AngioDynamics, Inc. (AngioDynamics) has reported net sales of $50.1 million for the first quarter of fiscal 2010, up 13%, compared with the net sales of $44.3 million in the year-ago quarter. It has also reported a net income of $2.1 million, or $0.09 per share, for the first quarter of fiscal 2010, compared with the net income of $2.2 million, or $0.09 per share, in the year-ago quarter.
Gross margin was 60.2% compared with 61.9% a year ago, with the decline primarily attributable to product mix, material cost increases, a competitive pricing environment and utilization factors. Operating income was $3.6 million in the quarter compared with $3.8 million a year ago. The decline in net income is primarily attributable to increased operating expenses associated with sales and marketing programs and the company’s continuing investment in irreversible electroporation (IRE) technology.
AngioDynamics reported cash and investments of $68.8 million and long-term debt of $6.7 million at August 31, 2009.
Peripheral Vascular sales increased by 14% from the first quarter a year ago to $21.1 million, and included sales of the Benephit® renal infusion system acquired from FlowMedica in January 2009, as well as the sales from the acquisition of Diomed assets since June 17, 2008. Access sales were $16.2 million in the quarter, an increase of 3% from the first quarter a year ago, and Oncology/Surgery sales grew 25% to $12.8 million from the first quarter a year ago.
“We made early progress in some of the areas of focus we established for the company, yet have hard work ahead of us,” said Jan Keltjens, President & CEO. “Our sales growth for the quarter was driven by our Oncology/Surgery business unit, as well as our laser vein ablation, or VenaCure EVLT™, product line. VenaCure EVLT sales benefited from the increased focus of our commercial team and the fundamental strength of our NeverTouch® technology.
“Our gross margin was impacted by sales mix, pricing pressures and cost increases on certain purchased products,” continued Mr. Keltjens. “We are addressing this through our stated focus on manufacturing excellence and inventory management. We believe this focus will result in gross margin improvement and lower inventory levels beginning in the second half of the fiscal year. In addition, our focus on innovation keeps us on schedule to launch an additional seven new products, for a total of 11, by the end of the fiscal year.”
Shawn P. McCarthy was named senior vice president and general manager of the company’s peripheral vascular business Unit. McCarthy was formerly vice president of marketing at Cordis, a division of Johnson & Johnson.
NanoKnife continues to be utilized by physicians at various institutions who have treated an additional 20 patients since mid-July. The total number of patients treated to date by the NanoKnife at eight centers now stands at 86. Procedures have been performed in five organs (prostate, liver, lung, kidney and lymph nodes). In all cases the safety profile for this non-thermal ablation technology remains impressive. NanoKnife IRE sales were $74,000 in the first quarter.
The IRE development program is making steady progress with an investigational device exemption (IDE) application for a focal prostate cancer study submitted to the FDA and for which we are in the process of responding to additional questions from the agency. In addition, an IDE application for a pancreatic cancer study is scheduled for FDA submission before the end of this calendar year. Pre-clinical work on lung and whole gland prostate are underway while pre-clinical work for pancreatic, focal prostate and liver studies are either complete or in the process of being completed this calendar year.
Launched the Benephit PROVIDE registry, an independently managed comprehensive clinical registry. It is designed to gather data on the clinical use of the Benephit renal infusion system by approximately 2,100 patients during the next several years.
Commenced commercial shipments of the StarBurst XLi-enhanced Semi-Flex probe, the first radiofrequency ablation device specifically designed to deliver a 7cm ablation of a tumor in a single placement during Computed Tomography-aided procedures.
Commenced commercial shipments of the DuraMax™ stepped chronic dialysis catheter. This new catheter is the first internally developed and manufactured dialysis catheter introduced by the company. DuraMax incorporates AngioDynamics Curved Tip Catheter Technology, a design platform employed to provide higher blood flow and lower recirculation, and to reduce the potential for clots.
A study, published in the July edition of Endovascular Today by Lowell Kabnick, director of New York University Vein Center and Associate Professor of Surgery at the division of vascular surgery at NYU Medical Center, that compared treatments of varicose veins with a bare-tip laser fiber against the new covered-tip VenaCure EVLT NeverTouch laser fiber showed easier postoperative recovery, reduced bruising and other benefits from the NeverTouch treatment.
Fiscal 2010 Guidance
The company revised its outlook for fiscal 2010 to the following:
Net sales in the range of $211 million to $215 million, an increase of 8-10% over fiscal 2009 net sales (an increase from previous guidance of $209 million to $215 million)
Gross margin in the range of 61-62% of net sales.
GAAP operating income in the range of $18 million to $20 million, an increase of 12-24%.
EBITDA in the range of $30 million to $32 million, an increase of 8-15%.
GAAP EPS in the range of $0.45 to $0.47, inclusive of a $0.24 EPS impact from IRE investments (an increase from previous guidance of $0.43 to $0.47).