Good afternoon ladies and gentlemen and welcome to the First Quarter of Fiscal Year 2018 Earnings Conference Call for Bovie Medical Corporation. At this time, all participants have been placed in a listen-only mode. At the end of the Company's prepared remarks, we will conduct a question-and-answer session. Please note that this conference call is being recorded and that the recording will be available on the Company's website for replay shortly. Before we begin, I would like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on the current expectations of management, and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including those identified in the Risk Factors section of our most recent annual report on Form 10-K filed with the Securities and Exchange Commission, as well as our most recent 10-Q filing. Such factors may be updated from time to time in our filings with the SEC, which are available on our website. We undertake no obligation to publicly update or revise our forward-looking statements as a result of new information, future events or otherwise. This call will also include references to certain financial measures that are not calculated in accordance with Generally Accepted Accounting Principles or GAAP. We generally refer to these as non-GAAP financial measures. Reconciliations of those non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in the earnings press release on the Investor Relations portion of our website. I would now like to turn the call over to Mr. Charlie Goodwin, Bovie Medical's Chief Executive Officer. Please go ahead sir.

Thanks, Jefy. Welcome everyone to our first quarter 2018 earnings call. I am joined on this afternoon's call by our Chief Financial Officer, Jay Ewers. Let me provide you with a quick agenda for today's call. I’ll begin with a high-level overview f our sales performance during the first quarter while sharing some additional commentary on the primary factors that contributed to our growth during the period. I’ll then discuss the operating progress that we have made so far this year with respect to our longer term growth strategy. Jay will then provide you with detailed review of our Q1 financial results and an overview of financial guidance for fiscal year 2018, which we reaffirmed in our earnings press release this afternoon. After Jay’s discussion, I’ll share some additional closing remarks before we open the call to questions. Let’s get started with a review of our first quarter sales performance. Our first quarter performance represented an exciting start to 2018. We achieved total revenue of $9.9 million for the first quarter, which represented 18% growth year-over-year. Our total revenue growth in the first quarter was driven by strong sales performance in our Advanced Energy business segment, which increased $2 million, or 333% year-over-year. The strong growth that we saw in our Advanced Energy business more than offset softer performance in our other two business segments Core and OEM, which together decreased by $495,000 or 6.4% year-over-year. By geography our total revenue was driven by strong sales in both the U.S. and international markets during the first quarter. In the U.S. sales increased approximately $1 million, or 14% year-over-year. And in international markets sales increased roughly $0.5 million, or 39% year-over-year. Our U.S. growth was driven by our Advanced Energy business where we saw strong sales of our renewing of cosmetic…

Thanks Charlie. Total revenue for first quarter 2018 increased $1.5 million or 18.2% year-over-year to $9.9 million, compared to $8.4 million last year. By business segment, total revenue growth in the first quarter was primarily driven by Advanced Energy segment sales which increased $2 million or 333.2% year-over-year to $2.6 million. Our impressive Advanced Energy growth in the first quarter was driven by strong sales of our generators and hand pieces into the U.S. cosmetic surgery market, the contributions from sales to O-U.S. distributors as well. The strong performance in our Advanced Energy segment was partially offset by decrease sales in our Core and OEM segments, during the first quarter 2018 period. Our Core segment revenue decreased $256,000 dollars or 3.8% year-over-year and our OEM segment revenue decreased $239,000 or 23.7% year-over-year. By business segment our Core, Advanced Energy and OEM segments represented 66%, 27% and 8% of total revenue respectively in the first quarter. Revenue in the United States increased approximately $1 million or 14% year-over-year to $8 million and international revenue increased approximately $546,000 or 39.1% year-over-year to $1.9 million. International revenue represented approximately 20% of sales in the first quarter of 2018, compared to 17% of total sales in the first quarter of 2017. Our international sales growth was largely driven by sales to our Advanced Energy international distributors. Moving down the P&L, gross profit increased $764,000 or 18.1% year-over-year to $5 million, compared to $4.2 million for the first quarter of 2017. The increase in first quarter 2018 gross profit was driven by strong sales in the Company's Advanced Energy segment. Gross margins for the first quarter of 2018 was 50.3%, compared to 50.4% last year. The change in gross margin was primarily due to strong Advanced Energy sales offset by softer core segment sales and…

