8-K
Angiodynamics Inc (ANGO)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 30, 2023
AngioDynamics, Inc.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 000-50761 | 11-3146460 | |
|---|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File<br><br> <br>Number) | (IRS Employer<br><br> <br>Identification No.) | |
| 14 Plaza Drive Latham, New York <br> 12110 | |||
| (Address of Principal Executive Offices) (Zip Code) | |||
| (518) 795-1400 | |||
| (Registrant’s telephone number, including area code) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which<br><br> registered |
|---|---|---|
| Common Stock, par value $0.01 per share | ANGO | NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 – Results of Operations and Financial Condition.
On March 30, 2023, AngioDynamics, Inc. (“AngioDynamics”) issued a press release announcing financial results for the fiscal third quarter ended February 28, 2023. A copy of the press release is furnished herewith as Exhibit 99.1.
The information set forth in Item 2.02 of this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section. Furthermore, such information shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01 – Regulation FD Disclosure.
Presentation slides discussing AngioDynamics and its fiscal third quarter ended February 28, 2023 are furnished herewith as Exhibit 99.2.
The presentation slides furnished pursuant to Item 7.01 of this Form 8-K (including Exhibit 99.2) shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section. Furthermore, the presentation slides shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act.
Forward-Looking Statements
This document and its attachments contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding AngioDynamics’ expected future financial position, results of operations, cash flows, business strategy, budgets, projected costs, capital expenditures, products, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include the words such as “expects,” “reaffirms,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “projects”, “optimistic,” or variations of such words and similar expressions, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Investors are cautioned that actual events or results may differ materially from AngioDynamics’ expectations, expressed or implied. Factors that may affect the actual results achieved by AngioDynamics include, without limitation, the scale and scope of the COVID-19 global pandemic, the ability of AngioDynamics to develop its existing and new products, technological advances and patents attained by competitors, infringement of AngioDynamics’ technology or assertions that AngioDynamics’ technology infringes the technology of third parties, the ability of AngioDynamics to effectively compete against competitors that have substantially greater resources, future actions by the FDA or other regulatory agencies, domestic and foreign health care reforms and government regulations, results of pending or future clinical trials, overall economic conditions (including inflation, labor shortages and supply chain challenges including the cost and availability of raw materials), the results of on-going litigation, challenges with respect to third-party distributors or joint venture partners or collaborators, the results of sales efforts, the effects of product recalls and product liability claims, changes in key personnel, the ability of AngioDynamics to execute on strategic initiatives, the effects of economic, credit and capital market conditions, general market conditions, market acceptance, foreign currency exchange rate fluctuations, the effects on pricing from group purchasing organizations and competition, the ability of AngioDynamics to obtain regulatory clearances or approval of its products, or to integrate acquired businesses, as well as the risk factors listed from time to time in AngioDynamics’ SEC filings, including but not limited to its Annual Report on Form 10-K for the year ended May 31, 2022. AngioDynamics does not assume any obligation to publicly update or revise any forward-looking statements for any reason.
Item 9.01 – Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release, dated March 30, 2023. |
| 99.2 | Presentation, dated March 30, 2023. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ANGIODYNAMICS, INC. | ||
|---|---|---|
| (Registrant) | ||
| Date: March 30, 2023 | By: | /s/ Stephen A. Trowbridge |
| Name: Stephen A. Trowbridge | ||
| Title: Executive Vice President and<br><br> <br>Chief Financial Officer |
Exhibit 99.1
PRESS RELEASE
Investor Contact:
AngioDynamics, Inc.
Stephen Trowbridge, Executive Vice President & CFO
(518) 795-1408
AngioDynamics Reports Fiscal 2023 Third Quarter
Financial Results; Revises Guidance
Fiscal Year 2023 Third Quarter Highlights
| • | Net sales of $80.7 million increased 9.1% compared to the prior-year quarter |
|---|---|
| o | Med Tech net sales of $22.9 million increased 16.6% |
| --- | --- |
| o | Med Device net sales of $57.8 million increased 6.4% |
| --- | --- |
| • | Gross margin of 50.2% decreased 200 basis points year over year |
| --- | --- |
| • | GAAP loss per share of $0.24 and adjusted loss per share of $0.03 |
| --- | --- |
Latham, New York, March 30, 2023 – AngioDynamics, Inc. (NASDAQ: ANGO), a leading and transformative medical technology company focused on restoring healthy blood flow in the body’s vascular system, expanding cancer treatment options and improving quality of life for patients, today announced financial results for the third quarter of fiscal year 2023, which ended February 28, 2023.
