AngioDynamics Reports Fiscal 2014 Second Quarter Financial Results
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Net sales of
$88.6 million -
GAAP income per share at break-even; Non-GAAP adjusted net income, excluding amortization, of
$0.14 per share -
Adjusted EBITDA of
$12.7 million -
Operating cash flow of
$8.2 million -
Company raises low end of revenue guidance to
$349-$353 million for FY14; reiterates adjusted EPS, excluding amortization, of $0.63-$0.67
"
Q2 FY14 Financial Results
Net sales of
Peripheral Vascular net sales in the second quarter increased 7% to
The Company's net loss in the second quarter was
Second quarter EBITDA was
Second quarter operating cash flow was
Recent Operational Highlights
- The Company's growth drivers are continuing to deliver positive results. Data presented at the recent AVA meeting supports the clinical effectiveness and economic impact of BioFlo, which now accounts for over 30% of the Company's global PICC revenue; while AngioVac technology is demonstrating increased market awareness.
-
The
Centers for Medicare and Medicaid Services (CMS) created a new Ambulatory Payment Classification (APC) that includes both in-hospital endovenous radiofrequency (RF) treatments and in-hospital endovenous laser varicose vein ablation, such as the Company's VenaCure EVLT procedure, increasing payment for laser vein ablation by 9% while creating parity for thermal varicose vein ablation procedures. -
AngioDynamics received EU CE Mark approval for its AngioVac venous drainage cannula and cardiopulmonary bypass circuit for use during extracorporeal bypass for up to six hours, with the AngioVac cannula also being approved for removal of fresh, soft thrombi or emboli. -
The Company announced an operational excellence program designed to save
$15 million to$18 million during the next three years by creating greater efficiencies and improving business performance through product rationalization, lean initiatives, supply chain optimization, ERP implementation and changes to itsNew York footprint. -
John Soto was appointed Chief Commercial Officer overseeing global sales and marketing initiatives as the Company seeks to accelerate its international business which currently contributes approximately 20% of net sales.
Mr. Soto is the current leader of the Peripheral Vascular business, which grew sales 7% U.S. in the fiscal second quarter of 2014.
Six Months Financial Results
For the six months ended
Fiscal 2014 Guidance
"As a result of our stronger than anticipated first half of our fiscal year, we are raising the low end of our revenue guidance to
"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 | Six months ended | ||||
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| 2013 | 2012 | 2013 | 2012 | ||
| (unaudited) | (unaudited) | ||||
| Net sales | $ 88,616 | $ 87,007 | $ 172,195 | $ 170,423 | |
| Cost of sales | |||||
| Acquired inventory step-up | 75 | -- | 75 | 3,445 | |
| Quality call to action | -- | 113 | -- | 812 | |
| Other cost of sales | 43,611 | 42,806 | 84,708 | 82,620 | |
| Total cost of sales | 43,686 | 42,919 | 84,783 | 86,877 | |
| Gross profit | 44,930 | 44,088 | 87,412 | 83,546 | |
| % of net sales | 50.7% | 50.7% | 50.8% | 49.0% | |
| Operating expenses | |||||
| Research and development | 7,003 | 7,014 | 13,712 | 14,088 | |
| Sales and marketing | 21,073 | 18,671 | 41,036 | 37,214 | |
| General and administrative | 6,323 | 6,910 | 12,851 | 13,808 | |
| Amortization of intangibles | 4,339 | 4,107 | 8,623 | 7,844 | |
| Medical device tax | 999 | -- | 1,975 | -- | |
| Change in fair value of contingent consideration | 940 | 197 | 1,673 | 197 | |
| Acquisition and other non-recurring | 2,679 | 2,067 | 4,681 | 4,589 | |
