Bovie Medical Corporation
FINANCIALS
 

Financial Profile
 
 
2014   |   2013   |   2012   |   2011   |   2010   |   2009   |   2008   |   2007   |   2006   |   2005   |   2004   
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BOVIE MEDICAL REPORTS SECOND QUARTER 2014 RESULTS

Second Quarter 2014 Highlights

  • Sales increased 15% year-on-year to $6.9 million
  • Adjusted1 gross margin expanded to 39.2%
  • Adjusted2 operating loss was $520,000 versus $609,000 in the previous year

J-Plasma® Update

  • Q2 sales of $15,000; July orders exceeded $50,000
  • Surgeon pipeline grows to 98, from approximately 50 at end of Q1
  • Product in use at more than 40 sites
  • Secured contract with one of the top 10 Integrated Delivery Networks (IDNs) in the country

CLEARWATER, Fl. – August 5, 2014- Bovie Medical (NYSE:BVX), a maker of medical devices and supplies and the developer of J-Plasma®, a patented new surgical product, announced results for the second quarter ended June 30, 2014.

Management Comment

“We continued to make significant progress in all aspects of the business during the second quarter,” said Robert L. Gershon, Chief Executive Officer. “We achieved double-digit revenue growth, which drove a 230 basis point increase in adjusted gross margin, demonstrating the potential of our core business and providing important support for the commercialization of our J-Plasma ® product. 

“Our core business grew 2.8% year-on-year, and we executed on our strategy of adding new products to our portfolio with the announced launch of Derm 101 and 102, for office-based practitioners.  These Bovie branded products represent the first new core product launches in several years, and we see multiple opportunities to leverage our significant brand equity to drive further revenue growth.

“The OEM business showed positive comparisons, increasing by a factor of four over last year’s second quarter, which was impacted by contract expirations.  This is a scalable business with additional profit potential, and we plan to grow it judiciously so as to optimize our resources to meet projected demand for both our core business products and J-Plasma®.

“We continued to make progress on the commercialization of J-Plasma® . At the end of the second quarter, J-Plasma® was in use at over 40 sites, up from 25 sites at the end of the first quarter, and the number of surgeons using the product increased to more than 60 from 40. Sales in the second quarter reflected timing issues associated with sales cycles for hospital based products as well as the continued build-up and training of our sales team. We succeeded in capturing orders of over $50,000 in July, and importantly, our surgeon pipeline continues to expand, increasing to 98 from approximately 50 at the end of the first quarter, and 12 at the end of 2013.

“In July, we were awarded an important contract with a mid-western Integrated Delivery Network (IDN) that is consistently rated among the top 10 systems by U.S. News & World Report.  This is a complex contract that will take some time to fully implement, but it gives us the opportunity to sell J-Plasma ® into each of the 13 hospitals that comprise the system,” noted Mr. Gershon.

 

1Excluding impact of $843,000 inventory adjustment charge in 2Q14; see page 4 for additional disclosure

2Excluding $843,000 inventory adjustment charge and $383,000 of expenses related to CFO transition and other charges in 2Q14 and $1.0 million legal award in 2Q13; see page 4 for additional disclosure

Second Quarter 2014 Results

Second quarter sales were $6.9 million, a 14.9% increase over the $6.0 million reported in last year’s second quarter. Sales of distributed and branded products were $6.0 million, up 2.8% from the $5.8 million reported for the second quarter of 2013. Sales of OEM products were $961,000, significantly higher than the $223,000 of last year’s second quarter, reflecting higher demand from existing customers. Sales of J-Plasma ® were $15,000 for the period.

The Company incurred an inventory write-down of $843,000 in the second quarter primarily related to the commercialization of J-Plasma® and other legacy items in our Core business. As a result, gross profit was $1.9 million compared to $2.2 million in the second quarter of 2013. Adjusted gross margin, which excludes the impact of the write-down, was 39.2%; including the impact, gross margin was 27.0% compared to 36.9% in the prior year. The operating loss in the second quarter was $1.7 million, essentially flat with the second quarter of 2013. The adjusted operating loss, which excludes the previously-mentioned inventory write-down and $383,000 related to CFO transition and other charges, was $520,000 compared to an adjusted operating loss of $609,000 in the prior year which excludes the $1.0 million impact of a legal award.

The Company recorded a non-cash gain of $1.5 million related to the mark-to-market accounting for the fair value of issued common stock purchase warrants.  As a result, the Company reported net income for the period of $251,000 with $29,000 attributable to common shareholders. This translated into $0.00 per basic share and a loss of $0.07 per diluted share of common stock compared to a net loss of $1.1 million, or $0.06 per basic and diluted share of common stock in last year’s second quarter. Exclusive of this non-cash gain and other non-GAAP operating charges in 2Q14 and the $1.0 million legal award in 2Q13, the Company would have reported a net loss of $0.03 per basic and diluted share of common stock in line with the loss of $0.03 per basic and diluted share of common stock from a year earlier.

Recent Developments

  • Mr. John C. Andres, JD, was elected to the Bovie Board of Directors at the Annual Meeting held on July 17, 2014.  Mr. Andres has over 30 years of experience in the medical device industry, specializing in patent/business strategy development and execution.  Most recently, he was a partner of Hawk Healthcare, LLC and previously helped found K2M, Inc. Prior to that, Mr. Andres held various legal and strategic business development positions at the Surgical Division of Tyco Healthcare Group, LLP, now Covidien, Plc and its predecessor, United States Surgical Corporation.   

Summary and Outlook

“This was another quarter of solid achievement for Bovie Medical. The commercialization of J-Plasma® is proceeding on schedule, and we continue to take advantage of growth opportunities within our core business. Below is an update on some of our key objectives for 2014:

  • In line with the Company’s objective to generate strong clinical data and publications, Bovie announced the publication of the first two independent white papers on J-Plasma®, authored by surgeons at a women’s health center in Nevada.  The first paper tracks J-Plasma® effect on tissue compared to the effects of Argon, monopolar cautery, and CO2 laser, and the second analyzes the versatility of the J-Plasma® product’s power settings. A third white paper, which is scheduled for publication in the third quarter, will examine the pre and post-procedural results on facial wrinkles, and at least two more white papers are scheduled to be published by the end of 2014.  This initiative is expected to greatly assist in the sell-in efforts with Value Analysis Committees at hospital customers.
  • The Company has scheduled surgeon trainings in Portland, St. Louis, Las Vegas and New York during the third quarter. As more surgeons express interest in J-Plasma®, we will increase our training program schedule to facilitate adoption of the technology.
  • Bovie’s current sales force is comprised of five direct salespeople, 28 independent manufacturers’ representatives and one clinical specialist to drive adoption of the J-Plasma® device. In August, the Company will conduct a 3-day intensive clinical and product training seminar in Tampa that will include certification and will provide the collateral materials needed to move forward with an efficient and focused sales campaign.
  • The Derm 101 and 102 products began shipping at the end of July.  These efficient and economical high frequency desiccators will allow medical practitioners including family physicians, pediatricians, general dermatologists and nurse practitioners to perform minor skin procedures.
  • To increase awareness of Bovie Medical and J-Plasma®, the Company has launched a new branding and marketing campaign, which includes new print advertisements and sales materials as well as videos on the Company’s website of actual procedures using J-Plasma®. In addition, Bovie will be redesigning its website.

“We are entering the second half of 2014 with positive momentum. J-Plasma® is gaining recognition by an increasing number of surgeons in our initial targeted markets of gynecology, dermatology and plastic surgery, and we have been able to attract top-notch sales talent to execute its broader roll-out. Thus, we expect to see progressive improvement in the second half of 2014 across the key metrics that relate to the J-Plasma® ramp, with the major positive financial impact to begin in 2015. At the same time, we are developing strategies to leverage our market leadership in electrosurgical products to capture additional profitable revenue growth,” concluded Mr. Gershon.

