AngioDynamics (NASDAQ:ANGO), a leading provider of innovative medical devices used by interventional radiologists and surgeons for the minimally invasive treatment of peripheral vascular disease and cancer, today reported financial results for the first quarter of fiscal 2008, which ended on August 31, 2007.
For the first fiscal quarter, the Company reported $37.5 million in net sales, an 85% increase over the $20.3 million reported for the first quarter of fiscal 2007. Operating income rose 93% to $3.5 million from $1.8 million for the same period of the prior fiscal year. First quarter net income increased 25% to $2.4 million from $1.9 million, while GAAP EPS decreased to $0.10 per share from $0.12 per share due to the 53% increase in diluted shares outstanding primarily related to the January 2007 acquisition of RITA Medical Systems.
AngioDynamics products constituted $23.3 million of first quarter net sales and RITA Medical products constituted $14.2 million. AngioDynamics product sales grew 15% in the first quarter compared with the first quarter of fiscal 2007. On a pro forma basis, RITA Medical sales grew 7% in the first quarter versus the comparable period a year ago.
“The year is off to an excellent start and we are delighted to reaffirm our outlook for a strong fiscal 2008,” said Eamonn P. Hobbs, president and chief executive officer. “While the first quarter is typically our lowest sales quarter of the fiscal year, our core AngioDynamics product lines generated healthy organic growth. Morpheus® CT PICC and insertion kits, the recently launched Profiler™ balloon catheters and VenaCure® products performed particularly well during the first quarter. In addition, on a pro forma basis, we doubled the sales of LC Bead embolization products as compared to last year’s first quarter and the Habib™ sealer sales growth was particularly impressive. We successfully launched our NeverTouch™ VenaCure® product line to treat venous disease. The fact that our venous products grew on a year over year basis, yet represented only seven percent of our total revenue as compared to a year ago, attests to the strengths of our broad product line.”
“We were also quite active and productive on the product development front,” continued Mr. Hobbs. “During the quarter, we launched into the oncology market the UniBlate™, a scalable, single-needle radio frequency ablation electrode used to coagulate lesions during percutaneous, laparoscopic, and intraoperative surgical procedures. We also finalized production plans to ensure our ability to provide our venous product line customers with uninterrupted supply regardless of the outcome of pending litigation. Our exciting Irreversible Electroporation (IRE) development program with Oncobionic continues to progress on schedule. Several peer review articles on the technology, including the first verification of data by an independent research team, have been published recently. We remain on schedule to have the first human cases performed in this calendar year.”
First Quarter Highlights
- Grew interventional product sales by 43% to $28.9 million
- Achieved $8.6 million in oncology product sales representing 20% proforma growth
- Accelerated successful launch and shipment of NeverTouch™ VenaCure product
- Successfully launched the RITA® UniBlate, a scalable, single-needle RF ablation electrode for small tumor treatment
- Continued execution of RITA Medical integration plan, which is expected to yield $9 million in cost savings from the RITA Medical operations in fiscal 2008
- Promoted William Appling to senior vice president of R&D Sean Morris to vice president of marketing and Mark Ortiz to vice president of IRE business development
Fiscal 2008 Guidance
The Company affirmed its outlook for fiscal 2008:
- Net sales in the range of $170- $175 million
- Approximately 45% of sales expected during the first half of the fiscal year and 55% of sales expected during the second half of the fiscal year; first quarter expected to be lowest sales quarter
- Gross profit margin in the range of 61-62%
- GAAP operating income in the range of $20-$22 million
- GAAP EPS in the range of $0.56 - $0.60
- Non-GAAP income of at least $30 million. Non-GAAP income excludes stock-based compensation, amortization of intangibles and includes the cash benefit from the use of NOLs.
Conference Call Information
AngioDynamics management will host a conference call to discuss this announcement today beginning at 4:30 p.m. Eastern time. To participate in the call, please dial (888) 679-8038 from the U.S. or (617) 213-4850 from outside the U.S. Please enter passcode 99830939.
A telephone replay of the call will be available from 6:30 p.m. Eastern time today through 11:59 p.m. Eastern time on October 8, 2007 by dialing (888) 286-8010 from the U.S. or (617) 801-6888 from outside the U.S., and entering the passcode 48003479.
