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What changed in ANGIODYNAMICS INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of ANGIODYNAMICS INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+242 added−250 removedSource: 10-K (2024-07-25) vs 10-K (2023-08-03)

Top changes in ANGIODYNAMICS INC's 2024 10-K

242 paragraphs added · 250 removed · 160 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

43 edited+27 added−34 removed96 unchanged
Biggest changeTwo lines are available in stiff/standard, 10cm or 15cm and echogenic for visibility under ultrasound guidance: Micro Introducer Kit and Ministick Max. 5 BioFlo AngioDynamics offers the BioFlo catheter, the only catheter on the market with Endexo Technology, a material more resistant to thrombus accumulation, in vitro (based on platelet count).
Biggest changePort Technologies • BioFlo: AngioDynamics offers the BioFlo catheter, the only catheter on the market with Endexo Technology, a material more resistant to thrombus accumulation, in vitro (based on platelet count). Endexo Technology is a permanent and non-eluting polymer that is “blended” into the polyurethane from which the catheter is made.
These acquisitions added product lines 2 including ablation and NanoKnife systems, vascular access products, angiographic products and accessories, dialysis products, drainage products, thrombolytic products, embolization products and venous products. In May 2012, the Company acquired Navilyst Medical's Fluid Management business, which the Company sold in May 2019 to Medline Industries, Inc. pursuant to an asset purchase agreement.
These acquisitions added product lines including ablation and NanoKnife systems, vascular access products, angiographic products and accessories, dialysis products, 2 drainage products, thrombolytic products, embolization products and venous products. In May 2012, the Company acquired Navilyst Medical's Fluid Management business, which the Company sold in May 2019 to Medline Industries, Inc. pursuant to an asset purchase agreement.
The funnel shaped tip enhances venous drainage flow when the distal tip is exposed by retracting the sheath, helps prevent clogging of the cannula with commonly encountered undesirable intravascular material, and facilitates embolic removal of such extraneous material. 3 AlphaVac The AlphaVac System is an emergent mechanical aspiration device that eliminates the need for perfusionist support.
The funnel shaped tip enhances venous drainage flow when the distal tip 3 is exposed by retracting the sheath, helps prevent clogging of the cannula with commonly encountered undesirable intravascular material, and facilitates embolic removal of such extraneous material. AlphaVac The AlphaVac System is an emergent mechanical aspiration device that eliminates the need for perfusionist support.
Mr. Campbell joined AngioDynamics from Medtronic where he served as the Vice President of Marketing for the Patient Care and Safety business after serving as the Vice President of Marketing for the SharpSafety business at Covidien (Medtronic). During his tenure at Covidien, Mr.
Campbell joined AngioDynamics from Medtronic where he served as the Vice President of Marketing for the Patient Care and Safety business after serving as the Vice President of Marketing for the SharpSafety business at Covidien (Medtronic). During his tenure at Covidien, Mr.
After a device receives 510(k) clearance, any modification that could significantly affect 10 its safety or effectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance. The 510(k) clearance procedure including questions and responses may take up to 12 months. In some cases, supporting clinical data may be required.
After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, requires a new 510(k) clearance. The 510(k) clearance procedure including questions and responses may take up to 12 months. In some cases, supporting clinical data may be required.
Procedure kits are available in a variety of lengths and configurations to accommodate varied patient anatomies. The VenaCure EVLT system comes with a comprehensive physician training program and extensive marketing support. 7 Microwave Ablation Solero Microwave Tissue Ablation (MTA) System The Solero MTA System features the Solero Microwave (MW) Generator and the specially designed Solero MW Applicators.
Procedure kits are available in a variety of lengths and configurations to accommodate varied patient anatomies. The VenaCure EVLT system comes with a comprehensive physician training program and extensive marketing support. Microwave Ablation Solero Microwave Tissue Ablation (MTA) System The Solero MTA System features the Solero Microwave (MW) Generator and the specially designed Solero MW Applicators.
New 11 products must be compliant with the Medical Device Regulation ("MDR") as of May 2021 and previously CE Marked products must become compliant when their certification expires, with a transition period ending December 2027 for higher classification devices, or December 2028 for lower classification devices.
New products must be compliant with the Medical Device Regulation ("MDR") as of May 2021 and previously CE Marked products must become compliant when their certification expires, with a transition period ending December 2027 for higher classification devices, or December 2028 for lower classification devices.
Clemmer currently serves on the Board of Directors for 13 AngioDynamics and previously served on the Board of Directors for Lantheus Medical Imaging. Mr. Clemmer is a graduate of the Massachusetts College of Liberal Arts, where he served as interim president from August 2015 until March 2016. Stephen A.
Clemmer currently serves on the Board of Directors for AngioDynamics and previously served on the Board of Directors for Lantheus Medical Imaging. Mr. Clemmer is a graduate of the Massachusetts College of Liberal Arts, where he served as interim president from August 2015 until March 2016. Stephen A.
Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls and webcasts. We use these channels as well 14 as social media and blogs to communicate with the public about our company, our services and other issues.
Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls and webcasts. We use these channels as well as social media and blogs to communicate with the public about our company, our services and other issues.
The ability to access a port for power-injected contrast studies eliminates the need for additional needle sticks in the patient’s arm and wrist veins. Once implanted, repeated access to the bloodstream can be accomplished with greater ease and less discomfort. Our SmartPort port line is available in standard, mini and low-profiles to accommodate more patient anatomies.
The ability to access a port for power-injected contrast studies eliminates the need for additional needle sticks in the patient’s arm and wrist veins. Once implanted, repeated access to the bloodstream can be accomplished with greater ease and less discomfort. Our SmartPort port line is available in standard, mini and low-profile to accommodate more patient anatomies.
We continue to focus on meeting the demand for our product and working towards standard inventory and backlog levels in fiscal year 2024. See Part I, Item 1A "Risk Factors" in this Annual Report on Form 10-K. INTELLECTUAL PROPERTY Patents, trademarks and other proprietary rights are very important to our business.
We continue to focus on meeting the demand for our product and working towards standard inventory and backlog levels in fiscal year 2025. See Part I, Item 1A "Risk Factors" in this Annual Report on Form 10-K. INTELLECTUAL PROPERTY Patents, trademarks and other proprietary rights are very important to our business.
Any stockholder also may obtain copies of these documents, free of charge, by sending a request in writing to our Corporate headquarters, Attention: Saleem Cheeks. Information on our website or connected to our website is not incorporated by reference into this Annual Report on Form 10-K. 15
Any stockholder also may obtain copies of these documents, free of charge, by sending a request in writing to our Corporate headquarters, Attention: Saleem Cheeks. Information on our website or connected to our website is not incorporated by reference into this Annual Report on Form 10-K. 13
Lastly, the IsoLoc device repositions and lifts the bowel in patients that have a low-lying bowel. 8 Alatus Vaginal Balloon Packing System The Alatus device was developed with the patient's comfort in mind and to assist the physician to move healthy tissue away from the radiation treatment field.
Lastly, the IsoLoc device repositions and lifts the bowel in patients that have a low-lying bowel. 7 Alatus Vaginal Balloon Packing System The Alatus device was developed with the patient's comfort in mind and to assist the physician to move healthy tissue away from the radiation treatment field.
International partners that are participating in the MDSAP include: • Therapeutic Goods Administration of Australia 9 • Brazil’s Agência Nacional de Vigilância Sanitária • Health Canada • Japan’s Ministry of Health, Labour and Welfare, and the Japanese Pharmaceuticals and Medical Devices Agency • U.S.
International partners that are participating in the MDSAP include: • Therapeutic Goods Administration of Australia 8 • Brazil’s Agência Nacional de Vigilância Sanitária • Health Canada • Japan’s Ministry of Health, Labour and Welfare, and the Japanese Pharmaceuticals and Medical Devices Agency • U.S.
Clemmer served as Group President at Kendall Healthcare (which was acquired by Tyco International in 1994), where he managed the U.S. business across five divisions and built the strategic plan for the medical supplies segment before Covidien was spun off from Tyco. Mr. Clemmer began his career at Sage Products, Inc. Mr.
Prior to his role at Covidien, Mr. Clemmer served as Group President at Kendall Healthcare (which was acquired by Tyco International in 1994), where he managed the U.S. business across five divisions and built the strategic plan for the medical supplies segment before Covidien was spun off 12 from Tyco. Mr. Clemmer began his career at Sage Products, Inc. Mr.
The 510(k) clearance procedure is available only if a manufacturer can establish that its device is “substantially equivalent” in intended use and in safety and effectiveness to a “predicate device,” which is (i) a device that has been cleared through the 510(k) clearance process; (ii) a device that was legally marketed prior to May 28, 1976 (preamendments device); (iii) a device that was originally on the U.S. market as a Class III device (Premarket approval) and later downclassified to Class II or I; (iv) or a 510(k) exempt device.
The 510(k) clearance procedure is available only if a manufacturer can establish that its device is “substantially equivalent” in intended use and in safety and effectiveness to a “predicate device,” which is (i) a device that has been cleared 9 through the 510(k) clearance process; (ii) a device that was legally marketed prior to May 28, 1976 (preamendment device); or (iii) a device that was originally on the U.S. market as a Class III device (Premarket approval) and later downclassified to Class II or I.
Item 1A "Risk Factors" in this Annual Report on Form 10-K. 12 INSURANCE Our product liability insurance coverage is limited to a maximum of $10 million per product liability claim and an annual aggregate policy limit of $10 million, subject to a self-insured retention of $500,000 per occurrence and $2 million in the aggregate.
See Part I. Item 1A "Risk Factors" in this Annual Report on Form 10-K. INSURANCE Our product liability insurance coverage is limited to a maximum of $10 million per product liability claim and an annual aggregate policy limit of $10 million, subject to a self-insured retention of $500,000 per occurrence and $2 million in the aggregate.
Executive Officers of the Company The following table sets forth certain information with respect to our executive officers. Name Age Position James C. Clemmer 59 President and Chief Executive Officer Stephen A. Trowbridge 49 Executive Vice President and Chief Financial Officer Chad T.
Executive Officers of the Company The following table sets forth certain information with respect to our executive officers. Name Age Position James C. Clemmer 60 President and Chief Executive Officer Stephen A. Trowbridge 50 Executive Vice President and Chief Financial Officer Chad T.
EMPLOYEES As of May 31, 2023, we had approximately 815 full time employees. None of our employees are represented by a labor union and we have never experienced a work stoppage.
EMPLOYEES As of May 31, 2024, we had approximately 748 full time employees. None of our employees are represented by a labor union and we have never experienced a work stoppage.
In fiscal year 2023, the Company's ability to manufacture products, the reliability of our supply chain, labor shortages, backlog and inflation (including the cost and availability of raw materials, direct labor and shipping) have impacted our business and resulted in a backlog of $2.7 million at the end of the fourth quarter.
In fiscal year 2024, the Company's ability to manufacture products, the reliability of our supply chain, labor shortages, backlog and inflation (including the cost and availability of raw materials, direct labor and shipping) have impacted our business and resulted in a backlog of $1.3 million at the end of the fourth quarter down $1.4 million from the fourth quarter of fiscal year 2023.
International The delivery of our devices in any market is subject to evolving regulation by the EU Medical Device Regulations, notified bodies and comparable nation-specific bodies responsible for reimbursement and regulation of health care items and services.
International The delivery of our devices in any EU member country is subject to evolving regulation by the EU Medical Device Regulations, notified bodies and comparable nation-specific bodies whether part of the EU or not, responsible for reimbursement and regulation of health care items and services.
The energy delivery is hyperechoic and can be monitored under real-time ultrasound. 4 Med Device Peripheral Products (Core) We offer a comprehensive portfolio for minimally invasive peripheral products. Product categories include an extensive line of angiographic catheters and diagnostic and interventional guidewires, percutaneous drainage catheters and coaxial micro-introducer kits.
The energy delivery is hyperechoic and can be monitored under real-time ultrasound. 4 Med Device Peripheral Products (Interventional Devices) We offer a comprehensive portfolio of products for use during minimally invasive procedures. Product categories include an extensive line of angiographic catheters, guidewires, drainage catheters and micropuncture kits.
Campbell joined AngioDynamics in May 2016 as the Senior Vice President and General Manager for Vascular Access. As of October 2021, Mr. Campbell assumed responsibility of the Oncology Global Business Unit in addition to his role of General Manager for Vascular Access. In his role, Mr. Campbell oversees research and development and global commercialization of the Global Business Unit’s portfolio.
As of October 2021, Mr. Campbell assumed responsibility of the Oncology Global Business Unit in addition to his role of General Manager for Vascular Access. In his role, Mr. Campbell oversees global commercialization of the Global Business Unit’s portfolio. Mr.
Campbell also held roles including Director of Marketing, Area Vice President of Sales, Region Manager, Product Manager and Account Manager. Mr. Campbell received a Bachelor of Arts from the University of Kentucky. Scott Centea joined AngioDynamics in 2005 as a sales representative serving the Carolinas.
Campbell also held roles including Director of Marketing, Area Vice President of Sales, Region Manager, Product Manager and Account Manager. Mr. Campbell received a Bachelor of Arts from the University of Kentucky.
In order to distribute and sell products into the European Union as well as a number of other countries including many Central European Free Trade Agreement participants, Scandinavian, and Middle Eastern countries, a CE Mark is required.
Sales of medical devices are subject to regulatory requirements in many countries. The regulatory review process may vary greatly from country to country. In order to distribute and sell products into the European Union as well as a number of other countries including many Central European Free Trade Agreement participants, Scandinavian, and Middle Eastern countries, a CE Mark is required.
Our ports are used primarily in systemic or regional short- and long-term cancer treatment protocols that require frequent infusions of highly concentrated or toxic medications (such as chemotherapy agents, antibiotics or analgesics) and frequent blood samplings. Our port products and accessories include: • BioFlo Port : Our BioFlo Port was the first port available featuring a catheter with Endexo Technology.
Our ports are used primarily in systemic or regional short- and long-term cancer treatment protocols that require frequent infusions of highly concentrated or toxic medications (such as chemotherapy agents, antibiotics or analgesics) and frequent blood samplings.
The Company also relies on third party manufacturers for the manufacturing of certain products. BACKLOG We have historically kept sufficient inventory on hand to ship product within 24-48 hours of order receipt to meet customer demand.