Thanks Jay. In conclusion, both our financial and operating performance in first quarter marked an exciting start to 20118. We achieved strong sales growth by leveraging our internal resources to drive adoption of Renuvion in the United States cosmetic surgery market and we continue to execute on the four initiatives of our longer term growth strategy. In addition to our strong financial and operating performance during the first quarter, we also continued to receive positive feedback on our technology with evidence of peer-to-peer selling. In light of these encouraging signs and our recent progress we are reaffirming our financial guidance for 2018. More broadly, we remain convinced that Renuvion represents a game changing technology with the potential to achieve attractive outcomes for physicians and their patients in the cosmetic surgery market. Our sales force will continue to focus exclusively on this large, growing and under penetrated market, which we believe has favorable characteristics that position us well to drive adoption. And lastly, we will continue to develop our expertise in our organization in cosmetic surgery, while expanding our longer-term strategy to encourage broad based adoptions, ultimately achieve strong, sustained and profitable growth for the benefit of our shareholders. Thanks everyone for your participation on today's call and your interest in Bovie Medical. And of course I would like to thank all of Bovie Medical’s employees and customers. Operator, we will now open the call for questions.

Thank you. [Operator Instructions] And our first question comes from Matthew O'Brien with Piper Jaffrey. Your line is open.

Good afternoon. Thanks for taking the question and congrats again on the study done about a month and a half early.

Thank you.

Thank you.

I know it's a lot of work. So just a few for me, on Advanced Energy not surprisingly the focus there the performance in the quarter was quite strong. Can you talk a little bit about what you saw in the quarter from an interest level from clinicians? And then as your sales funnel builds, how that's trending? Because what I'm really trying to get at, is I looked at the rest of the year given some of the sequential growth that you saw last year. You pretty much have to assume very little sequential growth out of the Advanced Energy business for the rest of the year to stay within your guidance range. So why out that?

Well first let me talk about the Advanced Energy business. It’s up $2 million year-over-year. More than 80% of that came from the U.S. cosmetic market. Generators were the primary driver of growth year-over-year, but we were very pleased with the handpiece demand. And we're executing both on new customer adoption, as well as seeing the utilization grow, as well. And so we remain very bullish and very positive on that for the rest of the year.

Okay. So can you talk specifically little bit more about the funnel as far as you mentioned some of the peer-to-peer selling that's going on? There's a certain number of docs which you're talking to every quarter, I'm sure that's growing in the conversion rate, I’m not sure where that is. But as the funnel increased meaningfully, Q4 to Q1 and now kind of trending up a lot as well and Q2, just anything you can provide there would be helpful.

Well number one, we're very happy with the progress that our group is making. But I want to come back and just remind you that we are still in the early innings of this. And we are still focused on the early adopters that are driving this technology because as you remember we're building out all the clinical work that needs to go into this year to be able to really go after all the clinicians that are in this marketplace. And so right now we are relying on a lot of our doctors for that peer-to-peer selling because they're having to adopt the technology in absence of a large body of clinical data. We are very encouraged by that, but at the same time this is just Q1 and we remain incredibly excited and positive on the future.

Got it. And then last one from me just on the handpiece side, Charlie you mentioned that one. I know there's been above other growth last couple quarters coming from the generators, so I guess from an investor perspective how do we get comfortable that that doesn't at some point slow down a little bit? I know you're very early days. But you get comfortable with the handpiece side can really drive a lot of growth going forward. Are there any metrics you can provide as far as what's going on from a man handpiece perspective if you have some existing accounts that you've been using this for awhile? Just anything you could provide there will be helpful. Thank you.

Yes on the Q4 call we had told you that as far as being in the cosmetic market that typically is seasonal from Q4 to Q1 and that was down about 30%. Actually we were down about 15% in the in Q1 from Q4. And that's roughly about $500,000 better than we had suspected. The majority of that came from better handpiece demand in the United States. There was a little bit in there that was also part of generators O-U.S., but the vast majority of that $500,000 beat was for better than expected handpiece demand. And we're confident and hope that that trend will continue. But I want to remind you that it is just one quarter.

Fair enough, thank you.

Your next question comes from Matt Hewitt with Craig-Hallum Capital. Your line is open.

Good afternoon and congratulations on the excellent start to the year.

Thank you.

The first question did you add any sales reps during the quarter? Is it still your intention to add two or three yet this year?

Yes we actually added two in the quarter and we have still the 14 independent agents, we have a total of 33 and we do have plans to add one more direct. That is correct.

Okay, great. And then secondly last quarter you were still looking to finalize a new regulatory strategy, have you completed that process? What indications are you may be going after with Renuvion any color along those lines?