| Total operating expenses | 43,356 | 38,966 | 84,551 | 77,740 | |
| Operating income (loss) | 1,574 | 5,122 | 2,861 | 5,806 | |
| Other income (expense), net | (1,660) | (1,990) | (3,594) | (3,828) | |
| Income (loss) before income taxes | (86) | 3,132 | (733) | 1,978 | |
| Provision for (benefit from) income taxes | 13 | 1,163 | (208) | 730 | |
| Net income (loss) | $ (99) | $ 1,969 | $ (525) | $ 1,248 | |
| Earnings (loss) per common share | |||||
| Basic | $ (0.00) | $ 0.06 | $ (0.01) | $ 0.04 | |
| Diluted | $ (0.00) | $ 0.06 | $ (0.01) | $ 0.04 | |
| Weighted average common shares | |||||
| Basic | 35,132 | 34,827 | 35,041 | 34,765 | |
| Diluted | 35,132 | 35,311 | 35,041 | 35,279 | |
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| GAAP TO NON-GAAP RECONCILIATION | ||||
| (in thousands, except per share data) | ||||
| Reconciliation of Net Income to non-GAAP Adjusted Net Income: | ||||
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| 2013 | 2012 | 2013 | 2012 | |
| (unaudited) | (unaudited) | |||
| Net income (loss) | $ (99) | $ 1,969 | $ (525) | $ 1,248 |
| After tax: | ||||
| Acquisition and other non-recurring (1) | 1,746 | 1,332 | 3,032 | 2,922 |
| Quality Call to Action Program (2) | -- | 72 | -- | 516 |
| Inventory step-up (3) | 48 | -- | 48 | 2,188 |
| Contingent earn out valuation (4) | 597 | 125 | 1,062 | 125 |
| Adjusted net income | 2,291 | 3,498 | 3,617 | 6,998 |
| Amortization of intangibles | 2,755 | 2,608 | 5,476 | 4,981 |
| Adjusted net income excluding amortization | $ 5,046 | $ 6,106 | $ 9,093 | $ 11,979 |
| Reconciliation of Diluted Earnings Per Share to non-GAAP Adjusted Diluted Earnings Per Share: | ||||
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| 2013 | 2012 | 2013 | 2012 | |
| (unaudited) | (unaudited) | |||
| Diluted earnings (loss) per share | $ (0.00) | $ 0.06 | $ (0.01) | $ 0.04 |
| After tax: | ||||
| Acquisition and other non-recurring (1) | 0.05 | 0.04 | 0.09 | 0.08 |
| Quality Call to Action Program (2) | 0.00 | 0.00 | 0.00 | 0.01 |
| Inventory step-up (3) | 0.00 | 0.00 | 0.00 | 0.06 |
| Contingent earn out valuation (4) | 0.02 | 0.00 | 0.03 | 0.00 |
| Adjusted diluted earnings per share | 0.06 | 0.10 | 0.10 | 0.20 |
| Amortization of intangibles | 0.08 | 0.07 | 0.16 | 0.14 |
| Adjusted diluted earnings per share excluding amortization | $ 0.14 | $ 0.17 | $ 0.26 | $ 0.34 |
| * Does not sum due to rounding | ||||
| (1) Includes costs relating to acquisitions, debt financing, business restructuring, litigation and facility consolidations. | ||||
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(2) Direct costs of implementing a comprehensive Quality Call to Action program to review and augment the quality management systems at our |
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| (3) Amortization of basis step-up of acquired inventory. | ||||
| (4) Impact of revaluation of contingent earn outs related to acquisitions. | ||||
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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 | Six months ended | |||
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| 2013 | 2012 | 2013 | 2012 | |
| (unaudited) | (unaudited) | |||
| Net income (loss) | $ (99) | $ 1,969 | $ (525) | $ 1,248 |
| Provision for (benefit from) income taxes | 13 | 1,163 | (208) | 730 |
| Other income (expense), net | 1,660 | 1,990 | 3,594 | 3,828 |
| Amortization of intangibles | 4,339 | 4,107 | 8,623 | 7,844 |
| Depreciation | 1,849 | 2,185 | 3,662 | 4,317 |
| EBITDA | 7,762 | 11,414 | 15,146 | 17,967 |
| Acquisition and other non-recurring (1) | 2,679 | 2,067 | 4,681 | 4,589 |
| Stock-based compensation | 1,271 | 1,252 | 2,423 | 2,375 |
