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April2018
SafeHarborStatement
CertainmattersdiscussedinthispresentationandoralstatementsmadefromtimetotimebyrepresentativesoftheCompanymayconstituteforward-lookingstatementswithinthemeaningofthePrivateSecuritiesLitigationReformActof1995andtheFederalsecuritieslaws. AlthoughtheCompanybelievesthattheexpectationsreflectedinsuchforward-lookingstatementsarebaseduponreasonableassumptions,itcangivenoassurancethatitsexpectationswillbeachieved.
Forward-lookinginformationissubjecttocertainrisks,trendsanduncertaintiesthatcouldcauseactualresultstodiffermateriallyfromthoseprojected. ManyofthesefactorsarebeyondtheCompany’sabilitytocontrolorpredict. ImportantfactorsthatmaycauseactualresultstodiffermateriallyandthatcouldimpacttheCompanyandthestatementscontainedinthispresentationcanbefoundintheCompany’sfilingswiththeSecuritiesandExchangeCommissionincludingourmostrecentreportsonForm10-KandForm10-Q.CopiesofthesefilingsareavailableonlinefromtheSEC. Forforward-lookingstatementsinthispresentation,theCompanyclaimstheprotectionofthesafeharborforforward-lookingstatementscontainedinthePrivateSecuritiesLitigationReformActof1995. TheCompanyassumesnoobligationtoupdateorsupplementanyforward-lookingstatementsasaresultofnewinformation,futureevents,orotherwise.
InvestmentHighlights
3
“Core”and“OEM”operatingsegments:establishedcommercialbusinesseswithstrongprofitabilityandcashflow
AdvancedEnergyoperatingsegment:BovieMedical’s‘growthengine’
J-Plasma®:transformationaltechnology,supportedbystrongandgrowingIPportfolio
AdvancedEnergysegmentgrowthfueledbycommercializationofJ-Plasma®technologyinthecosmeticsurgerymarket
Experiencedmanagementteam;enhancedwithrecenthires
Solidbalancesheetconditionsupportedbyimprovinggrowthandprofitabilityprofile
Long-termAdvancedEnergygrowthprofileenhancedbyclinical,regulatory&marketinginitiatives
ExperiencedManagementTeamMgmt.TeamMember JoinedBovie RepresentativePreviousExperience
CharlieGoodwinChiefExecutiveOfficer December2017
JayEwersChiefFinancialOfficer June2014
ToddHornsbyVicePresident&General
ManagerofAdvancedEnergyAugust2014
4
RobSaronPresidentandDirector January1978
MosheCitronowiczSeniorVicePresident October1993
YearsofRelevantExperience
25
35
18
36
31 KCRTechnologies SequentialInformationSystems
Dr.TopazKirlewDirectorofRegulatoryAffairs March2018 30
Experiencedmanagementteam;enhancedwithrecenthires
ScottSandersDirectorofClinicalEducation
&MarketDevelopmentMarch2018 37
5
CompanySnapshot
Core
Energy-based medical device company specializing in developing, manufacturingand marketing a range of electrosurgical products and technologies, as well asrelated medical products used in doctor’s offices, surgery centers and hospitalsworldwide.
