ANGO - Earnings call transcript Q1 2023

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Operator

Good morning. And welcome to the AngioDynamics’ Fiscal Year 2023 First Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. our this first on morning website. detailing the results the release earlier wire and news fiscal quarter XXXX crossed company’s The is available conference be at after today’s www.angiodynamics.com over the webcast one broadcast Investors This hour the the of the and also call. call same of at approximately will section website of Internet at the live company’s the replay is call available end the being site

course insight Executive described caution addition and Before in financial future events statements in offering slide in SEC, AngioDynamics’ presentation Management and conference as the and read and of actual Clemmer, reporting which and would for financial over you non-GAAP measures identify company’s uses without performance, we measures well the financial statements trends business cause also Investors and company’s as the GAAP. this to the Events under now I review should discuss I over or differ accordance adjusted the into Jim trends factors that discussing begin, margins not the operational review Chief in to results conjunction like the believes to these company’s performance the make the these regarding is financial as results forward-looking and year goals Mr. available with revenue, earnings The A encourages of with including this time. materially substitute underlying the XX-K, certain to measures non-GAAP for the to operational the that results or listeners call. should establish section limitation, that will the filings like Clemmer? to, events, company about Presentations. the the may call, expected with Officer. during company’s XXXX, may those forward-looking this Management President past that fiscal to gross during statements. during call. these in investors measures operating as would and release projections specific company or press assist future will also measures prepared company’s Forms morning’s turn XX-Q be including from package analyzing superior company’s website Investors in consider on a call may to, This continue.

Jim Clemmer

AngioDynamics’ Thank and you, morning, fiscal first Melissa, for everyone. earnings thank quarter for joining And good you call. us XXXX

Financial a on quarter today’s Joining is Chief detailed AngioDynamics’ will who Trowbridge, and of call me our analysis provide Vice Officer, Steve first President Executive performance. financial

talk about we Hurricane a know how results, people devastation. result the all Before in by Ian, many still with are those impacted struggling who Florida, the as particularly our of have are been as we of people thoughts

in and We we on are customers and supporting focused closely situation. employees are the region our monitoring the

going Despite platforms, costs focus our in Investor while solid operating our we’ve ongoing plan Day these executed persisted large, We platforms quarter At growing goals. our bottomline. the July how driving first as goals. in towards fast and detailed headwinds, material we strategic first proprietary with rise. and prioritize results, growth and first our growth maintaining Turning ended the a our last million, pleased segment markets Med Tech our I year. in to designed revenue and balanced necessary approximately X% quarter challenges our the of throughout strategic freight drive with quarter, August. $XX.X June, our Inflationary to persisted raw growth committed Med investments and our proprietary the outcomes. making beneficial and patient our performance we long-term on XX% our Tech to sustained three-year continue goals. we our utilize outlined over pressures -- consistently progress of led by during XXXX, of Med July quarter enter to from attractive roughly were technology am year-over-year, the on Tech of We tech measurable, representing Macro Technology remain to to

this on pressure our Hospitals care team how have staffing am While our challenges later summer, on provide managed in chain does this results, an environment. the has I details a supply Steve bit during will significant experienced locations procedural our on impact volumes. and resulting with pleased pressure through more dynamic call. some

that of at more staffing level adept are anticipate becoming challenges some will persist, issues. through we While managing hospitals these

ancillary streams, procedural causing some of effects, In call. addition as our lengthen hospitals direct impact on later with volumes, care on their Steve challenges will their and struggle which the again to payables, staffing hospitals create sites discuss to the revenue reduced timing

We slightly with both strong This continued our of performance challenging during impact year-over-year environment, giving prior and which of our impressive this the and FXX execute. growing to the performance by full and its year. growth NanoKnife growth terms we product the typical our partner more the of customers ability Auryon, continue platforms strong the segment and have closely expected XX% finish Auryon by current of QX. utilization in over to market continues to our our growth payment been and continued resilience AlphaVac driven the Auryon with seasonality exhibit was illustrates sequentially, urologists. our release of in the team’s product light down in quarter, environment. Despite the flexible Tech Med

in IDE our Auryon, illustrated The number efficacy or the SIR presentations patient patients peripheral safety population challenging there and for included the complex PATHFINDER in results. [ph]. quarter, data a presented safety Link IDE. at specifically, of The and were During with experience detailing Physicians original than setting in a impressive results study. follow-up this clinical from Auryon world similar our more significantly more disease patient XX-month are original included from those real results PATHFINDER in exceeded study and with efficacy PATHFINDER from The the IDE population. the to

of ischemia meeting, a the great addition, effective typically in outcomes disease, chronic that In to much patients. This patients demonstration in less the complex the of similar complex limb below CLI just the patients reported the fare patients outcomes is between for less less at knee how complex CLI those worse AMP the as than long-term patients. analyzing a patients presentation Auryon is were treating

expect to see this Auryon as We use to continue rapidly physicians are to introduced grow technology. and more innovative

faced the this given and our the for AlphaVac including Our XX% mechanical million AlphaVac XX% the year. particularly grew AngioVac revenue with were we When the quarter summer. procedural challenging prior almost and was thrombus comprising performance, thrombectomy business the during quarter. Uni-Fuse, over pleased grew $X.X platform during we headwinds

release entered market FXX product Additionally, during a of our full AlphaVac quarter. the into we

