Company Contact: | Investor Relations Contacts: | Media Contact: |
AngioDynamics, Inc. Mark Frost, CFO (800) 772-6446 x1981 mfrost@AngioDynamics.com | EVC Group, Inc. Jamar Ismail/Robert Jones (415) 568-9348; (646) 201-5447 jismail@evcgroup.com; bjones@evcgroup.com | EVC Group, Inc. Chris Gale (646) 201-5431 cgale@evcgroup.com |
AngioDynamics Reports Fiscal 2013 Second Quarter Financial Results
| · | Pro forma net sales growth of 3% to $87 million |
| · | Adjusted (Non-GAAP) Net Income of $0.10 per share; GAAP Net Incomeof $0.06 per share |
| · | Adjusted EBITDA of $13.8 million; or $0.39 per share, a 26%YOY increase |
| · | Operating cash flow of $11.1 million |
ALBANY, N.Y. (January 3, 2013) – AngioDynamics (Nasdaq:ANGO), a leading provider of innovative, minimally invasive medical devices for vascular access, surgery, peripheral vascular disease and oncology, today reported financial results for the fiscal 2013 second quarter ended November 30, 2012. Financial results include Navilyst Medical operations acquired in May 2012.
Net sales for the second quarter were $87 million, a 50% increase over the $58.1 million reported a year ago. Compared to prior year second quarter pro forma net sales, which include Navilyst Medical and exclude LC Beads sales, total company pro forma net sales increased 3%; U.S. net sales decreased 1%; International net sales increased 21% (22% on a constant currency basis); Vascular net sales increased 1%; and Oncology/Surgery net sales increased 12%. Net sales by product line are presented on a pro forma basis in a table at the end of this news release.
The Company reported second quarter net income of $2 million, or $0.06 per share, compared to net income of $2.3 million, or $0.09 per share, a year ago. Second quarter results include costs related to the Navilyst Medical acquisition, the subsequent restructuring of the Company and the Quality Call to Action Program. Excluding the aforementioned costs, which are set forth in the attached reconciliation table, adjusted (Non-GAAP) net income was $3.6 million, or $0.10 per share, compared to $2.8 million, or $0.11 per share, a year ago. Diluted average shares outstanding increased to 35.3 million in the quarter from 25.3 million in the prior year period due to the additional shares issued in conjunction with the Navilyst Medical acquisition.
Second quarter EBITDA was $11.4 million, or $0.32 per share, compared to $7.1 million, or $0.28 per share, a year ago. Adjusted EBITDA, computed with the adjustments to GAAP
reporting set forth in the attached reconciliation table, was $13.8 million, or $0.39 per share, in the second quarter compared to $7.8 million, or $0.31 per share, a year ago.
“We improved our performance in the fiscal second quarter,” said Joseph DeVivo, President and CEO. “We met our revenue expectations by generating 3% pro forma growth. Our international, VenaCure EVLT and Oncology/Surgery product offerings all posted double-digit growth. We had strong earnings growth for the quarter and began to demonstrate the type of cash the business can generate by delivering $11.1 million in cash flow from operations and a 26% year-over-year increase in adjusted EBITDA per share. During the quarter, our team significantly increased the value of our portfolio with the addition of the AngioVac device and also began to sell BioFlo PICCs in the U.S. AngioDyanamics’ financial performance continues to improve, and we are excited about our future growth opportunities.”
Operating cash flow improved to $11.1 million compared to $2.7 million in the prior year quarter. At November 30, 2012, cash, escrow receivable and investments were $24 million, and debt was $146.3 million.
