On January 7, 2021 AngioDynamics, Inc. (NASDAQ: ANGO), a leading provider of innovative, minimally invasive medical devices for vascular access, peripheral vascular disease, and oncology, reported financial results for the second quarter of fiscal year 2021, which ended November 30, 2020 (Press release, AngioDynamics, JAN 7, 2021, View Source [SID1234573652]).
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"I am very pleased with our performance in the second quarter, as sales execution and continued expense management drove strong revenue and positive earnings," commented Jim Clemmer, President and Chief Executive Officer of AngioDynamics, Inc. "AngioVac and Auryon performed well during the quarter, as we continue to focus on growing our key technology platforms while managing expenses throughout the business. In the second half of the year, we expect ongoing COVID-related headwinds as well as typical third-quarter seasonality, which is contemplated in our full-year guidance. We are excited about the planned launch of our multi-purpose mechanical aspiration thrombectomy device in calendar 2021, as this new member of the AngioVac platform family will position us to serve the much larger addressable market of moderately complex thrombectomy cases, while AngioVac and Uni-Fuse continue to address the complex and simple ends of the spectrum, respectively."
Second Quarter 2021 Financial Results
Net sales for the second quarter of fiscal 2021 were $72.8 million, an increase of 4.0% compared to the prior-year quarter. Net sales in the second quarter continued to be impacted by the disruption to procedure volumes resulting from the COVID-19 global pandemic. Foreign currency translation did not have a significant impact on the Company’s sales in the quarter.
Vascular Interventions and Therapies ("VIT") net sales were $33.9 million, an increase of 8.8%, compared to $31.2 million a year ago. Growth was driven by increased AngioVac sales over the previous year, partially offset by a decline in sales of Venous products resulting from lower elective procedure volumes. Auryon sales during the quarter were $2.1 million.
Oncology net sales were $14.9 million, a decrease of 7.0% from $16.0 million a year ago. The year-over-year decline was primarily attributable to lower capital sales, which were somewhat offset by strong growth in sales of NanoKnife disposables, particularly in the United States.
Vascular Access net sales were $23.9 million, an increase of 5.0% from $22.8 million a year ago.
U.S. net sales in the second quarter of fiscal 2021 were $60.7 million, an increase of 9.2% from $55.6 million a year ago. International net sales were $12.1 million in the second quarter of fiscal 2021, a decrease of 16.3% from $14.4 million a year ago.
Gross margin for the second quarter of fiscal 2021 was 55.2%, a decline of 410 basis points compared to the second quarter of fiscal 2020. The gross margin decline was primarily attributable to the Company’s previously discussed COVID-related operating plan. This plan included under-absorption of the Company’s manufacturing facilities related to additional COVID-related operating protocols designed to ensure supply-chain security and employee safety. Additionally, during the second quarter, inventory was reduced by $3.2 million when compared to inventory levels on August 31, 2020. Since year end, inventory levels have been reduced by $10.3 million.
The Company recorded a net loss of $4.3 million, or loss per share of $0.11, in the second quarter of fiscal 2021. This compares to net loss of approximately $2.7 million, or loss per share of $0.07, a year ago.
Excluding the items shown in the non-GAAP reconciliation table below, adjusted net income for the second quarter of fiscal 2021 was $0.6 million or adjusted earnings of $0.01 per share, compared to adjusted net income of $2.2 million, or adjusted earnings per share of $0.06, in the second quarter of fiscal 2020.
Adjusted EBITDA in the second quarter of fiscal 2021, excluding the items shown in the reconciliation table below, was $5.2 million, compared to $6.4 million in the second quarter of fiscal 2020.
In the second quarter of fiscal 2021, the Company generated $11.5 million in operating cash and had capital expenditures of $1.4 million. As of November 30, 2020, the Company had $58.0 million in cash and cash equivalents compared to $47.9 million in cash and cash equivalents on August 31, 2020. As of November 30, 2020, the Company had $40.0 million in debt outstanding, consistent with its debt balance on August 31, 2020. Subsequent to quarter end, the Company repaid $10 million of its outstanding debt. Management remains focused on cash preservation amid the current environment.
Six Months Financial Results
For the six months ended November 30, 2020:
Net sales were $143.0 million, an increase of 5.1%, compared to $136.0 million for the same period a year ago.
The Company’s net loss was $9.0 million, or a loss of $0.22 per share, compared to a net loss of $4.0 million, or a loss of $0.11 per share, a year ago.
Gross margin decreased 550 basis points to 53.1% from 58.6% a year ago due to the Company’s previously discussed COVID-related operating plan.
Excluding the items shown in the non-GAAP reconciliation table below, adjusted net income was $1.2 million, or $0.03 per share, compared to adjusted net income of $5.3 million, or $0.14 per share, a year ago.
Adjusted EBITDA, excluding the items shown in the reconciliation table below, was $9.6 million, compared to $13.7 million for the same period a year ago.
Fiscal Year 2021 Financial Guidance
The Company continues to expect fiscal year 2021 net sales in the range of $278 to $284 million and fiscal year 2021 adjusted earnings per share in the range of $0.00 to $0.05.
Conference Call
The Company’s management will host a conference call today at 8:00 a.m. ET to discuss its fiscal 2021 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 13714154.
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 7, 2021, until 11:59 p.m. ET on Thursday, January 14, 2021. To hear this recording, dial 1-844-512-2921 (domestic) or +1-412-317-6671 (international) and enter the passcode 13714154.
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, adjusted earnings per share, and free cash flow. 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.