EX-99.1 2 an54932882-ex99_1.htm PRESS RELEASE, DATED APRIL 7, 2020.
Exhibit 99.1


PRESS RELEASE
Investor Contact:

AngioDynamics, Inc.
Stephen Trowbridge, Executive Vice President & CFO
(518) 795-1408

AngioDynamics Reports Fiscal 2020 Third Quarter Financial Results
Fiscal 2020 Third Quarter Highlights
Net sales of $69.8 million increased 6.5% compared to the prior-year quarter
Gross margin declined 40 basis points to 57.8% year over year
GAAP loss per share of $0.15; adjusted earnings per share of $0.01
Launched PATHFINDER I Registry to evaluate performance and clinical outcomes of the AURYON Atherectomy System
As a result of the uncertainty created by the COVID-19 pandemic, management is withdrawing its fiscal year 2020 financial guidance

Latham, New York, April 7, 2020  AngioDynamics, Inc. (NASDAQ: ANGO), a leading provider of innovative, minimally invasive medical devices for vascular access, peripheral vascular disease, and oncology, today announced financial results for the third quarter of fiscal year 2020, which ended February 29, 2020.

“The health and safety of the team is our top priority, and I want to thank each of our team members for the resiliency they have shown. We are very pleased with our third quarter results, as increases across all three of our businesses drove solid ex-Asclera top-line growth of 9.3%,” commented Jim Clemmer, President and Chief Executive Officer of AngioDynamics, Inc. “Looking ahead, we are operating in a very dynamic macro environment, and the coming months are likely to present further challenges. However, our healthy balance sheet and world-class team leave us well-prepared to weather those challenges. We experienced strong momentum during the third quarter, and we look forward to building on that momentum once the environment begins to normalize, as we believe that the long-term fundamentals and growth drivers of our

business remain intact. All of us at AngioDynamics remain steadfastly focused on the health and safety of our employees and patients and ensuring that our physicians and customers have uninterrupted access to our innovative product portfolio in order to deliver the highest quality care possible.

Third Quarter 2020 Financial Results
 
Net sales for the third quarter of fiscal 2020 were $69.8 million, an increase of 6.5% compared to the prior-year quarter. Excluding the impact of Asclera sales, which were discontinued during fiscal year 2019, net sales grew 9.3% year over year. Foreign currency translation did not have a significant impact on the Company’s sales in the quarter.
 
         Oncology net sales were $14.6 million, an increase of 5.1% from $13.9 million a year ago, led by strong NanoKnife sales.
 
         Vascular Interventions and Therapies (“VIT”) net sales were $30.6 million, an increase of 4.3%, compared to $29.3 million a year ago. Excluding last year’s Asclera sales of $1.7 million in the third quarter, VIT grew 10.5%, driven by higher sales of the Company’s AngioVac, Thrombolytic, and core VIT products.
 
         Vascular Access net sales were $24.6 million, an increase of 10.3% from $22.3 million a year ago, due primarily to higher sales of PICCs, Ports, and Midline products.
 
Excluding Asclera, U.S. net sales in the third quarter of fiscal 2020 were $54.9 million, an increase of 6.1% from $51.7 million a year ago, and International net sales were $14.9 million, an increase of 22.8% from $12.1 million a year ago.
 
Gross margin for the third quarter of fiscal 2020 was 57.8%, a decrease of 40 basis points compared to the third quarter of fiscal 2019, primarily due to product mix.
 
The Company recorded a net loss from continuing operations of $5.7 million, or a loss of $0.15 per share, in the third quarter of fiscal 2020. This compares to a net loss from continuing operations of approximately $4.6 million, or a loss of $0.12 per share, a year ago.
 
Excluding the items shown in the non-GAAP reconciliation table below, adjusted net income for the third quarter of fiscal 2020 was $0.4 million, or $0.01 per share, compared to adjusted net income of $1.9 million, or $0.05 per share, in the third quarter of fiscal 2019.
 
Adjusted EBITDA in the third quarter of fiscal 2020, excluding the items shown in the reconciliation table below, was $3.8 million, compared to $7.7 million in the third quarter of fiscal 2019.

