December 15th, 2015

AngioDynamics Reports Fiscal 2021 First Quarter Financial Results

AngioDynamics, Inc. (NASDAQ: ANGO), a leading provider of innovative, minimally invasive medical devices for vascular access, peripheral vascular disease, and oncology, today announced financial results for the first quarter of fiscal year 2021, which ended August 31, 2020.

“We had a strong first quarter, as our customers continued to show signs of recovery from the disruption of COVID-19,” commented Jim Clemmer, President and Chief Executive Officer of AngioDynamics, Inc. “While customer demand has not yet returned to pre-COVID levels, the team is clearly executing in this challenging environment. Our key technology platforms performed well during the quarter, including strong sales growth of our AngioVac platform and more than $1 million in sales of our Auryon platform. We’re still seeing the impact of COVID, particularly in our Oncology business, but, despite the unique challenges presented by this environment, we remain confident in our ability to efficiently manage the business while growing our key technology platforms.”

First Quarter 2021 Financial Results

Net sales for the first quarter of fiscal 2021 were $70.2 million, an increase of 6.3% compared to the prior-year quarter. Net sales in the first quarter continued to be impacted by the disruption to procedure volumes resulting from the COVID-19 global pandemic. Foreign currency translation did not have a significant impact on the Company’s sales in the quarter.

  • Oncology net sales were $12.3 million, a decrease of 12.3% from $14.0 million a year ago, with growth in microwave ablation and U.S. NanoKnife probe sales more than offset by lower sales in international markets.
  • Vascular Interventions and Therapies (“VIT”) net sales were $29.9 million, an increase of 3.3%, compared to $29.0 million a year ago. Sales of AngioVac grew 46% over the previous year and were partially offset by a decline in sales of Venous products as a result of lower elective procedure volumes. Auryon sales during the quarter were $1.1 million, and the Company announced the full commercial launch of this platform on September 21, 2020.
  • Vascular Access net sales were $28.1 million, an increase of 21.4% from $23.2 million a year ago, which includes the impact of a previously disclosed sale in the UK through our distributor partner to the NHS. Excluding the impact of this sale, Vascular Access sales declined approximately 1.2% year over year.

U.S. net sales in the first quarter of fiscal 2021 were $54.1 million, an increase of 2.2% from $52.9 million a year ago, and International net sales were $16.1 million, including the one-time sale to NHS, an increase of 22.9% from $13.1 million a year ago.

Gross margin for the first quarter of fiscal 2021 was 50.9%, a decline of 700 basis points compared to the first quarter of fiscal 2020. The gross margin decline was primarily attributable to the Company’s previously discussed COVID-related operating plan, which included COVID-related operating protocols designed to ensure supply-chain security and employee safety. Additionally, during the first quarter, inventory was reduced by $7.2 million when compared to inventory levels on May 31, 2020.

The Company recorded a net loss of $4.3 million, or loss per share of $0.11, in the first quarter of fiscal 2021. This compares to net loss of approximately $1.3 million, or loss per share of $0.03, a year ago.

Excluding the items shown in the non-GAAP reconciliation table below, adjusted net income for the first quarter of fiscal 2021 was $0.6 million or adjusted earnings of $0.02 per share, compared to adjusted net income of $3.2 million, or adjusted earnings per share of $0.08, in the first quarter of fiscal 2020.

Adjusted EBITDA in the first quarter of fiscal 2021, excluding the items shown in the reconciliation table below, was $4.5 million, compared to $7.3 million in the first quarter of fiscal 2020.

In the first quarter of fiscal 2021, the Company used $5.4 million in operating cash and had capital expenditures of $1.8 million. As of August 31, 2020, the Company had $47.9 million in cash and cash equivalents compared to $54.4 million in cash and cash equivalents at the end of the fourth quarter of fiscal 2020. As of August 31, 2020, the Company had $40.0 million in debt outstanding, consistent with its debt balance on May 31, 2020. Management remains focused on cash preservation amid the current environment.