We expectations are full year. for meet our on to track AlphaVac revenue the

seen NanoKnife during increasing within Our disposable quarter, as traction the XX% grew we’ve urology practices. sales approximately

procedure during the to prostate our volumes awareness As quarter PRESERVE the and space. drove continued clinical grow trial in increased

treated XXX cases quarter more prostate from year. up QX of the cases cases in completed prostate an physicians NanoKnife, and increase of last XX with QX, During fourth than XX over

markets, markets had international the quarter. strong a European really Additionally, particularly

of demand growth remains strong, some supply bottlenecks and backlog disposable our quarter a While chain small topline in the orders. encountered resulted NanoKnife during impacted

turn couldn’t one example, led subcomponents of suppliers meet For a to which shortfall. in demand, our production our

this drove raw to clear process increased shortfall our we which work in add and expect levels. material to decision in our inventory, continuing chain While supply QX, challenges inventory

at strategic to of a the deliberate the first end million $X.X down May. down manner, with million from of in we our continue On the work end backlog total $X.X front, and of the quarter, operations backlog

addressable drive invest to existing to and development the continue platforms, continuing products expand our markets. the new during We supporting on in while business into to also faster our our growing quarter focus larger, remains of

a reminder, initiatives expansion. As geographic include investment marketing, product expansion and regulatory pathway development, internationally, clinical these research, selling and

platforms, Auryon with thrombectomy, hydrophilic recent expansion Our when FDA for of FXX study our pathway embolism product our and strategic product. our for in as adjacent atherectomy, our regulatory investments removing as in continue Auryon our treatment clearance to advance APEX the of with initiation a arterial accumulation, coating of AlphaVac catheters, thrombus clinical on pulmonary well the to particular, growth

the AlphaVac cancer our IDE pancreatic with of PRESERVE Our clinical including study as treatment NanoKnife; with of execute as of for teams three pulmonary our FXX, cancer the treatment prostate direct NanoKnife. our study, to our continue with a our study on the studies; treatment for well embolism trials, APEX

$XXX an estimate market United I’d effective $X.X quality another surgery. estimate of that treatment the and NanoKnife a prove of favorable study total an antitrust a U.S. PE As that excess will against unlocking be a that to effective to can opportunity potential of an now is when demonstrate alone. be provide in for are addressable the States. like while for NanoKnife be can products ease-of-use you that our outcomes our business deliberated we PRESERVE unique in cancer We on option the treatment in large Bard the men an in providing Vascular and to verdict. as can provide with market million it addressed treatment option, to APEX focal treatment We believe focal jury also that AlphaVac C.R. that also options and The update week billion relates Becton, we that life be other exceed believe and may our concluded Access we Dickinson’s will reminder, our or being for trial this business. suit by waiting disease by risk treatment prostate compared intermediate with focal

team our AngioDynamics the Executive Steve, Their the I’d to work effort detail. at quarter of transformation turning to Before Steve essential over the is like our I’d to and for Trowbridge, in President to here continued unwavering like Officer achieving call to AngioDynamics. Financial With the dedication Chief hard thank turn and more call our review over that, goals. to to the Vice

Steve Trowbridge

Jim. Good everyone. morning, Thanks,

on website from direct results. everyone our Relations our quarterly key items the begin, Before to like I’d I presentation Investor summarizing the to

first our a Med Tech Our continued NanoKnife to XXXX Med $XX.X FY Auryon, by first revenue the and management. strength revenue driven thrombus X.X% compared revenue was million, to was X.X% XX.X% and million, including the year-over-year $XX.X declining quarter Device XXXX. FY quarter platforms, million, Tech for year-over-year increased while of $XX.X increase, of Med

our our composed of of XX% quarter, total revenue to For the segment year compared a Med XX% revenue, total ago. Tech

Our increase year. contributed first revenue the quarter, million $X.X in during XX% Auryon to compared platform a last

QX. seasonality slightly expectations. solid to our mentioned, in this Auryon performance the QX Jim line strong from with down sequentially Not typical was As finish when considering and represented

pleased our continued Auryon August with platform. QX. the an improving for strong growth very trend the and we growth was saw a of Auryon We’re month throughout

lasers As is depreciation quarter. approximately cash, million Total XX first of with launch since expense our adding quarterly XXX during the lasers gross margins. to place utilized base approximately have our $XX today, of about installed placed lasers

extensions Auryon coated for clearance launched regulatory we quarter, received also we usability, providing the a September, catheter line in enhanced During hydrophilic and catheter.