In the third quarter of fiscal 2020, the Company used $17.8 million in operating cash and had capital expenditures of $1.7 million. As of February 29, 2020, the Company had $27.2 million in cash and cash equivalents and $15.0 million in debt outstanding.

Nine Months Financial Results

For the nine months ended February 29, 2020:

Net sales were $205.8 million, an increase of 3.2%, compared to $199.5 million for the same period a year ago. Excluding the impact of Asclera, sales of which were discontinued during fiscal year 2019, net sales grew 5.7% year over year.

The Company's net loss from continuing operations was $9.7 million, or a loss of $0.26 per share, compared to a net loss from continuing operations of $13.9 million, or a loss of $0.37 per share, a year ago.

Gross margin improved 80 basis points to 58.3% from 57.5% a year ago.

Excluding the items shown in the non-GAAP reconciliation table below, adjusted net income was $5.7 million, or $0.15 per share, compared to adjusted net income of $5.4 million, or $0.14 per share, a year ago.

Adjusted EBITDA, excluding the items shown in the reconciliation table below, was $17.5 million, compared to $22.0 million for the same period a year ago.

Fiscal Year 2020 Financial Guidance

As a result of the ongoing pandemic, health systems throughout the country, many of which are AngioDynamics customers, are currently prioritizing the care of COVID-19 patients. Consequently, certain of the procedures that the Company supports have been, and will continue to be, impacted. Given the uncertainty surrounding the magnitude and duration of these impacts, management is withdrawing its fiscal year 2020 financial guidance.


Conference Call
 
The Company’s management will host a conference call today at 8:00 a.m. ET to discuss its fiscal 2020 third quarter results.
 
To participate in the conference call, dial 1-877-407-0784 (domestic) or +1-201-689-8560 (international) and refer to the passcode 13700177.

This conference call will also be webcast and can be accessed from the “Investors” section of the AngioDynamics website at www.angiodynamics.com. The webcast replay

of the call will be available at the same site approximately one hour after the end of the call.

A recording of the call will also be available from 11:00 a.m. ET on Tuesday, April 7, 2020, until 11:59 p.m. ET on Tuesday, April 14, 2020. To hear this recording, dial 1-844-512-2921 (domestic) or +1-412-317-6671 (international) and enter the passcode 13700177.

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 adjusted EBITDA, adjusted net income, adjusted earnings per share, free cash flow and net sales excluding Asclera. 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, Inc.
 
AngioDynamics, Inc. is a leading provider of innovative, minimally invasive medical devices used by professional healthcare providers for vascular access, peripheral vascular disease, and oncology. AngioDynamics’ diverse product lines include market-leading ablation systems, vascular access products, angiographic products and accessories, drainage products, thrombolytic products and venous products. For more information, visit 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 scale and scope of the COVID-19 global pandemic, 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 acquired 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, 2019 and its Quarterly Report on Form 10-Q for the period ended February 29, 2020. 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 29, 2020
 
Feb 28, 2019
 
Feb 29, 2020
 
Feb 28, 2019
 
(unaudited)
 
(unaudited)
               
Net sales
$
69,780 
   
$
65,524 
   
$
205,825 
   
$
199,451 
 
Cost of sales (exclusive of intangible amortization)
29,481 
   
27,361 
   
85,765 
   
84,783 
 
Gross profit
40,299 
   
38,163 
   
120,060 
   
114,668 
 
% of net sales
57.8 
%
 
58.2 
%
 
58.3 
%
 
57.5 
%
               
Operating expenses
             
Research and development
8,395 
   
6,915 
   
22,450 
   
21,365 
 
Sales and marketing
20,934 
   
18,385 
   
60,427 
   
56,054 
 
General and administrative
10,203 
   
8,718 
   
29,651 
   
26,414 
 
Amortization of intangibles
5,019 
   
4,660 
   
13,417 
   
12,599 
 
Change in fair value of contingent consideration
419 
   
609 
   
116 
   
865 
 
Acquisition, restructuring and other items, net
1,565 
   
2,550 
   
4,486 
   
9,700 
 
Total operating expenses
46,535 
   
41,837 
   
130,547 
   
126,997 
 
Operating loss
(6,236)
   
