) reported first-quarter fiscal 2013 (ended August 31) adjusted
earnings of 10 cents per share, beating the Zacks Consensus
Estimate by a penny. The year-ago earnings were 8 cents per share.
Adjusted earnings exclude one-time expenses such as the Quality
Call to Action program (QCAP) expenses, acquisition and
restructuring charges as well as inventory step-up charges.
Results include the Navilyst Medical acquisition, which was
completed on May 22, 2012. In the first-quarter fiscal 2013, the
company reported a loss of $7.21 million (or a loss of 2 cents a
share) compared with a net income of $1.4 million (or 5 cents a
share) in the year-ago quarter. The loss was mainly driven by
higher operating costs associated with the Navilyst acquisition and
the company's restructuring program as well as the QCAP
Revenues reported for the fiscal first quarter increased 53% on
a year-over-year basis to $83.4 million, slightly trailing the
Zacks Consensus Estimate of $84 million. However, on a pro forma
basis (including Navilyst and excluding LC Beads sales), revenues
decreased 1%, as higher Oncology sales were offset by declining
Vascular sales. The Navilyst integration process is generating
significant cost savings.
On a geographic basis, pro forma revenues in the U.S. dropped 4%
year over year to $67.9 million. However, international pro forma
sales climbed 16% (or 18% on a constant currency basis) to $15.6
million. Double digit growth was driven by strong sales in Canada,
a recent group purchasing organizations (GPO) contract win, healthy
BioFlo PICC sales and higher microwave product sales under
On a pro forma basis, revenues from the core Vascular segment
(84% of total revenue) declined 2% to $69.8 million. Within
Vascular, pro forma sales from the Peripheral Vascular sub-segment
remained nearly flat year over year at $43.2 million and pro forma
sales from the Vascular Access sub-segment decreased 6% to $26.6
Revenues from the Oncology/Surgery division (14% of total
revenue) jumped 15% year over year to $11.3 on a pro forma basis
(excluding LC Beads). NanoKnife product sales soared 31% to 3
million and thermal ablation grew 14% on the back of solid
international sales of Microwave ablation offerings.
Supply Agreement (2% of total revenue) was 2.3 million in the
In the first quarter of fiscal 2013, on a reported basis, gross
margin fell to 47.3% from 59.1% in the year-ago period, on account
of amortization costs related to the step-up of Navilyst's
inventory and expenses for its quality efforts. Sales and marketing
along with general and administrative expenses (as a percentage of
sales) decreased to 30.5% from 37.9% in the year-ago period.
Research and development expenses (as a percentage of sales)
edged down to 8.5% from 10.3%. Adjusted operating income in the
quarter was $7.4 million, more than two folds higher than the
AngioDynamics ended the quarter with cash and cash equivalents
of $18.9 million, down 62.6% year over year. Total long-term debt
was $150 million, 23 times higher than the year-ago quarter due to
the Navilyst acquisition.
AngioDynamics revised its full year fiscal 2013 guidance due to
a change in the phasing of the annual sales guidance as well as to
accommodate the pending Vortex Medical acquisition. The company
revised its revenues guidance (both on reported and adjusted basis)
in the band of $361 million and $364 million (earlier $360 million
and $363 million) for fiscal 2013. Pro forma sales growth is
expected to be 5% both on reported and adjusted basis.
Earnings per share (on a reported basis) for fiscal 2013 are
expected in the range of 12cents to 14 cents (earlier 21 cents - 23
cents). Adjusted earnings per share are projected in the range of
40cents - 42 cents (earlier 49cents - 51 cents).
Gross margin is forecast to be in the range of 50% to 51%
(earlier 52% to 53%) for fiscal 2013. Adjusted operating income is
expected to be $29 million to $31 million (earlier $34 million to
$36 million). Earnings before interest, taxes, depreciation and
amortization (EBITDA), on an adjusted basis, has been forecast in
the range of $60 million to $61 million.
AngioDynamics announced a definitive agreement to purchase
privately-held medical devices company Vortex Medical for $15
million in cash, plus future earn out payments based on AngioVAc
system sales over a 10 year period and payable in cash. The
acquisition will boost AngioDynamics' peripheral vascular product
portfolio. The company expects to close the deal by end
The acquisition will enhance revenues by roughly $1 million but
lower earnings (both reported and adjusted) by around 9 cents.
Additionally, operating income is expected to reduce by $5 million
but impact on EBITDA is expected to be minimal. In fiscal 2014, the
acquisition is expected to contribute $10 million to total sales as
well as boost reported net income and earnings.
AngioDynamics also received 510(k) approval from the U.S. Food
and Drug Administration for its BioFlo peripherally inserted
catheters (PICCs) with Endexo technology. Moreover, HealthTrust
Purchasing Group (HealthTrust), a GPO, awarded the company a
contract covering vascular access products.
However, AngioDynamics' product lines face strong challenges
from the competitive offerings of its larger rivals such as
Boston Scientific Corporation
CR Bard Inc.
). We are currently Neutral on AngioDynamics, which carries a
short-term Zacks #2 Rank (Buy rating).
ANGIODYNAMICS (ANGO): Free Stock Analysis
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BOSTON SCIENTIF (BSX): Free Stock Analysis
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