the the throughout and Our forecast the in of unchanged, as year for management which thrombectomy first remains When FY of AlphaVac XXXX. FY of million. includes full year to expect Uni-Fuse, quarter AngioVac XX.X% growth for XXXX to Auryon grew range revenue million. see Mechanical the $XX year-over-year revenue, course we revenue year-over-year. million XX.X% and AlphaVac for first $XX the continued $X.X generate grew over revenue was including quarter thrombus sales

pleased completed the of volume the our volume FXX generating over remained continued require $X.X impact PE to all during macro particularly an with XXXX our the at four and was procedunists X.X% of that $X.X requirements believe Procedure on very remains excited challenges these in very due revenue quarter challenging feedback full AngioVac excited complexity are have procedures, quarter, and sites after quarter. begun bed. product the of which the environment. year’s study. are recruiting we’re for during and procedure AngioVac have representing to typically AngioVac million million revenue Physician staffing this that release solid, We’re APEX prior of and for quarter. given patients to the ICU the have We performance the initiation FXX positive during hospitals FY currently market growth

revenue to this markets. We significant to be continue to invest international driver thrombectomy mechanical to a XX Capital by and placement expanded XX.X%, models increased and adoption within plan urology our increased to continue awareness market. expect in as as practices continues base increased the NanoKnife of be $XXX,XXX platform installed our growth were in year, growth studies, procedure base. driven from down our our versus installed by alternative by contributor disposable growth XX% grow NanoKnife XX.X% driven to by the we in XX% urologist clinical and units, we key transformation. to implemented a sales ongoing growing platform overall our but prior a

in in Turning Device the offset achieved balance the our to our of the declines in microwave segment quarter resulting Med and core portfolio, of segment, overall products, the modest modest dialysis X.X%. by growth, decline each

reminder, Med Device million all relates As $X.X our to segment. almost a of the backorder

earnings statement, included as the in this down bridge presentation gross the margin income morning. the posted in illustrated Moving

a our decrease to driven Our of by ago higher sales to of gross Med of margin Gross FY margin the year to to expect installed were Tech ago. This increasing consolidated our In continued of our the Device due margin increased and associated of segment our segment XXXX decrease largely segment expand strategy, gross with margin catheters. first XX.X%, XXXX, a mix. basis our a depreciation -- quarter the a in FY some we was of period. margin sales costs pricing as Gross to year portion XX-basis-point Med for XX compared inflationary was XX.X%, was compared for the first XX.X%, for basis Tech Med points our quarter points compared XXX accordance was pressures. grow represent primarily and decrease decline throughout base with total Auryon Auryon larger XXXX, a

said, our including Jim while of and As headwinds, pressure. we supply macroeconomic expect inflationary in a continued manufacturing, to we’re see to variability as chain some pleased XXXX result progress FY on continue other with

did the As gross quarter, with a our published in fourth today. bridge we’ve included we margin materials

provided consolidated Our manufacturing on the as gross freight the mix a as increased first mix, year from increased the in basis headwinds of market margin approximately offset The material benefit efficiencies These was of costs basis the were positively benefits points. approximately raw versus increase points prior production by inflation, XXX approximately basis, margins from basis and XXX sales capacity a impact impacted initiatives was in continued costs. labor our benefit our offset from a by points. impact. in prices negative Inflationary gross in well an operations. XX-basis-point year-over-year product period resulted efficiency due were approximately to costs. with on higher labor manufacturing approximately the quarter another and tailwinds material pressures These by and negative product and associated increased had XX XXX-basis-point on costs impact quarter tight In raw increasing freight corporate

depreciation to increasing I’ll levels basis heightened about a of more we shortly discussing the impact result when from our this points. is freight from in accelerated address purchases impacted gross raw a position. that disruptions. installed costs component of detail material base of Some bit cover XX continuing our Auryon higher by supplier Hardware cash negatively margins

million ago. during first the was of a million Our X.X% $X.X of XXXX of quarter sales, research year expense and XX.X% development FY or or compared to sales $X.X

focused driving We for continue product and development spend investment R&D portfolio. Med platforms, our disciplined in Tech our technology clinical the our key on including

Auryon. XX.X% was or target expense to to FY compared anticipate SG&A SG&A XXXX, in increase particularly representing for teams, R&D For of to in first ago. XX% to spend investments the $XX.X million, sales SG&A to annualization we XX% The FY spending of still anticipate XXXX, of target XX% revenue. we year-over-year of driven spend year sales sales. primarily of XXXX a FY quarter million $XX.X by of XX% our the is to sales, continue XX.X%

