Fiscal 2020 Second Quarter Highlights
- Net sales of $70.0 million, flat
compared to the prior-year quarter
- Gross margin increased 140 basis
points year over year to 59.3%
- GAAP loss per share of $0.07;
adjusted earnings per share of $0.06
- Announces the acquisition of C3 Wave
PICC tip location system subsequent to quarter end
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
2020, which ended November 30, 2019.
“Sales growth of 2.5%, ex-Asclera, exhibited continued momentum
during the quarter, and I am pleased with the resulting gross
margin expansion and profitability,” commented Jim Clemmer,
President and Chief Executive Officer of AngioDynamics, Inc. “We
are making excellent progress on the integration of Eximo Medical
and are currently building out a dedicated commercial organization
to support a product launch in the second half of our fiscal year
2020. I’m also excited to announce the acquisition of the C3 Wave
tip location product, which will fill a technology gap in our
portfolio and enable broader market adoption of our innovative
BioFlo PICCs. Looking ahead, strong growth in sales of our AngioVac
and NanoKnife products during the quarter should position us well
to achieve our full-year guidance and drive growth across our
portfolio.”
Second Quarter 2020 Financial Results
Net sales for the second quarter of fiscal 2020, which now
include the fiscal year 2019 acquisitions of BioSentry and
RadiaDyne as organic revenue, were $70.0 million, flat compared to
the prior-year quarter. Excluding the impact of Asclera sales,
which were discontinued during fiscal year 2019, net sales grew
2.5% year over year. Foreign currency translation did not have a
significant impact on the Company’s sales in the quarter.
- Oncology net sales were $16.1 million,
an increase of 5.1% from $15.3 million a year ago, led by higher
sales of NanoKnife and the Alatus and IsoLoc balloon products.
- Vascular Interventions and Therapies
(“VIT”) net sales were $31.2 million, an increase of 0.6%, compared
to $31.0 million a year ago. Excluding last year’s Asclera sales of
$1.7 million in the second quarter, VIT grew 6.5%, driven by growth
in sales of the Company’s AngioVac and core VIT products.
- Vascular Access net sales were $22.8
million, a decrease of 4.0% from $23.7 million a year ago, due
primarily to lower sales of Ports and PICCs.
Excluding Asclera, U.S. net sales in the second quarter of
fiscal 2020 were $55.6 million, an increase of 1.8% from $54.6
million a year ago, and International net sales were $14.4 million,
an increase of 5.6% from $13.7 million a year ago.
Gross margin for the second quarter of fiscal 2020 was 59.3%, an
increase of 140 basis points compared to the second quarter of
fiscal 2019, driven primarily by productivity and supply chain
improvements as well as positive product mix.
The Company recorded a net loss from continuing operations of
$2.7 million, or a loss of $0.07 per share, in the second quarter
of fiscal 2020. This compares to a net loss from continuing
operations of approximately $3.6 million, or a loss of $0.10
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 2020
was $2.2 million, or $0.06 per share, compared to adjusted net
income of $2.9 million, or $0.07 per share, in the second quarter
of fiscal 2019.
Adjusted EBITDA in the second quarter of fiscal 2020, excluding
the items shown in the reconciliation table below, was $6.4
million, compared to $9.0 million in the second quarter of fiscal
2019.
In the second quarter of fiscal 2020, the Company used $5.9
million in operating cash and had capital expenditures of $2.6
million. As of November 30, 2019, the Company had $41.2 million in
cash and cash equivalents and no debt outstanding.
Six Months Financial Results
For the six months ended November 30, 2019:
- Net sales were $136.0 million, an
increase of 1.6%, compared to $133.9 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 4.0% year over
year.
- The Company's net loss from continuing
operations was $4.0 million, or a loss of $0.11 per share, compared
to a net loss from continuing operations of $9.3 million, or a loss
of $0.25 per share, a year ago.
- Gross margin improved 150 basis points
to 58.6% from 57.1% a year ago.
- Excluding the items shown in the
non-GAAP reconciliation table below, adjusted net income was $5.3
million, or $0.14 per share, compared to adjusted net income of
$3.6 million, or $0.09 per share, a year ago.
