AngioDynamics Reports Fiscal 2014 Third Quarter Financial Results
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Net sales increase 8% over prior year to
$88.2 million -
GAAP income per share of
$0.14 ; Non-GAAP adjusted net income, excluding amortization, of$0.16 per share -
Adjusted EBITDA of
$14.6 million -
Company's revenue guidance to
$351 million -$355 million for FY14;
Adjusted EPS, excluding amortization, of $0.60-$0.63
"Our strong top line performance marks the fourth consecutive quarter of improved sales results, reflecting continued market acceptance of our innovative products and solid execution by our global sales team. The 8% revenue increase was driven by double-digit sales growth in our Peripheral Vascular and Oncology/Surgery businesses of 11% and 15%, respectively, and a significant turnaround in Vascular Access, which grew 3% over last year's comparable quarter and 7% from the prior quarter. The improvement in our Vascular Access business demonstrates the effectiveness of the BioFlo technology which now accounts for 40% of our global PICC revenue," said
Q3 FY14 Financial Results
Net sales of
Peripheral Vascular net sales in the third quarter increased 11% to
The Company's net income in the third quarter was
Third quarter EBITDA was
At
Recent Operational Highlights
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The U.S. Food and Drug Administration (FDA) cleared an expanded indication for the Company's AngioVac cannula for venous drainage during extracorporeal bypass for up to six hours to include removal of fresh, soft thrombi or emboli. The expanded clearance makes AngioVac a more powerful tool for physicians in the U.S., where an estimated 1 million people are affected by venous thromboembolic disease (VTE). - The Company received 510(k) clearance for its BioFlo DuraMax chronic hemodialysis catheter - the third U.S. clearance of a BioFlo product line in the Company's Vascular Access business. The Company expects a commercial launch in the fourth quarter of fiscal year 2014.
- The Company executed an agreement with Medcomp and its development partner to acquire regulatory control over the Celerity tip-location platform, as well as access to next-generation product introductions.
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Enrollment of the first patient in a clinical study at
Duke University to evaluate the feasibility and short-term safety and effectiveness of the NanoKnife system in the ablation of focal prostate cancer occurred. The prospective, non-randomized pilot study will enroll six patients who meet a low risk prostate cancer criteria defined by this protocol. The primary objective will be to evaluate procedural and short-term post-treatment safety of the NanoKnife system via incidence of adverse events and evaluation of effect on urologic (urinary and erectile) function. -
The Company was awarded
$74.9 million in damages based on AngioDynamics' claims against biolitec AG, Biomed Technology Holdings Limited and Wolfgang Neuberger. -
The Company completed the creation of its
Distribution Center of Excellence inQueensbury , representing a major milestone in its Company-wide operational excellence program designed to save$15 million to$18 million during the course of the next three years. -
AngioDynamics' new Oracle-based business system was launched, unifying the Company under a single ERP system, and completing one of the final and most visible steps to completing the integration ofAngioDynamics andNavilyst Medical .
