AngioDynamics Reports 2015 Third Quarter Financial Results
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Third quarter fiscal 2015 net sales of
$86.6 million ; flat vs. prior year, excluding the wind down of supply agreement and$1 million on a constant currency basis -
GAAP loss of
$0.12 per share primarily due to one-time non-cash charges -
Non-GAAP adjusted net income of
$0.12 per share, negatively impacted$0.02 by foreign currency -
Operating cash generation of
$12.2 million - Company updates full-year fiscal year 2015 net sales and adjusted EPS guidance
Q3 FY15 Financial Results
Net sales of
Peripheral Vascular net sales in the third quarter were
The Company's GAAP net loss was
Third quarter EBITDA was a loss of
During the third quarter, the Company voluntary recalled its Morpheus PICC line. An internal cost/benefit analysis, coupled with the favorable market response to the Company's BioFlo product offerings, prompted the acceleration of a pre-existing strategy to focus the Vascular Access business on products featuring BioFlo technology, resulting in the termination of the Morpheus PICC product line.
At
"We delivered mixed financial results in the fiscal 2015 third quarter," said
"I am also very pleased we signed a definitive agreement with EmboMedics,"
Recent Events
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On
April 9, 2015 , the Company announced a worldwide licensing agreement with privately-heldEmboMedics Inc. , ofMinneapolis, Minn. , which develops injectable and resorbable microspheres. Embolization is the fastest growing segment in Interventional Radiology, and this newly formed strategic relationship will allowAngioDynamics to leverage the talent and knowledge of its sales team to re-enter the approximately$150 million addressable global embolic market. -
AngioDynamics receivedU.S. Food and Drug Administration (FDA) clearance for an expanded indication for the Celerity tip location system. The new clearance allows for the elimination of a follow-up X-ray when the Celerity system is used to aid in positioning Peripherally Inserted Central Catheters (PICCs) in adults.
Nine Months Financial Results
For the nine months ended
Fiscal 2015 and Fourth Quarter Guidance
"We expect to show sequential improvement in our financial results in the fiscal fourth quarter ended
"We are anticipating revenue to range from
Conference Call
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
About
Trademarks
Safe Harbor
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding
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| CONSOLIDATED INCOME STATEMENTS | ||||
| (in thousands, except per share data) | ||||
| Three months ended | Nine months ended | |||
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| 2015 | 2014 | 2015 | 2014 | |
| (unaudited) | (unaudited) | |||
| Net sales | $ 86,597 | $ 88,150 | $ 266,077 | $ 260,365 |
| Cost of sales | 48,746 | 43,357 | 134,745 | 128,107 |
| Gross profit | 37,851 | 44,793 | 131,332 | 132,258 |
| % of net sales | 43.7% | 50.8% | 49.4% | 50.8% |
| Operating expenses | ||||
| Research and development | 6,855 | 7,045 | 19,642 | 20,757 |
| Sales and marketing | 19,355 | 20,700 | 60,405 | 61,736 |
| General and administrative | 6,917 | 6,445 | 22,213 | 19,542 |
| Medical device excise tax | 1,034 | 980 | 3,105 | 2,955 |
| Amortization of intangibles | 5,106 | 4,248 | 13,182 | 12,696 |
| Change in fair value of contingent consideration | (10,044) | (4,154) | (8,626) | (2,481) |
| Acquisition, restructuring and other items, net | 18,779 | 3,016 | 23,745 | 7,697 |
| Total operating expenses | 48,002 | 38,280 | 133,666 | 122,902 |
| Operating income (loss) | (10,151) | 6,513 | (2,334) | 9,356 |
| Other income (expense), net | (1,828) | (1,970) | (5,398) | (5,726) |
| Income (loss) before income taxes | (11,979) | 4,543 | (7,732) | 3,630 |
| Income tax expense (benefit) | (7,717) | 28 | (5,278) | (251) |