- Adjusted EBITDA, excluding the items
shown in the reconciliation table below, was $13.7 million,
compared to $14.4 million for the same period a year ago.
C3 Wave PICC Tip Location Acquisition
Today, the Company announces the acquisition of the C3 Wave PICC
tip location system from Medical Components Inc. This innovative,
wireless, app-based ECG system eliminates the need for a
confirmatory chest x-ray of PICC tip placement, allowing greater
patient access to the Company’s proprietary BioFlo PICCs. The C3
Wave PICC tip location system has received FDA 510k, CE, Health
Canada, and other international approvals.
Fiscal Year 2020 Financial Guidance
The Company reiterates its fiscal year 2020 guidance, which
includes investments related to the full-market launch of the
products acquired from Eximo anticipated in the second half of the
fiscal year.
Specifically, the Company continues to expect net sales in the
range of $280 to $286 million and gross margin in the range of 58%
to 59%. Adjusted earnings per share is expected in the range of
$0.10 to $0.15.
Conference Call
The Company’s management will host a conference call today at
8:00 a.m. ET to discuss its fiscal 2020 second 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 13697417.
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, January 7, 2020, until 11:59 p.m. ET on Tuesday,
January 14, 2020. To hear this recording, dial 1-844-512-2921
(domestic) or +1-412-317-6671 (international) and enter the
passcode 13697417.
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 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, 2019. 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, 2019 2018 2019 2018
(unaudited) (unaudited) Net sales $ 70,003 $ 69,985 $
136,045 $ 133,928 Cost of sales (exclusive of intangible
amortization) 28,459 29,433 56,284 57,423
Gross profit 41,544 40,552 79,761
76,505 % of net sales 59.3 % 57.9 % 58.6 % 57.1 %
Operating expenses Research and development 7,764 7,076 14,055
14,450 Sales and marketing 20,113 19,263 39,493 37,669 General and
administrative 10,994 9,262 19,448 17,697 Amortization of
intangibles 4,530 4,506 8,398 7,939 Change in fair value of
contingent consideration 145 244 (303 ) 256 Acquisition,
restructuring and other items, net 1,421 2,728 2,921
7,150 Total operating expenses 44,967 43,079
84,012 85,161 Operating income (3,423 ) (2,527
) (4,251 ) (8,656 ) Interest expense, net (41 ) (1,330 ) (506 )
(2,247 ) Other income, net 162 80 64 194
Total other (expense), net 121 (1,250 ) (442 ) (2,053 ) Loss
from continuing operations before income taxes (3,302 ) (3,777 )
(4,693 ) (10,709 ) Income tax benefit (566 ) (190 ) (682 ) (1,418 )
Net loss from continuing operations (2,736 ) (3,587 ) (4,011 )
(9,291 ) Net income from discontinued operations — 5,727
— 10,962 Net income (loss) $ (2,736 ) $ 2,140
$ (4,011 ) $ 1,671 Loss per share - continuing
operations Basic $ (0.07 ) $ (0.10 ) $ (0.11 ) $ (0.25 ) Diluted $
(0.07 ) $ (0.10 ) $ (0.11 ) $ (0.25 ) Income per share -
discontinued operations Basic $ — $ 0.15 $ — $ 0.29 Diluted $ — $
0.15 $ — $ 0.29 Income (loss) per share
Basic
$ (0.07 ) $ 0.06 $ (0.11 ) $ 0.04 Diluted $ (0.07 ) $ 0.06 $ (0.11
) $ 0.04 Weighted average shares outstanding Basic 37,992
37,500 37,887 37,411 Diluted 37,992 37,500 37,887 37,411
ANGIODYNAMICS, INC. AND
SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
(in thousands, except per share data)
Reconciliation of Net Loss to non-GAAP
Adjusted Net Income:
Three months ended Six months ended November
30, November 30, November 30, November 30, 2019 2018 2019 2018
(unaudited) (unaudited) Net loss from continuing operations