“We continued to make solid progress during the quarter executing on our strategic plan. Auryon, AlphaVac, NanoKnife, and our Med Device portfolio were bright spots during the third quarter, and while we experienced continued softness in AngioVac, we have taken steps to address the performance, and it remains an important driver for AngioDynamics’ growth,” commented Jim Clemmer, President and Chief Executive Officer of AngioDynamics, Inc. “While our quarterly results were softer than we would have liked, I am pleased with our continued operational improvements and expense discipline, which drove positive cash flow from operations during the quarter in the face
of continued inflationary pressures. Our team remains committed to pursuing innovation and driving sustained growth in attractive end markets.”
Third Quarter 2023 Financial Results
Net sales for the third quarter of fiscal 2023 were $80.7 million, an increase of 9.1% compared to the prior-year quarter. Foreign currency translation did not have a significant impact on the Company's net sales in the quarter.
Med Tech net sales were $22.9 million, a 16.6% increase from the prior-year period. Med Tech includes the Auryon peripheral atherectomy platform, the thrombus management platform and the NanoKnife irreversible electroporation platform. Growth was driven by Auryon sales during the quarter of $10.4 million, which increased 42.8%, and NanoKnife sales of $4.1 million, which increased 5.4% compared to the third quarter of fiscal 2022. NanoKnife disposable sales were $3.5 million, which increased 22.2% compared to the third quarter of fiscal 2022. In addition, AlphaVac sales were $2.0 million, an increase of $1.3 million from a year ago, and AngioVac sales were $5.5 million, a decline of 15.7% compared to the third quarter of fiscal 2022.
Med Device net sales were $57.8 million, an increase of 6.4% compared to the prior-year period. Med Device sales growth was primarily driven by growth in angiographic catheters, ports, dialysis catheters and microwave products.
U.S. net sales in the third quarter of fiscal 2023 were $67.6 million, an increase of 8.3% from $62.4 million a year ago. International net sales were $13.1 million, an increase of 13.6% from $11.5 million a year ago.
Gross margin for the third quarter of fiscal 2023 was 50.2%, a decrease of 200 basis points compared to the third quarter of fiscal 2022. Gross margin for the Med Tech business was 64.6%, a decline of 150 basis points from the third quarter of fiscal 2022. Gross margin for the Med Device business was 44.5%, a decrease of 260 basis points compared to the third quarter of fiscal 2022. Gross margin was negatively impacted by inflationary pressures including increased costs for labor and raw materials.
The Company recorded a net loss of $9.5 million, or a loss per share of $0.24, in the third quarter of fiscal 2023. This compares to a net loss of $5.0 million, or a loss per share of $0.13, a year ago.
Excluding the items shown in the non-GAAP reconciliation table below, adjusted net loss for the third quarter of fiscal 2023 was $1.0 million, and adjusted loss per share was $0.03, compared to adjusted net income of $1.3 million and adjusted earnings per share of $0.03 in the prior-year period. Adjusted net income and adjusted earnings per share in the third quarter of fiscal 2022 included a $4.2 million, or $0.08 per share benefit, respectively, related to the reimbursement of certain expenses under the employee retention credit as part of the CARES Act.
Adjusted EBITDA in the third quarter of fiscal 2023, excluding the items shown in the reconciliation table below, was $4.3 million, compared to adjusted EBITDA of $6.7 million in the third quarter of fiscal 2022.
In the third quarter of fiscal 2023, the Company generated $1.4 million in operating cash, had capital expenditures of $0.7 million and had additions to Auryon placement and evaluation units of $1.5 million.
On February 28, 2023, the Company had $30.1 million in cash and cash equivalents, compared to $28.8 million in cash and cash equivalents on May 31, 2022. The Company had $25.0 million outstanding on the delayed-draw term loan and $25.0 million outstanding under its revolving credit facility at February 28, 2023.
Nine Months Financial Results
For the nine months ended February 28, 2023:
Net sales were $247.7 million, an increase of 8.1%, compared to $229.2 million for the same period a year ago.
Med Tech net sales were $70.2 million, a 25.1% increase from the prior year period. Med Device net sales were $177.5 million, an increase of 2.5% from the prior year period.
Gross margin decreased 40 basis points to 51.6% from 52.0% a year ago.
The Company’s net loss was $31.0 million, or a loss of $0.79 per share, compared to a net loss of $20.3 million, or a loss of $0.52 per share, a year ago.
Excluding the items shown in the non-GAAP reconciliation table, below, adjusted net loss was $3.2 million, with adjusted loss per share of $0.08, compared to adjusted net loss and adjusted loss per share of $0.4 million, and $0.01, respectively, a year ago. Adjusted net income and adjusted earnings per share for the nine months ended February 28, 2022 included a $4.2 million, or $0.08 per share benefit, respectively, related to the reimbursement of certain expenses under the employee retention credit as part of the CARES Act.
Adjusted EBITDA, excluding the items shown in the reconciliation table below, was $14.7 million, compared to $14.7 million for the same period a year ago.
