Announcements

AngioDynamics Reports Fiscal 2019 Second Quarter Financial Results

   12:01 AM - 4 Jan 2019

Fiscal 2019 Second Quarter Highlights

  • Net sales of $91.5 million, an increase of 5.5% year over year
  • Gross margin expanded 440 basis points year over year to 53.7%
  • GAAP EPS of $0.06 per share; adjusted EPS of $0.22 per share
  • Cash provided by operations of $13.0 million; capital expenditures of $0.7 million
  • Announced the acquisition ofRadiaDyne and its proprietary OARtrac® radiation dose monitoring platform to build the Company’s continuum of care within the oncology space

LATHAM, N.Y.--(BUSINESS WIRE)--Jan. 4, 2019-- 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 second quarter of fiscal year 2019, which ended November 30, 2018.

“We are very pleased with our second quarter financial results, which are marked by growth across all of our business segments, expanding gross margins, and improved profitability. Our quarterly performance was positively impacted by our recent acquisitions, validating our portfolio optimization strategy and enhancing our value proposition within oncology. In addition, we continue to make progress toward obtaining a pancreatic cancer indication for NanoKnife and recently received notification from the FDA that NanoKnife will be considered a Category B IDE once we receive approval to begin our DIRECTtm NanoKnife study for Stage III pancreatic cancer,” commented Jim Clemmer, President and Chief Executive Officer of AngioDynamics, Inc. “We are encouraged by these accomplishments and are well positioned to achieve our financial targets for the full year.”

Second Quarter 2019 Financial Results

Net sales for the second quarter of fiscal 2019 were $91.5 million, an increase of 5.5%, compared to $86.7 million a year ago. During the quarter, each of the Company’s three businesses posted growth, led by the Oncology business.

Currency did not have a significant impact on the Company’s sales in the quarter.

  • Oncology net sales were $15.3 million, an increase of 19.8% from $12.8 million a year ago, as strong NanoKnife sales in both capital and disposables and positive contributions from the two recent acquisitions more than offset decreased sales of the Company’s Thermal Ablation products. The comparison of year-over-year results within the Company’s Oncology business was negatively impacted by the timing of the prior-year Acculis Microwave ablation system market withdrawal. Excluding the impact of this transition from the Company’s Acculis Microwave product to its Solero Microwave product, the Oncology business grew 28.7% year over year.
  • Vascular Interventions and Therapies net sales in the second quarter of fiscal 2019 were $52.5 million, an increase of 2.2%, compared to $51.4 million a year ago, as strong growth in Fluid Management and AngioVac were partially offset by a decelerating decline in the Venous Insufficiency business.
  • Vascular Access net sales were $23.7 million, an increase of 5.1% from $22.6 million a year ago, as strong sales of Ports and Dialysis products were slightly offset by a decline in sales of PICCs.
  • U.S. net sales in the second quarter of fiscal 2019 were $71.9 million, an increase of 5.2% from $68.3 million a year ago, and International net sales were $19.6 million, an increase of 6.6% from $18.4 million a year ago.

    Gross margin for the second quarter of fiscal 2019 expanded 440 basis points to 53.7% from 49.3% a year ago, consistent with the trending improvements related to the Company’s core operational enhancements, as well as higher gross margins associated with our portfolio optimization strategy.

    The Company recorded net income of $2.1 million, or $0.06 per share, in the second quarter of fiscal 2019. This compares to net income of approximately $0.2 million, or $0.01 per share, a year ago.

    Excluding the items shown in the non-GAAP reconciliation table below, adjusted net income for the second quarter of fiscal 2019 was $8.4 million, or $0.22 per share, compared to adjusted net income of $6.3 million, or $0.17 per share, in the second quarter of fiscal 2018.

    Adjusted EBITDAS in the second quarter of fiscal 2019, excluding the items shown in the reconciliation table below, was $16.3 million, compared to $13.3 million in the second quarter of fiscal 2018.

    In the second quarter of fiscal 2019, the Company generated $13.0 million in operating cash flow and had capital expenditures of $0.7 million. As of November 30, 2018, the Company had $42.8 million in cash and cash equivalents and $145.0 million in debt, excluding the impact of deferred financing costs.

