• Net Sales of $53.4 Million, International Sales Rise 12%
• Net Income of $3.3 Million, or $0.13 EPS
• Gross Margin of 59.1%
• Operating Cash Flow of $9.9 Million
• Reiterates Fiscal Year 2011 Guidance
• Conference Call Today at 4:30 p.m. Eastern Time

ALBANY, N.Y.--(BUSINESS WIRE)-- AngioDynamics (NASDAQ: ANGO), a leading provider of innovative medical devices for the minimally-invasive treatment of cancer and peripheral vascular disease, today reported financial results for the fiscal 2011 second quarter ended November 30, 2010.

Net sales in the second quarter were $53.4 million, virtually identical to the $53.5 million reported in the prior year period. Oncology sales increased 16% to $15.9 million from the prior year, and included $1.6 million in NanoKnife^® System sales, up from $1.1 million in the fiscal 2011 first quarter. Vascular sales were $37.5 million, a decrease of 6% from the second quarter a year ago. Effective for the fiscal year beginning June 1, 2010, Vascular sales include both Peripheral Vascular and Access product lines, for which the Company combined the respective sales forces. International sales in the second quarter grew 12% to $6.7 million from the prior year period.

Gross margin was 59.1% in the second quarter, compared with 59.1% for the prior year period and 58.3% in the first quarter of fiscal 2011. The quarter-over-quarter increase is primarily due to the impact of programs to reduce material costs and increase manufacturing efficiencies. Operating income increased 1% to $5.4 million in the quarter compared with $5.3 million a year ago. Net income in the second quarter increased 5% to $3.3 million, or $0.13 per share, compared with $3.1 million, or $0.13 per share, a year ago.

AngioDynamics generated cash flow from operations of $9.9 million during the second quarter. At November 30, 2010, cash and investments totaled $110.6 million, and long-term debt was $6.4 million.

For the six months ended November 30, 2010, net sales were $104.9 million, a 1% increase over the $103.6 million reported for the prior year period. Gross margin for the six months ended November 30, 2010 was 58.7% compared with 59.6% for the six months ended November 30, 2009. For the six months ended November 30, 2010, operating income of $8.9 million and net income of $5.2 million, or $0.21 per share, were the same as reported for the prior year period.

"While we continued to face a challenging operating environment during our fiscal second quarter, we further invested in our R&D, international business and NanoKnife® programs to build for future growth," said Jan Keltjens, President and Chief Executive Officer. "We grew international sales 12%, our Oncology business posted strong growth and NanoKnife System sales were up 42% over the fiscal first quarter. Our efforts to increase gross margins began to generate initial results and led to a sequential 80 basis point improvement. As we complete the transition to a strong, integrated Vascular sales force and build on the momentum from our international and Oncology product sales, we are optimistic about improved results in the second half of fiscal 2011. We remain focused on delivering profitability by tightly managing expenses while generating strong operating cash flow and driving sustained long-term growth through investment in innovative products."

Highlights of the quarter, and more recent activities, include the following:

• Strong clinician response to AngioDynamics' NanoKnife System commercial sales efforts continued. An additional 90 patients were treated since October 1, 2010. A total of 412 patients have been treated to date with the NanoKnife System. NanoKnife System sales in the second quarter totaled $1.6 million. Included in this total were system sales to customers in Taiwan and Hong Kong, which represent the first sales of the NanoKnife System in Asia.
• The Company expanded its Morpheus^® Smart PICC product line with the launch of a 5 French / dual lumen IR Kit, which brought the number of new products launched to date during fiscal 2011 to four. The Company remains on track for a total of 10 launches in this fiscal year.
• AngioDynamics entered into contracts with two leading hospital group purchasing organizations covering certain vascular products.
• The Company reached a favorable settlement of patent infringement litigation with Vascular Solutions that settles and resolves the lawsuit between the companies filed in July 2009.