Founded: 1978
Locations: • Clearwater,FL• Sofia,BulgariaFull-Time Employees: 211**
CommercialProfile: >300 products soldin>150countries
LTMSales(12/31/17): $38.9M
OperatingSegments:• Core• OEM• AdvancedEnergy
Yearof IPO: 1982
NYSEMKT: BVX
MarketCap: ~$104M*
Avg.DailyVol(LTM): ~104,000
*
*Shareprice:$3.15asofmarketcloseon3/15/2018;Sharesoutstanding:33.0Masof3/9/2018**Asof12/31/2017LTM=“LastTwelveMonths”
99.3% 95.6%90.4%
80.4%
FY'14 FY'15 FY'16 FY'17
OEMCore
OperatingSegments:“Core”&“OEM”• Legacybusinessesfocusedonthedesignand
manufactureofelectrosurgicaltechnologiesandaccessories:
- “Core”productsmarketedandsoldthroughdistributorsworldwideto>6,000hospitals
- “OEM”productsmanufacturedinresponsetoinbounddemandfromlargemedicaldevicecompanies
Core/OEMFinancialProfile:• Modestannualrevenuegrowthovermulti-yr.period
- Core/OEM’14-’17CAGRof~4%;volatilityinannualgrowthratesdrivenbyfluctuationsinOEMdemand
- Core/OEMshareoftotalcompanyrevenuedecreasingduetostrongrevenuegrowthfromAdvancedEnergysegmentinrecentyears
• Strongprofitabilityandcashflowprofile
6
Establishedcommercialbusinesseswithstrongprofitabilityandcashflow
$27.5M $28.2M$33.1M $31.2M
FY'14 FY'15 FY'16 FY'17
Core/OEM:AnnualRevenueOEMCore
Core/OEM:PercentofAnnualCompanyRevenue
$0.2M$1.3M
$3.5M
$7.6M
$10.9M
FY'14 FY'15 FY'16 FY'17 FY'18GuidanceMidPt.
• Advancedelectrosurgicalandplasmatechnology(generatorsandhandpieces)
• PrimarydriverofBovie’slong-termrevenuegrowth
• CommercializedproductsmarketedintheU.S.viahybridsellingorganizationandinternationallyviadistributors
- U.S.hybriddistributionnetworkasof12/31/17:- 14directreps- 3regionalmanagers- 14independentreps
OperatingSegment:“AdvancedEnergy”
7
Adv.Energy:20%
PercentofFY’17Revenue
BovieMedical’s‘growthengine’
AdvancedEnergy:AnnualRevenue
AdvancedEnergy:J-Plasma®Technology
• Revolutionarytechnologyionizesheliumtocreatestreamofplasmaforcutting,coagulatingandablatingsofttissue
• Superiorprecision,withlimitedthermalspread
- Stable,thin,focusedstreamofionizedheliumgas- Widerangeofcontrol
• Allowsphysicianstosafelyperformproceduresonorarounddelicatestructures
8
UniqueRetractableBlade
Transformationaltechnology
J-PlasmaTechnology:LimitedThermalDamagevs.Energy-basedSurgicalTools*
• Prospectivestudycomparedlevelsofunintendedthermaldamagetoperitonealtissue(membraneliningtheabdominalcavity)amongotherenergy-basedsurgicaltoolsvs.J-Plasma
• Redareasrepresentthedepthofthermalorenergydamageeachtoolleftbelowthetissuesurface;blueareasrepresentunaffectedtissue
• J-Plasmademonstratedfarlowestamountofcollateralthermalinjurytohealthytissuesurroundingtheoperativesite
*Reference:PedrosoJ,GutierrezM,VolkerW.J-Plasma,monopolarpencil,argonbeamandCO2laserelectrosurgery:comparativeevaluationofthermalspreadinaporcinetissuemodel(whitepaper).BovieMedicalCorporation.June2014 9
J-PlasmaTechnology:DemonstrationVideo
10
VideoURL:http://www.boviemedical.com/downloads/J-Plasma_Demonstration_Video.mp4
Ifyouarehavingtroubleviewingvideo,chooseotheroption.
TodownloadaWindowsMediaVideoversionclickhere.https://cloud.boviemedical.com/index.php/s/4E5Uwb0hcscxNPp
FlashorQuickTimePlayerrequiredtoview.
ToviewvideofromYouTubeclickhere.https://youtu.be/UsnKHLvrmnY
J-PlasmaTechnology:ClinicianFeedback
11
“J-PlasmadeliversthemostprecisionIhaveeverseeninanenergy-baseddevice.Thisallowsthephysiciantotreatsmallandlargeareaswithease.TheamountofenergycanbetailoredtogetoutcomesIhavenotyetseenwithanycompetitivelaserdevice.”