    Six Months Financial Results

    For the six months ended November 30, 2018:

    • Net sales were $176.8 million, an increase of 2.7%, compared to $172.1 million for the same period a year ago.
    • The Company's net income was $1.7 million, or $0.04 per share, compared to net income of $0.2 million, or $0.01 per share, a year ago.
    • Excluding the items shown in the non-GAAP reconciliation table below, adjusted net income was $14.6 million, or $0.38 per share, compared to adjusted net income of $11.3 million, or $0.30 per share, a year ago.
    • Adjusted EBITDAS, excluding the items shown in the reconciliation table below, was $28.9 million, compared to $24.6 million for the same period a year ago.
  • Fiscal Year 2019 Financial Guidance

    The Company reiterates its previously announced financial guidance, continuing to expect fiscal year 2019 net sales in the range of $354 to $359 million and free cash flow in the range of $26 to $31 million. Additionally, the Company continues to expect adjusted earnings per share in the range of $0.82 to $0.86.

    Conference Call

    The Company’s management will host a conference call today at 8:00 a.m. ET to discuss its second quarter 2019 results.

    To participate in the conference call, dial 1-877-407-0784 (domestic) or 1-201-689-8560 (international) and refer to the passcode 13685683.

    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 Friday, January 4, 2019, until 11:59 p.m. ET on Friday, January 11, 2019. To hear this recording, dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and enter the passcode 13685683.

    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 EBITDAS, 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, fluid management 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 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 fourth 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 fourth-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 inAngioDynamics'SEC filings, including but not limited to its Annual Report on Form 10-K for the year ended May 31, 2018. 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    Six months ended




    November 30,

       November 30,



    November 30,

       

    November 30,





    2018


    2017



    2018


    2017




    (unaudited)



    (unaudited)

















     
    Net sales


    $91,503


    $86,706



    $176,843



    172,117
    Cost of sales (exclusive of intangible amortization)


     42,394


     43,975



     83,267


     88,157
    Gross profit


     49,109


     42,731



     93,576


     83,960
    % of net sales



    53.7%



    49.3%




    52.9%



    48.8%

















     
    Operating expenses
















    Research and development



    7,363



    6,107




    15,025



    12,548
    Sales and marketing



    20,269



    18,967




    39,702



    38,369
    General and administrative



    9,336



    7,540




    17,832



    15,596
    Amortization of intangibles



    5,188



    4,146




    9,304



    8,242
    Change in fair value of contingent consideration



    244



    82




    256



    187
    Acquisition, restructuring and other items, net


     2,728


     4,766



     7,150


     7,755
    Total operating expenses


     45,128


     41,608



     89,269


     82,697
    Operating income



    3,981



    1,123




    4,307



    1,263
    Interest expense, net



    (1,330)



    (760)




    (2,247)



    (1,483)
    Other income (expense), net


     80


     (280)



     194


     287
    Total other expense, net



    (1,250)



    (1,040)




    (2,053)



    (1,196)
    Income before income taxes



    2,731



    83




    2,254



    67
    Income tax expense (benefit)


     591


     (166)



     583


     (147)
    Net income


    $2,140


    $249



    $1,671


    $214

















     
    Earnings per share
















    Basic


    $0.06


    $0.01



    $0.04


    $0.01
    Diluted


    $0.06


    $0.01



    $0.04


    $0.01

















     
    Weighted average shares outstanding
















    Basic



    37,500



    37,066




    37,411



    36,983
    Diluted



    38,117



    37,383




    38,131



    37,322
     
    ANGIODYNAMICS, INC. AND SUBSIDIARIES
    GAAP TO NON-GAAP RECONCILIATION
    (in thousands, except per share data)
     
    Reconciliation of Net Income to non-GAAP Adjusted Net Income:

       
       
        
       




    Three months ended



    Six months ended




    November 30,


    November 30,



    November 30,


    November 30,




    2018


    2017



    2018


    2017




    (unaudited)



    (unaudited)

















     
    Net income


    $2,140


    $249



    $1,671


    $214

















     
    Amortization of intangibles



    5,188



    4,146




    9,304



    8,242
    Change in fair value of contingent consideration



    244



    82




    256



    187
    Acquisition, restructuring and other items, net (1)



    2,728



    4,766




    7,150



    7,755
    Tax effect of non-GAAP items (2)


     (1,914)


     (2,945)



     (3,779)


     (5,123)
    Adjusted net income


    $8,386


    $6,298



    $14,602


    $11,275

















     

















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

















     




    Three months ended



    Six months ended




    November 30,


    November 30,



    November 30,


    November 30,




    2018


    2017



    2018


    2017




    (unaudited)



    (unaudited)

















     
    Diluted earnings per share


    $0.06


    $0.01



    $0.04


    $0.01

















     
    Amortization of intangibles



    0.14



    0.11




    0.24



    0.22
    Change in fair value of contingent consideration



    0.01



    0.00




    0.01



    0.01
    Acquisition, restructuring and other items, net (1)



    0.07



    0.13




    0.19



    0.21
    Tax effect of non-GAAP items (2)


     (0.06)


