AngioDynamics Posts Third-Quarter Gains for FY14

AngioDynamics had a solid third quarter.

The Albany, N.Y.-based maker of medical devices for vascular access, surgery, peripheral vascular disease and oncology, saw sales and profits rise for the third quarter of its 2104 financial year (ended Feb. 28).

“Our strong top line performance marks the fourth consecutive quarter of improved sales results, reflecting continued market acceptance of our innovative products and solid execution by our global sales team,” said Joe DeVivo, president and CEO.

He said the firm’s 8 percent revenue increase was driven by double-digit sales growth in its Peripheral Vascular and Oncology/Surgery businesses of 11 and 15 percent, respectively, and a “significant turnaround” in Vascular Access, which grew 3 percent over last year’s comparable quarter and 7 percent from the prior quarter.

“The improvement in our Vascular Access business demonstrates the effectiveness of the BioFlo technology which now accounts for 40 percent of our global PICC (peripherally inserted central catheter) revenue,” DeVivo continued. “With the recent FDA (U.S. Food and Drug Administration) clearance of the DuraMax Dialysis Catheter with BioFlo—he third U.S. clearance of a BioFlo product line—we expect further adoption of this technology as its clinical value becomes widely accepted. As our other key growth drivers, including the AngioVac Cannula and Circuit in our Peripheral Vascular business, and the Acculis microwave system in our Oncology/Surgery business, make a more significant contribution to overall revenue, we anticipate improved margin profile over time leading to improved profitability.”

Net sales of $88.2 million were up 8 percent compared with last year’s third quarter net sales of $81.6 million. Excluding the planned wind-down of the supply agreement with Boston Scientific Corp. (BSC), third-quarter sales were up 9 percent to $86.6 million compared to $79.5 million in last year’s third quarter. The following sales comparisons exclude the BSC supply agreement.

Peripheral Vascular net sales in the third quarter increased 11 percent to $47.4 million compared to $42.6 million in the prior year period. Vascular Access business net sales increased 3 percent to $27.3 million compared to $26.4 million in the year-ago quarter. Oncology/Surgery net sales of $12 million increased 15 percent compared to the same quarter last year. U.S. net sales increased 10 percent to $69.9 million from $63.8 million in 2013, and international net sales were up 7 percent at $16.8 million compared to a year ago.

The company’s net income in the third quarter was $5.1 million, or 14 cents per share, compared to a net loss of $1 million, or .03 cents per share. Third-quarter EBITDA (earnings before interest, taxes, depreciation and amortization) was $14 million, or 39 cents per share, compared to EBITDA of $6.5 million, or 18 cents per share, a year ago.

For the nine months ended Feb. 28, net sales were $260.4 million, a 3 percent increase compared to net sales of $252 million reported a year ago. The company’s net income was $4.6 million, or 13 cents per share, compared to net income of $300,000, or .01 cents per share, reported a year ago. EBITDA was $29.1 million, or 83 cents per share, compared to EBITDA of $24.4 million, or 69 cents per share, a year ago.

Based on the year so far, AngioDynamics execs are expecting a more robust year.

“Our net sales increase in the third quarter included one additional selling day, which benefited our top-line by approximately 2 percent. Given our strong sales performance in the first nine months of fiscal 2014, we are raising our fiscal year 2014 sales guidance to a range of $351 million to $355 million,” said Mark Frost, executive vice president and chief financial officer. “We are also revising our fiscal year 2014 expectation for adjusted EPS (earnings per share) without amortization to a range of 60 to 63 cents due to our current product and geographic mix, as well as unanticipated costs related to the recent Medcomp agreement.”

In March,  the FDA rejected a 510(k) application for the Celerity tip location system from AngioDynamics’ distribution partner, Medcomp Inc. At the time, AngioDynamics officials noted that  the agency’s decision resulted from the execution of a human factors study rather than the device itself. Following discussions with the FDA, AngioDynamics officials said they can address the issues in a subsequent filing, which it expects to be submitted in April.

As a result, AngioDynamics executed an agreement with Medcomp and Medcomp’s development partner to acquire regulatory control over the Celerity platform and exclusive rights to a next-generation system that includes navigation capabilities.

“Based on our review and discussions with the Agency, we have established a clear regulatory path to bring Celerity to the U.S. market by mid-summer,” DeVivo said. “With this new agreement, we have established a clear plan to build a strong tip-location portfolio that includes next-generation product introductions.

As a result of the updated fiscal year 2014 guidance, officials anticipate revenue to range from $91 million to $95 million in the fiscal fourth quarter.