• Q3 net sales of $85.6 million, down 2% year-over-year
  
• Q3 GAAP earnings per share of $0.08; non-GAAP adjusted EPS up 27% from Q3 fiscal 2016
• Q3 operating cash generation of $14.4 million; free cash flow generation of $14.0 million
• Revised FY2017 revenue and adjusted EPS guidance; free cash flow guidance unchanged

ALBANY, N.Y., March 30, 2017 (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 financial results for the 2017 fiscal year third quarter ended February 28, 2017.

"The quarter demonstrates continued execution on our core imperatives to improve our operational efficiency, strengthen our balance sheet and move forward on initiatives that will enable us to deliver sustainable top line revenue growth," said Jim Clemmer, President and Chief Executive Officer of AngioDynamics. "We have already taken several positive steps to improve our operational efficiency and simplify our supply chain, and in February we made the decision to consolidate operations in Denmead, U.K. and Manchester, Ga. into our New York facilities."

Mr. Clemmer added, "As the quarter ended, we obtained CE Mark certification for the Solero Microwave Tissue Ablation System. With an initial launch in Europe in April, we await FDA approval in the U.S. which we believe will fortify our global position in the innovative ablation market. To support our long-term performance, we will remain focused on delivering high value products within growing markets by better leveraging our renewed R&D process and our existing portfolio of high value offerings like BioFlo and NanoKnife."

Third Quarter 2017 Financial Results
Net sales for the fiscal third quarter were $85.6 million compared with $87.4 million a year ago. Currency did not have an impact in the quarter.

The following comparisons exclude the Boston Scientific supply agreement.

Peripheral Vascular net sales in the third quarter were $48.5 million compared to $49.8 million in the fiscal year 2016 third quarter. Vascular Access net sales in the third quarter were $23.7 million compared to $24.9 million a year ago. Oncology/Surgery net sales in the third quarter were $13.0 million compared to $12.1 million in the fiscal year 2016 third quarter. Overall U.S. net sales in the third quarter were $67.4 million compared to $69.5 million in the year ago third quarter. Overall International net sales in the third quarter were $17.8 million compared to $17.2 million a year ago.

In the third quarter of fiscal 2017, the Company recorded net income of $2.9 million, or $0.08 on a per share basis. The Company recorded net income of $0.6 million, or $0.02 on a per share basis, in the third quarter of fiscal 2016. Excluding the items shown in the attached quarterly non-GAAP reconciliation table, adjusted net income for the third quarter of fiscal 2017 was $6.9 million, or $0.19 per share, compared to an adjusted net income of $5.4 million, or $0.15 per share, in the third quarter of fiscal 2016.

Adjusted EBITDA in the third quarter of fiscal 2017, excluding the items shown in the attached reconciliation table, was $15.5 million compared to $13.9 million in the third quarter of fiscal 2016.

In the third quarter of fiscal 2017, the Company generated $14.4 million in operating cash flow and $14.0 million in free cash flow. As of February 28, 2017, cash and cash equivalents were $35.6 million and debt was $98.8 million.

"Our commitment to prudent financial management during the quarter was evidenced by year-over-year and sequential gross margin expansion, EPS growth and strong cash flow," said Michael Greiner, Executive Vice President and Chief Financial Officer of AngioDynamics. "To further enhance our financial performance and strengthen our operations, the consolidation of our manufacturing operations, which is expected to be completed and fully integrated by the end of the third quarter of the 2018 fiscal year, will drive additional efficiencies and improve margins. We are confident that a solid operating platform and strong balance sheet will fuel our long-term growth potential."

Nine Months Financial Results
For the nine months ended February 28, 2017, net sales were $262.7 million compared to $260.5 million a year ago. The Company's net income was $17.9 million, or $0.49 per share, compared to a net loss of $0.5 million, or $0.01 per share a year ago. Excluding the items shown in the attached quarterly non-GAAP reconciliation table, adjusted net income was $20.2 million, or $0.55 per share, compared to adjusted net income of $14.4 million, or $0.40 per share, a year ago. Adjusted EBITDA, excluding the items shown in the attached reconciliation table, was $46.5 million compared to $38.9 million in the year ago period.

Fiscal Year 2017 Financial Guidance
The company is revising its FY2017 revenue guidance from a range of $355 million to $360 million to a range of $352 million to $355 million. The company is increasing its FY2017 adjusted EPS guidance from a range of $0.65 to $0.67 to a range of $0.68 to $0.70. The company's free cash flow guidance remains unchanged at greater than $35 million.

