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 of
RadiaDyne and its proprietary OARtrac® radiation dose monitoring
platform to build the Company’s continuum of care within the
oncology space
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 in AngioDynamics' 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
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version on businesswire.com: https://www.businesswire.com/news/home/20190104005074/en/
Investor Contact:AngioDynamics, Inc.Michael C. Greiner,
Executive Vice President & CFO(518) 795-1821
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