AngioDynamics, Inc. (NASDAQ: ANGO):
Fiscal Year 2024 Third Quarter Highlights
- Completed the sale of its PICC and Midline product
portfolios to Spectrum Vascular on February 15, 2024
- Discontinued its Uniblate and Starburst RadioFrequency
products, as well as its Syntrax support catheter products, to
further streamline its product portfolio
GAAP As Reported
Pro Forma*
Net Sales:
$75.2 million
$66.0 million
Growth:
N/A
8.0%
Gross Margin
47.7%
51.1%
GAAP Loss per Share**
$(4.73)
N/A
Adj. Loss per Share
N/A
$(0.16)
*“Pro forma” results exclude the Dialysis
and BioSentry businesses divested in June 2023 and the PICC and
Midline product portfolios divested in February 2024, as well as
the discontinued Uniblate, Starburst, and Syntrax products. “As
Reported” results include sales of the divested assets through
February 14, 2024
**GAAP Loss per share includes a $159.5
million goodwill impairment and $22.0 million related to the
previously announced settlement of IP litigation. The total value
of the goodwill impairment is preliminary, is undergoing further
evaluation and will be adjusted, if necessary, prior to the filing
of the Company’s quarterly report on Form 10-Q
- Pro forma Med Tech net sales of $25.7 million increased
12.6%
- Pro forma Med Device net sales of $40.3 million increased
5.2%
- Subsequent to quarter end, the Company entered into a
settlement agreement with Becton, Dickinson and Company (“BD”) to
resolve all patent litigation with C.R. Bard, Inc., an affiliate of
BD
- Subsequent to quarter end, the Company received 510(k)
clearance for the use of AlphaVac to treat pulmonary
embolism
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 2024, which
ended February 29, 2024.
“During our fiscal third quarter, we took another significant
step in our transformation with the divestiture of our PICC and
Midline product portfolios, further strengthening our balance sheet
and providing us with an opportunity to enhance our focus on the
growth of our Med Tech portfolio,” commented Jim Clemmer, President
and Chief Executive Officer of AngioDynamics, Inc. “We saw a strong
pick up in growth from both our Med Tech and Med Device portfolios
during the quarter and continue to drive toward meaningful margin
expansion and profitability.”
Mr. Clemmer continued, “Subsequent to the end of our fiscal
third quarter, we reached a settlement agreement with BD/Bard that
provides us with clarity and certainty going forward. This allows
us to avoid continued litigation and keep the team focused on
further developing our key growth platforms. I am also very pleased
to announce that earlier this week we received FDA 510(k) clearance
for AlphaVac in the treatment of pulmonary embolism. This approval
came in ahead of even our expectations and is a testament to the
strong submission compiled by our team and the compelling data
generated by our APEX trial. This expanded indication is a
significant piece of our long-term strategy and validates the
effectiveness of the product, opening up another large,
fast-growing market for us to serve with this innovative
platform.”
Third Quarter 2024 Financial Results
Unless otherwise noted, all financial results below are
presented on a pro forma basis excluding the Dialysis and BioSentry
businesses divested in June 2023, the PICC and Midline product
portfolios divested in February 2024, and the recently discontinued
Uniblate and Starburst RadioFrequency products and Syntrax support
catheter products.
Net sales for the third quarter of fiscal year 2024 were $66.0
million, an increase of 8.0% 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 $25.7 million, a 12.6% increase from
$22.8 million in the prior-year period. Med Tech includes the
Auryon peripheral atherectomy platform, the thrombus management
platform and the NanoKnife irreversible electroporation platform.
Year-over-year growth was driven by Auryon sales during the quarter
of $11.8 million, which increased 14.7%, and NanoKnife sales of
$6.0 million, which increased 46.7% compared to the third quarter
of fiscal 2023. NanoKnife disposable sales were $4.2 million, which
increased 19.8% compared to the third quarter of fiscal 2023.
AngioVac sales were $5.5 million, similar to the prior-year
quarter, while AlphaVac sales were $1.1 million, down from $2.0
million in the third quarter of fiscal 2023.
Med Device net sales were $40.3 million, an increase of 5.2%
compared to the prior-year period.
U.S. net sales in the third quarter of fiscal 2024 were $55.8
million, an increase of 5.9% from sales of $52.7 million a year
ago. International net sales were $10.1 million, an increase of
20.8% from sales of $8.4 million in the prior-year period.
GAAP reported gross margin was 47.7%, a decrease of 250 basis
points compared to the third quarter of fiscal 2023. On a pro forma
basis, gross margin for the third quarter of fiscal 2024 was 51.1%,
a decline of 290 basis points from the third quarter of fiscal
2023. Gross margin for the Med Tech business was 61.5%, a decline
of 300 basis points from the third quarter of fiscal 2023. The
year-over-year decline in gross margin for the Med Tech business
was driven primarily by product and geographic mix. Gross margin
for the Med Device business was 44.4%, a decrease of 330 basis
points compared to the third quarter of fiscal 2023. The
year-over-year decline in gross margin for the Med Device business
was driven primarily by a supplier recall as well as costs
associated with the Company’s ongoing transition to outsourced
manufacturing.
