ANGIODYNAMICS INC annual report, FY2024

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Business context and reporting period

AngioDynamics, Inc. (NASDAQ: ANGO) designs and sells medical devices for vascular access, peripheral vascular disease, oncology and surgical procedures. This is its Form 10-K for the fiscal year ended May 31, 2024—not a standalone “2023 Q4” report. The company reports Med Tech and Med Device segments.

Financial performance and position

  • Revenue: $303.9 million, down 10.3% from $338.8 million. Med Tech revenue rose 10.0% to $106.4 million; Med Device fell 18.4% to $197.5 million.
  • Profitability: Gross profit was $154.7 million, with a 50.9% gross margin versus 51.4% a year earlier. Operating loss was $192.4 million and net loss was $184.3 million, or $4.59 per diluted share, compared with net losses of $51.2 million and $52.4 million, respectively, in FY2023.
  • Cash flow: Operating activities used $28.2 million, versus $0.1 million provided in FY2023. Investing activities provided $123.7 million, including $134.5 million in divestiture proceeds; financing activities used $64.2 million. Cash increased to $76.1 million from $44.6 million.
  • Liquidity and debt: Cash was $76.1 million and total current assets were $193.3 million at year-end. The company had no outstanding debt, after repaying its $50.0 million credit balance following a divestiture. Management said available cash and expected operating cash flows should meet anticipated capital needs for at least 12 months.
  • Other metrics: Inventory was $60.6 million, up from $55.3 million; backlog was $1.3 million, down from $2.7 million. Total assets were $317.7 million, versus $532.6 million, largely reflecting the $159.5 million goodwill impairment and divestitures.

Material changes versus FY2023

  • Net sales declined $34.8 million. Divestitures and product-line discontinuations reduced sales by a combined $48.4 million; growth in Med Tech partly offset the impact.
  • Med Tech growth was led by Auryon (+$6.4 million) and NanoKnife (+$5.7 million), partly offset by $2.4 million lower thrombectomy-platform sales. Med Device declines primarily reflected the sale of dialysis and BioSentry businesses and the PICC and Midline businesses, plus discontinued RadioFrequency Ablation products.
  • Gross margin decreased 0.5 percentage point. Divested businesses reduced gross profit by $23.9 million, partly offset by favorable sales volume and price mix.
  • Net loss widened by $131.9 million. Key items included a non-cash $159.5 million Med Tech goodwill impairment (versus $14.5 million in FY2023) and $53.2 million of acquisition, restructuring and other costs (versus $15.6 million). The company also recorded $54.5 million in gains on asset sales.

Outlook, management commentary and risks

  • Management is focusing on higher-growth technology products, including Auryon, AngioVac, AlphaVac and NanoKnife, and on portfolio optimization. The company reported clearance and CE mark for AlphaVac F18 85 for pulmonary embolism and completed enrollment in the NanoKnife PRESERVE prostate study. The filing provides no specific revenue or earnings guidance.
  • The company plans to move to a fully outsourced manufacturing model by the third quarter of FY2026. Estimated plan costs are $38.5 million to $43.25 million; $9.5 million had been recorded through FY2024. Execution, supplier capacity, quality, cost and transition disruptions are material risks.
  • In FY2024, AngioDynamics sold its dialysis and BioSentry businesses for $100.0 million and its PICC and Midline businesses for $34.5 million. The latter transaction includes a $5.5 million sales-related earn-out and a $5.0 million manufacturing-transfer milestone payment. Management expects to invest in higher-margin growth areas, but cautions that lost revenue and cash flow may not be replaced.
  • A March 2024 settlement with Becton, Dickinson and Company (BD) includes a $7.0 million lump-sum payment, six minimum annual payments of $2.5 million through February 2029, and possible additional payments tied to port-product sales. A further $3.0 million could be due if BD prevails in a specified patent appeal. The filing recorded $19.4 million as the present value of the lump-sum and minimum payments.
  • Other notable items include a $3.4 million impairment related to manufacturing facilities, a $3.3 million Syntrax technology impairment and a $2.9 million inventory write-off related to product-line abandonment. A full valuation allowance was recorded on U.S. net deferred tax assets because the company had not achieved sustained profitability.
  • Principal risks include competition and pricing pressure, clinical and regulatory outcomes, reimbursement, supplier dependence, manufacturing transition, international distributor and geopolitical exposure, litigation and product liability, and impairment or continued operating losses. Management reported effective disclosure controls and internal control over financial reporting; the auditor issued an unqualified opinion on the financial statements.

Important facts for investors to verify

  1. Whether Med Tech growth can continue and whether the company can improve margins and generate positive operating cash flow after divestitures.
  2. Progress, total costs and operational effects of the outsourced-manufacturing transition through FY2026.
  3. Clinical, regulatory and commercial milestones for Auryon, thrombectomy products and NanoKnife, including the PRESERVE study.
  4. BD settlement payments and the outcome of the pending patent appeal, including any contingent payment.
  5. Whether backlog, inventory levels and cash needs stabilize, and whether the company’s 12-month liquidity expectation remains supported by operating performance.