Highlights of the reporting and subsequent period include:
| · | International pro forma sales growth of 21%, or 22% on a constant currency basis, led by strong sales in Canada, reflecting the establishment of a direct sales operation there, and the sale of Microwave ablation products internationally. |
| · | Oncology/Surgery pro forma sales growth of 12% (excluding LC Beads) led by the sale of Microwave ablation products internationally. |
| · | VenaCure EVLT sales increased 10%, primarily driven by strong worldwide sales of NeverTouch laser fiber kits. |
| · | The Company received U.S. Food and Drug Administration 510(K) clearance for the BioFlo Hybrid PICC featuring BioFlo technology. Designed to reduce the accumulation of catheter-related thrombus on, and in the catheter, this is the second clearance for a vascular access product with BioFlo technology in the U.S. market. |
| · | The acquisition of Vortex Medical Inc., a privately-held company focused on the development of innovative medical devices for venous drainage. The transaction included the AngioVac venous drainage system comprising the AngioVac Cannula and Circuit. These two disposable devices, when combined with other manufacturers’ filters, pumps and return cannula, comprise an extracorporeal bypass circuit that facilitates drainage, filtration and reinfusion of blood for up to six hours. The AngioVac Cannula has a proprietary balloon-actuated, expandable, funnel-shaped distal tip that enhances flow, prevents clogging of the cannula and facilitates en bloc removal of undesirable intravascular material. Both the AngioVac Cannula and Circuit are FDA-cleared, and an application has been filed for CE Mark approval. |
| · | The appointment of Mark Frost as Chief Financial Officer (CFO), succeeding retiring CFO Joseph Gersuk, and the appointment of George Bourne to the expanded role of Vice President and Chief Technology & Operations Officer. |
For the six months ended November 30, 2012, net sales were $170.4 million, a 51% increase over the $112.5 million reported a year ago and a 1% increase on a pro forma basis. Net income of $1.2 million, or $0.04 per share, compared to $3.7 million, or $0.15 per share, as reported a year ago. Adjusted net income, excluding costs relating to the Navilyst Medical acquisition, as well as other costs detailed in the attached reconciliation, was $7.2 million, or $0.20 per share, compared to $3.7 million, or $0.14 per share, a year ago. Adjusted EBITDA was $27 million, or $0.77 per share, compared to $12.9 million, or $0.51 per share, a year ago.
| | Adjusted Non-GAAP |
| | |
| Sales ($ in mils.) (a), (b) | 355 — 360 |
| | |
| Gross Margin (c) | 50 - 51% |
| | |
| Operating Income ($ in mils.) (d) | 29 — 31 |
| | |
| EBITDA ($ in mils.) (d) (e) | 56 — 57 |
| | |
| EPS ($) (f) | 0.40 - 0.42 |
| | |
| a) | Quarterly calendarization is expected to approximate 23%/24%/25%/28% of the annual amount. |
| b) | Fiscal Year 2012 pro forma combined sales excluding LC Beads were $344.3 million. |
| c) | Excludes $3.4 million for amortization of inventory basis step-up and $1 million for the QCTA/FDA remediation programs, and includes $1.8 million for the medical device tax with effect from January 1, 2013. |
| d) | Adjusted result reflects an estimated $14 million in acquisition-related and restructuring costs, which include amortization of inventory basis step-up, accelerated asset depreciation, transaction-related professional fees, employment severance costs, QCTA/FDA remediation programs, and the closure of the U.K. manufacturing facility. Quarterly calendarization of the $14 million will approximate $7 million/$2 million/$3 million/$2 million. |
| e) | $16 million in amortization, $8 million in depreciation, and $2 million in purchase accounting related to Vortex Medical are excluded from both measures. |
| f) | Approximately 36 million diluted shares outstanding and a 37% tax rate. |
Conference Call
AngioDynamics will host a conference call today at 4:30 p.m. Eastern Time to discuss its second quarter results. To participate in the call, please dial 1-877-941-0844. In addition, a live webcast and archived replay of the call will be available at http://investors.angiodynamics.com. To access the live webcast, please go to the website 15 minutes prior to its start to register, download and install the necessary software.
