Part I [Business](index=5&type=section&id=Item%201.%20Business) AngioDynamics is a medical technology company specializing in devices for vascular health, cancer treatment, and patient quality of life - The company is structured into two business segments: Med Tech, which includes high-growth platforms like Auryon, Thrombectomy, and NanoKnife, and Med Device, which comprises a broader portfolio of established products[16](index=16&type=chunk)[196](index=196&type=chunk) - AngioDynamics sells its products in the U.S. primarily through a direct sales force and internationally through a combination of direct sales and distributor relationships, targeting various medical specialists[44](index=44&type=chunk) - The company faces significant competition from major medical device manufacturers and is subject to comprehensive regulation by the FDA in the U.S. and similar bodies internationally, including the European Union's MDR[42](index=42&type=chunk)[53](index=53&type=chunk)[61](index=61&type=chunk) [Overview and History](index=5&type=section&id=Item%201.%20Business%20-%20Overview%20and%20History) Founded in 1988, AngioDynamics is a medical technology company focused on vascular health and cancer treatment - AngioDynamics was founded in **1988** and is headquartered in Latham, N.Y. It is publicly traded on NASDAQ under the symbol ANGO[13](index=13&type=chunk)[15](index=15&type=chunk) - The company's growth has been fueled by key acquisitions, such as RITA Medical Systems (ablation), Oncobionic (NanoKnife), and Eximo Medical (Auryon laser atherectomy technology)[13](index=13&type=chunk)[15](index=15&type=chunk) [Products](index=6&type=section&id=Item%201.%20Business%20-%20Products) The company's products are divided into two segments, Med Tech and Med Device, offering advanced technologies for peripheral artery disease, thrombus management, soft tissue ablation, and a broad range of vascular access devices - The Med Tech segment features high-growth products: the Auryon Atherectomy System, the AlphaVac and AngioVac Mechanical Thrombectomy Systems, and the NanoKnife Ablation System[16](index=16&type=chunk)[17](index=17&type=chunk)[22](index=22&type=chunk) - The Med Device segment includes a comprehensive portfolio of core peripheral products, vascular access devices featuring BioFlo with Endexo Technology (a polymer blend resistant to thrombus accumulation), and various ablation technologies[23](index=23&type=chunk)[25](index=25&type=chunk)[35](index=35&type=chunk) [Operations and Strategy](index=13&type=section&id=Item%201.%20Business%20-%20Operations%20and%20Strategy) AngioDynamics' strategy relies on continuous innovation, strategic acquisitions, and physician collaboration, competing on quality, clinical outcomes, and cost-effectiveness with manufacturing primarily in-house - The company's growth depends on continuous innovation through internal R&D, technology licensing, and strategic acquisitions[41](index=41&type=chunk) - Primary competitors include Boston Scientific, Medtronic, Johnson & Johnson, and Inari Medical. Competition is based on quality, clinical outcomes, and increasingly, price[42](index=42&type=chunk)[43](index=43&type=chunk) - Manufacturing is conducted at owned facilities in New York and through a third-party supplier in Costa Rica. The company experienced a backlog of **$2.7 million** at the end of fiscal **2023** due to manufacturing and supply chain issues[46](index=46&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) [Regulation and Reimbursement](index=14&type=section&id=Item%201.%20Business%20-%20Regulation%20and%20Reimbursement) The company's products are subject to extensive regulation by the FDA and international bodies, requiring clearances and compliance with quality systems, with commercial success dependent on third-party reimbursement - Products are regulated by the FDA, generally requiring **510(k)** clearance or, more rarely, a PMA. Manufacturing facilities are subject to periodic FDA inspections for compliance with Quality System Regulation (QSR)[53](index=53&type=chunk)[54](index=54&type=chunk)[58](index=58&type=chunk) - For sales in the European Union, products must comply with the Medical Device Regulation (MDR), which has increased clinical data requirements and extended certification timeframes to **12-18 months** or longer[61](index=61&type=chunk) - The business is subject to healthcare laws like the Anti-kickback Statute and the False Claims Act. Commercial success is highly dependent on obtaining adequate reimbursement from governmental and private third-party payors[64](index=64&type=chunk)[65](index=65&type=chunk) [Risk Factors](index=20&type=section&id=Item%201A.%20Risk%20Factors) The company faces numerous risks, including intense competition, reliance on new technologies, single-source suppliers, and extensive government regulation [Business and Industry Risks](index=20&type=section&id=Item%201A.