View:
Download DOC
Download PDF
Download XLS
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________

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):  July 10, 2019

AngioDynamics, Inc.
(Exact Name of Registrant as Specified in Charter)

Delaware
000-50761
11-3146460
     
(State or Other Jurisdiction of Incorporation)
(Commission File
Number)
(IRS Employer
Identification No.)

 14 Plaza Drive Latham, New York                         12110
 
(Address of Principal Executive Offices)                 (Zip Code)
 
(518) 795-1400
(Registrant’s telephone number, including area 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:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
ANGO
NASDAQ Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01 – Regulation FD Disclosure.

Presentation slides discussing AngioDynamics, Inc. (“AngioDynamics”) and its fiscal fourth quarter and full year ended May 31, 2019 are being furnished herewith as Exhibit 99.1. The slides are being furnished pursuant to Item 7.01 and the information contained therein shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section. Furthermore, the information in Exhibit 99.1 shall not be deemed to be incorporated by reference into the filings of AngioDynamics under the Securities Act of 1933, as amended.


Item 9.01 – Financial Statements and Exhibits.

(d)     Exhibits.
     
Exhibit No.
  
Description
 

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:  July 10, 2019
By:
/s/ Stephen A. Trowbridge  
         Stephen A. Trowbridge  
         Senior Vice President and General Counsel  
       

Exhibit 99.1



 AngioDynamics   Fourth Quarter 2019 Earnings PresentationJuly 10, 2019 
 
 Notice Regarding Forward-Looking StatementsThis presentation 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 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, 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.Notice Regarding Non-GAAP Financial MeasuresManagement 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 presentation, AngioDynamics has reported adjusted EBITDAS (income before interest, taxes, depreciation and amortization and stock-based compensation); 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.  Forward-Looking Statements 
 
 Fourth Quarter 2019 Highlights  Financial Performance  Revenue of $96.3 million (+9.0%), compared to $88.3 million a year ago. Organic revenue (excluding RadiaDyne and BioSentry) was $93.0 million (+5.2%).Gross Margin of 53.6%, flat year over year. Adjusted EPS of $0.25, compared to $0.20 a year ago.Adjusted EBITDAS of $17.6 million, compared to $15.6 million a year ago.Cash provided by operations of $25.0 million; free cash flow of $24.2 million.  Corporate Developments  Closed the sale of the NAMIC Fluid Management business on May 31, 2019.Received FDA approval to begin our DIRECT NanoKnife study for Stage III pancreatic cancer with a Category B IDE and enrolled the first patient.Received FDA approval for a safety study for the use of NanoKnife to treat prostate cancer. Discontinued supply agreement to distribute Asclera. Paid down all existing outstanding debt and entered into a new revolver-only credit facility of $125.0 million on June 3, 2019.  Vascular Interventions and Therapies  Fluid Management: 13%AngioVac®: 21% Core Peripheral: 7%Venous Insufficiency: (12%)  Vascular Access  Midlines: 14%PICCs: (3%)Ports: 4%Dialysis: 13%  Oncology  NanoKnife®: (12%)Solero® Microwave: 10%RadioFrequency Ablation: (1%)  Select Product Family Year-over-Year Sales Growth  
 
 Sale of Fluid Management  US GAAP Gain  Tax Impact  Use of Proceeds  On June 3, 2019, the Company used a portion of the net proceeds to pay down $132.5 million of outstanding debt. Additionally, on June 3, 2019, the Company entered into a new revolving credit facility with $125.0 million capacity.As of July 9, 2019, the Company had no debt outstanding and approximately $85.0 of cash and cash equivalents.  $ in thousands    Cash ConsiderationLess: Transaction CostsLess: Working Capital AdjustmentNet ProceedsCash Prior to CloseCash as of May 31, 2019Paydown Credit Facility:Term Loan ARevolving Credit FacilityNet Cash After Debt Pay Down  $169,2424,030612$164,60063,041$227,641$87,50045,000$94,141  $ in thousands    Proceeds ReceivedLess: Working Capital AdjustmentNet Proceeds ReceivedLess Fluid Management Assets:InventoriesProperty, Plant and EquipmentIntangible Assets, netGoodwillTotal Fluid Management AssetsLess: Transaction CostsGain on Sale Before Taxes  $169,242612$168,630$11,02916,62415,04775,308$118,0084,030$46,592  $ in thousands    Cash ConsiderationLess: Transaction CostsLess: Working Capital AdjustmentLess: Tax Basis in AssetsGain Before NOLsNOLs Utilized Taxable GainTax RateTaxes to be PaidNOLs Available Pre-FMNOLs UtilizedRemaining NOL’s  $169,2424,03061285,148$79,452(79,452)$0.023%$600$158,43279,452$78,980  Gain calculated by taking the book value of the NAMIC Fluid Management assets and the fair value of the transaction costs and subtracting costs from the gross proceeds received.Goodwill allocated based on fair value of the NAMIC Fluid Management business (cash consideration) compared to the fair value of the total Company.  No Federal taxes paid as a result of the transaction due to the use of NOLs noted above. State taxes of approximately $600k to be paid on the gain.The Company fully anticipates utilizing all remaining NOLs. 
 
