AngioDynamics, Inc.

earlier this morning and is available on the company's website. This conference call is also being broadcast live over the internet at the investor section of the company's website at www.angiodynamics.com. And the webcast replay of the call will be available at the same site approximately one hour after the end of today's call. Before we begin, I would like to caution listeners that during the course of this conference call, The company will make projections or forward-looking statements regarding future events, including statements about expected revenue, adjusted earnings, and gross margins for fiscal year 2025, as well as trends that may continue. Management encourages 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 the actual results or events to differ materially from those described in the forward-looking statements. The company will also include certain non-GAAP and pro forma financial measures during this call. Management uses these measures to establish operational goals and review operational performance and believes that these measures may assist investors in analyzing the underlying trends in the company's business over time. Investors should consider these non-GAAP and pro forma measures in addition to, not as a substitute for, or as superior to financial reporting measures prepared in accordance with GAAP. A slide package offering insight to the company's financial results is also available on the investor section of the company's website under the events and presentations. This presentation should be read in conjunction with the press release discussing the company's operating results and financial performance during this morning's conference call. I'd now like to turn the call over to Jim Clemmer, Angio Dynamics President and Chief Executive Officer. Mr. Clemmer?

Thank you, Operator. Good morning, everyone, and thank you for joining us for Angio Dynamics Fiscal 2025 Second Quarter Earnings Call. Joining me on today's call is Steve Trowbridge, AngioDynamics Executive Vice President and Chief Financial Officer. I will begin today's call by providing an overview of our recent performance. Steve will then provide a detailed analysis of our second quarter financial performance, and I will conclude with our outlook for the balance of the year before opening the line for questions. Unless otherwise noted, All financial results and growth rates mentioned during today's call are on a pro forma basis, which exclude the results of the dialysis and biocentury businesses that we divested in June 2023, and the PIC and midline products that we divested in February 2024, and the radiofrequency and Syntrax support catheter products that we discontinued. in February 2024. We had a very strong second quarter. Total worldwide revenue was $73 million, representing growth of approximately 9% year over year. Our MedTech segment had yet another excellent quarter, growing 25%, led by growth across all of our platforms. Beyond the top line, We continue to show strong results with respect to profitability, reporting adjusted EBITDA of $3.1 million and generated $2.5 million in operating cash flow. Based on our first half performance and the momentum we expect to deliver in the back half of the year, we now expect to deliver positive adjusted EBITDA for the full year, illustrating continued execution on our goal of delivering sustained profitability. Starting with an update on our MedTech business, Arion continued on its sustained delivery of solid results, growing approximately 22% over the prior year. We have continued to execute on our strategy by taking share with a better product, allowing us to increase penetration and drive a higher mix of revenue from hospital customers. Turning to our mechanical thrombectomy business, we are very encouraged by the performance of both AlphaVac and AngioVac, which in combination grew approximately 46% over the second quarter of last year and further validates the strength of this broad, innovative portfolio. AngioVac and AlphaVac together provide angiodynamics with an unparalleled product portfolio option, and we will continue to leverage the synergies between these two product lines to cement angiodynamics as a solid, bona fide competitor in this large, fast-growing, high-margin market. Beginning with AlphaVac, we saw solid performance in the quarters, with revenue increasing by over 33% versus prior year. This also marks the third consecutive quarter of sequential revenue growth, highlighting its adoption for treating PE following our FDA clearance in early April and our CE marking in late May. As noted on our prior call, supported by our excellent clinical data and a fully trained sales force, We moved into full market release in both the U.S. and Europe in June. We remain very encouraged by physicians and hospitals' willingness to evaluate AlphaVac for the treatment of PE, evidenced by the positive utilization trends we are seeing within existing customer accounts, as well as progress we are making within our new customer pipeline as AlphaVac is being reviewed as part of a growing number of hospitals' value analysis committees. As expected, the vast majority of our growth in the quarter was driven within the US, as our focused commercial efforts, in combination with the strength of our APEX data, have been very successful. In late December, data from the APEX trial were published in the Journal of the Society for Cardiovascular Angiography and Interventions, one of the premier peer-reviewed journals in the space. The publication confirmed the outstanding results announced in May of 2024, which highlighted that AlphaVac is safe, effective, and highly efficient in treating patients with acute intermediate risk, PE. Importantly, The paper highlighted AlphaVac's 35.5% reduction in clot burden from the baseline, which compares favorably to the 9.3% reduction reported in