In addition, individuals can listen to the call on the Internet by visiting the investor relations portion of the Company's Web site at: www.angiodynamics.com. A recording of the conference call will be archived there for 12 months.
Use of Non-GAAP Measures
Management uses non-GAAP measures to establish operational goals, and believes that non-GAAP measures may assist investors in analyzing the underlying trends in the Company's business over time. Investors should consider these non-GAAP measures in addition to, not as a substitute for or as superior to, financial reporting measures prepared in accordance with GAAP. In this news release, the Company has reported non-GAAP adjusted income and adjusted EPS. Adjusted income and adjusted EPS excludes certain expenses relating to the acquisition of RITA Medical, stock-based compensation expense, and includes the cash benefit from the use of acquired net operating losses, and assumed taxes on income where applicable. Management uses these measures in its internal analysis and review of operational performance. Management believes that these measures provide investors with useful information in comparing the Company's performance over different periods, particularly when comparing this period to periods in which the Company did not incur any expenses relating to these activities or items. By using these non-GAAP measures, management believes that investors get a better picture of the performance of the Company's underlying business. Management encourages investors to review the Company's financial results prepared in accordance with GAAP to understand the Company's performance taking into account all relevant factors, including those that may only occur from time to time but have a material impact on the Company's financial results. Please see the tables that follow for a reconciliation of GAAP to non-GAAP measures.
Safe Harbor
The statements made in this document include forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Words such as "expects," "reaffirms," "anticipates," "plans," "believes," "estimates," or variations of such words and similar expressions, are intended to identify such forward-looking statements. Investors are cautioned that actual events or results may differ from the Company's expectations. In addition to the matters described above, the ability of the Company to develop its products, future actions by the FDA or other regulatory agencies, results of pending or future clinical trials, the outcome of pending patent litigation, overall economic conditions, general market conditions, market acceptance, foreign currency exchange rate fluctuations, the effects on pricing from group purchasing organizations and competition, as well as the risk factors listed from time to time in the SEC filings of AngioDynamics, including but not limited to its Annual Report on Form 10-K for the year ended June 2, 2007, may affect the actual results achieved by the Company.
About AngioDynamics
AngioDynamics is a leading provider of innovative medical devices used by interventional radiologists, surgeons, and other physicians for the minimally invasive treatment of cancer and peripheral vascular disease. The Company's diverse product line includes market-leading radiofrequency ablation systems, vascular access products, angiographic products and accessories, dialysis products, angioplasty products, drainage products, thrombolytic products, embolization products and venous products.
More information is available at www.angiodynamics.com.
| ANGIODYNAMICS, INC. AND SUBSIDIARIES | |||||||||||||
| CONSOLIDATED INCOME STATEMENTS | |||||||||||||
| (in thousands, except per share data) | |||||||||||||
| Three months ended | |||||||||||||
