July 13, 2016

AngioDynamics Reports Fiscal 2016 Fourth Quarter and Full Year Results

  • Q4 Net sales of $93.4 million, up 3% year-over-year
  • Q4 GAAP loss per share of $1.21, inclusive of a one-time tax asset write down of $40.1 million; Non-GAAP adjusted EPS of $0.19, up 37% year-over-year
  • Q4 Operating cash generation of $18.5 million
  • FY2017 revenue guidance set at $355-$360 million, adjusted EPS of $0.62-$0.65

                               

ALBANY, N.Y., July 13, 2016 (GLOBE NEWSWIRE) -- AngioDynamics (NASDAQ:ANGO), a leading provider of innovative, minimally invasive medical devices for vascular access, surgery, peripheral vascular disease and oncology, today reported fourth quarter and full year financial results the 2016 fiscal year ended May 31, 2016.

"Our fourth quarter results reflect a solid quarter of revenue and adjusted EPS growth driven primarily by outperformance in our Peripheral Vascular business, which saw a 10% increase over the prior year period," said Jim Clemmer, President and Chief Executive Officer of AngioDynamics. "The Peripheral Vascular business growth was driven by the successful launch of Asclera, as well as opportunities created by the recent Cook Medical recall. We also drove strong free cash flow generation during the quarter of $18.1 million, which was primarily attributable to improved inventory management."

Clemmer continued, "In addition to ensuring that we delivered solid fourth quarter financial results, during my first quarter with AngioDynamics I have spent a significant amount of time focusing on a plan that will increase our operating efficiency, facilitate investment in areas where we have a competitive advantage and bring products to market that improve patient outcomes and reduce costs to the health system. As we move in to 2017 fiscal year, this focus on execution, excellence and innovation will enable us to build upon our recent momentum and put us on a pathway to sustainable and profitable growth."

Fourth Quarter 2016 Financial Results
Net sales for the fiscal fourth quarter were $93.4 million, an increase of 3% compared with $90.9 million a year ago. On a constant currency basis, sales were also up 3% compared to the fourth quarter last year.

The following comparisons exclude the BSC supply agreement.  

Peripheral Vascular net sales in the fourth quarter were $54.8 million compared to $49.8 million in the fiscal year 2015 fourth quarter. Vascular Access net sales were $24.8 million compared to $27.1 million a year ago. Oncology/Surgery net sales were $13.0 million compared to $13.0 million in the prior year's fourth quarter. Overall, net sales in the U.S. were $75.0 million compared to $72.0 million in the 2015 fiscal year fourth quarter. International net sales were $17.6 million, down 2% from $17.9 million a year ago. On a constant currency basis, international sales declined by 1%. 

The Company recorded a net loss of $44.0 million, or $1.21 on a per share basis, driven by a one-time long-term deferred tax asset write down as well as an inventory write-off related to a change in direction to the Celerity product line. In the fourth quarter of fiscal 2015, the Company recorded a net loss of $0.8 million, or $0.02 per share. Excluding the items shown in the attached quarterly non-GAAP reconciliation table, adjusted net income was $6.8 million, or $0.19 per share, compared to adjusted net income of $5.0 million, or $0.14 per share, from the year ago fourth quarter. 

Adjusted EBITDA, excluding the items shown in the attached reconciliation table, was $13.9 million, or $0.38 per share, compared to $13.2 million, or $0.36 per share, in the year ago comparable period. 

In the fourth quarter, the Company generated $18.5 million in operating cash flow. At May 31, 2016, cash and investments were $34.0 million and debt was $121.4 million.

Twelve Months Financial Results
For the twelve months ended May 31, 2016, net sales were $353.7 million compared to the $357.0 million reported a year ago. The Company recorded a loss of $44.5 million, or $1.23 per share, compared to a net loss of $3.3 million, or $0.09 per share, reported a year ago. Excluding the items shown in the attached quarterly non-GAAP reconciliation table, adjusted net income was $21.2 million, or $0.58 per share, compared to adjusted net income of $21.2 million, or $0.58 per share, a year ago. Adjusted EBITDA, excluding the items shown in the attached reconciliation table, was $53.2 million, or $1.46 per share, compared to $56.7 million, or $1.56 per share, in the year ago period.

