Cover Page
Cover Page - shares | 3 Months Ended | |
Aug. 31, 2022 | Oct. 07, 2022 | |
Document Information [Line Items] | ||
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001275187 | |
Current Fiscal Year End Date | --05-31 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Aug. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 0-50761 | |
Entity Registrant Name | AngioDynamics, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 11-3146460 | |
Entity Address, Address Line One | 14 Plaza Drive | |
Entity Address, City or Town | Latham | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 12110 | |
City Area Code | 518 | |
Local Phone Number | 795-1400 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 39,107,751 | |
Entity Filer Category | Large Accelerated Filer | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common stock, par value $.01 | |
Trading Symbol | ANGO | |
Security Exchange Name | NASDAQ | |
Preferred Stock Purchase Rights | ||
Document Information [Line Items] | ||
No Trading Symbol Flag | true | |
Title of 12(b) Security | Preferred Stock Purchase Rights | |
Security Exchange Name | NASDAQ |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Income Statement [Abstract] | ||
Net sales | $ 81,537 | $ 76,971 |
Cost of sales (exclusive of intangible amortization) | 39,232 | 36,832 |
Gross profit | 42,305 | 40,139 |
Operating expenses: | ||
Research and development | 8,333 | 7,394 |
Sales and marketing | 26,543 | 24,446 |
General and administrative | 10,101 | 8,943 |
Amortization of intangibles | 4,837 | 4,821 |
Change in fair value of contingent consideration | 211 | 195 |
Acquisition, restructuring and other items, net | 5,581 | 2,440 |
Total operating expenses | 55,606 | 48,239 |
Operating loss | (13,301) | (8,100) |
Other expense: | ||
Interest expense, net | (381) | (156) |
Other expense, net | (175) | (352) |
Total other expense, net | (556) | (508) |
Loss before income tax benefit | (13,857) | (8,608) |
Income tax benefit | (853) | (1,636) |
Net loss | $ (13,004) | $ (6,972) |
Loss per share | ||
Loss per share, basic (USD per share) | $ (0.33) | $ (0.18) |
Loss per share, diluted (USD per share) | $ (0.33) | $ (0.18) |
Weighted average shares outstanding | ||
Basic weighted average shares outstanding (in shares) | 39,302 | 38,734 |
Diluted weighted average shares outstanding (in shares) | 39,302 | 38,734 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (13,004) | $ (6,972) |
Other comprehensive income (loss), before tax: | ||
Foreign currency translation | (550) | 590 |
Other comprehensive income (loss), before tax | (550) | 590 |
Income tax expense related to items of other comprehensive income (loss) | 0 | 0 |
Other comprehensive income (loss), net of tax | (550) | 590 |
Total comprehensive loss, net of tax | $ (13,554) | $ (6,382) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Aug. 31, 2022 | May 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 24,564 | $ 28,825 |
Accounts receivable, net of allowances of $1,913 and $1,939 respectively | 53,586 | 52,304 |
Inventories | 57,609 | 51,392 |
Prepaid expenses and other | 15,612 | 10,824 |
Total current assets | 151,371 | 143,345 |
Property, plant and equipment, net | 46,189 | 45,005 |
Intangible assets, net | 147,976 | 152,380 |
Goodwill | 201,038 | 201,058 |
Other assets | 11,078 | 10,963 |
Total assets | 557,652 | 552,751 |
Current liabilities | ||
Accounts payable | 29,258 | 28,047 |
Accrued liabilities | 25,558 | 34,842 |
Current portion of contingent consideration | 8,892 | 8,783 |
Other current liabilities | 2,682 | 2,652 |
Total current liabilities | 66,390 | 74,324 |
Long-term debt | 49,798 | 25,000 |
Deferred income taxes | 15,115 | 16,037 |
Contingent consideration, net of current portion | 8,266 | 8,165 |
Other long-term liabilities | 4,042 | 4,736 |
Total liabilities | 143,611 | 128,262 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity | ||
Preferred stock, par value $0.01 per share, 5,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Common stock, par value $0.01 per share, 75,000,000 shares authorized; 39,847,751 and 39,541,173 shares issued and 39,477,751 and 39,171,173 shares outstanding at August 31, 2022 and May 31, 2022, respectively | 381 | 380 |
Additional paid-in capital | 589,984 | 586,879 |
Accumulated deficit | (171,417) | (158,413) |
Treasury stock, 370,000 shares at August 31, 2022 and May 31, 2022, respectively | (5,714) | (5,714) |
Accumulated other comprehensive income | 807 | 1,357 |
Total Stockholders’ Equity | 414,041 | 424,489 |
Total Liabilities and Stockholders' Equity | $ 557,652 | $ 552,751 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Aug. 31, 2022 | May 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 1,913 | $ 1,939 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 39,847,751 | 39,541,173 |
Common stock, shares outstanding (in shares) | 39,477,751 | 39,171,173 |
Treasury stock, shares (in shares) | 370,000 | 370,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (13,004) | $ (6,972) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 7,660 | 6,997 |
Non-cash lease expense | 621 | 602 |
Stock based compensation | 3,024 | 2,429 |
Change in fair value of contingent consideration | 211 | 195 |
Gain on contingent consideration for IPR&D Write-off | (907) | (1,690) |
Change in accounts receivable allowances | 45 | (44) |
Fixed and intangible asset impairments and disposals | 87 | 30 |
Other | (96) | (46) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,425) | (36) |
Inventories | (6,238) | (670) |
Prepaid expenses and other | (5,733) | (3,354) |
Accounts payable, accrued and other liabilities | (8,990) | (6,345) |
Net cash used in operating activities | (24,745) | (8,904) |
Cash flows from investing activities: | ||
Additions to property, plant and equipment | (809) | (1,021) |
Acquisition of intangibles | (540) | 0 |
Additions to placement and evaluation units | (2,227) | (4,471) |
Cash paid for acquisitions | 0 | (3,600) |
Net cash used in investing activities | (3,576) | (9,092) |
Cash flows from financing activities: | ||
Proceeds from borrowings on long-term debt | 70,000 | 5,000 |
Repayment of long-term debt | (45,000) | 0 |
Deferred financing costs on long-term debt | (706) | 0 |
Proceeds from exercise of stock options and employee stock purchase plan | 82 | 446 |
Net cash provided by financing activities | 24,376 | 5,446 |
Effect of exchange rate changes on cash and cash equivalents | (316) | (139) |
Decrease in cash and cash equivalents | (4,261) | (12,689) |
Cash and cash equivalents at beginning of period | 28,825 | 48,161 |
Cash and cash equivalents at end of period | 24,564 | 35,472 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Accrual for capital expenditures incurred during the period | $ 426 | $ 162 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Restricted stock units | Performance share units | Common Stock | Common Stock Restricted stock units | Common Stock Performance share units | Additional paid in capital | Additional paid in capital Restricted stock units | Additional paid in capital Performance share units | Accumulated deficit | Accumulated other comprehensive income | Treasury Stock |
Beginning Balance, Shares at May. 31, 2021 | 38,920,951,000 | |||||||||||
Beginning Balance at May. 31, 2021 | $ 439,457 | $ 377 | $ 573,507 | $ (131,866) | $ 3,153 | $ (5,714) | ||||||
Beginning Balance, Treasury Shares at May. 31, 2021 | (370,000,000) | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net loss | (6,972) | (6,972) | ||||||||||
Exercise of stock options, Shares | 80,635,000 | |||||||||||
Exercise of stock options | 1,280 | $ 1 | 1,279 | |||||||||
Issuance/Cancellation of performance share units and restricted stock units, net, Shares | 279,495,000 | 59,371,000 | ||||||||||
Issuance/Cancellation of performance share units and restricted stock units | $ (1,734) | $ (1,734) | ||||||||||
Purchase of common stock under ESPP, Shares | 49,789,000 | |||||||||||
Purchases of common stock under ESPP | 900 | $ 1 | 899 | |||||||||
Stock-based compensation | 2,429 | 2,429 | ||||||||||
Other comprehensive loss, net of tax | 590 | 590 | ||||||||||
Ending Balance, Shares at Aug. 31, 2021 | 39,390,241,000 | |||||||||||
Ending Balance at Aug. 31, 2021 | $ 435,950 | $ 379 | 576,380 | (138,838) | 3,743 | $ (5,714) | ||||||
Ending Balance, Treasury Shares at Aug. 31, 2021 | (370,000,000) | |||||||||||
Beginning Balance, Shares at May. 31, 2022 | 39,171,173 | 39,541,173 | ||||||||||
Beginning Balance at May. 31, 2022 | $ 424,489 | $ 380 | 586,879 | (158,413) | 1,357 | $ (5,714) | ||||||
Beginning Balance, Treasury Shares at May. 31, 2022 | (370,000) | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net loss | (13,004) | |||||||||||
Exercise of stock options, Shares | 6,617 | |||||||||||
Exercise of stock options | (29) | (29) | ||||||||||
Issuance/Cancellation of performance share units and restricted stock units, net, Shares | 213,241 | 29,826 | ||||||||||
Issuance/Cancellation of performance share units and restricted stock units | $ (648) | $ (312) | $ (648) | $ (312) | ||||||||
Purchase of common stock under ESPP, Shares | 56,894 | |||||||||||
Purchases of common stock under ESPP | 1,071 | $ 1 | 1,070 | |||||||||
Stock-based compensation | 3,024 | 3,024 | ||||||||||
Other comprehensive loss, net of tax | $ (550) | (550) | ||||||||||
Ending Balance, Shares at Aug. 31, 2022 | 39,477,751 | 39,847,751 | ||||||||||
Ending Balance at Aug. 31, 2022 | $ 414,041 | $ 381 | $ 589,984 | $ (171,417) | $ 807 | $ (5,714) | ||||||
Ending Balance, Treasury Shares at Aug. 31, 2022 | (370,000) |
Consolidated Financial Statemen
Consolidated Financial Statements | 3 Months Ended |
Aug. 31, 2022 | |
Accounting Policies [Abstract] | |
Consolidated Financial Statements | CONSOLIDATED FINANCIAL STATEMENTS The Consolidated Statements of Operations and the Consolidated Statements of Comprehensive Loss for the three months ended August 31, 2022 and 2021, the Consolidated Balance Sheet as of August 31, 2022, the Consolidated Statements of Cash Flows for the three months ended August 31, 2022 and 2021, and the Consolidated Statements of Stockholders’ Equity for the three months ended August 31, 2022 and 2021 have been prepared by the Company and are unaudited. The Consolidated Balance Sheet as of May 31, 2022 was derived from audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary to state fairly the financial position, changes in stockholders’ equity and comprehensive income, results of operations and cash flows as of and for the period ended August 31, 2022 (and for all periods presented) have been made. The unaudited interim consolidated financial statements for the three months ended August 31, 2022 and 2021 include the accounts of AngioDynamics, Inc. and its wholly owned subsidiaries (collectively, the "Company", "we", "our" or "us"). All intercompany balances and transactions have been eliminated. |
