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(State or Other Jurisdiction of Incorporation)
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(Commission File
Number)
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(IRS Employer
Identification No.)
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(Address of Principal Executive Offices) (Zip Code)
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(
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(Registrant’s telephone number, including area code)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Exhibit No.
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Description
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ANGIODYNAMICS, INC.
(Registrant)
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||||
Date: September 29, 2020
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By:
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/s/ Stephen A. Trowbridge | ||
Name: | Stephen A. Trowbridge | |||
Title: |
Executive Vice President, General Counsel
and Chief Financial Officer
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|||
•
|
Net sales of $70.2 million increased 6.3% compared to the prior-year quarter, inclusive of the previously
disclosed $5.2 million order from the National Health Service (NHS) in the UK
|
•
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Gross margin declined 700 basis points year over year to 50.9%
|
•
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GAAP loss per share of $0.11 and adjusted earnings per share of $0.02
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•
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Cash and cash equivalents on August 31, 2020 were $47.9 million, compared to $54.4 million on May 31, 2020
|
• |
The Company expects fiscal year 2021 net sales between $278 and $284 million and fiscal year 2021 adjusted
earnings per share between $0.00 and $0.05
|
•
|
Subsequent to quarter end, the Company announced the full commercial launch of its Auryon Atherectomy System
|
• |
Oncology net sales were $12.3 million, a decrease of 12.3% from $14.0 million a year ago, with growth in microwave ablation and U.S. NanoKnife probe
sales more than offset by lower sales in international markets.
|
• |
Vascular Interventions and Therapies (“VIT”) net sales were $29.9 million, an increase of 3.3%, compared to $29.0 million a year ago. Sales of AngioVac
grew 46% over the previous year and were partially offset by a decline in sales of Venous products as a result of lower elective procedure volumes. Auryon sales during the quarter were $1.1 million, and the Company announced the full
commercial launch of this platform on September 21, 2020.
|
• |
Vascular Access net sales were $28.1 million, an increase of 21.4% from $23.2 million a year ago, which includes the impact of a previously disclosed
sale in the UK through our distributor partner to the NHS. Excluding the impact of this sale, Vascular Access sales declined approximately 1.2% year over year.
|
ANGIODYNAMICS, INC. AND SUBSIDIARIES
|
CONSOLIDATED INCOME STATEMENTS
|
(in thousands, except per share data)
|
Three Months Ended
|
|||||||
Aug 31, 2020
|
Aug 31, 2019
|
||||||
(unaudited)
|
|||||||
Net sales
|
$
|
70,216
|
$
|
66,042
|
|||
Cost of sales (exclusive of intangible amortization)
|
34,452
|
27,825
|
|||||
Gross profit
|
35,764
|
38,217
|
|||||
% of net sales
|
50.9
|
%
|
57.9
|
%
|
|||
Operating expenses
|
|||||||
Research and development
|
9,009
|
6,292
|
|||||
Sales and marketing
|
17,705
|
19,380
|
|||||
General and administrative
|
8,557
|
8,453
|
|||||
Amortization of intangibles
|
4,953
|
3,868
|
|||||
Change in fair value of contingent consideration
|
(657)
|
(448)
|
|||||
Acquisition, restructuring and other items, net
|
1,319
|
1,500
|
|||||
Total operating expenses
|
40,886
|
39,045
|
|||||
Operating loss
|
(5,122)
|
(828)
|
|||||
Interest expense, net
|
(215)
|
(465)
|
|||||
Other income (expense), net
|
524
|
(98)
|