Use of non-GAAP financial measures
In this press announcement, management has disclosed financial measurements that present financial information not in accordance with Generally Accepted Accounting Principles (GAAP).  These measurements are not a substitute for GAAP measurements, although company management uses these measurements as aids in monitoring the company's ongoing financial performance from quarter to quarter and year to year on a regular basis and for benchmarking against other medical technology companies. Adjusted non-GAAP income from operations, adjusted non-GAAP net income and adjusted non-GAAP income per diluted share measure the income from operations, net income and income per diluted share of the company excluding unusual items.  Management uses and presents these measures because management believes that such adjustments facilitate an understanding of the financial impact of unusual items on the company's short- and long-term financial trends.  Management also uses adjusted non-GAAP items to forecast and to evaluate the operational performance of the company, as well as to compare results of current periods to prior periods on a consistent basis.

Non-GAAP financial measures used by the company may be calculated differently from, and therefore may not be comparable to, similarly-titled measures used by other companies. Investors should consider non-GAAP measures in addition to, and not as a substitute for, or superior to, financial performance measures prepared in accordance with GAAP.

Please refer to the attached reconciliation between GAAP and non-GAAP financial measures.

Conference Call

Bovie Medical will host a conference call on Tuesday, August 5th, at 4:30 pm Eastern Time to discuss first quarter results and latest corporate developments. To listen to the call by phone, interested parties within the U.S. should call 1-877-317-6789. International callers should call 1-412-317-6789. All callers should ask for the Bovie Medical Corporation conference call. The conference call will also be available through a live webcast at Bovie Medical Corporation’s website or at http://services.choruscall.com/links/bvx140805.html. A replay of the call will be available approximately one hour after the end of the call through September 5, 2014. The replay will be available via Bovie Medical Corporation’s website.

About Bovie Medical Corporation

Bovie Medical Corporation is a leading maker of medical devices and supplies as well as the developer of J-Plasma®, a patented new plasma-based surgical product for cutting and coagulation. J-Plasma® utilizes a helium ionization process to produce a stable, focused beam of ionized gas that provides surgeons with greater precision, minimal invasiveness and an absence of conductive currents through the patient during surgery. Bovie Medical Corporation is also a leader in the manufacture of a range of electrosurgical products and technologies, marketed through both private labels and the Company’s own well-respected brands (Bovie®, Aaron®, IDS and ICON) to distributors worldwide. The Company also leverages its expertise through original equipment manufacturing (OEM) agreements with other medical device manufacturers. For further information about the Company’s current and new products, please refer to the Investor Relations section of Bovie Medical Corporation’s website www.boviemed.com.

Cautionary Statement on Forward-Looking Statements

Certain matters discussed in this release 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 release can be found in the Company’s filings with the Securities and Exchange Commission including the Company’s Reports on Form 10-K/A for the year ended December 31, 2013.  For forward-looking statements in this release, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.  The Company assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise.

BOVIE MEDICAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2014 AND 2013
(UNAUDITED) (in thousands except per share data)

 
Three Months Ended
June 30,
Six Months Ended
June 30,
 
2014
2013
2014
2013
Sales
$6,945
$6,042
$13,427
$11,738
Cost of sales
5,068
3,812
8,793
7,357
Gross Profit
1,877
2,230
4,634
4,381
27.0%
36.9%
34.5%
37.3%
Costs and Expenses:
  Research and Development
318
314
651
647
  Professional Services
287
383
544
836
  Salaries and Related Costs
1,419
999
2,326
1,818
  Selling, General, and Administrative   Services
1,599
2,184
2,800
3,395
Total Expenses
3,623
3,880
6,321
6,696
52.2%
64.2%
47.1%
57.0%
Loss from operations
(1,746)
(1,650)
(1,687)
(2,315)
Interest (net of interest income)
(40)
(60)
(69)
(116)
Gain (loss) on change in fair value of derivative liabilities
1,454
37
(8,145)
3
Pre-tax loss
(332)
(1,673)
(9,901)
(2,428)
Benefit for income tax
583
554
545
899
Net Income/(loss)
251
(1,119)
(9,356)
(1,529)
Accretion on convertible preferred stock
(222)
 --
(426)
--
Net Income/(loss) attributable to common shareholders (Note 3)
29
(1,119)
(9,782)
(1,529)
Income (loss) per share:        
Basic
$0.00
($0.06)
($0.55)
($0.09)
   Diluted
($0.07)
($0.06)
($0.55)
($0.09)
Weighted average number of shares outstanding - basic
17,717
17,669
17,667
17,660
Weighted average number of shares outstanding - diluted
21,176 (Note 1)
17,669
17,667 (Note 2)
17,660

Note 1)For the three months ended June 30, 2014, options and warrants to purchase shares of common stock were included in the computation of diluted earnings per share because their effects were dilutive, while the conversion of Series A Preferred Stock into 3,500,000 shares of common stock were excluded from the computation of diluted earnings per share as the effect is anti-dilutive.

(Note 2)For the six months ended June 30, 2014, options and warrants to purchase shares of common stock and Series A Preferred Stock were excluded in the computation of diluted earnings per share because their effects were anti-dilutive.

(Note 3)Amounts reflected in the presentation of calculations may be impacted by rounding.

BOVIE MEDICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS JUNE 30, 2014 AND DECEMBER 31, 2013
(in thousands)

ASSETS
JUNE 30, 2014
(unaudited)
DECEMBER 31, 2013
Current assets:
  Cash and cash equivalents
$5,575
$7,924
  Restricted cash
898
--
  Trade accounts receivable, net
2,617
1,990
  Inventories, net
6,922
8,415
  Current portion of deposits
1,235
948
  Prepaid expenses
857
545
  Total current assets
18,104
19,822
  Property and equipment, net
6,863
7,063
Other Assets:
  Brand Name/Trademark
1,510
1,510
  Purchased Technology (net)
485
 575
  Deferred tax Asset
3,961
3,412
  Deposits, net of current portion
69
120
  Other assets
607
674
  Total assets(Note 1)
$31,599
$33,176
(Note 1) Amount reflected in the presentation of calculations may be impacted by rounding.

BOVIE MEDICAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS JUNE 30, 2014 AND DECEMBER 31, 2013
(Continued) (in thousands)

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
JUNE 30, 2014
DECEMBER 31, 2013
Current liabilities:
  Accounts payable
$1,031
$1,060
  Accrued expenses and other liabilities
1,254
1,766
  Customer deposit
15
15
        Total current liabilities
2,299
2,840
Other Liabilities:
  Notes payable
3,532
3,257
  Derivative liability
13,473
5,749
  Total other liabilities
17,005
9,006
        Total liabilities
19,304
11,846

Series A 6% convertible preferred stock (par value $0.001; 3,500,000 shares authorized and issued)
2,684
2,259
     
STOCKHOLDER’S EQUITY:
   
Common stock (par value $.001 par value; 40,000,000 shares authorized)
18
18
Additional paid in capital
29,009
28,688
Accumulated deficit
(19,416)
(9,634)
Total stockholders' equity
9,611
19,071
Total Liabilities and Stockholders' Equity(Note 1)
$31,599
$33,176
(Note 1)Amounts reflected in the presentation of calculations may be impacted by rounding.

RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL MEASURES
(in thousands except per share data)

 
Three Months Ended
June 30, (unaudited)
Six Months Ended
June 30,
(unaudited)
 
2014
2013
2014
2013
Net income/(loss) (GAAP basis)
$251
$(1,119)
$(9,356)
$(1,529)
Accretion on convertible preferred stock
(222)
(426)
Net income/(loss) attributable to common shareholders
$29
$(1,119)
$(9,782)
$(1,529)
Net income/(loss) per share - basic (GAAP basis)
$0.00
$(0.06)
$(0.55)
$(0.09)

Net income/(loss) per share - diluted (GAAP basis)

$(0.07)
$(0.06)
$(0.55)
$(0.09)
Other non-GAAP adjustments:
  (Gain)/ loss on change in fair value of   derivative liabilities
$(1,454)
$(37)
$8,145
(3)
  Increase in inventory E&O reserve
843
843
  CFO transition costs
340
340
  Other administrative expenses
43
43
  Accretion on convertible preferred   stock
222
426
  Legal settlement
0
$1,041
0
$1,041
  Tax impact on non-GAAP   adjustments
(483)
(345)
(551)
(345)
Adjusted non-GAAP net (loss)
(460)
(460)
(536)
(836)
Income/(loss) per share - basic on:(Note 1)
  Gain on change in fair value of   derivative liabilities
(0.08)
0.00
0.46
0.00
  Increase in inventory E&O reserve
0.05
0.00
0.05
0.00
  Executive management transition costs
0.02
0.00
0.02
0.00
  Other expenses
0.00
0.00
0.00
0.00
  Accretion on convertible preferred   stock
0.01
0.00
0.02
0.00
  Legal settlement
0.00
0.06
0.00
0.06
  Tax impact on non-GAAP adjustments
(0.03)
(0.02)
(0.03)
(0.02)
Adjusted non-GAAP net income/(loss) per share - basic and diluted(Note 1)
$(0.03)
$(0.03)
$(0.03)
$(0.05)
Weighted average number of shares outstanding - basic and diluted(Note 2)
$17,717
$17,669
$17,667
$17,660
(Note 1)Amounts reflected in the presentation of EPS calculations may be impacted by rounding.
(Note 2)For the three and six months ended June 30, 2014 and 2013, respectively, gains, losses and accretions were excluded from the adjusted non-GAAP net income/(loss) as were the respective diluted shares associated with those instruments for purposes of the EPS calculation.

Contact Information
Bovie Medical Investor Relations and Shareholder Information:
investor.relations@boviemed.com



BOVIE MEDICAL CORPORATION SECOND QUARTER 2014 EARNINGS
CONFERENCE CALL TO BE HELD ON TUESDAY, AUGUST 5, 2014

CLEARWATER, Fl.—July 29, 2014 Bovie Medical (NYSE:BVX), a maker of medical devices and supplies and the developer of
J-Plasma®, a patented new surgical product, today announced that it will issue its financial results for the second quarter ended
June 30, 2014 following the close of market on Tuesday, August 5, 2014.

Management will host a conference call on Tuesday, August 5, 2014, at 4:30 pm Eastern Time to discuss latest corporate developments. Following management’s formal remarks, there will be a question and answer session.

To listen to the call by phone, interested parties within the U.S. should call 1-877-317-6789. International callers should call 1-412-317-6789. All callers should ask for the Bovie Medical Corporation conference call. The conference call will also be available through a live webcast at Bovie Medical Corporation’s website or at http://services.choruscall.com/links/bvx140805.html

A replay of the call will be available approximately one hour after the end of the call through September 5, 2014. The replay can be accessed via Bovie Medical Corporation’s website.


About Bovie Medical Corporation

Bovie Medical Corporation is a leading maker of medical devices and supplies as well as the developer of J-Plasma®, a patented new plasma-based surgical product. J-Plasma® utilizes a gas ionization process that produces a stable, focused beam of ionized gas that provides surgeons with greater precision, minimal invasiveness and an absence of conductive currents during surgery. Bovie Medical Corporation is also a leader in the manufacture of a range of electrosurgical products and technologies, marketed through both private labels and the Company’s own well-respected brands (Bovie®, Aaron®, IDS™ and ICON™) to distributors worldwide. The Company also leverages its expertise through original equipment manufacturing (OEM) agreements with other medical device manufacturers. For further information about the Company’s current and new products, please refer to the Investor Relations section of Bovie Medical Corporation’s website www.boviemed.com.

Contact Information
Bovie Medical Investor Relations and Shareholder Information:
investor.relations@boviemed.com



BOVIE MEDICAL PROVIDES UPDATE ON J-PLASMA,
NEW PRODUCTS AND PERSONNEL APPOINTMENT

--First Two White Papers on J-Plasma® to be Published July 1st--
--Core Business to Launch Derm 101 and 102 Devices--
--New Controller Joined on June 23--

CLEARWATER, Fl.—June 27, 2014-Bovie Medical (NYSE: BVX), a maker of medical devices and supplies and the developer of J-Plasma®, a patented new surgical product, provided an update on operating developments.

The Company is pleased to announce that the first two white papers on J-Plasma® will be published on July 1, 2014 and made available simultaneously on Bovie Medical’s website. The first paper tracks J-Plasma’s® effect on tissue compared to the effects of cautery, argon and monopolar lasers, and the other analyzes the versatility of the J-Plasma® product’s power settings. A third white paper that evaluates the pre- and post-procedural results on facial wrinkles is scheduled to be published in the third quarter.

“We continue to progress on or ahead of schedule with the commercialization of our J-Plasma® product”, said Robert L. Gershon, Chief Executive Officer.  “Our surgeon pipeline is growing, and we held an additional surgeon training program in Las Vegas this month. In August, we will bring together our J-Plasma® direct salesforce and distributor network for 3-days of intense clinical and product training and certification.”
Bovie Medical is adding to its core equipment/device business through the launch of Derm 101 and 102, efficient and economical high frequency desiccators that provides a low wattage platform for minor in-office skin procedures. The product will be available for purchase in August.

The Company also announced today that it has hired Jay D. Ewers as Controller, effective June 23, 2014. Mr. Ewers comes to Bovie with more than 30 years of senior experience in all phases of finance, accounting, administrative and general management. He has held financial executive positions in the manufacturing, medical equipment, semiconductor and retail industries at companies ranging from early stage and high growth to high profile public companies. Mr. Ewers entered into an employment agreement with the Company and was awarded a non-qualified stock option to purchase an aggregate of 35,000 shares of Bovie common stock, exercisable at the closing price on the effective date of his employment agreement.  The option shall vest and be exercisable in four equal annual installments beginning on the first anniversary of the effective date.

“Jay’s appointment is another illustration of our commitment to building the solid infrastructure required to support future growth, and it further demonstrates our ability to attract top-flight executives to the Company,” Mr. Gershon said.


About Bovie Medical Corporation

Bovie Medical Corporation is a leading maker of medical devices and supplies as well as the developer of J-Plasma®, a patented new plasma-based surgical product. J-Plasma® utilizes a gas ionization process that produces a stable, focused beam of ionized gas that provides surgeons with greater precision, minimal invasiveness and an absence of conductive currents during surgery. Bovie Medical Corporation is also a leader in the manufacture of a range of electrosurgical products and technologies, marketed through both private labels and the Company’s own well-respected brands (Bovie®, Aaron®, IDS™ and ICON™) to distributors worldwide. The Company also leverages its expertise through original equipment manufacturing (OEM) agreements with other medical device manufacturers. For further information about the Company’s current and new products, please refer to the Investor Relations section of Bovie Medical Corporation’s website www.boviemed.com.