| Aug 31, | Sep 2, | ||||||||||||
| 2007 | 2006 | ||||||||||||
| (unaudited) | |||||||||||||
| Net Sales | $ | 37,526 | $ | 20,265 | |||||||||
| Cost of sales (1) | 15,025 | 8,339 | |||||||||||
| Gross Profit | 22,501 | 11,926 | |||||||||||
| % of Net Sales | 60.0 | % | 58.9 | % | |||||||||
| Operating Expenses | |||||||||||||
| Research and development (1) | 2,711 | 1,627 | |||||||||||
| Sales and marketing (1) | 10,549 | 5,730 | |||||||||||
| General and administrative (1) | 4,132 | 2,715 | |||||||||||
| Amortization of purchased intangibles | 1,588 | 31 | |||||||||||
| Total operating expenses | 18,980 | 10,103 | |||||||||||
| Operating Income | 3,521 | 1,823 | |||||||||||
| Other income, net | 288 | 1,169 | |||||||||||
| Income before income taxes | 3,809 | 2,992 | |||||||||||
| Provision for income taxes | 1,429 | 1,094 | |||||||||||
| Net Income | $ | 2,380 | $ | 1,898 | |||||||||
| Earnings per common share | |||||||||||||
| Basic | $ | 0.10 | $ | 0.12 | |||||||||
| Diluted | $ | 0.10 | $ | 0.12 | |||||||||
| Weighted average common shares | |||||||||||||
| Basic | 23,969 | 15,500 | |||||||||||
| Diluted | 24,244 | 15,852 | |||||||||||
| ANGIODYNAMICS, INC. AND SUBSIDIARIES | |||||||||||||
| CONSOLIDATED INCOME STATEMENTS | |||||||||||||
| (in thousands, except per share data) | |||||||||||||
| Three months ended | |||||||||||||
| Aug 31, | Sep 2, | ||||||||||||
| 2007 | 2006 | ||||||||||||
| (unaudited) | |||||||||||||
| (1) Includes stock-based compensation charges of: | |||||||||||||
| Cost of sales | $ | 153 | $ | 89 | |||||||||
| Research and development | 190 | 124 | |||||||||||
| Sales and marketing | 325 | 154 | |||||||||||
| General and administrative | 543 | 276 | |||||||||||
| Total stock-based compensation | 1,211 | 643 | |||||||||||
| Less: tax benefit | (454 | ) | (221 | ) | |||||||||
| Net stock-based compensation | $ | 757 | $ | 422 | |||||||||
| Reconciliation of Net Income to non-GAAP adjusted income: | |||||||||||||
| Net Income | $ | 2,380 | $ | 1,898 | |||||||||
| Stock-based compensation | 1,211 | 643 | |||||||||||
| Amortization of purchased intangibles | 1,588 | 31 | |||||||||||
| Cash benefit from use of NOL's | 1,330 | - | |||||||||||
| Adjusted income before taxes | 6,509 | 2,572 | |||||||||||
| Effect of income taxes | (454 | ) | (221 | ) | |||||||||
| Adjusted income | $ | 6,055 | $ | 2,351 | |||||||||
| Adjusted income per common share | |||||||||||||
| Basic | $ | 0.25 | $ | 0.15 | |||||||||
| Diluted | $ | 0.25 | $ | 0.15 | |||||||||
| Weighted average common shares | |||||||||||||
| Basic | 23,969 | 15,500 | |||||||||||
| Diluted | 24,244 | 15,852 | |||||||||||
| ANGIODYNAMICS, INC. AND SUBSIDIARIES | ||||||||||||
| NET SALES BY PRODUCT CATEGORY AND BY GEOGRAPHY | ||||||||||||
| (in thousands) | ||||||||||||
| Three months ended | ||||||||||||
| Aug 31, | Sep 2, | |||||||||||
| 2007 | 2006 | |||||||||||
| (unaudited) | ||||||||||||
| Net Sales by Product Category | ||||||||||||
| Interventional Products | $ | 28,903 | $ | 20,265 | ||||||||
| Oncology Products | 8,623 | - | ||||||||||
| Total | $ | 37,526 | $ | 20,265 | ||||||||
| Net Sales by Geography | ||||||||||||
| United States | $ | 34,007 | $ | 19,559 | ||||||||
| International | 3,519 | 706 | ||||||||||
| Total | $ | 37,526 | $ | 20,265 | ||||||||
| ANGIODYNAMICS, INC. AND SUBSIDIARIES | ||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||
| (in thousands) | ||||||||||||
| Aug 31, | Jun 2, | |||||||||||
| 2007 | 2007 | |||||||||||
| (unaudited) | (2) | |||||||||||
| Assets | ||||||||||||
| Current Assets | ||||||||||||
| Cash and cash equivalents | $ | 23,426 | $ | 28,313 | ||||||||
| Restricted cash | 1,284 | 1,786 | ||||||||||
| Marketable securities | 46,167 | 43,191 | ||||||||||