BACKLOG We have historically kept sufficient inventory on hand to ship product within 24-48 hours of order receipt to meet customer demand.
Reimbursement approval must be obtained individually in each country in which our products are marketed. Outside the U.S., we maintain a healthcare economics team that works directly with providers, our distributors and health systems to obtain reimbursement approval in the countries in which they will use or sell our products.
Reimbursement 11 approval must be obtained individually in each country in which our products are marketed. Members of our healthcare economics team work directly with providers, our distributors and health systems to obtain reimbursement approval in the countries in which they will use or sell our products. There can be no assurance that reimbursement approvals will be received.
Prior to joining AngioDynamics, Mr. Clemmer served as President of the $1.8 billion medical supplies segment at Covidien plc. where he directed the strategic and day-to-day operations for global business divisions that collectively manufactured 23 different product categories.
Clemmer served as President of the $1.8 billion medical supplies segment at Covidien plc. where he directed the strategic and day-to-day operations for global business divisions that collectively manufactured 23 different product categories. In addition, he managed global manufacturing, research and development, operational excellence, business development and all other functions associated with the medical supplies business.
In August 2018, the Company acquired the BioSentry product line from Surgical Specialties, LLC. In September 2018, the Company acquired RadiaDyne, which included endorectal and vaginal balloons. On October 2, 2019, the Company acquired Eximo Medical, Ltd., a pre-commercial stage medical device company and its proprietary 355nm laser atherectomy technology (now called Auryon), which treats Peripheral Artery Disease.
On October 2, 2019, the Company acquired Eximo Medical, Ltd., a pre-commercial stage medical device company and its proprietary 355nm laser atherectomy technology (now called Auryon), which treats Peripheral Artery Disease.
On December 17, 2019, the Company acquired the C3 Wave tip location asset from Medical Components Inc. On July 27, 2021, AngioDynamics acquired the Camaro Support Catheter asset from QX Medical, LLC. AngioDynamics is publicly traded on the NASDAQ stock exchange under the symbol ANGO. PRODUCTS Our product offerings fall within two segments, Med Tech and Med Device.
On July 27, 2021, AngioDynamics acquired the Camaro Support Catheter asset from QX Medical, LLC and subsequently discontinued this product in the third quarter of fiscal year 2024. AngioDynamics is publicly traded on the NASDAQ stock exchange under the symbol ANGO. PRODUCTS Our product offerings fall within two segments, Med Tech and Med Device.
Endexo Technology is a permanent and non-eluting polymer that is “blended” into the polyurethane from which the catheter is made. It is present throughout the catheter, including the extraluminal, intraluminal and cut catheter surface of the tip. Endexo Technology remains present for the life of the catheter.
It is present throughout the catheter, including the extraluminal, intraluminal and cut catheter surface of the tip. Endexo Technology remains present for the life of the catheter.
Advanced features of the BioFlo Port include multiple profile and catheter options, a large septum area for ease of access and the ability to administer contrast through a CT injection for purposes of imaging. • SmartPort, SmartPort+, SmartPort Plastic : The SmartPort power-injectable port with Vortex technology offers the ability for a clinician to access a vein for both the delivery of medications or fluids and for administering power- 6 injected contrast to perform a CT scan.
Our port products and accessories include: • SmartPort, SmartPort+, SmartPort Plastic : The SmartPort power-injectable port with Vortex technology offers the ability for a clinician to access a vein for both the delivery of medications or fluids and for administering power-injected contrast to perform a CT scan.
Many states have similar laws. There can be no assurance that we will not be required to incur significant costs to comply with such laws and regulations now or in the future, or that such laws or regulations will not have a material adverse effect upon our ability to do business.
There can be no assurance that we will not be required to incur significant costs to comply with such laws and regulations now or in the future, or that such laws or regulations will not have a material adverse effect upon our ability to do business. 10 International Regulation Internationally, all of our current products are considered medical devices under applicable regulatory regimes, and we anticipate that this will be true for all of our future products.
The cannula is intended for use in the venous system. The handle is indicated as a vacuum source for the AlphaVac MMA system. Thrombolytic Catheters Thrombolytic catheters are used to deliver thrombolytic agents, which are drugs that dissolve blood clots in hemodialysis access grafts, arteries, veins and surgical bypass grafts.
Thrombolytic Catheters Thrombolytic catheters are used to deliver thrombolytic agents, which are drugs that dissolve blood clots in hemodialysis access grafts, arteries, veins and surgical bypass grafts.
The SmartPort+ port line combines Vortex technology with BioFlo catheters. In addition to the three titanium port body sizes, there is a plastic port body. • Vortex: Our Vortex port technology line of ports features a clear-flow port technology that, we believe, revolutionized port design.
The SmartPort+ port line combines Vortex technology with BioFlo catheters. In addition to the three titanium port body sizes, there is a plastic port body. • BioFlo Port : Our BioFlo Port was the first port available featuring a catheter with Endexo Technology.
In addition to serving as the Company’s CFO and managing the finance functions, Mr. Trowbridge also managed the Legal function on an interim basis until January 30, 2021. Prior to AngioDynamics, Mr. Trowbridge served as Corporate Counsel at Philips Healthcare and Intermagnetics General Corporation. Mr.
In addition to serving as the Company’s CFO and managing the finance functions, Mr. Trowbridge also manages the Legal function. Prior to AngioDynamics, Mr. Trowbridge served as Corporate Counsel at Philips Healthcare and Intermagnetics General Corporation. Mr. Trowbridge began his career with Cadwalader, Wickersham & Taft LLP in the firm’s Mergers and Acquisitions and Securities Group. Mr.
The Solero MTA System and Accessories are indicated for the ablation of soft tissue during open procedures. The Solero MTA System is not intended for cardiac use. Radiofrequency Ablation StarBurst Radiofrequency Ablation Devices Radiofrequency Ablation (RFA) products use radiofrequency energy to provide a minimally invasive approach to ablating solid cancerous or benign tumors.
The Solero MTA System and Accessories are indicated for the ablation of soft tissue during open procedures. The Solero MTA System is not intended for cardiac use.
Campbell 52 Senior Vice President and General Manager, Vascular Access and Oncology Scott Centea 45 Senior Vice President and General Manager, Endovascular Therapies David D. Helsel 59 Senior Vice President, Global Operations and Research and Development Laura Piccinini 53 Senior Vice President and General Manager, International James C. Clemmer became our President and Chief Executive Officer (CEO) in April 2016.
Campbell 53 Senior Vice President and General Manager, Global Oncology and Vascular Access Laura Piccinini 54 Senior Vice President and General Manager, Endovascular Therapies and International Warren G. Nighan 55 Senior Vice President, Global Supply Chain, Quality and Regulatory Affairs James C. Clemmer became our President and Chief Executive Officer (CEO) in April 2016. Prior to joining AngioDynamics, Mr.
The BioFlo catheter’s long-term durability and efficacy is intended to provide clinicians a high degree of safety and confidence in providing better patient care and improved patient outcomes. BioFlo catheters are available across the Vascular Access family of products, including PICCs, midlines, ports and dialysis catheters.
The BioFlo catheter’s long-term durability and efficacy is intended to provide clinicians a high degree of safety and confidence in providing better patient care and improved patient outcomes • Vortex: Our Vortex port technology line of ports features a clear-flow port technology that, we believe, revolutionized port design.
Piccinini is a graduate of the Parma University of Medicine, where she received a nursing degree with specializations in ICU, Anesthesia, and First Aid as a Helicopter Flight Coordinator. AVAILABLE INFORMATION Our corporate headquarters is located at 14 Plaza Drive, Latham, New York 12110. Our phone number is (518) 795-1400. Our website is www.angiodynamics.com .
Piccinini is a graduate of the Parma University of Medicine, where she received a nursing degree with specializations in ICU, Anesthesia, and First Aid as a Helicopter Flight Coordinator. Warren G.
Trowbridge began his career with Cadwalader, Wickersham & Taft LLP in the firm’s Mergers and Acquisitions and Securities Group. Mr. Trowbridge received a Bachelor of Science in Science and Technology Studies from Rensselaer Polytechnic Institute, a Juris Doctor from the University of Pennsylvania Law School, and a Master of Business Administration from Duke University’s Fuqua School of Business. Chad T.
Trowbridge received a Bachelor of Science in Science and Technology Studies from Rensselaer Polytechnic Institute, a Juris Doctor from the University of Pennsylvania Law School, and a Master of Business Administration from Duke University’s Fuqua School of Business. Chad T. Campbell joined AngioDynamics in May 2016 as the Senior Vice President and General Manager for Vascular Access.
With its rounded chamber, the Vortex port is designed to have no sludge-harboring corners or dead spaces. This product line consists of titanium, plastic and dual-lumen offerings. • PASV Valve Technology: The PASV Valve Technology is designed to automatically resist backflow and reduce blood reflux that could lead to catheter-related complications.
This product line consists of titanium, plastic and dual-lumen offerings. • PASV Valve Technology: The PASV Valve Technology is designed to automatically resist backflow and reduce blood reflux that could lead to catheter-related complications. 6 Venous Insufficiency VenaCure EVLT laser system Our VenaCure EVLT system products are used in endovascular laser procedures to treat superficial venous disease (varicose veins).
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Angiographic Products and Accessories Angiographic products and accessories are used during peripheral diagnostic and interventional procedures. These products permit physicians to reach targeted locations to deliver contrast media for visualization purposes and therapeutic agents and devices, such as percutaneous transluminal angioplasty (PTA) balloons. Angiographic products consist of angiographic catheters and guidewires.
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In August 2018, the Company acquired the BioSentry product line from Surgical Specialties, LLC, which the Company sold in June 2023 to Merit Medical Systems, Inc. pursuant to an asset purchase agreement. In September 2018, the Company acquired RadiaDyne, which included endorectal and vaginal balloons.
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Our angiographic catheter line includes the following brands, all with radiopaque tips to assure excellent visibility under fluoroscopy: • Soft-Vu flush catheters are available in flush and selective varieties. Flush catheters are used in procedures where a high flow of contrast is required for “big picture” diagnostics.
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On December 17, 2019, the Company acquired the C3 Wave tip location asset from Medical Components Inc., which the Company sold in February 2024 to Spectrum Vascular pursuant to an asset purchase agreement.
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Anomalies discovered through a flush angiogram may require further investigation into a vessel of interest.
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The cannula is intended for use in the venous system. The handle is indicated as a vacuum source for the AlphaVac MMA system.
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Soft-Vu selective catheters are used to gain access to smaller or more distal vessels and advance the catheter or wire into the diseased section. • Accu-Vu sizing catheters feature radiopaque marker bands at the distal portion of the catheter to provide a highly accurate measurement of the patient’s anatomy.
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The AlphaVac F18 system is indicated for the treatment of pulmonary embolism and allows for the utilization in the non-surgical removal of thrombi or emboli from the venous vasculature, reducing thrombus burden and improving right ventricular function in patients with PE.
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This enables precise measurement for interventional devices such as stents. • Mariner catheters have a hydrophilic coating that, when combined with water, reduces friction. This makes insertion potentially easier and more comfortable for the patient, and can also be used for advancing through tortuous anatomy.
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Angiographic Catheters & Guidewires Our extensive line of various angiographic catheter configurations are designed to allow physicians to navigate and reach targeted anatomical locations within a patient’s vasculature that are in need of angiographic diagnosis.
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AngioDynamics guidewires include Nit-Vu (featuring a kink-resistant NiTi alloy core facilitating smooth navigation through tortuous vasculature and accurate wire control) and Polytetrafluoroethylene (PTFE) Coated diagnostic guidewires (fixed core and movable core). AngioDynamics catheters and guidewires are available in more than 500 tip configurations and lengths. Drainage Products Drainage products percutaneously drain abscesses and other fluid pockets.
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Typically run over a diagnostic guidewire, our angiographic catheters allow physicians to deliver contrast media to the desired location to determine the diagnosis and subsequent therapeutic modalities, as needed for the patient. AngioDynamics offers three different angiographic catheter lines to meet physicians’ procedural needs.
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An abscess is a tender inflamed mass that typically must be drained by a physician. AngioDynamics offers two brands of drainage catheters for multi-purpose/general, nephrostomy and biliary drainage: Total Abscession and Exodus. Each offer features and benefits depending on case presentation and physician preferences.
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All of our catheters feature our soft, atraumatic, super-radiopaque tip that is uniquely welded to our co-extruded nylon shaft, which provides excellent visibility under fluoroscopy and re-enforced tip stability. • Soft-Vu Angiographic Catheters highlight the soft, atraumatic super-radiopaque and proprietary tip-to-shaft weld in a full offering of different tip shapes, lengths and french sized flush and selective catheters.
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Micro Access Kits Our Micro Access kits provide interventional physicians a smaller introducer system for minimally-invasive procedures. Our Micro Access product line provides physicians with the means to choose from the wide selection of configurations, including guidewire, needle and introducer options.
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Flush catheters are used in procedures where a large volume of contrast is required to deliver a concentrated bolus of contrast quickly for visualization or larger anatomical locations, such as the aorta or for run-offs into lower extremities. Selective catheters are typically used to gain access to more specific vasculature within the body to deliver smaller amounts of contrast.
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Midlines Midline catheters are inserted via the same veins used for PICC placement in the middle third of the upper arm; however, the midline catheter is advanced and placed so that the catheter tip is level or near the level of the axilla and distal to the shoulder.
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Mariner Hydrophilic Catheters also feature a hydrophilic coating on the distal 20cm of the catheter that reduces friction during catheter advancement in the vasculature and allows for smooth navigation, as well as, optimum handling and control by the physician. • Accu-Vu Sizing Catheters are our line of flush catheters that also feature highly visible radiopaque marker bands, which are heat embedded, along the catheter shaft, providing a smooth transition across the catheter shaft to ensure the marker bands will not separate from the shaft.
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Our Midline product is a BioFlo Midline Catheter which incorporates Endexo Technology and is an effective solution to preserving a patient’s peripheral access. It provides a cost-effective alternative to multiple IV site rotations for patients who need short-term venous access.
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These radiopaque marker bands come in different patterns along the shaft and allow physicians, under fluoroscopy, to take measurements in different anatomical locations for the placement of stents, IVC filters or other devices. The tight tolerances and consistent placement across the entire sizing pattern, within +/-1mm of accuracy, provide a highly accurate measurement to the physician.
