AngioDynamics (ANGO) Q3 2012 Earnings Call April 04, 2012 4:30 pm ET Executives Bob Jones - Joseph M. DeVivo - Chief Executive Officer, President and Director D. Joseph Gersuk - Chief Financial Officer, Chief Accounting Officer, Executive Vice President and Treasurer Analysts Matthew Hewitt - Craig-Hallum Capital Group LLC, Research Division Jamar Ismail - Canaccord Genuity, Research Division Jayson T. Bedford - Raymond James & Associates, Inc., Research Division Charles Croson - Sidoti & Company, LLC Robert M. Goldman - CL King & Associates, Inc. Larry Haimovitch - Haimovitch Medical Technology Consultants Presentation Operator
We encourage you to review the company's past and future filings with the SEC, including, without limitation, the company's forms 10-Q and 10-K, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.Finally, during the question-and-answer period today, we'd like to request each caller to limit themselves to 2 questions and encourage callers to re-queue to ask additional questions. We appreciate everyone's cooperation with this procedure. And now I'd like to turn the call over to Joseph DeVivo, President and Chief Executive Officer of AngioDynamics. Joseph M. DeVivo Thank you, Bob. Good afternoon, everyone, and welcome to our call. With me on this call is Joe Gersuk, our Chief Financial Officer. During the third quarter, we embarked on a course to transform AngioDynamics into a global, world-class medical device leader by creating a platform for stronger future growth. AngioDynamics is a company who has innovated through the years, with customer intensity at the core of its business. It's grown and has seen success. In order to set the company up for future success, we quite frankly, put the past several years behind us, we chose a catalyst to get us there, the acquisition of Navilyst Medical. Not a bolt-on or a tuck-in, but a combination, a reset, a realignment of the best of 2 successful companies to create an enterprise, which will sustain above-market top line growth and expanding margins through ongoing efficiencies. That's a company that investors want to invest in, and I intend to get us there. In looking at our third quarter results, as you see, sales came in as we expected in the range of $51.6 million, with gross margin a little less than we expected at 57% and earnings of $0.09 per share, excluding special items. I'll let Joe review our results in detail in a moment.
Let me touch on our strategy behind the investments that we made during the quarter. It wasn't an easy quarter for Angio. And to get to the world-class organization we intend to be, we must continue to invest.As I mentioned to you on prior calls, delivering quality at every level of the organization is our top priority. As you're aware of, we received a warning letter last year in May. In my first month, I reviewed the letter and was unimpressed with the extent of our progress in remediation. As I mentioned to you on calls since then, I knew we needed to get better fast. We made changes at the top, pulled resources from many departments and launched the company's Quality Call to Action, or QCTA. Everyone in the company learned of our commitment to quality and what we all need to do to reach these objectives. We created QCTA work streams for each area, and we felt that we needed to fix, but not just fix, systematically improve. I'm very proud of this early effort and the scope, depth and breadth of the project we laid out for ourselves. Following the notification of the NeverTouch recall you all heard about last quarter, the FDA came in for a follow-up inspection. With our QCTA program in its infancy, the program has not yet impacted the outcome of the inspection. The audit lasted more than 2 months. It was expensive and ultimately resulted in some observations at Queensbury, as well as our Fremont location, of some of which were repeat. The good news is while the audit continued, in parallel, our teams were aggressively building new processes, along the lines of the observations, making progress even before the observations were formally delivered. During the quarter, we brought in a significant amount of outside expertise and have made and continued to make a significant amount of progress.
We committed to the FDA in our response. We would have remediations in place, with key milestones identified. I'm pleased to say we've set all of our commitments to date and are well on the way of the process improvement, remediation and implementation.Read the rest of this transcript for free on seekingalpha.com