Financial Data and Key Metrics Changes - The company reported revenue of $77 million for the first quarter, representing a year-over-year growth of 9.6% [9][20] - Adjusted net loss for the quarter was $0.9 million, or a loss of $0.02 per share, compared to adjusted net income of $0.6 million, or earnings per share of $0.02 in the same quarter last year [27] - Gross margin for the quarter was 52.1%, an increase of 120 basis points compared to the previous year [23] Business Line Data and Key Metrics Changes - Revenue from the Med Tech business was $17.6 million, a 68% increase year-over-year, while the Med Device business revenue was approximately flat year-over-year at $59.4 million [20] - Auryon revenue was $5.9 million, up from $4.6 million in the previous quarter, with expectations for FY 2022 revenue now projected between $24 million to $26 million [10][20] - AngioVac revenue grew 12% year-over-year, while Vascular Access revenue declined 11.2% compared to the prior year [21][22] Market Data and Key Metrics Changes - The endovascular therapies business saw a revenue increase of 27.5% year-over-year to $38.1 million, driven by Auryon growth [20] - NanoKnife sales grew 34% year-over-year globally and 63% in the U.S., supported by increased procedural volumes [14][22] Company Strategy and Development Direction - The company is transforming into a high-growth Med Tech company, focusing on innovative technologies to drive growth in larger markets [8][29] - Strategic and tuck-in M&A remains a part of the long-term growth strategy, with ongoing monitoring of the landscape for opportunities [15][16] Management's Comments on Operating Environment and Future Outlook - Management noted that the ongoing COVID-19 pandemic, particularly the Delta variant, impacted case volumes but observed improving trends in September [8][18] - The company anticipates continued headwinds from COVID-related challenges but remains confident in its growth trajectory [19][55] Other Important Information - The company is investing in R&D and sales and marketing to drive sustainable growth, with R&D expenses at $7.4 million for the quarter [26] - The company has a disciplined approach to capital allocation and expense management, with expectations for FY 2022 net sales in the range of $310 million to $315 million [28][29] Q&A Session Summary Question: Can you summarize the COVID commentary? - Management confirmed that the Delta variant negatively impacted the fiscal first quarter but noted improving trends in September [31][32] Question: What drove the jump in the installed base of Auryon lasers? - The increase was attributed to strong customer demand and a secure supply chain [33][34] Question: What is the timing for the 18 French AlphaVac device? - The launch is expected in the first half of calendar year 2022 [39] Question: What is the growth expectation for the thrombectomy platform? - The 30% growth target is focused on mechanical thrombectomy products, primarily from the AngioVac and AlphaVac platforms [40] Question: How is the company addressing nursing staff shortages? - Management is closely monitoring the situation and noted that hospitals are under pressure but have learned to balance care delivery better than before [58][59]

Financial Data and Key Metrics Changes - For FY '21, the company reported full year revenue of $291 million, representing a growth of 10.2% year-over-year [10] - The fourth quarter revenue was $76.8 million, reflecting a sequential growth of 8% over the third quarter [10] - Adjusted EPS for FY '21 was $0.05, compared to an adjusted net loss of $2.1 million or $0.06 per share in the fourth quarter of the previous year [25] - Gross margin for the fourth quarter was 55.1%, an increase of 330 basis points year-over-year [21] Business Line Data and Key Metrics Changes - Auryon revenue for the fourth quarter was $4.6 million, with total FY '21 revenue at $11.1 million, and expected to grow to $18 million to $22 million in FY '22 [12][19] - AngioVac platform revenue increased 14% sequentially in the fourth quarter, with year-over-year growth of 47% in FY '21 [12] - NanoKnife probe sales grew 14% sequentially in the fourth quarter and 19% in the U.S., with FY '21 growth of 13% worldwide and 38% in the U.S. [15] Market Data and Key Metrics Changes - The total endovascular therapies business increased 72.3% year-over-year to $38.1 million, driven by strong performance from AngioVac and Auryon [19] - Vascular Access revenue increased 3.2% year-over-year, while Oncology business revenue increased 14.2% during the quarter [20][21] Company Strategy and Development Direction - The company is focused on transforming into a customer-focused, technology-driven, growth-oriented entity, with strategic investments in R&D and sales and marketing [7][9] - The company plans to continue investing in its Med Tech platforms, including Auryon, Mechanical Thrombectomy, and NanoKnife, while maintaining a disciplined approach to capital allocation [16][27] - M&A remains a long-term growth strategy, although it was deprioritized in the short term due to COVID-related challenges [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the normalization of procedural volumes as the COVID-19 pandemic subsides, indicating a positive trend in end markets [10][11] - The company anticipates FY '22 net sales in the range of $305 million to $310 million, reflecting a growth of 5% to 7% over FY '21 [27] - Management acknowledged external pressures such as staffing challenges and