Conference Call
AngioDynamics will host a conference call today at 8:00am ET to discuss its third quarter results. To participate in the live call by telephone, please call 888-299-7212 and reference the Conference ID: 6053267. In addition, a live webcast and archived replay of the call will be available at investors.angiodynamics.com/events. To access the live webcast, please go to the website 15-minutes prior to 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 EBITDA; adjusted gross profit; 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.

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 drainage products, thrombolytic products and venous products. More information is available at AngioDynamics.com.

Trademarks
AngioDynamics, the AngioDynamics logo, BioFlo, NanoKnife and Solero are trademarks and/or registered trademarks of AngioDynamics Inc., an affiliate or a subsidiary.

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 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, 2016 and  its quarterly report on Form 10-Q for the fiscal periods ended August 31, 2016 and November 30, 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.

ANGIODYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share data)
		Three months ended								Nine months ended
		Feb 28,				Feb, 29				Feb 28,				Feb, 29
			2017				2016				2017				2016
		(unaudited)								(unaudited)
Net sales		$	85,602			$	87,434			$	262,729			$	260,471
Cost of sales (exclusive of intangible amortization)			41,810				43,900				128,895				127,682
Gross profit			43,792				43,534				133,834				132,789
% of net sales			51.2%				49.8%				50.9%				51.0%
Operating expenses
Research and development			5,951				5,808				18,573				18,116
Sales and marketing			19,469				20,955				58,481				63,534
General and administrative			7,000				6,901				22,952				22,897
Amortization of intangibles			4,360				4,458				12,886				13,356
Change in fair value of contingent consideration			122				(31	)			(15,386	)			630
Acquisition, restructuring and other items, net			1,750				3,042				12,028				9,098
Medical device excise tax			-				435				-				2,416
Total operating expenses			38,652				41,568				109,534				130,047
Operating  income			5,140				1,966				24,300				2,742
Other (expense), net			(583	)			(1,021	)			(2,425	)			(3,173	)
Income (loss) before income taxes			4,557				945				21,875				(431	)
Income tax expense (benefit)			1,670				351				3,954				84
Net income (loss)		$	2,887			$	594			$	17,921			$	(515	)
Earnings (loss) per share
Basic		$	0.08			$	0.02			$	0.49			$	(0.01	)
Diluted		$	0.08			$	0.02			$	0.48			$	(0.01	)
Weighted average shares outstanding
Basic			36,625				36,146				36,557				36,083
Diluted			37,126				36,390				37,068				36,083

 

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								Nine months ended
	Feb 28,				Feb, 29				Feb 28,				Feb, 29
		2017				2016				2017				2016
	(unaudited)								(unaudited)
Gross profit	$	43,792			$	43,534			$	133,834			$	132,789
Recall expenses included in cost of sales		14				6				216				(92	)
Adjusted gross profit	$	43,806			$	43,540			$	134,050			$	132,697
Adjusted gross profit % of sales		51.2%				49.8%				51.0%				50.9%
Reconciliation of Net Income to non-GAAP Adjusted Net Income:
	Three months ended								Nine months ended
	Feb 28,				Feb, 29				Feb 28,				Feb, 29
		2017				2016				2017				2016
	(unaudited)								(unaudited)
Net income (loss)	$	2,887			$	594			$	17,921			$	(515	)
Recall expenses included in cost of sales		14				6				216				(92	)
Amortization of intangibles		4,360				4,458				12,886				13,356
Change in fair value of contingent consideration		122				(31	)			(15,386	)			630
Acquisition, restructuring and other items, net (1)		1,750				3,042				12,028				9,098
Tax effect of non-GAAP items (2)		(2,219	)			(2,680	)			(7,429	)			(8,038	)
Adjusted net income	$	6,914			$	5,389			$	20,236			$	14,439
Reconciliation of Diluted Earnings Per Share to non-GAAP Adjusted Diluted Earnings Per Share:
	Three months ended								Nine months ended
	Feb 28,				Feb, 29				Feb 28,				Feb, 29
		2017				2016				2017				2016
	(unaudited)								(unaudited)
Diluted earnings (loss) per share	$	0.08			$	0.02			$	0.48			$	(0.01	)
Recall expenses included in cost of sales	$	0.00				0.00			$	0.01				(0.00	)
Amortization of intangibles	$	0.12				0.12			$	0.34				0.37
Change in fair value of contingent consideration	$	0.00				(0.00	)		$	(0.41	)			0.02
Acquisition, restructuring and other items, net (1)	$	0.05				0.08			$	0.33				0.25
Tax effect of non-GAAP items (2)	$	(0.06	)			(0.07	)		$	(0.20	)			(0.22	)
Adjusted diluted earnings per share	$	0.19			$	0.15			$	0.55			$	0.40
Adjusted diluted sharecount		37,126				36,390				37,068				36,083
(1)  Includes costs related to mergers and acquisition activities, integrations, restructurings, asset impairments and write-offs, litigation, and other items.
(2)  Represents the net tax effect of non-GAAP adjustments.  Based on our historical non-GAAP earnings, our tax effect of non-GAAP items has been calculated assuming no valuation allowance on our deferred tax assets and an effective tax rate of 36%.

