) posted adjusted earnings of 6 cents per share for the second
quarter of fiscal 2014 that not only ebbed sharply by 40% from 10
cents in the year-ago quarter but also missed the Zacks Consensus
Estimate by a penny. Net adjusted earnings fell 34.5% to $2.3
million from $3.5 million a year ago.
ANGIODYNAMICS (ANGO): Free Stock Analysis
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Revenues inched up 2% to $88.6 million, marginally exceeding the
Zacks Consensus Estimate of $88 million. Excluding the planned
termination of the supply agreement with
Boston Scientific Corp.
), sales grew 3% to $87.0 million from $84.5 million in last
business rose 7% to $48.9 million;
business dipped 4% to $25.6 million;
business went up 5% to $12.6 million; and
business plunged 35.5% to $1.6 million from the year ago quarter.
Revenues in the U.S. edged up 3% to $69.5 million while
international revenues rose marginally by 1% at $17.5 million
compared to the fiscal 2013 quarter.
Gross profit was almost flat at $44.9 million compared with $44.1
million in the year-ago quarter. Consequently, gross margin was
flat at 50.7% in the quarter.
Adjusted operating income dipped 29.8% to $5.3 million from $7.5
million a year ago. Consequently, adjusted operating margin
decreased 270 basis points (bps) to 5.9% from 8.6% a year ago.
EBITDA in the quarter was $7.8 million, down 31.6% from $11.4
million in the second quarter of fiscal 2013. Adjusted EBITDA
fell 16.9% to $11.5 million from $13.8 million a year ago.
ANGO had cash and cash equivalents of $15.2 million as of Nov 30,
2013, down 30.4% from $21.8 million as of May 31, 2013. Long-term
debt declined to $140.2 million as of Nov 30, 2013 compared with
$142.5 million as of May 31, 2013. As a result, long-term
debt-to-capitalization ratio decreased 40 bps to 20.9% from 21.3%
as of May 31, 2013.
In the first six months of fiscal 2014, AngioDynamics' cash flow
from operating activities nearly tripled to $15.8 million from
$5.5 million in the same period of fiscal 2013, mainly driven by
lower inventories and higher accounts payable and accrued
liabilities. Capital expenditure rose significantly by 50.2% to
$7.2 million compared with $4.8 million a year ago.
Due to the stronger-than-expected first half results, ANGO
upgraded the low-end of its revenue guidance to $349 to $353
million for fiscal 2014 from the prior level of $347-$353
million. However, the company retained its adjusted EPS guidance
in the range of 63 to 67 cents, excluding amortization for the
For the third quarter of fiscal 2014, AngioDynamics expects
revenues to lie between $85 and $88 million, reflecting a 4-8%
increase at the top end compared with the prior-year quarter.
Adjusted EPS (excluding amortization) for the quarter is expected
in the range of 15 to 18 cents.
ANGO launched an operational excellence program in the quarter
aimed at saving $15 to $18 million for the next three years
through greater efficiencies and improved business performance
with the help of product rationalization, lean initiatives,
supply chain optimization, ERP implementation and changes to its
New York footprint.
We are discouraged with AngioDynamics' earnings miss in the
fiscal second quarter. However, we are optimistic about its
promising guidance as the company is poised to grow on the back
of new products, an innovative pipeline, acquisitions as well as
management's efforts to leverage operational activities.
ANGO currently carries a Zacks Rank #2 (Buy). Other medical
instrument companies that worth a look include
Natus Medical Inc.
). Both of them carry a Zacks Rank #1 (Strong Buy).