Attached files
| file | filename |
|---|---|
| 8-K/A - AMENDMENT NO. 1 - ANGIODYNAMICS INC | an20170804-8ka.htm |
Exhibit 99.2
ANGIODYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share data)
|
Three months ended
|
Twelve months ended
|
|||||||||||||||
|
May 31,
|
May 31,
|
May 31,
|
May 31,
|
|||||||||||||
|
2017
|
2016
|
2017
|
2016
|
|||||||||||||
|
(unaudited)
|
(unaudited)
|
|||||||||||||||
|
Net sales
|
$
|
86,914
|
$
|
93,419
|
$
|
349,643
|
$
|
353,890
|
||||||||
|
Cost of sales (exclusive of intangible amortization)
|
44,579
|
51,892
|
173,474
|
179,574
|
||||||||||||
|
Gross profit
|
42,335
|
41,527
|
176,169
|
174,316
|
||||||||||||
|
% of net sales
|
48.7
|
%
|
44.5
|
%
|
50.4
|
%
|
49.3
|
%
|
||||||||
|
Operating expenses
|
||||||||||||||||
|
Research and development
|
6,696
|
6,937
|
25,269
|
25,053
|
||||||||||||
|
Sales and marketing
|
20,476
|
21,104
|
78,819
|
83,743
|
||||||||||||
|
General and administrative
|
8,316
|
6,791
|
31,406
|
30,583
|
||||||||||||
|
Amortization of intangibles
|
4,410
|
4,608
|
17,296
|
17,964
|
||||||||||||
|
Change in fair value of contingent consideration
|
125
|
318
|
(15,261
|
)
|
948
|
|||||||||||
|
Acquisition, restructuring and other items, net
|
15,482
|
3,493
|
27,510
|
12,591
|
||||||||||||
|
Medical device excise tax
|
(1,837
|
)
|
-
|
(1,837
|
)
|
2,416
|
||||||||||
|
Total operating expenses
|
53,668
|
43,251
|
163,202
|
173,298
|
||||||||||||
|
Operating income
|
(11,333
|
)
|
(1,724
|
)
|
12,967
|
1,018
|
||||||||||
|
Other (expense), net
|
(695
|
)
|
(1,098
|
)
|
(3,120
|
)
|
(4,271
|
)
|
||||||||
|
Income (loss) before income taxes
|
(12,028
|
)
|
(2,822
|
)
|
9,847
|
(3,253
|
)
|
|||||||||
|
Income tax expense (benefit)
|
885
|
40,253
|
4,839
|
40,337
|
||||||||||||
|
Net income (loss)
|
$
|
(12,913
|
)
|
$
|
(43,075
|
)
|
$
|
5,008
|
$
|
(43,590
|
)
|
|||||
|
Earnings (loss) per share
|
||||||||||||||||
|
Basic
|
$
|
(0.35
|
)
|
$
|
(1.19
|
)
|
$
|
0.14
|
$
|
(1.21
|
)
|
|||||
|
Diluted
|
$
|
(0.35
|
)
|
$
|
(1.19
|
)
|
$
|
0.14
|
$
|
(1.21
|
)
|
|||||
|
Weighted average shares outstanding
|
||||||||||||||||
|
Basic
|
36,655
|
36,242
|
36,617
|
36,161
|
||||||||||||
|
Diluted
|
36,655
|
36,242
|
36,959
|
36,161
|
||||||||||||
ANGIODYNAMICS, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
(in thousands, except per share data)
|
Reconciliation of Gross Profit to non-GAAP Adjusted Gross Profit:
|
||||||||||||||||
|
Three months ended
|
Twelve months ended
|
|||||||||||||||
|
May 31,
|
May 31,
|
May 31,
|
May 31,
|
|||||||||||||
|
2017
|
2016
|
2017
|
2016
|
|||||||||||||
|
(unaudited)
|
(unaudited)
|
|||||||||||||||
|
Gross profit
|
$
|
42,335
|
$
|
41,527
|
$
|
176,169
|
$
|
174,316
|
||||||||
|
Recall expenses included in cost of sales
|
2,645
|
-
|
2,861
|
(92
|
)
|
|||||||||||
|
