28th Annual Piper Jaffray Healthcare Conference
2016
Safe Harbor Statement
Certain matters discussed in this presentation and oral statements made from time to time by representatives of the Company may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Federal securities laws. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved.
Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Many of these factors are beyond the Company’s ability to control or predict. Important factors that may cause actual results to differ materially and that could impact the Company and the statements contained in this presentation can be found in the Company’s filings with the Securities and Exchange Commission including the Company’s Report on Form 10-Q for the quarter ended September 30, 2016, and 10-K for the year ended December 31, 2015. For forward-looking statements in this presentation, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company assumes no obligation to update or supplement any forward-looking statements as a result of new information, future events, or otherwise.
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Company Snapshot
Core OEM
Growth
• Private label electrosurgical
manufacturing
• Customers: Large medical
technology companies
• J-Plasma
• PlazXact
• Future new products
• Direct and channel partners
• Electrosurgical
• Cauteries
• Lighting Solutions
• Sold through distribution
YTD Revenue: $2.5M
YTD Revenue: $20.3M YTD Revenue: $4.4M
Product Examples Product Examples
Product Examples
• Advanced energy-based medical device company• Specializes in developing, manufacturing and marketing of electrosurgical products
Experienced Management Team
Executive Joined Bovie Representative Previous Experience
Rob GershonChief Executive Officer
December 2013
Jay EwersChief Financial Officer
June 2014
Todd HornsbyVice President of Sales
August 2014
Shawn RomanVice President of Research &
DevelopmentOctober 2014
4
Rob SaronPresident and Director
January 1978
Moshe CitronowiczSenior Vice President
October 1993
Years of Relevant Experience
28 Yrs.
34 Yrs.
15+ Yrs.
15 Yrs.
35 Yrs.
30 Yrs. KCR TechnologiesSequential
Information Systems
Jack McCarthyChief Commercialization Officer
March 2014 28 Yrs.
Investment Highlights
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Growing Core and OEM Businesses in Electrosurgery with Global Footprint
Transformational J-Plasma® Surgical Product Targeting Large and Growing Markets
Robust R&D Pipeline
Strong Direct Salesforce and High Profile Channel Partners for Growth Segment
Highly Experienced Management Team
High Growth (+28% YTD 2016) and Expanding Gross Margin
Strong Momentum in Core Business
• Bovie has unique brand position with global name recognition
• Long-standing relationships with “Big 7” distributors
• New product & private label launches drive incremental growth
• Actively targeting new market opportunities (e.g., animal health)
• Predictable revenue generator
6
7
Advancing OEM Business
• Inbound OEM requests from industry’s top manufacturers
• Staggered customer contracts to smooth revenue inflows
• Benefits from joint development activities
• Design and develop specs to address partners’ innovations
• Produce finished products
2,038,000
1,947,038
695,171
GYN Procedures
Surgical PlasticsProcedures
AestheticPlasticsProcedures
Potential specialties to target in the short/medium term:• Cardiac• Thoracic• Urology• General surgery
Sources: CDC, NIH, APGO, ASPS, ASAPS, AHA, ASPS*Assumes $375 ASP for disposable hand piece, and $25,000 ASP per J-Plasma generator 8
• GYN ONC • Oncology• ENT • Vascular
Initial Targeted Specialties > $2 Billion TAM* -- U.S. Only
Significant Market Growth Opportunities
J-Plasma PlazXact
1,414,900
190,600
27,60022,700
1,257,600
Knee Shoulder Elbow Ankle
Future Potential Market Application
Arthroplastic Procedures for:
U.S. and EUOrthopedic Arthroplasty Procedure Volumes
Sources: Meddevicetracker report dated August 2016Note: 2016E procedure volumes
• Revolutionary technology ionizes helium to create stream of plasma
• Precise cutting, coagulation and ablation with limited thermal spread
- Stable, thin, focused stream of ionized helium gas
- Wide range of control
- No conductive currents through the patient during surgery
• Allows surgeons to safely perform procedures on delicate structures such as:
- Fallopian Tubes - Ureters - Bowel
- Esophagus - Ovaries - Lymph Nodes
• Protected by 38 patents:
- 13 US and 3 foreign issued
- 15 US and 7 foreign pending
Recognized as an Innovation of the Year by
