1,131) (4,522) (5,653) (5,265) (8,620) (13,885) (3,792) (7,600) (11,392) Interest expense, net (72) - (72) (136) - (136) (158) - (158) Change in fair value of derivative liabilities Total other income (expense), net (52) - (52) (94) - (94) Loss before income taxes (1,183) (4,522) (5,705) (5,218) (8,620) (13,838) (3,886) (7,600) (11,486) Income tax expense (benefit) 24 (950) (926) (156) (1,810) (1,966) 64 (1,596) (1,532) Net loss (1,207) (3,572) (4,779) (5,062) (6,810) (11,872) (3,950) (6,004) (9,954) Loss per share Basic (0.04) (0.15) (0.16) (0.38) (0.14) (0.36) Diluted (0.04) (0.15) (0.17) (0.38) (0.15) (0.36) Weighted avg. shares out.- basic 32,884 32,884 31,420 31,420 27,433 27,433 Weighted avg. shares out.- dilutive 32,884 32,884 31,427 31,427 27,449 27,449 (1) Pro forma income statement has been prepared assuming the Asset Sale Transaction occurred as of 1/1/16, the first day of the first year presented. For additional information, see exhibit 99.2 of the Company s 8-K filed with the SEC on 8/30/18 (b) For additional information, see Notes to Pro Forma Condensed Consolidated Financial Information in exhibit 99.2 of the Company s 8-K filed with the SEC on 8/30/18 22