the current market leader's IDE data. This publication is yet another point of validation within the clinical community and should act as a catalyst as many physicians and hospital value analysis committees use studies like these to support their decision-making process when evaluating new technologies. Turning to AngioVac, the PE indication for AlphaVac has proven to be a positive catalyst for AngioVac. As the awareness and utilization of AlphaVac has grown, it has created opportunities for a commercial organization to educate physicians on our entire mechanical thrombectomy portfolio. This increased engagement has opened doors to new facilities and physicians, which helped to drive revenue growth of approximately 51%. While we don't expect to see this level of growth during the balance of 2025, we do expect continued broader adoption to drive year-over-year growth moving forward. And lastly within our MedTech segment is NanoKnife, which has recently seen a number of exciting developments. We continue to be encouraged by trends in the adoption and utilization of NanoKnife, in particular within the urology community, as evidenced by approximately 23% growth in probe revenue in the quarter. As outlined on our last call, we expected to achieve multiple key milestones for NanoKnife by the end of calendar 2024, all of which we did. We identified three key pillars that are necessary to drive long-term adoption and exciting growth for NATO knife. First, regulatory clearances for specific indications. Second, reimbursement and market access. And third, increased market awareness. We have made significant progress on all three fronts since our last update. With respect to regulatory clearance, we received an expanded indication for the NanoNIFE system for prostate tissue ablation from the FDA in early December. With this clearance in hand, we can now more proactively market, educate, and train for the procedure in ways that we've been previously unable to do. With respect to reimbursement and market access, in mid-September, we participated in the CPT editorial panel meeting related to a proposal to create a new CPT Category 1 code specific to IRE and prostate procedures. In October, we were thrilled to have been granted a new CPT 1 code for the treatment of lesions in the prostate and in liver. The new codes will be effective with physician relative value units attached on January 1, 2026. We continue to work diligently with our market access teams on coverage, coding, and payment initiatives to ensure that reimbursement will be widely available across both the commercial and private payers in advance of that effective date. Finally, With respect to our marketing and education strategy to both urologists and patients, we began highlighting the quality of outcomes generated during our Preserve clinical study, the pivotal trial we ran in support of our NanoKnife prostate expanded indication. Preserve evaluated the safety and effectiveness of NanoKnife for the ablation of prostate tissue, in patients with intermediate-risk prostate cancer, which included 121 patients enrolled across 17 clinical sites. Preserve met its primary effectiveness endpoint, demonstrating the performance of the NanoKnife system for the ablation of prostate tissue in patients with intermediate-risk prostate cancer. At 12 months post-procedure, 84% of men were free from any clinically significant cancer in the targeted area. Just as importantly, the study demonstrated extremely compelling quality-of-life outcomes. When men have prostate cancer and are evaluating treatment options, they are forced to choose between effectively treating the cancer or maintaining the quality of life post-treatment, particularly as it relates to sexual and urinary function. While traditional treatments such as radical prostatectomy and radiation therapy often result in significant rates of erectile dysfunction and urinary incontinence following treatment, NanoKnife's targeted approach demonstrates that men need not be forced to make this trade-off and represents a meaningful advancement in prostate cancer treatment. In the preserved study, men treated with NanoKnife did not have any higher rates of sexual dysfunction after 12 months than is seen with active surveillance, or men who undergo no intervention. Just as impressively, approximately 99% of men did not suffer increased urinary incontinence 12 months post-procedure. The preserved study validates the robust safety and clinical efficacy we have seen in more than 32 clinical studies involving over 2,600 patients. In addition to the publications that we expect over the coming months, the preserved data will be featured at the AUA Annual Meeting in Las Vegas at the end of April. 2025. As we look forward to the future of NanoKnife, we are very excited about what this product can be with the validation of a specific prostate indication and line of sight to a well-established reimbursement pathway. With a solid foundation of existing users in the U.S. and an established commercial infrastructure, we are able to hit the ground running. NanoKnife has the potential to redefine the standard of care for prostate health and deliver treatment outcomes that patients and physicians need. With its unique mechanism of action, in combination with its efficiency and efficacy, it is a fantastic alternative to radical therapies which force patients to make significant quality-of-life trade-offs. We believe that these trade-offs have historically limited the widespread adoption of other focal therapies. We are confident that NanoLife can provide a new paradigm for men. We are very excited to provide a deep dive into NanoLife and how it can revolutionize the treatment of prostate cancer with our virtual NanoLife technology event following this earnings call. Turning to our medical device segment, Revenue was approximately flat to the prior year, with