AngioDynamics Q4 Earnings Beat, Revenues Up on Higher Sales

AngioDynamics Inc. ANGO reported adjusted earnings per share of 18 cents for the fourth quarter of fiscal 2014 ended May 31, 2014, beating the Zacks Consensus Estimate by 6 cents and the year-ago earnings of 15 cents by 20%. Adjusted net earnings increased 22.3% to $6.4 million from $5.2 million reported a year ago.

On a reported basis, the company recorded a net loss of $1.1 million in the quarter, wider than the year-ago level of $0.9 million by 24.2%. On a per share basis, net loss climbed 50% to 3 cents from 2 cents in the fourth quarter of 2013.
 

Revenue Details

Revenues in the quarter went up 4.5% to $94.1 million from $90.0 million in the year-ago quarter, in line with the Zacks Consensus Estimate of $94 million. The upside was driven by sales growth in the Peripheral Vascular and Oncology/Surgery businesses and a significant turnaround in Vascular Access business brought about by the success of ANGO's BioFlo products.

Excluding the planned termination of the supply agreement with Boston Scientific Corp. BSX, revenues were up 5% to $92.9 million from $88.4 million in the comparable prior-year period.

Revenues in the U.S. increased 5.8% to $73.7 million during the quarter while international revenues rose 2.1% to $19.2 million.

Revenues from the Peripheral Vascular business were up 6.1% to $50.9 million, Vascular Access business improved 4.9% to $28.3 million, and Oncology/Surgery business edged up 1.5% to $13.7 million. However, revenues from the Supply Agreement business plunged 24.9% to $1.2 million from the year-ago quarter.

Expenses and Margins

ANGO reported a 7.4% rise in gross profit to $47.5 million from $44.2 million in the year-ago quarter. Consequently, gross margin expanded 140 basis points (bps) to 50.5% from 49.1% a year ago.

Adjusted operating earnings increased 12.5% to $11.5 million from $10.2 million a year ago while adjusted operating margin expanded 80 bps to 12.2% from 11.4% in the comparable fiscal 2013 quarter.

Fourth-quarter adjusted EBITDA increased 7.3% to $14.7 million from $13.7 million in the year-earlier quarter.

Full-year Results

For fiscal 2014, ANGO reported adjusted earnings per share of 58 cents, down 9.4% from 64 cents in fiscal 2013. However, earnings easily surpassed the Zacks Consensus Estimate of 30 cents.

Revenues for the fiscal year stood at $354.5 million, up 3.6% from $342.0 million in fiscal 2013 and were in line with the Zacks Consensus Estimate.

Financial Position

ANGO exited the year with cash and cash equivalents of $16.1 million, down 26.1% from $21.8 million as of May 31, 2013. Long-term debt increased marginally by 0.1% to $142.7 million from $142.5 million as of May 31, 2013. However, the long-term debt-to-capitalization ratio decreased 30 bps to 21% from 21.3% as of May 31, 2013.

In fiscal 2014, cash flow from operating activities dropped 5.9% to $25.3 million from $26.9 million in fiscal 2013. Capital expenditure declined 2.9% to $11.8 million from $12.1 million incurred last year.

Guidance

ANGO introduced earnings and revenue guidance for the first quarter of fiscal 2015 as well as the entire fiscal year.

For the first quarter of fiscal 2015, adjusted earnings per share are expected in the range of 8 to 12 cents. The Zacks Consensus Estimate of 6 cents lies below the company's guided range.

Meanwhile, ANGO anticipates revenues between $83 and $86 million during the quarter. The Zacks Consensus Estimate of $86 million coincides with the upper end of the company's guided range.

For fiscal 2015, ANGO anticipates adjusted earnings per share in the range of 64 to 70 cents, representing a 10–12% increase over fiscal 2014. The guided range is significantly higher than the Zacks Consensus Estimate of 40 cents.

Revenues for the entire fiscal year is expected in the band of $362 to $368 million, reflecting a 3–5% growth excluding the impact of the planned wind down of ANGO's supply agreement. The Zacks Consensus Estimate of $367 million lies within the guided range.

Zacks Rank

Currently, ANGO carries a Zacks Rank #4 (Sell). Better-ranked stocks in the medical instruments industry include Accuray Incorporated ARAY,  and Heartware International Inc. HTWR. While Accuray sports a Zacks Rank #1 (Strong Buy), Heartware International carries a Zacks Rank #2 (Buy).
 

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