The Company recorded a GAAP net loss of $190.4 million, or a
loss per share of $4.73, in the third quarter of fiscal 2024. The
GAAP net loss includes a goodwill impairment charge of $159.5
million, settlement charge of $22.0 million and asset impairment
charges totaling $6.7 million related to the transition to
outsourced manufacturing and discontinuation of Syntrax. The amount
of the goodwill impairment is preliminary, is undergoing further
evaluation and will be adjusted, if necessary, prior to the filing
of the Company’s quarterly report on Form 10-Q. Excluding the items
shown in the non-GAAP reconciliation table below, adjusted net loss
for the third quarter of fiscal 2024 was $6.5 million, and adjusted
loss per share was $0.16.
Adjusted EBITDA in the third quarter of fiscal 2024, excluding
the items shown in the reconciliation table below, was negative
$3.6 million, compared to adjusted EBITDA of negative $1.5 million
in the third quarter of fiscal 2023.
On February 29, 2024, the Company had $78.5 million in cash and
cash equivalents and no debt compared to $44.6 million in cash and
cash equivalents and $50.0 million of debt on May 31, 2023.
In the third quarter of fiscal 2024, the Company used $12.5
million in operating cash, had capital expenditures of $0.6 million
and had additions to Auryon placement and evaluation units of $1.2
million. Cash flow during the third quarter was significantly
impacted by a combination of timing and extraordinary items related
to both the divestiture transaction and manufacturing restructuring
as well as approximately $1.0 million related to a supplier
recall.
Nine Months Financial Results
Unless otherwise noted, all financial results below are
presented on a pro forma basis excluding the Dialysis and BioSentry
businesses divested in June 2023, the PICC and Midline product
portfolios divested in February 2024, and the recently discontinued
Uniblate and Starburst RadioFrequency products and Syntrax support
catheter products.
For the nine months ended February 29, 2024:
Net sales were $199.6 million, an increase of 6.5% compared to
$187.4 million for the same period a year ago.
Med Tech net sales were $76.6 million, a 9.6% increase from the
prior-year period. Med Device net sales were $123.0 million, an
increase of 4.6% from the prior-year period.
U.S. net sales were $167.6 million, a 3.6% increase from the
prior-year period. International net sales were $32.0 million, an
increase of 24.6% from the prior-year period.
GAAP reported gross margin was 49.9%, a decrease of 170 basis
points compared to the prior-year period. On a pro forma basis,
gross margin was 53.6%, a decline of 150 basis points from the
prior-year period. The year-over-year decline in gross margin was
driven primarily by a supplier recall as well as costs associated
with the Company’s ongoing transition to outsourced
manufacturing.
The Company’s GAAP net loss was $173.6 million, or a loss of
$4.33 per share, compared to a net loss of $31.0 million, or a loss
of $0.79 per share, a year ago. The GAAP net loss includes a
goodwill impairment charge of $159.5 million, settlement charge of
$22.0 million and asset impairment charges totaling $6.8 million
related to the transition to outsourced manufacturing and
discontinuation of Syntrax. The amount of the goodwill impairment
is preliminary, is undergoing further evaluation and will be
adjusted, if necessary, prior to the filing of the Company’s
quarterly report on Form 10-Q. Excluding the items shown in the
non-GAAP reconciliation table below, adjusted net loss was $16.1
million, with adjusted loss per share of $0.40, compared to
adjusted net loss and adjusted loss per share of $17.5 million and
$0.44, respectively, a year ago.
Adjusted EBITDA, excluding the items shown in the reconciliation
table below, was negative $4.7 million, compared to negative $4.3
million for the same period a year ago.
Fiscal Year 2024 Financial Guidance
The Company now expects its fiscal year 2024 net sales to be in
the range of $270 to $275 million, which reflects the recent
divestiture of the PICC and Midline businesses and discontinuance
of the RadioFrequency ablation and Syntrax businesses, which
accounted for approximately $50 million of the prior revenue
guidance of $320 to $325 million. The Company expects gross margin
to be approximately 52.0% to 54.0% and adjusted loss per share in
the range of $0.54 to $0.58.
For comparison, pro forma revenue, gross margin, and adjusted
loss per share for FY23 when excluding the discontinued assets and
the assets divested to Spectrum Vascular and Merit Medical were
$257.2 million, 54.9%, and $0.55, respectively.
Conference Call
The Company’s management will host a conference call today at
8:00 a.m. ET to discuss its third quarter 2024 results.
