We reiterate our Neutral recommendation on
). Its third-quarter fiscal 2012 adjusted earnings of 6 cents per
share missed the Zacks Consensus Estimate of 7 cents. Revenues
dropped 5.5% year over year to $51.6 million, but marginally beat
the Zacks Consensus Estimate of $51 million.
Sales were impacted by several factors including the end of the
LC Beads distribution contract and the temporary decision to curb
sales of NanoKnife products in the U.S. However, in late April
2012, the company resumed the shipment of its Nanoknife product
line, following a technical upgrade.
AngioDynamics completed, in May 2012, its previously announced
acquisition of Navilyst Medical. The acquisition is expected to
double the company's market share in the vascular access market as
the company will be in a position to offer an enhanced product
portfolio to its customers. The addition of the renowned
NAMIC fluid management brand is a major benefit for AngioDynamics.
Furthermore, the company is also expected to benefit from the
technical knowledgeand skill set provided by Navilyst Medical.
The company reported strong international sales of $7.9 million
(up 25.8%) in the third quarter, backed by healthy sales across
Europe and Asia. It is also enjoying healthy demand for its popular
NanoKnifesystem and is investing in expanding its commercial
AngioDynamics is ramping up research and development (R&D)
investments to broaden its product portfolio and support the
ongoing clinical studies of NanoKnife and vascular product
development programs. The company expanded its VenaCure EVLT laser
vein treatment with the launch of its VenaCure 1470 nanometer (nm)
laser for treating varicose veins (abnormally swollen veins) and
the NeverTouch procedure kits. Both these products are gaining
traction and contributing to the healthy growth in VenaCure EVLT
However, AngioDynamics is exposed to pricing headwinds, stemming
from lower selling prices of some of its access and peripheral
vascular products due to aggressive price competition. The
lingering impact of pricing pressure continues to weigh on its core
The company also revised its guidance for fiscal 2012 based on
higher restructuring charges, R&D expenses, quality efforts and
an anticipated loss of 15 cents a share from NanoKnife.
AngioDynamics has market leadership in several of its operating
segments including angiographic products and thrombolytic catheters
and products. Its product lines face strong challenges from the
competitive offerings of its larger rivals such as
C. R. Bard
). Our recommendation on the stock is supported by a short-term
Zacks #3 Rank (Hold).
ANGIODYNAMICS (ANGO): Free Stock Analysis
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