Acquisitions
Acquisitions | 3 Months Ended |
Aug. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | ACQUISITIONSCamaro Support Catheter Asset AcquisitionOn July 27, 2021, the Company acquired the Camaro support catheter (rebranded as Syntrax) from QX Medical, LLC for an aggregate purchase price of $4.0 million, which included an upfront payment of $3.6 million and $0.4 million in purchase price holdbacks, along with $1.0 million of potential future contingent consideration related to revenue milestones. This acquisition supports the Auryon product family and the Company's strategic plan. The Company accounted for this acquisition as an asset purchase. The Company recorded the amount paid at closing as inventory and fixed assets of $0.1 million and an intangible asset product technology of $3.9 million. The intangible asset will be amortized over 15 years. The contingent consideration is comprised of revenue milestones and will be accounted for when the contingency is resolved or becomes probable and reasonably estimable. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Aug. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue Recognition Under ASC 606, Revenue from Contracts with Customers , revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company has one primary revenue stream which is the sales of its products. Disaggregation of Revenue As the Company has previously announced, the Company is focused on its ongoing transformation from a company with a broad portfolio of largely undifferentiated products to a more focused medical technology company that delivers unique and innovative health care solutions. The Company believes that this transformation will enable the Company to shift the portfolio from the mature, lower-growth markets where we have competed in the past by investing in technology and products that provide access to larger and faster growing markets. As such, we believe the growth in the near to mid-term will be driven by our Med Tech segment. The following table summarizes net sales by Med Tech, Med Device and by geography: Three Months Ended August 31, 2022 Three Months Ended August 31, 2021 (in thousands) United States International Total United States International Total Net sales Med Tech $ 20,442 $ 2,375 $ 22,817 $ 15,223 $ 2,384 $ 17,607 Med Device 48,581 10,139 58,720 49,241 10,123 59,364 Total $ 69,023 $ 12,514 $ 81,537 $ 64,464 $ 12,507 $ 76,971 Net Product Revenue The Company's products consist of a wide range of medical, surgical and diagnostic devices used by professional healthcare providers for vascular access, for the treatment of peripheral vascular disease and for use in oncology and surgical settings. The Company's devices are generally used in minimally invasive, image-guided procedures. Most of the Company's products are intended to be used once and then discarded, or they may be implanted for short or long term use. The Company sells its products to its distributors and to end users, such as interventional radiologists, interventional cardiologists, vascular surgeons, urologists, interventional and surgical oncologists and critical care nurses. Contracts and Performance Obligations The Company contracts with its customers based on customer purchase orders, which in many cases are governed by master purchasing agreements. The Company’s contracts with customers are generally for product only, and do not include other performance obligations such as services or other material rights. As part of its assessment of each contract, the Company evaluates certain factors including the customer’s ability to pay (or credit risk). For each contract, the Company considers the promise to transfer products, each of which is distinct, to be the identified performance obligations. Transaction Price and Allocation to Performance Obligations Transaction prices of products are typically based on contracted rates. Product revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products to a customer, net of any variable consideration as described below. If a contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products underlying each performance obligation. The Company has standard pricing for its products and determines standalone selling prices based on the price at which the performance obligation is sold separately. Revenue Recognition Revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which occurs at a point in time, and may be upon shipment from the Company’s manufacturing site or delivery to the customer’s named location, based on the shipping terms of a contract. In determining whether control has transferred, the Company considers if there is a present right to payment from the customer and when physical possession, legal title and risks and rewards of ownership have transferred to the customer. The Company typically invoices customers upon satisfaction of identified performance obligations. As the Company’s standard payment terms are 30 to 90 days from invoicing, the Company does not provide any significant financing to its customers. The Company enters into agreements to place placement and evaluation units (“units”) at customer sites, but the Company retains title to the units. For the duration of these agreements the customer has the right to use the unit at no upfront charge in connection with the customer’s ongoing purchase of disposables. These types of agreements include an embedded operating lease for the right to use the units. In these arrangements, revenue recognized for the sale of the disposables is not allocated between the disposal revenue and lease revenue due to the insignificant value of the units in relation to the total agreement value. Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue. Variable Consideration Reserves: Revenue from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established for discounts, returns, rebates and allowances that are offered within contracts between the Company and its customers. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as a contra asset. Rebates and Allowances: The Company provides certain customers with rebates and allowances that are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. The Company establishes reserves for such amounts, which is included in accrued expenses in the accompanying Consolidated Balance Sheets. These rebates and allowances result from performance-based offers that are primarily based on attaining contractually specified sales volumes. The Company is also required to pay administrative fees to group purchasing organizations. Product Returns: The Company generally offers customers a limited right of return. Product returns after 30 days must be pre-approved by the Company and customers may be subject to a 20% restocking charge. To be accepted, a returned product must be unadulterated, undamaged and have at least twelve months remaining prior to its expiration date. The Company estimates the amount of its product sales that may be returned by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized. The Company currently estimates product return liabilities using its historical product return information and considers other factors that it believes could significantly impact its expected returns, including product recalls. During the three months ended August 31, 2022, such product returns were not material. Contract Balances with Customers A receivable is generally recognized in the period the Company ships the product. Payment terms on invoiced amounts are based on contractual terms with each customer and generally coincide with revenue recognition. Accordingly, the Company does not have any contract assets associated with the future right to invoice its customers. In some cases, if control of the product has not yet transferred to the customer or the timing of the payments made by the customer precedes the Company’s fulfillment of the performance obligation, the Company recognizes a contract liability that is included in deferred revenue in the accompanying Consolidated Balance Sheets. The following table presents changes in the Company’s receivables, contract assets and contract liabilities with customers: (in thousands) Aug 31, 2022 May 31, 2022 Receivables $ 53,586 $ 52,304 Contract assets $ — $ — Contract liabilities $ 647 $ 526 During the three months ended August 31, 2022, the Company had additions to contract liabilities of $0.3 million. This was offset by $0.2 million in revenue that was recognized during the three months ended August 31, 2022. Costs to Obtain or Fulfill a Customer Contract Under ASC 606, the Company may recognize an asset for incremental costs of obtaining a contract with a customer if it expects to recover those costs. The Company’s sales incentive compensation plans qualify for capitalization since these plans are directly related to sales achieved during a period of time. However, the Company has elected the practical expedient under ASC 340-40-25-4 to expense the costs as they are incurred within selling and marketing expenses since the amortization period is less than one year. |
Inventories
Inventories | 3 Months Ended |