To participate in the conference call, dial 1-877-407-0784
(domestic) or +1-201-689-8560 (international) and refer to the
passcode 13745239.
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 10:00 a.m.
ET on Thursday, April 4, 2024, until 11:59 p.m. ET on Thursday,
April 11, 2024. To hear this recording, dial 1-844-512-2921
(domestic) or +1-412-317-6671 (international) and enter the
passcode 13745239.
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 pro-forma results, 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, 2023. 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
Three Months Ended
Actual (1)
Pro Forma Adjustments (2)
Pro Forma
As Reported (1)
Pro Forma Adjustments (2)
Pro Forma
Feb 29, 2024
Feb 29, 2024
Feb 29, 2024
Feb 28, 2023
Feb 28, 2023
Feb 28, 2023
(unaudited)
(unaudited)
Net sales
$
75,182
(9,211
)
$
65,971
$
80,712
(19,622
)
$
61,090
Cost of sales (exclusive of intangible
amortization)
39,321
(7,038
)
32,283
40,208
(12,096
)
28,112
Gross profit
35,861
(2,173
)
33,688
40,504
(7,526
)
32,978
% of net sales
47.7
%
51.1
%
50.2
%
54.0
%
Operating expenses
Research and development
8,189
(117
)
8,072
6,852
(139
)
6,713
Sales and marketing
25,405
(1,758
)
23,647
25,406
(1,404
)
24,002
General and administrative
10,578
22
10,600
8,839
(306
)
8,533
Amortization of intangibles
3,287
(643
)
2,644
4,739
(1,448
)
3,291
Goodwill impairment (3)
159,476
—
159,476
—
—
—
Change in fair value of contingent
consideration
112
—
112
227
—
227
Acquisition, restructuring and other
items, net
38,116
(6,266
)
31,850
3,369
—
3,369
Total operating expenses
245,163
(8,762
)
236,401
49,432
(3,297
)
46,135
Gain on sale of assets
6,657
(6,657
)
—
—
—
—
Operating loss
(202,645
)
(68
)
(202,713
)
(8,928
)
(4,229
)
(13,157
)
Interest income (expense), net
394
—
394
(736
)
—
(736
)
Other expense, net
(238
)
—
(238
)
—
—
—
Total other income (expense), net
156
—
156
(736
)
—
(736
)
Loss before income tax expense
(benefit)
(202,489
)
(68
)
(202,557
)
(9,664
)
(4,229
)
(13,893
)
Income tax benefit
(12,050
)
—
(12,050
)
(179
)
—
(179
)
Net loss
$
(190,439
)
$
(68
)
$
(190,507
)
$
(9,485
)
$
(4,229
)
$
(13,714
)
Loss per share
Basic
$
(4.73
)
$
(4.73
)
$
(0.24
)
$
(0.35
)
Diluted
$
(4.73
)
$
(4.73
)
$
(0.24
)
$
(0.35
)
Weighted average shares outstanding
Basic
40,234
40,234
39,509
39,509
Diluted
40,234
40,234
39,509
39,509
(1) Reflects the Company's US GAAP
consolidated financial statements before pro forma adjustments
related to the sale of the Dialysis and BioSentry Businesses, the
sale of the PICCs and Midlines Businesses and the discontinuation
of the RadioFrequency Ablation and Syntrax products ("the
Businesses") for the three months ended February 29, 2024 and
February 28, 2023.
(2) Reflects the elimination of revenues
and expenses representing the operating results from the sales and
discontinuation of the Businesses.
(3) The total value of the goodwill
impairment is preliminary, is undergoing further evaluation and
will be adjusted, if necessary, prior to the filing of the
Company’s quarterly report on Form 10-Q.