Recent Events

  • The Peripheral Vascular segment had a solid quarter with double digit year-over-year sales growth. The segment was positively impacted by increased demand resulting from the recent product recall by Cook Medical.
     
  • The company successfully launched Asclera for the treatment of uncomplicated spider and uncomplicated reticular (small varicose) veins.
     
  • The Vascular Access business saw increased BioFlo Midline sales during the quarter, highlighting the improved outcomes for patients and cost savings for the healthcare system.
     
  • The company received clearance by Chinese regulators during the fourth quarter for NanoKnife applicators.


Fiscal Year 2017 and First Quarter Financial Guidance

The Company announced its FY2017 net sales guidance of $355 to $360 million and adjusted earnings per share (EPS) of $0.62 to $0.65. The Company expects first quarter net sales to be in the range of $84 to $87 million and adjusted EPS of $0.11 to $0.14. The company announced FY2017 free cash flow guidance of greater than $30 million.

Conference Call
AngioDynamics will host a conference call today at 8:00am ET to discuss its fourth quarter and full year results. To participate in the live call by telephone, please call 888-504-7953 and reference the Conference ID: 7684613. In addition, a live webcast and archived replay of the call will be available at investors.angiodynamics.com. To access the live webcast, please go to the website 15-minutes prior its start to register, download and install the necessary software.

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 net sales excluding a supply agreement; adjusted sales growth; adjusted EBITDA (income before interest, taxes, depreciation and amortization); adjusted gross profit; adjusted net income and adjusted earnings per share. Additionally, this press release evaluates results on a constant currency basis. As a non-GAAP measure, constant currency excludes the impact of foreign currency exchange rate fluctuations. 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
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, angioplasty products, drainage products, thrombolytic products and venous products. More information is available at AngioDynamics.com.

Trademarks
AngioDynamics, the AngioDynamics logo and NanoKnife are trademarks and/or registered trademarks of AngioDynamics Inc., an affiliate or a subsidiary. Asclera is a registered trademark of Chemische Fabrik Kreussler & Co. GmbH.

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 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, 2015 and its quarterly reports on Form 10-Q for the fiscal period ended August 31, 2015, November 30, 2015 and February 29, 2016. 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.

Company Contact:  Investor Relations Contacts:  Media Contact:
AngioDynamics Inc.
Caitlin Stefanik
(518) 795-1418
cstefanik@angiodynamics.com
  FTI Consulting
Jim Polson
(312) 553-6730
Jim.Polson@fticonsulting.com,
Kotaro Yoshida
(212) 850-5690
Kotaro.Yoshida@fticonsulting.com
  FTI Consulting
Kimberly Ha
(212) 850-5612
kimberly.ha@fticonsulting.com


ANGIODYNAMICS, INC. AND SUBSIDIARIES  
CONSOLIDATED INCOME STATEMENTS  
(in thousands, except per share data)  
          
          
          
          
          
 Three months ended Twelve months ended  
 May 31, May 31, May 31, May 31,  
  2016   2015   2016   2015   
 (unaudited) (unaudited)      
              
Net sales$93,369  $90,897  $353,690  $356,974       
Cost of sales 51,892   45,340   179,721   180,085       
Gross profit 41,477   45,557   173,969   176,889       
% of net sales 44.4%  50.1%  49.2%  49.6%      
              
