AngioDynamics(ANGO) - 2023 Q2 - Quarterly Report

Financial Performance - Net sales for the three months ended November 30, 2022, were $85,429 thousand, an increase of 9.3% compared to$ 78,280 thousand for the same period in 2021[19] - Gross profit for the six months ended November 30, 2022, was $87,383 thousand, up from$ 80,694 thousand for the same period in 2021, reflecting a gross margin improvement[19] - Operating loss for the three months ended November 30, 2022, was $(8,115) thousand, slightly improved from$ (8,679) thousand in the prior year[19] - Net loss for the six months ended November 30, 2022, was $(21,490) thousand, compared to$ (15,323) thousand for the same period in 2021, indicating a worsening financial performance[21] - The net loss for the three months ended November 30, 2022, was $8.5 million, consistent with a loss per share of$ 0.21[130] - The net loss for the six months ended November 30, 2022, increased by $6.2 million to$ 21.5 million, with a loss per share of $0.55[127] Cash and Assets - Cash and cash equivalents at the end of the period were$ 29,857 thousand, an increase from $28,825 thousand at the beginning of the period[28] - Total assets as of November 30, 2022, were$ 558,207 thousand, a slight increase from $552,751 thousand as of May 31, 2022[25] - The company had total debt outstanding of$ 50.0 million as of November 30, 2022, related to the Credit Agreement[149] - Cash used in operating activities was $17.2 million for the six months ended November 30, 2022, compared to$ 7.0 million for the same period in the prior year[150] Debt and Liabilities - Long-term debt increased to $49,796 thousand from$ 25,000 thousand, indicating a significant rise in leverage[25] - The company entered into a new Credit Agreement providing for a $75.0 million secured revolving credit facility and a$ 30.0 million delayed draw term loan[67] - As of November 30, 2022, the company had $25.0 million outstanding on the Revolving Facility and$ 25.0 million on the Delayed Draw Term Loan, with an interest rate of 5.59%[70] - The total lease liabilities decreased from $7,263,000 on May 31, 2022, to$ 5,981,000 on November 30, 2022, indicating a reduction in lease obligations[95] Revenue Segments - The Med Tech segment generated $24,502,000 in net sales for the three months ended November 30, 2022, compared to$ 18,886,000 in the prior year, indicating a growth of 30%[43] - The Med Device segment reported net sales of $60,927,000 for the three months ended November 30, 2022, up from$ 59,394,000 in the same period of 2021, reflecting a growth of 3%[43] - Med Tech segment net sales increased by $5.6 million for the three months and$ 10.8 million for the six months ended November 30, 2022, primarily driven by increased Auryon sales[134] - Med Device segment net sales increased by $1.5 million for the three months and$ 0.9 million for the six months ended November 30, 2022, despite backlog impacts[135] Expenses - Research and development expenses for the three months ended November 30, 2022, were $6,838 thousand, down from$ 8,199 thousand in the prior year, reflecting cost management efforts[19] - Share-based compensation expense for the six months ended November 30, 2022, was $6,400,000, compared to$ 5,400,000 for the same period in 2021, reflecting an increase of 18.5%[77] - Sales and marketing expense increased by $2.4 million and$ 4.5 million for the three and six months ended November 30, 2022, compared to the same periods in the prior year[141] - General and administrative expense increased by $1.2 million and$ 2.3 million for the three and six months ended November 30, 2022, compared to the same periods in the prior year[142] Stockholder Equity - Total stockholders' equity decreased to $407,958 thousand as of November 30, 2022, from$ 424,489 thousand as of May 31, 2022, indicating a decline in shareholder value[26] - The total balance of treasury stock was $407,958,000, with a net loss of$ 8,486,000 recorded during the period[31] - The total balance of treasury stock increased from $424,489,000 on May 31, 2022, to$ 414,041,000 by August 31, 2022[31] Legal and Compliance - The company is involved in various legal proceedings, but has not recorded an expense related to the outcome of ongoing litigation as it cannot determine if a potential loss is probable or reasonably estimable[101] - The company reported legal expenses of $2,422,000 for the three months ended November 30, 2022, compared to$ 2,072,000 for the same period in 2021, reflecting an increase of 16.9%[108] - The company has not recorded an expense related to ongoing litigation as it is not yet possible to determine if a potential loss is probable nor reasonably estimable[104] Market and Strategic Focus - The company is focused on transforming its portfolio to target larger and faster-growing markets, which is expected to drive near to mid-term growth[41] - The company aims to grow sales and profitability by expanding geographically and introducing new products, with a focus on research and development investments[123] - The company’s business operations are influenced by market dynamics such as value-based purchasing, healthcare provider consolidation, and an aging population[122] Tax and Valuation - The estimated annual effective tax rate prior to discrete items was 5.8% for the second quarter of fiscal year 2023, down from 12.3% for the same period in fiscal year 2022[72] - The Company has provided a valuation allowance on its deferred tax assets due to not attaining a sustained level of profitability as of November 30, 2022[74]