ANGIODYNAMICS, INC. AND
SUBSIDIARIES
CONSOLIDATED INCOME
STATEMENTS
(in thousands, except per share
data)
Nine Months Ended
Nine Months Ended
Actual (1)
Pro Forma Adjustments (2)
Pro Forma
As Reported (1)
Pro Forma Adjustments (2)
Pro Forma
Feb 29, 2024
Feb 29, 2024
Feb 29, 2024
Feb 28, 2023
Feb 28, 2023
Feb 28, 2023
(unaudited)
(unaudited)
Net sales
$
232,934
(33,336
)
$
199,598
$
247,678
(60,260
)
$
187,418
Cost of sales (exclusive of intangible
amortization)
116,751
(24,121
)
92,630
119,791
(35,704
)
84,087
Gross profit
116,183
(9,215
)
106,968
127,887
(24,556
)
103,331
% of net sales
49.9
%
53.6
%
51.6
%
55.1
%
Operating expenses
Research and development
24,788
(647
)
24,141
22,023
(391
)
21,632
Sales and marketing
78,237
(4,714
)
73,523
77,956
(4,305
)
73,651
General and administrative
30,723
(52
)
30,671
29,775
(1,241
)
28,534
Amortization of intangibles
10,474
(2,571
)
7,903
14,384
(4,343
)
10,041
Goodwill impairment (3)
159,476
—
159,476
—
—
—
Change in fair value of contingent
consideration
203
—
203
2,084
—
2,084
Acquisition, restructuring and other
items, net
47,516
(6,394
)
41,122
12,009
(17
)
11,992
Total operating expenses
351,417
(14,378
)
337,039
158,231
(10,297
)
147,934
Gain on sale of assets
54,499
(54,499
)
—
—
—
—
Operating loss
(180,735
)
(49,336
)
(230,071
)
(30,344
)
(14,259
)
(44,603
)
Interest income (expense), net
1,047
—
1,047
(1,801
)
—
(1,801
)
Other expense, net
(558
)
—
(558
)
(427
)
—
(427
)
Total other income (expense), net
489
—
489
(2,228
)
—
(2,228
)
Loss before income tax benefit
(180,246
)
(49,336
)
(229,582
)
(32,572
)
(14,259
)
(46,831
)
Income tax benefit
(6,643
)
—
(6,643
)
(1,597
)
—
(1,597
)
Net loss
$
(173,603
)
$
(49,336
)
$
(222,939
)
$
(30,975
)
$
(14,259
)
$
(45,234
)
Loss per share
Basic
$
(4.33
)
$
(5.56
)
$
(0.79
)
$
(1.15
)
Diluted
$
(4.33
)
$
(5.56
)
$
(0.79
)
$
(1.15
)
Weighted average shares outstanding
Basic
40,098
40,098
39,436
39,436
Diluted
40,098
40,098
39,436
39,436
(1) Reflects the Company's US GAAP
consolidated financial statements before pro forma adjustments
related to the sale of the Dialysis and BioSentry Businesses, the
sale of the PICCs and Midlines Businesses and the discontinuation
of the RadioFrequency Ablation and Syntrax products ("the
Businesses") for the nine months ended February 29, 2024 and
February 28, 2023.
(2) Reflects the elimination of revenues
and expenses representing the operating results from the sales and
discontinuation of the Businesses.
(3) The total value of the goodwill
impairment is preliminary, is undergoing further evaluation and
will be adjusted, if necessary, prior to the filing of the
Company’s quarterly report on Form 10-Q.
ANGIODYNAMICS, INC. AND
SUBSIDIARIES
GAAP TO NON-GAAP
RECONCILIATION
(in thousands, except per share
data)
Reconciliation of Net Loss to non-GAAP Adjusted Net
Loss:
Three Months Ended
Nine Months Ended
Feb 29, 2024
Feb 28, 2023
Feb 29, 2024
Feb 28, 2023
(unaudited)
(unaudited)
Net loss
$
(190,439
)
$
(9,485
)
$
(173,603
)
$
(30,975
)
Amortization of intangibles
3,287
4,739
10,474
14,384
Change in fair value of contingent
consideration
112
227
203
2,084
Acquisition, restructuring and other
items, net (1)
38,116
3,369
47,516
12,009
Goodwill impairment (2)
159,476
—
159,476
—
Gain on sale of assets
(6,657
)
—
(54,499
)
—
Tax effect of non-GAAP items (3)
(10,174
)
127
(2,716
)
(655
)
Adjusted net loss
$
(6,279
)
$
(1,023
)
$
(13,149
)
$
(3,153
)
Reconciliation of Diluted Loss Per
Share to non-GAAP Adjusted Diluted Loss Per Share:
Three Months Ended
Nine Months Ended
Feb 29, 2024
Feb 28, 2023
Feb 29, 2024
Feb 28, 2023
(unaudited)
(unaudited)
Diluted loss per share
$
(4.73
)
$
(0.24
)
$
(4.33
)
$
(0.79
)
Amortization of intangibles
0.08
0.12
0.26
0.36
Change in fair value of contingent
consideration
—
0.01
0.01
0.05
Acquisition, restructuring and other
items, net (1)
0.95
0.08
1.18
0.32
Goodwill impairment (2)
3.96
—
3.98
—
Gain on sale of assets
(0.17
)
—
(1.36
)
—
Tax effect of non-GAAP items (3)
(0.25
)
—
(0.07
)
(0.02
)
Adjusted diluted loss per share
$
(0.16
)
$
(0.03
)
$
(0.33
)
$
(0.08
)
Adjusted diluted sharecount (4)
40,234
39,509
40,098
39,436
(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) The total value of the goodwill
impairment is preliminary, is undergoing further evaluation and
will be adjusted, if necessary, prior to the filing of the
Company’s quarterly report on Form 10-Q.
(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 the periods ended February 29,
2024 and February 28, 2023.