Fiscal 2011 Guidance

The Company reiterated its outlook for fiscal year 2011 as follows:

• Net sales in the range of $220.0 million to $225.0 million, an increase of 2% to 4% over fiscal 2010 net sales
• Gross margin in the range of 58% to 59% of net sales
• GAAP operating income in the range of $20.5 million to $22.0 million
• EBITDA in the range of $33.0 million to $34.5 million
• GAAP EPS in the range of $0.47 to $0.50, inclusive of a $0.21 to $0.23 per share negative impact from the ongoing investment in the NanoKnife® program

Conference Call

AngioDynamics management will host a conference call to discuss its second quarter results today beginning at 4:30 p.m. Eastern Time. To participate in the live call by telephone, please dial 1 (877) 941-6009.

In addition, individuals can listen to the live call and the replay on the Internet by visiting the investor relations portion of the AngioDynamics Web site at http://investors.angiodynamics.com. To listen to the live call, please go to the Web site 15 minutes prior to its start to register, download and install the necessary audio 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 non-GAAP EBITDA (income before interest, taxes, depreciation and amortization). Management uses this measure in its internal analysis and review of operational performance. Management believes that this measure provides investors with useful information in comparing AngioDynamics' performance over different periods. By using this non-GAAP measure, 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 Operating Income to non-GAAP measures.

About AngioDynamics

AngioDynamics, Inc. is a leading provider of innovative medical devices used by interventional radiologists, surgeons and other physicians for the minimally-invasive treatment of cancer and peripheral vascular disease. AngioDynamics' diverse product lines include market-leading radiofrequency and irreversible electroporation ablation systems, vascular access products, angiographic products and accessories, dialysis products, angioplasty products, drainage products, thrombolytic products, embolization products and venous products. More information is available at www.angiodynamics.com.

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, future actions by the FDA or other regulatory agencies, results of pending or future clinical trials, overall economic conditions, the results of on-going litigation, 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, 2010. AngioDynamics does not assume any obligation to publicly update or revise any forward-looking statements for any reason.

In the United States, NanoKnife® has been cleared by the FDA for use in the surgical ablation of soft tissue. This document may discuss the use of NanoKnife for specific clinical indications for which it is not cleared in the United States at this time.

ANGIODYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share data)
		Three months ended								Six months ended
		Nov, 30				Nov, 30				Nov, 30				Nov, 30
			2010				2009				2010				2009
		(unaudited)								(unaudited)
Net sales		$	53,372			$	53,459			$	104,879			$	103,551
Cost of sales			21,836				21,852				43,323				41,812
Gross profit			31,536				31,607				61,556				61,739
% of net sales			59.1	%			59.1	%			58.7	%			59.6	%
Operating expenses
Research and development			5,259				4,763				10,501				9,612
Sales and marketing			13,793				15,042				28,237				30,401
General and administrative			4,173				4,031				8,760				8,108
Non-recurring costs			772				-				772				-
Amortization of intangibles			2,142				2,451				4,408				4,723
Total operating expenses			26,139				26,287				52,678				52,844
Operating income			5,397				5,320				8,878				8,895
Other income (expense), net			(262	)			(290	)			(790	)			(455	)
Income before income taxes			5,135				5,030				8,088				8,440
Provision for income taxes			1,856				1,901				2,921				3,200
Net income		$	3,279			$	3,129			$	5,167			$	5,240
Earnings per common share
Basic		$	0.13			$	0.13			$	0.21			$	0.21
Diluted		$	0.13			$	0.13			$	0.21			$	0.21
Weighted average common shares
Basic			24,845				24,518				24,799				24,472
Diluted			25,094				24,729				25,067				24,662

ANGIODYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
			Nov, 30			May 31,
			2010			2010
			(unaudited)				(2)
Assets
Current Assets
	Cash and cash equivalents		$	27,132		$	58,763
	Marketable securities			83,471			41,311
	Total cash and investments			110,603			100,074
	Receivables, net			25,762			29,838
	Inventories, net			32,731			29,216
	Deferred income taxes			2,997			5,281
	Prepaid income taxes			3,639			5,525
	Prepaid expenses and other			1,714			1,426
	Total current assets			177,446			171,360
Property, plant and equipment, net				24,102			24,193
Intangible assets, net				53,948			58,352
Goodwill				161,964			161,974
Deferred income taxes				2,598			2,527
Other non-current assets				5,925			5,519
	Total Assets		$	425,983		$	423,925
Liabilities and Stockholders' Equity
Current portion of long-term debt			$	270		$	260
Other current liabilities				19,851			25,766
Long-term debt, net of current portion				6,410			6,550
	Total Liabilities			26,531			32,576
Stockholders' equity				399,452			391,349
	Total Liabilities and Stockholders' Equity		$	425,983		$	423,925
				-			-
Shares outstanding				24,852			24,747
(2)	Derived from audited financial statements

ANGIODYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
			Six months ended
			Nov, 30				Nov, 30
				2010				2009
			(unaudited)				(unaudited)
Cash flows from operating activities:
Net income			$	5,167			$	5,240
Depreciation and amortization				5,984				6,219
Tax effect of exercise of stock options				(29	)			31
Deferred income taxes				2,285				3,126
Stock-based compensation				2,254				2,413
Other				34				(324	)
Changes in operating assets and liabilities
Receivables				4,157				1,816
Inventories				(3,477	)			(2,767	)
Accounts payable and accrued liabilities				(5,944	)			(4,304	)
Other				1,195				931
	Net cash provided by operating activities			11,626				12,381
Cash flows from investing activities:
Additions to property, plant and equipment				(1,489	)			(1,951	)
Acquisition of intangible assets and businesses				-				(5,350	)
Purchases, sales and maturities of marketable securities, net				(42,394	)			2,431
	Net cash provided by (used in) investing activities			(43,883	)			(4,870	)
Cash flows from financing activities:
Repayment of long-term debt				(130	)			(145	)
Proceeds from exercise of stock options and ESPP				718				971
	Net cash provided by financing activities			588				826
	Effect of exchange rate changes on cash			38				10
	Increase (Decrease) in cash and cash equivalents			(31,631	)			8,347
Cash and cash equivalents
	Beginning of period			58,763				27,909
	End of period		$	27,132			$	36,256

ANGIODYNAMICS, INC. AND SUBSIDIARIES
NET SALES BY PRODUCT CATEGORY AND BY GEOGRAPHY
(in thousands)
		Three months ended				Six months ended
		Nov, 30		Nov, 30		Nov, 30		Nov, 30
		2010		2009		2010		2009
		(unaudited)				(unaudited)
Net Sales by Product Category
Vascular
Peripheral Vascular		$ 22,004		$ 23,167		$ 42,705		$ 44,226
Access		15,516		16,677		30,729		32,908
Total Vascular		37,520		39,844		73,434		77,134
Oncology		15,852		13,615		31,445		26,417
Total		$ 53,372		$ 53,459		$ 104,879		$ 103,551
Net Sales by Geography
United States		$ 46,703		$ 47,488		$ 92,176		$ 92,401
International		6,669		5,971		12,703		11,150
Total		$ 53,372		$ 53,459		$ 104,879		$ 103,551

ANGIODYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share data)
Reconciliation of Operating Income to non-GAAP EBITDA:
		Three months ended						Six months ended
		Nov, 30			Nov, 30			Nov, 30			Nov, 30
			2010			2009			2010			2009
		(unaudited)						(unaudited)
Operating income		$	5,397		$	5,320		$	8,878		$	8,895
Amortization of intangibles			2,142			2,451			4,408			4,723
Depreciation			887			758			1,576			1,496
EBITDA		$	8,426		$	8,529		$	14,862		$	15,114
EBITDA per common share
Basic		$	0.34		$	0.35		$	0.60		$	0.62
Diluted		$	0.34		$	0.34		$	0.59		$	0.61
Weighted average common shares
Basic			24,845			24,518			24,799			24,472
Diluted			25,094			24,729			25,067			24,662

Company Contact:
AngioDynamics, Inc.
D. Joseph Gersuk, CFO, 800-772-6446 ext. 1608
jgersuk@AngioDynamics.com
or
EVC Group, Inc.
Investor Relations Contacts:
Doug Sherk, 415-896-6820
dsherk@evcgroup.com
Greg Gin, 646-445-4801
ggin@evcgroup.com
Media Contact:
Chris Gale, 646-201-5431
cgale@evcgroup.com

Source: AngioDynamics

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