| Net income (loss) | $ (4,262) | $ 4,515 | $ (2,454) | $ 3,881 |
| Earnings (loss) per share | ||||
| Basic | $ (0.12) | $ 0.13 | $ (0.07) | $ 0.11 |
| Diluted | $ (0.12) | $ 0.13 | $ (0.07) | $ 0.11 |
| Weighted average shares outstanding | ||||
| Basic | 35,755 | 35,184 | 35,568 | 35,088 |
| Diluted | 35,755 | 35,704 | 35,568 | 35,372 |
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| GAAP TO NON-GAAP RECONCILIATION | ||||
| (in thousands, except per share data) | ||||
| Reconciliation of Gross Profit to non-GAAP Adjusted Gross Profit | ||||
| Three months ended | Nine months ended | |||
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| 2015 | 2014 | 2015 | 2014 | |
| (unaudited) | (unaudited) | |||
| Gross profit | $ 37,851 | $ 44,793 | $ 131,332 | $ 132,258 |
| Recall expenses included in cost of sales | 4,997 | -- | 4,997 | -- |
| Amortization of inventory basis step-up (1) | -- | 75 | -- | 150 |
| Adjusted gross profit | $ 42,848 | $ 44,868 | $ 136,329 | $ 132,408 |
| Adjusted gross profit % of sales | 49.5% | 50.9% | 51.2% | 50.9% |
| Reconciliation of Net Income to non-GAAP Adjusted Net Income: | ||||
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| 2015 | 2014 | 2015 | 2014 | |
| (unaudited) | (unaudited) | |||
| Net income (loss) | $ (4,262) | $ 4,515 | $ (2,454) | $ 3,881 |
| Recall expenses included in cost of sales | 4,997 | -- | 4,997 | -- |
| Amortization of inventory basis step-up (1) | -- | 75 | -- | 150 |
| Amortization of intangibles | 5,106 | 4,248 | 13,182 | 12,696 |
| Change in fair value of contingent consideration | (10,044) | (4,154) | (8,626) | (2,481) |
| Fixed and intangible asset impairments | 9,074 | -- | 9,074 | -- |
| Indefinite-lived intangible asset impairment | 6,400 | -- | 6,400 | -- |
| Acquisition, restructuring and other items, net (2) | 3,305 | 3,016 | 8,271 | 7,697 |
| Tax effect of non-GAAP items (3) | (10,221) | (2,793) | (14,610) | (8,169) |
| Adjusted net income | $ 4,355 | $ 4,907 | $ 16,234 | $ 13,774 |
| Reconciliation of Diluted Earnings Per Share to non-GAAP Adjusted Diluted Earnings Per Share: | ||||
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| 2015 | 2014 | 2015 | 2014 | |
| (unaudited) | (unaudited) | |||
| Diluted earnings (loss) per share | $ (0.12) | $ 0.13 | $ (0.07) | $ 0.11 |
| Recall expenses included in cost of sales | 0.14 | -- | 0.14 | -- |
| Amortization of inventory basis step-up (1) | -- | 0.00 | -- | 0.00 |
| Amortization of intangibles | 0.14 | 0.12 | 0.36 | 0.36 |
| Change in fair value of contingent consideration | (0.27) | (0.12) | (0.24) | (0.07) |
| Fixed and intangible asset impairments | 0.25 | -- | 0.25 | -- |
| Indefinite-lived intangible asset impairment | 0.18 | -- | 0.18 | -- |
| Acquisition, restructuring and other items, net (2) | 0.09 | 0.08 | 0.23 | 0.22 |
| Tax effect of non-GAAP items (3) | (0.28) | (0.08) | (0.40) | (0.23) |
| Adjusted diluted earnings per share | $ 0.12 | $ 0.14 | $ 0.45 | $ 0.39 |
| Adjusted diluted sharecount | 36,526 | 35,704 | 36,236 | 35,372 |
| (1) Amortization of step-up of acquired inventory value in accounting for acquisitions. | ||||
| (2) Includes costs related to acquisitions, integrations, restructurings, debt refinancings, litigation, and other items. | ||||
| (3) Represents the net tax effect of non-GAAP adjustments. | ||||
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| GAAP TO NON-GAAP RECONCILIATION (Continued) | ||||
| (in thousands, except per share data) | ||||
| Reconciliation of Net Income to EBITDA and Adjusted EBITDA: | ||||
| Three months ended | Nine months ended | |||
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| 2015 | 2014 | 2015 | 2014 | |
| (unaudited) | (unaudited) | |||
| Net income (loss) | $ (4,262) | $ 4,515 | $ (2,454) | $ 3,881 |
| Income tax expense (benefit) | (7,717) | 28 | (5,278) | (251) |
| Other income (expense), net | 1,828 | 1,970 | 5,398 | 5,726 |