Contact Information
Bovie Medical Investor Relations and Shareholder Information:
investor.relations@boviemed.com



BOVIE MEDICAL REPORTS FIRST QUARTER 2014 RESULTS

First Quarter 2014 Highlights

  • Sales increased 14% year-on-year to $6.5 million
  • Gross margin expanded to 42.5% from 37.8%
  • Achieved positive operating income compared to an operating loss in last year’s first quarter

J-Plasma® Update

  • First quarter sales of $31,000, compared with full year 2013 sales of $45,000
  • Four (4) highly-experienced direct salespeople engaged to complement existing 28-person distributor network
  • J-Plasma® product in use at over 25 sites
  • Surgeon pipeline expanded to more than 50 at quarter-end

 

CLEARWATER, Fl. – May 15, 2014- Bovie Medical (NYSE:BVX), a maker of medical devices and supplies and the developer of J-Plasma®, a patented new surgical product, announced results for the first quarter ended March 31, 2014.

Management Comment

“First quarter results demonstrated the revenue growth opportunities that we see in our core business, the benefits of recent OEM contract wins, and the progress we are making in the commercialization of our J-Plasma® product,” said Robert L. Gershon, Chief Executive Officer. “We achieved a double-digit sales increase on a year-over-year basis; sales growth drove significant gross margin expansion; and J-Plasma® sales in the first quarter, despite the early phase of the launch, represented 70% of full year 2013 sales.

“Our core business continues to benefit from Bovie’s strong market position and brand recognition, and we expect to further leverage those strengths through new products which will be brought to market through our existing distribution network.  New OEM contracts that were signed in last year’s fourth quarter are benefitting 2014 comparisons, and we expect to launch new products late in this year’s second quarter or early in the third quarter, including the DERM 101 and DERM 102 high frequency desiccators for simple dermatological procedures, as well as new electrosurgical generators.

“Commercialization of our J-Plasma® product is advancing on schedule. At the end of the first quarter, the product was in use at over 25 sites, up from 12 sites at the end of 2013, and the number of surgeons using the product increased to more than 40 from 18. Importantly, our surgeon pipeline continues to grow substantially increasing to more than 50 from 24 at the end of 2013.  The majority of the pipeline consists of thought leaders in the gynecology, dermatology and plastic surgery specialties, which are our priority markets,” Mr. Gershon noted.


 

First Quarter 2014 Results

First quarter sales were $6.5 million, a 13.8% increase over the $5.7 million reported in last year’s first quarter. Sales of distributed and branded products were $5.4 million, up 6.5% from the $5.0 million reported for the first quarter of 2013. Sales of OEM products were $1.1 million, 66.9% higher than the $650,000 of last year’s first quarter, reflecting the new contracts signed at the end of 2013. Sales of J-Plasma were $31,000, a six-fold increase over the $5,100 of the 2013 first quarter.

Gross profit was $2.8 million compared to $2.2 million, and gross margin expanded by 470 basis points to 42.5% from 37.8%, due primarily to higher sales and product mix. Operating income was $58,000, compared to an operating loss of $665,000 in the first quarter of 2013.

The Company incurred a non-cash loss of $9.6 million related to the mark-to-market fair value of issued common stock purchase warrants, compared to a non-cash loss of $34,000 in last year’s first quarter. Consequently, the Company reported a net loss for the period of $9.6 million, or $0.55 per share. Exclusive of this non-cash loss, the Company would have reported a net loss per diluted share of $0.01 compared to a net loss of $0.02 per share last year. 

Recent Developments

Executive Management Appointments

  • On May 6, 2014, the Company announced that its Board of Directors had appointed Peter Donato Executive Vice President and Chief Financial Officer. Mr. Donato brings more than 22 years of financial management and accounting experience, including 10 years as an executive in the healthcare industry. His most recent positions were as Corporate Controller for Cyberonics, Inc, Chief Financial Officer for Catasys Inc. and Iris International Inc.   

 

Mr. Gershon stated, “Peter Donato brings a wealth of experience to Bovie Medical, including his prior positions at publicly-traded medical device companies. His deep financial background, coupled with his strategic insight, makes him an excellent addition to Bovie’s management team and Peter will play an important role in helping us achieve our corporate and financial objectives.”

Additional Developments

  • The Company leased 3,650 square feet of office space in Purchase, New York for its new executive offices, and closed its location in Melville, New York. The new office will be open by July of this year.

 


Summary and Outlook

“First quarter operating results position Bovie for a year of strong commercial progress in 2014. We are either on or ahead of schedule with respect to the key elements of a comprehensive go-to-market strategy for J-Plasma®. Below is an update on some of our key objectives for 2014:

  • Generating strong clinical data and publications: Our stated objective is to publish a minimum of five white papers in 2014 written by surgeons who have experienced the clinical benefits of the J-Plasma® product. By the end of the 2014 first quarter, all five were underway. Once available, we believe that the white papers will greatly aid our sell-in efforts with Value Analysis Committees at our hospital customers.
  • Building a world-class direct sales team: Our strategy is to create a hybrid sales force comprised of direct salespeople and independent manufacturers’ representatives to drive adoption of the J-Plasma® device. To date, we have recruited four highly-experienced salespeople to serve as the core of our direct salesforce and have enlisted a world-class firm to roll-out their training program over the next three months.
  • Investing in surgeon training and procedure development: Surgeon training is another key element of a focused marketing campaign. To date we have conducted one dedicated surgeon training course and have three scheduled to take place in the second quarter. We expect this number to increase throughout the year, commensurate with the growth in product interest and adoption.
  • Driving awareness of J-Plasma: There is still much work to be done in order to drive awareness of the key attributes of J-Plasma®. As part of the commercialization process, we will be executing focused marketing and branding campaigns to increase product knowledge across our target markets.

 

“Our main goal for 2014 is to create the foundation for substantial and sustainable long-term growth. In the first quarter, we succeeded in achieving important milestones in the commercialization of J-Plasma®, and we expect that momentum to continue and even accelerate as the year evolves. We are particularly encouraged by our ability to attract experienced, highly sought-after talent, with key new employees joining the Company based on the potential they see for J-Plasma®. The commercialization process, however, will take time and, while there will be some benefits in 2014, we believe the major positive financial impact will not begin until 2015. Our core business plays an important role in supporting the growth of J-Plasma, and we were very pleased by its operating performance in this year’s first quarter, in which it demonstrated solid sales growth and significant operating leverage. We remain confident in our ability to more fully leverage our existing product suite, and continue to successfully bid on OEM contracts,” Mr. Gershon concluded.

Conference Call

Bovie Medical will host a conference call on Thursday, May 15, 2014, at 4:30 pm Eastern Time to discuss first quarter results and latest corporate developments. To listen to the call by phone, interested parties within the U.S. should call 1-877-317-6789. International callers should call 1-412-317-6789. All callers should ask for the Bovie Medical Corporation conference call. The conference call will also be available through a live webcast at Bovie Medical Corporation’s website or at http://services.choruscall.com/links/bvx140515.html.
A replay of the call will be available approximately one hour after the end of the call through June 15, 2014. The replay will be available via Bovie Medical Corporation’s website.

Investor Relations Contacts:
MBS Value Partners
Lynn Morgen and Hugh Collins
212.750.5800
Investor.relations@boviemed.com

About Bovie Medical Corporation

Bovie Medical Corporation is a leading maker of medical devices and supplies as well as the developer of J-Plasma®, a patented new plasma-based surgical product. J-Plasma® utilizes a gas ionization process that produces a stable, focused beam of ionized gas that provides surgeons with greater precision, minimal invasiveness and an absence of conductive currents through the patient during surgery. Bovie Medical Corporation is also a leader in the manufacture of a range of electrosurgical products and technologies, marketed through both private labels and the Company’s own well-respected brands (Bovie®, Aaron®, IDS™ and ICON™) to distributors worldwide. The Company also leverages its expertise through original equipment manufacturing (OEM) agreements with other medical device manufacturers. For further information about the Company’s current and new products, please refer to the Investor Relations section of Bovie Medical Corporation’s website www.boviemed.com.