%20Risk%20Factors%20-%20Business%20and%20Industry%20Risks) Key business risks include intense competition, reliance on new product development and clinical trial success, supply chain vulnerabilities, and the impact of recent divestitures and macroeconomic factors - The company faces intense competition and pricing pressure, and its growth relies heavily on the successful market development and clinical trial results of its high-growth products (NanoKnife, AlphaVac, Auryon)[86](index=86&type=chunk)[91](index=91&type=chunk) - The company is dependent on single-source suppliers and third-party international distributors, which accounted for approximately **72%** of international revenues in fiscal **2023**[101](index=101&type=chunk)[104](index=104&type=chunk) - The recent divestiture of the dialysis and BioSentry businesses to Merit Medical for **$100.0 million** presents a risk if the company cannot successfully replace the associated revenue and cash flow with higher-growth initiatives[112](index=112&type=chunk)[113](index=113&type=chunk) - Labor shortages in fiscal years **2022** and **2023** significantly contributed to production backlogs[120](index=120&type=chunk) [Regulatory and Legal Risks](index=29&type=section&id=Item%201A.%20Risk%20Factors%20-%20Regulatory%20and%20Legal%20Risks) The company operates under a complex system of laws and regulations, where non-compliance can lead to severe penalties, recalls, and operational suspensions, with lengthy and costly approval processes - The company is subject to extensive federal, state, and international laws (FDCA, FCPA, HIPAA, GDPR), and failure to comply can result in significant fines, penalties, and business disruption[149](index=149&type=chunk)[151](index=151&type=chunk) - Obtaining and maintaining regulatory approvals like FDA **510(k)** or PMA is costly and time-consuming. The transition to the EU's new Medical Device Regulation (MDR) has increased the time and resources required for certification[155](index=155&type=chunk)[157](index=157&type=chunk)[159](index=159&type=chunk) - In fiscal year **2023**, the company generated **$1.2 million** in revenue from sales to distributors doing business in Iran, which is subject to changing U.S. laws and regulations[166](index=166&type=chunk) [Intellectual Property and Stock Price Risks](index=32&type=section&id=Item%201A.%20Risk%20Factors%20-%20Intellectual%20Property%20and%20Stock%20Price%20Risks) The company's success depends on protecting its intellectual property and navigating patent litigation, while its stock price is subject to volatility from market fluctuations and unpredictable results - The company's success depends on protecting its intellectual property. It faces risks from patent litigation, which could result in significant costs, royalty payments, or injunctions against selling products[168](index=168&type=chunk)[171](index=171&type=chunk) - The company's stock price may be volatile due to factors like fluctuating operating results, competition, and market conditions, which are often beyond its control[173](index=173&type=chunk)[174](index=174&type=chunk) [Unresolved Staff Comments](index=34&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - None[177](index=177&type=chunk) [Properties](index=34&type=section&id=Item%202.%20Properties) AngioDynamics operates from several locations, including a leased corporate headquarters in Latham, NY, and two owned manufacturing facilities in Glens Falls and Queensbury, NY | Location | Purpose | Approx. Sq. Ft. | Property Type | | :--- | :--- | :--- | :--- | | Latham, NY | Corporate headquarters | **39,000 Sq. Ft.** | Lease | | Glens Falls, NY | Manufacturing | **21,000 Sq. Ft.** | Owned | | Queensbury, NY | Manufacturing | **135,000 Sq. Ft.** | Owned | | Queensbury, NY | Distribution | **58,000 Sq. Ft.** | Lease | | Marlborough, MA | Research and development | **8,400 Sq. Ft.** | Lease | | Amsterdam, NL | Selling, marketing and administrative | **8,100 Sq. Ft.** | Lease | | Rehovot, IL | Research and development | **4,300 Sq. Ft.** | Lease | [Legal Proceedings](index=34&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in multiple patent infringement lawsuits with C.R. Bard, Inc. concerning its implantable port products, with ongoing trials and appeals - The company is engaged in ongoing, multi-case patent litigation with C.R. Bard, Inc. regarding its implantable port products[439](index=439&type=chunk)[440](index=440&type=chunk) - In one case, a jury found infringement in November **2022**, but the Court issued a judgment in favor of AngioDynamics in June **2023**, invalidating the patent claims. Bard has appealed this decision[440](index=440&type=chunk) - Due to the uncertainty of the litigation outcomes, the company has not recorded any financial accrual for potential losses[439](index=439&type=chunk)[440](index=440&type=chunk)[441](index=441&type=chunk) [Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business - Not applicable[180](index=180&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=35&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) AngioDynamics' common