AngioDynamics (NASDAQ: ANGO), a leading provider of innovative medical devices for the minimally-invasive treatment of cancer and peripheral vascular disease, today reported financial results for the fiscal 2011 first quarter ended August 31, 2010 that were in line with the preliminary results reported on September 7, 2010.
“The first quarter results reflect the challenging environment we face in several markets”
Net sales in the first quarter were $51.5 million, a 3% increase over the $50.1 million reported in the prior year period. Oncology/Surgery sales increased 22% to $15.6 million from the prior year, and included $1.1 million in NanoKnife® System sales. Peripheral Vascular sales were $20.7 million, a decrease of 2%, and Access sales were $15.2 million, a decrease of 6%, from the first quarter a year ago.
Gross margin was 58.3% compared with 58.0% in the preceding quarter and 60.2% a year ago. The year-over-year decline is primarily due to lower average selling prices for Peripheral Vascular and Access products due to a competitive pricing environment, and sales mix. Operating income was $3.5 million in the quarter compared with $3.6 million a year ago. Other expense increased to $528,000 in the first quarter of 2011 from $165,000 in the first quarter a year ago primarily due to the cost of an interest rate swap and foreign exchange losses. The impact of this increase was a reduction in earnings of $0.01 per share. Net income in the first quarter was $1.9 million, or $0.08 per share, compared with $2.1 million, or $0.09 per share, a year ago.
AngioDynamics generated cash flow from operations of $1.7 million during the first quarter. At August 31, 2010, cash and investments totaled $102.0 million, and long-term debt was $6.5 million.
"The first quarter results reflect the challenging environment we face in several markets," said Jan Keltjens, President and Chief Executive Officer. "As we noted last month, a procedure volume slowdown in some of our U.S. markets, compounded by the impact of our first quarter transition to a unified U.S. vascular sales force reduced our revenue growth in the quarter. The softness in the Vascular division offset ongoing strong growth from our Oncology business in the U.S. and Asia Pacific. We completed the recruitment of our senior leadership team and implemented organizational changes in our research and development organization that we believe will increase productivity. Our goal is to grow significantly faster than the broader market. We remain confident that our focus on Oncology, Venous Intervention and Access markets, investments in innovative products and financial strength position us to drive our long-term growth and profitability."
Highlights of the quarter, and more recent activities, include the following:
- Strong clinician response to AngioDynamics' NanoKnife System commercial sales efforts continued with physicians treating an additional 92 new patients since July 15, 2010. A total of 322 patients have now been treated to date with the NanoKnife system. Four hospitals entered into a commercial agreement for the NanoKnife System during the first quarter.
- An article, "Irreversible Electroporation of Renal Cell Carcinoma: A First in Man Phase 1 Clinical Study," authored by Maciej Pech, Andreas Janitzky, Johann Jacob Wendler, Christof Strang, Simon Blaschke, Oliver Dudeck, Jens Ricke and Uwe-Bernd Liehr, was published in Cardiovascular Interventional Radiology, August 2010, DOI 10.1007/s00270-010-9964-1.
- The Company expanded its Smart Port® CT family of power-injectable ports, featuring its patented Vortex port technology, to include low-profile and mini models for repeated treatments, such as chemotherapy and for use with computer tomography (CT). The new models offer additional placement options for specialized anatomies, such as smaller patients. The Company also began to sell a 16 gauge non-coring high flow needle for use with implantable ports.
- The new 0.18-inch procedure kit featuring NeverTouch® gold-tip fiber technology was launched for the VenaCure EVLT™ endovenous laser system, reducing the number of components involved in gaining access for the procedure, allowing fewer procedure steps and faster procedure time for physicians.
- The Company strengthened its executive team with the appointment of Scott Solano as Senior Vice President and Chief Technology Officer, and Scott Etlinger to the position of Senior Vice President, Global Operations. Mr. Solano will lead worldwide research, product development and intellectual property activities. Mr. Etlinger will have responsibility for manufacturing, sourcing and global supply chain management.
Fiscal 2011 Guidance
The Company updated its outlook for fiscal 2011 as follows:
- Net sales in the range of $220.0 million to $225.0 million, an increase of 2% to 4% over fiscal 2010 net sales
- Gross margin in the range of 58% to 59% of net sales
- GAAP operating income in the range of $20.5 million to $22.0 million
- EBITDA in the range of $33.0 million to $34.5 million
- GAAP EPS in the range of $0.47 to $0.50, inclusive of a $0.21 to $0.23 per share negative impact from the ongoing investment in the NanoKnife program
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