On January 5, 2023 AngioDynamics, Inc. (NASDAQ: ANGO), a leading and transformative medical technology company focused on restoring healthy blood flow in the body’s vascular system, expanding cancer treatment options and improving quality of life for patients, reported financial results for the second quarter of fiscal year 2023, which ended November 30, 2022 (Press release, AngioDynamics, JAN 5, 2023, View Source [SID1234625944]).

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"We drove strong performance during the second quarter, and we believe our results through the first half of the year position us well to achieve our full-year targets," commented Jim Clemmer, President and Chief Executive Officer of AngioDynamics, Inc. "I am pleased with the way the team has managed through the current macro environment as we continue to execute on our strategy of pursuing attractive markets where our med tech platforms possess a differentiated technology advantage. In addition, I am thrilled that we have surpassed the mid-point of our enrollment target on our Preserve study during the quarter, as we continue to progress toward our goal of offering treatment options aimed at improving quality of life for prostate cancer patients."

Second Quarter 2023 Financial Results

Net sales for the second quarter of fiscal 2023 were $85.4 million, an increase of 9.1% compared to the prior-year quarter. Foreign currency translation did not have a significant impact on the Company’s net sales in the quarter.

Med Tech net sales were $24.5 million, a 29.7% increase from the prior-year period. Med Tech includes the Auryon peripheral atherectomy platform, the thrombus management platform and the NanoKnife irreversible electroporation platform. Growth was driven by Auryon sales during the quarter of $10.1 million, which increased 60.6%, and NanoKnife sales of $5.5 million, which increased 49.5% compared to the second quarter of fiscal 2022. NanoKnife disposable sales were $4.2 million, which increased 45.4% compared to the second quarter of fiscal 2022.

Med Device net sales were $60.9 million, an increase of 2.6% compared to the prior-year period.

U.S. net sales in the second quarter of fiscal 2023 were $71.6 million, an increase of 9.6% from $65.4 million a year ago. International net sales were $13.8 million, an increase of 6.7% compared to a year ago.

Gross margin for the second quarter of fiscal 2023 was 52.8%, an increase of 100 basis points compared to the second quarter of fiscal 2022. Gross margin for the Med Tech business was 63.7%, a decline of 290 basis points from the second quarter of fiscal 2022. Gross margin for the Med Device business was 48.4%, an increase of 130 basis points compared to the second quarter of fiscal 2022. Gross margin was negatively impacted by macro forces including labor shortages and increased costs for labor, raw materials and freight.

The Company recorded a net loss of $8.5 million, or a loss per share of $0.21, in the second quarter of fiscal 2023. This compares to a net loss of $8.4 million, or a loss per share of $0.21, a year ago.

Excluding the items shown in the non-GAAP reconciliation table below, adjusted net income for the second quarter of fiscal 2023 was $0.4 million, and adjusted earnings per share was $0.01, compared to adjusted net loss of $0.9 million and adjusted loss per share of $0.02 in the prior-year period.

Adjusted EBITDA in the second quarter of fiscal 2023, excluding the items shown in the reconciliation table below, was $7.5 million, compared to adjusted EBITDA of $4.4 million in the second quarter of fiscal 2022.

In the second quarter of fiscal 2023, the Company generated $7.5 million in operating cash, had capital expenditures of $1.3 million and had additions to Auryon placement and evaluation units of $1.2 million.

On November 30, 2022, the Company had $29.9 million in cash and cash equivalents, compared to $28.8 million in cash and cash equivalents on May 31, 2022. The Company had $25.0 million outstanding on the delayed-draw term loan and $25.0 million outstanding under its revolving credit facility at November 30, 2022.

Six Months Financial Results

For the six months ended November 30, 2022:

Net sales were $167.0 million, an increase of 7.5%, compared to $155.3 million for the same period a year ago.

Med Tech net sales were $47.3 million, a 29.7% increase from the prior year period. Med Device net sales were $119.6 million, an increase of 0.7% from the prior year period.

Gross margin increased 30 basis points to 52.3% from 52.0% a year ago.

The Company’s net loss was $21.5 million, or a loss of $0.55 per share, compared to a net loss of $15.3 million, or a loss of $0.39 per share, a year ago.

Excluding the items shown in the non-GAAP reconciliation table, below, adjusted net loss was $2.1 million, with adjusted loss per share of $0.05, compared to adjusted net loss and adjusted loss per share of $1.7 million, and $0.04, respectively, a year ago.

Adjusted EBITDA, excluding the items shown in the reconciliation table below, was $10.4 million, compared to $8.0 million for the same period a year ago.

Fiscal Year 2023 Financial Guidance

Management is reaffirming its previously issued fiscal year 2023 guidance. Management expects net sales to be in the range of $342 to $348 million, gross margin to be approximately 52.5% to 54.5% and adjusted earnings per share in the range of $0.01 to $0.06 as it continues to invest in new product launches to drive future growth.

Conference Call

The Company’s management will host a conference call today at 8:00 a.m. ET to discuss its second quarter results.

To participate in the conference call, dial 1-877-407-0784 (domestic) or +1-201-689-8560 (international) and refer to the passcode 13734978.

This conference call will also be webcast and can be accessed from the "Investors" section of the AngioDynamics website at www.angiodynamics.com. The webcast replay of the call will be available at the same site approximately one hour after the end of the call.

A recording of the call will also be available from 11:00 a.m. ET on Thursday, January 5, 2023, until 11:59 p.m. ET on Thursday, January 12, 2023. To listen to this recording, dial 1-844-512-2921 (domestic) or +1-412-317-6671 (international) and enter the passcode 13734978.

Use of Non-GAAP Measures

Management uses non-GAAP measures to establish operational goals and believes that non-GAAP measures may assist investors in analyzing the underlying trends in AngioDynamics’ business over time. Investors should consider these non-GAAP measures in addition to, not as a substitute for or as superior to, financial reporting measures prepared in accordance with GAAP. In this news release, AngioDynamics has reported adjusted EBITDA, adjusted net income and adjusted earnings per share. Management uses these measures in its internal analysis and review of operational performance. Management believes that these measures provide investors with useful information in comparing AngioDynamics’ performance over different periods. By using these non-GAAP measures, management believes that investors get a better picture of the performance of AngioDynamics’ underlying business. Management encourages investors to review AngioDynamics’ financial results prepared in accordance with GAAP to understand AngioDynamics’ performance taking into account all relevant factors, including those that may only occur from time to time but have a material impact on AngioDynamics’ financial results. Please see the tables that follow for a reconciliation of non-GAAP measures to measures prepared in accordance with GAAP.