| Quality Call to Action Program (2) | -- | 113 | -- | 812 |
| Inventory step-up (3) | 75 | -- | 75 | 3,445 |
| Contingent earn out revaluation (4) | 940 | 197 | 1,673 | 197 |
| Adjusted EBITDA | $ 12,727 | $ 15,043 | $ 23,998 | $ 29,385 |
| EBITDA per common share | ||||
| Basic | $ 0.22 | $ 0.33 | $ 0.43 | $ 0.52 |
| Assumes Diluted | $ 0.22 | $ 0.32 | $ 0.43 | $ 0.51 |
| Adjusted EBITDA per common share | ||||
| Basic | $ 0.36 | $ 0.43 | $ 0.68 | $ 0.85 |
| Assumes Diluted | $ 0.36 | $ 0.43 | $ 0.68 | $ 0.83 |
| Reconciliation of Operating Income to non-GAAP Adjusted Operating Income: | ||||
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| 2013 | 2012 | 2013 | 2012 | |
| (unaudited) | (unaudited) | |||
| Operating income (loss) | $ 1,574 | $ 5,122 | $ 2,861 | $ 5,806 |
| Acquisition and other non-recurring (1) | 2,679 | 2,067 | 4,681 | 4,589 |
| Quality Call to Action Program (2) | -- | 113 | -- | 812 |
| Inventory step-up (3) | 75 | -- | 75 | 3,445 |
| Contingent earn out revaluation (4) | 940 | 197 | 1,673 | 197 |
| Adjusted Operating income | $ 5,268 | $ 7,499 | $ 9,290 | $ 14,849 |
| (1) Includes costs relating to acquisitions, debt financing, business restructuring, litigation and facility consolidations. | ||||
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(2) Direct costs of implementing a comprehensive Quality Call to Action program to review and augment the quality management systems at our |
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| (3) Amortization of basis step-up of acquired inventory. | ||||
| (4) Impact of revaluation of contingent earn outs related to acquisitions. | ||||
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| PRELIMINARY NET SALES BY PRODUCT CATEGORY AND BY GEOGRAPHY | ||||||
| (unaudited in thousands) | ||||||
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% | |
| 2013 | 2012 | Growth | 2013 | 2012 | Growth | |
| Net Sales by Product Category | ||||||
| Peripheral Vascular | $ 48,860 | $ 45,766 | 7% | $ 94,340 | $ 89,060 | 6% |
| Vascular Access | 25,571 | 26,712 | (4%) | 50,854 | 53,342 | (5%) |
| Oncology/Surgery | 12,557 | 12,006 | 5% | 23,724 | 23,239 | 2% |
| Total Excluding Supply Agreement | 86,988 | 84,484 | 3% | 168,918 | 165,641 | 2% |
| Supply Agreement | 1,628 | 2,523 | (35%) | 3,277 | 4,782 | (31%) |
| Total | $ 88,616 | $ 87,007 | 2% | $ 172,195 | $ 170,423 | 1% |
| Net Sales by Geography | ||||||
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$ 69,530 | $ 67,394 | 3% | $ 136,632 | $ 132,898 | 3% |
| International | 17,458 | 17,355 | 1% | 32,286 | 32,743 | (1%) |
| Supply Agreement | 1,628 | 2,258 | (28%) | 3,277 | 4,782 | (31%) |
| Total | $ 88,616 | $ 87,007 | 2% | $ 172,195 | $ 170,423 | 1% |
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(a) Sales days for the three months ended |
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(b) Sales days for the six months ended |
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| CONSOLIDATED BALANCE SHEETS | ||
| (in thousands) | ||
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May 31, | |
| 2013 | 2013 | |
| (unaudited) | (unaudited) | |
| Assets | ||
| Current Assets | ||
| Cash and cash equivalents | $ 15,173 | $ 21,802 |
| Marketable securities | 1,850 | 2,153 |
| Total cash and investments | 17,023 | 23,955 |
| Receivables, net | 48,405 | 47,791 |
| Inventories, net | 60,052 | 55,062 |
| Deferred income taxes | 6,706 | 6,591 |
| Prepaid income taxes | 2,007 | 438 |
| Prepaid expenses and other | 7,380 | 7,679 |
| Total current assets | 141,573 | 141,516 |
| Property, plant and equipment, net | 66,390 | 62,650 |
| Intangible assets, net | 212,195 | 214,848 |