Aug. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES Inventories are stated at lower of cost and net realizable value (using the first-in, first-out method). Inventories consisted of the following: (in thousands) Aug 31, 2022 May 31, 2022 Raw materials $ 32,474 $ 28,251 Work in process 8,113 7,186 Finished goods 17,022 15,955 Inventories $ 57,609 $ 51,392 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Aug. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill is not amortized, but rather, is tested for impairment annually or more frequently if impairment indicators arise. Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. The Company has historically performed its annual goodwill assessment during the third quarter of each fiscal year. During the fourth quarter of fiscal year 2022, the Company changed its annual impairment assessment date from December 31 to April 30 to more closely align the impairment assessment date with the Company's long term planning and forecasting process. The Company's annual testing for impairment of goodwill was completed as of April 30, 2022. Prior to the first quarter of fiscal year 2023, the Company managed its operations as one reporting unit. At the beginning of the first quarter of fiscal year 2023, the Company began to manage its operations as two operating segments and two reporting units, namely Med Tech and Med Device (see Note 11"Segment and Geographic Information" set forth in the Notes to our consolidated financial statements included in this Quarterly Report on Form 10-Q). As a result of this change, goodwill was required to be allocated to each reporting unit and an interim goodwill impairment assessment was performed at the Company and reporting unit levels. To determine the fair value of the individual reporting units and the entire company as of June 1, 2022, the Company utilized the income approach. The income approach is based on the projected cash flows discounted to their present value using discount rates, that in the Company's judgment, consider the timing and risk of the forecasted cash flows using internally developed forecasts and assumptions. Under the income approach, the discount rate used is the average estimated value of a market participant’s cost of capital and debt, derived using customary market metrics. Other significant assumptions include revenue growth rates, profitability projections, and terminal value growth rates. The market approach was also considered; however, the income approach was chosen as the Company determined it is a better representation of both the Med Tech and Med Device reporting units' projected long-term performance. The fair value of each reporting unit and the Company as a whole was assessed to determine if there was any impairment. The Company compared each reporting unit's fair value to the adjusted carrying value to conclude that there was no impairment for either reporting unit or the Company as a whole. The adjusted carrying value of each reporting unit was used to calculate the Company's book value to compare to its market capitalization at the assessment date. Based on the results of this evaluation, there were no adjustments to goodwill for either reporting unit or the Company as a whole as of August 31, 2022. Even though the Company determined that there was no goodwill impairment at August 31, 2022, the future occurrence of a potential indicator of impairment, such as a significant adverse change in legal, regulatory, business or economic conditions or a more-likely-than-not expectation that one of the reporting units or a significant portion of either of the reporting units will be sold or disposed of, would require an interim assessment for the reporting units prior to the next required annual assessment as of April 30, 2023. Goodwill for each reporting unit is allocated as follows: Three Months Ended Aug 31, 2022 (in thousands) Med Tech Med Device Total Balance, June 1, 2022 $ 160,529 $ 40,529 $ 201,058 Foreign currency translation adjustments (20) — (20) Balance, August 31, 2022 $ 160,509 $ 40,529 $ 201,038 There were no adjustments to goodwill for the three months ended August 31, 2022 other than foreign currency translation adjustments. Definite Lived Intangible Assets Intangible assets other than goodwill are amortized over their estimated useful lives on a straight-line basis. Useful lives range from two Intangible assets consisted of the following: Aug 31, 2022 (in thousands) Gross carrying value Accumulated amortization Net carrying value Product technologies $ 239,354 $ (115,865) $ 123,489 Customer relationships 60,034 (38,926) 21,108 Trademarks 9,950 (7,256) 2,694 Licenses 5,377 (4,692) 685 $ 314,715 $ (166,739) $ 147,976 May 31, 2022 (in thousands) Gross carrying value Accumulated amortization Net carrying value Product technologies $ 239,467 $ (112,141) $ 127,326 Customer relationships 60,115 (38,003) 22,112 Trademarks 9,950 (7,185) 2,765 Licenses 4,837 (4,660) 177 $ 314,369 $ (161,989) $ 152,380 Amortization expense for the three months ended August 31, 2022 and 2021 was $4.8 million and $4.8 million, respectively. Expected future amortization expense related to the intangible assets for each of the following fiscal years is as follows: (in thousands) Remainder of 2023 $ 14,134 2024 16,780 2025 16,761 2026 16,580 2027 16,410 2028 and thereafter 67,311 $ 147,976 |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Aug. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | ACCRUED LIABILITIES Accrued liabilities consisted of the following: (in thousands) Aug 31, 2022 May 31, 2022 Payroll and related expenses $ 10,109 $ 20,232 Royalties 1,518 2,986 Outside services 5,917 3,731 Research and development 1,332 1,279 Sales and franchise taxes 938 750 Rebates 558 511 Other 5,186 5,353 $ 25,558 $ 34,842 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Aug. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | LONG-TERM DEBT On August 30, 2022, the Company repaid all amounts outstanding under its then existing credit agreement and entered into a new Credit Agreement (the "Credit Agreement") with its lenders, JPMorgan Chase Bank, N.A., as Administrative Agent, sole bookrunner, and sole lead arranger, and Bank of America, N.A. and KeyBank National Association, as Syndication Agents. The Credit Agreement provides for a $75.0 million secured revolving credit facility (the "Revolving Facility") and a $30.0 million delayed draw term loan (the "Delayed Draw Term Loan"), and also includes an uncommitted expansion feature that allows the Company to increase the total revolving commitments and/or add new tranches of term loans in an aggregate amount not to exceed $75.0 million. Each exercise of such expansion feature must be drawn in $5.0 million increments. The proceeds of the Revolving Facility may be used for general corporate purposes, including permitted acquisitions. The proceeds of the Delayed Draw Term Loan may be used for general corporate purposes, including primarily to finance the manufacturing costs of the Auryon laser capital equipment. The Credit Agreement has a five-year maturity. Interest on the Revolving Facility and Delayed Draw Term Loan will be based, at the Company's option, on a rate equal to (i) the Secured Overnight Financing Rate ("SOFR") plus 0.10% (subject to a floor of 0%), or (ii) if the Company elects to treat a borrowing as an ABR Borrowing, an alternate base rate based on SOFR, plus, in each case, an applicable margin of 1.25%, 1.50% or 1.75%, depending on the leverage ratio. If any amounts are not paid when due, such overdue amounts will bear interest at an amount generally equal to 2.0% plus the existing loan rate. The Credit Agreement also carries a commitment fee in the case of the Revolving Facility, and a ticking fee, in the case of the Delayed Draw Term Loans of 0.20% to 0.25% per annum on the unused portion. The Company's obligations under the Credit Agreement are unconditionally guaranteed, jointly and severally, by the Company's material direct and indirect domestic subsidiaries (the “Guarantors”). All obligations of the Company and the Guarantors under the Credit Agreement are secured by first priority security interests in substantially all of the assets of the Company and the Guarantors. The Credit Agreement includes customary representations, warranties and covenants, and acceleration, indemnity and events of default provisions, including, among other things, two quarterly financial covenants as follows: • Maximum leverage ratio of consolidated total indebtedness* to consolidated EBITDA* of not greater than 3.00 to 1.00 (during certain periods following material acquisitions the ratio shall be increased to 3.50 to 1.00). • Fixed charge coverage ratio of consolidated EBITDA minus consolidated capital expenditures* to consolidated interest expense* paid or payable in cash plus scheduled principal payments in respect of indebtedness under the Credit Agreement of not less than 1.25 to 1.00. * The definitions of consolidated total indebtedness, consolidated EBITDA, consolidated capital expenditures and consolidated interest expense are specifically defined in the Credit Agreement included as an exhibit to Form 8-K filed on August 31, 2022. As of August 31, 2022, there was $25.0 million outstanding on the Revolving Facility and $25.0 million outstanding on the Delayed Draw Term Loan and the interest rate at August 31, 2022 applicable to each was 4.06%. As of August 31, 2022 and May 31, 2022, the carrying value of long-term debt approximated its fair market value. (in thousands) Aug 31, 2022 Revolving Facility $ 25,000 Delayed Draw Term Loan 25,000 Less: unamortized debt issuance costs (202) Total long-term debt $ 49,798 Principal payments of approximately 3.57% on the Delayed Draw Term Loan will amortize in equal quarterly installments over a five year period beginning on the earlier of a full draw or the expiry of the draw period (March 1, 2024). |
Income Taxes
Income Taxes | 3 Months Ended |
Aug. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company provides for income taxes at the end of each interim period based on the estimated effective tax rate for the full fiscal year adjusted for any discrete events, which are recorded in the period that they occur. The estimated annual effective tax rate prior to discrete items was 5.5% as of the first quarter of fiscal year 2023, as compared to 10.6% for the same period in fiscal year 2022. In fiscal year 2023, the Company’s effective tax rate differs from the U.S. statutory rate primarily due to the impact of the valuation allowance, foreign taxes, and other non-deductible permanent items (such as non-deductible meals and entertainment, Section 162(m) excess compensation and non-deductible share-based compensation). The Company regularly assesses its ability to realize its deferred tax assets. Assessing the realization of deferred tax assets requires significant management judgment. In determining whether its deferred tax assets are more likely than not realizable, the Company evaluated all available positive and negative evidence, and weighted the evidence based on its objectivity. Based on the review of all available evidence, the Company determined that it has not yet attained a sustained level of profitability and the objectively verifiable negative evidence outweighed the positive evidence. Therefore, the Company has provided a valuation allowance on its federal and state net operating loss carryforwards, federal and state R&D credit carryforwards and other net deferred tax assets that have a limited life and are not supportable by the naked credit deferred tax liability sourced income as of August 31, 2022. The Company will continue to assess the level of the valuation allowance required. If sufficient positive evidence exists in future periods to support a release of some or all of the valuation allowance, such a release would likely have a material impact on the Company’s results of operations. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Aug. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION On October 13, 2020, the Company's shareholders approved the 2020 Stock and Incentive Award Plan (the “2020 Plan”). The 2020 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance share units, performance shares and other incentive awards to the Company's employees, directors and other service providers. As of August 31, 2022, there was a maximum of 0.8 million shares of common stock available for future grant under the 2020 Plan. Prior to the adoption of the 2020 Plan, equity awards were issued under the 2004 Stock and Incentive Award Plan (the “2004 Plan”). The adoption of the 2020 Plan did not impact the administration of equity awards issued under the 2004 Plan but following the adoption of the 2020 Plan, equity award grants are no longer made under the 2004 Plan. The Company also has an employee stock purchase plan. As of August 31, 2022, there was a maximum of 2.3 million shares of common stock available for future grant under the employee stock purchase plan. For the three months ended August 31, 2022 and 2021, share-based compensation expense was $3.0 million and $2.4 million, respectively. During the three months ended August 31, 2022 and 2021, the Company granted stock options and restricted stock units under the 2020 Plan to certain employees and members of the Board of Directors. Stock option awards are valued using the Black-Scholes option-pricing model and then amortized on a straight-line basis over the requisite service period of the award. Restricted stock unit awards are valued based on the closing trading value of the Company’s common stock on the date of grant and then amortized on a straight-line basis over the requisite service period of the award. During the three months ended August 31, 2022 and 2021, the Company granted performance share units under the 2020 Plan to certain employees. The awards may be earned by achieving performance levels over the requisite service period. The performance criteria are based on achieving certain performance targets and the total shareholder return (“TSR”) of the Company’s common stock relative to the TSR of the common stock of a pre-defined industry peer-group. The fair value of these awards is based on a Monte Carlo simulation model. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Aug. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Basic earnings per share is based on the weighted average number of common shares outstanding without consideration of potential common stock. Diluted earnings per share includes the dilutive effect of potential common stock consisting of stock options, restricted stock units and performance stock units, provided that the inclusion of such securities is not anti-dilutive. In periods with a net loss, stock options and restricted stock units are not included in the computation of diluted loss per share as the impact would be anti-dilutive. The following table reconciles basic to diluted weighted-average shares outstanding: Three Months Ended (in thousands) Aug 31, 2022 Aug 31, 2021 Basic 39,302 38,734 Effect of dilutive securities — — Diluted 39,302 38,734 Securities excluded as their inclusion would be anti-dilutive 3,821 3,443 |
Segment and Geographic Informat
Segment and Geographic Information | 3 Months Ended |
Aug. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | SEGMENT AND GEOGRAPHIC INFORMATION Segment information The Company regularly reviews its segments and the approach used by the chief operating decision maker and management to evaluate performance and allocate resources. Prior to the first quarter of fiscal year 2023, the Company considered the business to be a single operating segment engaged in the development, manufacture and sale of medical devices for vascular access, peripheral vascular disease and oncology on a global basis. Commencing with the first quarter of fiscal year 2023, the Company began to manage its operations through two segments, Med Tech and Med Device to align with the transformation from a company with a broad portfolio of largely undifferentiated products to a more focused medical technology company. The Company's chief operating decision maker, the President and Chief Executive Officer (CEO), evaluates these two segments based on net sales and gross margin to, among other items, allocate resources and assess performance. Executives reporting to the CEO include those responsible for commercial operations, manufacturing operations, regulatory and quality and certain corporate functions. The CEO evaluates all other elements of profitability, investment and cash flow metrics on a consolidated global basis due to shared infrastructure and resources. The Company manages its assets on a total company basis, not by operating segment; therefore, the CEO does not review any asset information by operating segment and, accordingly, asset information is not reported or evaluated by operating segment. Total assets were $557.7 million as of August 31, 2022. The table below summarizes net sales and gross margin by Med Tech and Med Device including prior periods during which the Company considered the business to be a single operating segment, in order to conform to the current period presentation: Three Months Ended (in thousands) Aug 31, 2022 Aug 31, 2021 Med Tech Net Sales $ 22,817 $ 17,607 Gross profit 14,429 11,517 Gross margin 63.2 % 65.4 % Med Device Net Sales $ 58,720 $ 59,364 Gross profit 27,876 28,622 Gross margin 47.5 % 48.2 % Total Net Sales $ 81,537 $ 76,971 Gross profit 42,305 40,139 Gross margin 51.9 % 52.1 % Geographic information The table below summarizes net sales by geographic area based on external customer location: Three Months Ended (in thousands) Aug 31, 2022 Aug 31, 2021 Net Sales United States $ 69,023 $ 64,464 International 12,514 12,507 Total $ 81,537 $ 76,971 |
Fair Value
Fair Value | 3 Months Ended |
Aug. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value | FAIR VALUE On a recurring basis, the Company measures certain financial assets and financial liabilities at fair value based upon quoted market prices, where available. Where quoted market prices or other observable inputs are not available, the Company applies valuation techniques to estimate fair value. FASB ASC Topic 820, Fair Value Measurements and Disclosures, establishes a three-level valuation hierarchy for disclosure of fair value measurements. The categorization of financial assets and financial liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy are defined as follows: • Level 1 - Inputs to the valuation methodology are quoted market prices for identical assets or liabilities. • Level 2 - Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities and market-corroborated inputs. • Level 3 - Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk. The Company's financial instruments include cash and cash equivalents, accounts receivable, accounts payable and contingent consideration. The carrying amount of cash and cash equivalents, accounts receivable, and accounts payable approximates fair value due to their immediate or short-term maturities. The recurring fair value measurements using significant unobservable inputs (Level 3) relate to contingent consideration liabilities. The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis: Fair Value Measurements using inputs considered as: Fair Value at Aug 31, 2022 (in thousands) Level 1 Level 2 Level 3 Financial Liabilities Contingent consideration for acquisition earn outs $ — $ — $ 17,158 $ 17,158 Total Financial Liabilities $ — $ — $ 17,158 $ 17,158 Fair Value Measurements using inputs considered as: Fair Value at May 31, 2022 (in thousands) Level 1 Level 2 Level 3 Financial Liabilities Contingent consideration for acquisition earn outs $ — $ — $ 16,948 $ 16,948 Total Financial Liabilities $ — $ — $ 16,948 $ 16,948 There were no transfers between Level 1, 2 and 3 for the three months ended August 31, 2022 and 2021. The table below presents the changes in fair value components of Level 3 instruments: Three Months Ended Aug 31, 2022 (in thousands) Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Balance, May 31, 2022 $ 16,948 Change in present value of contingent consideration (1) 211 Currency gain from remeasurement (1) Balance, August 31, 2022 $ 17,158 (1) Change in the fair value of contingent consideration is included in earnings and comprised of changes in estimated earn out payments based on projections of Company performance and amortization of the present value discount. Contingent Liability for Acquisition Earn Outs Some of the Company's business combinations involve the potential for the payment of future contingent consideration upon the achievement of certain product development milestones or various other performance conditions. Payment of the additional consideration is generally contingent on the acquired company reaching certain performance milestones, including attaining specified revenue levels or product development targets. Contingent consideration is recorded at the estimated fair value of the contingent payments on the acquisition date. The fair value of the contingent consideration is remeasured at the estimated fair value at each reporting period with the change in fair value recognized as income or expense within change in fair value of contingent consideration in the Consolidated Statements of Operations. The Company measures the initial liability and remeasures the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements, which is determined using a discounted cash flow model applied to projected net sales, using probabilities of achieving projected net sales and projected payment dates. Projected net sales are based on internal projections and extensive analysis of the target market and the sales potential. Increases or decreases in any valuation inputs in isolation may result in a significantly lower or higher fair value measurement in the future. The recurring Level 3 fair value measurements of the contingent consideration liabilities include the following significant unobservable inputs as of August 31, 2022: (in thousands) Fair Value Valuation Technique Unobservable Input Range Revenue based payments $ 17,158 Discounted cash flow Discount rate 5% Probability of payment 66% - 100% Projected fiscal year of payment 2023 - 2025 |
Leases
Leases | 3 Months Ended |
Aug. 31, 2022 | |
Leases [Abstract] | |