| Depreciation and amortization | 8,777 | 7,243 | 22,776 | 21,113 |
| EBITDA | (1,374) | 13,756 | 20,442 | 30,469 |
| Recall expenses included in cost of sales | 4,997 | -- | 4,997 | -- |
| Amortization of inventory basis step-up (1) | -- | 75 | -- | 150 |
| Change in fair value of contingent consideration | (10,044) | (4,154) | (8,626) | (2,481) |
| Fixed and intangible asset impairments | 9,074 | -- | 9,074 | -- |
| Indefinite-lived intangible asset impairment | 6,400 | -- | 6,400 | -- |
| Acquisition, restructuring and other items, net (2,3) | 2,929 | 2,641 | 7,142 | 7,322 |
| Stock-based compensation | 1,488 | 1,599 | 4,389 | 4,022 |
| Adjusted EBITDA | $ 13,470 | $ 13,917 | $ 43,818 | $ 39,482 |
| Per diluted share: | ||||
| EBITDA | $ (0.04) | $ 0.39 | $ 0.56 | $ 0.86 |
| Adjusted EBITDA | $ 0.37 | $ 0.39 | $ 1.21 | $ 1.12 |
| (1) Amortization of step-up of acquired inventory value in accounting for acquisitions. | ||||
| (2) Includes costs related to acquisitions, integrations, restructurings, debt refinancings, litigation, and other items. | ||||
| (3) Excludes depreciation expense captured in the depreciation and amortization component of the reconciliation. | ||||
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| PRELIMINARY NET SALES BY PRODUCT CATEGORY AND BY GEOGRAPHY | ||||||||||
| (unaudited in thousands) | ||||||||||
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| Currency | Constant | Currency | Constant | |||||||
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% | Impact | Currency |
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% | Impact | Currency | |
| 2015 | 2014 | Growth | (Pos) Neg | Growth | 2015 | 2014 | Growth | (Pos) Neg | Growth | |
| Net Sales by Product Category | ||||||||||
| Peripheral Vascular | $ 46,195 | $ 47,358 | -2% | $ 142,996 | $ 141,718 | 1% | ||||
| Vascular Access | 26,400 | 27,259 | -3% | 80,793 | 78,113 | 3% | ||||
| Oncology/Surgery | 13,066 | 11,968 | 9% | 39,062 | 35,692 | 9% | ||||
| Total Excluding Supply Agreement | 85,661 | 86,585 | -1% | 1% | 0% | 262,851 | 255,523 | 3% | 0% | 3% |
| Supply Agreement | 936 | 1,565 | -40% | 0% | -40% | 3,226 | 4,842 | -33% | 0% | -33% |
| Total | $ 86,597 | $ 88,150 | -2% | 1% | -1% | $ 266,077 | $ 260,365 | 2% | 1% | 3% |
| Net Sales by Geography | ||||||||||
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$ 68,410 | $ 69,814 | -2% | 0% | -2% | $ 208,848 | $ 206,466 | 1% | 0% | 1% |
| International | 17,251 | 16,771 | 3% | 5% | 8% | 54,003 | 49,057 | 10% | 3% | 13% |
| Supply Agreement | 936 | 1,565 | -40% | 0% | -40% | 3,226 | 4,842 | -33% | 0% | -33% |
| Total | $ 86,597 | $ 88,150 | -2% | 1% | -1% | $ 266,077 | $ 260,365 | 2% | 1% | 3% |
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(a) There were 61 sales days in the three months ended |
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(b) There were 187 sales days in the nine months ended |
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| CONSOLIDATED BALANCE SHEETS | ||
| (in thousands) | ||
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| 2015 | 2014 | |
| (unaudited) | (unaudited) | |
| Assets | ||
| Current Assets | ||
| Cash and cash equivalents | $ 19,704 | $ 16,105 |
| Marketable securities | 1,682 | 1,809 |
| Total cash and investments | 21,386 | 17,914 |
| Accounts receivable, net | 57,770 | 61,968 |
| Inventories | 68,710 | 61,234 |
| Deferred income taxes | 2,638 | 4,625 |
| Prepaid income taxes | 1,929 | 510 |
| Prepaid expenses and other | 4,859 | 5,471 |
| Total current assets | 157,292 | 151,722 |
| Property, plant and equipment, net | 58,295 | 66,590 |
| Intangible assets, net | 186,547 | 205,256 |
| Goodwill | 360,473 | 360,473 |
| Deferred income taxes, long-term | 16,469 | 10,403 |
| Other non-current assets | 4,060 | 4,447 |
| Total Assets | $ 783,136 | $ 798,891 |
| Liabilities and Stockholders' Equity | ||