-JasonEmer,M.D.,FAAD,FAACSDermatologicSurgeon
“J-PlasmaisatrulyinnovativetechnologythatwillbeinvaluabletoFacialandPlasticSurgeonsandDermatologists.Thethermalcharacteristicsofthisenergy-baseddeviceareunlikeanydevicescurrentlyavailable.”
-RichardGentile,M.D.,MBAPlasticSurgeon
“Thereisanincredibleamountofcontrolintermsofdepth-of-penetration;becauseit’snotdeliveringaburningenergy”“It’sachancetobeartistic,becauseyouareusingadevicemorelikeapaintbrushthananatombomb.”
-JosephB.DeLozier III,MD,FACSPlasticSurgeon
“J-Plasmaisfast,easytouseandIamhappywiththeresults.ThisisoneofthefewdevicesIhavepurchasedthatwon'tspendanytimeinthecloset.”
-DianeDuncan,M.D.PlasticSurgeon
“J-Plasmaisaninnovativeenergy-baseddevicewithanimpactontissueunlikeanydevicecurrentlyavailable.J-PlasmawillcreateafundamentalshiftinthewayproceduresareperformedbyallPlasticSurgeons,CosmeticSurgeonsandDermatologists.”
-JackZamora,M.D.OculoplasticSurgeon
AdvancedEnergy:CommercialFocus
U.S.commercialfocus" cosmeticsurgerymarket:
• U.S.cosmeticsurgerymarketcomprisedof~15,000*plasticsurgeons,cosmeticsurgeons&dermatologists
• FavorableU.S.marketcharacteristics:Proceduresperformedinoutpatientfacilitiesandpaidforoutofpocket
• StronginitialU.S.commercialtraction:hybridsalesforcefocusedonearlyadopters
- Initialproceduralareafocus:subdermalcoagulationfollowingliposuction(~200Kannualliposuctionproceduresinplasticsurgeryalone**)
Internationalcommercialfocus" soldtodistributors,whomarketandsellintothehospitalsurgicalsuite
12
AdvancedEnergysegmentgrowthfueledbycommercializationofJ-Plasmatechnologyinthecosmeticsurgerymarket
*American Society of Plastic Surgeons (ASPS) database 2016**American Society for Aesthetic Plastic Surgery (ASAPS) database 2016
DevelopingExpertiseintheCosmeticSurgeryMarket
1. Enhancingphysicianandpracticesupportforcosmeticsurgerycustomers
- Currentfocus: launchofnewchannel-dedicatedbrand-- Recentmilestone: InitiatedRenuvion™brandlaunchonMarch29th
2. ExpandingclinicalsupportforJ-Plasmaincosmeticsurgeryprocedures
- Currentfocus: IDEprospective,multicenter,singlearmclinicalstudyevaluatingthe_____________useofJ-Plasma®fordermalskinresurfacing
- Upcomingmilestone: expecttocompletestudyenrollmentbyendofQ2’18
3. Pursuingnew,specificclinicalindicationsinthecosmeticsurgerymarket:
- Currentfocus: FDA510(k)specificindicationforuseindermalskinresurfacingprocedures- Upcomingmilestone: expecttosubmitforregulatoryindicationbyendofFY‘18
13
Long-termAdvancedEnergygrowthprofileenhancedbyclinical,regulatory&marketinginitiativesincosmeticsurgery
Focusedonbuildingsupporttofacilitatebroad-basedadoptionby:
IntroducingRenuvion™CosmeticTechnology
• Anewbranddedicatedtothecosmeticsurgerymarket:
- - BovieMedical’sJ-PlasmatechnologyisnowbeingmarketedandsoldinthecosmeticsurgerymarketundertheRenuvionbrandname
• Createdforphysiciansinthecosmeticsurgerymarket
- Physicianfeedbackfromearly-adoptersofJ-Plasmatechnologyinstrumentalincreatingabrand/campaignthatwillresonatewithcosmeticsurgerycustomers
• Designedto:
- Enhancephysicianpractice-basedmarketing- LeveragetheincreasingawarenessofRenuvioninthe
cosmeticsurgerymarket
14
Renuvion:enhancingphysicianandpracticesupportforcosmeticsurgerycustomers
WhatisRenuvion?