|||||
Total other income (expense), net
|
309
|
(563)
|
|||||
Loss before income tax benefit
|
(4,813)
|
(1,391)
|
|||||
Income tax benefit
|
(545)
|
(116)
|
|||||
Net loss
|
$
|
(4,268)
|
$
|
(1,275)
|
|||
Loss per share
|
|||||||
Basic
|
$
|
(0.11)
|
$
|
(0.03)
|
|||
Diluted
|
$
|
(0.11)
|
$
|
(0.03)
|
|||
Weighted average shares outstanding
|
|||||||
Basic
|
38,157
|
37,783
|
|||||
Diluted
|
38,157
|
37,783
|
ANGIODYNAMICS, INC. AND SUBSIDIARIES
|
GAAP TO NON-GAAP RECONCILIATION
|
(in thousands, except per share data)
|
Reconciliation of Net Loss to non-GAAP Adjusted Net Income:
|
|||||||
Three Months Ended
|
|||||||
Aug 31, 2020
|
Aug 31, 2019
|
||||||
(unaudited)
|
|||||||
Net loss
|
$
|
(4,268)
|
$
|
(1,275)
|
|||
Amortization of intangibles
|
4,953
|
3,868
|
|||||
Change in fair value of contingent consideration
|
(657)
|
(448)
|
|||||
Acquisition, restructuring and other items, net (1)
|
1,319
|
1,500
|
|||||
Write-off of deferred financing fees (2)
|
—
|
593
|
|||||
Tax effect of non-GAAP items (3)
|
(729)
|
(1,064)
|
|||||
Adjusted net income
|
$
|
618
|
$
|
3,174
|
|||
Reconciliation of Diluted Loss Per Share to non-GAAP Adjusted Diluted Earnings Per Share:
|
|||||||
Three Months Ended
|
|||||||
Aug 31, 2020
|
Aug 31, 2019
|
||||||
(unaudited)
|
|||||||
Diluted loss per share
|
$
|
(0.11)
|
$
|
(0.03)
|
|||
Amortization of intangibles
|
0.13
|
0.10
|
|||||
Change in fair value of contingent consideration
|
(0.02)
|
(0.01)
|
|||||
Acquisition, restructuring and other items, net (1)
|
0.03
|
0.04
|
|||||
Write-off of deferred financing fees (2)
|
—
|
0.02
|
|||||
Tax effect of non-GAAP items (3)
|
(0.01)
|
(0.04)
|
|||||
Adjusted diluted earnings per share
|
$
|
0.02
|
$
|
0.08
|
|||
Adjusted diluted sharecount
|
38,191
|
38,158
|
|||||
(1) Includes costs related to merger and acquisition activities, restructuring, and unusual items, including asset impairments
and write-offs, certain litigation, and other items.
|
(2) Deferred financing fees related to the old credit agreement were written off during the first quarter of fiscal year 2020.
|
(3) Adjustment to reflect the income tax provision on a non-GAAP basis has been calculated assuming no valuation allowance on the
Company's U.S. deferred tax assets and an effective tax rate of 23% for August 31, 2020 and 2019.
|
ANGIODYNAMICS, INC. AND SUBSIDIARIES
|
GAAP TO NON-GAAP RECONCILIATION (Continued)
|
(in thousands, except per share data)
|
Reconciliation of Net Loss to Adjusted EBITDA:
|
|||||||
Three Months Ended
|
|||||||
Aug 31, 2020
|
Aug 31, 2019
|
||||||
(unaudited)
|
|||||||
Net loss
|
$
|
(4,268)
|
$
|
(1,275)
|
|||
Income tax benefit
|
(545)
|
(116)
|
|||||
Interest expense, net
|
215
|
465
|
|||||
Depreciation and amortization
|
6,538
|
5,170
|
|||||
Change in fair value of contingent consideration
|
(657)
|
(448)
|
|||||
Stock based compensation
|
1,864
|
1,984
|
|||||
Acquisition, restructuring and other items, net (1)
|
1,319
|
1,500
|
|||||
Adjusted EBITDA
|
$
|
4,466
|
$
|
7,280
|
|||
Per diluted share:
|
|||||||
Adjusted EBITDA
|
$
|
0.12
|
$
|
0.19
|
(1) Includes costs related to merger
and acquisition activities, restructuring, and unusual items, including asset impairments and write-offs, certain litigation, and other items.
|
ANGIODYNAMICS, INC. AND SUBSIDIARIES
|
NET SALES BY PRODUCT CATEGORY AND BY GEOGRAPHY
|
(in thousands)
|
Three Months Ended
|
||||||||||||
Aug 31, 2020
|
Aug 31, 2019
|
% Growth
|
Currency Impact
|
Constant Currency Growth
|
||||||||
(unaudited)
|
||||||||||||
Net Sales by Product Category
|
||||||||||||
Vascular Interventions & Therapies
|
$
|
29,857
|
$
|
28,913
|
3.3%
|
|||||||
Vascular Access
|
28,105
|
23,159
|
21.4%
|
|||||||||
Oncology
|
12,254
|
13,970
|
(12.3)%
|
|||||||||
$
|
70,216
|
$
|
66,042
|
6.3%
|
0.0%
|
6.3%
|
||||||
—
|
—
|
|||||||||||
Net Sales by Geography
|
||||||||||||
United States
|
$
|
54,108
|
$
|
52,937
|
2.2%
|
0.0%
|
2.2%
|
|||||
International
|
16,108
|
13,105
|
22.9%
|
0.0%
|
22.7%
|
|||||||
$
|
70,216
|
$