The Society of Laparoendoscopic
Surgeons (SLS) 3 Years in a Row
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J-Plasma®: Transformational Product
J-Plasma® Energy Stream for Limited Thermal Damage*
• Clinical study compared levels of unintended thermal damage to peritoneal tissue (membrane lining the abdominal cavity) among other energy-based surgical tools vs J-Plasma®
• Red areas represent the depth of thermal or energy damage each tool left below the tissue surface; blue areas represent unaffected tissue
• J-Plasma® demonstrated far lowest amount of collateral thermal injury to healthy tissue surrounding the operative site
*Reference: Pedroso J, Gutierrez M, Volker W. J-Plasma, monopolar pencil, argon beam and CO2 laser electrosurgery: comparative evaluation of thermal spread in a porcine tissue model (white paper). Bovie Medical Corporation. June 2014 10
J-Plasma® Demonstration Video
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J-Plasma®: Competitive Advantages
Comparative Case Study: J-Plasma® in Endometriosis600,000 procedures per year in US
Key Differences CO2 Laser J-Plasma®
Treating potential lesions Treats visible lesions only Treats visible and potential lesions
Tactile feedback No tactile cutting feedback or maneuverability
Direct tactile cutting feedback and maneuverability
Control of energy Requires laser safety backstop Controlled energy: stream distance limited to surgical site
OR requirements Multiple specialized OR requirements (privileges, goggles,
techs, wet drapes, etc.)
No additional OR resources required
Price Estimated Capital ASP: $100,000+
Estimated disposable hand piece ASP: $425+
Estimated Capital ASP: $25,000
Estimated disposable hand piece ASP: $375
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Current J-Plasma Channel Partners
• Privately held medical device company with deep experience, expertise and
relationships in the plastic surgery/aesthetics space
• Non-exclusive 4 year Agreement signed June 30, 2016
• Training and launch plans underway
Plastic Surgery / Aesthetics
GYN and GYN Oncology
• Leading women’s health company (NASDAQ: HOLX)
• Pilot underway; option to expand into global distribution agreement
• Hologic will add J-Plasma® product line to portfolio in GYN and GYN/oncological surgery in all U.S. and OUS markets it serves
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Clinical Research Pipeline for J-Plasma
Lymphocele Reduction
Pediatric Heart Surgery
Dermal Resurfacing
GYN Oncology
Vulvar Dysplasia
Chronic Wound Reduction
General Surgery Oncology
Studies in Progress Planned Studies
Estimated TimingCategory
2017
2017
2017 – 2018
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Arthroscopic Ablator
• Sterile, single-use device for cutting, coagulating and ablation of soft tissue
• Orthopedic sports medicine focus
• Efficient tip design translates into the following advantages:
– Low power requirement to initiate ablation
– Lower power = lower heat = safer for the patient
– Compatible with any generator
• FDA clearance August 2016
PlazXact™
Targeting New Specialties: Medical Advisory Board
• Comprised of surgeon thought-leaders to advise on growth
product launches including J-Plasma® application for
specialty procedures
• Initial target specialties including: urology, cardiothoracic
and cardiovascular
• Progress in robotics
• Expect to add at least 1 additional member in GYN
Oncology within next few months
• Expect to have 6-9 surgeon members
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Dr. Husam Balkhy, Director, Minimally Invasive & Robot Cardiac Surgery, Duhossois Center for Advanced Medicine
Dr. Robert J. Cerfolio, Section Chief, Thoracic Surgery University of Alabama Hospital
Founding member of MAB: Dr. Vipul Patel,
world renowned robotic surgeon, Medical
Director of Global Robotics Institute,
Florida
Dr. Craig McCoy, Women’s Wellness Center, Columbia MO. Obstetrics & Gynecology Specialist
• Developing new growth products to complement J-Plasma® and boost growth in core business
• Cadence of product launches
J-Plasma Precise 360 ™
Bovie Ultimate®
IDS-310 ™
DERM 101™
DERM 102 ™
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PlazXact™ Ablator
World-Class R&D Capability as Growth Catalyst
J-Plasma Precise
• New Growth products• Select new Core products• FDA clearances for new
indications• J-Plasma line extensions
2014 2015 2016 2017
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State-of-the-Art Manufacturing Footprint
Clearwater, FL Sofia, Bulgaria China
Size 60,000 sq. ft. 16,000 sq. ft. • 70,000 sq. ft.