Cautionary Statement on Forward-Looking Statements

Certain matters discussed in this release 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 release can be found in the Company’s filings with the Securities and Exchange Commission including the Company’s Reports on Form 10-K/A for the year ended December 31, 2013.  For forward-looking statements in this release, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.  The Company assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise.

BOVIE MEDICAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013
(UNAUDITED) (in thousands except per share data)

 
Three Months Ended
March 31,
 
2014
2013
Sales, net
$6,482
$5,696
Cost of sales
3,726
3,545
Gross Profit
2,756
2,151
Other costs and expenses:
Research and development
Professional services
Salaries and related costs
Selling, general and administrative
332
258
907
1,201
333
453
818
1,212
    Total other costs and expenses
2,698
2,816
Income (loss) from operations
Other Expense:
Interest expense, net
Loss on change in fair value of derivative liabilities
58
 
(28)
(9,599)
(665)
 
(55)
(34)
   Total other expense, net
(9,627)
(89)
Loss before income taxes
(9,569)
(754)
Benefit (provision) for deferred income taxes
(38)
345
Net loss
Accretion on convertible preferred stock
(9,607)
(204)
(409)
--
Net loss attributable to common shareholders
(9,811)
(409)
Loss per share
Basic
$(0.55)
$(0.02)
   Diluted
$(0.55)
$(0.02)
Weighted average number of shares outstanding-basic
17,684
17,650
Weighted average number of shares outstanding - dilutive
17,684
17,650



RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL MEASURES
( in thousands except per share data)

 
Three Months Ended
March 31, (unaudited)
2014
2013
Net Loss
$(9,607)
$(409)
Accretion on convertible preferred stock
(204)
--
Net Loss attributable to common shareholders
$(9,811)
$(409)
Loss on change in fair value of derivative liabilities
9,599
34
Adjusted non-GAAP net (Loss)
$(212)
$(375)
Diluted (loss) per share
$(0.55)
$(0.02)
Loss on change in fair value of derivative liabilities
0.54
0.00
Adjusted non-GAAP diluted net (Loss) per share
$(0.01)
$(0.02)



BOVIE MEDICAL CORPORATION
CONSOLIDATED BALANCE SHEETS MARCH 31, 2014 AND DECEMBER 31, 2013
(in thousands)Assets

ASSETS
March 31,
2014
December 31,
2013
Current assets:
(unaudited)
Cash and cash equivalents
$5,816
$7,924
Restricted cash
898
--
Trade accounts receivable, net
2,235
1,990
Inventories, net
8,267
8,415
Current portion of deposits
1,179
948
Prepaid expenses and other current assets
982
545
  Total current assets
19,377
19,822
Property and equipment, net
6,950
7,063
Brand name and trademark
1,510
1,510
Purchased technology, net
526
 575
Deferred income tax assets, net
3,378
3,412
Deposits, net of current portion
173
120
Other assets
594
674
 $32,508
$33,176



BOVIE MEDICAL CORPORATION
CONSOLIDATED BALANCE SHEETS MARCH 31, 2014 DECEMBER 31, 2013
(Continued) (in thousands)

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
March 31,
2014
December 31,
2013
Current liabilities:
(unaudited)
Accounts payable
$1,031
$1,060
Accrued payroll
111
172
Accrued vacation
111
200
Current portion of bonds payable
--
72
Current portion of mortgage not payable
239
--
Accrued-litigation settlement
100
541
Accrued and other liabilities
831
867
  Total current liabilities
2,423
2,912
Mortgage note payable, net of current portion
3353
--
Bonds payable, net of current portion
--
3185
Derivative liabilities
14927
5749
Total liabilities
20,703
11,846
     
Series A 6% convertible preferred stock, par value $.001; 3,500,000 shares authorized and issued, preference in liquidation - $7,126,000 Preferred stock, par value $.001; 10,000,000 shares authorized; 3,500,000 shares of series A 6% convertible preferred stock issued and outstanding on March 31, 2014 and December 31, 2013 respectively
2,463
2,259
     
Common stock, par value $.001 par value; 40,000,000 shares authorized; 17,826,336 issued and 17,683,257 outstanding on March 31, 2014 and December 31, 2013, respectively
18
18
Additional paid-in capital
28,769
28,687
Accumulated deficit
(19,445)
(9,634)
  Total stockholders' equity
9,342
19,071
Total Liabilities and Stockholders' Equity
$32,508
$33,176


Contact Information
Bovie Medical Investor Relations and Shareholder Information:
investor.relations@boviemed.com



BOVIE MEDICAL NAMES PETER DONATO CHIEF FINANCIAL OFFICER

CLEARWATER, FL. - May 6, 2014 - Bovie Medical (NYSE:BVX), a maker of medical devices and supplies and the developer of J-Plasma®, a patented new surgical product, announced today the appointment of Mr. Peter Donato, 44, as Executive Vice President and Chief Financial Officer, effective immediately.

“I am very pleased that Peter Donato has accepted the role of Executive Vice President and Chief Financial Officer”

Mr. Donato has over 22 years of financial management and accounting experience in roles of increasing responsibility. For the past 10 years, he has been focused on healthcare companies. Most recently, he served as Corporate Controller for Cyberonics, Inc. Prior to that, Mr. Donato served as a CFO for Catasys, Inc., and before that, as CFO for IRIS International. Mr. Donato is a graduate of The Ohio State University, where he obtained a B.S./B.A. degree in Accounting in 1992 and earned an MBA from The University of Akron in 1999. Mr. Donato received his CPA license in 1995.

“I am very pleased that Peter Donato has accepted the role of Executive Vice President and Chief Financial Officer,” said Robert L. Gershon, Chief Executive Officer. “His experience as a CFO with publicly-held medical device companies, combined with his depth of financial knowledge and strategic acumen, makes him an ideal candidate to help the Company achieve its corporate and financial goals.”

Additionally, Bovie Medical today announced that Mr. Gary Pickett has decided to leave the Company, effective June 18, 2014, to pursue other opportunities.

“Gary has made an invaluable contribution to Bovie Medical, and we wish him all the best in his future endeavors,” Mr. Gershon said.

Mr. Donato entered into an employment agreement with the Company and was awarded a non-qualified stock option to purchase an aggregate of 125,000 shares of Bovie common stock, exercisable at the closing price on the effective date of his employment agreement. The option shall vest and be exercisable in four equal annual installments beginning on the first anniversary of the effective date.

About Bovie Medical Corporation

Bovie Medical Corporation is a leading maker of medical devices and supplies as well as the developer of J-Plasma®, a patented new plasma-based surgical product. J-Plasma® utilizes a gas ionization process that produces a stable, focused beam of ionized gas that provides surgeons with greater precision, minimal invasiveness and an absence of conductive currents through the patient during surgery. Bovie Medical Corporation is also a leader in the manufacture of a range of electrosurgical products and technologies, marketed through both private labels and the Company’s own well-respected brands (Bovie®, Aaron®, IDS™ and ICON™) to distributors worldwide. The Company also leverages its expertise through original equipment manufacturing (OEM) agreements with other medical device manufacturers. For further information about the Company’s current and new products, please refer to the Investor Relations section of Bovie Medical Corporation’s website www.boviemed.com.