     (0.08)



     (0.10)


     (0.15)
    Adjusted diluted earnings per share


    $0.22


    $0.17



    $0.38


    $0.30

















     

















     
    Adjusted diluted share count



    38,117



    37,383




    38,131



    37,322
    (1) Includes costs related to merger and acquisition activities, restructurings, 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 our U.S. deferred tax assets and an effective tax rate of 23% for November 30, 2018. For November 30, 2017 the effective tax rate i) has been calculated using a blended rate of 30.62% for the year ended May 31, 2018 due to the enactment of the Tax Cuts and Jobs Act (the “Act”) that reduced the federal corporate tax rate to 21%; ii) excludes the benefit recorded in Q3 fiscal 2018 resulting from remeasurement of our deferred tax assets from the Act; iii) tax effects the non-GAAP adjustment shown above and iv) assumes the Company does not have a valuation allowance on its U.S deferred tax assets.
     
    ANGIODYNAMICS, INC. AND SUBSIDIARIES
    GAAP TO NON-GAAP RECONCILIATION (Continued)
    (in thousands, except per share data)
     
    Reconciliation of Net Income to EBITDAS and Adjusted EBITDAS:

       
       
        
       




    Three months ended



    Six months ended




    November 30,


    November 30,



    November 30,


    November 30,




    2018


    2017



    2018


    2017




    (unaudited)



    (unaudited)

















     
    Net income


    $2,140


    $249



    $1,671


    $214

















     
    Income tax expense (benefit)



    591



    (166)




    583



    (147)
    Interest expense, net



    1,330



    760




    2,247



    1,483
    Depreciation and amortization



    6,692



    5,884




    12,291



    11,677
    Stock-based compensation


     2,591


     1,966



     4,741


     3,763
    EBITDAS


    $13,344


    $8,693



     21,533


     16,990

















     
    Change in fair value of contingent consideration


    $244


    $82




    256



    187
    Acquisition, restructuring and other items, net (1)


     2,728


     4,560



     7,150


     7,441
    Adjusted EBITDAS


    $16,316


    $13,335



    $28,939


    $24,618

















     
    Per diluted share:
















    EBITDAS


    $0.35


    $0.23



    $0.56


    $0.46
    Adjusted EBITDAS


    $0.43


    $0.36



    $0.76


    $0.66
    (1) Includes costs related to merger and acquisition activities, restructurings, 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    Six months ended




     Currency  Constant




      Currency  Constant




    November 30,  November 30,  % 
    Impact

    Currency



    November 30,  November 30,
     % 
    Impact

    Currency




    2018

    2017

    Growth

    (Pos) Neg

    Growth



    2018

    2017

    Growth

    (Pos) Neg

    Growth




    (unaudited)














    (unaudited)









































     
    Net Sales by Product Category
































    Vascular Interventions and Therapies


    $52,494

    $51,368

    2.2%









    $102,488

    $101,234

    1.2%





    Vascular Access



    23,723


    22,574

    5.1%










    47,513


    45,812

    3.7%





    Oncology


     15,286

     12,764

    19.8%









     26,842

     25,071

    7.1%





    Total


    $91,503

    $86,706

    5.5%

    0.0%

    5.8%



    $176,843

    $172,117

    2.7%

    0.0%

    2.9%

































     
    Net Sales by Geography
































    United States


    $71,883

    $68,301

    5.2%

    0.0%

    5.2%



    $139,567

    $137,232

    1.7%

    0.0%

    1.7%
    International


     19,620

     18,405

    6.6%

    1.0%

    7.8%



     37,276

     34,885

    6.9%

    1.0%

    7.5%
    Total


    $91,503

    $86,706

    5.5%

    0.0%

    5.8%



    $176,843

    $172,117

    2.7%

    0.0%

    2.9%





































     
    ANGIODYNAMICS, INC. AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS
    (in thousands)
     

       November 30,   May 31,




    2018


    2018




    (unaudited)