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PICCs A peripherally inserted central catheter, or PICC, is a long thin catheter that is inserted into a peripheral vein, typically in the upper arm, and advanced until the catheter tip terminates in a large vein in the chest near the heart to obtain intravenous access.
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AngioDynamics offers a line of diagnostic and interventional guidewires which are designed to aid in delivering diagnostic and/or therapeutic devices to the desired location. • The ADx Peripheral Vascular Guidewire line is AngioDynamics diagnostic line of guidewires that is available in a multitude of fixed core wire configurations, including J-Tip and Bentson, in various lengths and ODs.
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PICCs can typically be used for prolonged periods of time and provide an alternative to central venous catheters. Our PICC product offerings include: • BioFlo PICC : Our BioFlo PICC line is the only power injectable PICC available that incorporates Endexo Technology into the manufacturing and design of the catheter.
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By utilizing a proprietary pre-coat process for the Polytetrafluoroethylene (PTFE) and upholding tight specifications, our ADx Guidewires offer high quality and performance for physicians. • The NiT-Vu High Performance Micro Guidewires are our highly kink resistant nitinol shaft interventional wires that feature a highly visible radiopaque tungsten tip and lubricious coating.
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Advanced features such as large lumen diameters allow the BioFlo PICC to deliver the power injection flow rates required for contrast-enhanced Computed Tomography (CT) scans compatible with up to 325 psi CT injections. • Xcela PICC : The Xcela PICC line is designed to provide a high degree of safety, ease and confidence in patient care.
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The NiT-Vu wires are designed to reduce friction during wire advancement and also provides torque control, flexibility and kink resistance. Drainage Products To aid physicians in percutaneous drainage procedures, AngioDynamics offers two different Drainage Catheter lines: Total Abscession Drainage Catheters and Exodus Drainage Catheters.
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Advanced features such as large lumen diameters allow the Xcela PICC to deliver the power injection flow rates required for contrast-enhanced CTs compatible with up to 325 psi CT injections. • PASV Valve Technology: The PASV Valve Technology is available in both BioFlo and Xcela lines and is designed to automatically resist backflow and reduce blood reflux that could lead to catheter-related complications.
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Each line is available in a Multipurpose/General and Biliary configuration, while Total Abscession also offers a Nephrostomy option.
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C3 Wave PICC tip location system The C3 Wave system is our innovative, wireless, app-based ECG system which eliminates the need for a confirmatory chest x-ray of PICC tip placement, allowing greater patient access to the Company’s proprietary BioFlo PICCs.
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Both lines offer options with a radiopaque marker band at the distal tip to aid in placement. • The Total Abscession Drainage Catheter line offers a soft, kink resistant shaft that features the lubricious Blue Silk Finish for easier insertion and pushability, while providing the optimal patient comfort.
Removed
Dialysis Products We market an extensive line of dialysis products that provide short and long-term vascular access for dialysis patients. Dialysis, or cleaning of the blood, is necessary in conditions such as acute renal failure, chronic renal failure and end-stage renal disease (ESRD).
Added
The unique Vault Locking Mechanism securely fixes the pigtail and prevents tampering or accidental removal. • The Exodus Drainage line features an integrated polymer blend extruded shaft with external catheter markings, and GLYCE Hydrophilic Coating on the distal 20cm of the catheter shaft.
Removed
We currently offer a variety of dialysis catheters, including: • BioFlo DuraMax : Our BioFlo DuraMax dialysis catheter is the only dialysis catheter with Endexo Technology.
Added
The unique Sure-Twist hub provides audible and tactile feedback when locked, without the need for a separate tool. 5 Micropuncture Kits AngioDynamics offers physicians two micropuncture kit lines that are designed to start each procedure with ease and efficiency: Mini Stick MAX Coaxial Microintroducer Kits and Micro-Introducer Kits.
Removed
Advanced features of the BioFlo DuraMax dialysis catheter include large inner diameter lumens designed for long term patency, a proprietary guidewire lumen to facilitate catheter exchanges and Curved Tip Technology that allows the catheter to self-center in the Superior Vena Cava (SVC). • DuraMax: The DuraMax catheter is a stepped-tip catheter designed to improve ease of use, dialysis efficiency and overall patient outcomes.
Added
Each kit features a coaxial design with a 4F or 5F sheath introducer and stiff or standard dilator, along with a 21G needle and various 0.018” access wire configurations. • Mini Stick MAX Coaxial Introducer kits contain a unique containment clip that keeps all the unique components of the kit together and organize.
Removed
In addition, AngioDynamics also offers other renal therapies, including our DuraFlow Chronic Hemodialysis Catheter, Acute Dialysis Catheter, EVENMORE Chronic Hemodialysis Catheter, EMBOSAFE Valved Splitable Sheath Dilator and Perchik Button Suture Retention Device. Venous Insufficiency VenaCure EVLT laser system Our VenaCure EVLT system products are used in endovascular laser procedures to treat superficial venous disease (varicose veins).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

56 edited+36 added−23 removed170 unchanged
Biggest changeThe failure to comply with these laws and regulatory standards, allegations of such non-compliance or the discovery of previously unknown problems with a product or manufacturer: (i) could result in FDA Form-483 notices and/or warning letters or the foreign equivalent, fines, delays or suspensions of regulatory clearances, investigations, detainment, seizures or recalls of products (with the attendant expenses), the banning of a particular device, an order to replace or refund the cost of any device previously manufactured or distributed, operating restrictions and/or civil or criminal prosecution, and/or penalties, as well as decreased sales as a result of negative publicity and product liability claims; (ii) could expose us to breach of contract claims, fines and penalties, costs for remediation and harm to our reputation; (iii) could result in criminal or civil sanctions, including substantial fines, imprisonment and exclusion from participation in healthcare programs such as Medicare and Medicaid and health programs outside the United States; and (iv) could otherwise disrupt our business and could have a material adverse effect on our business, financial condition, results of operations and/or liquidity.
Biggest changeForeign Corrupt Practices Act (“FCPA”) and similar anti-bribery laws in international jurisdictions, including the UK Anti-Bribery Act, the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), General Data Protection Regulation (“GDPR”), domestic and foreign data protection, data security and privacy laws, laws related to the collection, storage, use and disclosure of personal data and laws and regulations relating to sanctions and money laundering. 24 The failure to comply with these laws and regulatory standards, allegations of such non-compliance or the discovery of previously unknown problems with a product or manufacturer: (i) could result in FDA Form-483 notices and/or warning letters or the foreign equivalent, fines, delays or suspensions of regulatory clearances, investigations, detainment, seizures or recalls of products (with the attendant expenses), the banning of a particular device, an order to replace or refund the cost of any device previously manufactured or distributed, operating restrictions and/or civil or criminal prosecution, and/or penalties, as well as decreased sales as a result of negative publicity and product liability claims; (ii) could expose us to breach of contract claims, fines and penalties, costs for remediation and harm to our reputation; (iii) could result in criminal or civil sanctions, including substantial fines, imprisonment and exclusion from participation in healthcare programs such as Medicare and Medicaid and health programs outside the United States; and (iv) could otherwise disrupt our business and could have a material adverse effect on our business, financial condition, results of operations and/or liquidity.
We cannot provide assurance that our business operations would generate sufficient cash flows from operations to fund potential cash requirements and debt service obligations. If our operating results, cash flow or capital resources prove inadequate, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt and other obligations.
We cannot provide assurance that our business operations would generate sufficient cash flows from operations to fund potential cash requirements and debt service obligations. If our operating results, cash flow or capital resources prove inadequate, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet other obligations.
Resulting changes in U.S. trade policy could trigger retaliatory actions by Russia, its allies and other affected countries, including China, resulting in a “trade war.” A trade war could result in increased costs for raw materials we use in our manufacturing and could result in Russia and other foreign governments imposing tariffs on products that we export outside the U.S. or otherwise limiting our ability to sell our products abroad.
Resulting changes in U.S. trade policy could trigger retaliatory actions by Russia, its allies and other affected countries, including China and Israel, resulting in a “trade war.” A trade war could result in increased costs for raw materials we use in our manufacturing and could result in Russia, Israel and other foreign governments imposing tariffs on products that we export outside the U.S. or otherwise limiting our ability to sell our products abroad.
We are periodically subject to product liability claims, and patients or customers may in the future bring claims against us in a number of circumstances and for a number of reasons, 19 including if our products were misused, if a component of our product fails, if our manufacture or design was flawed, if the product produced unsatisfactory results or if the instructions for use and operating manuals and disclosure of product related risks for our products were found to be inadequate.
We are periodically subject to product liability claims, and patients or customers may in the future bring claims against us in a number of circumstances and for a number of reasons, including if our products were misused, if a component of our product fails, if our manufacture or design was flawed, if the product produced unsatisfactory results or if the instructions for use and operating manuals and disclosure of product related risks for our products were found to be inadequate.
If integration-related expenses and capital expenditure 21 requirements are greater than anticipated or if we are unable to manage our growth profitably, our financial results and the market price of our common stock may decline. In recent years we have begun to implement operational excellence initiatives which include a number of restructuring, realignment and cost reduction initiatives.
If integration-related expenses and capital expenditure requirements are greater than anticipated or if we are unable to manage our growth profitably, our financial results and the market price of our common stock may decline. In recent years we have begun to implement operational excellence initiatives which include a number of restructuring, realignment and cost reduction initiatives.
Either process can be lengthy and expensive. The FDA’s 510(k) clearance procedure, also known as “premarket notification,” is the process we have used for our current products. This process usually takes from four to twelve months from the date the premarket 26 notification is submitted to the FDA, but may take significantly longer.
Either process can be lengthy and expensive. The FDA’s 510(k) clearance procedure, also known as “premarket notification,” is the process we have used for our current products. This process usually takes from four to twelve months from the date the premarket notification is submitted to the FDA, but may take significantly longer.
The magnitude of the potential losses relating to these lawsuits may remain unknown for substantial periods of time. We carry a product liability policy with a limit of $10.0 million per product liability claim and an aggregate policy limit of $10.0 million, subject to a self-insured retention of $0.5 million per occurrence and $2.0 million in the aggregate.
The magnitude of the potential losses relating to these lawsuits may remain unknown for substantial periods of time. 18 We carry a product liability policy with a limit of $10.0 million per product liability claim and an aggregate policy limit of $10.0 million, subject to a self-insured retention of $0.5 million per occurrence and $2.0 million in the aggregate.
Third-party infringement claims, regardless of their outcome, would not only consume our financial resources but also divert our management’s time and effort. Such claims could also cause our customers or potential customers to purchase competitors’ products or defer or limit their purchase or use of our affected products until resolution of the claim.
Third-party infringement claims, regardless of their outcome, would not only consume our financial resources but also divert our management’s time and effort. 27 Such claims could also cause our customers or potential customers to purchase competitors’ products or defer or limit their purchase or use of our affected products until resolution of the claim.
Any of these results could have a material adverse effect on our business, financial condition, results of operations and/or liquidity. Laws and regulations governing the export of our products could adversely impact our business. If the U.S. government imposes strict sanctions on Iran, our revenue could be impacted. 27 The U.S.
Any of these results could have a material adverse effect on our business, financial condition, results of operations and/or liquidity. Laws and regulations governing the export of our products could adversely impact our business. If the U.S. government imposes strict sanctions on Iran, our revenue could be impacted. The U.S.
Our future financial results will depend in part on our ability to profitably manage our growth. Management will need to maintain existing customers and attract new customers, recruit, retain and effectively manage employees, as well as expand operations and integrate customer support and financial control systems.
Our future financial results will depend in part on our ability to profitably manage our growth. Management will need to maintain existing customers and attract new customers, recruit, retain and effectively manage employees, as well as expand 20 operations and integrate customer support and financial control systems.
Additionally, there can be no assurance that the size of the markets in which we compete will increase above existing levels or not decline, that we will be able to maintain, gain or regain market share or that we can compete effectively on the basis of price or that the number of procedures in which our products are used will increase above existing levels or not decline. 16 In particular, the future prospects of many of our high growth products, such as the NanoKnife system, the AngioVac system, the AlphaVac system and the Auryon system, rely on continued market development and continued generation of clinical data pursuant to clinical trials conducted by us, our competitors or other third parties.
Additionally, there can be no assurance that the size of the markets in which we compete will increase above existing levels or not decline, that we will be able to maintain, gain or regain market share or that we can compete effectively on the basis of price or that the number of procedures in which our products are used will increase above existing levels or not decline. 14 In particular, the future prospects of many of our high growth products, such as the NanoKnife system, the AngioVac system, the AlphaVac system and the Auryon system, rely on continued market development and continued generation of clinical data pursuant to clinical trials conducted by us, our competitors or other third parties.
Any significant uninsured loss, prolonged or repeated disruption, or inability to operate experienced by us or any of our principal suppliers could cause significant harm to our business, financial condition, results of operations and/or liquidity.
Any significant uninsured loss, prolonged or repeated disruption, or inability to 23 operate experienced by us or any of our principal suppliers could cause significant harm to our business, financial condition, results of operations and/or liquidity.
In addition, third parties may attempt to gain 23 access into our systems or products or those of our supply chain partners to obtain data relating to patients or our proprietary information.
In addition, third parties may attempt to gain access into our systems or products or those of our supply chain partners to obtain data relating to patients or our proprietary information.
A significant deterioration in economic conditions, including economic slowdowns or recessions, increased unemployment levels, inflationary pressures or disruptions to credit and capital markets, could lead to decreased consumer confidence and spending and availability of credit. For example, in 2022 and continuing into 2023, the United States and other certain foreign countries have experienced a rapid increase in inflation levels.
A significant deterioration in economic conditions, including economic slowdowns or recessions, increased unemployment levels, inflationary pressures or disruptions to credit and capital markets, could lead to decreased consumer confidence and spending and availability of credit. For example, in 2022 and continuing into 2024, the United States and other certain foreign countries have experienced a rapid increase in inflation levels.
Sales outside the U.S. accounted for approximately 17% of our net sales during our fiscal year ended May 31, 2023. We anticipate that sales from international operations will continue to represent a significant portion of our total sales, and we intend to continue our expansion into emerging and/or faster-growing markets outside the U.S.
Sales outside the U.S. accounted for approximately 17% of our net sales during our fiscal year ended May 31, 2024. We anticipate that sales from international operations will continue to represent a significant portion of our total sales, and we intend to continue our expansion into emerging and/or faster-growing markets outside the U.S.