Use of Non-GAAP Measures
Management uses non-GAAP measures to establish operational goals, and believes that non-GAAP measures may assist investors in analyzing the underlying trends in AngioDynamics’ business over time. Investors should consider these non-GAAP measures in addition to, not as a substitute for or as superior to, financial reporting measures prepared in accordance with GAAP. In this news release, AngioDynamics has reported pro forma sales growth, sales on a constant currency basis, non-GAAP gross margin, non-GAAP operating income, EBITDA (income before interest, taxes, depreciation and amortization), adjusted EBITDA, non-GAAP net income and non-GAAP earnings per share. 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
AngioDynamics Inc. is a leading provider of innovative, minimally invasive medical devices used by professional healthcare providers for vascular access, surgery, peripheral vascular disease and oncology. AngioDynamics’ diverse product lines include market-leading ablation systems, fluid management systems, vascular access products, angiographic products and accessories, angioplasty products, drainage products, thrombolytic products and venous products. More information is available at www.AngioDynamics.com.
Trademarks
AngioDynamics, the AngioDynamics logo, Navilyst Medical, VenaCure EVLT, NeverTouch, BioFlo and NanoKnife are trademarks and/or registered trademarks of AngioDynamics Inc., an affiliate or a subsidiary.
Safe Harbor
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding AngioDynamics’ expected future financial position, results of operations, cash flows, business strategy, budgets, projected costs, capital expenditures, products, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include the words such as “expects,” “reaffirms,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “optimistic,” or variations of such words and similar expressions, are forward-looking statements. These forward looking statements are not guarantees of future performance and are subject to risks and uncertainties. Investors are cautioned that actual events or results may differ from AngioDynamics’ expectations. Factors that may affect the actual results achieved by AngioDynamics include, without limitation, the ability of AngioDynamics to develop its existing and new products, technological advances and patents attained by competitors, 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, 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 purchased businesses, including Navilyst Medical and its products, R&D capabilities, infrastructure and employees 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, 2012. AngioDynamics does not assume any obligation to publicly update or revise any forward-looking statements for any reason.
ANGIODYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share data)
| | | | | | | | | | | | | | |
| | | | Three months ended | | | Six months ended | |
| | | | Nov 30, | | | Nov 30, | | | Nov 30, | | | Nov 30, | |
| | | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| | | | (unaudited) | | | (unaudited) | |
| | | | | | | | | | | | | | |
| Net sales | | | $ | 87,007 | | | $ | 58,099 | | | $ | 170,423 | | | $ | 112,530 | |
| Cost of sales | | | | | | | | | | | | | | | | |
| Acquired inventory step-up | | | - | | | | - | | | | 3,445 | | | | - | |
| Quality call to action | | | 113 | | | | - | | | | 812 | | | | - | |
| Other cost of sales | | | 42,806 | | | | 24,868 | | | | 82,620 | | | | 47,154 | |
| | Total cost of sales | | | 42,919 | | | | 24,868 | | | | 86,877 | | | | 47,154 | |
| | Gross profit | | | 44,088 | | | | 33,231 | | | | 83,546 | | | | 65,376 | |
| | % of net sales | | | 50.7 | % | | | 57.2 | % | | | 49.0 | % | | | 58.1 | % |