inflationary costs impacting gross margins, but expects gradual improvement over time [22][23] Other Important Information - The company generated free cash flow of $3.1 million during the fourth quarter and ended with $48.2 million in cash and cash equivalents [26] - The company received FDA approval for its 100 patient NanoKnife prostate IDE study, PRESERVE, which is expected to enhance its clinical offerings [17] Q&A Session Summary Question: Can you provide insight into the types of procedures Auryon is growing in? - Management noted a blend of above and below the knee procedures, with increasing confidence in the technology leading to more complex cases being performed [31][32] Question: How is the growth in AngioVac being driven? - Growth is attributed to new users and existing users increasing their usage as they gain confidence in the product's outcomes [39] Question: What are the trends in April and May? - Management indicated that while there is improvement, the operating environment is not yet fully normalized, particularly in regions like Latin America and Asia Pacific [44][62] Question: What is the expected growth for the different business segments in FY '22? - Guidance includes $18 million to $22 million from Auryon, 30% growth for the Mechanical Thrombectomy platform, and 20% growth for NanoKnife probes [46] Question: What is the expected gross margin for FY '22? - The company expects gross margin to be approximately 55%, with potential for improvement as sales mix shifts towards higher-margin products [23][56]

Strategic Transformation - AngioDynamics is pursuing larger, faster-growing markets through active portfolio management, relying on technology and innovation to produce measurable patient outcomes[5] - The company is focusing resource development in areas that offer better opportunities for success[6] - Portfolio transformation and strength are driven by R&D, M&A, and Clinical & Regulatory activities[6] - AngioDynamics aims to become a growth company, with a U S Total Addressable Market (TAM) of $7 8 billion by 2025, with a market CAGR of 3-7%[8] Peripheral Atherectomy - AngioDynamics' Auryon system provides access to the peripheral atherectomy market[8] - The Auryon system uses a photon energy of 3 5 eV to vaporize calcium while remaining nonreactive to vessel endothelium[16] - AngioDynamics is expanding commercial and clinical presence, physician training programs, and physician ambassador programs for Peripheral Atherectomy[21] Thrombus Management - AngioVac's current use is focused on the Right Atrium, which is a $77 million addressable market[28] - AlphaVac, a multi-purpose mechanical aspiration device, is planned for launch and will allow AngioDynamics to compete in the broader DVT & PE addressable markets of $3 billion for Pulmonary Embolism and $1 3 billion for Deep Vein Thrombosis[28] - AngioDynamics is developing the next generation of AngioVac, driven by physician requests for use in DVT[30] Irreversible Electroporation (NanoKnife) - In 2020, there were 1,256,970 new cancer cases[44] - Adoption of focal therapy for prostate cancer remains low (<5%) due to gaps within existing technology[51] Financial Performance (Q3 YTD FY2021) - Revenue reached $214 2 million, a 4 1% increase year-over-year[55] - Adjusted EPS was $0 05, compared to $0 15 in the previous year[55]

Strategic Transformation - AngioDynamics is pursuing larger markets through active portfolio management, relying on technology and innovation to produce measurable patient outcomes[5, 64] - The company is focusing resource development in areas that offer the best opportunities for success[6, 65] - Portfolio transformation and strength are driven by R&D, M&A, and clinical & regulatory efforts, combined with top talent to drive value[7, 66] Peripheral Atherectomy - The US addressable market for peripheral atherectomy is $555 million, with mechanical atherectomy accounting for 77% and laser atherectomy for 23%[19] - AngioDynamics' Auryon system provides access to the peripheral atherectomy market[9] Thrombus Management - The addressable market for right atrium thrombus is $77 million, while the deep vein thrombosis (DVT) market is $1.3 billion and the pulmonary embolism (PE) market is $1.6 billion[28] - AngioVac's use is currently focused on the right atrium, which is a $77 million addressable market[28] - There are an estimated 100,000 to 300,000 VTE-related deaths in the USA annually[25] Irreversible Electroporation (NanoKnife) - In 2020, new cancer cases were estimated at 1,256,970, with breast, lung, and prostate cancer accounting for 22%, 18%, and 15% respectively[48] - Within the U S, 191,930 men will be diagnosed with prostate cancer in 2020[56] Financial Performance (Q3 YTD FY2021) - Revenue was $214.2 million, a 4.1% increase year-over-year (YOY) compared to $205.8 million[61] - Adjusted EBITDA was $15.0 million, a decrease of $2.5 million compared to $17.5 million[61] - Free cash flow was $7.3 million, an increase of $31.5 million compared to ($24.2) million[61]

AngioDynamics, Inc. (NASDAQ:ANGO) Q3 2021 Earnings Conference Call March 30, 2021 8:00 AM ET Company Participants Jim Clemmer - President and Chief Executive Officer Steve Trowbridge - Executive Vice President and Chief Financial Officer Conference Call Participants Jayson Bedford - Raymond James Matt Mishan - KeyBanc Capital Markets Operator Good morning, and welcome to the AngioDynamics Fiscal Year 2021 Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question-and-a ...