Fiscal Year 2023 Financial Guidance
As a result of lower than anticipated AngioVac sales, management now expects the Company’s fiscal year 2023 net sales to be in the range of $338 million to $342 million, a
decrease from its prior guidance of $342 million to $348 million. Management now expects gross margin to be approximately 51.0% to 52.0%, a decrease from its prior guidance of 52.5% to 54.5%, and adjusted earnings per share to be in the range of a loss of $0.06 to a loss of $0.01, a decrease from its prior guidance of earnings of $0.01 to $0.06. The adjusted earnings per share guidance is the result of higher than previously anticipated inflationary pressure combined with the lower AngioVac revenue.
Conference Call
The Company's management will host a conference call today at 8:00 a.m. ET to discuss its third quarter results.
To participate in the conference call, dial 1-877-407-0784 (domestic) or +1-201-689-8560 (international) and refer to the passcode 13737051.
This conference call will also be webcast and can be accessed from the “Investors” section of the AngioDynamics website at www.angiodynamics.com. The webcast replay of the call will be available at the same site approximately one hour after the end of the call.
A recording of the call will also be available from 11:00 a.m. ET on Thursday, March 30, 2023, until 11:59 p.m. ET on Thursday, April 6, 2023. To listen to this recording, dial 1-844-512-2921 (domestic) or +1-412-317-6671 (international) and enter the passcode 13737051.
Use of Non-GAAP Measures
Management uses non-GAAP measures to establish operational goals and believes that non-GAAP measures may assist investors in analyzing the underlying trends in AngioDynamics' business over time. Investors should consider these non-GAAP measures in addition to, not as a substitute for or as superior to, financial reporting measures prepared in accordance with GAAP. In this news release, AngioDynamics has reported adjusted EBITDA, adjusted net income and adjusted earnings per share. Management uses these measures in its internal analysis and review of operational performance. Management believes that these measures provide investors with useful information in comparing AngioDynamics' performance over different periods. By using these non-GAAP measures, management believes that investors get a better picture of the performance of AngioDynamics' underlying business. Management encourages investors to review AngioDynamics' financial results prepared in accordance with GAAP to understand AngioDynamics' performance taking into account all relevant factors, including those that may only occur from time to time but have a material impact on AngioDynamics' financial results. Please see the tables that follow for a reconciliation of non-GAAP measures to measures prepared in accordance with GAAP.
About AngioDynamics, Inc.
AngioDynamics is a leading and transformative medical technology company focused on restoring healthy blood flow in the body’s vascular system, expanding cancer treatment options and improving quality of life for patients.
The Company’s innovative technologies and devices are chosen by talented physicians in fast-growing healthcare markets to treat unmet patient needs. For more information, visit www.angiodynamics.com.
Safe Harbor
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding AngioDynamics' expected future financial position, results of operations, cash flows, business strategy, budgets, projected costs, capital expenditures, products, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include the words such as "expects," "reaffirms," "intends," "anticipates," "plans," "believes," "seeks," "estimates," “projects”, "optimistic," or variations of such words and similar expressions, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Investors are cautioned that actual events or results may differ materially from AngioDynamics' expectations, expressed or implied. Factors that may affect the actual results achieved by AngioDynamics include, without limitation, the scale and scope of the COVID-19 global pandemic, the ability of AngioDynamics to develop its existing and new products, technological advances and patents attained by competitors, infringement of AngioDynamics' technology or assertions that AngioDynamics' technology infringes the technology of third parties, the ability of AngioDynamics to effectively compete against competitors that have substantially greater resources, future actions by the FDA or other regulatory agencies, domestic and foreign health care reforms and government regulations, results of pending or future clinical trials, overall economic conditions (including inflation, labor shortages and supply chain challenges including the cost and availability of raw materials), the results of on-going litigation, challenges with respect to third-party distributors or joint venture partners or collaborators, the results of sales efforts, the effects of product recalls and product liability claims, changes in key personnel, the ability of AngioDynamics to execute on strategic initiatives, the effects of economic, credit and capital market conditions, general market conditions, market acceptance, foreign currency exchange rate fluctuations, the effects on pricing from group purchasing organizations and competition, the ability of AngioDynamics to obtain regulatory clearances or approval of its products, or to integrate acquired businesses, as well as the risk factors listed from time to time in AngioDynamics' SEC filings, including but not limited to its Annual Report on Form 10-K for the year ended May 31, 2022. AngioDynamics does not assume any obligation to publicly update or revise any forward-looking statements for any reason.