(3,674)
   
(10,487)
   
(12,329)
 
Interest expense, net
(166)
   
(1,442)
   
(672)
   
(3,689)
 
Other expense, net
(131)
   
(266)
   
(67)
   
(72)
 
Total other expense, net
(297)
   
(1,708)
   
(739)
   
(3,761)
 
Loss from continuing operations before income tax benefit
(6,533)
   
(5,382)
   
(11,226)
   
(16,090)
 
Income tax benefit
(824)
   
(773)
   
(1,506)
   
(2,191)
 
Net loss from continuing operations
(5,709)
   
(4,609)
   
(9,720)
   
(13,899)
 
Income from discontinued operations, net of income tax
— 
   
5,405 
   
— 
   
16,366 
 
Net income (loss)
$
(5,709)
   
$
796 
   
$
(9,720)
   
$
2,467 
 
               
Loss per share - continuing operations
             
Basic
$
(0.15)
   
$
(0.12)
   
$
(0.26)
   
$
(0.37)
 
Diluted
$
(0.15)
   
$
(0.12)
   
$
(0.26)
   
$
(0.37)
 
Income per share - discontinued operations
             
Basic
$
— 
   
$
0.14 
   
$
— 
   
$
0.44 
 
Diluted
$
— 
   
$
0.14 
   
$
— 
   
$
0.44 
 
Income (loss) per share
             
Basic
$
(0.15)
   
$
0.02 
   
$
(0.26)
   
$
0.07 
 
Diluted
$
(0.15)
   
$
0.02 
   
$
(0.26)
   
$
0.07 
 
               
Weighted average shares outstanding
             
Basic
37,999 
   
37,518 
   
37,924 
   
37,446 
 
Diluted
37,999 
   
37,518 
   
37,924 
   
37,446 
 


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
 
Nine months ended
 
Feb 29, 2020
 
Feb 28, 2019
 
Feb 29, 2020
 
Feb 28, 2019
 
(unaudited)
 
(unaudited)
               
Net loss from continuing operations
$
(5,709)
   
$
(4,609)
   
$
(9,720)
   
$
(13,899)
 
               
Amortization of intangibles
5,019 
   
4,660 
   
13,417 
   
12,599 
 
Change in fair value of contingent consideration
419 
   
609 
   
116 
   
865 
 
Acquisition, restructuring and other items, net (1)
1,565 
   
2,550 
   
4,486 
   
9,700 
 
Write-off of deferred financing fees (2)
— 
   
— 
   
593 
   
— 
 
Tax effect of non-GAAP items (3)
(932)
   
(1,334)
   
(3,205)
   
(3,818)
 
Adjusted net income
$
362 
   
$
1,876 
   
$
5,687 
   
$
5,447 
 

Reconciliation of Diluted Loss Per Share to non-GAAP Adjusted Diluted Earnings Per Share:

 
Three months ended
 
Nine months ended
 
Feb 29, 2020
 
Feb 28, 2019
 
Feb 29, 2020
 
Feb 28, 2019
 
(unaudited)
 
(unaudited)
               
Diluted loss per share
$
(0.15)
   
$
(0.12)
   
$
(0.26)
   
$
(0.37)
 
               
Amortization of intangibles
0.13 
   
0.12 
   
0.35 
   
0.33 
 
Change in fair value of contingent consideration 0.01
     0.02
     —      0.02  
Acquisition, restructuring and other items, net (1)
0.04 
   
0.07 
   
0.12 
   
0.25 
 
Write-off of deferred financing fees (2)
— 
   
— 
   
0.02 
   
— 
 
Tax effect of non-GAAP items (3)
(0.02)
   
(0.04)
   
(0.08)
   
(0.09)
 
Adjusted diluted earnings per share
$
0.01 
   
$
0.05 
   
$
0.15 
   
$
0.14 
 
    Adjusted diluted sharecount
   
38,094
       
38,338
       
38,111
       
38,350
 

(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 February 29, 2020 and February 28, 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
 
Nine months ended
 
Feb 29, 2020
 
Feb 28, 2019
 
Feb 29, 2020
 
Feb 28, 2019
 
(unaudited)
 