| Total cash and investments | 70,877 | 73,290 | ||||||||||
| Receivables, net | 19,686 | 20,798 | ||||||||||
| Inventories, net | 30,754 | 28,569 | ||||||||||
| Deferred income taxes | 2,276 | 2,247 | ||||||||||
| Other current assets | 3,066 | 2,957 | ||||||||||
| Total current assets | 126,659 | 127,861 | ||||||||||
| Property, plant & equipment, net | 18,882 | 16,832 | ||||||||||
| Intangible assets, net | 48,655 | 49,148 | ||||||||||
| Goodwill | 154,341 | 153,787 | ||||||||||
| Deferred income taxes | 28,280 | 29,289 | ||||||||||
| Other non-current assets | 8,223 | 6,364 | ||||||||||
| Total Assets | $ | 385,040 | $ | 383,281 | ||||||||
| Liabilities and Stockholders' Equity | ||||||||||||
| Current portion of long-term debt | $ | 9,950 | $ | 315 | ||||||||
| Litigation provision | 9,910 | 9,790 | ||||||||||
| Other current liabilities | 17,402 | 20,103 | ||||||||||
| Long-term debt, net of current portion | 7,410 | 17,115 | ||||||||||
| Total Liabilities | 44,672 | 47,323 | ||||||||||
| Stockholders' equity | 340,368 | 335,958 | ||||||||||
| Total Liabilities and Stockholders' Equity | $ | 385,040 | $ | 383,281 | ||||||||
| Shares outstanding | 24,015 | 23,962 | ||||||||||
(2) Derived from audited financial statements | ||||||||||||
| ANGIODYNAMICS, INC. AND SUBSIDIARIES | |||||||||||||||
| CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||||||||||
| (dollars in thousands) | |||||||||||||||
| Three months ended | |||||||||||||||
| Aug 31, | Sep 2, | ||||||||||||||
| 2007 | 2006 | ||||||||||||||
| (unaudited) | (unaudited) | ||||||||||||||
| Cash flows from operating activities: | |||||||||||||||
| Net income | 2,380 | 1,898 | |||||||||||||
| Depreciation and amortization | 2,092 | 312 | |||||||||||||
| Tax benefit from exercise of stock options | 76 | 24 | |||||||||||||
| Deferred income taxes | 981 | (132 | ) | ||||||||||||
| Stock-based compensation | 1,211 | 643 | |||||||||||||
| Other | (188 | ) | (122 | ) | |||||||||||
| Changes in operating assets and liabilities | |||||||||||||||
| Accounts receivable | 965 | 1,313 | |||||||||||||
| Inventories | (2,316 | ) | (2,453 | ) | |||||||||||
| Accounts payable and accrued liabilities | (2,829 | ) | (2,019 | ) | |||||||||||
| Other | (1,868 | ) | 1,114 | ||||||||||||
| Net cash provided by operating activities | 504 | 578 | |||||||||||||
| Cash flows from investing activities: | |||||||||||||||
| Additions to property, plant and equipment | (2,604 | ) | (90 | ) | |||||||||||
| Acquisition of intangible assets | (1,193 | ) | (1,500 | ) | |||||||||||
| Decrease in restricted cash | 502 | - | |||||||||||||
| Purchases of marketable securities, net | (2,768 | ) | 7,516 | ||||||||||||
| Net cash (used in) provided by investing activities | (6,063 | ) | 5,926 | ||||||||||||
| Cash flows from financing activities: | |||||||||||||||
| Repayment of long-term debt | (70 | ) | (45 | ) | |||||||||||
| Payments related to issuance of common stock | - | (329 | ) | ||||||||||||
| Proceeds from exercise of stock options and ESPP | 738 | 385 | |||||||||||||
| Tax benefit from exercise of stock options | 4 | 229 | |||||||||||||
| Net cash provided by financing activities | 672 | 240 | |||||||||||||
| Increase (decrease) in cash and equivalents | (4,887 | ) | 6,744 | ||||||||||||
| Cash and cash equivalents | |||||||||||||||
| Beginning of period | 28,313 | 64,042 | |||||||||||||
| End of period | 23,426 | 70,786 | |||||||||||||
Contacts:
Joseph Gersuk, 800-772-6446 x1608 (CFO)
jgersuk@AngioDynamics.com
or
EVC
Group, Inc.
Jennifer Beugelmans, 415-896-6820 (Investor Relations)
jbeugelmans@evcgroup.com
Doug
Sherk, 415-896-6820 (Investor Relations)
dsherk@evcgroup.com
Steve
DiMattia, 646-201-5445 (Media)
sdimattia@evcgroup.com