In the United States, the NanoKnife System has received a 510(k) clearance by the Food and Drug Administration for use in the surgical ablation of soft tissue and is similarly approved for commercialization in Canada, the European Union and Australia. The NanoKnife System has not been cleared for the treatment or therapy of a specific disease or condition.
| ANGIODYNAMICS, INC. AND SUBSIDIARIES | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED INCOME STATEMENTS | ||||||||||||
| (in thousands, except per share data) | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2023 | Feb 28, 2022 | |||||||||
| (unaudited) | (unaudited) | |||||||||||
| Net sales | $ | 80,712 | $ | 73,970 | $ | 247,678 | $ | 229,221 | ||||
| Cost of sales (exclusive of intangible amortization) | 40,208 | 35,387 | 119,791 | 109,944 | ||||||||
| Gross profit | 40,504 | 38,583 | 127,887 | 119,277 | ||||||||
| % of net sales | 50.2 | % | 52.2 | % | 51.6 | % | 52.0 | % | ||||
| Operating expenses | ||||||||||||
| Research and development | 6,852 | 7,280 | 22,023 | 22,873 | ||||||||
| Sales and marketing | 25,406 | 20,416 | 77,956 | 68,468 | ||||||||
| General and administrative | 8,839 | 8,727 | 29,775 | 27,348 | ||||||||
| Amortization of intangibles | 4,739 | 4,895 | 14,384 | 14,605 | ||||||||
| Change in fair value of contingent consideration | 227 | 201 | 2,084 | 1,005 | ||||||||
| Acquisition, restructuring and other items, net | 3,369 | 2,359 | 12,009 | 7,052 | ||||||||
| Total operating expenses | 49,432 | 43,878 | 158,231 | 141,351 | ||||||||
| Operating loss | (8,928 | ) | (5,295 | ) | (30,344 | ) | (22,074 | ) | ||||
| Interest expense, net | (736 | ) | (173 | ) | (1,801 | ) | (503 | ) | ||||
| Other expense, net | — | (289 | ) | (427 | ) | (651 | ) | |||||
| Total other expense, net | (736 | ) | (462 | ) | (2,228 | ) | (1,154 | ) | ||||
| Loss before income tax benefit | (9,664 | ) | (5,757 | ) | (32,572 | ) | (23,228 | ) | ||||
| Income tax benefit | (179 | ) | (799 | ) | (1,597 | ) | (2,947 | ) | ||||
| Net loss | $ | (9,485 | ) | $ | (4,958 | ) | $ | (30,975 | ) | $ | (20,281 | ) |
| Loss per share | ||||||||||||
| Basic | $ | (0.24 | ) | $ | (0.13 | ) | $ | (0.79 | ) | $ | (0.52 | ) |
| Diluted | $ | (0.24 | ) | $ | (0.13 | ) | $ | (0.79 | ) | $ | (0.52 | ) |
| Weighted average shares outstanding | ||||||||||||
| Basic | 39,509 | 39,092 | 39,436 | 38,959 | ||||||||
| Diluted | 39,509 | 39,092 | 39,436 | 38,959 |
| ANGIODYNAMICS, INC. AND SUBSIDIARIES | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GAAP TO NON-GAAP RECONCILIATION | ||||||||||||
| (in thousands, except per share data) | ||||||||||||
| Reconciliation of Net Loss to non-GAAP Adjusted Net Income (Loss): | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Three Months Ended | Nine Months Ended | |||||||||||
| Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2023 | Feb 28, 2022 | |||||||||
| (unaudited) | (unaudited) | |||||||||||
| Net loss | $ | (9,485 | ) | $ | (4,958 | ) | $ | (30,975 | ) | $ | (20,281 | ) |
| Amortization of intangibles | 4,739 | 4,895 | 14,384 | 14,605 | ||||||||
| Change in fair value of contingent consideration | 227 | 201 | 2,084 | 1,005 | ||||||||
| Acquisition, restructuring and other items, net (1) | 3,369 | 2,359 | 12,009 | 7,052 | ||||||||
| Tax effect of non-GAAP items (2) | 127 | (1,190 | ) | (655 | ) | (2,817 | ) | |||||
| Adjusted net income (loss) | $ | (1,023 | ) | $ | 1,307 | $ | (3,153 | ) | $ | (436 | ) | |
| Reconciliation of Diluted Loss Per Share to non-GAAP Adjusted Diluted Earnings (Loss) Per Share: | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2023 | Feb 28, 2022 | |||||||||
| (unaudited) | (unaudited) | |||||||||||
| Diluted loss per share | $ | (0.24 | ) | $ | (0.13 | ) | $ | (0.79 | ) | $ | (0.52 | ) |
| Amortization of intangibles | 0.12 | 0.12 | 0.36 | 0.37 | ||||||||
| Change in fair value of contingent consideration | 0.01 | — | 0.05 | 0.03 | ||||||||
| Acquisition, restructuring and other items, net (1) | 0.08 | 0.07 | 0.32 | 0.18 | ||||||||
| Tax effect of non-GAAP items (2) | — | (0.03 | ) | (0.02 | ) | (0.07 | ) | |||||
| Adjusted diluted earnings (loss) per share | $ | (0.03 | ) | $ | 0.03 | $ | (0.08 | ) | $ | (0.01 | ) | |