Operating expenses             
Research and development 6,937   7,289   25,126   26,931       
Sales and marketing 21,191   20,730   84,911   82,571       
General and administrative 6,906   7,658   29,206   29,871       
Amortization of intangibles 4,762   4,730   18,118    17,912       
Change in fair value of contingent consideration 318   430   948   (8,196)      
Acquisition, restructuring and other items, net 3,493   2,855    12,591   26,600       
Medical device excise tax -   1,037   2,416   4,142       
Total operating expenses 43,607   44,729    173,316   179,831       
Operating  income (loss) (2,130)  828   653   (2,942)       
Other income (expense), net (1,835)  (1,095)  (5,008)  (5,057 )      
Income (loss) before income taxes (3,965)  (267)  (4,355)  (7,999)      
Income tax expense (benefit) 39,997   547    40,096   (4,731)      
Net income (loss)$(43,962) $ (814) $(44,451) $(3,268)      
            
Earnings (loss) per share           
Basic$(1.21) $(0.02) $(1.23) $(0.09)    
Diluted$(1.21) $(0.02) $(1.23) $(0.09)    
             
Weighted average shares outstanding           
Basic 36,242   35,918   36,161   35,683     
Diluted 36,242   35,918   36,161   35,683     
            

 


ANGIODYNAMICS, INC. AND SUBSIDIARIES 
GAAP TO NON-GAAP RECONCILIATION 
(in thousands, except per share data) 
              
              
             
 Reconciliation of Gross Profit to non-GAAP Adjusted Gross Profit        
              
  Three months ended Twelve months ended    
  May 31, May 31, May 31, May 31,    
   2016   2015    2016   2015     
  (unaudited) (unaudited)    
             
 Gross profit$   41,477  $  45,557  $  173,969  $  176,889     
             
 Recall expenses included in cost of sales   -      (202)    (92)    4,795     
 Inventory charge included in cost of sales    5,940      -      5,940     -      
 Adjusted gross profit$  47,417  $  45,355  $  179,817  $  181,684     
 Adjusted gross profit % of sales 50.8%  49.9%  50.8%  50.9%    
             
 Reconciliation of Net Income to non-GAAP Adjusted Net Income:        
             
  Three months ended Twelve months ended    
  May 31, May 31, May 31, May 31,    
   2016   2015   2016   2015     
  (unaudited) (unaudited)    
              
 Net income (loss)$  (43,962) $  (814) $  (44,451) $  (3,268)    
             
 Recall expenses included in cost of sales   -      (202)    (92)    4,795     
 Inventory charge included in cost of sales    5,940     -      5,940     -      
 Amortization of intangibles   4,762     4,730     18,118     17,912     
 Change in fair value of contingent consideration   318     430     948     (8,196)    
 Fixed and intangible asset impairments   -      -      -      9,074     
 Indefinite-lived intangible asset impairment   -      -      -      6,400     
 Acquisition, restructuring and other items, net (1)   3,493     2,855     12,591     11,126     
 Tax effect of non-GAAP items (2)    36,200     (2,041)    28,162     (16,651)    
 Adjusted net income$  6,751  $  4,958  $  21,216  $  21,192      
             
             
 Reconciliation of Diluted Earnings Per Share to non-GAAP Adjusted Diluted Earnings Per Share:      
             
  Three months ended Twelve months ended    
  May 31, May 31, May 31, May 31,    
   2016   2015   2016   2015     
  (unaudited) (unaudited)    
             
 Diluted earnings (loss) per share$  (1.21) $  (0.02) $  (1.23) $  (0.09)    
              
 Recall expenses included in cost of sales   -      (0.01)    (0.00)    0.13     
 Inventory charge included in cost of sales    0.16     -      0.16     -      
 Amortization of intangibles   0.13      0.13     0.50     0.49      
 Change in fair value of contingent consideration   0.01     0.01     0.03     (0.23)     
 Fixed and intangible asset impairments   -      -      -      0.25     
 Indefinite-lived intangible asset impairment   -      -      -      0.18     
 Acquisition, restructuring and other items, net (1)   0.10     0.08     0.35     0.31     
 Tax effect of non-GAAP items (2)   0.99     (0.06)    0.77     (0.46)    
 Adjusted diluted earnings per share$  0.19  $  0.14  $  0.58  $  0.58      
             
             
 Adjusted diluted sharecount   36,391     36,616     36,372     36,359     
             
 (1)  Includes costs related to mergers and acquisition activities, integrations, restructurings, debt refinancings, litigation, and other items.    
 (2)  Represents the net tax effect of non-GAAP adjustments.           
 

