AngioDynamics Inc (ANGO) Reports Fiscal 2024 Second Quarter Results and Revises Full-Year Guidance
Net Sales: Reported a 2.7% increase in Q2 fiscal year 2024 to $79.1 million.
Gross Margin: Experienced a decrease to 50.9% in Q2 fiscal year 2024 from 51.7% in the prior-year quarter.
Net Loss: Recorded a net loss of $29.0 million, or $0.72 per share, in Q2 fiscal year 2024.
Adjusted EBITDA: Adjusted EBITDA was $1.8 million in Q2 fiscal year 2024, compared to $2.3 million in the same quarter last year.
Cash Position: Ended the quarter with $60.9 million in cash and cash equivalents.
Manufacturing Restructuring: Announced a shift to a fully outsourced model expected to reduce annual expenses by $15 million by fiscal year 2027.
FY 2024 Guidance: Adjusted net sales forecast to $320 to $325 million with an anticipated gross margin of 49% to 51%.
On January 5, 2024, AngioDynamics Inc (NASDAQ:ANGO), a leading provider of medical, surgical, and diagnostic devices, released its 8-K filing, detailing the financial results for the second quarter of fiscal year 2024, which ended on November 30, 2023. The company, which primarily serves the peripheral vascular disease market and oncology and surgical settings in the United States, is undergoing a strategic transformation to enhance its competitiveness and profitability.
Financial Performance and Challenges
AngioDynamics Inc reported a modest increase in net sales, with Med Tech and Med Device segments contributing to the growth. However, the company faced a decline in gross margin, primarily due to inflationary pressures, including increased labor and raw material costs, as well as geographic mix. The net loss widened significantly to $29.0 million, or $0.72 per share, compared to the prior year, impacted by restructuring and other related costs.
The importance of these performance metrics lies in their reflection of the company's ability to navigate market challenges while investing in growth opportunities. The decline in gross margin and the net loss highlight the pressures AngioDynamics faces in maintaining profitability amidst a changing cost environment and strategic shifts.
Strategic Initiatives and Outlook
President and CEO Jim Clemmer emphasized the company's commitment to restructuring its manufacturing operations and focusing on portfolio optimization. The shift to an outsourced manufacturing model is expected to significantly reduce expenses and drive the company to profitability within two years. This strategic move is crucial for AngioDynamics as it aims to improve its gross margin profile and establish long-term growth.
"Fully shifting both Med Device and Med Tech to this model will allow us to more effectively compete in our chosen markets, fundamentally changing our corporate gross margin profile and driving us to profitability in two years," said Jim Clemmer.
The company has revised its fiscal year 2024 guidance, now expecting net sales to be in the range of $320 to $325 million, with a gross margin of approximately 49% to 51%. The adjusted loss per share is anticipated to be between $0.35 to $0.42. These adjustments reflect the challenges faced in the Thrombectomy business and the impacts associated with the manufacturing restructuring.
Comprehensive Financial Review
AngioDynamics Inc's balance sheet shows a solid cash position, which is critical for funding its strategic initiatives and managing the transition to an outsourced manufacturing model. The company's ability to generate operating cash, maintain capital expenditures, and manage additions to Auryon placement and evaluation units demonstrates its operational efficiency and commitment to investing in its growth platforms.
The company's performance analysis indicates that while there are immediate challenges, the strategic steps being taken are aimed at positioning AngioDynamics for sustainable growth and profitability. The focus on optimizing the product portfolio and restructuring manufacturing operations is expected to create a leaner, more focused organization capable of delivering improved patient outcomes and shareholder value.
For more detailed financial information and to view the full earnings release, please visit the AngioDynamics website or access the 8-K filing.
Explore the complete 8-K earnings release (here) from AngioDynamics Inc for further details.
This article first appeared on GuruFocus.