Leases | LEASES The Company determines if an arrangement is a lease at inception of the contract. The Company has operating leases for buildings, primarily for office space, R&D, manufacturing and warehousing. Operating lease right-of-use (“ROU”) assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. Many of the lease agreements contain renewal or termination clauses that are factored into the determination of the lease term if it is reasonably certain that these options would be exercised. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The following table presents supplemental balance sheet information related to leases: (in thousands) Balance Sheet Location Aug 31, 2022 May 31, 2022 Assets Operating lease ROU asset Other assets $ 6,335 $ 6,974 Liabilities Current operating lease liabilities Other current liabilities 2,588 2,560 Non-current operating lease liabilities Other long-term liabilities 4,008 4,703 Total lease liabilities $ 6,596 $ 7,263 The interest rate implicit in lease agreements is typically not readily determinable, and as such the Company used the incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The incremental borrowing rate is defined as the interest the Company would pay to borrow on a collateralized basis, considering factors such as length of lease term. The following table presents the weighted average remaining lease term and discount rate: Aug 31, 2022 Weighted average remaining term (in years) 3.06 Weighted average discount rate 3.8 % The maturities of the lease liabilities for each of the following fiscal years is: (in thousands) Aug 31, 2022 Remainder of 2023 $ 2,079 2024 2,183 2025 1,419 2026 1,125 2027 and thereafter 171 Total lease payments $ 6,977 Less: Imputed Interest 381 Total lease obligations $ 6,596 Less: Current portion of lease obligations 2,588 Long-term lease obligations $ 4,008 During the three months ended August 31, 2022 and 2021, the Company recognized $0.7 million and $0.7 million of operating lease expense, respectively, which includes immaterial short-term leases. The expenses on the Consolidated Statement of Operations were classified as follows: Three Months Ended (in thousands) Aug 31, 2022 Aug 31, 2021 Cost of sales $ 219 $ 219 Research and development 51 98 Sales and marketing 39 40 General and administrative 360 330 $ 669 $ 687 The following table presents supplemental cash flow and other information related to leases for the three months ended: (in thousands) Aug 31, 2022 Aug 31, 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 691 $ 682 ROU assets obtained in exchange for lease liabilities Operating leases $ — $ — |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Aug. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES The Company is involved in various legal proceedings, including commercial, intellectual property, product liability, and regulatory matters of a nature considered normal for its business. The Company accrues for amounts related to these matters if it is probable that a liability has been incurred, and an amount can be reasonably estimated. The Company discloses such matters when there is at least a reasonable possibility that a material loss may have been incurred. However, the Company cannot predict the outcome of any litigation or the potential for future litigation. C.R. Bard, Inc. v. AngioDynamics, Inc. On January 11, 2012, C.R. Bard, Inc. (“Bard”) filed a suit in the United States District Court of Utah claiming certain of the Company's implantable port products infringe on three U.S. patents held by Bard (US Patent Nos. 7,785,302 ("302"), 7,959,615 (“615”) and 7,947,022 ("022")). The case was stayed pending reexamination in the US Patent and Trademark Office ("USPTO"). Following the reexamination proceedings, and the parties’ related appeals to the Federal Circuit which resulted in further proceedings at the USPTO, certain claims of the 615 patent were held invalid, while the remaining claims of the 615 patent and the other two patents were upheld over the prior art references considered in the reexamination proceedings. Thereafter, the case was transferred from the District of Utah to the United States District Court for the District of Delaware (“District of Delaware”). A scheduling order was entered on March 23, 2021. On July 22, 2021, in another case against a different defendant, the District of Utah invalidated multiple claims of the ‘302, ‘022, and ‘615 Patents under 35 USC §101, including claims asserted against the Company. Following the Utah court’s decision, the Company filed a Motion for Judgment on the Pleadings based on collateral estoppel on August 9, 2021. Bard filed its opposition brief on September 2, 2021 and the Company filed a reply on September 9, 2021. Following a hearing on the Motion for Judgment on the Pleadings on December 21, 2021, the District of Delaware stayed the case pending the Federal Circuit's resolution of Bard's appeal from the Utah Decision. Previously, the Company had filed a Motion for Leave to Amend its Answer and Counterclaims on April 14, 2021. This motion sought to add counterclaims for infringement of U.S. Patent Nos. 9,168,365; 9,895,523; and 10,632,295, as well as a counterclaim of inequitable conduct. On November 5, 2021, the Company notified the District of Delaware that the Utah decision was certified for appeal to the Court of Appeals for the Federal Circuit. Contemporaneously, the Company withdrew its Motion for Leave to Amend its Answer and Counterclaims without prejudice to refile. Bard filed its Opening Appellate Brief in its appeal at the Federal Circuit on December 8, 2021, and the appeal remains pending. The Company believes these claims are without merit and intends to defend them vigorously. The Company has not recorded an expense related to the outcome of this litigation because it is not yet possible to determine if a potential loss is probable nor reasonably estimable. On March 10, 2015, Bard and Bard Peripheral Vascular filed suit in the District of Delaware claiming certain of the Company's implantable port products infringe on three U.S. patents held by Bard (US Patent Nos. 8,475,417, 8,545,460, 8,805,478). The case proceeded through trial which began on March 4, 2019. At the close of Bard’s case, the Court granted the Company's oral motion for judgment as a matter of law as well as its motions for summary judgment on the grounds that the asserted patents are invalid, ineligible, not infringed and not willfully infringed. On May 10, 2019, the Company filed a motion for attorney fees and non-taxable expenses under 35 USC Sec. 285. Bard appealed the judgment to the Federal Circuit and on November 10, 2020, the Federal Circuit reversed the judgment in part with respect to Section 101 (subject matter eligibility), and vacated and remanded the trial court’s invalidity and non-infringement judgments. The Company filed a combined Petition for rehearing and rehearing en banc on December 10, 2020, which was denied on January 15, 2021. The Federal Circuit issued its mandate on January 22, 2021. On March 15, 2021, the District of Delaware entered an order requiring the parties to submit status reports and denied as moot the Company’s motion for attorney’s fees and expenses. The parties agreed to schedule trial the week of May 9, 2022, which was subsequently rescheduled for the week of November 14, 2022. The Company maintains its belief that Bard’s claims are without merit. The Company has not recorded an expense related to the outcome of this litigation because it is not yet possible to determine if a potential loss is probable nor reasonably estimable. On March 8, 2021, Bard filed suit in the District of Delaware asserting certain of the Company’s port products (including certain related infusion sets) infringe U.S. Patent Nos. 8,025,639, 9,603,992 (“992”) and 9,603,993 (“993”). On May 20, 2021, the Company filed a Motion to Dismiss Bard’s claims with respect to the ’992 and ’993 patents. On July 22, 2021, the Company submitted the Utah court’s decision invalidating claims of the related ‘302, ‘022, and ‘615 Patents as supplemental authority in support of its Motion to Dismiss. The parties agreed to submit supplemental briefing to address the Utah court’s decision. Bard submitted its brief on August 12, 2021, and the Company submitted its reply on September 2, 2021. On December 21, 2021, the District of Delaware stayed the case pending the Federal Circuit's resolution of Bard's appeal of the Utah decision invalidating multiple claims of the ‘302, ‘022, and ‘615 patents under 35 USC §101. The Company maintains its belief that Bard's claims are without merit. The Company has not recorded an expense related to the outcome of this litigation because it is not yet possible to determine if a potential loss is probable nor reasonably estimable. AngioDynamics, Inc. v. C.R. Bard, Inc. On May 30, 2017, the Company commenced an action in the United States District Court for the Northern District of New York entitled AngioDynamics, Inc. v. C.R. Bard, Inc. and Bard Access Systems, Inc. (“Bard”). In this action, the Company alleged that Bard had illegally tied the sales of its tip location systems to the sales of its PICCs in violation of federal antitrust laws and this practice had an anti-competitive effect in the US market for PICCs. The Company sought both monetary damages and injunctive relief. On October 6, 2022, a jury verdict was rendered finding Bard did not restrain competition in violation of federal antitrust laws. |
Acquisition, Restructuring and
Acquisition, Restructuring and Other Items, Net | 3 Months Ended |
Aug. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Acquisition, Restructuring and Other Items, Net | ACQUISITION, RESTRUCTURING, AND OTHER ITEMS, NET Acquisition, Restructuring and Other Items Acquisition, restructuring and other items, net, consisted of: Three Months Ended (in thousands) Aug 31, 2022 Aug 31, 2021 Legal (1) $ 1,863 $ 2,084 Manufacturing relocation (2) 136 — Israeli Innovation Authority prepayment (3) 3,544 — Other 38 356 Total $ 5,581 $ 2,440 (1) Legal expenses related to litigation that is outside the normal course of business. (2) Expenses to relocate certain manufacturing lines from Queensbury, NY to Costa Rica. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Aug. 31, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | ACCUMULATED OTHER COMPREHENSIVE INCOME Changes in each component of accumulated other comprehensive income, net of tax, are as follows: Three Months Ended Aug 31, 2022 (in thousands) Foreign currency translation income Balance at May 31, 2022 $ 1,357 Other comprehensive loss, net of tax (550) Net other comprehensive loss $ (550) Balance at August 31, 2022 $ 807 |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 3 Months Ended |