stock trades on the NASDAQ under the symbol "ANGO", experiencing significant volatility in fiscal year 2023, with no cash dividends paid in the last three fiscal years - The company's common stock is traded on the NASDAQ under the symbol "ANGO"[181](index=181&type=chunk) | Fiscal Year 2023 | High | Low | | :--- | :--- | :--- | | Fourth Quarter | **$12.65** | **$8.29** | | Third Quarter | **$15.48** | **$12.06** | | Second Quarter | **$22.81** | **$12.51** | | First Quarter | **$24.30** | **$17.83** | - The company has not paid cash dividends for the last three fiscal years and does not plan to in the foreseeable future[183](index=183&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal year **2023**, AngioDynamics' revenue grew **7.1%** to **$338.8 million**, driven by Med Tech, but gross margin declined to **51.4%** due to inflation and product mix, resulting in a net loss of **$52.4 million** [Overview and Strategic Initiatives](index=37&type=section&id=Item%207.%20MD%26A%20-%20Overview%20and%20Strategic%20Initiatives) AngioDynamics is transforming into a focused medical technology company by prioritizing high-growth Med Tech platforms and streamlining its portfolio through strategic divestitures and product pipeline advancements - The company is transforming to focus on high-growth medical technology, shifting away from mature, lower-growth markets[200](index=200&type=chunk) - A significant strategic action was the sale of the dialysis product portfolio and BioSentry system to Merit Medical for **$100.0 million**, which was finalized on June **8**, **2023**[197](index=197&type=chunk) - Key growth initiatives include expanding the Auryon platform, gaining FDA clearance for the AlphaVac F18 thrombectomy system, and advancing clinical studies for AlphaVac (APEX) and NanoKnife (PRESERVE)[201](index=201&type=chunk) [Results of Operations (FY2023 vs. FY2022)](index=42&type=section&id=Item%207.%20MD%26A%20-%20Results%20of%20Operations) For fiscal year **2023**, total net sales increased **7.1%** to **$338.8 million**, with Med Tech growing **22.8%**, but gross margin declined to **51.4%** and the company reported a net loss of **$52.4 million** | (in thousands) | FY 2023 | FY 2022 | $ Change | | :--- | :--- | :--- | :--- | | **Net Sales** | | | | | Med Tech | **$96,687** | **$78,717** | **$17,970** | | Med Device | **$242,065** | **$237,502** | **$4,563** | | **Total** | **$338,752** | **$316,219** | **$22,533** | | (in thousands) | FY 2023 | FY 2022 | $ Change | | :--- | :--- | :--- | :--- | | **Gross Profit** | **$174,246** | **$165,732** | **$8,514** | | **Gross Margin %** | **51.4%** | **52.4%** | **-1.0 p.p.** | - The company recorded a goodwill impairment charge of **$14.5 million** in FY**2023** related to the Med Device reporting unit[234](index=234&type=chunk)[235](index=235&type=chunk) | (in thousands, except per share) | FY 2023 | FY 2022 | | :--- | :--- | :--- | | **Operating Loss** | **$(51,181)** | **$(28,471)** | | **Net Loss** | **$(52,442)** | **$(26,547)** | | **Loss Per Share (Diluted)** | **$(1.33)** | **$(0.68)** | [Liquidity and Capital Resources](index=47&type=section&id=Item%207.%20MD%26A%20-%20Liquidity%20and%20Capital%20Resources) As of May **31**, **2023**, AngioDynamics had **$44.6 million** in cash and **$50.0 million** in debt, with positive cash from operations and subsequent debt extinguishment from asset sale proceeds | (in thousands) | May 31, 2023 | May 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | **$44,620** | **$28,825** | | Total Debt | **$50,000** | **$25,000** | | (in thousands) | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Cash from Operating Activities | **$78** | **$(7,194)** | | Cash used in Investing Activities | **$(9,746)** | **$(19,307)** | | Cash from Financing Activities | **$25,420** | **$7,683** | - Subsequent to fiscal year-end, on June **8**, **2023**, the company used proceeds from the sale of its dialysis and BioSentry businesses to repay all amounts owed under its Credit Agreement, extinguishing the facility[246](index=246&type=chunk)[454](index=454&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from foreign currency exchange rates, interest rate fluctuations on its variable-rate debt, and credit concentration, with trade receivables credit risk limited by a diverse customer base - The company is exposed to foreign currency risk, as approximately **4.7%** of FY**2023** sales were in foreign currencies. A stronger U.S. dollar negatively impacts sales and gross profit[253](index=253&type=chunk) - Interest rate risk stems from the variable-rate Credit Agreement. As of May **31**, **2023**, the interest rate on the **$50.0 million** outstanding debt was **6.73%**[254](index=254&type=chunk) - Credit risk from trade receivables is considered limited as no single customer accounts for more than **10%** of total sales[256](index=256&type=chunk) [Financial Statements and Supplementary