Inventory charge included in cost of sales
|
-
|
5,940
|
-
|
5,940
|
||||||||||||
|
Adjusted gross profit
|
$
|
44,980
|
$
|
47,467
|
$
|
179,030
|
$
|
180,164
|
||||||||
|
Adjusted gross profit % of sales
|
51.8
|
%
|
50.8
|
%
|
51.2
|
%
|
50.9
|
%
|
||||||||
|
Reconciliation of Net Income to non-GAAP Adjusted Net Income:
|
||||||||||||||||
|
Three months ended
|
Twelve months ended
|
|||||||||||||||
|
May 31,
|
May 31,
|
May 31,
|
May 31,
|
|||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
|
(unaudited)
|
(unaudited)
|
|||||||||||||||
|
Net income (loss)
|
$
|
(12,913
|
)
|
$
|
(43,075
|
)
|
$
|
5,008
|
$
|
(43,590
|
)
|
|||||
|
Recall expenses included in cost of sales
|
2,645
|
-
|
2,861
|
(92
|
)
|
|||||||||||
|
Inventory charge included in cost of sales
|
-
|
5,940
|
-
|
5,940
|
||||||||||||
|
Amortization of intangibles
|
4,410
|
4,608
|
17,296
|
17,964
|
||||||||||||
|
Change in fair value of contingent consideration
|
125
|
318
|
(15,261
|
)
|
948
|
|||||||||||
|
Acquisition, restructuring and other items, net (1)
|
15,482
|
3,493
|
27,510
|
12,591
|
||||||||||||
|
Tax effect of non-GAAP items (2)
|
(2,943
|
)
|
36,100
|
(10,372
|
)
|
28,062
|
||||||||||
|
Adjusted net income
|
$
|
6,806
|
$
|
7,384
|
$
|
27,042
|
$
|
21,823
|
||||||||
|
Reconciliation of Diluted Earnings Per Share to non-GAAP Adjusted Diluted Earnings Per Share:
|
||||||||||||||||
|
Three months ended
|
Twelve months ended
|
|||||||||||||||
|
May 31,
|
May 31,
|
May 31,
|
May 31,
|
|||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
|
(unaudited)
|
(unaudited)
|
|||||||||||||||
|
Diluted earnings (loss) per share
|
$
|
(0.35
|
)
|
$
|
(1.19
|
)
|
$
|
0.14
|
$
|
(1.21
|
)
|
|||||
|
Recall expenses included in cost of sales
|
0.07
|
-
|
0.08
|
(0.00
|
)
|
|||||||||||
|
Inventory charge included in cost of sales
|
-
|
0.16
|
-
|
0.16
|
||||||||||||
|
Amortization of intangibles
|
0.12
|
0.13
|
0.47
|
0.49
|
||||||||||||
|
Change in fair value of contingent consideration
|
0.00
|
0.01
|
(0.41
|
)
|
0.03
|
|||||||||||
|
Acquisition, restructuring and other items, net (1)
|
0.42
|
0.10
|
0.74
|
0.35
|
||||||||||||
|
Tax effect of non-GAAP items (2)
|
(0.07
|
)
|
0.99
|
(0.29
|
)
|
0.78
|
||||||||||
|
Adjusted diluted earnings per share
|
$
|
0.19
|
$
|
0.20
|
$
|
0.73
|
$
|
0.60
|
||||||||
|
Adjusted diluted sharecount
|
36,655
|
36,391
|
36,959
|
36,372
|
||||||||||||
|
(1) Includes costs related to mergers and acquisition activities, integrations, restructurings, asset impairments and write-offs, litigation, and other items.
|
|||||||||
|
(2) Represents the net tax effect of non-GAAP adjustments. Based on our historical non-GAAP earnings, our tax effect of non-GAAP items has been calculated assuming no valuation allowance on our deferred tax assets and an effective tax rate of 36%.