FY quarter $X for year. first quarter Our first million adjusted the the FY million share an of share loss million, compared loss of the $XXX,XXX adjusted net adjusted quarter of last FY loss was XXXX in was net in of $X.XX, the or first $X.XX Adjusted loss $X.X per to adjusted XXXX per EBITDA in or of quarter $X.X XXXX. to compared of first of

placement million. of $XXX,XXX cash, had million $XX.X The evaluation we $X.X expenditures used to first of and additions in capital Auryon quarter units and XXXX operating

a to cash end Details August that cash today’s also call. and are of we equivalents in had cash a website included Investor on $XX.X at the in credit included of on cash with in our cash closed of facility We’ve the equivalents, in QX. million our quarter cash XXXX. compared presentation bridge and at $XX.X this of end position million Relations XX, May XXXX, balance cash published our The in materials. we XX, connection As refinancing includes

disruptions. these of times and nine quoted to times used lead times supply are suppliers, in raw than increased levels first to we accelerated this accelerated disruption have expected large significantly utilization a quarter order FY address XXXX. XXXX FY of prepaids, the XXXX of quarter hold. other take supply Costa as inventory placements, of future, driven our cash driven now cash expanded initiatives to beginning insurance to quarter to and of year in in our cash. is balance first annual million We high of to inventory levels results, insurance use lead discussed the in than capacity material In proactively purchases the our especially was Supplier for months as disruption mitigate of Rica that address component by for from and with more continuing levels various one-time chain suppliers its year. chain Auryon cash months some of $X.X quarter This subsequent raw Higher have increased we laser resulting FY our quoting increased believe have in higher by other that significant disruptions, lead our material as fourth call, increase Inventory in incentive the months purchases compensation from or from XXXX, it’s against of in our part purchases, FY six disruptions quarters use we first payments we quote in connection increased through suppliers May XX. three partial to of As payments. typical utilization prudent

high just increased. mentioned, I our our increased addition In the balances cash account remain have to DSOs of and uses receivable

This to impacted we’ve with withheld our caregivers very to have and hospitals or We’ve cycles. and seen certain customers our remaining begin been deliberate to delivery has hold pragmatic order about timing. placed cash out on flexibility customers, payment mentioned negatively Jim conversion appropriate providing his push As when our while appropriate. remarks, in fulfillment approach credit

We’re and with addressed have adequately credit, perspective, working sheet ratio we’re capital, ratio. risk. and liquidity our our comfortable any with balance approach a taking we closely balanced working to in customers extending that believe a credit increase current From

accomplish goals. we’ve ratio our is respect historically. a with in With structure, how few was we capital facility specific to business the consistent refinanced which current QX Our to X.XX, managed our credit

First, the mature LIBOR maturity to given and reference June SOFR financing XXXX the wanted previous environment, extend dynamic facility XXXX and was we set to to the in as with replace rate.

Second, revolving the $XXX previous facility. facility million was

Our does or current a strategy $XXX require support base million. not borrowing of

So amount of fee. a commitment there significant carried was credit unused a which

through wanted term capital the The more revenue cash those expensing new has credit laser profile The modify $XX we a appropriately structure generation long-term with revolver fee. placements Auryon Lastly, XXXX to lasers. commitment million, of our of and believe new facility align current strategy. to that accomplishes our $XXX in resized of August support million cash goals. million needs the sized for and reducing revolving was of facility to the credit to our our is closely used and these We each liquidity $XX from the

with a profile. term $XX to and revenue added cash for Auryon lasers line we the loan their Finally, better used million expense delayed-draw

are installed and at launch we Auryon have $XX As base. we of since useful revenue discussed million customer of quarter life. facilities cash utilized laser of placed generate their in lasers roughly the manufacturing the last over These Auryon, the

reflected the of five-year our laser period. and over amortized cost on sheet is balance addition, In a

catheters, expense. is also purchase As providing refinances the revenue while to with for generating term then the laser FY laser cash immediately, each utilization an a lasers for delayed-draw in each lasers future field, monthly effectively front monthly having of XXXX. through The we associated financing with result, place the is profile. cash revenue But while some and compared already to the expect loaded expense spent loan

and with well a of the At business. will the We loan just revenue a delayed-draw believe is million place structure that during pay as term manner half we loan this in more lasers profile expense down in we connection XXXX. the FY with our facility, we to mentioned, Auryon drew the lasers the for currently in term first field, the expect the as efficient the capital and I closing $XX of revised on delayed-draw consistent

links this of Authority goods Finally, also total IAA oXur debt on margin term $X.X paid $XXX million, for obligation we will gross unused going utilize and end loan benefit the were to revenue us reduced fees lasers The Eximo. increased a X% million Auryon FY cash which adding was match pricing as Innovation that refinance this to and the of to available the from royalty facility grid at the exactly million a provide we least prepay forward extended their Auryon. expense had made but royalty result to unlikely that with of XXXX of profile. our $XXX SOFR. financing to of portions the a use same Israeli is facility to remained The acquisition through facility and for to previous negotiated of spread reducing Paying payment cost that the now a the as prior delayed-draw

specifically pleased are We with environment. of these in the current light very terms,

flat where XXXX. cash we the continue position our net from XXXX up We exited expect to by be is net our FY slightly end of of to debt that to FY cash

excluded during milestone our for cash aggregate we which Auryon, to payment expect the from would a reminder, revenue contingent million. operating half FY consideration a payment back contingent As XXXX, expectations. is achieve our trigger $XX currently of of consideration This target the