| | | | | | | | | | | | | | | | | | |
| Operating expenses | | | | | | | | | | | | | | | | |
| Research and development | | | 7,014 | | | | 5,125 | | | | 14,088 | | | | 10,715 | |
| Sales and marketing | | | 18,671 | | | | 15,847 | | | | 37,214 | | | | 32,156 | |
| General and administrative | | | 6,910 | | | | 4,625 | | | | 13,808 | | | | 8,937 | |
| Amortization of intangibles | | | 4,107 | | | | 2,300 | | | | 7,844 | | | | 4,594 | |
| Acquisition and other non-recurring | | | 2,264 | | | | 1,408 | | | | 4,786 | | | | 2,331 | |
| | Total operating expenses | | | 38,966 | | | | 29,305 | | | | 77,740 | | | | 58,733 | |
| | Operating income | | | 5,122 | | | | 3,926 | | | | 5,806 | | | | 6,643 | |
| Other income (expense), net | | | (1,990 | ) | | | (357 | ) | | | (3,828 | ) | | | (971 | ) |
| | Income before income taxes | | | 3,132 | | | | 3,569 | | | | 1,978 | | | | 5,672 | |
| Provision for income taxes | | | 1,163 | | | | 1,240 | | | | 730 | | | | 1,970 | |
| | Net income | | $ | 1,969 | | | $ | 2,329 | | | $ | 1,248 | | | $ | 3,702 | |
| | | | | | | | | | | | | | | | | | |
| Earnings per common share | | | | | | | | | | | | | | | | |
| | Basic | | $ | 0.06 | | | $ | 0.09 | | | $ | 0.04 | | | $ | 0.15 | |
| | Diluted | | $ | 0.06 | | | $ | 0.09 | | | $ | 0.04 | | | $ | 0.15 | |
| | | | | | | | | | | | | | | | | | |
| Weighted average common shares | | | | | | | | | | | | | | | | |
| | Basic | | | 34,827 | | | | 25,190 | | | | 34,765 | | | | 25,107 | |
| | Diluted | | | 35,311 | | | | 25,340 | | | | 35,279 | | | | 25,278 | |
ANGIODYNAMICS, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
(in thousands, except per share data)
| Reconciliation of Net Income to non-GAAP Adjusted Net Income: | | | | | | |
| | | | | | | | | | | | | |
| | | Three months ended | | Six months ended | |
| | | Nov 30, | | | Nov 30, | | | Nov 30, | | | Nov 30, | |
| | | 2012 | | | 2011 | | | 2012 | | | 2011 | |
| | | (unaudited) | | | (unaudited) | |
| | | | | | | | | | | | | |
| Net income | | $ | 1,969 | | | $ | 2,329 | | | $ | 1,248 | | | $ | 3,702 | |
| | | | | | | | | | | | | | | | | |
| After tax: | | | | | | | | | | | | | | | | |
| Acquisition and other non-recurring (1) | | | 1,539 | | | | 907 | | | | 3,149 | | | | 1,500 | |
| Quality Call to Action Program (2) | | | 73 | | | | - | | | | 528 | | | | - | |
| Inventory step-up (3) | | | - | | | | - | | | | 2,239 | | | | - | |
| Product recalls (4) | | | - | | | | 924 | | | | - | | | | 924 | |
| LC Beads contribution (5) | | | - | | | | (1,392 | ) | | | - | | | | (2,468 | ) |
| Adjusted net income | | $ | 3,581 | | �� | $ | 2,768 | | | $ | 7,164 | | | $ | 3,658 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Reconciliation of Diluted Earnings Per Share to non-GAAP Adjusted Diluted Earnings Per Share: | |
| | | | | | | | | | | | | | | | | |
| | | Three months ended | | Six months ended | |
| | | Nov 30, | | | Nov 30, | | | Nov 30, | | | Nov 30, | |
| | | | 2012 | | | | 2011 | | | | 2012 | | | | 2011 | |
| | | (unaudited) | | | (unaudited) | |
| | | | | | | | | | | | | | | | | |
| Diluted earnings per share | | $ | 0.06 | | | $ | 0.09 | | | $ | 0.04 | | | $ | 0.15 | |
| | | | | | | | | | | | | | | | | |
| After tax: | | | | | | | | | | | | | | | | |
| Acquisition and other non-recurring (1) | | | 0.04 | | | | 0.04 | | | | 0.09 | | | | 0.06 | |
| Quality Call to Action Program (2) | | | 0.00 | | | | - | | | | 0.01 | | | | - | |
| Inventory step-up (3) | | | - | | | | - | | | | 0.06 | | | | - | |
| Product recalls (4) | | | - | | | | 0.04 | | | | - | | | | 0.04 | |
| LC Beads contribution (5) | | | - | | | | (0.05 | ) | | | - | | | | (0.10 | ) |
| Adjusted diluted earnings per share | | $ | 0.10 | * | | $ | 0.11 | | | $ | 0.20 | * | | $ | 0.14 | |
| | | | | | | | | | | | | | | | | |