 


ANGIODYNAMICS, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION (Continued)
(in thousands, except per share data)
             
              
             
 Reconciliation of Net Income to Adjusted EBITDA:         
             
    Three months ended Twelve months ended  
    May 31, May 31, May 31, May 31,  
     2016   2015   2016   2015   
     (unaudited) (unaudited)  
              
 Net income (loss)$  (43,962) $  (814) $ (44,451) $  (3,268)  
              
 Income tax expense (benefit)   39,997     547      40,096     (4,731)  
 Other income (expense), net   1,835     1,095     5,008     5,057   
 Depreciation and amortization   6,860     7,582     27,900     29,956   
 Recall expenses included in cost of sales   -      (202)    (92)    4,795   
 Inventory charge included in cost of sales    5,940     -      5,940     -    
 Change in fair value of contingent consideration   318     430     948     (8,196)  
 Fixed and intangible asset impairments   -      -      -      9,074   
 Indefinite-lived intangible asset impairment   -      -      -      6,400   
 Acquisition, restructuring and other items, net (1,2)   3,493     2,478     11,590     9,619   
 Credit card fees   689     512     2,980     1,948   
 Stock-based compensation   (1,260)    1,609     3,240     5,998   
 Adjusted EBITDA$  13,910  $  13,237  $  53,159  $  56,652   
             
 Per diluted share:         
 Adjusted EBITDA$  0.38  $  0.36   $  1.46  $  1.56   
              
             
 (1)  Includes costs related to mergers and acquisition activities, integrations, restructurings, debt refinancings, litigation, and other items.  
 (2)  Excludes depreciation expense captured in the depreciation and amortization component of the reconciliation.    

 


 ANGIODYNAMICS, INC. AND SUBSIDIARIES   
 PRELIMINARY NET SALES BY PRODUCT CATEGORY AND BY GEOGRAPHY   
 (unaudited in thousands)   
                        
                        
                        
                        
                         
  Three months ended Twelve months ended   
        Currency Constant       Currency Constant   
  May 31, May 31, % Impact Currency May 31, May 31, % Impact Currency   
   2016   2015  Growth (Pos) Neg Growth  2016   2015  Growth (Pos) Neg Growth   
                        
 Net Sales by Product Category                      
 Peripheral Vascular$54,837  $49,837   10%     $202,780  $192,833   5%       
 Vascular Access 24,799   27,081   -8%      99,375   107,874   -8%       
 Oncology/Surgery 12,989   13,028   0%      48,695   52,090   -7%       
 Total Excluding Supply Agreement 92,625   89,946   3%  0%  3%  350,850   352,797   -1%  1%  0%   
 Supply Agreement 744   951   -22%   0%  -22%  2,840   4,177   -32%  0%  -32%   
 Total$93,369  $90,897   3%  0%  3% $353,690  $356,974   -1%  1%  0%   
                                
                        
 Net Sales by Geography                       
 United States$74,990  $72,003   4%  0%  4% $283,519  $280,851   1%  0%  1%   
 International 17,635   17,943   -2%   1%  -1%  67,331   71,946   -6%  3%  -3%   
 Supply Agreement 744   951   -22%  0%  -22%  2,840   4,177   -32%  0%  -32%   
 Total$93,369  $90,897   3%  0%  3% $353,690  $356,974   -1%  1%  0%   
                        

 


ANGIODYNAMICS, INC. AND SUBSIDIARIES 
CONSOLIDATED BALANCE SHEETS 
(in thousands) 
      
      
      
  May 31, May 31 
   2016   2015  
  (unaudited) (unaudited) 
Assets    
Current Assets    
 Cash and cash equivalents$  32,333  $  18,391  
 Marketable securities   1,653     1,689  
   Total cash and investments   33,986     20,080  
      