We may incur additional indebtedness or draw additional amounts on our existing credit facilities in the future subject to limitations contained in the agreements governing our debt. The interest rate on potential borrowings could be a floating rate which could expose us to the risk of increased interest expense in the future.
We may incur indebtedness or draw amounts on credit facilities in the future subject to limitations contained in the agreements governing our debt. The interest rate on potential borrowings could be a floating rate which could expose us to the risk of increased interest expense in the future.
Some companies in the medical device industry have used intellectual property infringement litigation to 28 gain a competitive advantage.
Some companies in the medical device industry have used intellectual property infringement litigation to gain a competitive advantage.
These economic conditions make it more difficult for us to accurately forecast and plan our future business activities. 20 Volatility in the cost of raw materials, components, freight and energy increases the costs of producing and distributing our products.
These economic conditions make it more difficult for us to accurately forecast and plan our future business activities. 19 Volatility in the cost of raw materials, components, freight and energy increases the costs of producing and distributing our products.
Patient enrollment is a function of many factors, including the size of the patient population for the target indication, the 17 proximity of patients to clinical sites, the eligibility criteria for the trial, the existence of competing clinical trials and the availability of alternative or new treatments.
Patient enrollment is a function of many factors, including the size of the patient population for the target indication, the proximity of patients to clinical sites, the eligibility criteria for the trial, the existence of competing clinical trials and the 15 availability of alternative or new treatments.
In the past, securities class action litigation has often been brought against a company after a period of volatility in the market price of its common stock. 29 Item 1B. Unresolved Staff Comments. None.
In the past, securities class action litigation has often been brought against a company after a period of volatility in the market price of its common stock. 28 Item 1B. Unresolved Staff Comments. None.
The Company and Merit entered into various agreements to facilitate the transition to Merit, including a Transactions Services Agreement and Contract Manufacturing Agreement. This divestiture along with potential future divestitures of certain product lines will allow us to transform ourselves into a high growth, highly profitable, medical technology company.
The Company and Merit entered into various agreements to facilitate the transition to Merit, including a Transactions Services Agreement and Contract Manufacturing Agreement. These divestitures along with potential future divestitures of certain product lines will allow us to transform ourselves into a high growth, highly profitable, medical technology company.
See Risk Factor titled “Our business and prospects rely heavily upon our ability to successfully complete clinical trials, including, but not limited to, our NanoKnife DIRECT clinical study, our NanoKnife PRESERVE clinical study, AlphaVac APEX-AV clinical study and clinical studies for AngioVac.
See Risk Factor titled “Our business and prospects rely heavily upon our ability to successfully complete clinical trials, including, but not limited to, our NanoKnife DIRECT clinical study, our NanoKnife PRESERVE clinical study and clinical studies for AngioVac.
Our business and prospects rely heavily upon our ability to successfully complete clinical trials, including, but not limited to, our NanoKnife DIRECT clinical study, our NanoKnife PRESERVE clinical study, AlphaVac APEX-AV clinical study and clinical studies for AngioVac.
Our business and prospects rely heavily upon our ability to successfully complete clinical trials, including, but not limited to, our NanoKnife DIRECT clinical study, our NanoKnife PRESERVE clinical study and clinical studies for AngioVac.
As such, our revenue, if any, 18 depends on the terms of such arrangements and the distributors’ efforts. These efforts may turn out not to be sufficient and our third-party distributors may not effectively sell our products. International distributors accounted for approximately 72% of international revenues for the fiscal year ended May 31, 2023.
As such, our revenue, if any, depends on the terms of such arrangements and the distributors’ efforts. These efforts may turn out not to be sufficient and our third-party distributors may not effectively sell our products. International distributors accounted for approximately 77% of international revenues for the fiscal year ended May 31, 2024.
Our ability to meet our cash requirements, including our debt service obligations, could be dependent upon our operating performance, which would be subject to general economic and competitive conditions and to financial, business and other factors affecting our operations, many of which could be beyond our control.
Our ability to meet our cash requirements could be dependent upon our operating performance, which would be subject to general economic and competitive conditions and to financial, business and other factors affecting our operations, many of which could be beyond our control.
We may fail to attract additional capital necessary to expand our business or may incur additional indebtedness which, together with our current indebtedness levels, could impose operating and financial restrictions on us as a result of debt service obligations which could significantly limit our ability to execute our business strategy or curtail our growth.
We may fail to attract additional capital necessary to expand our business or may incur indebtedness which could impose operating and financial restrictions on us as a result of debt service obligations which could significantly limit our ability to execute our business strategy or curtail our growth. We may require additional capital to expand our business.
The impairment charge is recorded in "Acquisition, restructuring and other items, net", on the Consolidated Statements of Operations (see Note 19, "Acquisition, restructuring and other items, net" set forth in the Notes in the consolidated financial statements included in this Annual Report on Form 10-K).
The impairment charges are recorded in "Acquisition, restructuring and other items, net", on the Consolidated Statements of Operations (see Note 19, "Acquisition, restructuring and other items, net" set forth in the Notes in the consolidated financial statements included in this Annual Report on Form 10-K).
If we are not able to hire and retain personnel in our manufacturing facilities, we may not meet our production demand. We have experienced labor shortages in fiscal years 2022 and 2023 that significantly contributed to the backlog.
If we are not able to hire and retain personnel in our manufacturing facilities, we may not meet our production demand. We experienced labor shortages in fiscal year 2023 that significantly contributed to the backlog in fiscal year 2023.
We may not realize the benefits of these initiatives to the extent or on the timing we anticipated and the ongoing difficulties in implementing these measures may be greater than anticipated and/or offset by inflationary pressures, which could cause us to incur additional costs or result in business disruptions like the backlogs we have experienced in fiscal years 2022 and 2023.
We may not realize the benefits of these initiatives to the extent or on the timing we anticipated and the ongoing difficulties in implementing these measures may be greater than anticipated and/or offset by inflationary pressures, which could cause us to incur additional costs or result in business disruptions like the backlog we experienced in fiscal year 2023.
The Company utilized the income approach to determine the fair value of the remaining Med Device reporting unit. Based on the results of this evaluation, the Company recorded a goodwill impairment charge of $14.5 million for the year ended May 31, 2023 to write down the carrying value of the Med Device reporting unit to fair value.
Based on the results of this evaluation, the Company recorded a goodwill impairment charge of $14.5 million for the year ended May 31, 2023 to write down the carrying value of the Med Device reporting unit to fair value.
We may require additional capital to expand our business. If cash generated internally is insufficient to fund capital requirements, we may require additional debt or equity financing. In addition, we may require financing to fund any significant acquisitions we may seek to make.
If cash generated internally is insufficient to fund capital requirements, we may require debt or equity financing. In addition, we may require financing to fund any significant acquisitions we may seek to make.
In addition, political and social turmoil may put further pressure on economic conditions in the United States and abroad. The global economy has been periodically impacted by the effects of global economic downturns (such as those recently related to COVID-19). There can be no assurance that there will not be further such events or deterioration in the global economy.
In addition, political and social turmoil may put further pressure on economic conditions in the United States and abroad. The global economy has been periodically impacted by the effects of global economic downturns. There can be no assurance that there will not be further such events or deterioration in the global economy.
Furthermore, if we are unable to identify alternative sources of supply, we would have to modify our products to use substitute components, which may cause delays in shipments, backlogs, increased prices for our products or increased design and manufacturing costs. In addition, we purchase certain products as a distributor for the manufacturer of those products.
Furthermore, if we are unable to identify alternative sources of supply, we would have to modify our products to use substitute components, which may cause delays in shipments, backlogs, increased prices for our products or increased design and manufacturing costs.
Similar to other large multi-national companies, the size and complexity of our information technology systems makes them vulnerable to cyber-attacks, malicious intrusions, breakdowns, destruction, losses of data privacy, or other significant disruptions. Our distributors and supply chain partners face similar risks.
We rely on information technology systems to process, transmit, and store electronic information in our day-to-day operations. Similar to other large multi-national companies, the size and complexity of our information technology systems makes them vulnerable to cyber-attacks, malicious intrusions, breakdowns, destruction, losses of data privacy, or other significant disruptions. Our distributors and supply chain partners face similar risks.
Our state net operating loss carryforwards as of May 31, 2023 after considering remaining IRC Section 382 limitations are $24.1 million which expire in various years from 2029 to 2042.
Our state net operating loss carryforwards as of May 31, 2024 after considering remaining IRC Section 382 limitations are $14.4 million which expire in various years from 2029 to 2043.
Our ability to maintain and expand our business may be impaired if we are unable to retain our current key personnel or hire or retain other qualified personnel in the future, including personnel for our manufacturing facilities and field based sales employees.
We do not have written employment agreements with our executive officers, other than the CEO. Our ability to maintain and expand our business may be impaired if we are unable to retain our current key personnel or hire or retain other qualified personnel in the future, including personnel for our manufacturing facilities and field based sales employees.
It generally takes from one to three years from the date the application is submitted to, and filed with the FDA, and may take even longer.
The PMA process is much more costly, lengthy and uncertain. It generally takes from one to three years from the date the application is submitted to, and filed with the FDA, and may take even longer.
To the extent the COVID-19 pandemic adversely affects our business, operations and financial results, it may also have the effect of heightening other risks described herein, such as those relating to general economic conditions, demand for our products, relationships with suppliers and sales efforts.
Such risks may also have the effect of heightening other risks described herein, such as those relating to general economic conditions, demand for our products, relationships with suppliers and sales efforts.
If actual results differ from the assumptions and estimates used in the goodwill and intangible asset calculations, we could incur future impairment or amortization charges, which could negatively impact our financial condition and results of operations.
If actual results differ from the assumptions and estimates used in the intangible asset calculations, we could incur future impairment or amortization charges, which could negatively impact our financial condition and results of operations. During the third quarter of fiscal year 2024, the Company made the decision to abandon the Syntrax product line.
The terms of indebtedness could require us to comply with certain financial maintenance covenants. In addition, the terms of our existing indebtedness include, and any future indebtedness could include, covenants restricting or limiting our ability to take certain actions.
The terms of indebtedness could require us to comply with certain financial maintenance covenants. In addition, any future indebtedness could include, covenants restricting or limiting our ability to take certain actions. These covenants could adversely affect our ability to obtain additional financing, to finance future operations, to pursue certain business opportunities or take certain corporate actions.
Furthermore, if the conflict between Russia and Ukraine continues for a long period of time, or if other countries, including the U.S., become further involved in the conflict, we could face material adverse effects on our business, financial condition, results of operations and/or liquidity. Our business could be harmed if we cannot hire or retain qualified personnel.
These increased costs could have a material adverse effect on our business, financial condition and results of operations. Furthermore, if global conflicts continue for a long period of time, or if other countries, including the U.S., become further involved in the conflict, we could face material adverse effects on our business, financial condition, results of operations and/or liquidity.
The annual goodwill impairment review performed in April 2023 and 2022 indicated no goodwill impairments. As of May 31, 2023, the Company concluded that the sale of the dialysis product portfolio and BioSentry tract sealant system biopsy businesses to Merit Medical Systems, Inc. was a triggering event for the Med Device report unit.
As of May 31, 2023, the Company concluded that the sale of the dialysis product portfolio and BioSentry tract sealant system biopsy businesses to Merit Medical Systems, Inc. was a triggering event for the Med Device report unit. The Company utilized the income approach to determine the fair value of the remaining Med Device reporting unit.
In fiscal year 2023 we generated $1.2 million of revenue for sales to distributors doing business in Iran. We continuously review our ability to sell products to distributors that conduct business in Iran in accordance with all applicable U.S. laws.
Further restrictions may be enacted, amended, enforced or interpreted in a manner that materially impacts our operations. In fiscal year 2024 we generated $1.4 million of revenue for sales to distributors doing business in Iran. We continuously review our ability to sell products to distributors that conduct business in Iran in accordance with all applicable U.S. laws.
Our goodwill, intangible assets and fixed assets are subject to potential impairment; we have recorded significant goodwill impairment charges and may be required to record additional charges to future earnings if our goodwill or intangible assets become impaired. 22 A significant portion of our assets consists of goodwill, intangible assets and fixed assets, the carrying value of which may be reduced if we determine that those assets are impaired, including intangible assets from recent acquisitions.
A significant portion of our assets consist of goodwill, intangible assets and fixed assets, the carrying value of which may be reduced if we determine that those assets are impaired, including intangible assets from recent acquisitions.
Our business depends upon our ability to attract and retain highly qualified personnel, including managerial, sales, and technical personnel. We compete for key personnel with other companies, healthcare institutions, academic institutions, government entities and other organizations. We do not have written employment agreements with our executive officers, other than the CEO.
Our business could be harmed if we cannot hire or retain qualified personnel. Our business depends upon our ability to attract and retain highly qualified personnel, including managerial, sales, and technical personnel. We compete for key personnel with other companies, healthcare institutions, academic institutions, government entities and other organizations.
Our Federal net operating loss carryforwards as of May 31, 2023 after considering IRC Section 382 limitations are $169.7 million. The expiration of the Federal net operating loss carryforwards is as follows: $5.2 million between 2023 and 2024, $79.4 million between 2028 and 2037 and $85.1 million indefinitely.
Our Federal net operating loss carryforwards as of May 31, 2024 after considering IRC Section 382 limitations are $111.0 million. The expiration of the Federal net operating loss carryforwards is as follows: $37.1 million between 2029 and 2032 and $73.9 million indefinitely.
Product approvals by the FDA and other foreign regulators can be withdrawn due to failure to comply with regulatory standards or the occurrence of unforeseen problems following initial approval or may be re-classified to a higher regulatory classification, such as requiring a PMA for a previously cleared 510(k) device. The PMA process is much more costly, lengthy and uncertain.
Even after a device receives regulatory approval it remains subject to significant regulatory and quality requirements, such as manufacturing, recordkeeping, renewal, recertification or reporting and other post market approval requirements, which may include clinical, laboratory or other studies. 25 Product approvals by the FDA and other foreign regulators can be withdrawn due to failure to comply with regulatory standards or the occurrence of unforeseen problems following initial approval or may be re-classified to a higher regulatory classification, such as requiring a PMA for a previously cleared 510(k) device.