|
ANGIODYNAMICS, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION (Continued)
(in thousands, except per share data)
|
Reconciliation of Net Income to EBITDAS and Adjusted EBITDAS:
|
||||||||||||||||
|
Three months ended
|
Twelve months ended
|
|||||||||||||||
|
May 31,
|
May 31,
|
May 31,
|
May 31,
|
|||||||||||||
|
2017
|
2016
|
2017
|
2016
|
|||||||||||||
|
(unaudited)
|
(unaudited)
|
|||||||||||||||
|
Net income (loss)
|
$
|
(12,913
|
)
|
$
|
(43,075
|
)
|
$
|
5,008
|
$
|
(43,590
|
)
|
|||||
|
Income tax expense
|
885
|
40,253
|
4,839
|
40,337
|
||||||||||||
|
Interest expense
|
689
|
789
|
2,860
|
3,396
|
||||||||||||
|
Depreciation and amortization
|
6,276
|
6,706
|
24,444
|
27,636
|
||||||||||||
|
Stock-based compensation
|
1,105
|
(1,260
|
)
|
6,183
|
3,240
|
|||||||||||
|
EBITDAS
|
(3,958
|
)
|
3,413
|
43,334
|
31,019
|
|||||||||||
|
Recall expenses included in cost of sales
|
2,645
|
-
|
2,861
|
(92
|
)
|
|||||||||||
|
Inventory charge included in cost of sales
|
-
|
5,940
|
-
|
5,940
|
||||||||||||
|
Change in fair value of contingent consideration
|
125
|
318
|
(15,261
|
)
|
948
|
|||||||||||
|
Acquisition, restructuring and other items, net (1,2)
|
15,482
|
3,493
|
27,510
|
11,590
|
||||||||||||
|
Other expense, net
|
6
|
309
|
260
|
875
|
||||||||||||
|
Credit card fees
|
710
|
689
|
2,809
|
2,794
|
||||||||||||
|
Adjusted EBITDAS
|
$
|
15,010
|
$
|
14,162
|
$
|
61,513
|
$
|
53,074
|
||||||||
|
Per diluted share:
|
||||||||||||||||
|
EBITDAS
|
$
|
(0.11
|
)
|
$
|
0.09
|
$
|
1.17
|
$
|
0.85
|
|||||||
|
Adjusted EBITDAS
|
$
|
0.41
|
$
|
0.39
|
$
|
1.66
|
$
|
1.46
|
||||||||
|
(1) Includes costs related to mergers and acquisition activities, integrations, restructurings, asset impairments and write-offs, litigation, and other items.
|
||||||||||||||||
|
(2) Excludes depreciation expense captured in the depreciation and amortization component of the reconciliation.
|
||||||||||||||||
ANGIODYNAMICS, INC. AND SUBSIDIARIES
NET SALES BY PRODUCT CATEGORY AND BY GEOGRAPHY
(unaudited in thousands)
|
Three months ended
|
Twelve months ended | |||||||||||||||||||||||||||||||||||||||
|
Currency
|
Constant
|
Currency
|
Constant
|
|||||||||||||||||||||||||||||||||||||
|
May 31,
|
May 31,
|
%
|
Impact
|
Currency
|
May 31,
|
May 31,
|
%
|
Impact
|
Currency
|
|||||||||||||||||||||||||||||||
|
2017
|
2016
|
Growth
|
(Pos) Neg
|
Growth
|
2017
|
2016
|
Growth
|
(Pos) Neg
|
Growth
|
|||||||||||||||||||||||||||||||
|
Net Sales by Product Category
|
||||||||||||||||||||||||||||||||||||||||
|
Peripheral Vascular
|
$
|
53,948
|
$
|
55,584
|
-3%
|
|
$
|
208,602
|
$
|
205,620
|
1%
|
|
||||||||||||||||||||||||||||
|
Vascular Access
|
24,243
|
24,799
|
-2%
|
|
96,481
|
99,375
|
-3%
|
|
||||||||||||||||||||||||||||||||
|
Oncology/Surgery
|
8,723
|
13,036
|
-33%
|
|
44,560
|
48,895
|
-9%
|
|
||||||||||||||||||||||||||||||||
|
Total
|
$
|
86,914
|
$
|
93,419
|
-7%
|
|
0%
|
|
-7%
|
|
$
|
349,643
|
$
|
353,890
|
-1%
|
|
0%
|
|
-1%
|
|||||||||||||||||||||
|
Net Sales by Geography
|