Cautionary Statement on Forward-Looking Statements

Certain matters discussed in this news release 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 news release can be found in the Company’s filings with the Securities and Exchange Commission including the Company’s Report on Form 10-K for the year ended December 31, 2013. For forward-looking statements in this news release, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise.

For further information about the Company’s current and new products, please refer to the Investor Relations section of Bovie’s website www.boviemed.com.


Contact Information
Bovie Medical Investor Relations and Shareholder Information:
investor.relations@boviemed.com




BOVIE MEDlCAL TO PRESENT AT THE SIDOTI SEMI-ANNUAL MICROCAP CONFERENCE
ON MAY 9, 2014

CLEARWATER, FL. - April 30, 2014 - Bovie Medical (NYSE:BVX), a maker of medical devices and supplies and the developer of
J-Plasma®, a patented new surgical product, today announced that CEO Robert L. Gershon will be presenting at the Sidoti Semi-Annual Microcap Conference on Friday, May 9, 2014, at 11:20 a.m. Eastern Time at the Grand Hyatt Hotel in New York City. In addition to presenting information on the company, management will be available for one-on-one meetings.

For more information about the conference or to schedule a one-on-one meeting with Bovie’s management, please contact your Sidoti representative or visit www.sidoti.com.

About Bovie Medical Corporation

Bovie Medical Corporation is a leading maker of medical devices and supplies as well as the developer of J-Plasma®, a patented new plasma-based surgical product. J-Plasma® utilizes a gas ionization process that produces a stable, focused beam of ionized gas that provides surgeons with greater precision, minimal invasiveness and an absence of conductive currents during surgery. Bovie Medical Corporation is also a leader in the manufacture of a range of electrosurgical products and technologies, marketed through both private labels and the Company’s own well-respected brands (Bovie®, Aaron®, IDS™ and ICON™) to distributors worldwide. The Company also leverages its expertise through original equipment manufacturing (OEM) agreements with other medical device manufacturers.

For further information about the Company’s current and new products, please refer to the Investor Relations section of Bovie Medical Corporation’s website www.boviemed.com.

Cautionary Statement on Forward-Looking Statements
Certain matters discussed in this news release 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 news release can be found in the Company’s filings with the Securities and Exchange Commission including the Company’s Report on Form 10‑K for the year ended December 31, 2013. For forward-looking statements in this news release, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise.


Contact Information
Bovie Medical Investor Relations and Shareholder Information:
investor.relations@boviemed.com


 

BOVIE MEDlCAL CORPORATION FIRST QUARTER 2014 EARNINGS CONFERENCE CALL
TO BE HELD ON THURSDAY, MAY 15, 2014

CLEARWATER, FL. - April 28, 2014 - Bovie Medical (NYSE:BVX), a maker of medical devices and supplies and the developer of
J-Plasma®, a patented new surgical product, today announced that it will issue its financial results  for the first quarter ended
March 31, 2014 following the close of market on Thursday, May 15, 2014.

Management will host a conference call on Thursday, May 15, 2014, at 4:30 pm Eastern Time to discuss latest corporate developments. Following management’s formal remarks, there will be a question and answer session.

To listen to the call by phone, interested parties within the U.S. should call 1-877-317-6789. International callers should call 1-412-317-6789. All callers should ask for the Bovie Medical Corporation conference call. The conference call will also be available through a live webcast at Bovie Medical Corporation’s website or at http://services.choruscall.com/links/bvx140515.html.

A replay of the call will be available approximately one hour after the end of the call through June 15, 2014. The replay can be accessed via Bovie Medical Corporation’s website.

About Bovie Medical Corporation

Bovie Medical Corporation is a leading maker of medical devices and supplies as well as the developer of J-Plasma®, a patented new plasma-based surgical product. J-Plasma® utilizes a gas ionization process that produces a stable, focused beam of ionized gas that provides surgeons with greater precision, minimal invasiveness and an absence of conductive currents during surgery. Bovie Medical Corporation is also a leader in the manufacture of a range of electrosurgical products and technologies, marketed through both private labels and the Company’s own well-respected brands (Bovie®, Aaron®, IDS™ and ICON™) to distributors worldwide. The Company also leverages its expertise through original equipment manufacturing (OEM) agreements with other medical device manufacturers.

For further information about the Company’s current and new products, please refer to the Investor Relations section of Bovie Medical Corporation’s website www.boviemed.com.

Cautionary Statement on Forward-Looking Statements
Certain matters discussed in this news release 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 news release can be found in the Company’s filings with the Securities and Exchange Commission including the Company’s Report on Form 10‑K for the year ended December 31, 2013.  For forward-looking statements in this news release, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.  The Company assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise.


Contact Information
Bovie Medical Investor Relations and Shareholder Information:
investor.relations@boviemed.com



BOVIE MEDICAL NAME JACK McCARTHY CHIEF COMMERCIALIZATION OFFICER

CLEARWATER, Fl. -- March 31, 2014 - Bovie Medical (NYSE:BVX), a maker of medical devices and supplies and the developer of
J-Plasma®, a patented new surgical product, announced today the appointment of Jack McCarthy, 47, as Chief Commercialization Officer.

Mr. McCarthy has 23 years of sales and marketing experience of which the last 16 years has been spent in the healthcare industry.  Most recently, he served as Vice President of Sales and Marketing for US Healthcare at Z-Medica. Prior to that, Mr. McCarthy spent 15 years with Covidien (NYSE:COV), in positions of increasing responsibility where he was charged with achieving sales and business development goals. His most recent position at Covidien was as Area Sales Vice President for the Endo Mechanical Intelligent Device franchise, where he managed a team of 50 sales professionals.  Mr. McCarthy is a graduate of Loyola College in Baltimore, Maryland, where he obtained a BA degree in Marketing in 1988 and an MBA in Marketing in 1990.

Robert L. Gershon, CEO, stated, “I am very pleased that we have been able to attract Jack McCarthy, a seasoned sales and business development executive to serve as our Chief Commercialization Officer.  I have worked closely with Jack for nearly 10 years and have witnessed first-hand his ability to successfully launch innovative medical devices.  Bovie is a well-respected brand in the medical community and it is our expectation that Jack, together with our existing managers, will further leverage the Bovie brand as well as accelerate the growth of J-Plasma®.”

Mr. McCarthy entered into an employment agreement with the Company and was awarded a non-qualified stock option to purchase an aggregate of 213,000 shares of Bovie common stock, exercisable at the closing price on the effective date of his employment agreement.  The option shall vest and be exercisable in four equal annual installments of 53,250 shares each, beginning on the first anniversary of the effective date.

About Bovie Medical Corporation

Bovie Medical Corporation is a leading maker of medical devices and supplies as well as the developer of J-Plasma®, a patented new plasma-based surgical product. J-Plasma® utilizes a gas ionization process that produces a stable, focused beam of ionized gas that provides surgeons with greater precision, minimal invasiveness and an absence of conductive currents through the patient during surgery. Bovie Medical Corporation is also a leader in the manufacture of a range of electrosurgical products and technologies, marketed through both private labels and the Company’s own well-respected brands (Bovie®, Aaron®, IDS™ and ICON™) to distributors worldwide. The Company also leverages its expertise through original equipment manufacturing (OEM) agreements with other medical device manufacturers. For further information about the Company’s current and new products, please refer to the Investor Relations section of Bovie Medical Corporation’s website www.boviemed.com.

Cautionary Statement on Forward-Looking Statements
Certain matters discussed in this news release 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 news release can be found in the Company’s filings with the Securities and Exchange Commission including the Company’s Report on Form 10‑K for the year ended December 31, 2013.  For forward-looking statements in this news release, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.  The Company assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise.