Department of the Treasury’s Office of Foreign Assets Control (OFAC), and the Bureau of Industry and Security at the U.S. Department of Commerce (BIS), administer certain laws and regulations that restrict U.S. persons and, in some instances, non-U.S. persons, in conducting activities, transacting business with or making investments in certain countries, governments, entities and individuals subject to U.S. economic sanctions.
Department of Commerce (BIS), administer certain laws and regulations that restrict U.S. persons and, in some instances, non-U.S. persons, in conducting activities, transacting business with or making investments in certain countries, governments, entities and individuals subject to U.S. economic sanctions. 26 Due to our international operations, we are subject to such laws and regulations, which are complex, restrict our business dealings with certain countries and individuals, and are constantly changing.
The rapid increase in inflation during fiscal year 2023 led to a rapid increase in market interest rates, which materially increased the interest rate on our floating rate debt. In addition, if rates continue to increase, we may incur significant additional expense and adversely impact our ability to achieve our other strategic goals and business plans.
In addition, if rates continue to increase, we may incur significant additional expense and adversely impact our ability to achieve our other strategic goals and business plans.
See Note 10, "Income Taxes" set forth in our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2023 for a further discussion of our tax loss carryovers.
See Note 10, "Income Taxes" set forth in our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2024 for a further discussion of our tax loss carryovers. 22 A cyber-attack or other breach of our, our distributors, or our supply chain partners' information technology systems could have a material adverse effect on our business, financial condition and/or results of operations.
Our failure to generate sufficient operating cash flow to pay our potential debts or to successfully undertake any of these actions could have a material adverse effect on us. Inflationary pressure and unfavorable economic conditions could negatively affect our operations and business.
Our failure to generate sufficient operating cash flow to pay our potential debts or to successfully undertake any of these actions could have a material adverse effect on us. On June 8, 2023, the Company completed the sale of the dialysis and BioSentry businesses to Merit Medical Systems, Inc.
If an intangible asset is considered to be impaired, the amount of the impairment will equal the excess of the carrying value over the fair value of the asset. Goodwill and other intangible assets that have indefinite useful lives are not amortized, but rather, are tested for impairment annually or more frequently if impairment indicators arise.
Goodwill and other intangible assets that have indefinite useful lives are not amortized, but rather, are tested for impairment annually or more frequently if impairment indicators arise. The annual goodwill impairment review performed in April 2023 indicated no goodwill impairment.
In certain circumstances, distributors may also sell competing products, or products for competing diagnostic modalities, and may have incentives to shift sales towards those competing products.
If we are unable to maintain our relationships or establish direct sales capabilities on acceptable terms or at all, we may lose significant revenue or be unable to achieve our growth aspirations. In certain circumstances, distributors may also sell competing products, or products for competing diagnostic modalities, and may have incentives to shift sales 17 towards those competing products.
Russia’s invasion and military attacks on Ukraine have triggered significant sanctions from U.S. and European leaders. These events may escalate and have created increasingly volatile global economic conditions.
These events may escalate and have created increasingly volatile global economic conditions.
These increased costs could have a material adverse effect on our business, financial condition and results of operations.
If we are unable to effectively execute on this Plan within the announced timeline it could have a material adverse effect on our business, financial condition and/or results of operations.
During the fourth quarter of fiscal year 2021, the Company made the decision to abandon the OARtrac product technology and trademark. This resulted in an impairment charge of $14.0 million.
This resulted in an impairment charge of $3.4 million. During the third quarter of fiscal year 2024, the Company announced a restructuring of its manufacturing footprint and a shift to an outsourced model. This resulted in an impairment charge of $3.4 million related to the facilities closure.
Removed
International sales grew 12% in fiscal year 2023 as we continued to develop and foster partnerships with distributors such as Healthcare 21, Cardiva and Mediplast. If we are unable to maintain our relationships or establish direct sales capabilities on acceptable terms or at all, we may lose significant revenue or be unable to achieve our growth aspirations.
Added
In addition, we historically have purchased and may purchase in the future certain products as a distributor for the manufacturer of those products.
Removed
These covenants could adversely affect our ability to obtain additional financing, to finance future operations, to pursue certain business opportunities or take certain corporate actions.
Added
We rely on third-party manufacturers to manufacture some of our products today, and we have announced a plan to move to a fully outsourced model for manufacturing in various parts of the world, which exposes us to additional risks, including reduced control over manufacturing, delivery timing, product quality issues, potential price fluctuations, regulatory, environmental, labor or other operational disruptions, which would result in a loss of revenue or reduced profitability.
Removed
Such heightened inflationary levels may negatively impact demand for our products and increase our costs. Additionally, we finance a portion of our portfolio with unhedged floating- rate debt from our Credit Agreement.
Added
We currently rely on third-party manufacturers for a portion of our products and due to the resource and cost limitations of manufacturing in upstate New York, on January 5, 2024, we announced a restructuring of our manufacturing footprint and a shift to an outsourced model (the “Plan”).
Removed
Prior to the first quarter of fiscal year 2023, the Company managed its operations as one reporting unit.
Added
This Plan is intended to transfer all product manufacturing processes to third-party 16 manufacturers located in various parts of the world, including, but not limited to the United States, Costa Rica, Latvia, Italy, Israel and China. The restructuring activities associated with the Plan are expected to be completed in the third quarter of fiscal year 2026.
Removed
At the beginning of the first quarter of fiscal year 2023, the Company began to manage its operations as two operating segments and two reporting units, namely Med Tech and Med Device (see Note 18 "Segment and Geographic Information" set forth in the Notes to our consolidated financial statements included in this Annual Report on Form 10-K).
Added
Our manufacturing strategy may present certain risks and uncertainties that could have a material adverse effect on our business, financial condition and/or results of operations, many of which we cannot predict, including, but not limited to: • the ability to effectively negotiate and enter into contracts with third party manufacturers; • if market demand for our products is less than our purchase obligations to our manufacturers, we may incur substantial penalties and substantial inventory write-offs; • manufacturers of our products are subject to ongoing periodic inspections by the FDA and other regulatory authorities for compliance with strictly enforced good manufacturing practices regulations and similar foreign standards, and we do not have control over our third-party manufacturers’ compliance with these regulations and standards; • we may have to share intellectual property rights, including any improvements in the manufacturing processes or new manufacturing processes for our products; • our product costs may increase if our manufacturers pass their increasing costs onto us; • if our agreement with a third-party manufacturer expires, we may not be able to renegotiate a new agreement with that manufacturer on favorable terms, if at all.
Removed
A cyber-attack or other breach of our, our distributors, or our supply chain partners' information technology systems could have a material adverse effect on our business, financial condition and/or results of operations. We rely on information technology systems to process, transmit, and store electronic information in our day-to-day operations.
Added
If we cannot successfully complete such renegotiation, we may not be able to locate any necessary acceptable replacement manufacturers or enter into favorable agreements with such replacement manufacturers in a timely manner, if at all; and • manufacturing could be curtailed or partially or completely shut down as the result of a number of circumstances, most of which are outside of our control, such as unscheduled maintenance, an earthquake, hurricane, flood, tsunami or other natural disaster, significant labor strikes or work stoppages, government implementation of export limitations or freezes, political unrest or pandemics.
Removed
The COVID-19 pandemic has negatively impacted our business and operations around the world and may continue to materially and adversely impact our business, operations and financial results. The COVID-19 pandemic has created significant disruption and uncertainty in the global economy and has negatively impacted our business and results of operations and financial condition during fiscal years 2021, 2022 and 2023.
Added
In addition, our business practices in international markets are subject to the requirements of the U.S. Foreign Corrupt Practices Act of 1977, as amended, any violation of which could subject us to significant fines, criminal sanctions and other penalties.
Removed
Although the impact of COVID-19 and the resulting measures decreased during 2023, they have the potential to continue to negatively impact our business, results of operations and financial condition in the future.
Added
We expect all of our contracted manufacturing facilities, to comply with all applicable laws, including labor, safety and environmental laws, and to otherwise meet our standards of conduct. Our ability to find manufacturing facilities that uphold these standards is a challenge, especially with respect to facilities located outside the United States.
Removed
Numerous national, international, state and local jurisdictions have imposed, and others in the future may impose, a variety of government orders and restrictions for their residents to control the spread of COVID-19.
Added
We also are subject to the risk that one or more of these manufacturing facilities will engage in business practices in violation of our standards or applicable laws, which could damage our reputation, hurt our relationship with our customers and result in negative publicity, damage to our brand and a material and adverse effect on our business, financial condition, results of operations and/or liquidity.
Removed
Such orders or restrictions may cause significant alteration of our operations, work stoppages, slowdowns and delays, travel restrictions and event cancellations, among other effects, thereby significantly and negatively impacting our operations.
Added
A portion of the manufacturing activities is conducted in China. As a result, our business, financial condition, results of operations could be affected significantly by economic, political and legal developments in China as well as trade disputes between China and the United States and the potential imposition of bilateral tariffs.
Removed
Other disruptions or potential disruptions include: (i) restrictions on our personnel and personnel of business partners to travel and access customers for training and case support; (ii) reductions in spending by our customers; (iii) delays in clearance, approvals or certifications by regulatory bodies; (iv) diversion of or limitations on employee resources that would otherwise be focused on the operations of our business, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; (v) reductions in our sales team, including through layoffs, furloughs or other losses of sales representatives; (vi) additional government requirements or other incremental mitigation efforts that may further impact our or our suppliers’ 24 capacity to manufacture our products; (vii) disruption of our research and development activities; and (viii) delays in ongoing studies and pre-clinical trials.
Added
The imposition of tariffs or export restrictions on products imported by us from China could require us to (i) increase prices to our members or (ii) locate suitable alternative manufacturing capacity or relocate our operations from China to other countries.
Removed
In addition, elective procedures that use our products significantly decreased in number during fiscal year 2021, as health care organizations around the world prioritized the treatment of patients with COVID-19 and reduced spending in other areas. We experienced a similar impact to procedure volumes with the resurgence of COVID-19 in fiscal year 2022 which continued through fiscal year 2023.
Added
In the event we are unable to increase our prices or find alternative manufacturing capacity or relocate to an alternative base of operation outside of China on favorable terms, we would likely experience higher manufacturing costs and lower gross margins, which could have an adverse effect on our business and results of operations.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. During the year ended May 31, 2023, we operated in the following locations: Location Purpose Approx. Sq. Ft.
Biggest changeItem 2. Properties. During the year ended May 31, 2024, we operated in the following locations: 29 Location Purpose Approx. Sq. Ft.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSale Price High Low Year ended May 31, 2023 Fourth Quarter $ 12.65 $ 8.29 Third Quarter $ 15.48 $ 12.06 Second Quarter $ 22.81 $ 12.51 First Quarter $ 24.30 $ 17.83 Sale Price High Low Year ended May 31, 2022 Fourth Quarter $ 24.50 $ 17.98 Third Quarter $ 29.16 $ 20.46 Second Quarter $ 30.97 $ 23.36 First Quarter $ 28.49 $ 22.99 As of August 2, 2023, there were 169 holders of record of our common stock.
Biggest changeSale Price High Low Year ended May 31, 2024 Fourth Quarter $ 7.03 $ 5.27 Third Quarter $ 8.04 $ 5.49 Second Quarter $ 7.73 $ 6.17 First Quarter $ 11.16 $ 8.00 Sale Price High Low Year ended May 31, 2023 Fourth Quarter $ 12.65 $ 8.29 Third Quarter $ 15.48 $ 12.06 Second Quarter $ 22.81 $ 12.51 First Quarter $ 24.30 $ 17.83 As of July 24, 2024, there were 166 holders of record of our common stock.
Performance Graph The graph below matches AngioDynamics, Inc.’s cumulative 5-year total shareholder return on common stock with the cumulative total returns of the NASDAQ Composite index, the RDG SmallCap Medical Devices index, S&P 500 Health Care index and the NASDAQ Medical Equipment index.
Performance Graph The graph below matches AngioDynamics, Inc.’s cumulative 5-year total shareholder return on common stock with the cumulative total returns of the NASDAQ Composite index, the RDG SmallCap Medical Devices index, and the S&P 500 Health Care index.
The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from May 31, 2018 to May 31, 2023. The stock price performance included in this graph is not necessarily indicative of future stock price performance. 31 Item 6. [Reserved] 32
The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from May 31, 2019 to May 31, 2024. The stock price performance included in this graph is not necessarily indicative of future stock price performance. 31 Item 6. [Reserved] 32

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

53 edited+18 added−28 removed57 unchanged
Biggest changeCash provided by financing activities: Years ended May 31, 2023 and 2022: • $70.0 million in proceeds on long-term debt less the repayment of $45.0 million associated with the new Credit Agreement in the first quarter of fiscal year 2023.
Biggest changeCash (used in) provided by financing activities: Years ended May 31, 2024 and 2023: • $50.0 million prepayment of the Credit Agreement in connection with the completion of the dialysis and BioSentry divestiture in fiscal year 2024; • $70.0 million in proceeds on long-term debt less the repayment of $45.0 million associated with the new Credit Agreement in the first quarter of fiscal year 2023; • $0.8 million of deferred financing costs associated with the then new Credit Agreement in the first quarter of fiscal year 2023; • $15.0 million of contingent consideration payments made in fiscal year 2024; and • $0.8 million and $1.2 million, respectively, of proceeds from stock option and ESPP activity. 42 On June 8, 2023 and in connection with the completion of the sale of the dialysis and BioSentry divestiture, the Company repaid all amounts outstanding under its existing Credit Agreement, and as a result, the Credit Agreement was extinguished.
To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following 34 five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
Projected revenues are based on the Company’s most recent internal operational budgets and long-range strategic plans. The discount rate used is determined at the time of measurement in accordance with accepted valuation methodologies. Changes in projected revenues, probabilities of payment, discount rates, and projected payment dates may result in adjustments to the fair value measurements.
Projected revenues are based on the Company’s most recent internal operational budgets and long-range strategic plans. The discount rate used is determined at the time of 36 measurement in accordance with accepted valuation methodologies. Changes in projected revenues, probabilities of payment, discount rates, and projected payment dates may result in adjustments to the fair value measurements.
In some cases, if control of the product has not yet transferred to the customer or the timing of the payments made by the customer precedes the Company’s 35 fulfillment of the performance obligation, the Company recognizes a contract liability that is included in deferred revenue in the accompanying Consolidated Balance Sheets.