• EstablishedIPportfolio;pendingapprovalsfocusedonAdvancedEnergysegment:
IP&NewProductDevelopment
15
GrowingIPportfolioandrecentprogressinnewproductdevelopment
PatentsIssued PatentsPending
UnitedStates 41 12
International 23 9
Total 64 21
AdvancedEnergyproductscomprise:42%ofissuedpatentsand
100%ofpendingpatents
Progress(2010– 2013):
- 4510(k)clearances- 2CEMarkapprovals- 4Productscommercialized
ProgresssinceJanuary,2014:
- 10510(k)clearances- 21CEMarkapprovals- 10Productscommercialized
• Productdevelopmenteffortsreinvigoratedin2014:
16
ManufacturingFootprint
Clearwater, FL Sofia, Bulgaria China
Size: 60,000sq.ft. 16,000sq. ft. • 70,000sq.ft.
Owned/Contracted:
Owned Owned Contracted
Capabilities:
• Assembly• Integration• FinalTesting• Packaging• SterilizationManagement
• Manufacturing• ComplexComponent
Assembly• InitialTesting
• ComponentManufacturing• Sub-Assemblies• Finished MedicalDevices
(Electrodes)
ImprovingmanufacturingcapacityandefficienciestoaccommodateanticipatedstrongdemandforJ-Plasma
17
HistoricalFinancialSummary
($in000's)2016 2017 2016 2017
Revenue $9,494 $11,348 $36,627 $38,883RevenueGrowth(Y/Y) 14.5% 19.5% 24.1% 6.2%
CostofGoodsSold 4,663 5,449 18,712 19,122
GrossProfit $4,831 $5,899 $17,915 $19,761GrossMargin 50.9% 52.0% 48.9% 50.8%
OperatingExpenses 5,875 6,987 21,707 25,026
LossfromOperations ($1,044) ($1,088) ($3,792) ($5,265)
AdjustedEBITDA ($589) ($580) ($2,249) ($3,698)
AdjustedEBITDAEx.Non-recurringitems* ($589) $944 ($2,249) ($2,174)
CashonhandasofDecember31,2017 $10,668
Q4 FY
*Fourth quarter and fiscal year 2017 periods include approximately $1.5 million of non-recurring severance andexpenses related to former members of the Company’s executive management team and related closure of thecorporate office in Purchase, New York.
18
FY’18GuidanceSummary
• FormalFinancialGuidance:
• TotalGAAPrevenueintherangeof$41.0millionto$42.5million,comparedto$38.9millioninfiscalyear2017.
• AdjustedEBITDAinarangeof$1.0millionto$1.5million,comparedtoalossof$2.2millioninfiscalyear2017.