Data](index=50&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates by reference the company's audited consolidated financial statements and supplementary data, which are included in Part IV of the report - This item refers to the full financial statements and supplementary data indexed under Item **15**[257](index=257&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and internal control over financial reporting were effective as of May **31**, **2023**, with an unqualified audit opinion from Deloitte & Touche LLP - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of May **31**, **2023**[259](index=259&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of May **31**, **2023**, based on the COSO framework[261](index=261&type=chunk) - The independent auditor, Deloitte & Touche LLP, provided an unqualified opinion on the effectiveness of the company's internal control over financial reporting[262](index=262&type=chunk)[266](index=266&type=chunk) Part III Part III of the Form **10-K**, covering Items **10** through **14**, incorporates information by reference from the company's definitive proxy statement for its **2023** Annual Meeting of Stockholders [Directors, Executive Officers, Compensation, Security Ownership, and Accountant Fees](index=54&type=section&id=Items%2010,%2011,%2012,%2013,%20and%2014) Information required for Items **10** through **14** is incorporated by reference from the company's Proxy Statement, to be filed within **120** days of the fiscal year-end - Information regarding directors, executive compensation, security ownership, and other governance matters is incorporated by reference from the forthcoming **2023** Proxy Statement[273](index=273&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=55&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This part contains the company's consolidated financial statements, the report of the independent registered public accounting firm (Deloitte & Touche LLP), and financial statement schedules, with an unqualified opinion and identified Critical Audit Matters - The independent auditor, Deloitte & Touche LLP, issued an unqualified opinion on the consolidated financial statements for the three years ended May **31**, **2023**[285](index=285&type=chunk) - The audit identified two Critical Audit Matters: the reserve for excess and obsolete inventory due to significant estimation of future demand, and the valuation of goodwill for the Med Device reporting unit following a divestiture-related triggering event[289](index=289&type=chunk)[292](index=292&type=chunk) [Consolidated Statements of Operations](index=58&type=section&id=Consolidated%20Statements%20of%20Operations) For the fiscal year ended May **31**, **2023**, AngioDynamics reported net sales of **$338.8 million**, a gross profit of **$174.2 million**, and a net loss of **$52.4 million** or **($1.33)** per diluted share | (in thousands, except per share) | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net sales | **$338,752** | **$316,219** | **$291,010** | | Gross profit | **$174,246** | **$165,732** | **$156,788** | | Operating loss | **$(51,181)** | **$(28,471)** | **$(35,283)** | | Net loss | **$(52,442)** | **$(26,547)** | **$(31,548)** | | Loss per share (Diluted) | **$(1.33)** | **$(0.68)** | **$(0.82)** | [Consolidated Balance Sheets](index=60&type=section&id=Consolidated%20Balance%20Sheets) As of May **31**, **2023**, AngioDynamics had total assets of **$532.6 million**, total liabilities of **$154.3 million**, and total stockholders' equity of **$378.3 million** | (in thousands) | May 31, 2023 | May 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | **$163,542** | **$143,345** | | **Total Assets** | **$532,637** | **$552,751** | | **Total Current Liabilities** | **$83,825** | **$74,324** | | **Total Liabilities** | **$154,341** | **$128,262** | | **Total Stockholders' Equity** | **$378,296** | **$424,489** | [Consolidated Statements of Cash Flows](index=62&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the fiscal year ended May **31**, **2023**, net cash provided by operating activities was **$0.1 million**, with a net increase in cash and cash equivalents of **$15.8 million**, ending the year with **$44.6 million** | (in thousands) | Year Ended May 31, 2023 | | :--- | :--- | | Net cash provided by (used in) operating activities | **$78** | | Net cash used in investing activities | **$(9,746)** | | Net cash provided by (used in) financing activities | **$25,420** | | **Net increase in cash and cash equivalents** | **$15,795** | | **Cash and cash equivalents at end of year** | **$44,620** |

AngioDynamics, Inc. (NASDAQ:ANGO) Q4 2023 Earnings Conference Call July 12, 2023 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 Jason Bedford - Raymond James Bill Plovanic - Canaccord Genuity Matthew Mishan - KeyBanc Capital Markets Operator Good morning, and welcome to the AngioDynamics Fourth Quarter and Fiscal Year 2023 Earnings Call. At this time, all participants are ...