$ (2,736 ) $ (3,587 ) $ (4,011 ) $ (9,291 ) Amortization of
intangibles 4,530 4,506 8,398 7,939 Change in fair value of
contingent consideration 145 244 (303 ) 256 Acquisition,
restructuring and other items, net (1) 1,421 2,728 2,921 7,150
Write-off of deferred financing fees (2) — — 593 — Tax effect of
non-GAAP items (3) (1,209 ) (1,041 ) (2,273 ) (2,484 ) Adjusted net
income $ 2,151 $ 2,850 $ 5,325 $ 3,570
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, 2019 2018 2019 2018 (unaudited)
(unaudited) Diluted loss per share $ (0.07 ) $ (0.10 ) $
(0.11 ) $ (0.25 ) Amortization of intangibles 0.12 0.12 0.22
0.21 Change in fair value of contingent consideration — 0.01 (0.01
) 0.01 Acquisition, restructuring and other items, net (1) 0.04
0.07 0.08 0.19 Write-off of deferred financing fees (2) — — 0.02 —
Tax effect of non-GAAP items (3) (0.04 ) (0.03 ) (0.06 ) (0.07 )
Adjusted diluted earnings per share $ 0.06 $ 0.07 $
0.14 $ 0.09 Adjusted diluted sharecount 38,092
38,117 38,120 38,131 (1) Includes costs related to merger
and acquisition activities, restructuring, and unusual items,
including asset impairments and write-offs, certain litigation, and
other items. (2) Deferred financing fees related to the old credit
agreement were written off during the first quarter of fiscal year
2020. (3) Adjustment to reflect the income tax provision on a
non-GAAP basis has been calculated assuming no valuation allowance
on the Company's U.S. deferred tax assets and an effective tax rate
of 23% for November 30, 2019 and 2018.
ANGIODYNAMICS, INC. AND
SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
(Continued)
(in thousands, except per share data)
Reconciliation of Net Income Adjusted EBITDA:
Three months ended Six months ended November 30,
November 30, November 30, November 30, 2019 2018 2019 2018
(unaudited) (unaudited) Net loss from continuing operations
$ (2,736 ) $ (3,587 ) $ (4,011 ) $ (9,291 ) Income tax
expense (benefit) (566 ) (190 ) (682 ) (1,418 ) Interest expense,
net 41 1,330 506 2,247 Depreciation and amortization 5,863 5,890
11,033 10,698 Change in fair value of contingent consideration 145
244 (303 ) 256 Stock based compensation 2,242 2,583 4,226 4,726
Acquisition, restructuring and other items, net (1) 1,421
2,728 2,921 7,150 Adjusted EBITDA $ 6,410
$ 8,998 $ 13,690 $ 14,368 Per
diluted share: Adjusted EBITDA $ 0.17 $ 0.24 $ 0.36 $ 0.38
(1) Includes costs related to merger and acquisition activities,
restructuring, and unusual items, including asset impairments and
write-offs, certain litigation, and other items.
ANGIODYNAMICS, INC. AND
SUBSIDIARIES
NET SALES BY PRODUCT CATEGORY AND BY
GEOGRAPHY
(in thousands)
Three months ended Six months ended
Nov 30,2019
Nov 30,2018
%Growth
CurrencyImpact
ConstantCurrencyGrowth
Nov 30,2019
Nov 30,2018
%Growth
CurrencyImpact
ConstantCurrencyGrowth
Net Sales by Product Category Vascular Interventions &
Therapies $ 31,150 $ 30,976 0.6% $ 60,063 $ 59,573 0.8% Vascular
Access 22,784 23,723 (4.0)% 45,943 47,513 (3.3)% Oncology 16,069
15,286 5.1% 30,039 26,842 11.9% $
70,003 $ 69,985 0.0% 0.0% 0.2% $ 136,045 $
133,928 1.6% 0.0% 1.8%
Net Sales by Geography United States $ 55,555 $ 56,300
(1.3)% 0.0% (1.3)% $ 108,492 $ 107,796 0.6% 0.0% 0.6% International
14,448 13,685 5.6% 1.0% 6.6% 27,553 26,132
5.4% 2.0% 6.5% $ 70,003 $ 69,985 0.0% 0.0%
0.2% $ 136,045 $ 133,928 1.6% 0.0% 1.8%
ANGIODYNAMICS, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
November 30, 2019 May 31, 2019 (unaudited) (audited)
Assets
Current assets: Cash and cash equivalents $ 41,247 $ 227,641
Total cash and investments 41,247 227,641 Accounts