In some cases, if control of the product has not yet transferred to the customer or the timing of the payments made by the customer precedes the Company’s fulfillment of the performance obligation, the Company recognizes a contract liability that is included in deferred revenue in the accompanying Consolidated Balance Sheets.
In these arrangements, revenue recognized for the sale of the disposables is not allocated between the disposal revenue and lease revenue due to the insignificant value of the units in relation to the total agreement value. Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue.
In these arrangements, revenue recognized for the sale of the disposables is not allocated 35 between the disposal revenue and lease revenue due to the insignificant value of the units in relation to the total agreement value. Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue.
The Company currently estimates product return liabilities using its historical product return information and considers other factors that it believes could significantly impact its expected returns, including product recalls. During the year ended May 31, 2023, such product returns were not material. A receivable is generally recognized in the period the Company ships the product.
The Company currently estimates product return liabilities using its historical product return information and considers other factors that it believes could significantly impact its expected returns, including product recalls. During the year ended May 31, 2024, such product returns were not material. A receivable is generally recognized in the period the Company ships the product.
Goodwill and Intangible Assets Intangible assets other than goodwill, indefinite lived intangible assets and in process research and development ("IP R&D") are amortized over their estimated useful lives, which range between two to eighteen years, on a straight-line basis over the expected period of benefit.
Goodwill and Intangible Assets Intangible assets other than goodwill and in process research and development ("IP R&D") are amortized over their estimated useful lives, which range between two to eighteen years, on a straight-line basis over the expected period of benefit.
General and administrative expense - General and administrative (“G&A”) expense includes executive management, finance, information technology, human resources, business development, legal, and the administrative and professional costs associated with those activities. G&A expense increased by $1.6 million compared to the prior year.
General and administrative expense - General and administrative (“G&A”) expense includes executive management, finance, information technology, human resources, business development, legal, and the administrative and professional costs associated with those activities. G&A expense increased by $1.2 million compared to the prior year.
Acquisition, restructuring and other items, net - Acquisition, restructuring and other items, net represents costs associated with mergers and acquisitions, restructuring expenses, legal costs that are related to litigation that is not in the ordinary course of business, legal settlements and other one-time items. Acquisition, restructuring and other items, net increased by $6.6 million compared to the prior year.
Acquisition, restructuring and other items, net - Acquisition, restructuring and other items, net represents costs associated with mergers and acquisitions, restructuring expenses, legal costs that are related to litigation that is not in the ordinary course of business, legal settlements and other one-time items. Acquisition, restructuring and other items, net increased by $37.5 million compared to the prior year.
As detailed in Note 9, "Goodwill and Intangible Assets" set forth in the Notes to our consolidated financial statements included in this Annual Report on Form 10-K, the Company recorded a goodwill impairment loss of $14.5 million for the year ended May 31, 2023 as the fair value of the Med Device reporting unit was less than its carrying value.
As detailed in Note 9, "Goodwill and Intangible Assets" set forth in the Notes to our consolidated financial statements included in this Annual Report on Form 10-K, the Company recorded a goodwill impairment loss of $159.5 million for the year ended May 31, 2024 as the fair value of the Med Tech reporting unit was less than its carrying value.
The change from the prior year was primarily driven by: • Compensation and benefits expense, which decreased $0.5 million; and • Other outside consultant spend for legal and IT which increased $1.9 million .
The change from the prior year was primarily driven by: • Compensation and benefits expense, which increased $0.9 million; and • Other outside consultant spend for legal and IT which increased $0.4 million.
Sales and marketing expense - Sales and marketing (“S&M”) expense consists primarily of salaries, commissions, travel and related business expenses, attendance at medical society meetings, product promotions and marketing activities. S&M expense increased by $8.9 million compared to the prior year.
Sales and marketing expense - Sales and marketing (“S&M”) expense consists primarily of salaries, commissions, travel and related business expenses, attendance at medical society meetings, product promotions and marketing activities. S&M expense decreased by $1.4 million compared to the prior year.
This was partially offset by increased accounts payable and accrued liabilities of $2.1 million. • For the year ended May 31, 2022, working capital was unfavorably impacted by increased accounts receivable, inventory on hand and prepaids of $17.2 million, $2.8 million and $5.0 million respectively. This was partially offset by increased accounts payable and accrued liabilities of $3.9 million.
This was partially offset by decreased accounts receivable and increased accounts payable and accrued liabilities of $7.9 million and $27.5 million, respectively; and • For the year ended May 31, 2023, working capital was unfavorably impacted by increased accounts receivable, inventory on hand and prepaids of $1.3 million and $8.2 million, respectively.
The change from the prior year was primarily driven by: • Sales volume, which positively impacted gross profit by $13.9 million; • Production volume, manufacturing and other incentives which positively impacted gross profit by $2.1 million; • Pricing pressures and mix, which negatively impacted gross profit by $4.7 million; • Inflationary costs on raw materials, labor shortages and freight costs, which negatively impacted gross profit by $0.5 million; and • Incremental depreciation on placement units of $1.3 million.
The change from the prior year was primarily driven by: • Sales volume and price mix, which positively impacted gross profit by $5.5 million; • Production volume and other incentives which positively impacted gross profit by $1.6 million; • Sales mix, which negatively impacted gross profit by $0.9 million; • Inflationary costs on raw materials, labor shortages and freight costs, which negatively impacted gross profit by $0.2 million; and • Incremental depreciation on placement units of $0.8 million.
Income Tax Benefit Year ended May 31, (in thousands) 2023 2022 Income tax benefit $ (1,995) $ (3,402) Effective tax rate 3.7 % 11.4 % Our effective tax rate was a benefit of 3.7% for fiscal year 2023 compared with an effective tax rate benefit of 11.4% for the prior year.
Income Tax Benefit Year ended May 31, (in thousands) 2024 2023 Income tax benefit $ (7,289) $ (1,995) Effective tax rate 3.8 % 3.7 % Our effective tax rate was a benefit of 3.8% for fiscal year 2024 compared with an effective tax rate benefit of 3.7% for the prior year.
If an intangible asset is considered to be impaired, the amount of the impairment will equal the excess of the carrying value over the fair value of the asset. 36 Goodwill and other intangible assets that have indefinite useful lives are not amortized, but rather, are tested for impairment annually or more frequently if impairment indicators arise.
If an intangible asset is considered to be impaired, the amount of the impairment will equal the excess of the carrying value over the fair value of the asset. Goodwill is not amortized, but rather, are tested for impairment annually or more frequently if impairment indicators arise.
The Med Tech segment gross profit increased by $9.4 million compared to the prior year.
The Med Tech segment gross profit increased by $5.2 million compared to the prior year.
The Med Device segment gross profit decreased by $0.9 million compared to the prior year.
The Med Device segment gross profit decreased by $24.8 million compared to the prior year.
Total Company gross profit increased by $8.5 million compared to the prior year.
Total Company gross profit decreased by $19.5 million compared to the prior year.
At May 31, 2023, the Company had a backlog of $2.7 million compared to $8.4 million at the end of May 31, 2022. The Med Tech business net sales increased $18.0 million for the year ended May 31, 2023 compared to the prior year.
At May 31, 2024, the Company had a backlog of $1.3 million compared to $2.7 million at the end of May 31, 2023. The Med Tech business net sales increased $9.7 million for the year ended May 31, 2024 compared to the prior year.
Results of Operations for the years ended May 31, 2023 and 2022 For the fiscal year ended May 31, 2023, the Company reported a net loss of $52.4 million, or a loss of $1.33 per diluted share, on net sales of $338.8 million compared to a net loss of $26.5 million, or a loss of $0.68 per diluted share, on net sales of $316.2 million in fiscal year 2022.
Results of Operations for the years ended May 31, 2024 and 2023 For the fiscal year ended May 31, 2024, the Company reported a net loss of $184.3 million, or a loss of $4.59 per diluted share, on net sales of $303.9 million compared to a net loss of $52.4 million, or a loss of $1.33 per diluted share, on net sales of $338.8 million in fiscal year 2023.
The table below summarizes our cash flows for the years ended May 31, 2023 and 2022: Year ended May 31, (in thousands) 2023 2022 Cash provided by (used in): Operating activities $ 78 $ (7,194) Investing activities (9,746) (19,307) Financing activities 25,420 7,683 Effect of exchange rate changes on cash and cash equivalents 43 (518) Net change in cash and cash equivalents $ 15,795 $ (19,336) During the years ended May 31, 2023 and 2022, cash flows consisted of the following: Cash provided by (used in) operating activities: Years ended May 31, 2023 and 2022: • Net loss of $52.4 million and $26.5 million, respectively, plus the non-cash items, primarily driven by depreciation and amortization, goodwill impairment and stock-based compensation, along with the changes in working capital below, contributed to cash provided by operations of $0.1 million for the year ended May 31, 2023 and cash used in operations of $7.2 million for the year ended May 31, 2022. • For the year ended May 31, 2023, working capital was unfavorably impacted by increased accounts receivable and inventory on hand of $1.3 million and $8.2 million, respectively.
The table below summarizes our cash flows for the years ended May 31, 2024 and 2023: Year ended May 31, (in thousands) 2024 2023 Cash provided by (used in): Operating activities $ (28,158) $ 78 Investing activities 123,717 (9,746) Financing activities (64,248) 25,420 Effect of exchange rate changes on cash and cash equivalents 125 43 Net change in cash and cash equivalents $ 31,436 $ 15,795 During the years ended May 31, 2024 and 2023, cash flows consisted of the following: Cash (used in) provided by operating activities: Years ended May 31, 2024 and 2023: • Net loss of $184.3 million and $52.4 million, respectively, plus the non-cash items, primarily driven by depreciation and amortization, gain on the divestiture and related expenses, goodwill impairment and stock-based compensation, along with the changes in working capital below, contributed to cash used in operations of $28.2 million for the year ended May 31, 2024 and cash provided by operations of $0.1 million for the year ended May 31, 2023; • For the year ended May 31, 2024, working capital was unfavorably impacted by increased prepaid expenses and inventory on hand of $11.6 million and $9.4 million, respectively.
The change from the prior year was primarily driven by: • Sales volume, which positively impacted gross profit by $2.1 million; • Production volume, manufacturing and other incentives which positively impacted gross profit by $8.6 million; • Pricing pressures and mix, which negatively impacted gross profit by $3.7 million; • Inflationary costs on raw materials, labor shortages and freight costs, which negatively impacted gross profit by $7.6 million; and • Incremental depreciation on placement units of $0.3 million. 38 Operating Expenses and Other Income (expense) Year ended May 31, (in thousands) 2023 2022 $ Change Research and development $ 29,883 $ 30,739 $ (856) % of sales 8.8 % 9.7 % Selling and marketing $ 104,249 $ 95,301 $ 8,948 % of sales 30.8 % 30.1 % General and administrative $ 40,003 $ 38,451 $ 1,552 % of sales 11.8 % 12.2 % Research and development expense - Research and development (“R&D”) expense includes internal and external costs to develop new products, enhance existing products, validate new and enhanced products, manage clinical, regulatory and medical affairs.
The change from the prior year was primarily driven by: • The sale of the PICCs, Midline, dialysis and BioSentry businesses, which negatively impacted gross profit by $23.9 million; • Sales volume and price mix, which positively impacted gross profit by $3.3 million; • Production volume and other incentives which positively impacted gross profit by $0.6 million; • Sales mix, which negatively impacted gross profit by $3.6 million; • Inflationary costs on raw materials, labor shortages and freight costs, which negatively impacted gross profit by $1.0 million; and • Incremental depreciation on placement units of $0.2 million. 39 Operating Expenses and Other Income (expense) Year ended May 31, (in thousands) 2024 2023 $ Change Research and development $ 31,512 $ 29,883 $ 1,629 % of sales 10.4 % 8.8 % Selling and marketing $ 102,818 $ 104,249 $ (1,431) % of sales 33.8 % 30.8 % General and administrative $ 41,164 $ 40,003 $ 1,161 % of sales 13.5 % 11.8 % Research and development expense - Research and development (“R&D”) expense includes internal and external costs to develop new products, enhance existing products, validate new and enhanced products, manage clinical, regulatory and medical affairs.
The change in sales from the prior year was primarily driven by: • Increased Auryon sales of $12.0 million; • Growth in the thrombectomy platform of $3.0 million, which was driven by growth in the mechanical thrombectomy platform in AlphaVac sales of $5.0 million, partially offset by softness in AngioVac; and • Increased NanoKnife sales of $3.0 million, which was driven by NanoKnife disposable sales in the U.S. and internationally which increased $3.3 million due to increased case volume.
The change in sales from the prior year was primarily driven by: • Increased Auryon sales of $6.4 million; • Increased NanoKnife sales of $5.7 million, which was driven by both NanoKnife disposable and capital sales, which increased $2.5 million and $3.2 million, respectively, due to increased case volume in both the U.S and international markets; and • Decrease in the thrombectomy platform of $2.4 million, which was driven by softness in the mechanical thrombectomy platform in AngioVac, AlphaVac and Thrombolytic sales of $1.4 million, $0.4 million and $0.6 million, respectively.
Other expense - Other expense includes interest expense, foreign currency impacts, bank fees, and amortization of deferred financing costs. • The change in other expe nse of $1.8 million compared to the prior year, is primarily due to increased interest expense of $2.1 million and unrealized foreign currency fluctuations of $0.2 million.
Other income (expense) - Other expense includes interest income and expense, foreign currency impacts and bank fees. • The change in other income and expe nse of $4.1 million compared to the prior year, is primarily due to decreased interest ex pense of $2.5 million and increased interest income of $1.6 million.
Results of Operations for the years ended May 31, 2022 and 2021 For management discussion and analysis of our 2022 financial results and liquidity compared with 2021, see Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended May 31, 2022 filed on July 22, 2022. 42 Recent Accounting Pronouncements Refer to Note 1 of the Notes to the consolidated financial statements for Recently Issued Accounting Pronouncements. 43
Results of Operations for the years ended May 31, 2023 and 2022 For management discussion and analysis of our 2023 financial results and liquidity compared with 2022, see Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended May 31, 2023 filed on August 3, 2023.
Year ended May 31, (in thousands) 2023 2022 $ Change Amortization of intangibles $ 18,790 $ 19,458 $ (668) Goodwill impairment $ 14,549 $ — $ 14,549 Change in fair value of contingent consideration $ 2,320 $ 1,212 $ 1,108 Acquisition, restructuring and other items, net $ 15,633 $ 9,042 $ 6,591 Other expense $ (3,256) $ (1,478) $ (1,778) Amortization of intangibles - Represents the amount of amortization expense that was taken on intangible assets held by the Company. • Amortization expense decreased $0.7 million compared to the prior year.