1 ANGIODYNAMICS Fourth Quarter 2023 Earnings Presentation July 12, 2023 Forward-Looking Statement Notice Regarding Forward-LookingStatements This presentation 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 an ...

ANGIODYNAMICS Third Quarter 2023 Earnings Presentation March 30, 2023 1 Forward-Looking Statement Notice Regarding Forward-LookingStatements This presentation 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 an ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 28, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | |--------------------------------------------------------------------------------------------| | For the transition period from to Commission file number 0-50761 | | Angio ...

Financial Data and Key Metrics Changes - The company reported revenue of $80.7 million for Q3 2023, representing a 9% year-over-year growth, driven by a 17% increase in the Med Tech segment [6][19] - Year-to-date, net sales have grown 8%, with the Med Tech segment growing 25% and the Med Device segment growing 2.5% [7][19] - Adjusted net loss for Q3 2023 was $1 million, compared to an adjusted net income of $1.3 million in the same quarter last year [27][28] - The company revised its full-year revenue guidance to a range of $338 million to $342 million, down from $342 million to $348 million [29] Business Line Data and Key Metrics Changes - Med Tech revenue was $22.9 million, a 16.6% year-over-year increase, while Med Device revenue was $57.8 million, an increase of 6.4% year-over-year [19][20] - Auryon platform contributed $10.4 million in revenue during Q3, a 42.8% increase compared to last year [20] - NanoKnife disposable sales grew approximately 22% during the quarter, with year-to-date sales growing 26.7% [22] - AngioVac revenue was $5.5 million, representing a decline of 15.7% year-over-year, and year-to-date revenue is down 8.2% [22] Market Data and Key Metrics Changes - International markets grew 14% year-over-year, driven by NanoKnife and contributions from the Med Device business [12] - The company expects regulatory approvals to launch Auryon and AlphaVac internationally during fiscal year 2024 [13] Company Strategy and Development Direction - The company is focused on optimizing its commercial strategy and enhancing the selling process for AngioVac and AlphaVac [9][10] - The mechanical thrombectomy platform is expected to grow 10% to 20% in fiscal 2023, below prior expectations of 25% to 30% [22] - The company aims to strengthen its sales network and expand its global scientific presence [13] Management's Comments on Operating Environment and Future Outlook - Management noted improvements in the macro environment, particularly regarding hospital staffing challenges [34] - The company remains confident in the long-term prospects for its mechanical thrombectomy business despite short-term challenges [10][22] - Management anticipates continued growth in the NanoKnife platform and is optimistic about upcoming regulatory approvals [15][44] Other Important Information - Gross margin for Q3 2023 was 50.2%, a decrease of 200 basis points compared to the previous year, impacted by inflationary pressures [24][25] - Research and development expenses were $6.9 million, or 8.5% of sales, with a focus on key technology platforms [26] Q&A Session Summary Question: What are the broader macro trends affecting the company? - Management indicated that the macro environment is improving, particularly in hospital staffing challenges, although supply chain disruptions and inflation remain [34][35] Question: Can you elaborate on the new selling processes for AngioVac? - Management is integrating the sales approach for AngioVac and AlphaVac, focusing on training and improving customer messaging [36][38] Question: What are the expectations for international approvals? - Management is focusing on Western Europe for growth opportunities and anticipates regulatory approvals for Auryon and AlphaVac in the next calendar year [39][41] Question: How does the company view the growth potential for NanoKnife? - Management expects continued growth driven by increased awareness and successful clinical studies, with a potential market exceeding $700 million in the U.S. [44] Question: What is the outlook for Auryon? - Management is optimistic about Auryon's development and plans to expand its applications, with positive feedback from physicians [46][49] Question: What are the dynamics affecting AngioVac's user base? - Management noted a mix of gaining new users and some users reducing their cases, with ongoing training efforts to improve usage [60]

Raymond James 44th Annual Institutional Investors Conference March 6, 2023 Jim Clemmer, President & CEO Stephen Trowbridge, Executive Vice President & CFO Notice Regarding Forward-Looking Statements This presentation 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, produ ...