|
66,042
|
6.3%
|
0.0%
|
6.3%
|
||||||
ANGIODYNAMICS, INC. AND SUBSIDIARIES
|
CONSOLIDATED BALANCE SHEETS
|
(in thousands)
|
Aug 31, 2020
|
May 31, 2020
|
||||||
(unaudited)
|
(audited)
|
||||||
Assets
|
|||||||
Current assets:
|
|||||||
Cash and cash equivalents
|
$
|
47,929
|
$
|
54,435
|
|||
Accounts receivable, net
|
33,590
|
31,263
|
|||||
Inventories
|
52,762
|
59,905
|
|||||
Prepaid expenses and other
|
7,957
|
7,310
|
|||||
Total current assets
|
142,238
|
152,913
|
|||||
Property, plant and equipment, net
|
29,427
|
28,312
|
|||||
Other assets
|
16,833
|
15,338
|
|||||
Intangible assets, net
|
194,318
|
197,136
|
|||||
Goodwill
|
200,943
|
200,515
|
|||||
Total assets
|
$
|
583,759
|
$
|
594,214
|
|||
Liabilities and stockholders' equity
|
|||||||
Current liabilities:
|
|||||||
Accounts payable
|
$
|
14,008
|
$
|
19,096
|
|||
Accrued liabilities
|
23,587
|
29,380
|
|||||
Current portion of contingent consideration
|
—
|
836
|
|||||
Other current liabilities
|
2,251
|
2,133
|
|||||
Total current liabilities
|
39,846
|
51,445
|
|||||
Long-term debt, net of current portion
|
40,000
|
40,000
|
|||||
Contingent consideration, net of current portion
|
14,994
|
14,811
|
|||||
Deferred income taxes
|
23,817
|
24,057
|
|||||
Other long-term liabilities
|
10,048
|
9,029
|
|||||
Total liabilities
|
128,705
|
139,342
|
|||||
Stockholders' equity
|
455,054
|
454,872
|
|||||
Total Liabilities and Stockholders' Equity
|
$
|
583,759
|
$
|
594,214
|
|||
ANGIODYNAMICS, INC. AND SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in thousands)
|
Three Months Ended
|
|||||||
Aug 31, 2020
|
Aug 31, 2019
|
||||||
(unaudited)
|
|||||||
Cash flows from operating activities:
|
|||||||
Net loss
|
$
|
(4,268)
|
$
|
(1,275)
|
|||
Adjustments to reconcile net loss to net cash used in operating activities:
|
|||||||
Depreciation and amortization
|
6,577
|
5,207
|
|||||
Non-cash lease expense
|
666
|
—
|
|||||
Stock based compensation
|
1,864
|
1,984
|
|||||
Change in fair value of contingent consideration
|
(657)
|
(448)
|
|||||
Deferred income taxes
|
(620)
|
(175)
|
|||||
Change in accounts receivable allowances
|
460
|
(453)
|
|||||
Fixed and intangible asset impairments and disposals
|
90
|
99
|
|||||
Write-off of other assets
|
—
|
593
|
|||||
Other
|
(432)
|
(8)
|
|||||
Changes in operating assets and liabilities, net of acquisitions:
|
|||||||
Accounts receivable
|
(2,706)
|
11,474
|
|||||
Inventories
|
7,247
|
(5,153)
|
|||||
Prepaid expenses and other
|
(2,272)
|
(746)
|
|||||
Accounts payable, accrued and other liabilities
|
(11,374)
|
(17,633)
|
|||||
Net cash used in operating activities
|
(5,425)
|
(6,534)
|
|||||
Cash flows from investing activities:
|
|||||||
Additions to property, plant and equipment
|
(1,824)
|
(1,391)
|
|||||
Acquisition of intangibles
|
—
|
(150)
|
|||||
Net cash used in investing activities
|
(1,824)
|
(1,541)
|
|||||
Cash flows from financing activities:
|
|||||||
Repayment of long-term debt
|
—
|
(132,500)
|
|||||
Deferred financing costs on long-term debt
|
—
|
(741)
|
|||||
Payment of acquisition related contingent consideration
|
—
|
(1,208)
|
|||||
Proceeds (outlays) from exercise of stock options and employee stock purchase plan
|
491
|
(1,300)
|
|||||
Net cash provided by (used in) financing activities
|
491
|
(135,749)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
252
|
(168)
|
|||||
Decrease in cash and cash equivalents
|
(6,506)
|
(143,992)
|
|||||
Cash and cash equivalents at beginning of period
|
54,435
|
227,641
|
|||||
Cash and cash equivalents at end of period
|
$
|
47,929
|
$
|
83,649
|
ANGIODYNAMICS, INC. AND SUBSIDIARIES
|
GAAP TO NON-GAAP RECONCILIATION
|
(in thousands)
|
Reconciliation of Free Cash Flows:
|
|||||||
Three Months Ended
|
|||||||
Aug 31, 2020
|
Aug 31, 2019
|
||||||
(unaudited)
|
|||||||
Net cash used in operating activities
|
$
|
(5,425)
|
$
|
(6,534)
|
|||
Additions to property, plant and equipment
|
(1,824)
|
(1,391)
|
|||||
Free Cash Flow
|
$
|
(7,249)
|
$
|
(7,925)
|
|||