 Fourth Quarter FY 2019 Results (unaudited)  $ in thousands (except per share data)  FY2019 Q4 ResultsActual  FY2018Q4 ResultsActual   Change    FY2019 Q4 ResultsPro Forma  FY2018 Q4 ResultsPro Forma  Change  Revenue- Vascular Interventions and Therapies- Vascular Access- Oncology - United States- International  $96,30056,20624,82615,26873,42322,877  $88,31752,58323,66912,06570,30718,080  9.0%6.9%4.9%26.5%4.4%27.0%    $71,18231,08824,82615,26855,78015,402  $66,19330,45923,66912,06554,09612,097  7.5%2.1%4.9%26.5%3.1%27.3%  Net IncomeAdjusted Net Income  $58,873$9,591  $2,102$7,674      $2,753$2,796  ($2,483)$2,516    GAAP Earnings Per ShareNon-GAAP Adjusted EPS  $1.54$0.25   $0.06$0.20      $0.07$0.07  ($0.07)$0.07    Gross Margin  53.6%  53.7%      58.1%  58.3%    Adjusted EBITDAS  $17,592  $15,557      $8,537  $7,902    Free Cash Flow  $24,197  $23,027      $24,197  $23,027    Cash  $227,641  $74,096      $227,641  $74,096    Debt  $132,500  $92,500      $132,500  $92,500   
 
 FY 2019 Results (unaudited)  $ in thousands (except per share data)  FY2019 ResultsActual  FY2018 ResultsActual  Change    FY2019 ResultsPro Forma  FY2018 ResultsPro Forma  Change  Revenue- Vascular Interventions and Therapies- Vascular Access- Oncology - United States- International  $359,484208,75194,73056,003281,30378,181  $344,285202,33492,76049,191273,32770,958  4.4%3.2%2.1%13.8%2.9%10.2%    $270,634119,90194,73056,003216,95753,677  $261,655119,70492,76049,191213,72747,928  3.4%0.2%2.1%13.8%1.5%12.0%  Net IncomeAdjusted Net Income  $61,340$31,750  $16,335$27,601      ($11,146)$8,243  ($6,227)$8,551    GAAP Earnings Per ShareNon-GAAP Adjusted EPS  $1.61$0.83  $0.44$0.74      ($0.30)$0.22  ($0.17)$0.23    Gross Margin  53.4%  51.4%      57.6%  55.0%    Adjusted EBITDAS  $61,456  $57,008      $30,564  $28,985    Free Cash Flow  $34,322  $38,896      $34,322  $38,896    Cash  $227,641  $74,096      $227,641  $74,096    Debt  $132,500  $92,500      $132,500  $92,500   
 
 Driving Future Growth  Net cash balance of ~$85 million plus $125 million credit facility will provide over $175 million of available capital to deploy    Internal Investments:Oncology, NanoKnife PlatformThrombus Management, AngioVacSelective investments in Core and Vascular Access categories  External Investments:M&A and Licensing for acquiring innovative assetsOpportunistic share repurchase and debt paydown  Portfolio optimization will remain a priority; continued execution across entire product portfolioSustained focus on operational excellence and appropriate balance sheet stewardship 
 
   FY 2020 Guidance  Revenue $280m - $286mAdjusted EPS $0.25 - $0.30Gross Margin 58% - 59%     
 
 GAAP to Non-GAAP Reconciliation 
 
 Reconciliation of GAAP to Non-GAAP Net Income and EPS – Actual    Amounts in thousands  Includes costs related to merger and acquisition activities, restructurings, and unusual items, including asset impairments and write-offs, certain litigation, and other items.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 May 31, 2019. For May 31, 2018, 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 the Company's 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.  
 
 Reconciliation of GAAP to Non-GAAP Net Income and EPS – Pro Forma    Amounts in thousands  Includes costs related to merger and acquisition activities, restructurings, and unusual items, including asset impairments and write-offs, certain litigation, and other items.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 May 31, 2019. For May 31, 2018, 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 the Company's 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.  
 
 Reconciliation of Net Income to EBITDAS to Adjusted EBITDAS – Actual  Amounts in thousands 
 
 Reconciliation of Net Income to EBITDAS to Adjusted EBITDAS – Pro Forma  Amounts in thousands 
 
 Growth through  Focus Execution Accountability