ANGIODYNAMICS Second Quarter 2023 Earnings Presentation January 5, 2023 1 Forward-Looking Statement Notice Regarding Forward-LookingStatements This presentation 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 ...

Financial Data and Key Metrics Changes - The company reported revenue of $85.4 million for Q2 FY '23, representing a year-over-year growth of over 9% [7][18] - Adjusted earnings per share were $0.01, compared to an adjusted net loss of $0.02 in the same quarter last year [25] - Gross margin for Q2 FY '23 was 52.8%, an increase of 100 basis points year-over-year [22] Business Line Data and Key Metrics Changes - Med Tech segment revenue was $24.5 million, a 29.7% increase year-over-year, while Med Device segment revenue was $60.9 million, a 2.6% increase [18] - Auryon platform revenue grew 60.6% year-over-year, contributing $10.1 million in revenue during Q2 [19] - NanoKnife disposable revenue increased by 45.4% year-over-year, with U.S. sales growing 44.2% [21] Market Data and Key Metrics Changes - International markets grew 7% year-over-year, driven by strong NanoKnife sales [11] - The company reduced its backlog from $7.1 million to $5 million, indicating improved operational capacity [21][45] Company Strategy and Development Direction - The company is focusing on innovation in the PAD market with the launch of hydrophilic coated catheters [9] - Auryon is being positioned as a disruptive technology in the PAD market, with plans to target small vessel DVT by the end of 2024 [16][52] - The company is committed to leveraging proprietary technology platforms to deliver solutions in attractive markets [14] Management's Comments on Operating Environment and Future Outlook - Management noted that hospitals are becoming more adept at managing staffing issues, which are expected to improve gradually [8][70] - The company reiterated its full-year revenue guidance in the range of $342 million to $348 million, indicating confidence in its operational stability [26][67] - Management expressed optimism about the ongoing clinical trials and their potential to drive future growth [12][74] Other Important Information - The company generated over $5 million of net cash during the quarter, increasing its cash position to $29.9 million [25][26] - Research and development expenses were $6.8 million, representing 8% of sales, with a target of 10% to 12% for the full year [24] Q&A Session Summary Question: What are the expectations for AngioVac growth? - Management indicated that dynamics are improving and expects stronger performance in the second half of the year [30][31] Question: What is driving the growth in NanoKnife? - The growth is attributed to the excitement around the PRESERVE study and improved international sales, particularly in China and Central Europe [32][33] Question: What are the next steps regarding the litigation with Bard? - Management stated that the litigation is ongoing and not expected to materially impact business operations [39][40] Question: How is the backlog expected to change moving forward? - The company aims to reduce the backlog to a normal operating level, targeting around half a day’s sales [45][46] Question: What is the status of the Auryon platform? - Management confirmed that the focus has shifted to Auryon for small vessel DVT, with a potential launch by the end of 2024 [52][59]

Financial Performance - Net sales for the three months ended November 30, 2022, were $85,429 thousand, an increase of 9.3% compared to $78,280 thousand for the same period in 2021[19] - Gross profit for the six months ended November 30, 2022, was $87,383 thousand, up from $80,694 thousand for the same period in 2021, reflecting a gross margin improvement[19] - Operating loss for the three months ended November 30, 2022, was $(8,115) thousand, slightly improved from $(8,679) thousand in the prior year[19] - Net loss for the six months ended November 30, 2022, was $(21,490) thousand, compared to $(15,323) thousand for the same period in 2021, indicating a worsening financial performance[21] - The net loss for the three months ended November 30, 2022, was $8.5 million, consistent with a loss per share of $0.21[130] - The net loss for the six months ended November 30, 2022, increased by $6.2 million to $21.5 million, with a loss per share of $0.55[127] Cash and Assets - Cash and cash equivalents at the end of the period were $29,857 thousand, an increase from $28,825 thousand