||||||||||||||||||||||||||||||||||||||||
|
United States
|
$
|
70,847
|
$
|
75,614
|
-6%
|
|
0%
|
|
-6%
|
|
$
|
282,168
|
$
|
285,824
|
-1%
|
|
0%
|
|
-1%
|
|||||||||||||||||||||
|
International
|
$
|
16,067
|
$
|
17,805
|
-10%
|
|
2%
|
|
-8%
|
|
67,475
|
68,066
|
-1%
|
|
2%
|
|
1%
|
|||||||||||||||||||||||
|
Total
|
$
|
86,914
|
$
|
93,419
|
-7%
|
|
0%
|
|
-7%
|
|
$
|
349,643
|
$
|
353,890
|
-1%
|
|
0%
|
|
-1%
|
|||||||||||||||||||||
ANGIODYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
|
May 31,
|
May 31,
|
|||||||
|
2017
|
2016
|
|||||||
|
(unaudited)
|
||||||||
|
Assets
|
||||||||
|
Current Assets
|
||||||||
|
Cash and cash equivalents
|
$
|
47,544
|
$
|
32,333
|
||||
|
Marketable securities
|
1,215
|
1,653
|
||||||
|
Total cash and investments
|
48,759
|
33,986
|
||||||
|
Accounts receivable, net
|
44,523
|
52,867
|
||||||
|
Inventories
|
54,506
|
55,370
|
||||||
|
Prepaid income taxes
|
336
|
788
|
||||||
|
Prepaid expenses and other
|
5,790
|
3,243
|
||||||
|
Total current assets
|
153,914
|
146,254
|
||||||
|
Property, plant and equipment, net
|
45,234
|
48,284
|
||||||
|
Other non-current assets
|
1,886
|
3,827
|
||||||
|
Intangible assets, net
|
145,675
|
166,577
|
||||||
|
Goodwill
|
361,252
|
361,252
|
||||||
|
Total Assets
|
$
|
707,961
|
$
|
726,194
|
||||
|
Liabilities and Stockholders’ Equity
|
||||||||
|
Current Liabilities
|
||||||||
|
Accounts payable
|
$
|
18,087
|
$
|
15,616
|
||||
|
Accrued liabilities
|
38,804
|
21,942
|
||||||
|
Current portion of long-term debt
|
5,000
|
16,250
|
||||||
|
Current portion of contingent consideration
|
9,625
|
12,919
|
||||||
|
Total current liabilities
|
71,516
|
66,727
|
||||||
|
Long-term debt, net of current portion
|
91,320
|
104,291
|
||||||
|
Deferred income taxes, long-term
|
26,112
|
21,684
|
||||||
|
Contingent consideration, net of current portion
|
3,136
|
25,356
|
||||||
|
Other long-term liabilities
|
850
|
908
|
||||||
|
Total Liabilities
|
192,934
|
218,966
|
||||||
|
Stockholders’ Equity
|
515,027
|
507,228
|
||||||
|
Total Liabilities and Stockholders’ Equity
|
$
|
707,961
|
$
|
726,194
|
||||
ANGIODYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
|
Three months ended
|
Twelve months ended
|
|||||||||||||||
|
May 31,
|
May 31,
|
May 31,
|
May 31,
|
|||||||||||||
|
2017
|
2016
|
2017
|
2016
|
|||||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
|||||||||||||
|
Cash flows from operating activities:
|
||||||||||||||||
|
Net income (loss)
|
$
|
(12,913
|
)
|
$
|
(43,075
|
)
|
$
|
5,008
|
$
|
(43,590
|
)
|
|||||
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||||||||||
|
Depreciation and amortization
|
6,356
|
6,826
|
24,811
|
28,115
|
||||||||||||
|
Stock-based compensation
|
1,105
|
(1,260
|
)
|
6,183
|
3,240
|
|||||||||||
|
Change in fair value of contingent consideration
|
125
|
318
|
(15,261
|
)
|
948
|
|||||||||||
|
Loss on impairment of intangible assets
|
-
|
384
|
-
|
384
|
||||||||||||
|
Fixed and intangible asset impairments and disposals
|
108
|
131
|
3,930
|
806
|
||||||||||||
|