• FY’18totalcompanyrevenueguidanceassumes:• TotalrevenuegrowthdrivenbyAdvancedEnergysegmentsales,which
areexpectedtogrow40%- 45%y/yin2018
Improvingprofitability;growthdrivenbystrongcommercialtractioninAdvancedEnergysegment
Appendix
BalanceSheet
20
(Unaudited)(Inthousands)
December31,2017
December31,2016
ASSETSCurrentassets:Cashandcashequivalents 9,949$ 14,456$Restrictedcash 719 779Tradeaccountsreceivable,netofallowanceof$204and$118 4,857 4,733Inventories,net 6,526 6,158Prepaidexpensesandothercurrentassets 496 413Totalcurrentassets 22,547 26,539
Propertyandequipment,net 6,408 6,449Brandnameandtrademark 1,510 1,510Purchasedtechnologyandlicenserights,net 179 215Goodwill 185 185Deposits 92 109Otherassets 67 103
Totalassets 30,988$ 35,110$
BalanceSheet
21
(Unaudited)(Inthousands)December31,
2017December31,
2016LIABILITIESANDSTOCKHOLDERS'EQUITYCurrentliabilities:Accountspayable 1,583$ 1,606$Accruedseveranceandrelated 1,242 —Accruedpayroll 447 419Accruedvacation 74 404Currentportionofmortgagenotepayable 239 239Accruedandotherl iabil ities 2,388 2,604Totalcurrentliabilities 5,973 5,272
Mortgagenotepayable,netofcurrentportion 2,455 2,694Notepayable 140 140Deferredrents — 14Deferredtaxl iabil ity 368 564Derivativel iabil ities 20 203Totalliabilities 8,956 8,887
STOCKHOLDERS'EQUITY
SeriesBconvertiblepreferredstock,$0.001parvalue;3,588,139authorizedandzeroissuedandoutstandingasofDecember31,2017and3,588,139authorizedand975,639issuedandoutstandingasofDecember31,2016,respectively — 1
Commonstock,$0.001parvalue;75,000,000sharesauthorized;33,021,170issuedand32,878,091outstandingasofDecember31,2017and40,000,000sharesauthorized;31,002,832issuedand30,859,753outstandingasofDecember31,2016,respectively 33 31Additionalpaid-incapital 50,495 49,625Accumulateddeficit (28,496) (23,434)Totalstockholders'equity 22,032 26,223Totalliabilitiesandstockholders'equity 30,988$ 35,110$
IncomeStatement
22
(Unaudited)(Inthousands,exceptpersharedata)
2017 2016 2017 2016Sales 11,348$ 9,494$ 38,883$ 36,627$Costofsales 5,449 4,664 19,122 18,712Grossprofit 5,899 4,830 19,761 17,915Othercostsandexpenses:Researchanddevelopment 440 676 2,455 2,618Professionalservices 480 441 1,771 1,486Salariesandrelatedcosts 1,123 2,546 7,906 9,038Selling,generalandadministrative 3,420 2,211 11,370 8,565Severanceandrelatedexpense 1,524 — 1,524 —Totalothercostsandexpenses 6,987 5,874 25,026 21,707Lossfromoperations (1,088) (1,044) (5,265) (3,792)Interestexpense,net (33) (35) (136) (158)Changeinfairvalueofderivativel iabil ities 126 620 183 64Totalotherincome(loss),net 93 585 47 (94)Lossbeforeincometaxes (995) (459) (5,218) (3,886)Incometax(benefit)expense (171) 64 (156) 64Netloss (824)$ (523)$ (5,062)$ (3,950)$
LosspershareBasic (0.03)$ (0.02)$ (0.16)$ (0.14)$Diluted (0.03)$ (0.02)$ (0.17)$ (0.15)$
Weightedaveragenumberofsharesoutstanding-basic 32,864 28,574 31,420 27,433Weightedaveragenumberofsharesoutstanding-dilutive 32,864 28,618 31,427 27,449
ThreeMonthsEndedDecember31,
TwelveMonthsEndedDecember31,
ReconciliationBetweenGAAPandNon-GAAP
23
(Unaudited)(Inthousands)
*Fourth quarter and fiscal year 2017 periods include approximately $1.5 million of non-recurringseverance and expenses related to former members of the Company’s executive management teamand related closure of the corporate office in Purchase, New York.
2017 2016 2017 2016NetlossGAAPBasis (824)$ (523)$ (5,062)$ (3,950)$Interestexpense,net 33 35 136 158Incometax(benefit)expense (171) 64 (156) 64Depreciationandamortization 169 178 696 734Stockbasedcompensation 339 277 871 809Changeinfairvalueofderivativeliabilities (126) (620) (183) (64)AdjustedEBITDA (580) (589) (3,698) (2,249)Severanceandrelatedexpense 1,524 — 1,524 —AdjustedEBITDA,excludingnon-recurringitems* 944 (589) (2,174) (2,249)
ThreeMonthsEndedDecember31,
TwelveMonthsEndedDecember31,