Year ended May 31, (in thousands) 2024 2023 $ Change Amortization of intangibles $ 13,048 $ 18,790 $ (5,742) Goodwill impairment $ 159,476 $ 14,549 $ 144,927 Change in fair value of contingent consideration $ 432 $ 2,320 $ (1,888) Acquisition, restructuring and other items, net $ 53,182 $ 15,633 $ 37,549 Other income (expense) $ 797 $ (3,256) $ 4,053 Amortization of intangibles - Represents the amount of amortization expense that was taken on intangible assets held by the Company. • Amortization expense decreased $5.7 million compared to the prior year.
The first revenue milestone was achieved in May 2023 and will be paid in the first quarter of fiscal year 2024.
The second revenue milestone was achieved in April 2024 and was paid in the fourth quarter of fiscal year 2024.
Change in fair value of contingent consideration - Represents changes in contingent consideration driven by changes to estimated future payments on earn-out liabilities created through acquisitions and amortization of present value discounts on long-term contingent consideration. • The change in the fair value for the year ended May 31, 2023 is related to the Eximo contingent consideration and the increased probability of achieving the revenue milestones.
Goodwill impairment - Represents the impairment charge taken on goodwill. • The Company recorded a non-cash goodwill impairment charge of $159.5 million for the year ended May 31, 2024 as the fair value of the Med Tech reporting unit was less than its carrying value compared to a $14.5 million goodwill impairment charge for the year ended May 31, 2023 as the fair value of the Med Device reporting unit was less than its carrying value. 40 Change in fair value of contingent consideration - Represents changes in contingent consideration driven by changes to estimated future payments on earn-out liabilities created through acquisitions and amortization of present value discounts on long-term contingent consideration. • The change in the fair value for the year ended May 31, 2024 is related to the Eximo contingent consideration and the increased probability of achieving the revenue milestones.
If sufficient positive evidence exists in future periods to support a release of some or all of the valuation allowance, such a release would likely have a material impact on the Company’s results of operations. 40 Liquidity and Capital Resources We regularly review our liquidity and anticipated capital requirements in light of the significant uncertainty created by the COVID-19 global pandemic.
If sufficient positive evidence exists in future periods to support a release of some or all of the valuation allowance, such a release would likely have a material impact on the Company’s results of operations. 41 Liquidity and Capital Resources We regularly review our liquidity and anticipated capital requirements and we believe that our current cash on hand provides sufficient liquidity to meet our anticipated needs for capital for at least the next 12 months.
The Company operates as two reporting units and two asset groups. If a triggering event is deemed to exist, the Company performs an undiscounted operating cash flow analysis to determine if an impairment exists.
When testing for impairment of definite-lived intangible assets held for use, the Company groups assets at the lowest level for which cash flows are separately identifiable. The Company operates as two reporting units and two asset groups. If a triggering event is deemed to exist, the Company performs an undiscounted operating cash flow analysis to determine if an impairment exists.
The change from the prior year was primarily driven by: • Sales volume, which positively impacted gross profit by $13.2 million; • Production volume and other incentives which positively impacted gross profit by $11.3 million • Price and mix, which negatively impacted gross profit by $4.9 million; • Inflationary costs on raw materials, labor shortages and freight costs, which negatively impacted gross profit by $8.1 million; • Incremental depreciation on placement units of $2.2 million; and • A benefit of $0.8 million that was recorded as a result of the employee retention credit that the Company filed for under the provision of the CARES Act in the prior year.
The change from the prior year was primarily driven by: • The sale of the PICCs, Midline, dialysis and BioSentry businesses, which negatively impacted gross profit by $23.9 million; • Sales volume and price mix, which positively impacted gross profit by $8.4 million; • Production volume and other incentives which positively impacted gross profit by $2.2 million; • Sales mix, inflationary costs on raw materials, labor shortages and freight costs, which negatively impacted gross profit by $5.0 million; and • Incremental depreciation on placement units of $1.2 million.
Based on the results of this evaluation, the Company recorded a goodwill impairment charge of $14.5 million for the year ended May 31, 2023 to write down the carrying value of the Med Device reporting unit to fair value.
The Company utilized the income approach to determine the fair value of the remaining Med Tech reporting unit. Based on the results of this evaluation, the Company recorded a goodwill impairment charge of $159.5 million for the quarter ended February 29, 2024 to write down the carrying value of the Med Tech reporting unit to fair value.
Our contractual obligations as of May 31, 2023 are set forth in the table below (in thousands). We have no variable interest entities or other off-balance sheet obligations.
Pursuant to the terms of the Credit Agreement, AngioDynamics had the option to repay this facility prior to the maturity date without penalty. Our contractual obligations as of May 31, 2024 are set forth in the table below (in thousands). We have no variable interest entities or other off-balance sheet obligations.
The change from the prior year was primarily driven by: • Legal expense, related to litigation that is outside of the normal course of business, which increased $2.4 million; • Mergers and acquisition expense related to legal fees, which increased $0.3 million; • Manufacturing relocation expense related to the move of certain manufacturing lines to Costa Rica, which increased $0.4 million; • Other expenses (mainly severance associated with organizational changes), which decreased $0.1 million; and • The payment to the Israeli Innovation Authority of $3.5 million related to grant funds that were provided to Eximo to develop the Auryon laser prior to the acquisition in the second quarter of fiscal year 2020.
The Company invoiced Merit Medical Systems, Inc. $0.5 million for the year ended May 31, 2024; • Manufacturing relocation expense related to the move of certain manufacturing lines from Queensbury, New York to a third party, which decreased $0.5 million; • Other expenses, mainly severance associated with organizational changes, which increased $2.0 million; and • The payment to the Israeli Innovation Authority of $3.5 million related to grant funds that were provided to Eximo to develop the Auryon laser prior to the acquisition in the second quarter of fiscal year 2020.
Gross Profit Year ended May 31, (in thousands) 2023 2022 $ Change Med Tech $ 61,966 $ 52,584 $ 9,382 Gross profit % of sales 64.1 % 66.8 % Med Device $ 112,280 $ 113,148 $ (868) Gross profit % of sales 46.4 % 47.6 % Total $ 174,246 $ 165,732 $ 8,514 Gross profit % of sales 51.4 % 52.4 % Gross profit - Gross profit consists of net sales less the cost of goods sold, which includes the costs of materials, products purchased from third parties and sold by us, manufacturing personnel, royalties, freight, business insurance, depreciation of property and equipment and other manufacturing overhead, exclusive of intangible amortization.
This increase was partially offset by decreased sales of Oncology and Microwave products of $1.2 million and $0.4 million, respectively. 38 Gross Profit Year ended May 31, (in thousands) 2024 2023 $ Change Med Tech $ 67,198 $ 61,966 $ 5,232 Gross profit % of sales 63.2 % 64.1 % Med Device $ 87,500 $ 112,280 $ (24,780) Gross profit % of sales 44.3 % 46.4 % Total $ 154,698 $ 174,246 $ (19,548) Gross profit % of sales 50.9 % 51.4 % Gross profit - Gross profit consists of net sales less the cost of goods sold, which includes the costs of materials, products purchased from third parties and sold by us, manufacturing personnel, royalties, freight, business insurance, depreciation of property and equipment and other manufacturing overhead, exclusive of intangible amortization.
The backlog, which primarily impacted sales of Core and Vascular Access products, was $2.7 million at May 31, 2023 compared to $8.4 million at May 31, 2022.
The Med Device business net sales decreased $44.6 million for the year ended May 31, 2024 compared to the prior year. The backlog, which primarily impacted sales of Core and Vascular Access products, was $1.3 million at May 31, 2024 compared to $2.7 million at May 31, 2023.
Cash used in investing activities: Years ended May 31, 2023 and 2022: • $3.8 million and $4.3 million, respectively, of cash was used for fixed asset additions; • $5.4 million and $11.4 million, respectively, of cash was used for Auryon placement and evaluation unit additions; • $0.5 million of cash was used for the acquisition of an exclusive license in the first quarter of fiscal year 2023; and • $3.6 million of cash was used for the QX Medical asset acquisition in the first quarter of fiscal year 2022.
Cash provided by (used in) investing activities: Years ended May 31, 2024 and 2023: • $2.5 million and $3.8 million, respectively, of cash was used for fixed asset additions; • $5.0 million and $5.4 million, respectively, of cash was used for Auryon placement and evaluation unit additions; • $134.5 million of cash was received for the divestiture of the PICCs, Midline, dialysis and BioSentry businesses; and • $3.3 million and $0.5 million, respectively, of cash was used for the acquisition of exclusive licenses.
This included: ◦ Pathway expansion for Auryon in arterial thrombectomy and full market release of the hyrodphilic coated catheters; ◦ FDA clearance of the AlphaVac F18 thrombectomy system; ◦ Enrollment of patients in the APEX IDE study for the use of AlphaVac F18 to treat pulmonary embolism; and ◦ Continued enrollment of patients in the PRESERVE study for the use of NanoKnife in the prostate. • Value Creation.
This included: ◦ Pathway expansion for Auryon in arterial thrombectomy and the launch of the Auryon XL radial catheter; ◦ 510(k) clearance and CE mark for the use of AlphaVac F18 85 System to treat pulmonary embolism; and ◦ Completed enrollment of patients in the PRESERVE study for the use of NanoKnife in the prostate in the first quarter. 34 • Value Creation.
The change from the prior year was primarily driven by: • The timing of certain projects and clinical spend associated with the ongoing clinical trials, which decreased R&D expense by $1.1 million; • Compensation and benefits expenses, which decreased $0.3 million; and • A benefit of $0.5 million that was recorded as a result of the employee retention credit that the Company filed for under the provision of the CARES Act in the prior year.
R&D expense increased $1.6 million compared to the prior year. The change from the prior year was primarily driven by: • The timing of certain projects and clinical spend associated with the ongoing clinical trials, which decreased R&D expense by $0.4 million; and • Compensation and benefits expenses, which increased $2.0 million.
Cash payments due by period as of May 31, 2023 (in thousands) Total Less than One Year 1-3 Years 3-5 Years After 5 Years Contractual Obligations: Long term debt and interest $ 50,108 $ 50,108 $ — $ — $ — Operating leases (1) 5,940 2,366 3,016 558 — Purchase obligations (2) 3,166 3,166 — — — Acquisition-related future obligations (3) 20,000 15,000 5,000 — — Royalties 39,840 3,640 7,280 7,280 21,640 $ 119,054 $ 74,280 $ 15,296 $ 7,838 $ 21,640 (1) Operating leases include short-term leases that are not recorded on our Consolidated Balance Sheets under ASU No. 2016-02 .
Cash payments due by period as of May 31, 2024 (in thousands) Total Less than One Year 1-3 Years 3-5 Years After 5 Years Contractual Obligations: Operating leases (1) $ 6,406 $ 2,202 $ 2,960 $ 1,244 $ — Purchase obligations (2) 2,946 2,946 — — — Acquisition-related future obligations (3) 5,000 5,000 — — — Royalties 36,005 3,625 7,240 7,240 17,900 $ 50,357 $ 13,773 $ 10,200 $ 8,484 $ 17,900 (1) Operating leases include short-term leases that are not recorded on our Consolidated Balance Sheets under ASU No. 2016-02 .
The decrease is due to assets that became fully amortized in fiscal year 2023. 39 Goodwill impairment - Represents the impairment charge taken on goodwill. • The Company recorded a non-cash goodwill impairment charge of $14.5 million for the year ended May 31, 2023 as the fair value of the Med Device reporting unit was less than its carrying value.
The Company recorded an impairment loss of $14.5 million for the year ended May 31, 2023 as the fair value of the Med Device reporting unit was less than its carrying value.
The Company and Merit entered into various agreements to facilitate the transition to Merit, including a Transactions Services Agreement and Contract Manufacturing Agreement.
On June 8, 2023, the Company completed the sale of the dialysis and BioSentry businesses to Merit Medical Systems, Inc. The Company also entered into various agreements to facilitate the transition to Merit, including a Transition Services Agreement and Contract Manufacturing Agreement.
The growth in Auryon, AlphaVac and NanoKnife disposables was partially offset by continued softness in AngioVac. Our Med Device business grew 1.9% in fiscal year 2023 driven by growth in Core, Dialysis, Ports and Microwave products.
Our Med Tech business, comprised of Auryon, the thrombus management platform and NanoKnife grew 10.0% in fiscal year 2024. The growth in Auryon and NanoKnife was partially offset by continued softness in the thrombus management platform.
The Company and Merit entered into various agreements to facilitate the transition to Merit, including a Transactions Services Agreement and Contract Manufacturing Agreement. The purchase price for the asset sale was $100.0 million in cash subject to the terms and conditions of the Asset Purchase Agreement.
The Company also entered into various agreements to facilitate the transition to Spectrum, including a Transition Services Agreement and Contract Manufacturing Agreement. Total consideration received by the Company for the Divestiture was $34.5 million in cash and resulted in a pre-tax book gain of $6.7 million.
A summary of these key financial metrics for the year ended May 31, 2023 compared to the year ended May 31, 2022 follows: Year ended May 31, 2023: • Revenue increased by 7.1% to $338.8 million • Med Tech growth of 22.8% and Med Device growth of 1.9% • Gross profit decreased by 100 bps to 51.4% • Net loss increased by $25.9 million to $52.4 million • Loss per share increased by $0.65 to a loss of $1.33 • Cash flow from operations increased by $7.3 million resulting in cash provided by operations of $0.1 million Our Med Tech business, comprised of Auryon, the Thrombectomy platform and NanoKnife grew 22.8% in fiscal year 2023.
A summary of these key financial metrics for the year ended May 31, 2024 compared to the year ended May 31, 2023 follows: Year ended May 31, 2024: • Revenue decreased by 10.3% to $303.9 million • Med Tech growth of 10.0% and Med Device decrease of 18.4% • Gross profit decreased by 50 bps to 50.9% • Net loss increased by $131.9 million to $184.3 million • Loss per share increased by $3.26 to a loss of $4.59 • Cash flow from operations decreased by $28.2 million resulting in cash used in operations of $28.2 million For the year ended May 31, 2024, the decrease in revenue is partially due to the sale of the PICCs, Midline, dialysis and BioSentry businesses, along with the discontinuation of the RadioFrequency Ablation and Syntrax product lines, the total of which impacted sales by $48.4 million compared to the year ended May 31, 2023.