| Adjusted diluted sharecount (3) | 39,509 | 40,280 | 39,436 | 38,959 | ||||||||
| (1) Includes costs related to merger and acquisition activities, restructuring, and unusual items, including asset impairments and write-offs, certain litigation, and other items. | ||||||||||||
| --- | ||||||||||||
| (2) Adjustment to reflect the income tax provision on a non-GAAP basis has been calculated assuming no valuation allowance on the Company's U.S. deferred tax assets and an effective tax rate of 23% for the periods ended February 28, 2023 and 2022. | ||||||||||||
| (3) Diluted shares may differ for non-GAAP measures as compared to GAAP due to a GAAP loss. |
| ANGIODYNAMICS, INC. AND SUBSIDIARIES | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GAAP TO NON-GAAP RECONCILIATION (Continued) | ||||||||||||
| (in thousands, except per share data) | ||||||||||||
| Reconciliation of Net Loss to Adjusted EBITDA: | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Three Months Ended | Nine Months Ended | |||||||||||
| Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2023 | Feb 28, 2022 | |||||||||
| (unaudited) | (unaudited) | |||||||||||
| Net loss | $ | (9,485 | ) | $ | (4,958 | ) | $ | (30,975 | ) | $ | (20,281 | ) |
| Income tax benefit | (179 | ) | (799 | ) | (1,597 | ) | (2,947 | ) | ||||
| Interest expense, net | 736 | 173 | 1,801 | 503 | ||||||||
| Depreciation and amortization | 7,787 | 7,367 | 23,175 | 21,566 | ||||||||
| Change in fair value of contingent consideration | 227 | 201 | 2,084 | 1,005 | ||||||||
| Stock based compensation | 1,803 | 2,352 | 8,177 | 7,789 | ||||||||
| Acquisition, restructuring and other items, net ^(1)^ | 3,369 | 2,359 | 12,009 | 7,052 | ||||||||
| Adjusted EBITDA | $ | 4,258 | $ | 6,695 | $ | 14,674 | $ | 14,687 | ||||
| Per diluted share: | ||||||||||||
| Adjusted EBITDA | $ | 0.11 | $ | 0.17 | $ | 0.37 | $ | 0.38 | ||||
| (1) Includes costs related to merger and acquisition activities, restructuring, and unusual items, including asset impairments and write-offs, certain litigation, and other items. | ||||||||||||
| --- |
| ANGIODYNAMICS, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| NET SALES BY PRODUCT CATEGORY AND BY GEOGRAPHY | ||||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Feb 28, 2023 | Feb 28, 2022 | % Growth | Currency Impact | Constant Currency Growth | Feb 28, 2023 | Feb 28, 2022 | % Growth | Currency Impact | Constant Currency Growth | |||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||||||||||
| Net Sales | ||||||||||||||||||||||||||
| Med Tech | $ | 22,874 | $ | 19,612 | 16.6 | % | $ | 70,193 | $ | 56,106 | 25.1 | % | ||||||||||||||
| Med Device | 57,838 | 54,358 | 6.4 | % | 177,485 | 173,115 | 2.5 | % | ||||||||||||||||||
| $ | 80,712 | $ | 73,970 | 9.1 | % | 0.3 | % | 9.4 | % | $ | 247,678 | $ | 229,221 | 8.1 | % | 0.4 | % | 8.5 | % | |||||||
| Net Sales | ||||||||||||||||||||||||||
| United States | $ | 67,620 | $ | 62,445 | 8.3 | % | $ | 208,274 | $ | 192,259 | 8.3 | % | ||||||||||||||
| International | 13,092 | 11,525 | 13.6 | % | 1.6 | % | 15.2 | % | 39,404 | 36,962 | 6.6 | % | 2.7 | % | 9.3 | % | ||||||||||
| $ | 80,712 | $ | 73,970 | 9.1 | % | 0.3 | % | 9.4 | % | $ | 247,678 | $ | 229,221 | 8.1 | % | 0.4 | % | 8.5 | % |
GROSS PROFIT BY PRODUCT CATEGORY
(in thousands)
| Three Months Ended | Nine Months Ended | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 28, 2023 | Feb 28, 2022 | % Change | Feb 28, 2023 | Feb 28, 2022 | % Change | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||
| Med Tech | $ | 14,774 | $ | 12,965 | 14.0 | % | $ | 44,816 | $ | 37,060 | 20.9 | % | ||||||
| Gross profit % of sales | 64.6 | % | 66.1 | % | 63.8 | % | 66.1 | % | ||||||||||
| Med Device | $ | 25,730 | $ | 25,618 | 0.4 | % | $ | 83,071 | $ | 82,217 | 1.0 | % | ||||||
| Gross profit % of sales | 44.5 | % | 47.1 | % | 46.8 | % | 47.5 | % | ||||||||||
| Total | $ | 40,504 | $ | 38,583 | 5.0 | % | $ | 127,887 | $ | 119,277 | 7.2 | % | ||||||
| Gross profit % of sales | 50.2 | % | 52.2 | % | 51.6 | % | 52.0 | % |
| ANGIODYNAMICS, INC. AND SUBSIDIARIES | ||||
|---|---|---|---|---|
| CONSOLIDATED BALANCE SHEETS | ||||
| (in thousands) | ||||