Aug. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Pronouncements | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Recently Issued Accounting Pronouncements - Adopted Standard Description Effective Date Effect on the Consolidated Financial Statements ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance This ASU increases the transparency of government assistance to include the disclosure of (1) the types of assistance, (2) an entity's accounting for the assistance, and (3) the effect of the assistance on an entity's financial statements. June 1, 2022 The Company adopted the new standard in the first quarter of fiscal year 2023 and it did not have an impact on the Company's consolidated financial statements. Recently Issued Accounting Pronouncements - Not Yet Applicable or Adopted Standard Description Effective Date Effect on the Consolidated Financial Statements ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers This ASU improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. June 1, 2023 The Company plans to adopt the new standard in the first quarter of fiscal year 2024 and does not expect there to be a material impact to the consolidated financial statements. |
Recently Issued Accounting Pr_2
Recently Issued Accounting Pronouncements (Policies) | 3 Months Ended |
Aug. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Revenue from Contracts with Customers | Revenue Recognition Under ASC 606, Revenue from Contracts with Customers Revenue Recognition Revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which occurs at a point in time, and may be upon shipment from the Company’s manufacturing site or delivery to the customer’s named location, based on the shipping terms of a contract. In determining whether control has transferred, the Company considers if there is a present right to payment from the customer and when physical possession, legal title and risks and rewards of ownership have transferred to the customer. The Company typically invoices customers upon satisfaction of identified performance obligations. As the Company’s standard payment terms are 30 to 90 days from invoicing, the Company does not provide any significant financing to its customers. The Company enters into agreements to place placement and evaluation units (“units”) at customer sites, but the Company retains title to the units. For the duration of these agreements the customer has the right to use the unit at no upfront charge in connection with the customer’s ongoing purchase of disposables. These types of agreements include an embedded operating lease for the right to use the units. In these arrangements, revenue recognized for the sale of the disposables is not allocated between the disposal revenue and lease revenue due to the insignificant value of the units in relation to the total agreement value. Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue. Variable Consideration Reserves: Revenue from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established for discounts, returns, rebates and allowances that are offered within contracts between the Company and its customers. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as a contra asset. Rebates and Allowances: The Company provides certain customers with rebates and allowances that are explicitly stated in the Company’s contracts and are recorded as a reduction of revenue in the period the related product revenue is recognized. The Company establishes reserves for such amounts, which is included in accrued expenses in the accompanying Consolidated Balance Sheets. These rebates and allowances result from performance-based offers that are primarily based on attaining contractually specified sales volumes. The Company is also required to pay administrative fees to group purchasing organizations. Contract Balances with Customers A receivable is generally recognized in the period the Company ships the product. Payment terms on invoiced amounts are based on contractual terms with each customer and generally coincide with revenue recognition. Accordingly, the Company does not have any contract assets associated with the future right to invoice its customers. In some cases, if control of the product has not yet transferred to the customer or the timing of the payments made by the customer precedes the Company’s fulfillment of the performance obligation, the Company recognizes a contract liability that is included in deferred revenue in the accompanying Consolidated Balance Sheets. Costs to Obtain or Fulfill a Customer Contract Under ASC 606, the Company may recognize an asset for incremental costs of obtaining a contract with a customer if it expects to recover those costs. The Company’s sales incentive compensation plans qualify for capitalization since these plans are directly related to sales achieved during a period of time. However, the Company has elected the practical expedient under ASC 340-40-25-4 to expense the costs as they are incurred within selling and marketing expenses since the amortization period is less than one year. |
Recently Issued Accounting Pronouncements | RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Recently Issued Accounting Pronouncements - Adopted Standard Description Effective Date Effect on the Consolidated Financial Statements ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance This ASU increases the transparency of government assistance to include the disclosure of (1) the types of assistance, (2) an entity's accounting for the assistance, and (3) the effect of the assistance on an entity's financial statements. June 1, 2022 The Company adopted the new standard in the first quarter of fiscal year 2023 and it did not have an impact on the Company's consolidated financial statements. Recently Issued Accounting Pronouncements - Not Yet Applicable or Adopted Standard Description Effective Date Effect on the Consolidated Financial Statements ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers This ASU improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. June 1, 2023 The Company plans to adopt the new standard in the first quarter of fiscal year 2024 and does not expect there to be a material impact to the consolidated financial statements. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes net sales by Med Tech, Med Device and by geography: Three Months Ended August 31, 2022 Three Months Ended August 31, 2021 (in thousands) United States International Total United States International Total Net sales Med Tech $ 20,442 $ 2,375 $ 22,817 $ 15,223 $ 2,384 $ 17,607 Med Device 48,581 10,139 58,720 49,241 10,123 59,364 Total $ 69,023 $ 12,514 $ 81,537 $ 64,464 $ 12,507 $ 76,971 |
Contract Balances with Customers | The following table presents changes in the Company’s receivables, contract assets and contract liabilities with customers: (in thousands) Aug 31, 2022 May 31, 2022 Receivables $ 53,586 $ 52,304 Contract assets $ — $ — Contract liabilities $ 647 $ 526 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories are stated at lower of cost and net realizable value (using the first-in, first-out method). Inventories consisted of the following: (in thousands) Aug 31, 2022 May 31, 2022 Raw materials $ 32,474 $ 28,251 Work in process 8,113 7,186 Finished goods 17,022 15,955 Inventories $ 57,609 $ 51,392 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible assets consisted of the following: Aug 31, 2022 (in thousands) Gross carrying value Accumulated amortization Net carrying value Product technologies $ 239,354 $ (115,865) $ 123,489 Customer relationships 60,034 (38,926) 21,108 Trademarks 9,950 (7,256) 2,694 Licenses 5,377 (4,692) 685 $ 314,715 $ (166,739) $ 147,976 May 31, 2022 (in thousands) Gross carrying value Accumulated amortization Net carrying value Product technologies $ 239,467 $ (112,141) $ 127,326 Customer relationships 60,115 (38,003) 22,112 Trademarks 9,950 (7,185) 2,765 Licenses 4,837 (4,660) 177 $ 314,369 $ (161,989) $ 152,380 |
Schedule of Future Amortization Expense | Expected future amortization expense related to the intangible assets for each of the following fiscal years is as follows: (in thousands) Remainder of 2023 $ 14,134 2024 16,780 2025 16,761 2026 16,580 2027 16,410 2028 and thereafter 67,311 $ 147,976 |
Goodwill for Each Reporting Unit | Goodwill for each reporting unit is allocated as follows: Three Months Ended Aug 31, 2022 (in thousands) Med Tech Med Device Total Balance, June 1, 2022 $ 160,529 $ 40,529 $ 201,058 Foreign currency translation adjustments (20) — (20) Balance, August 31, 2022 $ 160,509 $ 40,529 $ 201,038 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued liabilities consisted of the following: (in thousands) Aug 31, 2022 May 31, 2022 Payroll and related expenses $ 10,109 $ 20,232 Royalties 1,518 2,986 Outside services 5,917 3,731 Research and development 1,332 1,279 Sales and franchise taxes 938 750 Rebates 558 511 Other 5,186 5,353 $ 25,558 $ 34,842 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Principal Obligations | (in thousands) Aug 31, 2022 Revolving Facility $ 25,000 Delayed Draw Term Loan 25,000 Less: unamortized debt issuance costs (202) Total long-term debt $ 49,798 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic to Diluted Weighted-Average Shares Outstanding | The following table reconciles basic to diluted weighted-average shares outstanding: Three Months Ended (in thousands) Aug 31, 2022 Aug 31, 2021 Basic 39,302 38,734 Effect of dilutive securities — — Diluted 39,302 38,734 Securities excluded as their inclusion would be anti-dilutive 3,821 3,443 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Segment Reporting [Abstract] | |
Summary of Net Sales by Product Category | The table below summarizes net sales and gross margin by Med Tech and Med Device including prior periods during which the Company considered the business to be a single operating segment, in order to conform to the current period presentation: Three Months Ended (in thousands) Aug 31, 2022 Aug 31, 2021 Med Tech Net Sales $ 22,817 $ 17,607 Gross profit 14,429 11,517 Gross margin 63.2 % 65.4 % Med Device Net Sales $ 58,720 $ 59,364 Gross profit 27,876 28,622 Gross margin 47.5 % 48.2 % Total Net Sales $ 81,537 $ 76,971 Gross profit 42,305 40,139 Gross margin 51.9 % 52.1 % |
