UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

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FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  January 4, 2018

AngioDynamics, Inc.

(Exact Name of Registrant as Specified in Charter)

 

14 Plaza Drive Latham, New York	12110
(Address of Principal Executive Offices)	(Zip Code)

 

 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

 

Item 2.02 – Results of Operations and Financial Condition.

On January 4, 2018, AngioDynamics, Inc. (“AngioDynamics”) issued a press release announcing financial results for the fiscal second quarter ended November 30, 2017. A copy of the press release is attached hereto as Exhibit 99.1.

The information set forth in Item 2.02 of this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Forward-Looking Statements

This document and its attachments contain 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 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 purchased 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, 2017 and its quarterly report on Form 10-Q for the fiscal period ended August 31, 2017. AngioDynamics does not assume any obligation to publicly update or revise any forward-looking statements for any reason.

Item 9.01 – Financial Statements and Exhibits.

 

Exhibit No.		Description
99.1		Press Release dated January 4, 2018.

 

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ANGIODYNAMICS, INC.
	(Registrant)
Date:  January 4, 2018	By:	/s/ Stephen A. Trowbridge
		Stephen A. Trowbridge
		Senior Vice President and General Counsel

 

PRESS RELEASE

Investor Contact:

AngioDynamics, Inc.

Michael Greiner, Executive Vice President & CFO

(518) 795-1821

AngioDynamics Reports Fiscal 2018 Second Quarter Financial Results

Fiscal 2018 Second Quarter Highlights

●	Net sales of $86.7 million, a decrease of 2.6% year over year

 

●	U.S. GAAP EPS of $0.01; Adjusted EPS of $0.16 per share

 

●	Operating cash flow of $10.2 million; free cash flow of $9.4 million

“Our top-line performance during the quarter did not meet our expectations and resulted in a reduction to our full-year net sales and free cash flow guidance. While we continue to improve our operating efficiencies and generate significant cash flow, we recognize that revenue growth is key to accomplishing our strategic goals. Our focus on financial discipline and building a high-quality capital structure will allow us to continue making investments in our innovative product portfolio while also pursuing strategic acquisitions, both of which will ensure that we meet our longer-term revenue and strategic expectations,” commented Jim Clemmer, President and Chief Executive Officer of AngioDynamics, Inc.

Second Quarter 2018 Financial Results

Net sales for the second quarter of fiscal 2018 were $86.7 million, a decrease of 2.6%, compared to $89.0 million a year ago, primarily related to declines in the Venous Insufficiency and Core businesses, as well as declines across the majority of the Company’s Vascular Access non-BioFlo products. During the same period of fiscal year 2017, the Company reported a $1.0 million increase in sales attributable to inventory build by its customers for these Angiographic Catheter products as a result of a previously disclosed recall by a competitor. Currency did not have a significant impact on the Company’s sales in the quarter.

Peripheral Vascular net sales in the second quarter of fiscal 2018 were $51.4 million, a decrease of 4.3% from $53.7 million a year ago, as growth in the Fluid and Thrombus Management product lines was offset by declines in the Venous Insufficiency and Angiographic Catheter businesses, as well as the continued winding down of the Company’s supply agreement with Boston Scientific Corporation. Vascular Access net sales were $22.6 million, a decrease of 4.2% from $23.6 million a year ago, as growth in BioFlo related products was more than offset by declines in the remainder of the product lines. Oncology/Surgery net sales were $12.8 million, an increase of 8.4% from $11.8 million a year ago, driven primarily by incremental sales of the recently launched Solero Microwave Tissue Ablation System.

U.S. net sales in the second quarter of fiscal 2018 were $68.3 million, a decrease of 4.4% from $71.4 million a year ago, primarily due to declines in the Venous, Core, and PICCs businesses, partially offset by growth in the Oncology/Surgery portfolio. International net sales in the second quarter of fiscal 2018 were $18.4 million, an increase of 4.6% from $17.6 million a year ago, due to robust sales within the Oncology/Surgery business across several key markets.

Gross margin for the second quarter of fiscal 2018 declined 130 basis points to 49.3% from 50.6% a year ago, primarily driven by an inventory write-off related to VOLTA, the Company’s radio frequency ablation product previously sold in Japan. Excluding this inventory write-off, gross margin would have been 51.2%, an increase of 60 basis points year over year.

The Company recorded net income of approximately $0.3 million, or $0.01 per share, in the second quarter of fiscal 2018. This compares to net income of $13.7 million, or $0.37 per share, a year ago, which included adjustments to contingent liabilities from revised sales projections, resulting in a gain of $16.5 million as well as operational improvements, partially offset by a decision to discontinue investments in both EmboMedics and the Company’s TiLo product equaling $5.6 million.

Excluding the items shown in the non-GAAP reconciliation table below, adjusted net income for the second quarter of fiscal 2018 was $5.8 million, or $0.16 per share, compared to adjusted net income of $6.9 million, or $0.19 per share, in the second quarter of fiscal 2017.

Adjusted EBITDAS in the second quarter of fiscal 2018, excluding the items shown in the reconciliation table below, was $13.3 million, compared to $15.2 million in the second quarter of fiscal 2017.

In the second quarter of fiscal 2018, the Company generated $10.2 million in operating cash flow and $9.4 million in free cash flow. As of November 30, 2017, the Company had $51.1 million in cash and cash equivalents and $95.0 million in debt, excluding the impact of deferred financing costs.

Six Months Financial Results

For the six months ended November 30, 2017, net sales were $172.1 million, a decrease of 2.8%, compared to $177.1 million for the same period a year ago. The Company's net income was $0.2 million, or $0.01 per share, compared to net income of $15.0 million, or $0.41 per share, a year ago. Excluding the items shown in the non-GAAP reconciliation table below, adjusted net income for the six months ended November 30, 2017 was $10.4 million, or $0.28 per share, compared to an adjusted net income of $13.3 million, or $0.36 per share, a year ago. Adjusted EBITDAS, excluding the items shown in the reconciliation table below, was $24.6 million, compared to $29.5 million for the same period a year ago.

Fiscal Year 2018 Financial Guidance

Based on year-to-date business trends, the Company is reducing its previously announced net sales and free cash flow guidance. The Company

now expects its fiscal year 2018 net sales in the range of $345 to $350 million, compared to the previous range of $352 to $359 million, and free cash flow in the range of $30 to $35 million down from greater than $35 million, excluding the potential cash payment related to the previously disclosed legal matters for the Department of Justice subpoenas. The Company reaffirms its previously issued adjusted earnings per share guidance range of $0.64 to $0.68, excluding any impact from the recently enacted 2017 Tax Reform Act. 

Conference Call

The Company’s management will host a conference call today at 8:00 a.m. ET to discuss its second quarter 2018 results.

To participate in the conference call, dial 877-407-0784 (domestic) or 201-689-8560 (international) and refer to the passcode 13674426.

A recording of the call will also be available from 11:00 a.m. ET on Thursday, January 4, 2018, until 11:59 p.m. ET on Thursday, January 11, 2018. To hear this recording, dial 844-512-2921 (domestic) or 412-317-6671 (international) and enter the passcode 13674426.

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 gross margin, 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, surgery, 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 purchased 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, 2017. 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.

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