AngioDynamics, Inc. First Quarter of Fiscal 2027 Earnings Conference Call - ANGIODYNAMICS INC

Explicit Guidance:

• FY2027 Net Sales: Projected range of $336M to $341M, representing 5–6.5% growth over FY2026 ($320.2M).
• Segment Revenue: MedTech net sales expected to grow 12–15% year-over-year; Med Device sales expected to be roughly flat.
• Gross Margin: Full-year target of 54–55%; First-half margins expected to exceed second-half due to accounting for rising costs.
• Adjusted EBITDA: Expected range of $13M to $16M for FY2027.
• Adjusted EPS: Expected loss per share range of $0.24 to $0.29.
• R&D Investment: Targeting approximately 10% of sales going forward to support MedTech growth.
• Cash Flow: Expectation to generate positive cash flow from operations for the full FY2027; Q1 remains the highest cash utilization quarter, with Q4 typically the highest generation quarter.
• Tariffs: Impact expected to be broadly similar to FY2026, though noted as dynamic and subject to change.

Business-Segment Outlook:

• MedTech Segment: Expected to comprise a majority of the overall revenue base by the end of FY2027 (currently ~49%).
• Orion: On track for 22nd consecutive quarter of double-digit YoY growth; strategy to shift share from OBL to hospital settings while continuing international adoption following RCE mark approval.
• Mechanical Thrombectomy (AlphaVac/AngioVac): AlphaVac expected to drive growth with continued single-digit growth anticipated for AngioVac as it returns to normal growth; combined sales expected to outperform market.
• NanoKnife (Prostate): Driven by record procedure volumes; capital sales viewed as lumpy, with disposables serving as the primary bellwether; seeking consistent nationwide reimbursement coverage.
• NanoKnife (BPH): Launching the "Relief" pilot study (FDA approved); evaluating treatment for Benign Prostate Hyperplasia in an estimated $1.9B market; durability and tissue impact metrics required to commit to larger program.
• Med Device: Expected to remain flat in FY2027 while providing consistent cash flow to fund MedTech investments.

Market and Competitive Outlook:

• Share Gains: Actively taking share in both hospital and office-based laboratory (OBL) settings for Orion; AlphaVac gaining adoption as hospitals replace competitors.
• Clinical Differentiation: AlphaVac positioned as the "most versatile" product; Orion highlighted as the only product capable of instant restenosis treatment above and below the knee.
• Competitive Landscape: Monitoring disruptions at competitor levels but confident in winning based on clinical value prop and product versatility rather than relying on competitor failures.
• Adoption Trends: Shifting from university-heavy adoption (hepatobiliary) to regional/community urology centers for prostate treatments; growing international adoption for Orion.

Macro / Industry Outlook:

• Regulatory/Reimbursement: Continuing to build towards consistent nationwide coverage for NanoKnife in prostate care following positive MAC coverage decisions; monitoring regulatory hurdles for AlphaReturn (IDE enrollment ongoing).
• Currency/FX: No specific FX guidance provided, but international adoption is noted as a growth driver.
• Inflation/Costs: Rising costs partially offset by pricing power and manufacturing efficiency gains; Costa Rica facility fully contributing to cost savings.

Strategic Initiatives:

• Leadership Transition: Eric Honroth appointed President and CEO effective November 2, 2026; Jim Clemmer remains closely involved to ensure a smooth transition.
• Product Pipeline: Advancing enrollment in Ambition BT case study to support clinical case for Orion below-the-knee; AlphaReturn IDE trial progressing to further strengthen position; Relief study initiated for BPH.
• Capacity/Manufacturing: Manufacturing transition and global inflation managed within expectations; Costa Rica cost accelerations realized over the last six quarters.
• R&D Focus: Maintaining commitment to R&D for long-term MedTech growth, specifically targeting 10% of sales.

Risks and Headwinds to Outlook:

• Tariff Volatility: Tariff situation remains dynamic and could materially impact results; specific refund timing is uncertain.
• Capital Sales Volatility: NanoKnife capital sales are lumpy and not indicative of future growth; reliance is on disposable utilization.
• Reimbursement Uncertainty: Need for consistent nationwide coverage for NanoKnife in prostate care remains a work in progress.
• Seasonality: Q4 is historically the highest revenue quarter; Q1, Q3 (due to Dec/Jan/Feb structural issues) and Q2 have different utilization/generation profiles.
• Clinical Trial Delays: Success of AlphaReturn and Relief studies is contingent on enrollment pace and clinical data outcomes (e.g., durability).

Management Tone on the Future:

• Confidence: High confidence in the "strategy guiding our transformation," citing 21 consecutive quarters of double-digit growth in Orion and a clear path to MedTech becoming the majority revenue source.
• Transition: Full confidence in the organization's ability to execute at a high level during the CEO transition; Jim Clemmer expresses pride in the foundation built and confidence in Eric Honroth to continue the trajectory.
• Execution: Strong belief in the product mix and clinical outcomes driving value; management views current growth as the result of a deliberate, well-planned 5–6 year strategy rather than random success.

Miscellaneous:

• Capital Utilization: No significant shift in Q1 cash usage trends compared to historical norms; cash usage driven by incentive compensation, sales comp, and tariffs.
• Gross Margin Drivers: Margins benefit from favorable pricing, MedTech mix shift, and tariff refunds; 57.8% was the baseline excluding the one-time $1.2M refund received.