| Goodwill | 359,736 | 355,458 |
| Deferred income taxes | 9,507 | 11,007 |
| Other non-current assets | 6,089 | 6,105 |
| Total Assets | $ 795,490 | $ 791,584 |
| Liabilities and Stockholders' Equity | ||
| Current portion of long-term debt | $ 5,000 | $ 7,500 |
| Current portion of contingent consideration | 12,221 | 9,207 |
| Other current liabilities | 51,466 | 46,730 |
| Total current liabilities | 68,687 | 63,437 |
| Long-term debt, net of current portion | 135,160 | 135,000 |
| Contingent consideration, net of current portion | 60,171 | 65,842 |
| Other long-term liabilities | 1,743 | 475 |
| Total Liabilities | 265,761 | 264,754 |
| Stockholders' equity | 529,729 | 526,830 |
| Total Liabilities and Stockholders' Equity | $ 795,490 | $ 791,584 |
| Shares outstanding | 35,305 | 35,060 |
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| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
| (in thousands) | ||||
| Three months ended | Six months ended | |||
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| 2013 | 2012 | 2013 | 2012 | |
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |
| Cash flows from operating activities: | ||||
| Net income (loss) | $ (99) | $ 1,969 | $ (525) | $ 1,248 |
| Depreciation and amortization | 6,188 | 6,292 | 12,285 | 12,161 |
| Change in fair value of contingent consideration | 943 | 197 | 1,673 | 197 |
| Tax effect of exercise of stock options | (85) | (504) | (146) | (504) |
| Deferred income taxes | 688 | 2,260 | 1,226 | 2,175 |
| Stock-based compensation | 1,271 | 1,252 | 2,423 | 2,375 |
| Amortization of inventory step-up | 75 | -- | 75 | 3,445 |
| Other | 19 | (617) | (24) | (571) |
| Changes in operating assets and liabilities | ||||
| Receivables | (1,845) | (1,657) | 209 | 1,497 |
| Inventories | (878) | 1,084 | (4,368) | (9,946) |
| Accounts payable and accrued liabilities | 1,863 | (46) | 3,288 | (6,861) |
| Other | 46 | 900 | (358) | 299 |
| Net cash provided by (used in) operating activities | 8,186 | 11,130 | 15,758 | 5,515 |
| Cash flows from investing activities: | ||||
| Additions to property, plant and equipment | (4,017) | (3,819) | (7,191) | (4,787) |
| Acquisition of businesses, net of cash acquired | (150) | (15,166) | (4,319) | (14,308) |
| Other cash flows from investing activities | -- | 801 | -- | 801 |
| Purchases, sales and maturities of marketable securities, net | -- | 9,452 | 303 | 11,855 |
| Net cash provided by (used in) investing activities | (4,167) | (8,732) | (11,207) | (6,439) |
| Cash flows from financing activities: | ||||
| Repayment of long-term debt | (143,750) | (1,875) | (143,750) | (3,750) |
| Proceeds from issuance of new debt | 141,410 | -- | 141,410 | -- |
| Payment of Contingent Consideration | (8,350) | -- | (9,300) | -- |
| Deferred financing costs of long-term debt | (677) | -- | (677) | -- |
| Proceeds from exercise of stock options and ESPP | 456 | (103) | 1,133 | 476 |
| Net cash provided by (used in) financing activities | (10,911) | (1,978) | (11,184) | (3,274) |
| Effect of exchange rate changes on cash | 1 | 6 | 4 | 12 |
| Increase (Decrease) in cash and cash equivalents | (6,891) | 426 | (6,629) | (4,186) |
| Cash and cash equivalents | ||||
| Beginning of period | 22,064 | 18,896 | 21,802 | 23,508 |
| End of period | $ 15,173 | $ 19,322 | $ 15,173 | $ 19,322 |
CONTACT: Company Contact:
AngioDynamics Inc.
Mark Frost , CFO
(800) 772-6446 x1981
mfrost@AngioDynamics.com
Investor Relations Contacts:
EVC Group, Inc.
Michael Polyviou /Robert Jones
(212) 850-6020; (646) 201-5447
mpolyviou@evcgroup.com;
bjones@evcgroup.com
Media Contact:
EVC Group, Inc.
John Carter
(212) 850-6021
jcarter@evcgroup.com
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