Nine Months Financial Results
For the nine months ended
Fiscal 2014 Guidance
"Our net sales increase in the third quarter included one additional selling day, which benefitted our top line by approximately 2%. Given our strong sales performance in the first nine months of fiscal 2014, we are raising our fiscal year 2014 sales guidance to a range of
"As a result of the updated fiscal year 2014 guidance, we anticipate 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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| 2014 | 2013 | 2014 | 2013 | |
| (unaudited) | (unaudited) | |||
| Net sales | $ 88,195 | $ 81,571 | $ 260,390 | $ 251,994 |
| Cost of sales | ||||
| Acquired inventory step-up | 75 | 400 | 150 | 3,845 |
| Quality call to action | -- | 38 | -- | 850 |
| Other cost of sales | 42,485 | 39,932 | 127,193 | 122,552 |
| Total cost of sales | 42,560 | 40,370 | 127,343 | 127,247 |
| Gross profit | 45,635 | 41,201 | 133,047 | 124,747 |
| % of net sales | 51.7% | 50.5% | 51.1% | 49.5% |
| Operating expenses | ||||
| Research and development | 7,045 | 5,793 | 20,757 | 19,881 |
| Sales and marketing | 20,700 | 18,520 | 61,736 | 55,734 |
| General and administrative | 6,231 | 6,046 | 19,082 | 19,854 |
| Amortization of intangibles | 4,248 | 4,314 | 12,871 | 11,961 |
| Medical device tax | 980 | 683 | 2,955 | 683 |
| Change in fair value of contingent consideration | (4,154) | 630 | (2,481) | 827 |
| Acquisition and other non-recurring | 3,016 | 5,157 | 7,697 | 9,943 |
| Total operating expenses | 38,066 | 41,143 | 122,617 | 118,883 |
| Operating income | 7,569 | 58 | 10,430 | 5,864 |
| Other income (expense), net | (1,985) | (1,879) | (5,580) | (5,707) |
| Income (loss) before income taxes | 5,584 | (1,821) | 4,850 | 157 |
| Provision for (benefit from) income taxes | 476 | (829) | 267 | (99) |
| Net income (loss) | $ 5,108 | $ (992) | $ 4,583 | $ 256 |
| Earnings (loss) per common share | ||||
| Basic | $ 0.15 | $ (0.03) | $ 0.13 | $ 0.01 |
| Diluted | $ 0.14 | $ (0.03) | $ 0.13 | $ 0.01 |
| Weighted average common shares | ||||
| Basic | 35,184 | 34,834 | 35,088 | 34,787 |
| Diluted | 35,704 | 34,834 | 35,372 | 35,315 |
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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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| 2014 | 2013 | 2014 | 2013 | |
| (unaudited) | (unaudited) | |||
| Net income (loss) | $ 5,108 | $ (992) | $ 4,583 | $ 256 |
| After tax: | ||||
| Acquisition and other non-recurring (1) | 2,176 | 3,111 | 5,208 | 6,158 |
| Quality Call to Action Program (2) | -- | 24 | -- | 540 |
| Inventory step-up (3) | 48 | 254 | 95 | 2,442 |
| Contingent earn out valuation (4) | (4,461) | 400 | (3,398) | 525 |
| Amortization of intangibles | 2,698 | 2,739 | 8,173 | 7,596 |
| Adjusted net income excluding amortization | $ 5,569 | $ 5,536 | $ 14,661 | $ 17,516 |
| Reconciliation of Diluted Earnings Per Share to non-GAAP Adjusted Diluted Earnings Per Share: | ||||
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| 2014 | 2013 | 2014 | 2013 | |
| (unaudited) | (unaudited) | |||
| Diluted earnings (loss) per share | $ 0.14 | $ (0.03) | $ 0.13 | $ 0.01 |
| After tax: | ||||
| Acquisition and other non-recurring (1) | 0.06 | 0.09 | 0.15 | 0.17 |
| Quality Call to Action Program (2) | 0.00 | 0.00 | 0.00 | 0.02 |
| Inventory step-up (3) | 0.00 | 0.01 | 0.00 | 0.07 |
| Contingent earn out valuation (4) | (0.12) | 0.01 | (0.10) | 0.01 |
| Amortization of intangibles | 0.08 | 0.08 | 0.23 | 0.22 |
| Adjusted diluted earnings per share excluding amortization | $ 0.16 | $ 0.16 | $ 0.41 | $ 0.50 |
| (1) Includes costs relating to acquisitions, debt financing, business restructuring, litigation and facility consolidations. |
| (2) Direct costs of implementing a comprehensive Quality Call to Action program to review and augment the |