Turning now guidance from our guidance, to QX. unchanged remains

continue per anticipate invest We million while our sustainable in continue revenue earnings managing $X.XX of expect Med $XXX in adjusted year to to of be XXXX headwinds. and full the continued to platforms, as range Tech we driving million $X.XX we range key the growth $XXX share in FY to also to in

customers. environment to tight supply the due the it certain chain facing our remains improved has disruptions, areas, uncertain macroeconomic While in labor market inflation, pressures and

of expect to XXXX gross FY to consolidated range XX.X%. in continue the to be XX.X% margins We

margins efforts tremendous of be and to continue allows Med team us this range XX% margins the our on to With Device goals. it’s in Med their of to range delivering to the of expect commitment to AngioDynamics comprised and of XX% gross I’m the range gross Jim. progress XX% turn that that, it XX%. making our in towards long-term proud of Tech I’ll drive back and We

Jim Clemmer

we improving AngioDynamics, our patient committed At so are with to we challenging Steve. technologies that to pout global partner Thanks, needs. caregivers can treat

with investment partner those as listen will our We and to caregivers guide they decisions.

are into that is to caregivers. these transforming important We a company

continue to the balance We part to our need investments where with will life. manage is uncertainty through everyday these times a challenging of

We company. strong are a

We grow serve to while customers. value our continue will our we

families. minimizing value that we risk. I’d questions. maximize like We accomplish while investors to by view We for these their creation that grow employees goals. committed believe while opportunities With as care their contribute our who are powered are talented and understand to company a that, success, take the they to Melissa, careers them to platform We of call our can gives seeking over and one turn

Operator

Oppenheimer Lichtman Instructions] question. question Steven [Operator Company. Please Thank comes with you. first Our line the your from & with of proceed

Steven Lichtman

you or And you’re bit that seeing from customers? it two, front that saw through lines you about then mentioned Thank you. Can better? I hospital there that that you wanted hospitals Jim, product was guys. most you Good AngioVac other is, challenges It two sounds ongoing any morning, mentioned the pronounced. Were on segments you what a to saw ask, again managing just impacted? like on talk also your questions.

Jim Clemmer

different we morning. that Hi, questions. There’s challenges said. for Thanks Good Steve. the been

June, quarter, I field we reported. where for started most we taking from reports always you companies staggered our don’t, shoulders First vacations, time, bit. my have really that I first now had just and remember, August which a getting quarter hear And the vacations, doctors was we saw, a from so July, all, of a we

customers Doctors some top while. our said, time to nurses. CEOs on of That So out ongoing taken staffing challenges, called more vacations I a of some be in, for hadn’t hospital these a of turned true. recruiting hard and to having check to

hospital patient P&L OR in Boston keep they in really own in their demand as OR had me hard needed time all to staff particular for had One they their actually staff XX through. all told XX, to they only a suites So enough have and could have flowing cash well although suites.

a lot I’ll Steve to -- beds a as ICU their to ICUs fill a give through just was that staff So side of full you serving commentary. patients challenge, another are challenge. and were challenges nursing a side

product. challenges, Even the a body, as can supply an it that you amazing complex specialty give the couple to chain But a AngioVac examples it also gave access before about AngioVac one. but talk we using real term to everybody’s today, can to use, there, is the of another I’ll requires a team we put life requires sheets we profusion in be treat patient. here,

hospital and that’s time have and parts these normally by into necessary summer stocked they still of backorder part Some remain globe hard a run the sheets on backward component in getting of the and them. to a that’s

we providing cases, patient probably help So able the They AngioVac some weren’t using to drugs treatment. believe in those we cases. manage

some the some on Steve, now of. more. is is, back. that it of behind some up there were And seen has to So the we’ve seeing are thing we us of come, hospital back, hasn’t dynamically, catching anecdotes whole vacation The of challenges. those take Steve. that their we’re care think come September patient is swung But loads now they second, want

I’ll are September. yet. But seeing say positive not we still trends in we’re some normal So

under pressure. I still think caregivers the are

Steven Lichtman

Got it.

a on this a anticipating think, last seeing of base. placements, with accounts little dynamic you really of That’s your that maybe year current Jim. go in fewer but Auryon, actually call you looking deeper Okay. helpful, to bit this did as pivot focusing go see On on Are quarter a year in maybe that talked up placements. through in had you terms current step install still I

Jim Clemmer

don’t clinical both, last to, we really work very strong. the of just and new you a of as many you’re during we that But team laser is blend want just the was I’d highlighted It’s bit putting But lasers said, demand, say, a there’s the demand as out did of a as Yeah. placement quarter very presented also we just saw a the Steve. strong. right, shifting is year, is lot not some

a sure it’s did, getting expectation So laser to coating But at the make of hydrophilic product we’re want doing we’re that. some interest. levels. We we by I mentioned the of being things generating new already just our also And lot managing placed at launched. the usage each

other demand. and we that in some feedback over out product the next roll be to quarter or We have improvements rolling response the that customer

placements during last Steve, to see people the on on in quarter, but as to each has a as of basis placement we’re many volume site per just know strong So, the wanted laser. again, you’ll don’t a last that really course up let going monthly work I year, expect getting also year. the

