Announcements

AngioDynamics Reports Fiscal 2020 Third Quarter Financial Results

   12:04 AM - 7 Apr 2020

Fiscal 2020 Third Quarter Highlights

  • Net sales of $69.8 million increased 6.5% compared to the prior-year quarter
  • Gross margin declined 40 basis points to 57.8% year over year
  • GAAP loss per share of $0.15; adjusted earnings per share of $0.01
  • Launched PATHFINDER I Registry to evaluate performance and clinical outcomes of the AURYON™ Atherectomy System
  • As a result of the uncertainty created by the COVID-19 pandemic, management is withdrawing its fiscal year 2020 financial guidance

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 third quarter of fiscal year 2020, which ended February 29, 2020.

“The health and safety of the team is our top priority, and I want to thank each of our team members for the resiliency they have shown. We are very pleased with our third quarter results, as increases across all three of our businesses drove solid ex-Asclera top-line growth of 9.3%,” commented Jim Clemmer, President and Chief Executive Officer of AngioDynamics, Inc. “Looking ahead, we are operating in a very dynamic macro environment, and the coming months are likely to present further challenges. However, our healthy balance sheet and world-class team leave us well-prepared to weather those challenges. We experienced strong momentum during the third quarter, and we look forward to building on that momentum once the environment begins to normalize, as we believe that the long-term fundamentals and growth drivers of our business remain intact. All of us at AngioDynamics remain steadfastly focused on the health and safety of our employees and patients and ensuring that our physicians and customers have uninterrupted access to our innovative product portfolio in order to deliver the highest quality care possible.”

Third Quarter 2020 Financial Results

Net sales for the third quarter of fiscal 2020 were $69.8 million, an increase of 6.5% compared to the prior-year quarter. Excluding the impact of Asclera sales, which were discontinued during fiscal year 2019, net sales grew 9.3% year over year. Foreign currency translation did not have a significant impact on the Company’s sales in the quarter.

  • Oncology net sales were $14.6 million, an increase of 5.1% from $13.9 million a year ago, led by strong NanoKnife sales.
  • Vascular Interventions and Therapies (“VIT”) net sales were $30.6 million, an increase of 4.3%, compared to $29.3 million a year ago. Excluding last year’s Asclera sales of $1.7 million in the third quarter, VIT grew 10.5%, driven by higher sales of the Company’s AngioVac, Thrombolytic, and core VIT products.
  • Vascular Access net sales were $24.6 million, an increase of 10.3% from $22.3 million a year ago, due primarily to higher sales of PICCs, Ports, and Midline products.

Excluding Asclera, U.S. net sales in the third quarter of fiscal 2020 were $54.9 million, an increase of 6.1% from $51.7 million a year ago, and International net sales were $14.9 million, an increase of 22.8% from $12.1 million a year ago.

Gross margin for the third quarter of fiscal 2020 was 57.8%, a decrease of 40 basis points compared to the third quarter of fiscal 2019, primarily due to product mix.

The Company recorded a net loss from continuing operations of $5.7 million, or a loss of $0.15 per share, in the third quarter of fiscal 2020. This compares to a net loss from continuing operations of approximately $4.6 million, or a loss of $0.12 per share, a year ago.

Excluding the items shown in the non-GAAP reconciliation table below, adjusted net income for the third quarter of fiscal 2020 was $0.4 million, or $0.01 per share, compared to adjusted net income of $1.9 million, or $0.05 per share, in the third quarter of fiscal 2019.

Adjusted EBITDA in the third quarter of fiscal 2020, excluding the items shown in the reconciliation table below, was $3.8 million, compared to $7.7 million in the third quarter of fiscal 2019.

In the third quarter of fiscal 2020, the Company used $17.8 million in operating cash and had capital expenditures of $1.7 million. As of February 29, 2020, the Company had $27.2 million in cash and cash equivalents and $15.0 million in debt outstanding.

Nine Months Financial Results

For the nine months ended February 29, 2020:

  • Net sales were $205.8 million, an increase of 3.2%, compared to $199.5 million for the same period a year ago. Excluding the impact of Asclera, sales of which were discontinued during fiscal year 2019, net sales grew 5.7% year over year.
  • The Company's net loss from continuing operations was $9.7 million, or a loss of $0.26 per share, compared to a net loss from continuing operations of $13.9 million, or a loss of $0.37 per share, a year ago.
  • Gross margin improved 80 basis points to 58.3% from 57.5% a year ago.
  • Excluding the items shown in the non-GAAP reconciliation table below, adjusted net income was $5.7 million, or $0.15 per share, compared to adjusted net income of $5.4 million, or $0.14 per share, a year ago.
  • Adjusted EBITDA, excluding the items shown in the reconciliation table below, was $17.5 million, compared to $22.0 million for the same period a year ago.