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quality management systems at our |
| (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: | ||||
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| 2014 | 2013 | 2014 | 2013 | |
| (unaudited) | (unaudited) | |||
| Net income (loss) | $ 5,108 | $ (992) | $ 4,583 | $ 256 |
| Provision for (benefit from) income taxes | 476 | (829) | 267 | (99) |
| Other income (expense), net | 1,985 | 1,879 | 5,580 | 5,707 |
| Amortization of intangibles | 4,248 | 4,314 | 12,871 | 11,961 |
| Depreciation | 2,227 | 2,096 | 5,889 | 6,610 |
| EBITDA | 14,044 | 6,468 | 29,190 | 24,435 |
| Acquisition and other non-recurring (1) | 3,016 | 5,157 | 7,697 | 9,943 |
| Stock-based compensation | 1,599 | 997 | 4,022 | 3,372 |
| Quality Call to Action Program (2) | -- | 38 | -- | 850 |
| Inventory step-up (3) | 75 | 400 | 150 | 3,845 |
| Contingent earn out revaluation (4) | (4,154) | 630 | (2,481) | 827 |
| Adjusted EBITDA | $ 14,580 | $ 13,690 | $ 38,578 | $ 43,272 |
| EBITDA per common share | ||||
| Basic | $ 0.40 | $ 0.19 | $ 0.83 | $ 0.70 |
| Assumes Diluted | $ 0.39 | $ 0.18 | $ 0.83 | $ 0.69 |
| Adjusted EBITDA per common share | ||||
| Basic | $ 0.41 | $ 0.39 | $ 1.10 | $ 1.24 |
| Assumes Diluted | $ 0.41 | $ 0.39 | $ 1.09 | $ 1.23 |
| Reconciliation of Operating Income to non-GAAP Adjusted Operating Income: | ||||
| Three months ended | Nine months ended | |||
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| 2014 | 2013 | 2014 | 2013 | |
| (unaudited) | (unaudited) | |||
| Operating income (loss) | $ 7,569 | $ 58 | $ 10,430 | $ 5,864 |
| Acquisition and other non-recurring (1) | 3,016 | 5,157 | 7,697 | 9,943 |
| Quality Call to Action Program (2) | -- | 38 | -- | 850 |
| Inventory step-up (3) | 75 | 400 | 150 | 3,845 |
| Contingent earn out revaluation (4) | (4,154) | 630 | (2,481) | 827 |
| Amortization of intangibles | 4,248 | 4,314 | 12,871 | 11,961 |
| Adjusted Operating income | $ 10,754 | $ 10,597 | $ 28,667 | $ 33,290 |
| (1) Includes costs relating to acquisitions, debt financing, business restructuring, litigation and facility consolidations. |
| (2) Direct costs of implementing a comprehensive Quality Call to Action program to review and augment the |
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quality management systems at our |
| (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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| 2014 | 2013 | Growth | 2014 | 2013 | Growth | |
| Net Sales by Product Category | ||||||
| Peripheral Vascular | $ 47,403 | $ 42,616 | 11% | $ 141,743 | $ 131,676 | 8% |
| Vascular Access | 27,259 | 26,391 | 3% | 78,113 | 79,733 | (2%) |
| Oncology/Surgery | 11,968 | 10,449 | 15% | 35,692 | 33,688 | 6% |
| Total Excluding Supply Agreement | 86,630 | 79,456 | 9% | 255,548 | 245,097 | 4% |
| Supply Agreement | 1,565 | 2,115 | (26%) | 4,842 | 6,897 | (30%) |
| Total | $ 88,195 | $ 81,571 | 8% | $ 260,390 | $ 251,994 | 3% |
| Net Sales by Geography | ||||||
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$ 69,859 | $ 63,784 | 10% | $ 206,491 | $ 196,682 | 5% |
| International | 16,771 | 15,672 | 7% | 49,057 | 48,415 | 1% |
| Supply Agreement | 1,565 | 2,115 | (26%) | 4,842 | 6,897 | (30%) |
| Total | $ 88,195 | $ 81,571 | 8% | $ 260,390 | $ 251,994 | 3% |
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(a) Sales days for the three months ended |
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(b) Sales days for the nine months ended |
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| CONSOLIDATED BALANCE SHEETS | ||
| (in thousands) | ||
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May 31, | |
| 2014 | 2013 | |
| (unaudited) | (unaudited) | |
| Assets | ||
| Current Assets | ||
| Cash and cash equivalents | $ 7,382 | $ 21,802 |
| Marketable securities | 1,807 | 2,153 |
| Total cash and investments | 9,189 | 23,955 |