Fiscal Year 2021 Financial Guidance

The Company expects fiscal year 2021 net sales to be in the range of $278 to $284 million and fiscal year 2021 adjusted earnings per share to be in the range of $0.00 to $0.05.

Conference Call

The Company’s management will host a conference call today at 8:00 a.m. ET to discuss its fiscal 2021 first 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 13710506.

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 Tuesday, September 29, 2020, until 11:59 p.m. ET on Tuesday, October 6, 2020. To hear this recording, dial 1-844-512-2921 (domestic) or +1-412-317-6671 (international) and enter the passcode 13710506.

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, adjusted earnings per share, and free cash flow. 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, Inc. is a leading provider of innovative, minimally invasive medical devices used by professional healthcare providers for vascular access, peripheral vascular disease, and oncology. AngioDynamics’ diverse product lines include market-leading ablation systems, vascular access products, angiographic products and accessories, drainage products, thrombolytic products and venous products. 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," "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 from AngioDynamics' expectations. 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, 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 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, 2020. 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

Aug 31, 2020

Aug 31, 2019

(unaudited)

Net sales

$

70,216

$

66,042

Cost of sales (exclusive of intangible amortization)

34,452

27,825

Gross profit

35,764

38,217

% of net sales

50.9

%

57.9

%

Operating expenses

Research and development

9,009

6,292

Sales and marketing

17,705

19,380

General and administrative

8,557

8,453

Amortization of intangibles

4,953

3,868

Change in fair value of contingent consideration

(657)

(448)

Acquisition, restructuring and other items, net

1,319

1,500

Total operating expenses

40,886

39,045

Operating loss

(5,122)

(828)

Interest expense, net

(215)

(465)

Other income (expense), net

524

(98)

Total other income (expense), net

309

(563)

Loss before income tax benefit

(4,813)

(1,391)

Income tax benefit

(545)

(116)

Net loss

$

(4,268)

$

(1,275)

Loss per share

Basic

$

(0.11)

$

(0.03)

Diluted

$

(0.11)

$

(0.03)

Weighted average shares outstanding

Basic

38,157

37,783

Diluted

38,157

37,783

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:

Three Months Ended

Aug 31, 2020

Aug 31, 2019

(unaudited)

Net loss

$

(4,268)

$

(1,275)

Amortization of intangibles

4,953

3,868

Change in fair value of contingent consideration

(657)

(448)

Acquisition, restructuring and other items, net (1)

1,319

1,500

Write-off of deferred financing fees (2)

593

Tax effect of non-GAAP items (3)

(729)

(1,064)

Adjusted net income

$

618

$

3,174

Reconciliation of Diluted Loss Per Share to non-GAAP Adjusted Diluted Earnings Per Share:

Three Months Ended

Aug 31, 2020

Aug 31, 2019

(unaudited)

Diluted loss per share

$

(0.11)

$

(0.03)

Amortization of intangibles

0.13

0.10

Change in fair value of contingent consideration

(0.02)

(0.01)

Acquisition, restructuring and other items, net (1)

0.03

0.04

Write-off of deferred financing fees (2)

0.02

Tax effect of non-GAAP items (3)

(0.01)

(0.04)

Adjusted diluted earnings per share

$

0.02

$

0.08

Adjusted diluted sharecount

38,191

38,158

(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) Deferred financing fees related to the old credit agreement were written off during the first quarter of fiscal year 2020.

(3) 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 August 31, 2020 and 2019.