| Feb 28, 2023 | May 31, 2022 | |||
| --- | --- | --- | --- | --- |
| (unaudited) | (audited) | |||
| Assets | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 30,111 | $ | 28,825 |
| Accounts receivable, net | 50,892 | 52,304 | ||
| Inventories | 63,532 | 51,392 | ||
| Prepaid expenses and other | 8,039 | 10,824 | ||
| Total current assets | 152,574 | 143,345 | ||
| Property, plant and equipment, net | 45,559 | 45,005 | ||
| Other assets | 10,729 | 10,963 | ||
| Intangible assets, net | 134,011 | 152,380 | ||
| Goodwill | 199,976 | 201,058 | ||
| Total assets | $ | 542,849 | $ | 552,751 |
| Liabilities and stockholders' equity | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 35,600 | $ | 28,047 |
| Accrued liabilities | 21,775 | 34,842 | ||
| Current portion of contingent consideration | 9,877 | 8,783 | ||
| Other current liabilities | 2,380 | 2,652 | ||
| Total current liabilities | 69,632 | 74,324 | ||
| Long-term debt | 49,807 | 25,000 | ||
| Deferred income taxes | 13,490 | 16,037 | ||
| Contingent consideration | 9,182 | 8,165 | ||
| Other long-term liabilities | 3,083 | 4,736 | ||
| Total liabilities | 145,194 | 128,262 | ||
| Stockholders' equity | 397,655 | 424,489 | ||
| Total Liabilities and Stockholders' Equity | $ | 542,849 | $ | 552,751 |
| ANGIODYNAMICS, INC. AND SUBSIDIARIES | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| (in thousands) | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2023 | Feb 28, 2022 | |||||||||
| (unaudited) | (unaudited) | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net loss | $ | (9,485 | ) | $ | (4,958 | ) | $ | (30,975 | ) | $ | (20,281 | ) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||
| Depreciation and amortization | 7,838 | 7,406 | 23,316 | 21,682 | ||||||||
| Non-cash lease expense | 635 | 613 | 1,883 | 1,822 | ||||||||
| Stock based compensation | 1,803 | 2,352 | 8,177 | 7,789 | ||||||||
| Change in fair value of contingent consideration | 227 | 201 | 2,084 | 1,005 | ||||||||
| Deferred income taxes | (227 | ) | (862 | ) | (1,752 | ) | (3,121 | ) | ||||
| Change in accounts receivable allowances | 168 | (82 | ) | 560 | (66 | ) | ||||||
| Fixed and intangible asset impairments and disposals | 57 | 148 | 144 | 245 | ||||||||
| Other | (274 | ) | 51 | (317 | ) | (27 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | 1,778 | (3,519 | ) | 759 | (6,441 | ) | ||||||
| Inventories | (423 | ) | 110 | (12,254 | ) | 588 | ||||||
| Prepaid expenses and other | 3,539 | (2,963 | ) | (392 | ) | (7,147 | ) | |||||
| Accounts payable, accrued and other liabilities | (4,266 | ) | (7,288 | ) | (7,109 | ) | (11,802 | ) | ||||
| Net cash provided by (used in) operating activities | 1,370 | (8,791 | ) | (15,876 | ) | (15,754 | ) | |||||
| Cash flows from investing activities: | ||||||||||||
| Additions to property, plant and equipment | (666 | ) | (1,106 | ) | (2,756 | ) | (3,258 | ) | ||||
| Additions to placement and evaluation units | (1,480 | ) | (1,487 | ) | (4,922 | ) | (8,676 | ) | ||||
| Cash paid in acquisition | — | — | (540 | ) | (3,600 | ) | ||||||
| Net cash used in investing activities | (2,146 | ) | (2,593 | ) | (8,218 | ) | (15,534 | ) | ||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from borrowings on long-term debt | — | — | 70,000 | 5,000 | ||||||||
| Repayment of long-term debt | — | — | (45,000 | ) | — | |||||||
| Deferred financing costs on long-term debt | — | — | (751 | ) | — | |||||||
| Proceeds from exercise of stock options and employee stock purchase plan | 941 | 966 | 1,171 | 2,354 | ||||||||
| Net cash provided by financing activities | 941 | 966 | 25,420 | 7,354 | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | 89 | 17 | (40 | ) | (337 | ) | ||||||
| Increase (decrease) in cash and cash equivalents | 254 | (10,401 | ) | 1,286 | (24,271 | ) | ||||||
| Cash and cash equivalents at beginning of period | 29,857 | 34,291 | 28,825 | 48,161 | ||||||||
| Cash and cash equivalents at end of period | $ | 30,111 | $ | 23,890 | $ | 30,111 | $ | 23,890 |
Exhibit 99.2
ANGIODYNAMICS Third Quarter 2023 Earnings Presentation March 30, 2023 1
