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AngioDynamics Reports Fiscal 2013 First Quarter Financial Results

Safe Harbor

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding AngioDynamics' expected future financial position, results of operations, cash flows, business strategy, budgets, projected costs, capital expenditures, products, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include the words such as "expects," "reaffirms," "intends," "anticipates," "plans," "believes," "seeks," "estimates," "optimistic," or variations of such words and similar expressions, are forward-looking statements. These forward looking statements are not guarantees of future performance and are subject to risks and uncertainties. Investors are cautioned that actual events or results may differ from AngioDynamics' expectations. Factors that may affect the actual results achieved by AngioDynamics include, without limitation, the ability of AngioDynamics to develop its existing and new products, technological advances and patents attained by competitors, future actions by the FDA or other regulatory agencies, domestic and foreign health care reforms and government regulations, results of pending or future clinical trials, overall economic conditions, the results of on-going litigation, the effects of economic, credit and capital market conditions, general market conditions, market acceptance, foreign currency exchange rate fluctuations, the effects on pricing from group purchasing organizations and competition, the ability of AngioDynamics to integrate purchased businesses, including Navilyst Medical and its products, R&D capabilities, infrastructure and employees as well as the risk factors listed from time to time in AngioDynamics' SEC filings, including but not limited to its Annual Report on Form 10-K for the year ended May 31, 2012. AngioDynamics does not assume any obligation to publicly update or revise any forward-looking statements for any reason.

ANGIODYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share data)
     
  Three months ended
  Aug 31, 2012 Aug 31, 2011
  (unaudited)
     
Net sales $ 83,406 $ 54,431
Cost of sales    
Acquired inventory step-up  3,445  -- 
Quality call to action  699  -- 
Other cost of sales  39,803  22,285
Total cost of sales   43,947  22,285
Gross profit  39,459  32,146
% of net sales 47.3% 59.1%
     
Operating expenses    
Research and development   7,074  5,591
Sales and marketing  18,543  16,308
General and administrative  6,899  4,312
Amortization of intangibles  3,737  2,295
Acquisition and other non-recurring  2,522  923
Total operating expenses  38,775  29,429
Operating income (loss)  684  2,717
Other income (expense), net  (1,838)  (614)
Income (loss) before income taxes  (1,154)  2,103
Provision for (benefit from) income taxes  (433)  730
Net income (loss)  $ (721) $ 1,373
     
Earnings (Loss) per common share    
Basic  $ (0.02)  $ 0.05
Diluted  $ (0.02)  $ 0.05
     
Weighted average common shares    
Basic  34,704  25,024
Diluted  34,704  25,197
 
ANGIODYNAMICS, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION
(in thousands, except per share data)
     
Reconciliation of Net Income to EBITDA and Adjusted EBITDA:    
     
  Three months ended
  Aug 31, 2012 Aug 31, 2011
  (unaudited)
     
Net income (loss)  $ (721) $ 1,373
     
Provision for (benefit from) income taxes  (433)  730
Other income (expense), net  1,838  614
Amortization of intangibles  3,737  2,295
Depreciation  2,132  837
EBITDA  6,553  5,849
     
Acquisition and restructuring (1)  2,522  923
Inventory step-up (3)  3,445  -- 
Quality Call to Action Program (2)  699  -- 
Adjusted EBITDA  $ 13,219  $ 6,772
     
EBITDA per common share    
Assumes Diluted  $ 0.19 $ 0.23
     
Adjusted EBITDA per common share    
Assumes Diluted $ 0.38 $ 0.27
     
Reconciliation of Operating Income to non-GAAP Adjusted Operating Income:    
     
  Three months ended
  Aug 31, 2012 Aug 31, 2011
  (unaudited)
     
Operating income  $ 684 $ 2,717
     
Acquisition and restructuring (1)  2,522  923
Inventory step-up (3)  3,445  -- 
Quality Call to Action Program (2)  699  -- 
Adjusted Operating income  $ 7,350  $ 3,640
 
ANGIODYNAMICS, INC. AND SUBSIDIARIES
GAAP TO NON-GAAP RECONCILIATION (Continued)
(in thousands, except per share data)
     