Owned / Contracted
Owned Owned Contracted
Capabilities
• Assembly• Integration• Final Testing• Packaging• Sterilization Management
• Manufacturing• Complex Component
Assembly• Initial Testing
• Component Manufacturing• Sub-Assemblies• Finished Medical Devices
(Electrodes)
The company also rents office space of 3,650 sq. ft. in Purchase, NY
Capacity to increase output from existing facilities
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Strong Financial Performance
$7.8
$10.1
$21.2
$27.1
41.3%
50.3%
42.6%
48.2%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
Q3 2015 Q3 2016 YTD 2015 YTD 2016
Gro
ss M
argi
n
Rev
enu
e ($
in m
illio
ns)
Core & OEM J-Plasma Gross Margin
• Over 20% growth – driven by J-Plasma
• 900 basis point gross margin improvement in Q3
• Cash flow neutral in Q3
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Historical Financials
($ in 000's) PY Q3 YTD 9/30
2015 2015 2016 2015 2016
Revenue $29,520 $7,823 $10,063 $21,226 $27,133
Revenue Growth 6.6% 15.2% 28.6% 5.0% 27.8%
Cost of Goods Sold 16,963 4,594 5,001 12,183 14,049
Gross Profit $12,557 $3,229 $5,062 $9,043 $13,084
Gross Margin 42.5% 41.3% 50.3% 42.6% 48.2%
Operating Expenses 19,543 5,042 5,307 14,678 15,832
Loss from Operations ($6,986) ($1,813) ($245) ($5,635) ($2,748)
Cash on hand as of September 30, 2016 $9,329
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Expected Shift in Business Mix
88.4%
74.7%68.6%
<40%
7.2%
16.0%17.5%
8% - 12%
4.4% 9.3% 13.9%
>50%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
2015 2016 YTD Q3 2016 Target
% o
f To
tal R
even
ue
Core OEM Growth
Financial Appendix
Financial Position: Assets
*All figures in thousands
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September 30, December 31,
2016 2015
(Unaudited)
Current assets:
Cash and cash equivalents $ 9,329 $ 11,805
Restricted cash 779 839
Trade accounts receivable, net 3,869 2,925
Inventories, net 5,930 5,957
Prepaid expenses and other current assets 564 516
Total current assets 20,471 22,042
Property and equipment, net 6,498 6,810
Brand name and trademark 1,510 1,510
Purchased technology and license rights, net 242 323
Goodwill 185 185
Deposits 123 123
Deferred tax asset - 25
Other assets 119 430
Total assets $ 29,148 $ 31,448
Financial Position: Liabilities and Stockholders’ Equity
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September 30, December 31,
2016 2015
(Unaudited)
Current liabilities:
Accounts payable $ 1,650 $ 1,214
Accrued payroll 216 321
Accrued vacation 454 228
Current portion of mortgage note payable 239 239
Accrued and other liabilities 1,666 2,119
Total current liabilities 4,225 4,121
Mortgage note payable, net of current portion 2,754 2,934
Notes payable 140 140
Deferred rent 14 18
Deferred tax liability 564 564
Derivative liabilities 822 267
Total liabilities 8,519 8,044
Stockholders' equity:
Series B convertible preferred stock, par value
$.001; 3,588,139 issued and 1,975,639
outstanding as of September 30, 2016 and
December 31, 2015.