Steven Lichtman

then the mix fiscal it. Got here margin lastly, it. the you obviously, anticipating improve gross throughout Eximo key -- milestone and as What improvements at noted from other that year, benefit sequentially you’re sequentially the look the and beyond Steve, Got anticipate you are year? And can throughout came in? it’s margin things you

Steve Trowbridge

to basis a of both Steve, couple year-over-year. on on also and a things, a standalone couple of a look it, at there’s ways So a comparison

saw anniversary really change, X, are and the upticks because importantly, If comparison, through QX. our the big of the we’re comparisons more to as you some going the that inflationary QX we going real that you about to during think get pressures accelerated in

also order to you That year, structural our in did and price benefit for expect of structural of pace the be last Device minimum Med our up at of you has the some in we that of turns continue see and going half driver a take that fees, maybe year. where handling Mix hold fees, last through then on we’re I areas accretion, the QX. so us inventory also to months increase first as talked six well. it to inflation the looking business, year, our step is QX margin been pointed a as dynamic I that initiatives gross out. and we’re to see some the we pricing that from put anniversary margin the then during going And as some gross we other dynamic in biggest first we’re some reroll, going to with every in things place. to expect some year, also standard that about running don’t same that deal So there’s

Steven Lichtman

guys. you, it. Thank Got

Jim Clemmer

Thanks, Steve.

Operator

Thank you.

comes line your with Our with Markets. Capital Please Matthew proceed KeyBanc next question of question. from Mishan

Matthew Mishan

the guys, questions. morning, thanks and Good today Hey.

firstly you Just of think, Auryon, boxes? sense a per continue lot of kind to I you Could these utilization a place on system. us give of

get up, going -- you how could from it are same-store a some in think could it seeing doing like where is been what where I back and hit now enough, are for at numbers? -- utilizing same you’ve what year-over-year, a had have where place kind like placements systems you a to -- people higher you these trend and of seeing that long of out they’ve are you new these you’re metrics point kind the

Jim Clemmer

Hi, Matt. It’s -- a Jim. great question. That’s good

do we you’re enough have right the you’re So in now. field exactly what we saying. And

were help We and months it our a So how finding after a Auryon level where patients. does now down of the gets the really familiarity installed, months, much to of that a understand they can placements. They and customer can they break three treat to how a analyzing treat, bit. develop customer team they laser four job first good really

we So running and that four a they we segments have it comparison months same-store sales into get break we up four do and really last, of once post track. and down months,

gaining and want an in publish to very product, We we’re basis and that our that. that up same-store is But averages. numbers working to don’t carefully. increased confidence seeing So tracking of our ongoing that the customers on to Steve in back my each get sales we’re the that also account the why ago. a few minutes we who lasers team follows statements with That’s have

effectively just been now knee. people the gain So PATHFINDER But of really going driving confidence innovations as our hydrophilic those the see and the that, as laser in the growth to is other couple the can where come really due years, same-store increased caregivers, below And that number their main whereas treat use factors product to new two, good going really like us out of coating, and above was sources, they has up above for we’re arterial two next indication, working the we product coming where years Matt, you’re from sales awareness for can doing like it both the more. thrombectomy that online that, things new one and see with the level by data showed. customers

time more think will we’ll come. those and really take growth over spectrum to time, PAD we So drive Auryon things for more throughout cases the and a of Matt, help long both

Steve Trowbridge

there’s are dynamics on play to Jim And at two other Matt, to, here. what that said just build

in we’re exactly Jim this utilization. So, we’re managing and seeing said right, accounts increase definitely

we determine We’re which around. methodology using want to to switch accounts also same the may

placed move And so some volumes. lasers have we’ve OBL that been upon them based OBL one had to from another and

find setting. as to midst they’ve saw what why There’s we’re this clip hospitals outpacing in a OBLs, dynamics the bit getting bit COVID, limited placements those to the of access right continue a of but than in that dynamic to that rate got increasing hospital when the customers. so prioritizing We see right little you aggressively really of too see the a was switching And and out the product that. little the higher that’s a overall really you also OBLs our utilization to hospitals. was now lower we’re than play we have of greater the going in launched hospitals Hospital is economic That’s settings market. offsetting and into at percentage

couple but said. trends exactly a Jim of in to together, see those going you’re it So flows what working

to well base. significant to to We’re drive is be still business going growth in driving there through utilization managing we’re of as increase customers, continuing seeing demand existing it new lasers, because that, we’re our both for as us installed and this

Matthew Mishan

between out -- force going than sales boxes owning What now these off and your Auryon. you of to up is clinical now these continue of follow is a of finance part of the one you this base just -- kind and -- why the have your -- that, here What better devices? a model to guys as is of customer’s why evidence have of other? trade this lot the lot CapEx, owning you I benefits these And is rollout of you cases use installed the mean, guys your the and but own selling and them

Jim Clemmer

customer a set. good been catheters had a question, company precedent It’s a their Historically, laser with the Matt. expectation, and because think, component criteria. has of that level really the I other There’s established that

are them. a So customers lot of expecting

We’ll them. more sold lasers time. have sell We over some

economic us they structure going different the forward. offer different those a They customers. models will how be contract laser. We on with buy There’ll of

here see So, product can do a you’re runway scientifically. we this Matt, think, what with I long right, and clinically

options gaining time, it value we more, over So, we lot does treatment of interest with as in more as with and build our the science. more customers have a

serving expectations I you’ll current that today, been. really customer us what primarily, But it’s think maybe shift. see Matt, have

Matthew Mishan

what you Tech FY of growth, endovascular And then do you don’t like Med you to seems Access, how like or should segmentation compared is Device Tech but just if Oncology, -- the for You then you re-segmented, Device think you moved lastly, growth? just the you’ve call Okay. changed of that growth where like therapies, kind out the if I Med about it previously new Med we And think report it. in looks up? can know XXXX versus you Med reported a and Vascular reporting? How

Jim Clemmer

questions, you divisions. with for three detailed Matt. questions. the you just run know, It’s our so But manage I’ll customers we Jim. to hand Good Yeah. business now still this our company,

accounting It’s our customers serve the details still marketplace point and Steve, Vascular here. we accounting, them give really I’ll we manage. us now helps So how to to Access It But business, according over the treat well. our you Oncology on our have rules our and DVT.

Steve Trowbridge

Yeah.

absolutely good did way the change reporting going Matt, business We we’re So, forward. that eye. our

segments. have we reportable two So do

and product that we business. think managing is that Now lines that have the we’re we how more reflective our of

be Med Device. forward to going segments, Med Tech, reporting two in we’re So going

will We margin. segments, as pursuant gross as reporting be those to revenue well

the our And that business drive we’re so said, XX% XX% what to plan. transparent, segments. moved That Tech that our were to That what business away our managing in we’ve X% formal Med at reflective, giving is, way Med that have we part grower. that our Tech revenue strategic the long-term our of to what -- think expects look detail more from Device grow we and according it to to it’s was units. business said -- it, to foremost Device on long-term and to X% be way We business our historically,

in targeting. we And were a some really right as we’re that up. going Expect You Tech came higher Device. gave saw forward. We then last than in little margin year where we level gross and that that around well. what guidance That’s

the XX%. end and to for with to between to gross segment of XX% margins segment Device and Tech margins that expect We the gross XX% XX% year have

Matthew Mishan

right. All Thank guys. you,

Steve Trowbridge

Thanks, Matt.

Operator

you. Thank

comes line Canaccord Plovanic question next your with Please proceed Our of Bill with from Genuity. question.

Bill Plovanic

calls Thanks. question. -- taking Great. for Good morning. Thanks my my

how end should by but there? of fourth play third, out mentioned expect second, help expect especially results just that is, then puts takes do the I cadence And we with first quarters, about question is us end first line as how and flat kind of think you guidance, of how guidance, that of we the and quarter the between think hoping should we in on So about just into year, get cash could you given high and understand then usage was sequentially? low you you during end the kind the to

Steve Trowbridge

Yeah.

So, thanks, there $XXX build how guidance, to to to our the Bill. some With We you specific full to expect million. is show get kind gave year respect we revenue guideposts it. $XXX million and of

said $XX quarter. Auryon, and growth For the you $XX million saw saw million we this that to XX% we

we together you give to said AngioVac We XX%. on those On growth to are and we mechanical thrombectomy, hit had expect XX% AlphaVac of right track numbers. to

at year. XX% in that And XX% that this had Nano looking be to we business growth in probes again, saw double-digit You range. we’re

there. ending the million the to work put positive $X.X backstop Med We the backorder we all those in a decline supply as and we’re at business got our some we expect get start that that business. taken we through have see X%, were back see out, through first having and about quarter quarter down to in Device that together you of going drive Device as of continue working million this to So chain the that to backorder the methodically to into plans, growth you’ll we that you’re continue $X.X

the that with we before, cadence. bit quarterly the of put itself, about quarter we a and guidance from all, little the quarter cash, years, being up year, highest maybe continue. growth takes QX like sequentially January that a So, usually weird and always in is and there, December, of together this were that in we to then small the smoothing And all going QX that Auryon because you’re of pleased revenue for from I see sequentially pattern seasonality in business, but typical think this in what QX talked a again. QX seen a a have from little pattern previous utilization last on back is QX We’ve you seasonality February dropping repeat our with is got expect down highest QX question QX, AlphaVac, step we’ve us. -- to cash products always in usually the a quarter, would

pretty quarters, to If our you look previous quarter. you at what back similar this it’s saw

the QX going significant So well, to see of start as cash into we to year. building you’re X, and throughout and as X move

with believing our net to cash end holding taken I the AR expect right debt to and to more it’s balances where position the we FY I this and cash terms, customers be going of But building in we’re remarks extending quarter there’s the cycle. the of did balances. that bit got of think, FY are this no people in this our our ended a lot seeing do one around we’re be at that four understanding increase account reasons there their disruption little receivable I payment down deal and so cash a about continuing XXXX, our to inventory those was the XXXX, in that And conversion well financing, expect doubt work out a prepared as talk seeing, dynamic are the balances, increase levels. continue And was quarter we as it’s to that things we’ve as All the environment. into move in

thing. an that. And not the permanent as a well, going So that’s we’re be eye to keeping inventory, on

also deal good you now very We’re try going give and which subcomponent bit, throughout materials. raw cash little increase of increase we’re some back on supplier into in of We’ll feel We about be some will to thoughtful go in purchases disruptions. kind a with year. position those acute to visibility pull those of a out how the that we to like