Yes obviously it was key for us to get the IDE Study finished. And we were very fortunate today to get to announce that we got our last of our 55 patients. And obviously with bringing Dr. Kirlew in here and also with Dr. Diane Duncan and Scott Sanders that we will be working on other things within the cosmetic surgery space, but we have not given or announced any guidance for that. It remains a key strategic focus area for us. And it has focus of everybody in the building.

Okay. Maybe one last one for me, you touched on this little bit in your prepared remarks it sounds like you had done some pre-launch activities from a rebranding standpoint with the Renuvion change. What has been the feedback pull switch? And I realize it's early days, but any initial feedback that you've gotten from either from some of the physicians that were already using the device or others that maybe even looking that or kind of waking up to the story again? Any color there would be helpful. Thank you.

Yes, no problem. As you mentioned it is in the very early days. I think we announced it on March 29, so it's incredibly early days. But we're very pleased by the reaction from our customers, we're very pleased how Renuvion is trending on some of the social media sites. And we couldn't be happier with the progress that we are having right now with the change in the brand to Renuvion.

Great, thank you.

Thank you.

Your next question comes from David Turkaly from JMP Securities. Your line is open.

Thanks. Just on the study front, could you just remind us a couple of quick things, sort of what's the follow-up time on that? Do you plan to share those results when they're compiled? And then I guess sort of your best guess as to when a 510(k) clearance should come?

Well, I can't necessarily speak to you about a 510(k) clearance because I'm not the FDA. But what I can help you with is that our focus now shifts to being preparing for that submission. And really what the timeline for that is, is our last patient was enrolled in the study today there is a 90-day follow-up for that and then we will need at least a couple months to analyze the data and prepare that submission. And so we are estimating to prepare – to have that to be able to submit to the FDA in November of this year, in November of 2018.

Thank you for that. And I guess may be along the line to some of Matt’s questions, you're selling the plastic cosmetic surgeons and dermatologists, I guess any color as to where the product is resonating in the most strong today? And any difference in sort of how those different custom bases react to the new Renuvion?

Well I think among the three different groups it's really for the same procedure and the primary procedure target is liposuction and where J-Plasma is used as a subdermal coagulator. And just as a reminder for that there's about 400,000 of those procedures in the U.S. per year with about 50% of those being done by plastic surgeons. And so the response is still very, very good, the customers, our physician customers are very ecstatic with the results that they are seeing because their patients are very happy with the results they are seeing. And so remain and very positive and very excited about the future of this technology in this space.

Okay last one from me. I’d just say congrats to all the hires, the KOLs, the new Board members, it seems sort of like a new Bovie I guess for you Charlie. Is your team assembled now? That sort of seems like you got a lot of new folks that could help you continue getting Renuvion out there?

Yes, thank you. I am very happy with the additions that we have. And just like any team if I have the ability to find a great athlete, we will try to find a place on the team if they can help us out with our strategic initiatives. And so I couldn't be happier with the way things are going and the way things are shaping up. And I couldn't be more excited about the future of this company.

Thanks, have a great day.

Thank you.

[Operator Instructions] Your next question comes from Russell Cleveland with RENN Capital. Your line is open.

Thanks for taking the call. First of all congratulations on the numbers, certainly very encouraging. My questions are around body sculpting. And you mentioned that there was 400 body sculpting. Could you give us more feeling about how big this industry is in body sculpting as opposed to face? And secondly, are we already cleared from other approvals with J-Plasma the body sculpturing or do we have to do a number of new studies? So that’s my two questions.

Yes well the first is Renuvion right now is used in those procedures as a subdermal coagulator. And so it is approved for that in those procedures. And as I mentioned before in the United States alone there are over 400,000 of these liposuction procedures that are being done where I mentioned that half of them were done by plastic surgeons, the other half of them are done by cosmetics and dermatologists. And so obviously with that huge procedure base and us being very early in the adoption curve, we have long ways to go. We will also be pursuing regulatory clearance for dermal resurfacing which offers another 165,000 to 200 procedures in the U.S. for the fully ablative resurfacing, so that right there just in the United States alone gives us somewhere around 600,000 procedures to be able to take Renuvion technology to. And in this space that is about 15,000 physicians in the United States alone. And so given all of this we've got a lot of execution left to go into and a lot of runway left for this company.

Great thanks so much. I appreciate it.

Thanks Russell.

This is all the time we have for today's – for tonight's call. Thank you for participating. You may now disconnect.