2 Forward-Looking Statement Notice Regarding Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding AngioDynamics’ expected future financial position, results of operations, cash flows, business strategy, budgets, projected costs, capital expenditures, products, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include the words such as “expects,” “reaffirms,” “intends,” “anticipates,” “plans,” “projects,” “believes,” “seeks,” “estimates,” “optimistic,” or variations of such words and similar expressions, are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Investors are cautioned that actual events or results may differ materially from AngioDynamics’ expectations, expressed or implied. Factors that may affect the actual results achieved by AngioDynamics include, without limitation, the scale and scope of the COVID-19 global pandemic, the ability of AngioDynamics to develop its existing and new products, technological advances and patents attained by competitors, infringement of AngioDynamics’ technology or assertions that AngioDynamics’ technology infringes the technology of third parties, the ability of AngioDynamics to effectively compete against competitors that have substantially greater resources, future actions by the FDA or other regulatory agencies, domestic and foreign health care reforms and government regulations, results of pending or future clinical trials, overall economic conditions (including inflation, labor shortages and supply chain challenges including the cost and availability of raw materials), the results of on-going litigation, challenges with respect to third-party distributors or joint venture partners or collaborators, the results of sales efforts, the effects of product recalls and product liability claims, changes in key personnel, the ability of AngioDynamics to execute on strategic initiatives, the effects of economic, credit and capital market conditions, general market conditions, market acceptance, foreign currency exchange rate fluctuations, the effects on pricing from group purchasing organizations and competition, the ability of AngioDynamics to obtain regulatory clearances or approval of its products, or to integrate acquired businesses, as well as the risk factors listed from time to time in AngioDynamics’ SEC filings, including but not limited to its Annual Report on Form 10-K for the year ended May 31, 2022. AngioDynamics does not assume any obligation to publicly update or revise any forward-looking statements for any reason. In the United States, the NanoKnife System has received a 510(k) clearance by the Food and Drug Administration for use in the surgical ablation of soft tissue, and is similarly approved for commercialization in Canada, the European Union and Australia. The NanoKnife System has not been cleared for the treatment or therapy of a specific disease or condition. Notice Regarding Non-GAAP Financial Measures Management uses non-GAAP measures to establish operational goals and believes that non-GAAP measures may assist investors in analyzing the underlying trends in AngioDynamics’ business over time. Investors should consider these non-GAAP measures in addition to, not as a substitute for or as superior to, financial reporting measures prepared in accordance with GAAP. In this presentation, AngioDynamics has reported adjusted EBITDA (income before interest, taxes, depreciation and amortization and stock-based compensation); adjusted net income and adjusted earnings per share. Management uses these measures in its internal analysis and review of operational performance. Management believes that these measures provide investors with useful information in comparing AngioDynamics’ performance over different periods. By using these non-GAAP measures, management believes that investors get a better picture of the performance of AngioDynamics’ underlying business. Management encourages investors to review AngioDynamics’ financial results prepared in accordance with GAAP to understand AngioDynamics’ performance taking into account all relevant factors, including those that may only occur from time to time but have a material impact on AngioDynamics’ financial results. Please see the tables that follow for a reconciliation of non-GAAP measures to measures prepared in accordance with GAAP.