    (audited)
    Assets







    Current Assets







    Cash and cash equivalents


    $42,820


    $74,096
    Marketable securities


     1,350


     1,317
    Total cash and investments



    44,170



    75,413








     
    Accounts receivable, net



    43,374



    39,401
    Inventories



    50,637



    48,916
    Prepaid expenses and other


     4,776


     4,302
    Total current assets



    142,957



    168,032








     
    Property, plant and equipment, net



    41,945



    42,461
    Other assets



    3,478



    3,417
    Intangible assets, net



    168,706



    130,310
    Goodwill


     426,874


     361,252
    Total Assets


    $783,960


    $705,472








     
    Liabilities and Stockholders' Equity







    Current Liabilities







    Accounts payable


    $19,424


    $15,775
    Accrued liabilities



    21,272



    34,426
    Current portion of long-term debt



    5,000



    5,000
    Current portion of contingent consideration


     4,006


     2,100
    Total current liabilities



    49,702



    57,301
    Long-term debt, net of current portion



    139,266



    86,621
    Deferred income taxes



    17,696



    17,173
    Contingent consideration, net of current portion



    22,512



    1,161
    Other long-term liabilities


     5,221


     621
    Total Liabilities



    234,397



    162,877








     
    Stockholders' equity


     549,563


     542,595
    Total Liabilities and Stockholders' Equity


    $783,960


    $705,472










     
    ANGIODYNAMICS, INC. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in thousands)
     

          Three months ended   Six months ended







    November 30,  November 30,


    November 30,  November 30,







    2018

    2017


    2018

    2017







    (unaudited)


    (unaudited)





















     
    Cash flows from operating activities:




















    Net income





    $2,140

    $249


    $1,671

    $214
    Adjustments to reconcile net income to net cash provided by operating activities:
    Depreciation and amortization






    6,692


    5,884



    12,291


    11,677
    Stock-based compensation






    2,591


    1,966



    4,741


    3,763
    Change in fair value of contingent consideration






    244


    82



    256


    187
    Deferred income taxes






    505


    (24)



    495


    (106)
    Change in accounts receivable allowance






    153


    2



    (75)


    280
    Fixed and intangible asset impairments and disposals






    12


    8



    12


    8
    Other






    (42)


    10



    (17)


    (557)
    Changes in operating assets and liabilities:




















    Accounts receivables






    (2,506)


    (804)



    (3,068)


    2,299
    Inventories






    (194)


    1,379



    (955)


    598
    Prepaid expenses and other






    17


    (1,323)



    (1,183)


    (703)
    Accounts payable, accrued and other liabilities





     3,347

     2,736


     (10,082)

     (4,459)
    Net cash provided by operating activities





     12,959

     10,165


     4,086

     13,201





















     
    Cash flows from investing activities:




















    Additions to property, plant and equipment






    (734)


    (721)



    (1,416)


    (1,222)
    Cash paid for acquisitions





     (47,920)

     -


     (84,920)

     -
    Net cash used in investing activities





     (48,654)

     (721)


     (86,336)

     (1,222)





















     
    Cash flows from financing activities:




















    Proceeds from issuance of and borrowings on long-term debt






    55,000


    -



    55,000


    -
    Repayment of long-term debt






    (1,250)


    (1,250)



    (2,500)


    (2,500)
    Payment of acquisition related contingent consideration






    -


    (7,400)



    (2,100)


    (9,500)
    Proceeds from exercise of stock options and employee stock purchase plan





     149

     926


     854

     1,738
    Net cash provided by (used in) financing activities





     53,899

     (7,724)


     51,254

     (10,262)





















     
    Effect of exchange rate changes on cash and cash equivalents





     (146)

     (64)


     (280)

     595
    Increase (decrease) in cash and cash equivalents






    18,058


    1,656



    (31,276)


    2,312





















     
    Cash and cash equivalents at beginning of period





     24,762

     48,200


     74,096

     47,544
    Cash and cash equivalents at end of period





    $42,820

    $49,856


    $42,820

    $49,856





















     
    ANGIODYNAMICS, INC. AND SUBSIDIARIES
    GAAP TO NON-GAAP RECONCILIATION
    (in thousands)
     
    Reconciliation of Free Cash Flows:

       
       
       
       




    Three months ended


    Six months ended




    November 30,


    November 30,


    November 30,


    November 30,




    2018


    2017


    2018


    2017




    (unaudited)

     




    (unaudited)

     

















     
    Net cash provided by operating activities


    $12,959


    $10,165


    $4,086


    $13,201
    Additions to property, plant and equipment


     (734)


     (721)


     (1,416)


     (1,222)
    Free Cash Flow


    $12,225


    $9,444


    $2,670


    $11,979




















     


    View source version on businesswire.com: https://www.businesswire.com/news/home/20190104005074/en/

    Source: AngioDynamics, Inc. 

    Investor Contact:
    AngioDynamics, Inc.
    Michael C. Greiner, Executive Vice President & CFO
    (518) 795-1821