2 2
Common stock, par value $.001 par value;
40,000,000 shares authorized; 27,285,297 issued
and 27,142,218 outstanding as of September 30,
2016 and 27,194,251 issued and 27,051,172
outstanding as of December 31, 2015
27 27
Additional paid-in capital 43,512 42,859
Accumulated deficit (22,912) (19,484)
Total stockholders' equity 20,629 23,404
Total liabilities and stockholders' equity $ 29,148 $ 31,448
Income Statement
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2016 2015 2016 2015
Sales $ 10,063 $ 7,823 $ 27,133 $ 21,226
Cost of sales 5,001 4,594 14,049 12,183
Gross profit 5,062 3,229 13,084 9,043
Other costs and expenses:
Research and development 682 583 1,941 1,534
Professional services 292 427 1,045 1,070
Salaries and related costs 2,192 1,929 6,492 5,749
Selling, general and administrative 2,141 2,103 6,354 6,325
Total other costs and expenses 5,307 5,042 15,832 14,678
Loss from operations (245) (1,813) (2,748) (5,635)
Interest expense, net (36) (40) (125) (120)
Change in fair value of warrant liabilities, net (683) 266 (555) 1,800
Total other income (expense), net (719) 226 (680) 1,680
Loss before income taxes (964) (1,587) (3,428) (3,955)
Income tax benefit, net -- -- -- (8)
Net loss $ (964) $ (1,587) $ (3,428) $ (3,963)
Accretion on convertible preferred stock -- -- -- (222)
Gain on conversion of warrants and preferred shares,
net-- -- -- 13,956
Net income (loss) attributable to common
shareholders$ (964) $ (1,587) $ (3,428) $ 9,771
Income (loss) per share
Basic (0.04) (0.06) (0.13) 0.42
Diluted (0.04) (0.06) (0.13) 0.31
Weighted average number of shares outstanding-
basic27,075 27,051 27,059 23,414
Weighted average number of shares outstanding -
dilutive27,075 27,051 27,059 26,346
September 30, September 30,
Three Months Ended Nine Months Ended
Reconciliation Between GAAP and Non-GAAP
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(Amounts in '000's except earnings per share) 2016 2015 2016 2015
Net income/(loss) GAAP basis (964)$ (1,587)$ (3,428)$ (3,963)$
Accretion on convertible preferred stock - - - (222)
Deemed dividend on conversion of warrants and Series A convertible preferred to
Series B convertible preferred stock -
- -
13,956
Net income/(loss) attributable to common shareholders (964)$ (1,587)$ (3,428)$ 9,771$
Net income/(loss) per share - basic (GAAP basis) (0.04)$ (0.06)$ (0.13)$ 0.42$
Other non-GAAP adjustments:
(Gain)/loss on change in fair value of derivative liabilities 683$ (266)$ 555$ (1,800)$
Accretion on convertible preferred stock - - - 222
Deemed dividend on conversion of warrants and Series A convertible preferred to
Series B convertible preferred stock -
- -
(13,956)
Adjusted non-GAAP net income/(loss) (281)$ (1,853)$ (2,873)$ (5,763)$
Income/(loss) per share - basic on: (Note 1)
(Gain) on change in fair value of derivative liabilities - (0.01) - (0.08)
Accretion on convertible preferred stock - - - 0.01
Gain on conversion of warrants and Series A convertible preferred to
Series B convertible preferred stock - - -
(0.60)
Adjusted non-GAAP net (loss) per share -basic (0.01)$ (0.07)$ (0.11)$ (0.25)$
Weighted average number of shares outstanding - basic 27,075 27,051 27,059 23,414
Weighted average number of shares outstanding - diluted 27,075 27,051 27,059 26,346
(Note 1) Amounts reflected in the presentation of EPS calculations may be impacted by rounding
Three Months Ended Nine Months Ended
September 30, September 30,
J-Plasma® US-Only Market
Sources: CDC, NIH, APGO, ASPS, ASAPS,AHA* (5,000 hospitals)27
GYN Market
Procedures # of Annual Procedures ASP
Endometriosis 600,000 $375 $225,000,000
Adhesiolysis 300,000 $375 $112,500,000
Myomectomy 65,000 $375 $24,375,000
Condylomas 360,000 $375 $135,000,000
Cesarean(Repeat) 280,000 $375 $105,000,000
Hysterectomy 433,000 $375 $162,000,000
Total GYN Procedures 2,038,000 $375 $764,250,000
Capital* 5,000 $25,000 $125,000,000
Total GYN Available Market $889,250,000
J-Plasma® US-Only Market
Sources: CDC, NIH, APGO, ASPS, ASAPS,AHA* (5,000 hospitals) 28
Plastic Market
Total Available Market
Procedure Type # of Annual Procedures ASP
Surgical Plastics Procedures 1,947,038 $375 $730,139,250
Aesthetics Plastics Procedures 695,171 $375 $260,689,125
Total Plastics Procedures 2,642,209 $375 $990,828,375
Capital* 5,000 $25,000 125,000,000
Total Plastic Available Market $1,115,828,375
GYN: Targeted Procedures 2,038,000 $375 $764,250,000
Capital 5,000 $25,000 $125,000,000
Plastic: Targeted Procedures 2,642,209 $375 $990,828,375
Capital 5,000 $25,000 $125,000,000
Total Available Market 4,685,209 $2,005,078,375
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