| Accounts payable | $ 21,696 | $ 32,895 |
| Accrued liabilities | 19,946 | 17,251 |
| Income taxes payable | 677 | 689 |
| Current portion of long-term debt | 7,500 | 5,000 |
| Current portion of contingent consideration | 9,868 | 10,918 |
| Total current liabilities | 59,687 | 66,753 |
| Long-term debt, net of current portion | 141,410 | 137,660 |
| Deferred income taxes, long-term | 1,146 | 1,146 |
| Contingent consideration, net of current portion | 37,137 | 56,413 |
| Other long-term liabilities | -- | 84 |
| Total Liabilities | 239,380 | 262,056 |
| Stockholders' equity | 543,756 | 536,835 |
| Total Liabilities and Stockholders' Equity | $ 783,136 | $ 798,891 |
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| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
| (in thousands) | ||||
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| 2015 | 2014 | 2015 | 2014 | |
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |
| Cash flows from operating activities: | ||||
| Net income (loss) | $ (4,262) | $ 4,515 | $ (2,454) | $ 3,881 |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||
| Depreciation and amortization | 8,777 | 7,243 | 22,776 | 21,113 |
| Stock-based compensation | 1,488 | 1,599 | 4,389 | 4,022 |
| Change in fair value of contingent consideration | (10,044) | (4,154) | (8,626) | (2,481) |
| Fixed and intangible asset impairments and disposals | 9,188 | -- | 9,188 | -- |
| Indefinite-lived intangible asset impairment | 6,400 | -- | 6,400 | -- |
| Deferred income taxes | (7,823) | 545 | (4,138) | 1,700 |
| Change in accounts receivable allowance | 315 | (31) | 659 | 281 |
| Tax effect of exercise of stock options and inssuance of performance shares | -- | -- | -- | (146) |
| Amortization of acquired inventory basis step-up | -- | 75 | -- | 150 |
| Other | 19 | (26) | (70) | (50) |
| Changes in operating assets and liabilities, net of acquisitions: | ||||
| Receivables | 466 | (9,545) | 3,535 | (9,668) |
| Inventories | 6,605 | 860 | (7,476) | (3,491) |
| Accounts payable and accrued liabilities | (290) | (589) | (6,428) | 2,821 |
| Other | 1,393 | (1,076) | (2,319) | (2,958) |
| Net cash provided by (used in) operating activities | 12,232 | (584) | 15,436 | 15,174 |
| Cash flows from investing activities: | ||||
| Additions to property, plant and equipment | (3,515) | (1,812) | (11,038) | (9,003) |
| Acquisition of businesses, net of cash acquired | -- | -- | -- | (4,169) |
| Acquisition of intangible assets | (754) | (30) | (1,004) | (180) |
| Other cash flows from investing activities | -- | 25 | -- | 328 |
| Net cash provided by (used in) investing activities | (4,269) | (1,817) | (12,042) | (13,024) |
| Cash flows from financing activities: | ||||
| Repayment of long-term debt | (6,250) | (1,250) | (8,750) | (145,000) |
| Proceeds from issuance of long-term debt and revolver borrowings | -- | -- | 15,000 | 141,410 |
| Payment of Contingent Consideration | -- | (5,297) | (11,222) | (14,597) |
| Proceeds from exercise of stock options and ESPP | 3,510 | 1,075 | 5,613 | 2,208 |
| Other cash flows from financing activities | -- | -- | -- | (677) |
| Net cash provided by (used in) financing activities | (2,740) | (5,472) | 641 | (16,656) |
| Effect of exchange rate changes on cash | (396) | 82 | (436) | 86 |
| Increase (Decrease) in cash and cash equivalents | 4,827 | (7,791) | 3,599 | (14,420) |
| Cash and cash equivalents | ||||
| Beginning of period | 14,877 | 15,173 | 16,105 | 21,802 |
| End of period | $ 19,704 | $ 7,382 | $ 19,704 | $ 7,382 |
CONTACT: Company Contact:
AngioDynamics Inc. Mark Frost , CFO
(800) 772-6446 x1981
mfrost@AngioDynamics.com
Investor Relations Contacts:
EVC Group, Inc. Chris Dailey /Robert Jones
(646) 445-4801; (646) 201-5447
cdailey@evcgroup.com; bjones@evcgroup.com
Media Contact:
EVC Group, Inc. Dave Schemelia
(646) 201-5431
dave@evcgroup.com
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