For further information about the Company’s current and new products, please refer to the Investor Relations section of Bovie’s website www.boviemed.com.


Contact Information
Bovie Medical Investor Relations and Shareholder Information:
investor.relations@boviemed.com



BOVIE MEDICAL REPORTS FOURTH QUARTER AND FULL YEAR 2013 RESULTS

Names Jack McCarthy Chief Commercialization Officer

Fourth Quarter 2013 Highlights

  • Appointed Robert L. Gershon Chief Executive Officer
  • Completed $7.0 Million Funding by Great Point Partners to Accelerate Growth of J-Plasma®
  • Sales Increased 6% Sequentially to $6.1 Million; Gross Profit Was $2.6 Million; Gross Margin was 41.9%
  • New OEM contracts to Benefit 2014 Revenues

Full Year 2013 Highlights

  • Sales Were $23.7 Million
  • Gross Profit Was $9.2 Million; Gross Margin was 38.9%

 

CLEARWATER, Fl. -- March 31, 2014- Bovie Medical (NYSE:BVX), a maker of medical devices and supplies and the developer of J-Plasma®, a patented new surgical product, announced results for the fourth quarter and full year ended December 31, 2013.

“2013 was a year of transition for Bovie.  We ended the year, however, with positive momentum in our core business, important early strides in the commercialization of J-Plasma® and a substantially stronger balance sheet, which have positioned us to achieve further progress in 2014,” said Robert L. Gershon, Chief Executive Officer.

Fourth Quarter 2013 Results

Fourth quarter sales were $6.1 million compared to $6.8 million in the 2012 fourth quarter. Sales of distributed branded and private label products were $5.9 million compared to $5.6 million in 2012. Gross profit was $2.6 million compared to $2.8 million and gross profit margin was 41.9% compared to 40.8%. Operating income, exclusive of legal settlement and award costs and related fees, was $32,000 compared to $127,000 in last year’s fourth quarter. The Company incurred a net loss for the period of $2.5 million, or $0.14 per diluted share, inclusive of warrant issuance costs relating to the December 2013 equity investment by Great Point Partners and debt refinancing charges, which together amounted to $1.2 million. In the 2012 fourth quarter, the Company reported net income of $285,000, or $0.02 per share.

“In the fourth quarter, we were awarded two new multi-year OEM contracts, which should enable us to at least replace about one-third of the sales lost in 2013 due to the expiration of two OEM contracts.  By the end of the fourth quarter, our J-Plasma® device was in use by 18 surgeons at 12 sites domestically, and today we are in over two dozen sites and have a strong pipeline of surgeon interest in the product,” Mr. Gershon noted.

Full Year 2013 Results

“For full year 2013, sales of distributed branded and private label products were $22.1 million compared to $21.8 million in 2012 and $20.4 million in 2011, which demonstrates the stability and visibility associated with this major part of our core business. From an operating standpoint, the highlight of 2013 was the successful production and testing of the Company’s J-Plasma® product,” Mr. Gershon said.

For full year 2013, total sales were $23.7 million compared to $27.7 million in 2012.  Sales increases in electrodes and medical lighting products and the stable performance of the Company’s cautery products were offset by the previously-noted expiration of two OEM contracts totaling $4.3 million.  Gross profit was $9.2 million, and gross margin was 38.9% compared to 2012’s gross profit of $11.3 million and gross margin of 40.9%.  The operating loss, exclusive of legal settlements/awards and related fees, was $740,000.  The Company’s full year 2013 operating costs included $1.2 million related to the production and pre-marketing of J-Plasma®, up from $0.8 million in 2012.  The Company reported a net loss of $4.3 million, or $0.25 per diluted share, inclusive of warrant issuance costs relating to the December 2013 equity investment by Great Point Partners and debt refinancing charges, which together amounted to $1.2 million. For 2012, the Company reported net income of $617,000, or $0.03 per diluted share.  Full year 2013 results included a tax benefit of $1.6 million.

Recent Developments

Executive Management Appointments

  • On December 13, 2013, the Company’s Board of Directors appointed Robert L. Gershon as the Company’s new Chief Executive Officer and member of the Board.  Mr. Gershon has over 25 years of healthcare industry experience, most recently as a senior sales and marketing executive at Covidien (NYSE:COV) and Henry Schein (NASDAQ:HSIC).
  • Effective March 31, 2014, the Company named Jack McCarthy to the new position of Chief Commercialization Officer, reporting to the CEO.  Mr. McCarthy’s most recent position was at Z-Medica as Vice President of Sales and Marketing for US Healthcare.  Prior to that, Mr. McCarthy spent 15 years with Covidien (NYSE:COV), primarily in sales, marketing and new business development.  His last position at Covidien was as Area Sales Vice President for the Endo Mechanical Intelligent Device franchise, where he managed a team of 50.

Mr. Gershon stated, “We are very pleased to have been able to attract Jack McCarthy, an executive with over 23 years of sales and marketing experience of which the last 16 years has been spent in the healthcare industry.  I have worked closely with Jack for nearly 10 years and his appointment as Chief Commercialization Officer is emblematic of our plans to assemble a group of executives with successful track records in launching innovative medical devices.  Together with our existing managers, we believe the team will be able to effectively leverage the Bovie brand to accelerate the growth of J-Plasma® and other innovative products in our pipeline.”  Mr. Gershon added, “We believe that J-Plasma® has the potential to be a transformational technology across a broad range of surgical specialties, enabling an improved intra-operative experience and thereby driving superior outcomes for surgeons and patients.”

Additional  Developments

  • On December 13, 2013, the Company announced the completion of a $7.0 million funding by Great Point Partners, a leading health care investment firm with approximately $700 million of equity capital under management.  The funding is earmarked to accelerate the growth of J-Plasma®.
  • On March 20, 2014 the Company refinanced its short term debt, extending its maturity and reducing interest expense.  The new mortgage loan agreement in the principal amount of $3.6 million with Bank of Tampa has an initial maturity of March 2017 with the option to extend the maturity to 2021.  The new interest rate is LIBOR plus 3.5%, which at current rates is equivalent to 3.7%. The bonds that the Company redeemed at loan closing carried an interest rate of 5.7%.
  • In the 2013 fourth quarter, the Company entered into two multi-year OEM contracts valued at approximately $1.3 million to provide electrosurgical generators to two customers.  Shipments are scheduled to take place throughout 2014.

Summary and Outlook

“2014 promises to be a year of progress for Bovie Medical. Our main driver of long-term growth is J-Plasma®, and we are moving ahead with the key elements needed for a comprehensive go-to-market strategy for the product. This is a process that includes:

  • Generating strong clinical data and publications:  J-Plasma has substantial clinical benefits and it is critical that we bring dimension to these benefits through clinical trials and publications.  To that end, we expect to publish a minimum of five white papers in 2014, which will greatly aid our sell-in efforts with Value Analysis Committees at our hospital customers.
  • Building a world-class direct sales team:  While independent distributor representatives have allowed the Company to obtain rapid trial of the J-Plasma device, we believe that a dedicated, highly trained, direct sales organization will provide the necessary focus to drive sustained adoption of the J-Plasma device.  The Company plans to exit 2014, with a small direct sales force complemented by a distributor network that is focused on J-Plasma®.
  • Investing in surgeon training and procedure development:  A well-informed and well-trained surgeon base is critical to the sustained adoption of J-Plasma.  To accomplish this objective, we will conduct several dedicated physician training courses throughout 2014.
  • Driving awareness of J-Plasma:  While J-Plasma holds great promise, its existence and key attributes are not yet widely known.  It is our intention to execute a targeted marketing and branding campaign to create better awareness of the technology.

