AngioDynamics (ANGO) Third Quarter Earnings Max Estimates, Revenue Lag – April 8, 2022

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AngioDynamics, Inc. (NGO Free Report) reported adjusted earnings per share (EPS) of 3 cents for the third quarter of fiscal 2022, compared to EPS of 2 cents a year ago. Zacks’ consensus estimate for the same was pegged at a loss of a penny a share.

GAAP loss per share was 13 cents, up from the loss of 9 cents a year ago.

Income Details

Fiscal third quarter revenue totaled $73.9 million, up 3.9% year-over-year on a reported basis (up 3.8% at constant currency or CER) . However, the top line lagged the Zacks consensus estimate by 3.1%.

The company continued to see strong contributions from its Med Tech business (which includes the thrombectomy platform, Auryon and NanoKnife) during the quarter.

Geographical analysis

In the quarter under review, net revenue in the United States totaled $62.4 million, up 6.5% year-on-year.

International revenue was $11.5 million, down 8% from the prior year quarter on a reported basis and down 9% at CER.

Segmental analysis

AngioDynamics’ product offerings fall under three Global Business Units (GBUs): Oncology/Surgery, Endovascular Therapies and Vascular Access.

Oncology net sales in the fiscal third quarter were $12.5 million, reflecting a 5% year-over-year decline, primarily due to oncology-related procedures being severely impacted by the pandemic, hospital staff disruptions and declining NanoKnife fixed asset sales. This was partially offset by an 11% increase in disposable revenue from NanoKnife in the United States.

Endovascular therapies revenue in the third fiscal quarter reached $38.1 million, up 14.5% from the same period last year. This is due to the continued adoption of Auryon and the thrombectomy portfolio. Auryon’s sales during the quarter were $7.3 million.

Vascular Access revenue was $23.4 million, down 5.6% year-on-year. The segment was impacted by supply chain headwinds and a tight labor market that dragged down AngioDynamics’ backlog.

Margin analysis

In the quarter under review, gross profit for AngioDynamics increased by 0.1% to $38.6 million. Gross margin contracted by 197 basis points (bps) to 52.2%.

Sales and marketing expenses increased 4.1% to $20.4 million year over year. Research and development expenses decreased 15% year over year to $7.3 million, while general and administrative expenses decreased 3.2% year over year. the other to settle at $8.7 million. Adjusted operating expenses of $36.4 million decreased 2% year over year.

Adjusted operating profit totaled $2.2 million, reflecting a 60.4% increase over the year-ago quarter level. Fiscal third quarter adjusted operating margin increased 103 basis points to 2.9%.

Treasury

The company ended the third quarter of fiscal 2022 with cash and cash equivalents of $23.9 million, compared to $34.3 million at the end of the second quarter of the fiscal year. Long-term debt at the end of the third quarter of fiscal 2022 was $25 million, stable compared to that at the end of the second quarter of the fiscal year.

Cumulative net cash used in operating activities was $15.8 million compared to net cash provided by operating activities of $11.9 million a year ago.

Guidance for exercise 22

The company reiterated its fiscal 2022 revenue forecast in the range of $310 million to $315 million. Zacks consensus estimate for the same currently stands at $313.4 million.

The adjusted EPS range was reiterated between a loss of 2 cents per share and a gain of 2 cents. The Zacks consensus estimate for the metric is currently pegged to a penny-per-share loss.

Our opinion

AngioDynamics ended the third quarter of fiscal 2022 with better than expected earnings. The company continued to leverage its Med Tech business. Its year-over-year revenue growth as well as the strong performance of the endovascular therapies segment are impressive. Strong domestic revenues are also encouraging. Subsequent to the end of the quarter, the company received FDA clearance for its AlphaVac F18 thrombectomy system as well as its investigational device exemption study for the use of AlphaVac F18 to treat pulmonary embolism, prompting optimism. The expansion of the adjusted operating margin in the third fiscal quarter bodes well for the company.

Lower-than-expected revenue in the quarter under review is worrisome. The ongoing disruptions caused by the pandemic (which have led to headwinds in the supply chain) have resulted in a backlog in the vascular access segment, which has heightened our apprehension. A two-fold drop in GBU revenue as well as a decline in international revenue in the quarter are concerning. The contraction in the gross margin does not bode well either.

Zacks ranking and key picks

AngioDynamics currently wears a Zacks rank #3 (Hold).

Some higher ranked stocks that are expected to report earnings soon are Abiomed, Inc. (AMDD free report), Becton, Dickinson and company (BDX Free Report), popularly known as BD, and AMN Healthcare Services, Inc. (AMN free report).

The Zacks consensus estimate for Abiomed’s adjusted EPS in the fourth quarter of fiscal 2022 is currently pegged at $1.09. The consensus revenue estimate is set at $266.3 million. Abiomed currently wears a Zacks Rank #2 (Buy). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Abiomed has an estimated long-term growth rate of 20%. ABMD’s earnings return of 1.5% compares favorably to the industry’s negative return.

BD currently has a Zacks rank of No. 2. Zacks’ consensus estimate for its second-quarter fiscal 2022 adjusted EPS is currently pegged at $3.00. The same for revenue is pinned at $4.86 billion.

BD has an estimated long-term growth rate of 6.3%. BDX’s earnings return of 4.7% compares favorably to the industry’s 3.6%.

AMN Healthcare currently has a Zacks No. 1 ranking. Zacks’ consensus estimate for its Q1 2022 Adjusted EPS is currently set at $3.25. The same for his income stands at $1.50 billion.

AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings return of 8.9% compares favorably to the industry’s negative return.

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