| Receivables, net | 57,726 | 47,791 |
| Inventories, net | 59,834 | 55,062 |
| Deferred income taxes | 3,656 | 6,591 |
| Prepaid income taxes | 2,727 | 438 |
| Prepaid expenses and other | 7,000 | 7,679 |
| Total current assets | 140,132 | 141,516 |
| Property, plant and equipment, net | 66,478 | 62,650 |
| Intangible assets, net | 207,970 | 214,848 |
| Goodwill | 359,736 | 355,458 |
| Deferred income taxes | 11,721 | 11,007 |
| Other non-current assets | 6,137 | 6,105 |
| Total Assets | $ 792,174 | $ 791,584 |
| Liabilities and Stockholders' Equity | ||
| Current portion of long-term debt | $ 5,000 | $ 7,500 |
| Current portion of contingent consideration | 12,146 | 9,207 |
| Other current liabilities | 46,235 | 46,730 |
| Total current liabilities | 63,381 | 63,437 |
| Long-term debt, net of current portion | 133,910 | 135,000 |
| Contingent consideration, net of current portion | 55,841 | 65,842 |
| Other long-term liabilities | 1,353 | 475 |
| Total Liabilities | 254,485 | 264,754 |
| Stockholders' equity | 537,689 | 526,830 |
| Total Liabilities and Stockholders' Equity | $ 792,174 | $ 791,584 |
| Shares outstanding | 35,416 | 35,060 |
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| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
| (in thousands) | ||||
| Three months ended | Nine months ended | |||
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| 2014 | 2013 | 2014 | 2013 | |
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |
| Cash flows from operating activities: | ||||
| Net income (loss) | $ 5,108 | $ (992) | $ 4,583 | $ 256 |
| Depreciation and amortization | 6,475 | 6,410 | 18,760 | 18,571 |
| Change in fair value of contingent consideration | (4,154) | 630 | (2,481) | 827 |
| Tax effect of exercise of stock options | -- | 82 | (146) | (422) |
| Deferred income taxes | 794 | 1,244 | 2,219 | 3,419 |
| Stock-based compensation | 1,599 | 997 | 4,022 | 3,372 |
| Amortization of inventory step-up | 75 | 400 | 150 | 3,845 |
| Other | (28) | 1,304 | (51) | 894 |
| Changes in operating assets and liabilities | ||||
| Receivables | (9,321) | 2,454 | (9,411) | 3,957 |
| Inventories | 144 | 644 | (4,225) | (9,468) |
| Accounts payable and accrued liabilities | (1,059) | (3,273) | 2,698 | (10,134) |
| Other | (265) | 100 | (944) | 398 |
| Net cash provided by (used in) operating activities | (632) | 10,000 | 15,174 | 15,515 |
| Cash flows from investing activities: | ||||
| Additions to property, plant and equipment | (1,811) | (2,921) | (9,003) | (7,708) |
| Acquisition of businesses, net of cash acquired | (30) | (10,966) | (4,349) | (25,274) |
| Other cash flows from investing activities | -- | 2,500 | -- | 3,301 |
| Purchases, sales and maturities of marketable securities, net | 25 | -- | 328 | 11,855 |
| Net cash provided by (used in) investing activities | (1,816) | (11,387) | (13,024) | (17,826) |
| Cash flows from financing activities: | ||||
| Repayment of long-term debt | (1,250) | (1,875) | (145,000) | (5,625) |
| Proceeds from issuance of new debt | -- | -- | 141,410 | -- |
| Payment of Contingent Consideration | (5,250) | -- | (14,597) | -- |
| Deferred financing costs of long-term debt | -- | -- | (677) | -- |
| Proceeds from exercise of stock options and ESPP | 1,075 | 620 | 2,208 | 1,096 |
| Net cash provided by (used in) financing activities | (5,425) | (1,255) | (16,656) | (4,529) |
| Effect of exchange rate changes on cash | 82 | (54) | 86 | (43) |
| Increase (Decrease) in cash and cash equivalents | (7,791) | (2,696) | (14,420) | (6,883) |
| Cash and cash equivalents | ||||
| Beginning of period | 15,173 | 19,321 | 21,802 | 23,508 |
| End of period | $ 7,382 | $ 16,625 | $ 7,382 | $ 16,625 |
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. Dave Schemelia
(646) 201-5431
dave@evcgroup.com
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