The change in sales from the prior year was primarily driven by: 37 • Increased sales of Core, Dialysis, Ports and Microwave sales of $5.4 million, $5.2 million, $1.4 million and $1.0 million, respectively.
The change from the prior year was primarily driven by: • Compensation and benefits expense, which increased by $1.1 million; and • Travel, meeting, tradeshow and other selling expenses, which decreased $2.5 million.
Therefore, the Company has provided a valuation allowance on its federal and state net operating loss carryforwards, federal and state R&D credit carryforwards and other net deferred tax assets that have a limited life and are not supportable by the naked credit deferred tax liability sourced income as of May 31, 2023.
As a result of the full impairment of Goodwill and the reversal of the naked credit deferred tax liability sourced income, the Company has recorded a full valuation allowance on its U.S. net deferred tax assets as of May 31, 2024. The Company will continue to assess the level of the valuation allowance required.
In conjunction with the Asset Purchase Agreement, on June 8, 2023, AngioDynamics used a portion of the consideration received to repay all amounts owed under AngioDynamics’ existing Credit Agreement, dated as of August 30, 2022, and as a result, the Credit Agreement was extinguished.
Total consideration received by the Company for the Divestiture was $100.0 million in cash and resulted in a pre-tax book gain of $47.8 million. On June 8, 2023 and in connection with the completion of the Divestiture, the Company repaid all amounts outstanding under its existing Credit Agreement, and as a result, the Credit Agreement was extinguished.
As of May 31, 2023, $25.0 million was drawn on the Revolving Facility and $25.0 million was drawn on the Delayed Draw Term Loan. See Note 12 "Long-Term Debt" set forth in the Notes to the consolidated financial statements. During the fourth quarter of fiscal year 2023, the Company was in discussions with Merit Medical Systems, Inc.
As of May 31, 2024 there was no outstanding debt as the Credit Agreement was extinguished in connection with the Divestiture (see Note 12 "Long-Term Debt" set forth in the Notes to our consolidated financial statements included in this Annual Report on Form 10-K). As of May 31, 2023, total debt outstanding related to the Credit Agreement was $50.0 million.
Year ended May 31, (in thousands) 2023 2022 $ Change Net Sales Med Tech $ 96,687 $ 78,717 $ 17,970 Med Device 242,065 237,502 $ 4,563 Total $ 338,752 $ 316,219 $ 22,533 Net Sales by Geography United States $ 282,713 $ 265,963 $ 16,750 International 56,039 50,256 $ 5,783 Total $ 338,752 $ 316,219 $ 22,533 For the year ended May 31, 2023, net sales increased $22.5 million to $338.8 million compared to the year ended May 31, 2022.
Net Sales Net sales - Net sales are derived from the sale of our products and related freight charges, less discounts, rebates and returns. 37 Year ended May 31, (in thousands) 2024 2023 $ Change Net Sales Med Tech $ 106,403 $ 96,687 $ 9,716 Med Device 197,511 242,065 $ (44,554) Total $ 303,914 $ 338,752 $ (34,838) Net Sales by Geography United States $ 251,486 $ 282,713 $ (31,227) International 52,428 56,039 $ (3,611) Total $ 303,914 $ 338,752 $ (34,838) For the year ended May 31, 2024, net sales decreased $34.8 million to $303.9 million compared to the year ended May 31, 2023.
We believe that our current cash on hand provides sufficient liquidity to meet our anticipated needs for capital for at least the next 12 months. Our cash and cash equivalents totaled $44.6 million as of May 31, 2023, compared with $28.8 million as of May 31, 2022.
Our cash and cash equivalents totaled $76.1 million as of May 31, 2024, compared with $44.6 million as of May 31, 2023.
These increases were partially offset by decreased Venous, PICCs, Midlines and other Oncology and Vascular Access sales of $3.6 million, $2.4 million, $0.8 million and $1.6 million, respectively.
This was partially offset by decreased prepaids and increased accounts payable and accrued liabilities of $0.3 million and $2.1 million, respectively.
Removed
The COVID-19 global pandemic has impacted our business and may continue to pose future risks with the emergence of new variants. Even with the public health actions that have been taken to reduce the spread of the virus, the market continues to experience disruptions with respect to consumer demand, hospital operating procedures and workflow, trends that may continue.
Added
On January 5, 2024, the Company announced a restructuring of its manufacturing footprint and a shift to an outsourced model (the "Plan"). This Plan is intended to transfer all product manufacturing processes to third-party manufacturers.
Removed
The Company's ability to manufacture products, the reliability of our supply chain, labor shortages, backlog and inflation (including the cost and availability of raw materials, direct labor and shipping) have impacted our business, trends that may continue.
Added
The restructuring activities associated with the Plan are expected to be completed in the third quarter of fiscal year 2026 and will allow the Company to more effectively compete in chosen markets and fundamentally change its corporate gross margin profile. On February 15, 2024, the Company completed the sale of its PICC and Midline businesses to Spectrum Vascular.
Removed
Accordingly, management continues to evaluate the Company’s liquidity position, communicate with and monitor the actions of our customers and suppliers, and review our near-term financial performance.
Added
Included in the agreement is a $5.5 million earn-out related to the sales of divested products over a two year period and a milestone payment of $5.0 million paid upon final transfer of the manufacturing to a third-party. 33 In the third quarter of fiscal year 2024, the Company concluded that the sustained decline in our stock price was a triggering event for the Med Tech reporting unit.
Removed
Commencing with the first quarter of fiscal year 2023, the Company began to manage its operations through two segments, Med Tech and Med Device to align with the transformation from a company with a broad portfolio of largely undifferentiated products to a more focused medical technology company.
Added
On March 31, 2024, the Company and BD entered into a Settlement Agreement as described in Note 17 "Commitments and Contingencies" set forth in the Notes to our consolidated financial statements in this Annual Report on Form 10-K.
Removed
On August 30, 2022, the Company repaid all amounts outstanding under its then existing credit agreement and entered into a new Credit Agreement that provides for a $75.0 million Revolving Facility and a $30.0 million Delayed Draw Term Loan.
Added
The Company will make a one-time lump sum payment to BD in the amount of $7.0 million, $3.0 million of which was paid within 5 business days of execution of the Settlement Agreement, and the remainder of which will be payable in installments over the 12 month period ending March 31, 2025.
Removed
("Merit") to sell the dialysis product portfolio and BioSentry tract sealant system biopsy businesses. This qualified for held for sale accounting as of May 31, 2023.
Added
The Company will also make six minimum annual payments to BD of $2.5 million through February 2029, and potential additional payments if six percent (6%) of annual net sales of AngioDynamics’ port products exceed the minimum payment. The parties will participate in the pending appeal before the Federal Circuit of the case titled C.R.
Removed
On June 8, 2023, the Company entered into an asset purchase agreement (the "Asset Purchase Agreement") with Merit Medical Systems, Inc. pursuant to which Merit acquired the dialysis product portfolio and BioSentry tract sealant system biopsy businesses for $100.0 million in cash subject to the terms and conditions of the Asset Purchase Agreement.
Added
Bard, Inc. and Bard Peripheral Vascular, Inc. v. AngioDynamics, Inc. (C.A. 15-00218–JFB; and CAFC appeal No. 23-2056) and a contingent payment of $3.0 million will be due from AngioDynamics to BD if the Federal Circuit reverses or vacates the District Court’s findings of invalidity with respect to the patent claims at issue in the case.
Removed
The Company determined that the sale of the 33 businesses did not constitute a strategic shift that had a major effect on the Company’s operations or financial results and as a result, this transaction will not be classified as discontinued operations.
Added
Appellate briefing is closed, but an agrument date has not yet been set. Neither party admitted any liability and the agreement contains mutual covenants not to sue and releases.
Removed
As of May 31, 2023, the Company concluded that the sale of the dialysis product portfolio and BioSentry tract sealant system biopsy businesses to Merit Medical Systems, Inc. was a triggering event for the Med Device reporting unit. The Company utilized the income approach to determine the fair value of the remaining Med Device reporting unit.
Added
As of May 31, 2024, the present value of the lump sum and minimum annual payments of $19.4 million was recorded in "Acquisition, restructuring and other items, net" on the accompanying consolidated statements of operations and a long-term asset of $1.2 million, other current liabilities of $5.5 million and other long-term liabilities of $12.1 million was recorded on the consolidated balance sheets.
Removed
When testing for impairment of definite-lived intangible assets held for use, the Company groups assets at the lowest level for which cash flows are separately identifiable. Prior to the first quarter of fiscal year 2023, the Company managed its operations as one reporting unit.
Added
Our Med Device business decreased 18.4% in fiscal year 2024 driven mainly by the sale of the PICCs, Midlines, dialysis and BioSentry businesses along with the discontinuation of the RadioFrequency Ablation product lines.
Removed
At the beginning of the first quarter of fiscal year 2023, the Company began to manage its operations as two operating segments and two reporting units, namely Med Tech and Med Device (see Note 18 "Segment and Geographic Information" set forth in the Notes to our consolidated financial statements included in this Annual Report on Form 10-K).
Added
This included: ◦ The sale of the dialysis and BioSentry businesses to Merit Medical Systems, Inc. on June 8, 2023; ◦ The sale of the PICC and Midline businesses to Spectrum Vascular on February 15, 2024; and ◦ The discontinuation of the RadioFrequency Ablation and Syntrax product lines as of February 29, 2024. • Focused Resource Deployment.
Removed
There were no adjustments to goodwill for the Med Tech reporting unit for the year ended May 31, 2023 other than foreign currency translation adjustments.
Added
The Company continued its discipline on deploying resources. This included: ◦ The announcement on January 5, 2024 to restructure the manufacturing footprint and a shift to an outsourced model which will transfer all product manufacturing processes to third-party manufacturers to allow the Company to more effectively compete in chosen markets and fundamentally change its corporate gross margin profile.
Removed
Net Sales Net sales - Net sales are derived from the sale of our products and related freight charges, less discounts, rebates and returns.
Added
The change in sales from the prior year was primarily driven by: • Decreased sales of PICCs and Midline products of $13.8 million which was due to the divestiture of these businesses on February 15, 2024; • Decreased sales of dialysis and BioSentry products of $31.8 million which was due to the divestiture of these businesses on June 8, 2023; • Decreased sales of RadioFrequency Ablation of $2.8 million due to the discontinuation of this product line as of February 29, 2024; and • Increased sales of Ports, Core and Venous of $2.5 million, $2.0 million and $0.9 million, respectively.
Removed
This increase was partially offset by decreased NanoKnife capital sales in the U.S. The Med Device business net sales increased $4.6 million for the year ended May 31, 2023 compared to the prior year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+1 added−5 removed2 unchanged
Biggest changeIn addition, the Credit Agreement is structured across three investment grade banks. The Company has the ability to draw equally amongst the five banks which limits the concentration of credit risk of one institution. Concentration of credit risk with respect to trade accounts receivable is limited due to the large number of customers that purchase products from the Company.
Biggest changeConcentration of credit risk with respect to trade accounts receivable is limited due to the large number of customers that purchase products from the Company. No single customer represents more than 10% of total sales. The Company monitors the creditworthiness of its customers.
CONCENTRATION OF CREDIT RISK Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of cash and cash equivalents, our Revolving Facility and trade accounts receivable. The Company maintains cash and cash equivalents at various institutions and performs periodic evaluations of the relative credit standings of these financial institutions to ensure their credit worthiness.
CONCENTRATION OF CREDIT RISK Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist primarily of cash and cash equivalents and trade accounts receivable. The Company maintains cash and cash equivalents at various institutions and performs periodic evaluations of the relative credit standings of these financial institutions to ensure their credit worthiness.
Dollar, particularly the Euro, British pound and Canadian dollar. Approximately 4.7% of our sales in fiscal year 2023 were denominated in foreign currencies. We do not have expenses denominated in foreign currencies at the level of our sales and as a result, our profitability is exposed to currency fluctuations. When the U.S.
Dollar, particularly the Euro, British pound and Canadian dollar. Approximately 3.6% of our sales in fiscal year 2024 were denominated in foreign currencies. We do not have expenses denominated in foreign currencies at the level of our sales and as a result, our profitability is exposed to currency fluctuations. When the U.S.
Although the Company does not currently foresee a significant credit risk associated with the outstanding accounts receivable, repayment is dependent upon the financial stability of our customers.
As the Company’s standard payment terms are 30 to 90 days from invoicing, the Company does not provide any significant financing to its customers. Although the Company does not currently foresee a significant credit risk associated with the outstanding accounts receivable, repayment is dependent upon the financial stability of our customers.
Removed
INTEREST RATE RISK Interest on the Revolving Facility and Delayed Draw Term Loan is based, at the Company's option, on a rate equal to (i) the Secured Overnight Financing Rate ("SOFR") plus 0.10% (subject to a floor of 0%), or (ii) if the Company elects to treat a borrowing as an ABR Borrowing, an alternate base rate based on SOFR, plus, in each case, an applicable margin of 1.25%, 1.50% or 1.75%, depending on the leverage ratio.
Added
INTEREST RATE RISK The risk associated with fluctuating interest rates is primarily limited to indebtedness. As of May 31, 2024, the Company does not have any outstanding debt (see Note 12, "Long-Term Debt" set forth in the Notes in the consolidated financial statements included in this Annual Report on Form 10-K).
Removed
If any amounts are not paid when due, such overdue amounts will bear interest at an amount generally equal to 2.0% plus the existing loan rate.
Removed
The Credit Agreement also carries a commitment fee in the case of the Revolving Facility, and a ticking fee, in the case of the Delayed Draw Term Loans of 0.20% to 0.25% per annum on the unused portion.
Removed
As of May 31, 2023, there was $25.0 million outstanding on the Delayed Draw Term Loan and $25.0 million outstanding on the Revolving Facility and the interest rate at May 31, 2023 was 6.73%.
Removed
No single customer represents more than 10% of total sales. The Company monitors the creditworthiness of its customers. As the Company’s standard payment terms are 30 to 90 days from invoicing, the Company does not provide any significant financing to its customers.

Other ANGO 10-K year-over-year comparisons