Part I: Financial Information [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The unaudited consolidated financial statements for the period ended February 28, 2021, show a **2.0%** increase in net sales for the third quarter and a **4.1%** increase for the nine-month period year-over-year. However, the company reported a net loss of **$3.5 million** for the quarter and **$12.1 million** for the nine-month period. The balance sheet indicates total assets of **$582.2 million** and total liabilities of **$127.3 million**. Cash flow from operations turned positive for the nine-month period at **$11.9 million**, a significant improvement from a use of **$18.4 million** in the prior year [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For the third quarter ended February 28, 2021, net sales increased to **$71.2 million** from **$69.8 million** in the prior-year period. Gross profit slightly decreased to **$38.5 million**. The company recorded a net loss of **$3.5 million**, an improvement from the **$5.7 million** loss in the same quarter last year. For the nine-month period, net sales grew to **$214.2 million**, but the net loss widened to **$12.1 million** from **$9.7 million** year-over-year Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Feb 28, 2021 | Three Months Ended Feb 29, 2020 | Nine Months Ended Feb 28, 2021 | Nine Months Ended Feb 29, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $71,182 | $69,780 | $214,168 | $205,825 | | **Gross profit** | $38,530 | $40,299 | $114,468 | $120,060 | | **Operating loss** | $(3,738) | $(6,236) | $(13,696) | $(10,487) | | **Net loss** | $(3,544) | $(5,709) | $(12,080) | $(9,720) | | **Diluted loss per share** | $(0.09) | $(0.15) | $(0.32) | $(0.26) | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) As of February 28, 2021, the company's total assets were **$582.2 million**, a slight decrease from **$594.2 million** at May 31, 2020. Total liabilities decreased to **$127.3 million** from **$139.3 million** over the same period, primarily due to a reduction in long-term debt. Cash and cash equivalents remained stable at approximately **$54.5 million** Consolidated Balance Sheet Highlights (in thousands) | Account | Feb 28, 2021 | May 31, 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $54,469 | $54,435 | | Inventories | $49,006 | $59,905 | | Total current assets | $145,657 | $152,913 | | Goodwill | $201,102 | $200,515 | | **Total assets** | **$582,245** | **$594,214** | | Total current liabilities | $50,256 | $51,445 | | Long-term debt, net | $30,000 | $40,000 | | **Total liabilities** | **$127,309** | **$139,342** | | **Total Stockholders' Equity** | **$454,936** | **$454,872** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended February 28, 2021, net cash provided by operating activities was **$11.9 million**, a significant turnaround from the **$18.4 million** used in the prior-year period. This improvement was mainly driven by better working capital management, particularly a decrease in inventories. Net cash used in investing activities was **$4.6 million**, significantly lower than the prior year's **$61.9 million** which included cash paid for acquisitions. Net cash used in financing activities was **$7.5 million**, primarily for debt repayment Cash Flow Summary (in thousands) | Activity | Nine Months Ended Feb 28, 2021 | Nine Months Ended Feb 29, 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $11,894 | $(18,434) | | Net cash used in investing activities | $(4,567) | $(61,866) | | Net cash used in financing activities | $(7,541) | $(120,189) | | **Net change in cash and cash equivalents** | **$34** | **$(200,481)** | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies and provide further information on financial statement items, including acquisitions, revenue disaggregation, goodwill, intangible assets, debt structure, and legal contingencies - In fiscal year 2020, the company acquired the C3 Wave tip location asset from MedComp for **$10.0 million** upfront with **$5.0 million** in potential contingent consideration[39](index=39&type=chunk) - The company acquired Eximo Medical, Ltd. for an aggregate price of **$60.7 million**, including a **$45.8 million** upfront payment and **$14.9 million** in contingent consideration, to expand its Vascular Interventions and Therapies portfolio[40](index=40&type=chunk) Net Sales by Global Business Unit (in thousands) | Global Business Unit | Nine Months Ended Feb 