DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 29, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | APYX MEDICAL CORP | |
Entity Central Index Key | 0000719135 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 33,921,476 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 67,360 | $ 16,466 |
Short term investments | 0 | 61,678 |
Trade accounts receivable, net of allowance of $285 and $428 | 6,218 | 5,015 |
Inventories, net of provision for obsolescence of $402 and $439 | 6,392 | 5,212 |
Prepaid expenses and other current assets | 1,987 | 1,146 |
Total current assets | 81,957 | 89,517 |
Property and equipment, net | 6,300 | 5,788 |
Intangibles | 185 | 191 |
Deposits | 73 | 73 |
Other assets | 368 | 41 |
Total assets | 88,883 | 95,610 |
Current liabilities: | ||
Accounts payable | 1,641 | 1,423 |
Accrued and other liabilities | 5,848 | 5,552 |
Accrued severance and related | 408 | 727 |
Total current liabilities | 7,897 | 7,702 |
Note payable | 140 | 140 |
Long term lease liability | 267 | |
Total liabilities | 8,304 | 7,842 |
STOCKHOLDERS’ EQUITY | ||
Common stock, $0.001 par value; 75,000,000 shares authorized; 33,847,100 issued and 33,704,525 outstanding as of December 31, 2018, and 34,061,360 issued and 33,918,785 outstanding as of June 30, 2019 | 34 | 34 |
Additional paid-in capital | 54,051 | 52,221 |
Retained earnings | 26,494 | 35,513 |
Total stockholders’ equity | 80,579 | 87,768 |
Total liabilities and stockholders’ equity | $ 88,883 | $ 95,610 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 285 | $ 428 |
Provision for obsolescence, inventory | $ 402 | $ 439 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 33,847,100 | 34,061,360 |
Common stock, shares outstanding (in shares) | 33,704,525 | 33,918,785 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Sales | $ 6,568 | $ 3,691 | $ 12,391 | $ 7,088 |
Cost of sales | 2,096 | 1,154 | 4,199 | 2,339 |
Gross profit | 4,472 | 2,537 | 8,192 | 4,749 |
Other costs and expenses: | ||||
Research and development | 888 | 763 | 1,698 | 1,277 |
Professional services | 1,633 | 681 | 3,424 | 1,187 |
Salaries and related costs | 3,333 | 1,813 | 6,554 | 3,615 |
Selling, general and administrative | 3,083 | 2,213 | 6,184 | 4,323 |
Total other costs and expenses | 8,937 | 5,470 | 17,860 | 10,402 |
Loss from operations | (4,465) | (2,933) | (9,668) | (5,653) |
Interest income | 403 | 0 | 826 | 0 |
Interest expense | 0 | (38) | 0 | (72) |
Other losses | (200) | 0 | (225) | 0 |
Change in value of derivative liabilities | 0 | 46 | 0 | 20 |
Total other income (expense), net | 203 | 8 | 601 | (52) |
Loss before income taxes | (4,262) | (2,925) | (9,067) | (5,705) |
Income tax expense (benefit) | 76 | 13 | (48) | 24 |
Loss from continuing operations | (4,338) | (2,938) | (9,019) | (5,729) |
Income from discontinued operations, net of tax | 0 | 2,666 | 0 | 4,522 |
Net loss | $ (4,338) | $ (272) | $ (9,019) | $ (1,207) |
EPS from continuing operations: | ||||
Basic (in dollars per share) | $ (0.13) | $ (90) | $ (270) | $ (170) |
Diluted (in dollars per share) | (0.13) | (90) | (270) | (170) |
EPS from discontinued operations: | ||||
Basic (in dollars per share) | 0 | 80 | 0 | 130 |
Diluted (in dollars per share) | 0 | 80 | 0 | 130 |
EPS from total operations: | ||||
Basic (in dollars per share) | (0.13) | (10) | (270) | (40) |
Diluted (in dollars per share) | $ (0.13) | $ (10) | $ (270) | $ (40) |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated deficit) |
Beginning balance (in shares) at Dec. 31, 2017 | 32,878 | |||
Beginning balance, amount at Dec. 31, 2017 | $ 22,032 | $ 33 | $ 50,495 | $ (28,496) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Options exercised (in shares) | 37 | |||
Options exercised | 83 | 83 | ||
Warrants exercised (in shares) | 40 | |||
Warrants exercised | 95 | 95 | ||
Stock based compensation | 749 | 749 | ||
Stock exercise to acquire options and warrants (in shares) | (42) | |||
Stock exercise to acquire options | (178) | (178) | ||
Net loss | (1,207) | (1,207) | ||
Ending balance (in shares) at Jun. 30, 2018 | 32,913 | |||
Ending balance, amount at Jun. 30, 2018 | 21,574 | $ 33 | 51,244 | (29,703) |
Beginning balance (in shares) at Mar. 31, 2018 | 32,878 | |||
Beginning balance, amount at Mar. 31, 2018 | 21,469 | $ 33 | 50,867 | (29,431) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Options exercised (in shares) | 37 | |||
Options exercised | 83 | 83 | ||
Warrants exercised (in shares) | 40 | |||
Warrants exercised | 95 | 95 | ||
Stock based compensation | 377 | 377 | ||
Stock exercise to acquire options and warrants (in shares) | (42) | |||
Stock exercise to acquire options | (178) | (178) | ||
Net loss | (272) | (272) | ||
Ending balance (in shares) at Jun. 30, 2018 | 32,913 | |||
Ending balance, amount at Jun. 30, 2018 | 21,574 | $ 33 | 51,244 | (29,703) |
Beginning balance (in shares) at Dec. 31, 2018 | 33,705 | |||
Beginning balance, amount at Dec. 31, 2018 | 87,768 | $ 34 | 52,221 | 35,513 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Options exercised (in shares) | 309 | |||
Options exercised | 777 | 777 | ||
Stock based compensation | 1,715 | 1,715 | ||
Stock exercise to acquire options and warrants (in shares) | (93) | |||
Stock exercise to acquire options | (662) | (662) | ||
Net loss | (9,019) | (9,019) | ||
Ending balance (in shares) at Jun. 30, 2019 | 33,921 | |||
Ending balance, amount at Jun. 30, 2019 | 80,579 | $ 34 | 54,051 | 26,494 |
Beginning balance (in shares) at Mar. 31, 2019 | 33,891 | |||
Beginning balance, amount at Mar. 31, 2019 | 84,013 | $ 34 | 53,147 | 30,832 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Options exercised (in shares) | 38 | |||
Options exercised | 0 | |||
Stock based compensation | 856 | 856 | ||
Stock exercise to acquire options and warrants (in shares) | (8) | |||
Stock exercise to acquire options | 48 | 48 | ||
Net loss | (4,338) | (4,338) | ||
Ending balance (in shares) at Jun. 30, 2019 | 33,921 | |||
Ending balance, amount at Jun. 30, 2019 | $ 80,579 | $ 34 | $ 54,051 | $ 26,494 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities | ||
Net loss | $ (9,019) | $ (1,207) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 316 | 371 |
Provision for inventory obsolescence | 36 | 0 |
Gain on disposal of property and equipment, net | 0 | (1) |
Stock based compensation | 1,715 | 749 |
Change in fair value of derivative liabilities | 0 | (20) |
Non-cash lease expense | 53 | 0 |
Realized gain on short term investments | (164) | 0 |
Provision for allowance for doubtful accounts | (157) | 82 |
Changes in current assets and liabilities: | ||
Trade receivables | (1,046) | (817) |
Prepaid expenses | (841) | (72) |
Inventories | (1,216) | (1,007) |
Deposits and other assets | (321) | (23) |
Accounts payable | 218 | 1,162 |
Accrued severance and related | (319) | 0 |
Accrued and other liabilities | 604 | (898) |
Net cash used in operating activities | (10,141) | (1,681) |
Cash flows from investing activities | ||
Purchases of property and equipment | (922) | (332) |
Purchases of marketable securities | (18,884) | 0 |
Proceeds from maturities of marketable securities | 80,726 | 0 |
Net cash provided by (used in) investing activities | 60,920 | (332) |
Cash flows from financing activities | ||
Proceeds from stock options/warrants exercised | 115 | 0 |
Repayment of mortgage note payable | 0 | (120) |
Net cash provided by (used in) financing activities | 115 | (120) |
Net change in cash, cash equivalents and restricted cash | 50,894 | (2,133) |
Cash, cash equivalents and restricted cash, beginning of period | 16,466 | 10,668 |
Cash, cash equivalents and restricted cash, end of period | 67,360 | 8,535 |
Cash paid for: | ||
Interest | 0 | 72 |
Non cash investing and financing activities: | ||
Cashless exercise of stock options/warrants | 662 | 0 |
Capitalization of lease | $ 394 | $ 0 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Unless the context otherwise indicates, the terms “we,” “our,” “us,” “Apyx,” and similar terms refer to Apyx Medical Corporation and its consolidated subsidiaries. We are a medical technology company and the developer of J-Plasma ® (marketed and sold under the Renuvion ® Cosmetic Technology brand in the cosmetic surgery market), a patented plasma-based surgical product for cutting, coagulation and ablation of soft tissue. J-Plasma ® technology utilizes a helium ionization process to produce a stable, focused beam of plasma that provides surgeons with greater precision and minimal invasiveness. The Company also leverages its expertise through original equipment manufacturing (OEM) agreements with other medical device manufacturers. On August 30, 2018, we closed on a definitive asset purchase agreement with Specialty Surgical Instrumentation Inc., a Tennessee Corporation and wholly-owned subsidiary of Symmetry Surgical Inc. (“Symmetry”), pursuant to which we divested and sold our electrosurgical "Core" business segment and related intellectual property, including the Bovie ® brand and trademarks, to Symmetry for gross proceeds of $97 million in cash. The divestiture and sale of our Core business segment to Symmetry allows us to further focus on our strategic objective of commercializing our J-Plasma ® technology, including the Renuvion ® brand in the cosmetic surgery market. We also entered into with Symmetry a transition services agreement, a Patent Licensing Agreement, a Disposables Supply Agreement, and a Generator Manufacturing and Supply Agreement, the latter of which will establish us as an OEM-provider of generators to Symmetry for a period of at least 10 years . In connection with the asset purchase agreement, we also entered into an Electro Surgical Disposables and Accessories, Cauteries and Other Products Supply Agreement with Symmetry for up to a four -year term, whereby we will manufacture certain Core products and sell them to Symmetry at agreed upon prices. Any revenue, costs and expenses resulting from this agreement are netted and reported in our Consolidated Statements of Operations as Other gains or losses. For the three months ended June 30, 2019, Core sales following the divestiture amounted to $2.1 million with cost of sales of $2.3 million and related operating expenses of $0.0 million , which are included in other losses on the Consolidated Statement of Operations. For the six months ended June 30, 2019, Core sales following the divestiture amounted to $4.4 million with cost of sales of $4.5 million and related operating expenses of $0.1 million , which are included in other losses on the Consolidated Statement of Operations. In connection with the asset purchase agreement, we also entered into a Manufacture and Supply Agreement with Symmetry for a ten-year term, whereby we will manufacture certain products and sell them to Symmetry at agreed upon prices. Revenue, costs and expenses resulting from this agreement are reported in our Consolidated Statements as income or loss from operations of our OEM reporting segment. We reclassified the financial results of the Core business to discontinued operations and from segment results for all periods presented. The accompanying unaudited consolidated financial statements have been prepared based upon SEC rules that permit reduced disclosure for interim periods. For a more complete discussion of significant accounting policies and certain other information, please refer to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 . These financial statements reflect all adjustments that are necessary for a fair presentation of results of operations and financial condition for the interim periods shown, including normal recurring accruals and other items. The results for the interim periods are not necessarily indicative of results for the full year. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories are stated at the lower of cost or net realizable values. Cost is determined on a first in, first out basis. Finished goods and work-in-process inventories include material, labor and overhead costs. Factory overhead costs are allocated to inventory manufactured in-house based upon labor hours. Inventories consisted of the following: (In thousands) June 30, December 31, Raw materials $ 5,341 $ 4,521 Finished goods and work in progress 1,453 1,130 Gross inventories 6,794 5,651 Less: reserve for obsolescence (402 ) (439 ) Net inventories $ 6,392 $ 5,212 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | INTANGIBLE ASSETS Intangible assets consisted of the following: (in thousands) June 30, 2019 December 31, 2018 Purchased technology (5-17 year lives) $ 1,442 $ 1,448 Less: accumulated amortization (1,442 ) (1,442 ) Purchased technology, net $ — $ 6 Goodwill $ 185 $ 185 Intangibles $ 185 $ 191 Intangible assets and goodwill are the result of our acquisition of Apyx (formerly known as Bovie) Bulgaria, EOOD in 2015. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The purpose of this ASU is to reduce the cost and complexity of evaluating goodwill for impairment. It eliminates the need for entities to calculate the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Under this ASU, an entity will perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted, however we have chosen not to do so. The amendment will not have a material impact on our financial condition or results of operations. ASU No. 2014-09 (ASC 606), Revenue from Contracts with Customers became effective for us beginning with the first quarter of 2018, and we adopted the new accounting standard using the modified retrospective transition approach. The modified retrospective transition approach recognized any changes from the beginning of the year of initial application through retained earnings with no restatement of comparative periods. We record revenue under ASC 606 at a single point in time, when control is transferred to the customer, which is consistent with past practice. We will continue to apply our current business processes, policies, systems and controls to support recognition and disclosure under the new standard. Based on the results of the evaluation, we have determined that the adoption of the new standard presents no material impact on our consolidated financial statements. Application of the transition requirements of the new standard did not have a material impact on opening retained earnings. We have disaggregated revenue by segment and geography in Note 11 Geographic and Segment Information. In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases (Topic 842), which became effective for us beginning with the first quarter of 2019. ASU 2016-02 requires a lessee to record a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, on the balance sheet for all leases with terms longer than 12 months, as well as the disclosure of key information about leasing arrangements. This new standard requires recognition in the statement of operations of a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis, and classification of all cash payments within operating activities in the statement of cash flows. The determination of the discount rate used to calculate net present value is based on what we would normally pay to borrow on a collateralized basis over a similar term. Disclosures are required to provide the amount, timing and uncertainty of cash flows arising from leases. In accordance with the standard, we took a modified retrospective transition approach and included the $394,000 right of use asset and corresponding liabilities in our property plant and equipment, accrued expenses and long term lease liability on the consolidated balance sheet. The lease is also represented in our consolidated statement of cash flows as a non-cash investing activity. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or disclosures. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE We compute basic earnings per share (“basic EPS”) by dividing the net income or loss by the weighted average number of common shares outstanding for the reporting period. Diluted earnings per share (“diluted EPS”) gives effect to all dilutive potential shares outstanding. The following table provides the computation of basic and diluted earnings per share. Six Months Ended (in thousands, except per share data) 2019 2018 Numerator: Net (loss) from continuing operations $ (9,019 ) $ (5,729 ) Numerator for diluted (loss) per common share - continuing operations (9,019 ) (5,729 ) Net income from discontinued operations, net of tax — 4,522 Numerator for diluted income per share - discontinued operations — 4,522 Net (loss) from all operations (9,019 ) (1,207 ) Numerator for full diluted (loss) per share - all (9,019 ) (1,207 ) Denominator - continuing operations Weighted average shares used to compute basic (loss) 33,363 32,890 Denominator for diluted (loss) per common share 33,363 32,890 Denominator - discontinued operations: Weighted average shares used to compute basic (loss) — 32,890 Denominator for diluted (loss) per common share - discontinued operations — 32,890 Denominator - all operations: Weighted average shares used to compute basic (loss) 33,363 32,890 Denominator for diluted (loss) per common share 33,363 32,890 Loss per share from continuing operations: Basic and diluted $ (0.27 ) $ (0.17 ) Income per share from discontinued operations Basic and diluted $ — $ 0.13 Income per share from all operations Basic and diluted $ (0.27 ) $ (0.04 ) Anti-dilutive instruments excluded from diluted loss per common share: Warrants — 14 Options 1,882 1,061 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Under our stock option plans, our board of directors may grant options to purchase common shares to our key employees, officers, directors and consultants. We account for stock options in accordance with FASB ASC Topic 718, Compensation - Stock Compensation , with option expense amortized over the vesting period based on the trinomial lattice option-pricing model fair value on the grant date, which includes a number of estimates that affect the amount of our expense. We expensed approximately $1,715,000 in stock-based compensation during the six months ended June 30, 2019 , as compared with $749,000 for the six months ended June 30, 2018 . The status of our stock options and stock awards are summarized as follows: Number of options Weighted average exercise price Outstanding at December 31, 2018 3,480,701 $ 3.10 Granted 1,277,500 7.73 Exercised (308,549 ) 2.87 Canceled and forfeited (50,500 ) 6.70 Outstanding at June 30, 2019 4,399,152 $ 4.42 Common shares required to be issued upon the exercise of stock options would be issued from our authorized and unissued shares. We calculated the fair value of issued options utilizing a trinomial lattice with an expected life calculated via the simplified method as we do not have sufficient history to determine actual expected life. 2019 Grants Option value $ 7.15 - $ 7.91 Risk-free rate 2.6% - 2.6 % Expected dividend yield — Expected volatility 69.1% - 69.1 % Expected term (in years) 6 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s income tax expense (benefit) was $76,000 and $(48,000) with an effective tax rate of -1.7% and 0.3% for the three and six months ended June 30, 2019, respectively, as compared to an expense of $13,000 , and $24,000 with an effective tax rate of -3.2% and -1.8% , for the three and six months ended June 30, 2018, respectively. The following is a roll-forward of the Company's total gross unrecognized tax benefits, not including interest and penalties, for the period ended June 30, 2019. (in thousands) Gross Unrealized Tax Benefits Balance at January 1, 2019 $ 1,313 Additions of tax positions related to the current year — Additions of tax positions related to the prior year — Decreases for tax positions related to the prior year — Balance at June 30, 2019 $ 1,313 The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in the Company’s condensed consolidated financial statements. As of June 30, 2019, the Company had approximately $53,000 in accrued interest and penalties related to unrecognized tax benefits. If the Company were to prevail on all uncertain tax positions, the resulting impact will be material as the Company will recognize $1.366 million of tax benefits in the provision of income taxes. It is expected that all of the uncertain tax positions should be resolved by December 31, 2019. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Property and Rental Agreements In October 2015, pursuant to our acquisition of Apyx Bulgaria, we became obligated to make lease payments of approximately $9,000 per month for approximately 20,000 square feet of office, research and manufacturing space in Sofia, Bulgaria. During Q2 2019, the lease was extended for an additional 2 years . The building lease expires in December 2022. With the adoption of ASC 842 we recognize all leases with terms greater than twelve months in duration on our Consolidated Balance Sheet as right-of-use assets and lease liabilities. The Apyx Bulgaria building lease is disclosed as a right-of-use asset and is included in the property, plant, and equipment totals on the Consolidated Balance Sheet. The following is a schedule of approximate future minimum lease payments under operating leases as of June 30, 2019 : (In thousands) 2019 (remaining 6 months) $ 56 2020 111 2021 118 2022 118 Total $ 403 On August 30, 2018, we paid the remaining mortgage balance of $2.5 million on the Clearwater facility, releasing us from any and all obligations to the Bank of Tampa. Litigation The medical device industry is characterized by frequent claims and litigation, and we are and may become subject to various claims, lawsuits and proceedings in the ordinary course of our business, including claims by current or former employees, distributors and competitors, and with respect to our products and product liability claims, lawsuits and proceedings. We are involved in a number of legal actions relating to the use of our J-Plasma ® technology. The outcomes of these legal actions are not within our complete control and may not be known for prolonged periods of time. In the opinion of management, the Company has meritorious defenses, and such claims are adequately covered by insurance, or are not expected, individually or in the aggregate, to result in a material, adverse effect on our financial condition. However, in the event that damages exceed the aggregate coverage limits of our policy or if our insurance carriers disclaim coverage, we believe it is possible that costs associated with these claims could have a material adverse impact on our consolidated earnings, financial position or cash flows. In addition, as previously disclosed with the Commission on Form 8-K filed April 26, 2019, we have learned that on April 17, 2019, a complaint (the “Complaint”) was filed in the United States District Court for the Middle District of Florida by plaintiff Kyle Pritchard, individually and on behalf of all others similarly situated against the Company and Charles D. Goodwin (“Goodwin”), the Company’s President and Chief Executive Officer and a member of the Company’s Board of Directors. The Complaint (which as of the date hereof has not been delivered through formal process to the Company) seeks class action status on behalf of all persons and entities that acquired the Company’s securities between August 1, 2018 and April 1, 2019 and alleges violations by the Company and Goodwin of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, primarily related to certain public statements concerning the Premarket Notification 510(k) submission made to the US Food and Drug Administration for a new indication for the Company’s J-Plasma® technology for use in dermal resurfacing procedures. The Complaint seeks an unspecified amount of compensatory damages, an award of interest, reasonable attorneys’ fees, expert fees and other costs, and equitable relief as the court may deem just and proper. On July 16, 2019, the court appointed a lead plaintiff for the putative class and approved the lead plaintiff’s selection of counsel. Although the ultimate outcome of this matter cannot be determined with certainty, the Company believes that the allegations stated in the Complaint are entirely without merit. The Company and Goodwin intend to defend themselves vigorously in the suit. Such claims are adequately covered by insurance, however, in the event that damages exceed the aggregate coverage limits of our policy or if our insurance carriers disclaim coverage, we believe it is possible that costs associated with this claim could have a material adverse impact on our consolidated earnings, financial position or cash flows. Under the deductible portion of our insurance coverage, we have accrued $0.5 million for initial defense costs. In accordance with authoritative guidance, we accrue a liability in our consolidated financial statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is recorded. If a loss is reasonably possible, but not known or probable, and can be reasonably estimated, the estimated loss or range of loss is disclosed in the notes to the consolidated financial statements. In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded, actual results may differ from these estimates. Purchase Commitments At June 30, 2019 , we had purchase commitments totaling approximately $3.4 million , substantially all of which is expected to be purchased by the end of 2019 . In response to the current worldwide helium shortage, to support our current and near term customer requirements, we issued purchase orders with two international companies to supply us with helium cylinders and have entered into agreements to purchase additional helium as needed. We also currently maintain our own supply of helium in the United States which can be utilized for our customer requirements. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Several relatives of Nikolay Shilev, Apyx Bulgaria’s Managing Director, are considered related parties. Teodora Shileva, Mr. Shilev’s spouse, is an employee of the Company working in the Accounting department. Antoaneta Dimitrova Shileva-Toromanova, Mr. Shilev’s sister, is the Manager of Production and Human Resources. Svetoslav Shilev, Mr. Shilev’s son, is an Engineer in the Quality Assurance department. In addition, as part of the purchase of the Bulgaria manufacturing facility, Mr. Shilev was issued a note payable for $140 thousand to be paid 5 years after the original purchase date which is in October 2020. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS Cash, Cash Equivalents and Marketable Securities at June 30, 2019, consists of $3.5 million in cash and $63.9 million in US Treasury Securities with maturities of 3 months or less. Cash, Cash Equivalents and Marketable Securities at December 31, 2018: (In thousands) Adjusted Cost Unrealized Gains Fair Value (3) Cash and Cash Equivalents (1) Short-term Marketable Securities Cash $ 6,337 $ — $ 6,337 $ 6,337 $ — Level 1 (2) U.S. Treasury Securities, maturities less than three months 10,129 — 10,129 10,129 — U.S. Treasury Securities, maturities greater than three months 61,431 247 61,678 — 61,678 Total $ 77,897 $ 247 $ 78,144 $ 16,466 $ 61,678 (1) The Company considers all highly liquid instruments with maturities of three months or less at the time of purchase to be cash equivalents. (2) The fair value of the debt securities consisting of U.S. Treasury bills is based on their quoted market prices. The fair value of these financial instruments are classified as Level 1 in the fair value hierarchy. The original purchase of U.S. Treasury bills occurred in September 2018, utilizing the proceeds from the sale of our Core business. (3) ASC 825-10 Financial Instruments, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings within interest income at each subsequent reporting date. At the date of purchase, the Company elected the fair value option for all investments with maturities of three months or greater at the time of purchase. |
GEOGRAPHIC AND SEGMENT INFORMAT
GEOGRAPHIC AND SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
GEOGRAPHIC AND SEGMENT INFORMATION | GEOGRAPHIC AND SEGMENT INFORMATION Operating segments are aggregated into reportable segments only if they exhibit similar economic characteristics. In addition to similar economic characteristics, we also consider the following factors in determining the reportable segments: the nature of business activities, the management structure directly accountable to our chief operating decision maker for operating and administrative activities, availability of discrete financial information and information presented to the Board of Directors and investors. Our reportable segments are disclosed as principally organized and managed as two operating segments: Advanced Energy and OEM. "Corporate & Other" includes certain unallocated corporate and administrative costs which were not specifically attributed to any reportable segment. Net assets are shared, therefore, not allocated to the reportable segments. The OEM segment is primarily development and manufacturing contract and product driven, all related expenses are recorded as cost of sales, therefore no segment specific operating expenses are incurred. Income (loss) from continuing operations for the first quarter of 2019 was labeled "Net income" instead of "Income (loss) from continuing operations". As a result, income (loss) from continuing operations for the first quarter of 2019 was $(3.4) million for Advanced Energy, $0.8 million for OEM, $(2.6) million for Corporate, and $(5.2) million in total. Summarized financial information with respect to reportable segments is as follows: Three Months Ended June 30, 2019 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 5,269 $ 1,299 $ — $ 6,568 Income (loss) from continuing operations (1,011 ) 136 (3,590 ) (4,465 ) Interest income — — 403 403 Other losses — — (200 ) (200 ) Income tax (benefit) expense — — 76 76 Three Months Ended June 30, 2018 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 3,113 $ 578 $ — $ 3,691 Income (loss) from continuing operations (792 ) 302 (2,443 ) (2,933 ) Interest expense — — (38 ) (38 ) Change in fair value of derivative liabilities — — 46 46 Income tax (benefit) expense — — 13 13 Six Months Ended June 30, 2019 (In thousands) Advanced Energy OEM Corporate & Other Total Sales 9,640 2,751 — 12,391 Income (loss) from continuing operations (4,399 ) 921 (6,190 ) (9,668 ) Interest income — — 826 826 Other losses — — (225 ) (225 ) Income tax (benefit) expense — — (48 ) (48 ) Six Months Ended June 30, 2018 (In thousands) Advanced Energy OEM Corporate & Other Total Sales 5,742 1,346 — 7,088 Income (loss) from continuing operations (1,370 ) 708 (4,991 ) (5,653 ) Interest expense — — (72 ) (72 ) Change in value of derivative liabilities — — 20 20 Income tax (benefit) expense — — 24 24 International sales represented approximately 30.9% of total revenues for the three months ended June 30, 2019, as compared with 19.8% of total revenues for the same prior year period. International sales represented approximately 30.2% of total revenues for the six months ended June 30, 2019 , as compared with 19.3% of total revenues for the same prior year period. Substantially all of these sales are denominated in U.S. dollars. Revenue by geographic region, based on the customer's “ship to” location on the invoice, are as follows: Three Months Ended Six Months Ended (In thousands) 2019 2018 2019 2018 Sales by Domestic and International Domestic $ 4,540 $ 2,960 $ 8,644 $ 5,718 International 2,028 731 3,747 1,370 Total $ 6,568 $ 3,691 $ 12,391 $ 7,088 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Inventories | Inventories are stated at the lower of cost or net realizable values. Cost is determined on a first in, first out basis. Finished goods and work-in-process inventories include material, labor and overhead costs. Factory overhead costs are allocated to inventory manufactured in-house based upon labor hours. |
Recent Accounting Pronouncements | In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The purpose of this ASU is to reduce the cost and complexity of evaluating goodwill for impairment. It eliminates the need for entities to calculate the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Under this ASU, an entity will perform its goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying value exceeds the reporting unit’s fair value. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted, however we have chosen not to do so. The amendment will not have a material impact on our financial condition or results of operations. ASU No. 2014-09 (ASC 606), Revenue from Contracts with Customers became effective for us beginning with the first quarter of 2018, and we adopted the new accounting standard using the modified retrospective transition approach. The modified retrospective transition approach recognized any changes from the beginning of the year of initial application through retained earnings with no restatement of comparative periods. We record revenue under ASC 606 at a single point in time, when control is transferred to the customer, which is consistent with past practice. We will continue to apply our current business processes, policies, systems and controls to support recognition and disclosure under the new standard. Based on the results of the evaluation, we have determined that the adoption of the new standard presents no material impact on our consolidated financial statements. Application of the transition requirements of the new standard did not have a material impact on opening retained earnings. We have disaggregated revenue by segment and geography in Note 11 Geographic and Segment Information. In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases (Topic 842), which became effective for us beginning with the first quarter of 2019. ASU 2016-02 requires a lessee to record a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, on the balance sheet for all leases with terms longer than 12 months, as well as the disclosure of key information about leasing arrangements. This new standard requires recognition in the statement of operations of a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis, and classification of all cash payments within operating activities in the statement of cash flows. The determination of the discount rate used to calculate net present value is based on what we would normally pay to borrow on a collateralized basis over a similar term. Disclosures are required to provide the amount, timing and uncertainty of cash flows arising from leases. In accordance with the standard, we took a modified retrospective transition approach and included the $394,000 right of use asset and corresponding liabilities in our property plant and equipment, accrued expenses and long term lease liability on the consolidated balance sheet. The lease is also represented in our consolidated statement of cash flows as a non-cash investing activity. No other new accounting pronouncement issued or effective during the fiscal year had or is expected to have a material impact on our consolidated financial statements or disclosures. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventories consisted of the following: (In thousands) June 30, December 31, Raw materials $ 5,341 $ 4,521 Finished goods and work in progress 1,453 1,130 Gross inventories 6,794 5,651 Less: reserve for obsolescence (402 ) (439 ) Net inventories $ 6,392 $ 5,212 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets consisted of the following: (in thousands) June 30, 2019 December 31, 2018 Purchased technology (5-17 year lives) $ 1,442 $ 1,448 Less: accumulated amortization (1,442 ) (1,442 ) Purchased technology, net $ — $ 6 Goodwill $ 185 $ 185 Intangibles $ 185 $ 191 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Basic and diluted earnings per share | The following table provides the computation of basic and diluted earnings per share. Six Months Ended (in thousands, except per share data) 2019 2018 Numerator: Net (loss) from continuing operations $ (9,019 ) $ (5,729 ) Numerator for diluted (loss) per common share - continuing operations (9,019 ) (5,729 ) Net income from discontinued operations, net of tax — 4,522 Numerator for diluted income per share - discontinued operations — 4,522 Net (loss) from all operations (9,019 ) (1,207 ) Numerator for full diluted (loss) per share - all (9,019 ) (1,207 ) Denominator - continuing operations Weighted average shares used to compute basic (loss) 33,363 32,890 Denominator for diluted (loss) per common share 33,363 32,890 Denominator - discontinued operations: Weighted average shares used to compute basic (loss) — 32,890 Denominator for diluted (loss) per common share - discontinued operations — 32,890 Denominator - all operations: Weighted average shares used to compute basic (loss) 33,363 32,890 Denominator for diluted (loss) per common share 33,363 32,890 Loss per share from continuing operations: Basic and diluted $ (0.27 ) $ (0.17 ) Income per share from discontinued operations Basic and diluted $ — $ 0.13 Income per share from all operations Basic and diluted $ (0.27 ) $ (0.04 ) Anti-dilutive instruments excluded from diluted loss per common share: Warrants — 14 Options 1,882 1,061 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of stock options and stock awards | The status of our stock options and stock awards are summarized as follows: Number of options Weighted average exercise price Outstanding at December 31, 2018 3,480,701 $ 3.10 Granted 1,277,500 7.73 Exercised (308,549 ) 2.87 Canceled and forfeited (50,500 ) 6.70 Outstanding at June 30, 2019 4,399,152 $ 4.42 |
Schedule of option fair value assumptions | 2019 Grants Option value $ 7.15 - $ 7.91 Risk-free rate 2.6% - 2.6 % Expected dividend yield — Expected volatility 69.1% - 69.1 % Expected term (in years) 6 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Unrecognized tax benefits roll-forward | The following is a roll-forward of the Company's total gross unrecognized tax benefits, not including interest and penalties, for the period ended June 30, 2019. (in thousands) Gross Unrealized Tax Benefits Balance at January 1, 2019 $ 1,313 Additions of tax positions related to the current year — Additions of tax positions related to the prior year — Decreases for tax positions related to the prior year — Balance at June 30, 2019 $ 1,313 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum lease payments under operating leases | The following is a schedule of approximate future minimum lease payments under operating leases as of June 30, 2019 : (In thousands) 2019 (remaining 6 months) $ 56 2020 111 2021 118 2022 118 Total $ 403 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Marketable Securities at June 30, 2019, consists of $3.5 million in cash and $63.9 million in US Treasury Securities with maturities of 3 months or less. Cash, Cash Equivalents and Marketable Securities at December 31, 2018: (In thousands) Adjusted Cost Unrealized Gains Fair Value (3) Cash and Cash Equivalents (1) Short-term Marketable Securities Cash $ 6,337 $ — $ 6,337 $ 6,337 $ — Level 1 (2) U.S. Treasury Securities, maturities less than three months 10,129 — 10,129 10,129 — U.S. Treasury Securities, maturities greater than three months 61,431 247 61,678 — 61,678 Total $ 77,897 $ 247 $ 78,144 $ 16,466 $ 61,678 (1) The Company considers all highly liquid instruments with maturities of three months or less at the time of purchase to be cash equivalents. (2) The fair value of the debt securities consisting of U.S. Treasury bills is based on their quoted market prices. The fair value of these financial instruments are classified as Level 1 in the fair value hierarchy. The original purchase of U.S. Treasury bills occurred in September 2018, utilizing the proceeds from the sale of our Core business. (3) ASC 825-10 Financial Instruments, allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings within interest income at each subsequent reporting date. At the date of purchase, the Company elected the fair value option for all investments with maturities of three months or greater at the time of purchase. |
GEOGRAPHIC AND SEGMENT INFORM_2
GEOGRAPHIC AND SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of reporting information by segment | Summarized financial information with respect to reportable segments is as follows: Three Months Ended June 30, 2019 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 5,269 $ 1,299 $ — $ 6,568 Income (loss) from continuing operations (1,011 ) 136 (3,590 ) (4,465 ) Interest income — — 403 403 Other losses — — (200 ) (200 ) Income tax (benefit) expense — — 76 76 Three Months Ended June 30, 2018 (In thousands) Advanced Energy OEM Corporate & Other Total Sales $ 3,113 $ 578 $ — $ 3,691 Income (loss) from continuing operations (792 ) 302 (2,443 ) (2,933 ) Interest expense — — (38 ) (38 ) Change in fair value of derivative liabilities — — 46 46 Income tax (benefit) expense — — 13 13 Six Months Ended June 30, 2019 (In thousands) Advanced Energy OEM Corporate & Other Total Sales 9,640 2,751 — 12,391 Income (loss) from continuing operations (4,399 ) 921 (6,190 ) (9,668 ) Interest income — — 826 826 Other losses — — (225 ) (225 ) Income tax (benefit) expense — — (48 ) (48 ) Six Months Ended June 30, 2018 (In thousands) Advanced Energy OEM Corporate & Other Total Sales 5,742 1,346 — 7,088 Income (loss) from continuing operations (1,370 ) 708 (4,991 ) (5,653 ) Interest expense — — (72 ) (72 ) Change in value of derivative liabilities — — 20 20 Income tax (benefit) expense — — 24 24 |
Schedule of revenue by geographic area | Revenue by geographic region, based on the customer's “ship to” location on the invoice, are as follows: Three Months Ended Six Months Ended (In thousands) 2019 2018 2019 2018 Sales by Domestic and International Domestic $ 4,540 $ 2,960 $ 8,644 $ 5,718 International 2,028 731 3,747 1,370 Total $ 6,568 $ 3,691 $ 12,391 $ 7,088 |
BASIS OF PRESENTATION - NARRATI
BASIS OF PRESENTATION - NARRATIVE (Details) - USD ($) $ in Millions | Aug. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Proceeds from disposition of Core business | $ 97 | ||
Manufacture and Supply Agreement | Symmetry Surgical Inc. | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Asset purchase agreement, term | 10 years | ||
Electro Surgical Disposables and Accessories, Cauteries and Other Products Supply Agreement | Symmetry Surgical Inc. | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Asset purchase agreement, term | 4 years | ||
Discontinued Operations, Held-for-sale | Electro Surgical Disposables and Accessories, Cauteries and Other Products Supply Agreement | Symmetry Surgical Inc. | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on sale of the Core Business, net of tax | $ 2.1 | $ 4.4 | |
Cost of sales | 2.3 | 4.5 | |
Operating expenses | $ 0 | $ 0.1 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 5,341 | $ 4,521 |
Finished goods and work in progress | 1,453 | 1,130 |
Gross inventories | 6,794 | 5,651 |
Less: reserve for obsolescence | (402) | (439) |
Net inventories | $ 6,392 | $ 5,212 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $ 185 | $ 185 |
Intangibles | 185 | 191 |
Purchased Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Purchased technology (5-17 year lives) | 1,442 | 1,448 |
Less: accumulated amortization | (1,442) | (1,442) |
Purchased technology, net | $ 0 | $ 6 |
Purchased Technology | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, useful life (in years) | 5 years | 5 years |
Purchased Technology | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset, useful life (in years) | 17 years | 17 years |
RECENT ACCOUNTING PRONOUNCEME_2
RECENT ACCOUNTING PRONOUNCEMENTS (Details) - ASU 2016-02 $ in Thousands | Jan. 01, 2019USD ($) |
New Accounting Pronouncement, Early Adoption [Line Items] | |
Right of use asset | $ 394 |
Lease liabilities | $ 394 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Numerator: | ||||
Net (loss) from continuing operations | $ (4,338) | $ (2,938) | $ (9,019) | $ (5,729) |
Numerator for diluted (loss) per common share - continuing operations | (9,019) | (5,729) | ||
Total income from discontinued operations, net of tax | 0 | 4,522 | ||
Numerator for diluted income per share - discontinued operations | 0 | 4,522 | ||
Net (loss) from all operations | $ (4,338) | $ (272) | (9,019) | (1,207) |
Numerator for full diluted (loss) per share - all | $ (9,019) | $ (1,207) | ||
Denominator | ||||
Denominator for diluted (loss) per common share (in shares) | 33,363 | 32,890 | ||
Weighted average shares used to compute basic (loss) (in shares) | 0 | 32,890 | ||
Denominator for diluted (loss) per common share - discontinued operations (in shares) | 0 | 32,890 | ||
Weighted average shares used to compute basic (loss) (in shares) | 33,363 | 32,890 | ||
Denominator for diluted (loss) per common share (in shares) | 33,363 | 32,890 | ||
Loss per share from continuing operations: | ||||
Basic and diluted (in dollars per share) | $ (0.27) | $ (0.17) | ||
Income per share from discontinued operations | ||||
Basic and diluted (in dollars per share) | 0 | 0.13 | ||
Income per share from all operations | ||||
Basic and diluted (in dollars per share) | $ (0.27) | $ (0.04) | ||
Warrants | ||||
Income per share from all operations | ||||
Anti-dilutive instruments excluded from diluted loss per common share (in shares) | 0 | 14 | ||
Options | ||||
Income per share from all operations | ||||
Anti-dilutive instruments excluded from diluted loss per common share (in shares) | 1,882 | 1,061 |
STOCK-BASED COMPENSATION - NARR
STOCK-BASED COMPENSATION - NARRATIVE (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Stock based compensation | $ 1,715 | $ 749 |
STOCK-BASED COMPENSATION - SUMM
STOCK-BASED COMPENSATION - SUMMARY OF STOCK OPTIONS (Details) | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding, beginning of period (in shares) | shares | 3,480,701 |
Granted (in shares) | shares | 1,277,500 |
Exercised (in shares) | shares | (308,549) |
Canceled and forfeited (in shares) | shares | (50,500) |
Outstanding, end of period (in shares) | shares | 4,399,152 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Outstanding, beginning of period (in dollars per share) | $ / shares | $ 3.10 |
Granted (in dollars per share) | $ / shares | 7.73 |
Exercised (in dollars per share) | $ / shares | 2.87 |
Canceled and forfeited (in dollars per shares) | $ / shares | 6.70 |
Outstanding, end of period (in dollars per share) | $ / shares | $ 4.42 |
STOCK-BASED COMPENSATION - FAIR
STOCK-BASED COMPENSATION - FAIR VALUE ASSUMPTIONS (Details) | 6 Months Ended |
Jun. 30, 2019$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Option value (in dollars per share) | $ 7.73 |
Expected dividend yield (as a percent) | 0.00% |
Expected volatility - low (as a percent) | 69.10% |
Expected volatility - high (as a percent) | 69.10% |
Expected term (in years) | 6 years |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Option value (in dollars per share) | $ 7.15 |
Risk-free rate (as a percent) | 2.60% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Option value (in dollars per share) | $ 7.91 |
Risk-free rate (as a percent) | 2.60% |
INCOME TAXES - NARRATIVE (Detai
INCOME TAXES - NARRATIVE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 76 | $ 13 | $ (48) | $ 24 |
Effective income tax rate, percent | (1.70%) | (3.20%) | 0.30% | (1.80%) |
Accrued interest and penalties | $ 53 | $ 53 | ||
Tax benefits recognized in the provision of income taxes | $ 1,366 |
INCOME TAXES - UNRECOGNIZED TAX
INCOME TAXES - UNRECOGNIZED TAX BENEFITS ROLL-FORWARD (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Gross Unrealized Tax Benefits | |
Balance at January 1, 2019 | $ 1,313 |
Additions of tax positions related to the current year | 0 |
Additions of tax positions related to the prior year | 0 |
Decreases for tax positions related to the prior year | 0 |
Balance at June 30, 2019 | $ 1,313 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - NARRATIVE (Details) | Aug. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Apr. 17, 2019USD ($) | Oct. 31, 2015USD ($)ft² |
Other Commitments [Line Items] | ||||
Lease term extension | 2 years | |||
Purchase commitments for inventories | $ 3,400,000 | |||
Sophia, Bulgaria | ||||
Other Commitments [Line Items] | ||||
Monthly cost of office space | $ 9,000 | |||
Area of real estate property (in square feet) | ft² | 20,000 | |||
Mortgages | ||||
Other Commitments [Line Items] | ||||
Repayment of mortgage note payable | $ 2,500,000 | |||
Unfavorable Regulatory Action | Pending Litigation | ||||
Other Commitments [Line Items] | ||||
Costs accrued | $ 500,000 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - FUTURE MINIMUM LEASE PAYMENTS (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Future minimum lease payments under operating leases | |
2019 (remaining 6 months) | $ 56 |
2020 | 111 |
2021 | 118 |
2022 | 118 |
Total | $ 403 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - Director - Bulgaria Manufacturing Plant Purchase $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Related Party Transaction [Line Items] | |
Notes payable | $ 140 |
Term of payment due | 5 years |
FINANCIAL INSTRUMENTS (Details)
FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Securities, Available-for-sale [Line Items] | ||
Cash | $ 3,500 | $ 6,337 |
Adjusted Cost | 77,897 | |
Unrealized Gains | 247 | |
Fair Value | 78,144 | |
Cash and cash equivalents | 67,360 | 16,466 |
Short-term Marketable Securities | 0 | 61,678 |
U.S. Treasury Securities, maturities less than three months | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | $ 63,900 | 10,129 |
Fair Value | 10,129 | |
Cash equivalents | 10,129 | |
U.S. Treasury Securities, maturities greater than three months | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | 61,431 | |
Unrealized Gains | 247 | |
Fair Value | 61,678 | |
Short-term Marketable Securities | $ 61,678 |
GEOGRAPHIC AND SEGMENT INFORM_3
GEOGRAPHIC AND SEGMENT INFORMATION - NARRATIVE (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)segment | Jun. 30, 2018USD ($) | |
Segment Reporting [Abstract] | |||||
Number of operating segments (in segments) | segment | 2 | ||||
Concentration Risk [Line Items] | |||||
Income (loss) from continuing operations | $ (4,465) | $ (5,200) | $ (2,933) | $ (9,668) | $ (5,653) |
Geographic concentration risk | Sales Revenue | International customers | |||||
Concentration Risk [Line Items] | |||||
Concentration receivable risk (as a percent) | 30.90% | 19.80% | 30.20% | 19.30% | |
Operating Segments | Advanced Energy | |||||
Concentration Risk [Line Items] | |||||
Income (loss) from continuing operations | $ (1,011) | (3,400) | $ (792) | $ (4,399) | $ (1,370) |
Operating Segments | OEM | |||||
Concentration Risk [Line Items] | |||||
Income (loss) from continuing operations | 136 | 800 | 302 | 921 | 708 |
Corporate & Other | |||||
Concentration Risk [Line Items] | |||||
Income (loss) from continuing operations | $ (3,590) | $ (2,600) | $ (2,443) | $ (6,190) | $ (4,991) |
GEOGRAPHIC AND SEGMENT INFORM_4
GEOGRAPHIC AND SEGMENT INFORMATION - REPORTABLE SEGMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | |||||
Sales | $ 6,568 | $ 3,691 | $ 12,391 | $ 7,088 | |
Income (loss) from continuing operations | (4,465) | $ (5,200) | (2,933) | (9,668) | (5,653) |
Interest income | 403 | 0 | 826 | 0 | |
Interest expense | 0 | (38) | 0 | (72) | |
Other losses | (200) | 0 | (225) | 0 | |
Change in value of derivative liabilities | 0 | 46 | 0 | 20 | |
Income tax expense (benefit) | 76 | 13 | (48) | 24 | |
Operating Segments | Advanced Energy | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 5,269 | 3,113 | 9,640 | 5,742 | |
Income (loss) from continuing operations | (1,011) | (3,400) | (792) | (4,399) | (1,370) |
Interest income | 0 | 0 | |||
Interest expense | 0 | 0 | |||
Other losses | 0 | 0 | |||
Change in value of derivative liabilities | 0 | 0 | |||
Income tax expense (benefit) | 0 | 0 | 0 | 0 | |
Operating Segments | OEM | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 1,299 | 578 | 2,751 | 1,346 | |
Income (loss) from continuing operations | 136 | 800 | 302 | 921 | 708 |
Interest income | 0 | 0 | |||
Interest expense | 0 | 0 | |||
Other losses | 0 | 0 | |||
Change in value of derivative liabilities | 0 | 0 | |||
Income tax expense (benefit) | 0 | 0 | 0 | 0 | |
Corporate & Other | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 0 | 0 | 0 | 0 | |
Income (loss) from continuing operations | (3,590) | $ (2,600) | (2,443) | (6,190) | (4,991) |
Interest income | 403 | 826 | |||
Interest expense | (38) | (72) | |||
Other losses | (200) | (225) | |||
Change in value of derivative liabilities | 46 | 20 | |||
Income tax expense (benefit) | $ 76 | $ 13 | $ (48) | $ 24 |
GEOGRAPHIC AND SEGMENT INFORM_5
GEOGRAPHIC AND SEGMENT INFORMATION - GEOGRAPHIC (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 6,568 | $ 3,691 | $ 12,391 | $ 7,088 |
Domestic | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 4,540 | 2,960 | 8,644 | 5,718 |
International | ||||
Segment Reporting Information [Line Items] | ||||
Sales | $ 2,028 | $ 731 | $ 3,747 | $ 1,370 |