“We expect to see some early sales benefit to J-Plasma® from these activities in 2014, but our main objective for the current year is to build the appropriate foundation for substantial and sustainable long-term growth and to report on milestones as they occur over the coming quarters of 2014.  Additionally, although J-Plasma® will serve as the primary driver of growth, we are confident in our ability to improve the performance of our core business.  We plan to employ a disciplined strategy of fully leveraging our existing product suite in electrosurgical generators, electrodes, and medical lighting, introducing several new products, and rebuilding our pipeline of OEM projects,” Mr. Gershon concluded. 

About Bovie Medical Corporation

Bovie Medical Corporation is a leading maker of medical devices and supplies as well as the developer of J-Plasma®, a patented new plasma-based surgical product. J-Plasma® utilizes a gas ionization process that produces a stable, focused beam of ionized gas that provides surgeons with greater precision, minimal invasiveness and an absence of conductive currents through the patient during surgery. Bovie Medical Corporation is also a leader in the manufacture of a range of electrosurgical products and technologies, marketed through both private labels and the Company’s own well-respected brands (Bovie®, Aaron®, IDS™ and ICON™) to distributors worldwide. The Company also leverages its expertise through original equipment manufacturing (OEM) agreements with other medical device manufacturers. For further information about the Company’s current and new products, please refer to the Investor Relations section of Bovie Medical Corporation’s website www.boviemed.com.

Cautionary Statement on Forward-Looking Statements

Certain matters discussed in this news release 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 news release can be found in the Company’s filings with the Securities and Exchange Commission including the Company’s Report on Form 10‑K for the year ended December 31, 2013.  For forward-looking statements in this news release, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.  The Company assumes no obligation to update or supplement any forward-looking statements whether as a result of new information, future events or otherwise.

For further information about the Company’s current and new products, please refer to the Investor Relations section of Bovie’s website www.boviemed.com.

BOVIE MEDICAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2013 AND 2012
(in thousands except per share data)

 
Three Months Ended
December 31, (unaudited)
Twelve Months Ended
December 31,
 
2013
2012
2013
2012
Sales
$6,128
$6,827
$23,660
$27,671
Cost of sales
3,560
4,041
14,462
16,338
Gross Profit
2,568
2,786
9,198
11,333
Other costs and expenses
2,844
2,659
11,224
10,287
Legal awards and settlement
599
--
1,640
--
Income (loss) from operations
(875)
127
(3,666)
1,046
Change in fair value of liabilities, net
(859)
129
(842)
20
Interest expense, net
(67)
(58)
(237)
(232)
Issuance Cost
(664)
--
(664)
--
Fees associated with refinance
(543)
--
(543)
--
Income (loss) before income taxes
(3,008)
 198
(5,952)
834
Benefit (provision) for income taxes, net
539
87
1,613
(217)
Net Income (loss)
$(2,469)
$285
$(4,339)
$617
Earnings (loss) per share        
Basic
$(0.14)
$0.02
$(0.25)
$0.04
   Diluted
$(0.14)
$0.02
$(0.25)
$0.03
Weighted average number of shares outstanding-basic
17,683
17,638
17,670
17,631
Weighted average number of shares outstanding - dilutive
17,683
17,830
17,670
17,787



BOVIE MEDICAL CORPORATION
CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2013 AND 2012
(in thousands)

ASSETS
2013
2012
Current assets:
Cash and cash equivalents
$7,924
$4,162
Trade accounts receivable, net
1,990
2,874
Inventories, net
8,415
7,543
Current portion of deposits
948
714
Prepaid expenses and other current assets
545
951
  Total current assets
19,822
16,244
Property and equipment, net
7,063
7,229
Brand name and trademark
1,510
1,510
Purchased technology, net
575
 664
Deferred income tax assets, net
3,412
1,799
Net Income (loss)
$(2,469)
$285
Deposits, net of current portion
120
133
Other assets
674
604
Total assets
$33,176
$28,183
The accompanying notes are an integral part of the consolidated financial statements.



BOVIE MEDICAL CORPORATION
CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2013 AND 2012
(Continued) (in thousands)

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
2013
2012
Current liabilities:
Accounts payable
$1,060
$803
Accrued payroll
172
118
Accrued vacation
200
186
Current portion of bonds payable to bank
72
138
Accrued-litigation settlement
541
232
Accrued and other liabilities
867
445
  Total current liabilities
2,912
1,922
Bonds payable to bank, net of current portion
3,185
3,281
Derivative liabilities - warrants
5,749
85
Total liabilities
11,846
5,288

Commitments and Contingencies (see Note 13)
   
     
Series A 6% convertible preferred stock, par value $0.001; 3,500,000 shares
authorized and issued; preference in liquidation - $7,000,000
2,259
--
     
STOCKHOLDER’S EQUITY:
   
   
Preferred stock, par value $.001; 10,000,000 shares authorized;
--
--
Common stock, par value $.001 par value; 40,000,000 shares authorized; 17,826,336 and
17,781,538 issued and 17,683,257 and 17,638,459 outstanding on December 31, 2013 and
2012, respectively
18
18
Additional paid-in capital
28,687
25,517
Deficit
(9,634)
(2,640)
  Total stockholders' equity
19,071
22,895
Total Liabilities and Stockholders' Equity
$33,176
$28,183
The accompanying notes are an integral part of the consolidated financial statements.
   


Contact Information
Bovie Medical Investor Relations and Shareholder Information:
investor.relations@boviemed.com




BOVIE MEDICAL CORPORATION FOURTH QUARTER AND FULL YEAR 2013 EARNINGS CONFERENCE CALL TO BE HELD ON MONDAY, MARCH 31, 2014

CLEARWATER, FL, March 20, 2014 – Bovie Medical Corporation (NYSE MKT: BVX), a manufacturer and marketer of electrosurgical products, today announced that it will issue financial results and corporate developments for the fourth quarter and full year 2013, following the close of market on Monday, March 31, 2014.

Management will host a conference call on Monday, March 31, 2014, at 4:30 pm Eastern Time to provide an update on the Company’s latest developments. Following management’s formal remarks, there will be a question and answer session.

To listen to the call by phone, interested parties within the U.S. should call 1-877-317-6789. International callers should call 1-412-317-6789. All callers should ask for the Bovie Medical Corporation conference call. The conference call will also be available through a live webcast at Bovie Medical Corporation’s website or at http://services.choruscall.com/links/bvx140331.html.

A replay of the call will be available approximately one hour after the end of the call through April 30, 2014. The replay can be accessed via Bovie Medical Corporation’s website.

About Bovie Medical Corporation

Bovie Medical Corporation is a leading maker of medical devices and supplies as well as the developer of J-Plasma®, a patented new plasma-based surgical product. J-Plasma® utilizes a gas ionization process that produces a stable, focused beam of ionized gas that provides surgeons with greater precision, minimal invasiveness and an absence of conductive currents during surgery. Bovie Medical Corporation is also a leader in the manufacture of a range of electrosurgical products and technologies, marketed through both private labels and the Company’s own well-respected brands (Bovie®, Aaron®, IDS™ and ICON™) to distributors worldwide. The Company also leverages its expertise through original equipment manufacturing (OEM) agreements with other medical device manufacturers. For further information about the Company’s current and new products, please refer to the Investor Relations section of Bovie Medical Corporation’s website www.boviemed.com.

Contact Information
Bovie Medical Investor Relations and Shareholder Information:
investor.relations@boviemed.com