(4) 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 29, 2024
Feb 28, 2023
Feb 29, 2024
Feb 28, 2023
(unaudited)
(unaudited)
Net loss
$
(190,439
)
$
(9,485
)
$
(173,603
)
$
(30,975
)
Income tax expense (benefit)
(12,050
)
(179
)
(6,643
)
(1,597
)
Interest expense, net
(394
)
736
(1,047
)
1,801
Depreciation and amortization
7,522
7,787
20,895
23,175
Goodwill impairment (1)
159,476
—
159,476
—
Change in fair value of contingent
consideration
112
227
203
2,084
Stock based compensation
2,612
1,803
8,633
8,177
Acquisition, restructuring and other
items, net (2)
36,981
3,369
46,380
12,009
Gain on sale of assets
(6,657
)
—
(54,499
)
—
Adjusted EBITDA
$
(2,837
)
$
4,258
$
(205
)
$
14,674
Per diluted share:
Adjusted EBITDA
$
(0.07
)
$
0.11
$
(0.01
)
$
0.37
(1) The total value of the goodwill
impairment is preliminary, is undergoing further evaluation and
will be adjusted, if necessary, prior to the filing of the
Company’s quarterly report on Form 10-Q.
(2) 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
GAAP TO NON-GAAP
RECONCILIATION
(in thousands, except per share
data)
Reconciliation of Pro Forma Net Loss to Pro Forma
Adjusted Net Loss:
Pro Forma
Pro Forma
Three Months Ended
Nine Months Ended
Feb 29, 2024
Feb 28, 2023
Feb 29, 2024
Feb 28, 2023
(unaudited)
(unaudited)
Pro forma net loss
$
(190,507
)
$
(13,714
)
$
(222,939
)
$
(45,234
)
Amortization of intangibles
2,644
3,291
7,903
10,041
Change in fair value of contingent
consideration
112
227
203
2,084
Acquisition, restructuring and other
items, net (1)
31,850
3,369
41,122
11,992
Goodwill impairment (2)
159,476
—
159,476
—
Tax effect of non-GAAP items (3)
(10,101
)
1,432
(1,841
)
3,627
Adjusted pro forma net loss
$
(6,526
)
$
(5,395
)
$
(16,076
)
$
(17,490
)
Reconciliation of Pro Forma Diluted
Loss Per Share to Pro Forma Adjusted Diluted Loss Per
Share:
Pro Forma
Pro Forma
Three Months Ended
Nine Months Ended
Feb 29, 2024
Feb 28, 2023
Feb 29, 2024
Feb 28, 2023
(unaudited)
(unaudited)
Pro forma diluted loss per share
$
(4.73
)
$
(0.35
)
$
(5.56
)
$
(1.15
)
Amortization of intangibles
0.07
0.08
0.20
0.25
Change in fair value of contingent
consideration
—
0.01
0.01
0.05
Acquisition, restructuring and other
items, net (1)
0.79
0.08
1.02
0.32
Goodwill impairment (2)
3.96
—
3.98
—
Gain on sale of assets
—
—
—
—
Tax effect of non-GAAP items (3)
(0.25
)
0.04
(0.05
)
0.09
Adjusted pro forma diluted loss per
share
$
(0.16
)
$
(0.14
)
$
(0.40
)
$
(0.44
)
Adjusted diluted sharecount (4)
40,234
39,509
40,098
39,436
(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) The total value of the goodwill
impairment is preliminary, is undergoing further evaluation and
will be adjusted, if necessary, prior to the filing of the
Company’s quarterly report on Form 10-Q.
(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 the periods ended February 29,
2024 and February 28, 2023.
(4) 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 Pro Forma Net Loss to Pro Forma
Adjusted EBITDA:
Pro Forma
Pro Forma
Three Months Ended
Nine Months Ended
Feb 29, 2024
Feb 28, 2023
Feb 29, 2024
Feb 28, 2023
(unaudited)
(unaudited)
Pro forma net loss
$
(190,507
)
$
(13,714
)
$
(222,939
)
$
(45,234
)
Income tax benefit
(12,050
)
(179
)
(6,643
)
(1,597
)
Interest expense, net
(394
)
736
(1,047
)
1,801
Depreciation and amortization
6,861
6,288
18,234
18,680
Goodwill impairment (1)
159,476
—
159,476
—
Change in fair value of contingent
consideration
112
227
203
2,084
Stock based compensation
2,141
1,728
8,000
7,924
Acquisition, restructuring and other
items, net (2)
30,714
3,369
39,986
11,992
Pro forma adjusted EBITDA
$
(3,647
)
$
(1,545
)
$
(4,730
)
$
(4,350
)
Per diluted share:
Adjusted EBITDA
$
(0.09
)
$
(0.04
)
$
(0.12
)
$
(0.11
)
(1) The total value of the goodwill
impairment is preliminary, is undergoing further evaluation and
will be adjusted, if necessary, prior to the filing of the
Company’s quarterly report on Form 10-Q.
(2) 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
ACQUISITION, RESTRUCTURING,
AND OTHER ITEMS, NET DETAIL
(in thousands)
Three Months Ended
Nine Months Ended
(in thousands)
Feb 29, 2024
Feb 28, 2023
Feb 29, 2024
Feb 28, 2023
Legal (1)
$
26,063
$
2,614
$
33,202
$
6,899
Mergers and acquisitions (2)
147
—
399
—
Plant closure (3)
5,426
—
6,115
—
Intangible and other asset impairment
(4)
6,260
—
6,260
—
Transition service agreement (5)
(333
)
—
(655
)
—
Manufacturing relocation (6)
—
324
587
1,062
Israeli Innovation Authority prepayment
(7)
—
—
—
3,544
Other (8)
553
431
1,608
504
Total
$
38,116
$
3,369
$
47,516
$
12,009
(1) Legal expenses related to litigation
that is outside the normal course of business. For the three and
nine months ended February 29, 2024, a $22.0 million settlement
expense was recorded as a result of the Settlement Agreement that
was entered into between the Company and BD.
(2) Mergers and acquisitions expense
related to legal and due diligence.
(3) Included in the $6.1 million in plant
closure for the nine months ended February 29, 2024 is $0.7 million
that was previously included in manufacturing relocation.
(4) An impairment of $3.4 million on
intangible assets and an inventory write-off of $2.9 million was
taken in the third quarter of fiscal year 2024 relating to the
abandonment of the Syntrax and RF product lines.
(5) Transition services agreements that
were entered into with Merit and Spectrum.
(6) Expenses to relocate certain
manufacturing lines out of Queensbury, NY.
(7) In the first quarter of fiscal year
2023, a $3.5 million payment was made to the Israeli Innovation
Authority to fully satisfy the obligation related to grant funds
that were provided to Eximo for development of the Auryon laser
prior to the acquisition in the second quarter of fiscal year
2020.
(8) Included in the $1.6 million in other
for the nine months ended February 29, 2024 is $0.9 million of
deferred financing fees that were written-off in conjunction with
the sale of the Dialysis and BioSentry businesses and concurrent
extinguishment of the debt.
ANGIODYNAMICS, INC. AND
SUBSIDIARIES
NET SALES BY PRODUCT CATEGORY
AND BY GEOGRAPHY
(in thousands)
Three Months Ended
Three Months Ended
Actual (1)
Pro Forma Adj. (2)
Pro Forma
As Reported (1)
Pro Forma Adj. (2)
Pro Forma
Actual
Pro Forma
Feb 29, 2024
Feb 29, 2024
Feb 29, 2024
Feb 28, 2023
Feb 28, 2023
Feb 28, 2023
% Growth
Currency Impact
Constant Currency Growth
% Growth
Currency Impact
Constant Currency Growth
(unaudited)
(unaudited)
Net Sales
Med Tech
$
25,844
$
(190
)
$
25,654
$
22,874
$
(91
)
$
22,783
13.0%
12.6%
Med Device
49,338
(9,021
)
40,317
57,838
(19,531
)
38,307
(14.7)%
5.2%
$
75,182
$
(9,211
)
$
65,971
$
80,712
$
(19,622
)
$
61,090
(6.9)%
0.0%
(6.9)%
8.0%
0.0%
8.0%
Net Sales
United States
$
62,342
$
(6,521
)
$
55,821
$
67,620
$
(14,932
)
$
52,688
(7.8)%
5.9%
International
12,840
(2,690
)
10,150
13,092
(4,690
)
8,402
(1.9)%
0.0%
(1.9)%
20.8%
$
75,182
$
(9,211
)
$
65,971
$
80,712
$
(19,622
)
$
61,090
(6.9)%
0.0%
(6.9)%
8.0%
0.0%
8.0%
(1) Reflects the Company's US GAAP
consolidated financial statements before pro forma adjustments
related to the sale of the Dialysis and BioSentry Businesses, the
sale of the PICCs and Midlines Businesses and the discontinuation
of the RadioFrequency Ablation and Syntrax products ("the
Businesses") for the three months ended February 29, 2024 and
February 28, 2023.
(2) Reflects the elimination of revenues
and expenses representing the operating results from the sales and
discontinuation of the Businesses.
GROSS PROFIT BY PRODUCT
CATEGORY
(in thousands)
Three Months Ended
Three Months Ended
Actual (1)
Pro Forma Adj. (2)
Pro Forma
As Reported (1)
Pro Forma Adj. (2)
Pro Forma
Actual
Pro Forma
Feb 29, 2024
Feb 29, 2024
Feb 29, 2024
Feb 28, 2023
Feb 28, 2023
Feb 28, 2023
% Change
% Change
(unaudited)
(unaudited)
Med Tech
$
15,857
$
(83
)
$
15,774
$
14,774
$
(93
)
$
14,681
7.3
%
7.4
%
Gross profit % of sales
61.4
%
61.5
%
64.6
%
64.5
%
Med Device
$
20,004
$
(2,090
)
$
17,914
$
25,730
$
(7,433
)
$
18,297
(22.3
)%
(2.1
)%
Gross profit % of sales
40.5
%
44.4
%
44.5
%
47.7
%
Total
$
35,861
$
(2,173
)
$
33,688
$
40,504
$
(7,526
)
$
32,978
(11.5
)%
2.2
%
Gross profit % of sales
47.7
%
51.1
%
50.2
%
54.0
%
(1) Reflects the Company's US GAAP
consolidated financial statements before pro forma adjustments
related to the sale of the Dialysis and BioSentry Businesses, the
sale of the PICCs and Midlines Businesses and the discontinuation
of the RadioFrequency Ablation and Syntrax products ("the
Businesses") for the three months ended February 29, 2024 and
February 28, 2023.
(2) Reflects the elimination of revenues
and expenses representing the operating results from the sales and
discontinuation of the Businesses.
ANGIODYNAMICS, INC. AND
SUBSIDIARIES
NET SALES BY PRODUCT CATEGORY
AND BY GEOGRAPHY
(in thousands)
Nine Months Ended
Nine Months Ended
Actual (1)
Pro Forma Adj. (2)
Pro Forma
As Reported (1)
Pro Forma Adj. (2)
Pro Forma
Actual
Pro Forma
Feb 29, 2024
Feb 29, 2024
Feb 29, 2024
Feb 28, 2023
Feb 28, 2023
Feb 28, 2023
% Growth
Currency Impact
Constant Currency Growth
% Growth
Currency Impact
Constant Currency Growth
(unaudited)
(unaudited)
Net Sales
Med Tech
$
77,068
$
(443
)
$
76,625
$
70,193
$
(302
)
$
69,891
9.8%
9.6%
Med Device
155,866
(32,893
)
122,973
177,485
(59,958
)
117,527
(12.2)%
4.6%
$
232,934
$
(33,336
)
$
199,598
$
247,678
$
(60,260
)
$
187,418
(6.0)%
0.0%
(6.0)%
6.5%
0.0%
6.5%
Net Sales
United States
$
190,743
$
(23,098
)
$
167,645
$
208,274
$
(46,496
)
$
161,778
(8.4)%
3.6%
International
42,191
(10,238
)
31,953
39,404
(13,764
)
25,640
7.1%
(0.2)%
6.9%
24.6%
$
232,934
$
(33,336
)
$
199,598
$
247,678
$
(60,260
)
$
187,418
(6.0)%
0.0%
(6.0)%
6.5%
0.0%
6.5%
(1) Reflects the Company's US GAAP
consolidated financial statements before pro forma adjustments
related to the sale of the Dialysis and BioSentry Businesses, the
sale of the PICCs and Midlines Businesses and the discontinuation
of the RadioFrequency Ablation and Syntrax products ("the
Businesses") for the nine months ended February 29, 2024 and
February 28, 2023.
(2) Reflects the elimination of revenues
and expenses representing the operating results from the sales and
discontinuation of the Businesses.
GROSS PROFIT BY PRODUCT
CATEGORY
(in thousands)
Nine Months Ended
Nine Months Ended
Actual (1)
Pro Forma Adj. (2)
Pro Forma
As Reported (1)
Pro Forma Adj. (2)
Pro Forma
Actual
Pro Forma
Feb 29, 2024
Feb 29, 2024
Feb 29, 2024
Feb 28, 2023
Feb 28, 2023
Feb 28, 2023
% Change
% Change
(unaudited)
(unaudited)
Med Tech
$
48,400
$
(155
)
$
48,245
$
44,816
$
(163
)
$
44,653
8.0
%
8.2
%
Gross profit % of sales
62.8
%
63.0
%
63.8
%
63.9
%
Med Device
$
67,783
$
(9,060
)
$
58,723
$
83,071
$
(24,393
)
$
58,678
(18.4
)%
—
%
Gross profit % of sales
43.5
%
47.7
%
46.8
%
49.9
%
Total
$
116,183
$
(9,215
)
$
106,968
$
127,887
$
(24,556
)
$
103,331
(9.2
)%
3.5
%
Gross profit % of sales
49.9
%
53.6
%
51.6
%
55.1
%
(1) Reflects the Company's US GAAP
consolidated financial statements before pro forma adjustments
related to the sale of the Dialysis and BioSentry Businesses, the
sale of the PICCs and Midlines Businesses and the discontinuation
of the RadioFrequency Ablation and Syntrax products ("the
Businesses") for the nine months ended February 29, 2024 and
February 28, 2023.
(2) Reflects the elimination of revenues
and expenses representing the operating results from the sales and
discontinuation of the Businesses.
ANGIODYNAMICS, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(in thousands)
Feb 29, 2024
May 31, 2023
(unaudited)
(audited)
Assets
Current assets:
Cash and cash equivalents
$
78,451
$
44,620
Accounts receivable, net
49,475
52,826
Inventories
58,068
55,325
Prepaid expenses and other
10,913
4,617
Current assets held for sale
—
6,154
Total current assets
196,907
163,542
Property, plant and equipment, net
37,040
44,384
Other assets
8,045
10,676
Intangible assets, net
81,570
111,144
Goodwill
—
159,238
Non-current assets held for sale
—
43,653
Total assets
$
323,562
$
532,637
Liabilities and stockholders'
equity
Current liabilities:
Accounts payable
$
35,152
$
40,445
Accrued liabilities
30,963
26,617
Current portion of contingent
consideration
9,500
14,761
Other current liabilities
10,259
2,002
Total current liabilities
85,874
83,825
Long-term debt
—
49,818
Deferred income taxes
5,871
12,813
Contingent consideration
—
4,535
Other long-term liabilities
15,822
3,350
Total liabilities
107,567
154,341
Stockholders' equity
215,995
378,296
Total Liabilities and Stockholders'
Equity
$
323,562
$
532,637
ANGIODYNAMICS, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
Three Months Ended
Nine Months Ended
Feb 29, 2024
Feb 28, 2023
Feb 29, 2024
Feb 28, 2023
(unaudited)
(unaudited)
Cash flows from operating
activities:
Net loss
$
(190,439
)
$
(9,485
)
$
(173,603
)
$
(30,975
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
7,522
7,838
20,895
23,316
Non-cash lease expense
484
635
1,441
1,883
Stock based compensation
2,612
1,803
8,633
8,177
Gain on disposal of assets
(6,657
)
—
(54,499
)
—
Transaction costs for disposition
(2,657
)
—
(5,084
)
—
Change in fair value of contingent
consideration
112
227
203
2,084
Impairment loss on indefinite-lived
intangible assets (1)
159,476
—
159,476
—
Deferred income taxes
(12,140
)
(227
)
(7,189
)
(1,752
)
Change in accounts receivable
allowances
458
168
1,007
560
Fixed and intangible asset impairments and
disposals
6,845
57
7,084
144
Write-off of other assets
—
—
869
—
Other
299
(274
)
161
(317
)
Changes in operating assets and
liabilities:
Accounts receivable
1,668
1,778
2,345
759
Inventories
2,019
(423
)
(6,825
)
(12,254
)
Prepaid expenses and other
(2,587
)
3,539
(7,566
)
(392
)
Accounts payable, accrued and other
liabilities
20,459
(4,266
)
19,493
(7,109
)
Net cash provided by (used in)
operating activities
(12,526
)
1,370
(33,159
)
(15,876
)
Cash flows from investing
activities:
Additions to property, plant and
equipment
(607
)
(666
)
(1,952
)
(2,756
)
Additions to placement and evaluation
units
(1,239
)
(1,480
)
(3,245
)
(4,922
)
Cash paid in acquisition
(3,250
)
—
(3,250
)
(540
)
Proceeds from sale of assets
34,500
—
134,500
—
Net cash provided by (used in)
investing activities
29,404
(2,146
)
126,053
(8,218
)
Cash flows from financing
activities:
Repayment of long-term debt
—
—
(50,000
)
(45,000
)
Proceeds from borrowings on long-term
debt
—
—
—
70,000
Deferred financing costs on long-term
debt
—
—
—
(751
)
Payment of acquisition related contingent
consideration
—
—
(10,000
)
—
Proceeds from exercise of stock options
and employee stock purchase plan
694
941
752
1,171
Net cash provided by (used in)
financing activities
694
941
(59,248
)
25,420
Effect of exchange rate changes on cash
and cash equivalents
(17
)
89
185
(40
)
Increase in cash and cash
equivalents
17,555
254
33,831
1,286
Cash and cash equivalents at beginning of
period
60,896
29,857
44,620
28,825
Cash and cash equivalents at end of
period
$
78,451
$
30,111
$
78,451
$
30,111
(1) The total value of the goodwill
impairment is preliminary, is undergoing further evaluation and
will be adjusted, if necessary, prior to the filing of the
Company’s quarterly report on Form 10-Q.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240404578502/en/
Investors: AngioDynamics, Inc. Stephen Trowbridge, Executive
Vice President & CFO (518) 795-1408
AngioDynamics (NASDAQ:ANGO)
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