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

Aug 31, 2020

Aug 31, 2019

(unaudited)

Net loss

$

(4,268)

$

(1,275)

Income tax benefit

(545)

(116)

Interest expense, net

215

465

Depreciation and amortization

6,538

5,170

Change in fair value of contingent consideration

(657)

(448)

Stock based compensation

1,864

1,984

Acquisition, restructuring and other items, net (1)

1,319

1,500

Adjusted EBITDA

$

4,466

$

7,280

Per diluted share:

Adjusted EBITDA

$

0.12

$

0.19

(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

Aug 31, 2020

Aug 31, 2019

%
Growth

Currency
Impact

Constant
Currency
Growth

(unaudited)

Net Sales by Product Category

Vascular Interventions & Therapies

$

29,857

$

28,913

3.3%

Vascular Access

28,105

23,159

21.4%

Oncology

12,254

13,970

(12.3)%

$

70,216

$

66,042

6.3%

0.0%

6.3%

Net Sales by Geography

United States

$

54,108

$

52,937

2.2%

0.0%

2.2%

International

16,108

13,105

22.9%

0.0%

22.7%

$

70,216

$

66,042

6.3%

0.0%

6.3%

ANGIODYNAMICS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands)

Aug 31, 2020

May 31, 2020

(unaudited)

(audited)

Assets

Current assets:

Cash and cash equivalents

$

47,929

$

54,435

Accounts receivable, net

33,590

31,263

Inventories

52,762

59,905

Prepaid expenses and other

7,957

7,310

Total current assets

142,238

152,913

Property, plant and equipment, net

29,427

28,312

Other assets

16,833

15,338

Intangible assets, net

194,318

197,136

Goodwill

200,943

200,515

Total assets

$

583,759

$

594,214

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

$

14,008

$

19,096

Accrued liabilities

23,587

29,380

Current portion of contingent consideration

836

Other current liabilities

2,251

2,133

Total current liabilities

39,846

51,445

Long-term debt, net of current portion

40,000

40,000

Contingent consideration, net of current portion

14,994

14,811

Deferred income taxes

23,817

24,057

Other long-term liabilities

10,048

9,029

Total liabilities

128,705

139,342

Stockholders' equity

455,054

454,872

Total Liabilities and Stockholders' Equity

$

583,759

$

594,214

ANGIODYNAMICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended

Aug 31, 2020

Aug 31, 2019

(unaudited)

Cash flows from operating activities:

Net loss

$

(4,268)

$

(1,275)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

6,577

5,207

Non-cash lease expense

666

Stock based compensation

1,864

1,984

Change in fair value of contingent consideration

(657)

(448)

Deferred income taxes

(620)

(175)

Change in accounts receivable allowances

460

(453)

Fixed and intangible asset impairments and disposals

90

99

Write-off of other assets

593

Other

(432)

(8)

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable

(2,706)

11,474

Inventories

7,247

(5,153)

Prepaid expenses and other

(2,272)

(746)

Accounts payable, accrued and other liabilities

(11,374)

(17,633)

Net cash used in operating activities

(5,425)

(6,534)

Cash flows from investing activities:

Additions to property, plant and equipment

(1,824)

(1,391)

Acquisition of intangibles

(150)

Net cash used in investing activities

(1,824)

(1,541)

Cash flows from financing activities:

Repayment of long-term debt

(132,500)

Deferred financing costs on long-term debt

(741)

Payment of acquisition related contingent consideration

(1,208)

Proceeds (outlays) from exercise of stock options and employee stock purchase plan

491

(1,300)

Net cash provided by (used in) financing activities

491

(135,749)

Effect of exchange rate changes on cash and cash equivalents

252

(168)

Decrease in cash and cash equivalents

(6,506)

(143,992)

Cash and cash equivalents at beginning of period

54,435

227,641

Cash and cash equivalents at end of period

$

47,929

$

83,649

ANGIODYNAMICS, INC. AND SUBSIDIARIES

GAAP TO NON-GAAP RECONCILIATION

(in thousands)

Reconciliation of Free Cash Flows:

Three Months Ended

Aug 31, 2020

Aug 31, 2019

(unaudited)

Net cash used in operating activities

$

(5,425)

$

(6,534)

Additions to property, plant and equipment

(1,824)

(1,391)

Free Cash Flow

$

(7,249)

$

(7,925)

Contacts:

Investor:
AngioDynamics, Inc.
Stephen Trowbridge, Executive Vice President & CFO
(518) 795-1408

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