 Accounts receivable, net   52,867     58,428  
 Inventories   55,370     67,388  
 Prepaid income taxes   788     770  
 Prepaid expenses and other   3,243     4,783  
   Total current assets   146,254     151,449  
      
Property, plant and equipment, net   48,284     54,560  
Other non-current assets   4,696     5,288  
Intangible assets, net   167,577     181,806  
Goodwill   361,252     361,252  
Deferred income taxes, long-term   -     19,268  
   Total Assets$  728,063  $  773,623  
      
Liabilities and Stockholders' Equity    
Accounts payable$  15,616  $  23,668  
Accrued liabilities   22,265     18,331  
Income taxes payable   46     439  
Current portion of long-term debt   16,250     8,750  
Current portion of contingent consideration   12,919     9,969  
   Total current liabilities   67,096      61,157  
Long-term debt, net of current portion   105,160     128,910  
Deferred income taxes, long-term   21,683     1,119  
Contingent consideration, net of current portion   25,356     37,415  
Other long-term liabilities   1,741     -  
   Total Liabilities   221,036     228,601  
      
Stockholders' equity   507,027     545,022  
   Total Liabilities and Stockholders' Equity$  728,063  $  773,623  

 


ANGIODYNAMICS, INC. AND SUBSIDIARIES   
CONSOLIDATED STATEMENTS OF CASH FLOWS   
(in thousands)   
           
           
           
 Three months ended Twelve months ended   
 May 31, May 31, May 31, May 31,   
  2016   2015   2016   2015    
 (unaudited) (unaudited) (unaudited)  (unaudited)   
           
Cash flows from operating activities:          
Net  income  (loss)$(43,962) $(814) $(44,451)  $(3,268)     
Adjustments to reconcile net income (loss) to net cash provided by operating activities:           
Depreciation and amortization 6,980   7,716   28,379   30,492    
Stock-based compensation (1,260)  1,609   3,240   5,998    
Change in fair value of contingent consideration  318   430   948   (8,196)   
Fixed and intangible asset impairments and disposals 131   193   806    9,381    
Indefinite-lived intangible asset impairment 384   -   384   6,400    
Deferred income taxes 40,115   (973)   39,742   (5,111)   
Change in accounts receivable allowance 1,022   790   2,377   1,448    
Other 827   104   827   34    
Changes in operating assets and liabilities, net of acquisitions:           
Receivables 639   (1,440)  3,131   2,095    
Inventories 10,519   1,322   11,976   (6,154)   
Prepaid and other assets 1,494   1,319   1,253   (1,000 )   
Accounts payable and accrued liabilities 1,337   551   (3,396)  (5,877)   
Net cash provided by (used in) operating activities 18,544   10,807   45,216   26,242    
           
Cash flows from investing activities:           
Additions to property, plant and equipment (431)  (902)  (2,326)  (11,940)   
Acquisition of warrants -   -   (2,000)  -    
Acquisition of intangible assets (3,250)  (349)  (3,268)  (1,353)   
Other cash flows from investing activities -   -   25   -    
Net cash provided by (used in) investing activities (3,681)  (1,251)   (7,569)  (13,293)   
           
Cash flows from financing activities:          
Repayment of long-term debt (5,000)  (11,250)  (16,250)  (20,000)   
Proceeds from issuance  of long-term debt and revolver borrowings -   -   -   15,000    
Payment of Contingent Consideration -   -    (9,850)  (11,222)   
Proceeds from exercise of stock options and ESPP 504   144   2,437   5,757    
Net cash provided by (used in) financing activities (4,496)  (11,106)  (23,663)  (10,465)   
           
Effect of exchange rate changes on cash 69   237   (42)  (198)   
Increase  (Decrease) in cash and cash equivalents 10,436   (1,313)  13,942   2,286    
           
Cash and cash equivalents          
Beginning of period 21,897   19,704   18,391   16,105    
End of period$32,333  $18,391  $32,333  $18,391    
           

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Source: AngioDynamics

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