Corporate Developments – Q3 and YTD FY23 Q3 Operational developments Positive cash flow from operations of $1.4 million Continued gross margin headwinds in raw material and labor inflation Backlog increased by $0.4 million to $5.4 million at quarter end due to certain component supplier delays Q3 revenue growth of 9.1% Med Tech up 16.6%; Med Device up 6.4% $10.4 million in Auryon sales, growth of 42.8% YOY Mechanical Thrombectomy (AngioVac and AlphaVac) up 4.5% $2.0 million in AlphaVac sales; AngioVac sales declined 15.7% 22.2% YOY growth in NanoKnife disposables IDE clinical studies and pathway expansion PRESERVE study for the treatment of prostate cancer with NanoKnife on track to complete enrollment around the end of June APEX study for the treatment of pulmonary embolism with AlphaVac F18 17 activated sites On track to complete enrollment in early calendar 2024 3 YTD revenue growth of 8.1% Med Tech up 25.1%; Med Device up 2.5% $29.3 million in Auryon sales, growth of 50.7% YOY 11.9% YOY growth in Mechanical Thrombectomy $5.4 million in AlphaVac sales; AngioVac sales declined 8.2% 26.7% YOY growth in NanoKnife disposables Continued focused investment in our 3 key Med Tech platforms: Auryon, Thrombus Management & NanoKnife
Q3 and YTD FY23 Results (unaudited) $ in thousands (except per share data) Q3 FY23 Q3 FY22 Change YTD FY23 YTD FY22 Change Revenue $80,712 $73,970 9.1% $247,678 $229,221 8.1% Med Tech Med Device $22,874 $57,838 $19,612 $54,358 16.6% 6.4% $70,193 $177,485 $56,106 $173,115 25.1% 2.5% United States International $67,620 $13,092 $62,445 $11,525 8.3% 13.6% $208,274 $39,404 $192,259 $36,962 8.3% 6.6% Gross Margin Med Tech Med Device 50.2% 64.6% 44.5% 52.2% 66.1% 47.1% (200 bps) (150 bps) (260 bps) 51.6% 63.8% 46.8% 52.0% 66.1% 47.5% (40 bps) (230 bps) (70 bps) Net Loss Non-GAAP Adjusted Net Income (Loss) ($9,485) ($1,023) ($4,958) $1,307 ($4,527) ($2,330) ($30,975) ($3,153) ($20,281) ($436) ($10,694) ($2,717) GAAP EPS Non-GAAP Adjusted EPS ($0.24) ($0.03) ($0.13) $0.03 ($0.11) ($0.06) ($0.79) ($0.08) ($0.52) ($0.01) ($0.27) ($0.07) Adjusted EBITDA $4,258 $6,695 ($2,437) $14,674 $14,687 ($13) $ in thousands Q3 FY23 Q4 FY22 Change Cash $30,111 $28,825 $1,286 Debt Revolving Facility Delayed-Draw Term Loan $50,000 $25,000 $25,000 $25,000 $25,000 $0 $25,000 $0 $25,000 Net (Debt) Cash ($19,889) $3,825 ($23,714) 4
Q3 and YTD FY23 Results 5 Med Device Med Tech 25.1% growth 2.5% growth YTD Revenue Growth YTD FY22 YTD FY23 YTD Revenue Contribution YTD FY22 YTD FY23 Med Device Med Tech 16.6% growth 6.4% growth Q3 Revenue Growth Q3 FY22 Q3 FY23 Q3 Revenue Contribution Q3 FY22 Q3 FY23
Sales Comparison to Prior-Year Periods 6 Med Tech Q3 FY23 YTD FY23 Auryon 42.8% 50.7% Thrombus Management* AngioVac AlphaVac** (0.7%) (15.7%) 199.4% 9.3% (8.2%) 347.9% NanoKnife® Disposables 22.2% 26.7% NanoKnife® Capital (45.6%) (13.0%) Med Device Q3 FY23 YTD FY23 Core Peripheral 13.8% 9.9% Venous (20.2%) (14.6%) PICCs (6.7%) (7.7%) Midlines (12.2%) (8.8%) Ports 22.6% 6.8% Dialysis 23.5% 26.7% Solero® Microwave 19.3% 10.4% RadioFrequency Ablation 12.8% (8.3%) BioSentry 6.7% (5.9%) Alatus and IsoLoc Balloons (7.5%) (11.4%) * Thrombus Management includes AngioVac, AlphaVac and Thrombolytics ** AlphaVac was launched in Q2 FY22
FY23 Guidance 7 Prior Revised Revenue $342 - $348 million $338 - $342 million Gross Margin Med Tech Med Device 52.5% - 54.5% 65.0% - 68.0% 45.0% - 48.0% 51.0% - 52.0% 64.0% – 66.0% 45.0% - 48.0% (unchanged) Adjusted EPS $0.01 - $0.06 ($0.06) – ($0.01)
GAAP to Non-GAAP Reconciliation 8
Reconciliation of GAAP to Non-GAAP Net Income (Loss) and EPS Reconciliation of Net Loss to Adjusted EBITDA Includes costs related to merger and acquisition activities, restructurings, and unusual items, including asset impairments and write-offs, certain litigation, and other items. Adjustment to reflect the income tax provision on a non-GAAP basis has been calculated assuming no valuation allowance on the Company's U.S. deferred tax assets and an effective tax rate of 23% for the periods ended February 28, 2023 and February 28, 2022. Diluted shares may differ for non-GAAP measures as compared to GAAP due to a GAAP loss. 9 Includes costs related to merger and acquisition activities, restructurings, and unusual items, including asset impairments and write-offs, certain litigation, and other items. (in thousands, except per share data) (in thousands)