our U.S. med device business increasing about 2 percent year over year. Beyond our commercial execution, we illustrated another significant step towards sustained profitability. We reported adjusted EBITDA of $3.1 million during the second quarter, compared to a loss of $10,000 during the second quarter of fiscal 2024. In the quarter, adjusted EPS was a loss of $0.04 per share, improving from a loss of $0.08 per share in fiscal 2024. And importantly, we generated $2.5 million of operating cash flow. These results highlight that our strategy to drive towards profitability is tracking ahead of plan, and we now expect to deliver positive adjusted EBITDA for the full year. Before turning the call over to Steve, I wanted to provide a quick update on our shift to outsourced manufacturing. We have continued to find ways to optimize the process, and as part of that, we have made the decision to keep a portion of our Queensbury facility open, which allows us to make our supply chain more resilient. The process remains on track with our expectations and will allow us to fundamentally change our manufacturing overhead structure and take out those overhead costs, which will ultimately flow through to our bottom line. As a reminder, we expect this transition to generate approximately $15 million in annualized savings by fiscal 2027. We are very excited about our performance during the second quarter and the momentum we have been able to generate during the first half of the year. Our achievements over the past six months, in combination with the efforts of our organization over the last three years, have transformed angiodynamics. Our focus on driving growth within large and fast-growing markets has paid off. Through strategic investments in R&D, clinical research, regulatory submissions, and market access initiatives within our MedTech portfolio, we have now successfully expanded our total addressable market, which now stands at over $10 billion globally, up from just $3 billion in 2021. Not only have we delivered improving growth, but we have also accelerated our pathway to profitability through operational efficiency initiatives. Supported by the strength of our balance sheet, We are in a fantastic position to bring our innovative technologies to more healthcare providers and more patients, while at the same time creating shareholder value. With that, I'll turn the call over to Steve Trowbridge, our Executive Vice President and Chief Financial Officer, to review the quarter in more detail.

Thanks, Jim. Good morning, everybody. Before I begin, I'd like to direct everyone to the presentation on our investor relations website, summarizing the key items from our quarterly results. As Jim mentioned, unless otherwise noted, all metrics and growth rates mentioned during today's call are on a pro forma basis, which exclude the results of the dialysis and biocentury businesses that we divested in June 2023, the pick and midline products that we divested in February 2024, and the radiofrequency and Syntrex support catheter products that we discontinued in February 2024. Our revenue for the second quarter of FY 2025 increased 9.2% year-over-year to $73 million, driven by growth in both our MedTech and U.S. MedDevice platforms. MedTech revenue was $31.6 million, a 25% year-over-year increase, while MedDevice revenue was $41.5 million, flat compared to the second quarter of FY20-24. But as Jim mentioned, our U.S. med device business was up 1.6% over the prior year. For the second fiscal quarter, our med tech platforms comprised 43.2% of our total revenue compared to 37.7% of total revenue a year ago, illustrating sustained execution on our strategy of increasing the percentage of our overall revenue base coming from our med tech segments. Our Arion platform contributed $13.7 million in revenue during the second quarter, growing 21.8% compared to last year. Arion has now delivered double-digit year-over-year growth in each of the 14 consecutive quarters following the anniversary of its launch. Mechanical thrombectomy revenue, which includes Alphavac and AngioVac sales, increased 46.2% over the second quarter of FY2024. AlphaVac revenue for the second quarter was $2.5 million, an increase of 33.3% year over year, and 14% sequential increase over the first quarter of 2025, resulting from the continued adoption of AlphaVac for PE. We're pleased to see the strong performance of AngioVac during the quarter, which generated $8.1 million of revenue, an increase of 50.7% year over year. As Jim mentioned, the combined strength of AngioVac and AlphaVac illustrate the strength of our comprehensive mechanical thrombectomy portfolio. We're definitely seeing synergies between the two product offerings. We remain very encouraged by the universally positive feedback we're receiving regarding AlphaVac, as well as the increased adoption of AngioVac. The mechanical thrombectomy market continues to be one of the most exciting, fastest-growing medtech markets. And although the market is currently led by two large-scale competitors, AngioDynamics continues to demonstrate our ability to take share, positioning us as a strong number three. We are excited about our current growth trajectory and our future prospects in this market, led by our innovative portfolio. Total Nanonife revenue was $6 million, an increase of 4.9% over the prior year quarter. Nanonife's disposable revenue during the quarter increased 23.1%. As we've discussed throughout the year, we expect capital sales during the year to be approximately half of what they were in 2024. And in line with those expectations, capital sales declined 39.7% during the quarter. We were very pleased with the trajectory of prostate cases in the quarter and are on track for our projections for NanoKnife for the full year. While we expect to see increasing contribution from NanoKnife following the positive reimbursement