Reconciliation of Net Income to non-GAAP Adjusted Net Income:    
     
  Three months ended
  Aug 31, 2012 Aug 31, 2011
  (unaudited)
     
Net income (loss)  $ (721)  $ 1,373
     
After tax:    
Acquisition and restructuring (1) 1,609 594
Quality Call to Action Program (2) 454 --
Inventory step-up (3) 2,239 --
Adjusted net income  $ 3,583  $ 1,967
     
Reconciliation of Diluted Earnings (Loss) Per Share to non-GAAP Adjusted Diluted Earnings Per Share:
     
  Three months ended
  Aug 31, 2012 Aug 31, 2011
  (unaudited)
     
Diluted earnings (Loss) per share (4)  $ (0.02)  $ 0.05
     
After tax:    
Acquisition and restructuring (1) 0.05 0.02
Quality Call to Action Program (2) 0.01 --
Inventory step-up (3) 0.06 --
Adjusted diluted earnings per share  $ 0.10  * $ 0.08
     
* Does not sum due to rounding    
     
(1) Represents costs relating to acquisitions and debt financing, as well as business restructuring actions, which include the CEO and other executive transitions and the beginning of a program to close a facility in the UK.
(2) Represents implementation of a comprehensive Quality Call to Action program to review and augment the quality management systems at our Queensbury and Fremont facilities.
(3) Represents costs attributable to the inventory basis step-up attributed to the acquired Navilyst inventory.
(4) Assumes diluted shares are used for the calculation of earnings (loss) per share.  
 
ANGIODYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT NON GAAP RECONCILIATION
FOR THE QUARTER ENDED AUGUST 31, 2012
(in thousands, except per share data)
(Unaudited)
         
  GAAP Results Quality Control Initiative Acquisition Related Costs NON GAAP Results
         
         
Net sales $ 83,406     $ 83,406
Cost of sales   43,947  (699)  (3,445)  39,803
Gross profit  39,459  699  3,445  43,603
% of net sales 47.3%     52.3%
         
Operating expenses        
Research and development   7,074      7,074
Sales and marketing  18,543      18,543
General and administrative  6,899      6,899
Amortization of intangibles  3,737      3,737
Acquisition and other non-recurring  2,522    (2,522)  -- 
Total operating expenses  38,775  --   (2,522)  36,253
Operating income (loss)  684  699  5,967  7,350
Other income (expense), net  (1,838)      (1,838)
Income (loss) before income taxes  (1,154)  699  5,967  5,512
Provision for (benefit from) income taxes  (433)  245 2,118  1,929
Net income (loss)  $ (721) $ 454 $ 3,849 $ 3,583
         
Earnings (Loss) per common share        
Assumes Diluted  $ (0.02)  $ 0.01 $ 0.11  $ 0.10
         
Weighted average common shares        
Assumes Diluted  35,210  35,210  35,210  35,210
         
Effective Tax Rate 38% 35% 35% 35%
 
 
ANGIODYNAMICS, INC. AND SUBSIDIARIES
NET SALES BY PRODUCT CATEGORY AND BY GEOGRAPHY
(in thousands)
     
  Three months ended
  Aug 31, 2012 Aug 31, 2011
  (unaudited)
Net Sales by Product Category    
Vascular    
Peripheral Vascular $ 43,243 $ 20,968
Vascular Access  26,584  15,597
Total Vascular  69,827  36,565
Oncology/Surgery  11,321  17,866
Supply Agreement  2,258  --
Total $ 83,406 $ 54,431
     
Net Sales by Geography    
United States $ 67,851 $ 47,305
International  15,555  7,126
Total $ 83,406 $ 54,431
 
ANGIODYNAMICS, INC. AND SUBSIDIARIES
PRO FORMA PRODUCT LINE NET SALES EXCLUDING LCBEADS
(in thousands)
       
  Three months ended
  Aug 31, 2012 Aug 31, 2011 % Change
  (unaudited)  
Net Sales by Product Line      
Vascular      
Peripheral Vascular      
Fluid Management $ 21,115 $ 20,919 1%
Venacure EVLT  8,639  8,328 4%
Core products  13,331  13,319 0%
Other  158  557 (72%)
Total Peripheral Vascular  43,243  43,123 0%
       
Vascular Access      
PICCS  12,882  13,569 (5%)
Ports  7,685  7,686 (0%)
Dialysis  4,628  5,580 (17%)
Other  1,389  1,444 (4%)
Total Vascular Access  26,584  28,279 (6%)
Total Vascular  69,827  71,402 (2%)
Oncology/Surgery      
Thermal Ablation  6,621  5,796 14%
Nanoknife  2,954  2,250 31%
Other  1,746  1,788 (2%)
Total Oncology/Surgery  11,321  9,834 15%
Supply Agreement  2,258  2,978 (24%)
Total Net Sales $ 83,406 $ 84,214 (1%)
       
Net Sales by Geography      
United States $ 67,851 $ 70,774 (4%)
International  15,555  13,440 16%
Total $ 83,406 $ 84,214 (1%)
 
ANGIODYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
     
  Aug 31, 2012 May 31, 2012
  (unaudited) (unaudited)
Assets    
Current Assets    
Cash and cash equivalents $ 18,896 $ 23,508
Escrow receivable  2,500  2,500
Marketable securities  11,627  14,070
Total cash, escrow receivable and investments  33,023  40,078
     
Receivables, net  45,428  48,588
Inventories, net  63,414  55,823
Deferred income taxes  6,507  4,923
Prepaid income taxes  3,743  3,180
Prepaid expenses and other  8,106  6,646
Total current assets  160,221  159,238
     
Property, plant and equipment, net  57,525  55,915
Intangible assets, net  143,538  147,266
Goodwill  307,171  308,912
Deferred income taxes  38,603  39,198
Other non-current assets  10,934  11,240
Total Assets $ 717,992 $ 721,769
     
Liabilities and Stockholders' Equity    
Current portion of long-term debt $ 7,500 $ 7,500
Other current liabilities  43,879  48,249
Long-term debt, net of current portion  142,104  142,500
Total Liabilities  193,483  198,249
     
Stockholders' equity  524,509  523,520
Total Liabilities and Stockholders' Equity $ 717,992 $ 721,769
     
Shares outstanding  34,801  34,684
 
ANGIODYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
     
  Three months ended
  Aug 31, 2012 Aug 31, 2011
  (unaudited) (unaudited)
     
Cash flows from operating activities:    
Net (loss) income   $ (721) $ 1,373
Depreciation and amortization   5,869  3,132
Tax effect of exercise of stock options   --   (240)
Deferred income taxes   (85)  911
Stock-based compensation   1,122  799
Amortization of inventory step-up   3,445  -- 
Other   (373)  (156)
Changes in operating assets and liabilities     
Receivables   3,195  722
Inventories   (10,653)  (1,727)
Accounts payable and accrued liabilities   (6,812)  (1,617)
Other   (601)  (153)
Net cash (used in) provided by operating activities   (5,614)  3,044
     
Cash flows from investing activities:     
Additions to property, plant and equipment   (968)  (541)
Acquisition of businesses, intangibles and other assets   858  -- 
Proceeds from sale of assets   --   1,000
Purchases, sales and maturities of marketable securities, net   2,403  (743)
Net cash provided by (used in) investing activities   2,293  (284)
     
Cash flows from financing activities:    
Repayment of long-term debt   (1,875)  (65)
Proceeds from exercise of stock options and ESPP   579  1,804
Net cash (used in) provided by financing activities   (1,296)  1,739
     
Effect of exchange rate changes on cash   5  10
(Decrease) Increase in cash and cash equivalents   (4,612)  4,509
     
Cash and cash equivalents    
Beginning of period   23,508  45,984
End of period  $ 18,896 $ 50,493
CONTACT: Company Contact:
         AngioDynamics, Inc.
         D. Joseph Gersuk, CFO
         (800) 772-6446 x1608
         jgersuk@AngioDynamics.com

         Investor Relations Contacts:
         EVC Group, Inc.
         Jamar Ismail/Robert Jones
         (415) 568-9348; (646) 201-5447
         jismail@evcgroup.com; bjones@evcgroup.com

         Media Contact:
         EVC Group, Inc.
         Chris Gale
         (646) 201-5431
         cgale@evcgroup.com

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