at the beginning of the period[28] - Total assets as of November 30, 2022, were $558,207 thousand, a slight increase from $552,751 thousand as of May 31, 2022[25] - The company had total debt outstanding of $50.0 million as of November 30, 2022, related to the Credit Agreement[149] - Cash used in operating activities was $17.2 million for the six months ended November 30, 2022, compared to $7.0 million for the same period in the prior year[150] Debt and Liabilities - Long-term debt increased to $49,796 thousand from $25,000 thousand, indicating a significant rise in leverage[25] - The company entered into a new Credit Agreement providing for a $75.0 million secured revolving credit facility and a $30.0 million delayed draw term loan[67] - As of November 30, 2022, the company had $25.0 million outstanding on the Revolving Facility and $25.0 million on the Delayed Draw Term Loan, with an interest rate of 5.59%[70] - The total lease liabilities decreased from $7,263,000 on May 31, 2022, to $5,981,000 on November 30, 2022, indicating a reduction in lease obligations[95] Revenue Segments - The Med Tech segment generated $24,502,000 in net sales for the three months ended November 30, 2022, compared to $18,886,000 in the prior year, indicating a growth of 30%[43] - The Med Device segment reported net sales of $60,927,000 for the three months ended November 30, 2022, up from $59,394,000 in the same period of 2021, reflecting a growth of 3%[43] - Med Tech segment net sales increased by $5.6 million for the three months and $10.8 million for the six months ended November 30, 2022, primarily driven by increased Auryon sales[134] - Med Device segment net sales increased by $1.5 million for the three months and $0.9 million for the six months ended November 30, 2022, despite backlog impacts[135] Expenses - Research and development expenses for the three months ended November 30, 2022, were $6,838 thousand, down from $8,199 thousand in the prior year, reflecting cost management efforts[19] - Share-based compensation expense for the six months ended November 30, 2022, was $6,400,000, compared to $5,400,000 for the same period in 2021, reflecting an increase of 18.5%[77] - Sales and marketing expense increased by $2.4 million and $4.5 million for the three and six months ended November 30, 2022, compared to the same periods in the prior year[141] - General and administrative expense increased by $1.2 million and $2.3 million for the three and six months ended November 30, 2022, compared to the same periods in the prior year[142] Stockholder Equity - Total stockholders' equity decreased to $407,958 thousand as of November 30, 2022, from $424,489 thousand as of May 31, 2022, indicating a decline in shareholder value[26] - The total balance of treasury stock was $407,958,000, with a net loss of $8,486,000 recorded during the period[31] - The total balance of treasury stock increased from $424,489,000 on May 31, 2022, to $414,041,000 by August 31, 2022[31] Legal and Compliance - The company is involved in various legal proceedings, but has not recorded an expense related to the outcome of ongoing litigation as it cannot determine if a potential loss is probable or reasonably estimable[101] - The company reported legal expenses of $2,422,000 for the three months ended November 30, 2022, compared to $2,072,000 for the same period in 2021, reflecting an increase of 16.9%[108] - The company has not recorded an expense related to ongoing litigation as it is not yet possible to determine if a potential loss is probable nor reasonably estimable[104] Market and Strategic Focus - The company is focused on transforming its portfolio to target larger and faster-growing markets, which is expected to drive near to mid-term growth[41] - The company aims to grow sales and profitability by expanding geographically and introducing new products, with a focus on research and development investments[123] - The company’s business operations are influenced by market dynamics such as value-based purchasing, healthcare provider consolidation, and an aging population[122] Tax and Valuation - The estimated annual effective tax rate prior to discrete items was 5.8% for the second quarter of fiscal year 2023, down from 12.3% for the same period in fiscal year 2022[72] - The Company has provided a valuation allowance on its deferred tax assets due to not attaining a sustained level of profitability as of November 30, 2022[74]