decision received in October and the prostate indication received in December, These milestones were built into our expectations for fiscal year 2025 and are already reflected in our guidance for the year. Moving down the income statement, our gross margin for the second quarter of FY 2025 was 54.7%, a decrease of 10 basis points compared to the year-ago period, but ahead of our expectations for the quarter. For the second fiscal quarter, MedTech gross margin was 63.7%, an increase of 120 basis points, primarily driven by mix associated with increased angioVac revenue. Med device gross margin was 47.8%, a decrease of 240 basis points, primarily driven by inflationary pressures and costs associated with the transition to outsourced manufacturing. Turning to R&D, our research and development expense during the second quarter of FY 2025 was 6.4 million, or 8.8% of sales, compared to 8.3 million, or 12.5% of sales a year ago. The year-over-year decrease is primarily related to timing, including the completion of our Preserve and Apex clinical studies. We remain committed to investing in R&D initiatives to support the long-term growth of our MedTech segment. SG&A expense for the second quarter of FY 2025 was $36 million, representing 49.3% of sales, compared to $33.2 million or 49.7% of sales a year ago. Our adjusted net loss for the second quarter of FY 2025 was $1.7 million or an adjusted loss per share of $0.04 compared to an adjusted net loss of $3.4 million or an adjusted loss per share of $0.08 in the second quarter of last year. The year-over-year improvement is largely attributable to higher revenue and improving operating leverage during the second quarter of this year. Adjusted EBITDA in the second quarter of FY2025 was a gain of $3.1 million compared to a loss of $10,000 in the second quarter of 2024. Turning to an update in our balance sheet, on November 30, 2024, we had $54.1 million in cash and cash equivalents, inclusive of the cash utilized in our stock repurchase program, compared to $55 million in cash and cash equivalents at August 31, 2024. As a reminder, we currently have zero debt. In the second quarter of fiscal 25, we generated $2.5 million in operating cash, had capital expenditures of $0.8 million, and additions to Arianne placement and evaluation units of $1.2 million. For the balance of the year, we expect to utilize approximately $10 million of cash in the third quarter before returning to cash generation in the fourth quarter. As we stated in July, we're targeting to end the year with approximately $60 million of cash on the balance sheet. Cash utilization in the third quarter will be driven by scheduled payments associated with the settlement of our patent litigation with B.D. Bard that we executed last year, and working capital usage connected with our transition manufacturing arrangement with Spectrum Vascular, the company we sold our pick and midline business to in February of last year. While we've been managing working capital associated with this transition manufacturing arrangement since the divestiture, we do expect working capital requirements to increase during the back half of our fiscal year, as we progress towards full manufacturing transfer during our calendar 2025. To leverage the strength of our balance sheet, we're evaluating the addition of a working capital revolving credit facility. While we're very comfortable with the current amount of cash on the balance sheet, we view the addition of a revolver as a matter of prudent financial housekeeping, one that further bolsters our balance sheet and provides for increased flexibility and optionality at a relatively low cost capital and zero dilution. We are extremely proud of our cash position in balance sheet management and will continue to appropriately manage working capital as we turn to proving that our business model generates cash for the full year in the next couple of quarters. Through the continued execution of our growth strategy and operational efficiency initiatives and our demonstrated progress towards profitability, we remain on track with our stated goal of being cash flow positive for the full year of fiscal 2026. As announced in July of calendar 2024, the company approved a stock repurchase program authorizing purchases of up to $15 million of our outstanding common shares. Through the end of the fiscal second quarter, we purchased approximately $1.7 million worth of stock at an average share price of $6.82. We will continue to be opportunistic about our decision to make further repurchases on a number of factors, including market conditions, as well as the need to balance investment in our growth strategy, as we seek to leverage the strength of our balance sheet to create value for our shareholders. And turning now to guidance. For fiscal year 2025, we continue to expect revenue will be in the range of $282 to $288 million, representing growth of between 4.2% and 6.4% over fiscal year 2024. Within each of our businesses, we now expect MedTechNet sales to grow in the range of 12% to 15%, ahead of our previous guidance of 10% to 12%. And we now expect MedDevice net sales to be about flat, down from the previous guidance of 1% to 3%. From a quarterly cadence perspective, we expect the balance of the year to follow a typical seasonality pattern, with total revenue in the third quarter being slightly down sequentially from the second quarter, with the fourth quarter being the strongest of the fiscal year. For fiscal 2025, we continue to expect gross margin to be in the range of 52% to 53%. We now expect adjusted EBITDA in the range of a gain of one to three million, up from the previous guidance of a loss of 2.5 million to zero. And finally, we now expect an adjusted loss per share in the range of 34 to 38 cents, an improvement from our previous guidance of a loss per share of 38 to 42 cents. With that, I'll turn it back to Jim.