Fiscal Year 2020 Financial Guidance

As a result of the ongoing pandemic, health systems throughout the country, many of which are AngioDynamics customers, are currently prioritizing the care of COVID-19 patients. Consequently, certain of the procedures that the Company supports have been, and will continue to be, impacted. Given the uncertainty surrounding the magnitude and duration of these impacts, management is withdrawing its fiscal year 2020 financial guidance.

Conference Call

The Company’s management will host a conference call today at 8:00 a.m. ET to discuss its fiscal 2020 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 13700177.

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, April 7, 2020, until 11:59 p.m. ET on Tuesday, April 14, 2020. To hear this recording, dial 1-844-512-2921 (domestic) or +1-412-317-6671 (international) and enter the passcode 13700177.

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, free cash flow and net sales excluding Asclera. 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, 2019 and its Quarterly Report on Form 10-Q for the period ended February 29, 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

 

Nine months ended

 

Feb 29, 2020

 

Feb 28, 2019

 

Feb 29, 2020

 

Feb 28, 2019

 

(unaudited)

 

(unaudited)

 

 

 

 

 

 

 

 

Net sales

$

69,780

 

 

$

65,524

 

 

$

205,825

 

 

$

199,451

 

Cost of sales (exclusive of intangible amortization)

29,481

 

 

27,361

 

 

85,765

 

 

84,783

 

Gross profit

40,299

 

 

38,163

 

 

120,060

 

 

114,668

 

% of net sales

57.8

%

 

58.2

%

 

58.3

%

 

57.5

%

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

Research and development

8,395

 

 

6,915

 

 

22,450

 

 

21,365

 

Sales and marketing

20,934

 

 

18,385

 

 

60,427

 

 

56,054

 

General and administrative

10,203

 

 

8,718

 

 

29,651

 

 

26,414

 

Amortization of intangibles

5,019

 

 

4,660

 

 

13,417

 

 

12,599

 

Change in fair value of contingent consideration

419

 

 

609

 

 

116

 

 

865

 

Acquisition, restructuring and other items, net

1,565

 

 

2,550

 

 

4,486

 

 

9,700

 

Total operating expenses

46,535

 

 

41,837

 

 

130,547

 

 

126,997

 

Operating loss

(6,236)

 

 

(3,674)

 

 

(10,487)

 

 

(12,329)

 

Interest expense, net

(166)

 

 

(1,442)

 

 

(672)

 

 

(3,689)

 

Other expense, net

(131)

 

 

(266)

 

 

(67)

 

 

(72)

 

Total other expense, net

(297)

 

 

(1,708)

 

 

(739)

 

 

(3,761)

 

Loss from continuing operations before income tax benefit

(6,533)

 

 

(5,382)

 

 

(11,226)

 

 

(16,090)

 

Income tax benefit

(824)

 

 

(773)

 

 

(1,506)

 

 

(2,191)

 

Net loss from continuing operations

(5,709)

 

 

(4,609)

 

 

(9,720)

 

 

(13,899)

 

Income from discontinued operations, net of income tax

 

 

5,405

 

 

 

 

16,366

 

Net income (loss)

$

(5,709)

 

 

$

796

 

 

$

(9,720)

 

 

$

2,467

 

 

 

 

 

 

 

 

 

Loss per share - continuing operations

 

 

 

 

 

 

 

Basic

$

(0.15)

 

 

$

(0.12)

 

 

$

(0.26)

 

 

$

(0.37)

 

Diluted

$

(0.15)

 

 

$

(0.12)

 

 

$

(0.26)

 

 

$

(0.37)

 

Income per share - discontinued operations

 

 

 

 

 

 

 

Basic

$

 

 

$

0.14

 

 

$

 

 

$

0.44

 

Diluted

$

 

 

$

0.14

 

 

$

 

 

$

0.44

 

Income (loss) per share

 

 

 

 

 

 

 

Basic

$

(0.15)

 

 

$

0.02

&nb