receivable, net 33,994 43,577 Inventories 50,239 40,071 Prepaid
expenses and other 6,496 4,003 Total current assets 131,976
315,292 Property, plant and equipment, net 27,508 24,258
Other assets 8,976 3,835 Intangible assets, net 196,325 145,387
Goodwill 360,094 347,666 Total assets $ 724,879 $
836,438
Liabilities and stockholders'
equity
Current liabilities: Accounts payable $ 17,968 $ 22,829 Accrued
liabilities 28,478 38,338 Current portion of long-term debt — 7,500
Current portion of contingent consideration 889 4,635 Other current
liabilities 9,670 — Total current liabilities 57,005 73,302
Long-term debt, net of current portion — 124,407 Deferred
income taxes 24,586 14,542 Contingent consideration, net of current
portion 25,986 8,851 Other long-term liabilities 3,492 521
Total liabilities 111,069 221,623 Stockholders' equity
613,810 614,815 Total Liabilities and Stockholders' Equity $
724,879 $ 836,438
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, 2019 2018 2019 2018
Cash flows from operating activities: (unaudited)
(unaudited) Net income (loss) from continuing operations $ (2,736 )
$ 2,140 $ (4,011 ) $ 1,671 Adjustments to reconcile net loss to net
cash provided by operating activities: Depreciation and
amortization 5,903 6,692 11,110 12,291 Non-cash lease expense 904 —
904 — Stock based compensation 2,242 2,591 4,226 4,741 Change in
fair value of contingent consideration 145 244 (303 ) 256 Deferred
income taxes (559 ) 505 (734 ) 495 Change in accounts receivable
allowances 652 153 199 (75 ) Fixed and intangible asset impairments
and disposals 270 12 369 12 Write-off of other assets — — 593 —
Other (19 ) (42 ) (27 ) (17 ) Changes in operating assets and
liabilities, net of acquisitions: Accounts receivable (2,010 )
(2,506 ) 9,464 (3,068 ) Inventories (4,856 ) (194 ) (10,009 ) (955
) Prepaid expenses and other (2,798 ) 17 (3,544 ) (1,183 ) Accounts
payable, accrued and other liabilities 8,799 3,347
(8,834 ) (10,082 )
Net cash provided by (used in) operating
activities 5,937 12,959 (597 ) 4,086
Cash flows from investing activities: Additions to property,
plant and equipment (2,623 ) (734 ) (4,014 ) (1,416 ) Acquisition
of intangibles (200 ) — (350 ) — Cash paid in acquisition (45,760 )
(47,920 ) (45,760 ) (84,920 )
Net cash used in investing
activities (48,583 ) (48,654 ) (50,124 ) (86,336 )
Cash
flows from financing activities: Proceeds from issuance of
long-term debt — 55,000 — 55,000 Repayment of long-term debt —
(1,250 ) (132,500 ) (2,500 ) Deferred financing costs on long-term
debt — — (741 ) — Payment of contingent consideration previously
established in purchase accounting — — (1,208 ) (2,100 ) Proceeds
(outlays) from exercise of stock options and employee stock
purchase plan — 149 (1,300 ) 854
Net cash
provided by (used in) financing activities — 53,899
(135,749 ) 51,254 Effect of exchange rate changes on
cash and cash equivalents 244 (146 ) 76 (280 )
Decrease in cash and cash equivalents (42,402 ) 18,058
(186,394 ) (31,276 ) Cash and cash equivalents at beginning of
period 83,649 24,762 227,641 74,096
Cash and cash equivalents at end of period $ 41,247 $
42,820 $ 41,247 $ 42,820
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, 2019 2018 2019 2018
(unaudited) (unaudited) Net cash provided by (used in)
operating activities $ 5,937 $ 12,959 $ (597 ) $ 4,086 Additions to
property, plant and equipment (2,623 ) (734 ) (4,014 ) (1,416 )
Free Cash Flow $ 3,314 $ 12,225 $ (4,611 ) $ 2,670
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Investors:AngioDynamics, Inc.Stephen Trowbridge, SVP General
Counsel and Interim CFO(518) 795-1408
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