Summary of Net Sales by Geographic Area | The table below summarizes net sales by geographic area based on external customer location: Three Months Ended (in thousands) Aug 31, 2022 Aug 31, 2021 Net Sales United States $ 69,023 $ 64,464 International 12,514 12,507 Total $ 81,537 $ 76,971 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities Measured on a Recurring Basis | The following tables provide information by level for assets and liabilities that are measured at fair value on a recurring basis: Fair Value Measurements using inputs considered as: Fair Value at Aug 31, 2022 (in thousands) Level 1 Level 2 Level 3 Financial Liabilities Contingent consideration for acquisition earn outs $ — $ — $ 17,158 $ 17,158 Total Financial Liabilities $ — $ — $ 17,158 $ 17,158 Fair Value Measurements using inputs considered as: Fair Value at May 31, 2022 (in thousands) Level 1 Level 2 Level 3 Financial Liabilities Contingent consideration for acquisition earn outs $ — $ — $ 16,948 $ 16,948 Total Financial Liabilities $ — $ — $ 16,948 $ 16,948 |
Fair Value Measurements Using Significant Unobservable Inputs | The table below presents the changes in fair value components of Level 3 instruments: Three Months Ended Aug 31, 2022 (in thousands) Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Balance, May 31, 2022 $ 16,948 Change in present value of contingent consideration (1) 211 Currency gain from remeasurement (1) Balance, August 31, 2022 $ 17,158 |
Summary Showing the Recurring Fair Value Measurements of the Contingent Consideration Liability | The recurring Level 3 fair value measurements of the contingent consideration liabilities include the following significant unobservable inputs as of August 31, 2022: (in thousands) Fair Value Valuation Technique Unobservable Input Range Revenue based payments $ 17,158 Discounted cash flow Discount rate 5% Probability of payment 66% - 100% Projected fiscal year of payment 2023 - 2025 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Leases [Abstract] | |
Supplemental Balance Sheet Information | The following table presents supplemental balance sheet information related to leases: (in thousands) Balance Sheet Location Aug 31, 2022 May 31, 2022 Assets Operating lease ROU asset Other assets $ 6,335 $ 6,974 Liabilities Current operating lease liabilities Other current liabilities 2,588 2,560 Non-current operating lease liabilities Other long-term liabilities 4,008 4,703 Total lease liabilities $ 6,596 $ 7,263 Aug 31, 2022 Weighted average remaining term (in years) 3.06 Weighted average discount rate 3.8 % |
Lease Liability Schedule | The maturities of the lease liabilities for each of the following fiscal years is: (in thousands) Aug 31, 2022 Remainder of 2023 $ 2,079 2024 2,183 2025 1,419 2026 1,125 2027 and thereafter 171 Total lease payments $ 6,977 Less: Imputed Interest 381 Total lease obligations $ 6,596 Less: Current portion of lease obligations 2,588 Long-term lease obligations $ 4,008 |
Supplemental Cash Flow Information | The expenses on the Consolidated Statement of Operations were classified as follows: Three Months Ended (in thousands) Aug 31, 2022 Aug 31, 2021 Cost of sales $ 219 $ 219 Research and development 51 98 Sales and marketing 39 40 General and administrative 360 330 $ 669 $ 687 The following table presents supplemental cash flow and other information related to leases for the three months ended: (in thousands) Aug 31, 2022 Aug 31, 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 691 $ 682 ROU assets obtained in exchange for lease liabilities Operating leases $ — $ — |
Acquisition, Restructuring an_2
Acquisition, Restructuring and Other Items, Net (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Acquisition, restructuring and other items, net, consisted of: Three Months Ended (in thousands) Aug 31, 2022 Aug 31, 2021 Legal (1) $ 1,863 $ 2,084 Manufacturing relocation (2) 136 — Israeli Innovation Authority prepayment (3) 3,544 — Other 38 356 Total $ 5,581 $ 2,440 (1) Legal expenses related to litigation that is outside the normal course of business. (2) Expenses to relocate certain manufacturing lines from Queensbury, NY to Costa Rica. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Aug. 31, 2022 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in each component of accumulated other comprehensive income, net of tax, are as follows: Three Months Ended Aug 31, 2022 (in thousands) Foreign currency translation income Balance at May 31, 2022 $ 1,357 Other comprehensive loss, net of tax (550) Net other comprehensive loss $ (550) Balance at August 31, 2022 $ 807 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | Jul. 27, 2021 | Dec. 17, 2019 | Aug. 31, 2022 | May 31, 2022 |
Business Acquisition [Line Items] | ||||
Contract liabilities | $ 647 | $ 526 | ||
QX Medical, LLC Camaro Support Catheter Asset Acquisition | ||||
Business Acquisition [Line Items] | ||||
Aggregate purchase price | $ 4,000 | |||
Contract liabilities | 3,600 | |||
Purchase price holdbacks | 400 | |||
Potential future contingent consideration | 1,000 | |||
Inventory and fixed assets | 100 | |||
Intangible asset amortization period | 15 years | |||
Technology-Based Intangible Assets | QX Medical, LLC Camaro Support Catheter Asset Acquisition | ||||
Business Acquisition [Line Items] | ||||
Intangible asset acquired | $ 3,900 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 81,537 | $ 76,971 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 69,023 | 64,464 |
International | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 12,514 | 12,507 |
Med Tech | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 22,817 | 17,607 |
Med Tech | United States | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 20,442 | 15,223 |
Med Tech | International | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 2,375 | 2,384 |
Med Device | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 58,720 | 59,364 |
Med Device | United States | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 48,581 | 49,241 |
Med Device | International | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 10,139 | $ 10,123 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Narrative (Details) $ in Millions | 3 Months Ended |
Aug. 31, 2022 USD ($) | |
Disaggregation of Revenue [Line Items] | |
Days after purchase after which pre-approval is required for product return | 30 days |
Restocking charge (as percent) | 20% |
Minimum remaining period prior to product expiration | 12 months |
Additions to contract liabilities | $ 0.3 |
Revenue recognized | $ 0.2 |
Minimum | |
Disaggregation of Revenue [Line Items] | |
Payment term | 30 days |
Maximum | |
Disaggregation of Revenue [Line Items] | |
Payment term | 90 days |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Contract Balances with Customers (Details) - USD ($) $ in Thousands | Aug. 31, 2022 | May 31, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Receivables | $ 53,586 | $ 52,304 |
Contract assets | 0 | 0 |
Contract liabilities | $ 647 | $ 526 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Aug. 31, 2022 | May 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 32,474 | $ 28,251 |
Work in process | 8,113 | 7,186 |
Finished goods | 17,022 | 15,955 |
Inventories | $ 57,609 | $ 51,392 |
Inventories - Narrative (Detail
Inventories - Narrative (Details) - USD ($) $ in Millions | Aug. 31, 2022 | May 31, 2022 |
Inventory Disclosure [Abstract] | ||
Inventory valuation reserves | $ 3.8 | $ 3.7 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 USD ($) | Aug. 31, 2022 USD ($) unit segment | Aug. 31, 2021 USD ($) | May 31, 2022 unit | |
Finite-Lived Intangible Assets [Line Items] | ||||
Number of reporting units | unit | 2 | 1 | ||
Number of operating segments | segment | 2 | |||
Goodwill impairment | $ 0 | |||
Amortization of intangibles | $ 4,837,000 | $ 4,821,000 | ||
Minimum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful life of intangible assets other than goodwill | 2 years | |||
Maximum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated useful life of intangible assets other than goodwill | 18 years |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Change in Goodwill (Details) $ in Thousands | 3 Months Ended |
Aug. 31, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 201,058 |
Foreign currency translation adjustments | (20) |
Ending balance | 201,038 |
Med Tech | |
Goodwill [Roll Forward] | |
Beginning balance | 160,529 |
Foreign currency translation adjustments | (20) |
Ending balance | 160,509 |
Med Device | |
Goodwill [Roll Forward] | |
Beginning balance | 40,529 |
Foreign currency translation adjustments | 0 |
Ending balance | $ 40,529 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | Aug. 31, 2022 | May 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value, finite intangible items | $ 314,715 | $ 314,369 |
Accumulated amortization | (166,739) | (161,989) |
Net carrying value, finite intangible items | 147,976 | 152,380 |
Product technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value, finite intangible items | 239,354 | 239,467 |
Accumulated amortization | (115,865) | (112,141) |
Net carrying value, finite intangible items | 123,489 | 127,326 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value, finite intangible items | 60,034 | 60,115 |
Accumulated amortization | (38,926) | (38,003) |
Net carrying value, finite intangible items | 21,108 | 22,112 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value, finite intangible items | 9,950 | 9,950 |
Accumulated amortization | (7,256) | (7,185) |
Net carrying value, finite intangible items | 2,694 | 2,765 |
Licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value, finite intangible items | 5,377 | 4,837 |
Accumulated amortization | (4,692) | (4,660) |
Net carrying value, finite intangible items | $ 685 | $ 177 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Expected Future Amortization Expense (Details) - USD ($) $ in Thousands | Aug. 31, 2022 | May 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2023 | $ 14,134 | |
2024 | 16,780 | |
2025 | 16,761 | |
2026 | 16,580 | |
2027 | 16,410 | |
2028 and thereafter | 67,311 | |
Net carrying value, finite intangible items | $ 147,976 | $ 152,380 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Aug. 31, 2022 | May 31, 2022 |
Payables and Accruals [Abstract] | ||
Payroll and related expenses | $ 10,109 | $ 20,232 |
Royalties | 1,518 | 2,986 |
Outside services | 5,917 | 3,731 |
Research and development | 1,332 | 1,279 |
Sales and franchise taxes | 938 | 750 |
Rebates | 558 | 511 |
Other | 5,186 | 5,353 |
Total accrued liabilities | $ 25,558 | $ 34,842 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) $ in Thousands | 3 Months Ended | |||
Aug. 30, 2022 USD ($) | Jun. 03, 2019 USD ($) | Aug. 31, 2022 USD ($) covenant | Aug. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||
Proceeds from borrowings on long-term debt | $ 70,000 | $ 5,000 | ||
Outstanding draw term loan | $ 49,798 | |||
Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Proceeds from borrowings on long-term debt | $ 5,000 | |||
Debt instrument term (years) | 5 years | |||
Debt default interest rate increase (percentage) | 2% | |||
Number of covenants | covenant | 2 | |||
Maximum total leverage ratio | 3 | |||
Maximum total leverage ratio subsequent to material acquisitions | 3.50 | |||
Minimum fixed charge coverage ratio | 1.25 | |||
Credit Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (percentage) | 0.10% | |||
Floor interest rate | 0% | |||
Credit Facility | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (percentage) | 1.50% | |||
Credit Facility | Minimum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (percentage) | 1.25% | |||
Credit Facility | Maximum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (percentage) | 1.75% | |||
Credit Facility | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit | $ 75,000 | |||
Line of credit accordion feature | $ 75,000 | |||
Borrowings outstanding | $ 25,000 | |||
Interest rate at period end (percentage) | 4.06% | |||
Credit Facility | Delayed Draw Term Loan | ||||
Debt Instrument [Line Items] | ||||
Term loan | $ 30,000 | |||
Debt instrument term (years) | 5 years | |||
Outstanding draw term loan | $ 25,000 | |||
Principal payment percentage | 3.57% | |||
Credit Facility | Delayed Draw Term Loan | Minimum | ||||
Debt Instrument [Line Items] | ||||
Commitment fee (percentage) | 0.20% | |||
Credit Facility | Delayed Draw Term Loan | Maximum | ||||
Debt Instrument [Line Items] | ||||
Commitment fee (percentage) | 0.25% |
Long-Term Debt - Schedule of De
Long-Term Debt - Schedule of Debt (Details) $ in Thousands | Aug. 31, 2022 USD ($) |
Debt Instrument [Line Items] | |
Less: unamortized debt issuance costs | $ (202) |
Total long-term debt | 49,798 |
Credit Facility | Revolving Credit Facility | |
Debt Instrument [Line Items] | |
Long-term debt, gross | 25,000 |
Credit Facility | Delayed Draw Term Loan | |
Debt Instrument [Line Items] | |
Long-term debt, gross | 25,000 |
Total long-term debt | $ 25,000 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Estimated federal statutory income tax rate | 5.50% | 10.60% |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Charges against income for share-based payment arrangements | $ 3 | $ 2.4 |
Unrecognized compensation expenses related to share-based payment arrangements | $ 27.1 | |
Recognition period | 2 years | |
2020 Stock And Incentive Award Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Amount of shares issuable through two stock-based compensation plans (shares) | 0.8 | |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Amount of shares issuable through two stock-based compensation plans (shares) | 2.3 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Basic (shares) | 39,302 | 38,734 |
Effect of dilutive securities (shares) | 0 | 0 |
Diluted (shares) | 39,302 | 38,734 |
Securities excluded as their inclusion would be anti-dilutive (shares) | 3,821 | 3,443 |
Segment and Geographic Inform_3
Segment and Geographic Information - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Aug. 31, 2022 USD ($) segment | Aug. 31, 2021 | May 31, 2022 USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | segment | 2 | ||
Assets | $ | $ 557,652 | $ 552,751 | |
International | Revenue from Contract with Customer Benchmark | Geographic Concentration Risk | |||
Segment Reporting Information [Line Items] | |||
Concentration risk percentage | 15.30% | 16.20% | |
United States | Net Assets, Geographic Area | Geographic Concentration Risk | |||
Segment Reporting Information [Line Items] | |||
Concentration risk percentage | 96% |
Segment and Geographic Inform_4
Segment and Geographic Information - Summary of Net Sales by Product Category (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 81,537 | $ 76,971 |
Gross profit | $ 42,305 | $ 40,139 |
Gross margin | 51.90% | 52.10% |
Med Tech | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 22,817 | $ 17,607 |
Gross profit | $ 14,429 | $ 11,517 |
Gross margin | 63.20% | 65.40% |
Med Device | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 58,720 | $ 59,364 |
Gross profit | $ 27,876 | $ 28,622 |
Gross margin | 47.50% | 48.20% |
Segment and Geographic Inform_5
Segment and Geographic Information - Summary of Net Sales by Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | $ 81,537 | $ 76,971 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 69,023 | 64,464 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | $ 12,514 | $ 12,507 |
Fair Value - Fair Value of Asse
Fair Value - Fair Value of Assets and Liabilities Measured on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Aug. 31, 2022 | May 31, 2022 |
Financial Liabilities | ||
Contingent consideration for acquisition earn outs | $ 17,158 | $ 16,948 |
Total Financial Liabilities | 17,158 | 16,948 |
Level 1 | ||
Financial Liabilities | ||
Contingent consideration for acquisition earn outs | 0 | 0 |
Total Financial Liabilities | 0 | 0 |
Level 2 | ||
Financial Liabilities | ||
Contingent consideration for acquisition earn outs | 0 | 0 |
Total Financial Liabilities | 0 | 0 |
Level 3 | ||
Financial Liabilities | ||
Contingent consideration for acquisition earn outs | 17,158 | 16,948 |
Total Financial Liabilities | $ 17,158 | $ 16,948 |
Fair Value - Fair Value Measure
Fair Value - Fair Value Measurements Using Significant Unobservable Inputs (Details) $ in Thousands | 3 Months Ended |
Aug. 31, 2022 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Financial liabilities, beginning balance | $ 16,948 |
Change in present value of contingent consideration | 211 |
Currency gain from remeasurement | (1) |
Financial liabilities, ending balance | $ 17,158 |
Fair Value - Summary Showing th
Fair Value - Summary Showing the Recurring Fair Value Measurements of the Contingent Consideration Liability (Details) - Recurring $ in Thousands | Aug. 31, 2022 USD ($) | May 31, 2022 USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration, liabilities | $ 17,158 | $ 16,948 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration, liabilities | 17,158 | $ 16,948 |
Revenue based payments | Level 3 | Discounted cash flow | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration, liabilities | $ 17,158 | |
Discount rate | Revenue based payments | Level 3 | Discounted cash flow | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration, liability, measurement input | 5 | |
Probability of payment | Revenue based payments | Level 3 | Discounted cash flow | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration, liability, measurement input | 0.66 | |
Probability of payment | Revenue based payments | Level 3 | Discounted cash flow | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration, liability, measurement input | 1 |
Fair Value - Additional Informa
Fair Value - Additional Information (Details) $ in Millions | Aug. 31, 2022 USD ($) |
Fair Value Disclosures [Abstract] | |
Potential amount of undiscounted future contingent consideration | $ 20 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Aug. 31, 2022 | May 31, 2022 |
Leases [Abstract] | ||
Operating lease ROU asset | $ 6,335 | $ 6,974 |
Current operating lease liabilities | 2,588 | 2,560 |
Non-current operating lease liabilities | 4,008 | 4,703 |
Total lease liabilities | $ 6,596 | $ 7,263 |
Operating lease, right-of-use asset, statement of financial position, extensible list | Other assets | Other assets |
Operating lease, liability, current, statement of financial position, extensible list | Other current liabilities | Other current liabilities |
Operating lease, liability, noncurrent, statement of financial position, extensible list | Other long-term liabilities | Other long-term liabilities |
Weighted average remaining term (in years) | 3 years 21 days | |
Weighted average discount rate | 3.80% |
Leases - Liability Maturity Sch
Leases - Liability Maturity Schedule (Details) - USD ($) $ in Thousands | Aug. 31, 2022 | May 31, 2022 |
Leases [Abstract] | ||
Remainder of 2023 | $ 2,079 | |
2024 | 2,183 | |
2025 | 1,419 | |
2026 | 1,125 | |
2028 and thereafter | 171 | |
Total lease payments | 6,977 | |
Less: Imputed Interest | 381 | |
Total lease liabilities | 6,596 | $ 7,263 |
Current operating lease liabilities | 2,588 | 2,560 |
Non-current operating lease liabilities | $ 4,008 | $ 4,703 |
Leases - Supplemental Statement
Leases - Supplemental Statement of Operations Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Lessee, Lease, Description [Line Items] | ||
Non-cash lease expense | $ 669 | $ 687 |
Cost of sales | ||
Lessee, Lease, Description [Line Items] | ||
Non-cash lease expense | 219 | 219 |
Research and development | ||
Lessee, Lease, Description [Line Items] | ||
Non-cash lease expense | 51 | 98 |
Sales and marketing | ||
Lessee, Lease, Description [Line Items] | ||
Non-cash lease expense | 39 | 40 |
General and administrative | ||
Lessee, Lease, Description [Line Items] | ||
Non-cash lease expense | $ 360 | $ 330 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 691 | $ 682 |
ROU assets obtained in exchange for lease liabilities | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - patent | Mar. 10, 2015 | Jan. 11, 2012 |
C.R. Bard, Inc. | ||
Loss Contingencies [Line Items] | ||
Number of petitions filed for reexamination of patents | 3 | |
Number of patents upheld over prior art references | 2 | |
The Delaware Action | ||
Loss Contingencies [Line Items] | ||
Number of patents allegedly infringed upon | 3 |
Acquisition, Restructuring an_3
Acquisition, Restructuring and Other Items, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||
Acquisition, restructuring and other items, net | $ 5,581 | $ 2,440 |
Payment for acquisition | 3,500 | |
Legal | ||
Restructuring Cost and Reserve [Line Items] | ||
Acquisition, restructuring and other items, net | 1,863 | 2,084 |
Manufacturing relocation | ||
Restructuring Cost and Reserve [Line Items] | ||
Acquisition, restructuring and other items, net | 136 | 0 |
Israeli Innovation Authority Prepayment | ||
Restructuring Cost and Reserve [Line Items] | ||
Acquisition, restructuring and other items, net | 3,544 | 0 |
Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Acquisition, restructuring and other items, net | $ 38 | $ 356 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | $ 424,489 | $ 439,457 |
Other comprehensive income (loss), net of tax | (550) | 590 |
Ending Balance | 414,041 | $ 435,950 |
Foreign currency translation income | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | 1,357 | |
Other comprehensive loss, net of tax | (550) | |
Other comprehensive income (loss), net of tax | (550) | |
Ending Balance | $ 807 |