Deferred income taxes
|
804
|
40,371
|
4,428
|
39,983
|
||||||||||||
|
Change in accounts receivable allowance
|
292
|
1,022
|
(313
|
)
|
2,377
|
|||||||||||
|
Write-off of other assets
|
-
|
-
|
2,685
|
-
|
||||||||||||
|
Other
|
(51
|
)
|
90
|
(586
|
)
|
90
|
||||||||||
|
Changes in operating assets and liabilities, net of acquisitions:
|
||||||||||||||||
|
Receivables
|
1,581
|
639
|
8,479
|
3,131
|
||||||||||||
|
Inventories
|
3,272
|
10,519
|
687
|
11,976
|
||||||||||||
|
Prepaid and other assets
|
(2,305
|
)
|
1,494
|
(3,520
|
)
|
712
|
||||||||||
|
Accounts payable and accrued liabilities
|
20,619
|
1,085
|
19,214
|
(2,956
|
)
|
|||||||||||
|
Net cash provided by (used in) operating activities
|
18,993
|
18,544
|
55,745
|
45,216
|
||||||||||||
|
Cash flows from investing activities:
|
||||||||||||||||
|
Additions to property, plant and equipment
|
(743
|
)
|
(431
|
)
|
(3,001
|
)
|
(2,326
|
)
|
||||||||
|
Acquisition of warrants
|
-
|
-
|
-
|
(2,000
|
)
|
|||||||||||
|
Acquisition of intangible assets
|
-
|
(3,250
|
)
|
-
|
(3,268
|
)
|
||||||||||
|
Proceeds from sale or maturity of marketable securities
|
-
|
-
|
450
|
25
|
||||||||||||
| Net cash provided by (used in) investing activities | (743 | ) | (3,681 | ) | (2,551 | ) | (7,569 | ) | ||||||||
|
Cash flows from financing activities:
|
||||||||||||||||
|
Repayment of long-term debt
|
(1,250
|
)
|
(5,000
|
)
|
(140,381
|
)
|
(16,250
|
)
|
||||||||
|
Proceeds from issuance of long-term debt and revolver borrowings
|
-
|
-
|
116,471
|
-
|
||||||||||||
|
Deferred financing costs on long-term debt
|
(29
|
)
|
-
|
(1,364
|
)
|
-
|
||||||||||
|
Payment of Contingent Consideration
|
-
|
-
|
(9,850
|
)
|
(9,850
|
)
|
||||||||||
|
Repurchase of shares
|
(5,717
|
)
|
-
|
(13,557
|
)
|
-
|
||||||||||
|
Proceeds from exercise of stock options and ESPP
|
429
|
504
|
10,698
|
2,437
|
||||||||||||
| Net cash provided by (used in) financing activities |
(6,567
|
) |
(4,496
|
) |
(37,983
|
) |
(23,663
|
) | ||||||||
|
Effect of exchange rate changes on cash
|
290
|
69
|
-
|
(42
|
)
|
|||||||||||
|
Increase (Decrease) in cash and cash equivalents
|
11,973
|
10,436
|
15,211
|
13,942
|
||||||||||||
|
Cash and cash equivalents
|
||||||||||||||||
|
Beginning of period
|
35,571
|
21,897
|
32,333
|
18,391
|
||||||||||||
|
End of period
|
$
|
47,544
|
$
|
32,333
|
$
|
47,544
|
$
|
32,333
|
||||||||
ANGIODYNAMICS, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
(in thousands)
|
Reconciliation of Free Cash Flows:
|
||||||||||||||||
|
Three months ended
|
Twelve months ended
|
|||||||||||||||
|
May 31,
|
May 31,
|
May 31,
|
May 31,
|
|||||||||||||
|
2017
|
2016
|
2017
|
2016
|
|||||||||||||
|
(unaudited)
|
(unaudited)
|
|||||||||||||||
|
|
||||||||||||||||
|
Net cash provided by (used in) operating activities
|
$
|
18,993
|
|
$
|
18,544
|
|
$
|
55,745
|
$
|
45,216
|
|
|||||
|
Additions to property, plant and equipment
|
(743
|
) | (431 | ) |
(3,001
|
) |
(2,326
|
) | ||||||||
|
Free Cash Flow
|
18,250
|
18,113
|
52,744
|
42,890
|
||||||||||||