(unaudited)
               
Net loss from continuing operations
$
(5,709)
   
$
(4,609)
   
$
(9,720)
   
$
(13,899)
 
               
Income tax benefit
(824)
   
(773)
   
(1,506)
   
(2,191)
 
Interest expense, net
166 
   
1,442 
   
672 
   
3,689 
 
Depreciation and amortization
6,401 
   
6,066 
   
17,434 
   
16,767 
 
Change in fair value of contingent consideration
419 
   
609 
   
116 
   
865 
 
Stock based compensation
1,772 
   
2,370 
   
5,998 
   
7,096 
 
Acquisition, restructuring and other items, net (1)
1,565 
   
2,550 
   
4,486 
   
9,700 
 
Adjusted EBITDA
$
3,790 
   
$
7,655 
   
$
17,480 
   
$
22,027 
 
               
Per diluted share:
             
Adjusted EBITDA
$
0.10 
   
$
0.20 
   
$
0.46 
   
$
0.57 
 

(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
  Nine months ended          
 
Feb 29,
2020
   
Feb 28,
2019
    % Growth   Currency Impact   Constant Currency Growth  
Feb 29,
2020
   
Feb 28,
2019
    % Growth   Currency Impact   Constant Currency Growth
      (unaudited)                     (unaudited)              
Net Sales by Product Category                                                      
Vascular Interventions & Therapies
$
30,552 
   
$
29,298 
   
4.3%
         
$
90,616 
   
$
88,870 
   
2.0%
       
Vascular Access
24,642 
   
22,348 
   
10.3%
         
70,585 
   
69,861 
   
1.0%
       
Oncology
14,586 
   
13,878 
   
5.1%
         
44,624 
   
40,720 
   
9.6%
       
 
$
69,780 
   
$
65,524 
   
6.5%
 
0.0%
 
6.5%
 
$
205,825 
   
$
199,451 
   
3.2%
 
0.0%
 
3.4%
 
— 
   
— 
                                 
                                       
Net Sales by Geography
                           
United States
$
54,889 
   
$
53,400 
   
2.8%
 
0.0%
 
2.8%
 
$
163,381 
   
$
161,195 
   
1.4%
 
0.0%
 
1.4%
International
14,891 
   
12,124 
   
22.8%
 
0.0%
 
23.1%
 
42,444 
   
38,256 
   
10.9%
 
1.0%
 
11.8%
 
$
69,780 
   
$
65,524 
   
6.5%
 
0.0%
 
6.5%
 
$
205,825 
   
$
199,451 
   
3.2%
 
0.0%
 
3.4%
                                       


ANGIODYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)

 
Feb 29, 2020
 
May 31, 2019
 
(unaudited)
 
(audited)
Assets
     
Current assets:
     
Cash and cash equivalents
$
27,160 
   
$
227,641 
 
Accounts receivable, net
35,619 
   
43,577 
 
Inventories
54,898 
   
40,071 
 
Prepaid expenses and other
11,369 
   
4,003 
 
Total current assets
129,046 
   
315,292 
 
Property, plant and equipment, net
28,182 
   
24,258 
 
Other assets
13,684 
   
3,835 
 
Intangible assets, net
201,956 
   
145,387 
 
Goodwill
359,093 
   
347,666 
 
Total assets
$
731,961 
   
$
836,438 
 
Liabilities and stockholders' equity
     
Current liabilities:
     
Accounts payable
$
18,304 
   
$
22,829 
 
Accrued liabilities
27,445 
   
38,338 
 
Current portion of long-term debt
— 
   
7,500 
 
Current portion of contingent consideration
889 
   
4,635 
 
Other current liabilities
2,074 
   
— 
 
Total current liabilities
48,712 
   
73,302 
 
Long-term debt, net of current portion
14,341 
   
124,407 
 
Contingent consideration, net of current portion
26,405 
   
8,851 
 
Deferred income taxes
24,013 
   
14,542 
 
Other long-term liabilities
8,015 
   
521 
 
Total liabilities
121,486 
   
221,623 
 
Stockholders' equity
610,475 
   
614,815 
 
Total Liabilities and Stockholders' Equity
$
731,961 
   
$
836,438 
 
       


ANGIODYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

 
Three months ended
 
Nine months ended
 
Feb 29, 2020
 
Feb 28, 2019
 
Feb 29, 2020
 
Feb 28, 2019
 
(unaudited)
 
(unaudited)
Cash flows from operating activities:
             
Net income (loss)
$
(5,709)
   
$
796 
   
$
(9,720)
   
$
2,467 
 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
             
Depreciation and amortization
6,440 
   
6,867 
   
17,550 
   
19,158 
 
Non-cash lease expense
663 
   
— 
   
1,567 
   
— 
 
Stock based compensation
1,772 
   
2,378 
   
5,998 
   
7,119 
 
Change in fair value of contingent consideration
419 
   
609 
   
116 
   
865 
 
Deferred income taxes
(872)
   
138 
   
(1,606)
   
633 
 
Change in accounts receivable allowances
(13)
   
(24)
   
186 
   
(99)
 
Fixed and intangible asset impairments and disposals
26 
   
677 
   
395 
   
689 
 
                Write-off of other assets
— 
   
— 
   
593 
   
— 
 
Other
97 
   
12 
   
70 
   
(5)
 
Changes in operating assets and liabilities, net of acquisitions:
             
Accounts receivable
(1,630)
   
(785)
   
7,834 
   
(3,853)
 
Inventories
(4,027)
   
(1,747)
   
(14,036)
   
(2,702)
 
Prepaid expenses and other
(5,834)
   
(325)
   
(9,378)
   
(1,508)
 
Accounts payable, accrued and other liabilities
(9,169)
   
(254)
   
(18,003)
   
(10,336)
 
Net cash provided by (used in) operating activities
(17,837)
   
8,342 
   
(18,434)
   
12,428 
 
Cash flows from investing activities:
             
Additions to property, plant and equipment
(1,742)
   
(887)
   
(5,756)
   
(2,303)
 
Acquisition of intangibles
— 
   
— 
   
(350)
   
— 
 
Cash paid in acquisition
(10,000)
   
— 
   
(55,760)
   
(84,920)
 
Proceeds from sale of marketable securities
— 
   
1,350 
   
— 
   
1,350 
 
Net cash provided by (used in) investing activities
(11,742)
   
463 
   
(61,866)
   
(85,873)
 
Cash flows from financing activities:
             
Proceeds from issuance of long-term debt
15,000 
   
— 
   
15,000 
   
55,000 
 
Repayment of long-term debt
— 
   
(11,250)
   
(132,500)
   
(13,750)
 
Deferred financing costs on long-term debt
(34)
   
— 
   
(775)
   
— 
 
Payment of acquisition related contingent consideration
— 
   
— 
   
(1,208)
   
(2,100)
 
Proceeds (outlays) from exercise of stock options and employee stock purchase plan
594 
   
1,169 
   
(706)
   
2,023 
 
Net cash provided by (used in) financing activities
15,560 
   
(10,081)
   
(120,189)
   
41,173 
 
Effect of exchange rate changes on cash and cash equivalents
(68)
   
160 
   
   
(120)
 
    Decrease in cash and cash equivalents
(14,087)
   
(1,116)
   
(200,481)
   
(32,392)
 
Cash and cash equivalents at beginning of period
41,247 
   
42,820 
   
227,641 
   
74,096 
 
Cash and cash equivalents at end of period
$
27,160 
   
$
41,704 
   
$
27,160 
   
$
41,704 
 



ANGIODYNAMICS, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
(in thousands)

Reconciliation of Free Cash Flows:
       
 
Three months ended
 
Nine months ended
 
Feb 29, 2020
 
Feb 28, 2019
 
Feb 29, 2020
 
Feb 28, 2019
 
(unaudited)
 
(unaudited)
               
Net cash provided by (used in) operating activities
$
(17,837)
   
$
8,342 
   
$
(18,434)
   
$
12,428 
 
Additions to property, plant and equipment
(1,742)
   
(887)
   
(5,756)
   
(2,303)
 
     Free Cash Flow
$
(19,579)
   
$
7,455 
   
$
(24,190)
   
$
10,125