Bill Plovanic

So, thanks, Steve.

terms of think does of down, we you should working in sequentially. it of So we will kind that can that in of do And supply of is fiscal down of backlog work about guesses the to out the that’ll on business the the QX, the But QX issues X.X% improve I cleared kind mean, think increased can’t -- you year X.X% look out, that? manufacturing how the we the guess we or something historically, cadence I you’ve take backlog? how all clear get As take sequentially. that don’t that into to -- have whole

Jim Clemmer

And in Hi, of we here our we’ve know. our fortunate been QX. a employees stable clear current announced don’t also And you stabilized a comes will Costa U.S. facilities a That base, we at a running. Rican operations quarters more We Bill. We’ve and run we Jim. We’ve at is little which base the now. in think that got it plant cost as that got terrific. up few back It’s

speak. as We’re there adding more capacity we

the by Costa expansion, really Rican the end stability better cleared QX. internal the end wouldn’t the a probably the the of we’ll capacity expect year. So combination both build fiscal I of and -- backorder that have of by our

Bill Plovanic

the you quarter flow more should that so are to that and be year? I’m positive just through trying saying on second Steve, in cash, the get go understand? then just Okay. we cash And so positive clarify, then as

Steve Trowbridge

yes, That’s pricing and all -- expecting. a inflationary that we’re still with directionally we’re Yeah. environment Again, is what rising that But yes. dealing all, environment. in

Bill Plovanic

Okay.

last the positive then question… cash So QX flow? And

Steve Trowbridge

Yeah.

Bill Plovanic

maybe the most across have the specific … exposed, pay it’s hospitals accounts is on OBLs this is or receivable, a of than part terms just there say, an of, slower are to is the business I in the Board thing?

Steve Trowbridge

do certain doc offices, be as slow office Clearly, dynamic as Board. some and are that typically to tend the have the There’s than hospitals a experience of had anybody based across well. hospitals. certain else you slower you’ve where It’s labs, they that as

different it it’s always really the because been for bit in that would a Board. payment So I area particular hospital across the that but we increase, setting. driving of wouldn’t example, ARR, there’s extended we focus business, as terms has little been a typical say knew that than any setting, the has the be Auryon

Jim Clemmer

on one it’s to with we’ve But other a line a drawn we times. during but -- situation. I’ll chasing would how mentioned weren’t Jim. also tough If comment too. flexible We customers some here that give revenue And credit We Yeah. line cash. these some we would we’re were, being quarter. our other Bill, have shipped customers stuff, hold where some drawn a with number we’ve this we have final

our customers, we’ve pushed haven’t So we’re being to just some and cash, the products thoughtful being for at also, inventory careful customers door. line and of, but got as our flexible a stewards be careful with we we that are there’s

Steve Trowbridge

I going were in QX. I turn as it But not payments Yeah. mean, The And expect with in that see too. better. Bill of talked clearly, cash the some getting overnight. just get about being structural not you repeat conversion clarify we QX still that’s expect to in dynamic, QX, we what QX. to to it’s to to us said,

as to into QX. going you be QX that’s element an So move there’s about think to that and

Bill Plovanic

on be available? the to you And result Bard, final -- in, it’s they’re then expect -- more out to when and jury one that now, the throw do I’m with sorry but

Jim Clemmer

will the don’t there. in It’s Well, how I know long we actually as speak. It’s deliberate. jury hands the jury’s

There’s It’s something we two anytime. which couple something could week, slowed we’ll depends how holiday. on bit. in long see. Yesterday last be next deliberate. hear But So choose It days. the was process we holidays. we a a of a There was down is they could the hear holiday about about court

Bill Plovanic

you. Great. Thank

Operator

gentlemen, floor I’ll Clemmer Ladies you. turn that comments. and Mr. our the to Thank concludes final question-and-answer session. back for

Jim Clemmer

are during and company challenging these patients has serving persevered, you I’m that customers Again, with AngioDynamics. the are touch efficient. technologies our investors our are with that Yeah. that our pleased in and for treating times, Thank listening innovative who and keep

company. So we’ll value our for and continue to the work. drive of again employees our you our Thank thanks the shareholders value for to by growing tremendous

Operator

conference. today’s This you. concludes Thank

time. participation. lines your You Thank at your for may disconnect this you

AngioDynamics (ANGO) 6 Oct 222023 Q1 Earnings call transcript