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STOCKS CLIMB ON MASSIVE U.S. JOBS REPORT BEAT

Jobs growth for September exceeds expectations, with unemployment rate a tick lower

AngioDynamics Inc (ANGO) Q1 2025 Earnings Call Transcript Highlights: A Promising Start with ...

GuruFocus News
·4 min read

  • Total Revenue: $67.5 million, representing a growth of just over 1% year-over-year.

  • Med Tech Segment Revenue: $28 million, an 8.7% year-over-year increase.

  • Med Device Segment Revenue: $39.5 million, a 3.6% decrease compared to the first quarter of FY24.

  • Auryon Revenue: $13.7 million, growing 24.9% compared to last year.

  • AlphaVac Revenue: $2.2 million, an increase of 21.1% year-over-year.

  • AngioVac Revenue: $5.8 million, stable compared to the fourth quarter of fiscal 2024.

  • NanoKnife Revenue: $5.1 million, down 6.9% over the first quarter of fiscal 2024.

  • Gross Margin: 54.4%, a decrease of 40 basis points compared to the year-ago period.

  • Adjusted EBITDA Loss: $200,000, compared to a loss of $1.1 million in fiscal 2024.

  • Adjusted EPS: Loss of $0.11 per share, improving from a loss of $0.16 per share in fiscal 2024.

  • Cash and Cash Equivalents: $55 million as of August 31, 2024.

  • R&D Expense: $6.3 million, 9.3% of sales.

  • SG&A Expense: $36.6 million, 54.2% of sales.

Release Date: October 03, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • AngioDynamics Inc (NASDAQ:ANGO) reported a solid start to fiscal 2025 with total worldwide revenue of $67.5 million, representing a growth of just over 1% year-over-year.

  • The med tech segment showed strong performance, growing approximately 9%, driven by products like Auryon and AlphaVac, which both grew over 20% in the quarter.

  • Significant progress was made towards profitability, with an adjusted EBITDA loss of just $200,000, an improvement from the previous year.

  • The company received CE mark approval for Auryon, opening access to the European PAD market, which is expected to contribute to revenue growth.

  • AngioDynamics Inc (NASDAQ:ANGO) is on track with its shift to outsourced manufacturing, expected to generate approximately $15 million in annualized savings by fiscal 2027.

Negative Points

  • The med device segment experienced a revenue decline of approximately 4%, impacted by the timing of international orders and softness in microwave products.

  • NanoKnife revenue declined by 6.9% due to a large European distributor's upfront inventory purchase in the prior year that did not recur.

  • Gross margin decreased by 40 basis points year-over-year, affected by increased hardware depreciation and inflationary pressures.

  • The company reported an adjusted net loss of $4.4 million for the first quarter of FY 2025, although this was an improvement from the previous year.

  • Cash and cash equivalents decreased significantly from $76.1 million at the end of May 2024 to $55 million at the end of August 2024, with a high cash utilization in the first quarter.

Q & A Highlights

Q: Can you provide further details on the AlphaVac PE launch, such as the number of physicians trained and accounts using it? A: James Clemmer, President and CEO, explained that the feedback from the field has been positive, aligning with expectations from the APEX study. The design elements, such as intuitive design and wireless operation, have been well-received. The company is closely monitoring new customer interactions and is pleased with the results.

Q: What initiatives are you targeting to penetrate the Auryon hospital market? A: James Clemmer noted that the focus has shifted to hospital customers as they return to normal operations post-COVID. The company is leveraging existing demand from hospitals familiar with Auryon, aiming to increase penetration and profitability.

Q: Can you provide more color on the manufacturing transition and potential savings for this fiscal year? A: Stephen Trowbridge, CFO, stated that the manufacturing transfer program is on track, with significant gross margin benefits expected at the end of the program. The transition is projected to save approximately $15 million annually by fiscal 2027.

Q: Regarding NanoKnife and the CPT pathway, will you launch without the code initially, and how will pricing be affected if a Level 1 CPT code is obtained? A: Stephen Trowbridge explained that the company is parallel-pathing FDA clearance and reimbursement processes. The launch will continue as planned, and while pricing specifics were not disclosed, the focus is on driving adoption through FDA approval and reimbursement.

Q: Can you explain the cash burn this quarter and the pathway to cash flow positivity? A: Stephen Trowbridge clarified that the first quarter typically sees the highest cash utilization due to annual expenses like incentive compensation and insurance premiums. The company expects cash flow to improve in subsequent quarters, aiming for cash flow positivity by fiscal 2026.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.