 

ANGIODYNAMICS, INC. AND SUBSIDIARIES
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
	Feb 28,				Feb, 29				Feb 28,				Feb, 29
		2017				2016				2017				2016
	(unaudited)								(unaudited)
Net income (loss)	$	2,887			$	594			$	17,921			$	(515	)
Income tax expense (benefit)		(1,670	)			(351	)			(3,954	)			(84	)
Other (expense), net		(583	)			(1,021	)			(2,425	)			(3,173	)
Depreciation and amortization		6,091				6,860				18,168				20,931
EBITDA		11,231				8,826				42,468				23,673
Recall expenses included in cost of sales		14				6				216				(92	)
Change in fair value of contingent consideration		122				(31	)			(15,386	)			630
Acquisition, restructuring and other items, net (1,2)		1,750				2,794				12,028				8,097
Credit card fees		702				654				2,099				2,107
Stock-based compensation		1,693				1,640				5,078				4,500
Adjusted EBITDA	$	15,512			$	13,889			$	46,503			$	38,915
Per diluted share:
EBITDA	$	0.30			$	0.24			$	1.15			$	0.66
Adjusted EBITDA	$	0.42			$	0.38			$	1.25			$	1.08
(1)  Includes costs related to mergers and acquisition activities, integrations, restructurings, asset impairments and write-offs, litigation, and other items.
(2)  Excludes depreciation expense captured in the depreciation and amortization component of the reconciliation.

 

ANGIODYNAMICS, INC. AND SUBSIDIARIES
NET SALES BY PRODUCT CATEGORY AND BY GEOGRAPHY
(unaudited in thousands)
	Three months ended																Nine months ended
											Currency			Constant													Currency			Constant
	Feb 28,				Feb, 29			%			Impact			Currency			Feb 28,				Feb, 29			%			Impact			Currency
		2017				2016		Growth			(Pos) Neg			Growth				2017				2016		Growth			(Pos) Neg			Growth
Net Sales by Product Category
Peripheral Vascular	$	48,496			$	49,779		-3	%								$	152,800			$	147,940		3	%
Vascular Access		23,680				24,911		-5	%									72,238				74,576		-3	%
Oncology/Surgery		12,993				12,054		8	%									35,837				35,859		0	%
Total Excluding Supply Agreement		85,169				86,744		-2	%		0	%		-2	%			260,875				258,375		1	%		0	%		1	%
Supply Agreement		433				690		-37	%		0	%		-37	%			1,854				2,096		-12	%		0	%		-12	%
Total	$	85,602			$	87,434		-2	%		0	%		-2	%		$	262,729			$	260,471		1	%		0	%		1	%
Net Sales by Geography
United States	$	67,366			$	69,501		-3	%		0	%		-3	%		$	209,901			$	208,523		1	%		0	%		1	%
International		17,803				17,243		3	%		1	%		4	%			50,974				49,852		2	%		2	%		4	%
Supply Agreement		433				690		-37	%		0	%		-37	%			1,854				2,096		-12	%		0	%		-12	%
Total	$	85,602			$	87,434		-2	%		0	%		-2	%		$	262,729			$	260,471		1	%		0	%		1	%

 

ANGIODYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
	Feb 28,				May 31,
	2017				2016
	(unaudited)				(unaudited)
Assets
Current Assets
Cash and cash equivalents	$	35,571			$	32,333
Marketable securities		1,203				1,653
Total cash and investments		36,774				33,986
Accounts receivable, net		46,302				52,867
Inventories		57,681				55,370
Prepaid income taxes		309				788
Prepaid expenses and other		3,985				3,243
Total current assets		145,051				146,254
Property, plant and equipment, net		46,180				48,284
Other non-current assets		1,757				3,827
Intangible assets, net		150,078				166,577
Goodwill		361,252				361,252
Total Assets	$	704,318			$	726,194
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$	15,357			$	15,616
Accrued liabilities		20,753				21,942
Current portion of long-term debt		5,000				16,250
Current portion of contingent consideration		9,531				12,919
Total current liabilities		50,641				66,727
Long-term debt, net of current portion		92,519				104,291
Deferred income taxes, long-term		25,304				21,684
Contingent consideration, net of current portion		3,104				25,356
Other long-term liabilities		1,000				908
Total Liabilities		172,568				218,966
Stockholders' equity		531,750				507,228
Total Liabilities and Stockholders' Equity	$	704,318			$	726,194

 

ANGIODYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
	Three months ended										Nine months ended
	Feb 28,					Feb, 29					Feb 28,					Feb, 29
		2017					2016					2017					2016
	(unaudited)					(unaudited)					(unaudited)					(unaudited)
Cash flows from operating activities:
Net  income  (loss)	$	2,887				$	594				$	17,921				$	(515	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		6,169					6,979					18,455					21,289
Stock-based compensation		1,693					1,640					5,078					4,500
Change in fair value of contingent consideration		122					(31	)				(15,386	)				630
Fixed and intangible asset impairments and disposals		78					53					3,822					675
Deferred income taxes		1,554					203					3,624					(388	)
Change in accounts receivable allowance		5					1,017					(605	)				1,355
Write-off of other assets		-					-					2,685					-
Other		41					261					(535	)				-
Changes in operating assets and liabilities, net of acquisitions:
Receivables		3,855					(2,416	)				6,898					2,492
Inventories		(1,027	)				4,930					(2,585	)				1,457
Prepaid and other assets		(747	)				1,359					(1,215	)				(782	)
Accounts payable and accrued liabilities		(265	)				(2,195	)				(1,405	)				(4,041	)
Net cash provided by (used in) operating activities		14,365					12,394					36,752					26,672
Cash flows from investing activities:
Additions to property, plant and equipment		(412	)				(727	)				(2,258	)				(1,895	)
Acquisition of businesses, net of cash acquired		-					(2,000	)				-					(2,000	)
Acquisition of intangible assets		-					(18	)				-					(18	)
Proceeds from sale or maturity of marketable securities		-					-					450					25
Net cash provided by (used in) investing activities		(412	)				(2,745	)				(1,808	)				(3,888	)
Cash flows from financing activities:
Repayment of long-term debt		(17,721	)				(7,500	)				(139,131	)				(11,250	)
Proceeds from issuance  of long-term debt and revolver borrowings		-					-					116,471					-
Deferred financing costs on long-term debt		(158	)				-					(1,335	)				-
Payment of Contingent Consideration		-					-					(9,850	)				(9,850	)
Repurchase of shares		-					-					(7,840	)				-
Proceeds from exercise of stock options and ESPP		3,865					703					10,269					1,933
Net cash provided by (used in) financing activities		(14,014	)				(6,797	)				(31,416	)				(19,167	)
Effect of exchange rate changes on cash		(32	)				49					(290	)				(111	)
Increase  (Decrease) in cash and cash equivalents		(93	)				2,901					3,238					3,506
Cash and cash equivalents
Beginning of period		35,664					18,996					32,333					18,391
End of period	$	35,571				$	21,897				$	35,571				$	21,897

 

ANGIODYNAMICS, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
(in thousands)
Reconciliation of Free Cash Flows:
		Three months ended								Nine months ended
		Feb 28,				Feb, 29				Feb 28,				Feb, 29
			2017				2016				2017				2016
		(unaudited)								(unaudited)
Net cash provided by (used in) operating activities		$	14,365			$	12,394			$	36,752			$	26,672
Additions to property, plant and equipment			(412	)			(727	)			(2,258	)			(1,895	)
Free Cash Flow		$	13,953			$	11,667			$	34,494			$	24,777

Company Contact:

AngioDynamics Inc.

Caitlin Stefanik

(518) 795-1418

cstefanik@angiodynamics.com



Investor Relations Contacts:

FTI Consulting

Jim Polson

(312) 553-6730

Jim.Polson@fticonsulting.com,

Kotaro Yoshida

(212) 850-5690

Kotaro.Yoshida@fticonsulting.com



Media Contact:

FTI Consulting

Kimberly Ha

(212) 850-5612

kimberly.ha@fticonsulting.com

Source: AngioDynamics

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