28, 2021 | Nine Months Ended Feb 29, 2020 | | :--- | :--- | :--- | | Vascular Interventions & Therapies | $97,008 | $90,616 | | Vascular Access | $76,848 | $70,585 | | Oncology | $40,312 | $44,624 | | **Total** | **$214,168** | **$205,825** | - As of February 28, 2021, the company had a **$30.0 million** outstanding balance on its **$125.0 million** secured revolving credit facility and was in compliance with all covenants[75](index=75&type=chunk) - The company is involved in multiple patent infringement lawsuits with C.R. Bard, Inc. Management believes Bard's claims are without merit and has not recorded an expense as a potential loss is not yet probable or reasonably estimable[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **2.0%** Q3 revenue growth to strong performance in the Vascular Interventions & Therapies segment, partially offset by a **10.1%** decline in the Oncology business, while maintaining sufficient liquidity [Results of Operations (Three Months)](index=27&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20February%2028%2C%202021%20and%20February%2029%2C%202020) Net sales for Q3 FY2021 increased **2.0%** to **$71.2 million**, driven by **8.8%** growth in Vascular Interventions & Therapies, while gross margin decreased by **370 basis points** due to manufacturing under-absorption and Auryon launch costs Q3 Net Sales by Global Business Unit (in thousands) | Global Business Unit | Feb 28, 2021 | Feb 29, 2020 | % Change | | :--- | :--- | :--- | :--- | | Vascular Interventions & Therapies | $33,251 | $30,552 | 8.8% | | Vascular Access | $24,813 | $24,642 | 0.7% | | Oncology | $13,118 | $14,586 | (10.1)% | | **Total** | **$71,182** | **$69,780** | **2.0%** | - The **8.8%** growth in Vascular Interventions & Therapies was driven by **$3.3 million** in sales from the recently acquired Auryon product and a **38%** increase in AngioVac case volumes[135](index=135&type=chunk) - Gross profit was negatively impacted by **$2.9 million** from net productivity issues, including **$1.5 million** in under-absorption and **$1.4 million** in start-up costs for the Auryon launch[140](index=140&type=chunk) - Sales and marketing expenses decreased by **$1.3 million**, primarily due to a **$1.2 million** reduction in travel expenses and a **$1.1 million** decrease in tradeshow costs, partially offset by a **$2.0 million** investment in the Auryon sales team build-out[142](index=142&type=chunk) [Results of Operations (Nine Months)](index=31&type=section&id=Results%20of%20Operations%20for%20the%20Nine%20Months%20Ended%20February%2028%2C%202021%20and%20February%2029%2C%202020) For the nine months ended February 28, 2021, net sales increased **4.1%** to **$214.2 million**, with gross margin falling **490 basis points** due to productivity issues and Auryon launch costs, while R&D expenses increased **21.5%** due to platform investments Nine-Month Net Sales by Global Business Unit (in thousands) | Global Business Unit | Feb 28, 2021 | Feb 29, 2020 | % Change | | :--- | :--- | :--- | :--- | | Vascular Interventions & Therapies | $97,008 | $90,616 | 7.1% | | Vascular Access | $76,848 | $70,585 | 8.9% | | Oncology | $40,312 | $44,624 | (9.7)% | | **Total** | **$214,168** | **$205,825** | **4.1%** | - Vascular Access sales growth was significantly impacted by a large, one-time order of **$5.2 million** in the United Kingdom related to the COVID-19 pandemic[154](index=154&type=chunk) - Gross profit for the nine-month period was negatively impacted by **$8.9 million** from net productivity, including **$6.1 million** in under-absorption and **$2.8 million** in Auryon launch costs[157](index=157&type=chunk) - R&D expenses increased by **$4.8 million** (**21.5%**), driven by a **$4.6 million** increase in spending on the AngioVac platform expansion, NanoKnife DIRECT© study, and Pathfinder study, plus **$1.7 million** for Auryon[159](index=159&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is sufficient for the next 12 months, with **$54.5 million** in cash and **$30.0 million** in outstanding debt, supported by a **$30.3 million** positive swing in operating cash flow driven by inventory reduction - As of February 28, 2021, the company had cash and cash equivalents of **$54.5 million** and **$30.0 million** of debt outstanding on its Revolving Facility[169](index=169&type=chunk) Cash Flow Summary (in thousands) | Activity | Nine Months Ended Feb 28, 2021 | Nine Months Ended Feb 29, 2020 | | :--- | :--- | :--- | | Operating activities | $11,894 | $(18,434) | | Investing activities | $(4,567) | $(61,866) | | Financing activities | $(7,541) | $(120,189) | - The significant improvement in operating cash flow in fiscal 2021 was favorably impacted by a **$11.1 million** decrease in inventory[172](index=172&type=chunk) - In the third quarter of fiscal 2021, the company made a **$10.0 million** payment on its Revolving Facility[174](index=174&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from foreign currency fluctuations, interest rate changes on its variable-rate debt, and credit concentration, with **7%** of sales in foreign currencies and **$30.0 million** outstanding on its **$125 million** revolving credit facility at **1.63%** - The company is exposed to foreign currency risk as approximately **7%** of its sales for the nine months ended February 28, 2021, were denominated in foreign currencies, primarily the Euro, British pound, and Canadian dollar[181](index=181&type=chunk) - The company is exposed to interest rate risk on its **$125 million** Revolving Facility. As of February 28, 2021, there was **$30.0 million** outstanding with a variable interest rate of **1.63%**[182](index=182&type=chunk) - Concentration of credit risk is considered limited as no single customer represents more than **10%** of total sales[184](index=184&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of February 28, 2021, with no material changes to internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[186](index=186&type=chunk) - There were no material changes to the company's internal control over financial reporting during the fiscal quarter ended February 28, 2021[187](index=187&type=chunk) Part II: Other Information [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in multiple patent infringement lawsuits with C.R. Bard, Inc., maintaining that claims are without merit, and has filed an antitrust lawsuit against Bard, while a breach of contract case with Merz North America was settled for **$2.5 million** - The company is defending against three separate patent infringement lawsuits filed by C.R. Bard, Inc. related to its implantable port products. The company believes the claims are without merit and has not recorded an expense for potential loss[191](index=191&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk) - The company has an ongoing antitrust lawsuit against C.R. Bard, Inc., alleging that Bard illegally ties the sales of its tip location systems to its PICCs[194](index=194&type=chunk) - A breach of contract lawsuit from Merz North America, Inc. was settled in June 2019 with a lump-sum payment of **$2.5 million** from AngioDynamics[196](index=196&type=chunk) [Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended May 31, 2020 - There have been no material changes to the risk factors previously disclosed in the company's annual report on Form 10-K for the fiscal year ended May 31, 2020[198](index=198&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the three months ended February 28, 2021, the company repurchased a total of **2,241 shares** of its common stock at an average price of **$18.48 per share** from employees to satisfy tax withholding requirements - For the three months ended February 28, 2021, the company repurchased **2,241 shares** from employees to satisfy tax withholding requirements on vested equity awards. The company does not have a share repurchase program in effect[201](index=201&type=chunk) [Defaults on Senior Securities](index=42&type=section&id=Item%203.%20Defaults%20on%20Senior%20Securities) None - None[202](index=202&type=chunk) [Mine Safety Disclosures](index=42&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) None - None[202](index=202&type=chunk) [Other Information](index=42&type=section&id=Item%205.%20Other%20Information) None - None[202](index=202&type=chunk) [Exhibits](index=43&type=section&id=Item%206.%20Exhibits) The report lists several exhibits filed, including amended change in control agreements and certifications by the CEO and CFO pursuant to the Sarbanes-Oxley Act of 2002, along with XBRL interactive data files - Exhibits filed include amended and restated change in control agreements[205](index=205&type=chunk)[206](index=206&type=chunk) - Certifications by the CEO and CFO pursuant to Rule 13a-14(a) and Section 1350 of the Sarbanes-Oxley Act of 2002 were filed as exhibits[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk)