Good day, ladies and gentlemen, thank you for standing by. Welcome to the AngioDynamics 3Q 2010 financial results conference call. (Operator instructions) I would now like to turn the conference over to Doug Sherk. Please go ahead, sir.

Thank you for joining us this afternoon for the AngioDynamics conference call to review the results of the fiscal third quarter of 2010, which ended on February 28, 2010. The news release announcing the third quarter earnings crossed the wire this afternoon after the market closed and is available on the AngioDynamics website. We’ve arranged for a recording of this call, which may be accessed by phone. The replay will become available at approximately 6:30 PM Eastern Time this evening and will remain available for seven days. The operator will provide the dial-in information at the conclusion of today’s call. In addition, the call is being broadcast live on the web at the AngioDynamics website. A replay of the call will also be archived of the AngioDynamics website. Before we get started, during the course of this conference call the company will make projections or forward-looking statements regarding future events including the statements about revenue and earnings for fiscal 2010. We encourage you to review the company’s past and future filings with the SEC, including without limitation the company’s Forms 10-Q and 10-K, which identify specific factors that may cause actual results or events to differ materially from those described in forward-looking statements. In addition, today’s presentation includes financial measures used to better understand our business that have not been prepared in accordance with the generally accepted accounting principles better known as GAAP. An explanation and reconciliation of these non-GAAP measures has been provided in today’s news release issued by the company and is available on the company’s website. In today’s call, the company has reported non-GAAP EBITDA and EBITDA per share and has reviewed these measures as an internal analysis and review of operational performance. AngioDynamics uses non-GAAP measures to establish operational goals and believes that non-GAAP measures may assist investors in analyzing the underlying trends of the company’s business over time. Investors should consider these non-GAAP measures in addition to, not as a substitute for or superior to, financial reporting measures prepared in accordance with GAAP. Finally, during the question-and-answer period today we’d like to request each caller to limit themselves to two questions and encourage callers to re-queue to ask additional questions. We appreciate everyone’s cooperation with this procedure. And now, I’d like to turn the call over to Jan Keltjens, President and Chief Executive Officer of AngioDynamics.

Thank you, Doug, and good afternoon everyone. Thank you for joining us for our third quarter conference call and with me today is Joe Gersuk, our CFO. Overall, we're pleased with the progress during the third fiscal quarter. Our Oncology/Surgery business continued to show solid growth and our Peripheral Vascular business growth accelerated. We had a second consecutive strong quarter of NanoKnife IRE system sales and enjoyed increased clinical utilization. We are also pleased today to report that we have extended our LC Bead US distribution agreement with Biocompatibles to the end of next calendar year. We continue to carefully manage our operating expenses, generated excellent operating cash flow and achieved $0.13 per share in earnings, and we're reiterating our guidance for the full fiscal year. At the same time, our Access business unit continues to face a combination of difficult circumstances, which is holding back its performance. We are aggressively implementing strategies to address these drags in our growth and gross margin, and as a result we believe we will see sequential gross margin improvement in the fourth quarter, and I will review this in more detail in a few moments. From a top line perspective, the quarter ended at 6% as compared to the year ago period. Factoring in the one less selling day than same quarter prior year, our organic growth rate was close to our year-to-date organic growth rate. Leading our growth was a 19% increase in Oncology/Surgery product sales, RF ablation, LC Bead and NanoKnife all were strong contributors during the quarter. We are pleased with the extension of the LC Bead distribution agreement with Biocompatibles, and this partnership has been very successful for both parties, and our strategic goal is to ensure continuity of our leadership role in this therapy area beyond calendar 2011.…

Thank you, Jan, and good afternoon ladies and gentlemen. Today we are reporting third fiscal quarter sales of $52.2 million, which is 6% growth over last year's third quarter and 7% growth on a daily sales basis, as there was one fewer sales day in this year's third quarter than a year ago. Our growth this quarter was again led by our oncology surgery unit, which grew 19% to $13.7 million. The growth was led by strong sales of (inaudible) in RF ablation products in addition to $724,000 in NanoKnife sales. This was our second consecutive quarter of solid NanoKnife sales and brings year-to-date IRE sales to $1.5 million. Five hospitals required a system in the third quarter, and we continue to be pleased with the commercial response to the technology. Peripheral vascular business unit sales grew 8% in the quarter to $22.4 million. This was an increase from 6% growth in the second quarter, and was despite some pricing pressure on disposable procedure kits this quarter. However, we saw very strong unit volume growth in procedure kits to offset the price erosion and deliver strong sales growth. We also enjoyed another strong quarter with our new renal infusion system, posting $754,000 in sales with our Benephit TRT product. As Jan noted, we had a very strong quarter in the Access business with third quarter sales declining 6% to $16.1 million. We continue to see very price competitive markets for Fixed Ports and dialysis products and experienced 6% lower average selling prices across the business unit this quarter in comparison to price levels a year ago, as hospitals and other buyers of these products are aggressively seeking to lower their purchase cost. While we are not expecting the pricing environment to improve any time soon, top line performance should improve…

(Operator instructions) And our first question comes from the line of Jason Mills with Canaccord Adams. Please go ahead. Jamar Ismail – Canaccord Adams: Hi good afternoon. This is Jamar Ismail for Jason. My first question was going to be on the reduction in operating expenses, but I think you answered that, I was thinking whether or not you are going to cut NanoKnife standing. But looking at the $0.05 that is pretty much comparable with last quarter, can you give more details like what projects are being reduced in terms of SG&A and R&D?

Yes, Jamar, this is Jan here. Good question. In our comments we actually said that we have leveraging operating expenses without cutting any strategic programs. So we are not cutting R&D programs, we're not holding back on investing in IRE. We're very much holding back on the more discretionary programs, holding headcount as far as we can et cetera, et cetera. So it is the normal operational measures and the normal leverage that we can do without affecting any growth or any future potential for the company. Jamar Ismail – Canaccord Adams: Okay. And my second question is on the venous business, can you just give us some color in terms of where do you think the venous market growth rate that is going out, and where you think your market share is?

Yes. I mean it has gotten a lot more difficult since venous has taken up the public grid at least, and the results of venous under the wings of Caribbean [ph] are not being disclosed anymore. For the same reason of course we stopped doing it. There is a little bit of reading the tea leaf, but we actually believe the market continues to be very strong, and we have no reason to believe that our market growth in the mid-teens is not valid any more. We have not seen a noticeable slowdown in growth from that point of view. We continue to be very excited about the potential, the long-term potential of this market and increasingly excited about our performance in that segment. So it has been a very strong franchise for us. Jamar Ismail – Canaccord Adams: Okay. Thanks a lot. I will get back in queue.

Okay.

Thank you. And our next question comes from the line of Jayson Bedford with Raymond James. Please go ahead. Jayson Bedford – Raymond James: Hi, good afternoon. Thanks for taking the question. Just on the Access business, where are you seeing the weakness? I think you kind of said broadly, but I'm just kind of curious is it fixed ports or dialysis, meaning is one having a bigger impact than another?

Well, Jayson, good afternoon. You know it is a good question, and I would love to say there is one significant culprit. But it is really, it is across the board. If you want to get a little color within that, I would say probably within the three, dialysis is probably the least worst or best or whatever you want to call that. But I think there is significant room for improvement in all three areas. And again what is really exciting is of the four launches that we will start benefiting from and that is on the near term horizon, there is one significant launch in each of those three segments. Centros will help us shoring up the dialysis segment; a couple of new ports will shore up the port segment, Smart Ports; and then of course, the first, while the triple lumen PICC, first PICC of the new generation will help that segment. So we think we can actually stop bucking the trend in all three buckets. Jayson Bedford – Raymond James: Okay. And then when you talked about kind of a push out or timing of launches here, did you expect a greater contribution or launch of Centros earlier in this third quarter. Is that what kind of contributed, I know you guys don't guide quarterly, but obviously there was a little bit of weakness relative to where the Street was and I am just trying to figure out if that was because of Centros or was it due more to some of the PICCs and ports that got pushed out?

Yes, it is a bit of combination Jayson. I think pricing actually continued even a little stronger than we anticipated a quarter ago. We did anticipate that the tough pricing environment was going to stay around. But if anything, it got a little worse I would say. But the other one is I would say, all three of the above, I think we would have anticipated the Centros to kick in a few weeks earlier. You know, regulatory approval has been delayed across the industry a little bit against historically what we are used to. And it is a little bit here and a little bit there, and that kind of took the shine off the Access business at least in the quarter. While shine off is kind of an understatement I guess, but that gave us strong headwind there. Jayson Bedford – Raymond James: Okay. That is fair. I will jump back in queue. Thank you.

Thank you, Jayson.

Thank you. And our next question comes from the line of Brooks West with Craig-Hallum Capital. Please go ahead. Brooks West – Craig-Hallum Capital: Hi, can you hear me?

Absolutely Brooks, we can. Welcome. Brooks West – Craig-Hallum Capital: Great. Thanks for taking the questions. On the new product launches Jan, you said that there was some risk on FDA, can you give us of the four products that are pending launch, kind of where those are in the process, and what risk there might be there?

Well, FDA approval is a binary process at the end of the day. So it happens or it doesn’t happen. I think most of the risk is behind us. To be very honest, there is one product where we still need approval. But again Q4 is not contingent. It would be – if it happens even on schedule, it would be that late in the quarter, it would not really help us drive Q4. So I think all that is accounted for in the maintained guidance from that point of view. Brooks West – Craig-Hallum Capital: So just to clarify, three of the four products are already approved, and you are just waiting for it is probably a 510(k) approval on the fourth?

Centros is approved. Obviously it is in the market. Brooks West – Craig-Hallum Capital: Yes.

We actually just received PICC approval, but we are not quite ready for launch. So we are waiting for the port approval, and you know nothing is normal in this day and age, but one would expect that is fairly straightforward. Brooks West – Craig-Hallum Capital: Sure. And then if I could get, on IRE, I guess a couple of questions there, Joe, can you break out what is disposables versus capital in that 724 number, and then can you also give us, you know, how many of those are commercial versus clinical cases?

Well, the majority of the revenue, more than half of it was probe [ph] sales this quarter, unlike last quarter where more of it was generators, but we don't break down the specifics of the revenue mix there. And all five of the hospital we sold in the quarter are commercial sites.

And if I can add to that actually, all 50 procedures done in the quarter are commercial procedures. Right now today we have no active clinical programs that are sponsored by the company. So every single bit of activity in the field is pure commercial activity. Brooks West – Craig-Hallum Capital: Great. And maybe I can sneak one more in; can you give us any light on how the hospitals are getting reimbursed for these procedures?

Yeah, the hospitals are billing under the traditional RF ablation codes. It is what they are using and getting reimbursed, and they are pretty healthy reimbursement rates. Brooks West – Craig-Hallum Capital: Okay, great. Thank you. I will jump back in line.

Thank you.

Thank you. And our next question comes from the line of Greg Brash with Sidoti & Company. Please go ahead. Greg Brash – Sidoti & Company: Good morning Jan, or sorry, good afternoon Jan and Joe, thanks for taking my call.

Good afternoon. Greg Brash – Sidoti & Company: Curious what – you know, you are reiterating your revenue guidance here. You need pretty strong sequential growth just to hit the bottom end there, the $214 million; it looks like you need around 12% sequential growth. Is there anything, what is giving you the confidence that you will see the sequential growth here in the fourth quarter other than the five extra selling days?

Well, yes, first thing is the five extra selling days which is a very significant number. You know, you are talking about 9% more selling days in the fourth quarter than in the third. But secondly are the new products that we are talking about as well. Those should be contributing, and lastly the fourth quarter is seasonally very strong for us. It always has been and it is our annual commissions’ plans and various other factors that always seem to bring us this strong fourth quarter. Greg Brash – Sidoti & Company: Okay. And then just on the PICC and port side, it looks like you will be launching two new products this quarter. I know one of your competitors mentioned during their year-end that they were seeing possibly some improved procedure volumes, curious if you are seeing any of that or you know is it at least holding steady and most of the decline is coming from pricing at that point or do you think maybe you are losing a little bit of share, just a little more color on that would be helpful?

Greg and I think both is true. I think we have to assume we're losing share. We also assume that there is at least procedure growth in the market place and maybe even revenue growth, and the fact that with a 6% negative revenue development, 6% price erosion, it means that our volumes have been virtually flat. So we have to assume we're losing share. I think with due respect, I'm not sure where – we're certainly not the market leader. I think those other parties are there, and I think you got your quotes from that as well that are really the market leaders. And we like to believe their arguments. Again as happily we would be to come up with any excuses, but I think the market is not one of them. I think the market is holding up. Procedures are good. Volumes are good. And keep in mind the procedures for PICCs and dialysis and ports and all that kind of stuff are to a large extent non-elective procedures. So the volume is driven by the prevalence of oncology, diabetes, and every single model we see, we believe the market continues to develop from the procedural point of view. So yes, we're losing share, and yes, we can do better, and yes we will. Greg Brash – Sidoti & Company: Thank you.

Thank you. And our next question comes from the line of Robert Goldman with CL King. Please go ahead. Robert Goldman – CL King:

Yes. Robert Goldman – CL King: Would you correct my math on that?

No, your math is perfectly fine. It is all about what you put into the math. And I say there is two things. You are correct in that we have said that we have approximately $5,000 worth of disposables per procedure. However, we also said early on in the game these numbers spring up and down a little bit, and we were frankly a little favorable to that average, but we don't want to give that guidance because these things may jerk up-and-down a little bit. Secondly, the way we report procedures is pretty much from conference call to conference call, whereas the revenue we book is very much in the fiscal quarter. So we can't really tie those numbers out. Of course, always a bit of a stroking effect up and down. There are some other dimensions in the revenue as well. So I think the most honest way to track the performance of IRE is really looking at the procedures, and it is almost like a data point in itself, and 50 procedures in the last 90 days is far above anything we have seen in previous quarters, and is a marked step up, and we have every reason to believe that is a beginning of a trend from that point of view, and we said the revenue – people continue to jerk back and forth a little bit, and again there is three elements in there, disposables, service agreements as well as the capital component of the equipment. Robert Goldman – CL King: Okay. And if I could ask one more follow-up, if the generator sales were something in the order of $350,000, and you sold five, I guess that is about $70,000 each. And could you give us a sense of what the obligation is on the part of the customer in acquiring a generator at that price under the program. In other words, what does that obligate them to do on consumable and utilizations?

As we have talked about before, there are two programs here that we are running. One would be the outright purchase of a generator, and in which case there is no absolute obligation to purchase any probes if they choose to pay the price for the generator, they can – they are only obligated to buy a service agreement with that, which will get them training and service over a year and that cost, the service cost would be amortization over the year. The other program would be one where the generator is bundled with the probes, and there is a commitment to buy a certain number of probes over a two-year period of time. But if it is just a generator purchased outright, there is no further obligation. And all of that revenue is recognized at the time of the shipment of the product.

And to add to that, if there is an outright purchase of capital equipment, it is always at a price level where it is profitable to us, and I think we said before, even at the lowest price levels we have seen that we are perfectly happy to continue to sell them at that level.

Yes and the last point would be to chime in further would be to say our prices are above 70,000 a generator. That math is not exactly right. We have not sold any below the listed price that we are selling them for under this new program. Robert Goldman – CL King: And can I ask one follow-up or should I get back in queue.

Sure. Go ahead. Robert Goldman – CL King: Could you give us a sense then regarding an idea how the customers are buying the generators. Of those five, how many were bought outright not tied to any consumables contracts?

Those five – those five were outright generator purchases. Robert Goldman – CL King: Okay. Thank you very much.

Maybe to clarify that, possibly one exception, I would say also may be to add on to that in general, our preference is – never a big fan of these long-term purchasing commitments. At the end of the day, physicians need liberty to choose patients for which they want to use this system. Obviously it is also their choice where they want to use it. We had this generic indication, soft tissue ablation indication, and then within that context we are working with physicians and saw this as a genuine pull from the market. From a strategic point of view and I want to clarify this once again, as a company we are lasered focused on getting these IDE trials started, and get more specific indications. And we are quite excited about the anecdotal results we see, and if anything we get more confident about the potential of this. But there is (inaudible) and that is working through the IDE trials, get the specific label indications, and then aggressively start developing the market. This is full.

Robert Goldman – CL King: Just two of the five, okay.

Yes, thank you. Robert Goldman – CL King: Okay. Thank you very much.

Thank you. And our next question comes from the line of Larry Haimovitch with HMTC. Please go ahead. Larry Haimovitch – HMTC: Good afternoon. Jan, on the Biocompatibles deal, can you discuss it? I realize there will probably be some sensitivity to discussing a lot about it, but can you talk about where the terms of the deal, the gross margin split and so on, pretty much similar to previous years, or was there any noticeable change in that agreement?

Well, Larry, and by the way good afternoon. Great question and I can talk as long as you can want on this, but I'm not going to say a lot. The only thing I will say is from a margin point of view, no real difference from that point of view. But as always, you know, well, not as always, but we made a couple of agreement. Again want to focus on; I think also on the Biocompatibles side, you would hear some of those stories. This has been a very, very successful relationship. It has been a great performance to the benefit of both companies. I think both companies have recognized this all along, and as relationships mature, and projects become more substantial, so do agreements evolve. And that is what we went through, and it has been a very, very cooperative spirit, we are quite pleased with the extension, and I'm sure again hear the same on the other side of the table. Larry Haimovitch – HMTC: Were you hopeful Jan of extending it even longer, and perhaps they were willing to do that or were you just shooting to have a one year extension and be happy with that.

We are very happy with this extension. I think this gives us what we need, and we look at this as a long term relationship from that point of view, and we are excited about this space and committed to this space. Larry Haimovitch – HMTC: But you are vulnerable in the event that they decide to go direct. And knowing you, I am sure you must have some alternatives in your mind in case that is the way it goes. A year from now you will be probably in the same position of trying to negotiate to extend it again.

If you want to avoid the vulnerability, of course, I would strongly recommend to get out of the medical device industry, so could a factory burn down, and there is a couple of things. And yes, without being let us put it this way, we are in the business of managing risk. This is a factor. But I think also sometimes we have to focus on the positives. This has been a great relationship. It is the strongest product out there in the market place leading in terms of clinical evidence, and I'm not sure we gave the detail here. But this is now a – about five years or so relationship between the two companies, first starting with RITA, then when we acquired RITA, we became the owner of that agreement. This is like the fourth amendment. So it is not unusual to go through this kind of amendments for different kinds of reasons. So we – I think both parties kept it right on the long-term goal there, and that is where I would like to focus on as well. Larry Haimovitch – HMTC: Yes, I want to ask one more quick question. I will get off and get back in queue, and that is congratulations on all the cash you generated, that is fantastic. Has the board considered the possibility of a share buyback, is that in the realm of possibility or is that cash most likely to be used for product acquisitions or company acquisitions?

(inaudible) split second. But we are not going to go in that direction. We think that share buyback, dividend payments, we think we got better use, better sources for this kind of cash to really fuel the business going forward, and that is what we are focused on. Obviously it is fair to assume that we are developing a potential license acquisition pipeline. We have used the last 12 months to really get a better understanding of the business, where we are, where we need to be, keep a note of the grindstone and get innovation going again. We are coming of a multi-year draft in launching products. We think we will hit the 11 product launches this year. We think we got a couple in the hopper for next year. Organic growth rate has picked up for the year to date about 8% assuming, and obviously we assume we will meet our guidance. It will certainly hang in at that kind of a level. We think we did good work on shoring up the foundation of this company, built the management’s strength, built to the team’s strength also to really go after acquisitions, and do them well. And I think that is what we are focused on as a management team with full support of the board. Larry Haimovitch – HMTC: Great, Jan. Thanks very much. Happy Holidays and Happy Easter!

And same to you Larry, Happy Easter!

Thank you. (Operator instructions) And we do have a follow-up question from the line of Greg Brash with Sidoti & Company. Please go ahead. Greg Brash – Sidoti & Company: Thanks for taking my follow-up. Just curious, some of this discretionary spending that you are holding back on, could you quantify how much you were holding back and should we expect those costs come back sometime in fiscal 11?

Well, I'm not sure there is a lot of value in going through details where we are holding back. But I would say by and large Greg, holding back on discretionary spending. One thing may be at a very high level, maybe one little titbit, our headcount today is probably a hair below what it was at the beginning of the year despite 10% revenue growth. So that has been a significant element I would say, and that is across many, many areas. The second thing I will say is the way we are holding back these expenses is not moving expenses from one quarter to the next. I think these expenses are – have gone away, and we don't expect to catch up effect neither in R&D nor in sales and marketing or G&A from that point of view. So I think it was a clean, real clean and frankly kudos to the management team here, and people in the organization, a clean, real, proactive management of expenses in areas where it does not affect our future from that point of view. Greg Brash – Sidoti & Company: Okay, that was very helpful Jan. Just one more from me, the Centros, when exactly did that launch in the third quarter and did it have any impact on sales?

It was just in the last week of the quarter that it launched and it was a negligible impact on the third quarter sales revenues. Greg Brash – Sidoti & Company: Okay, good. Thanks Joe.

We presented this first time at the SIR meeting in Tampa, which I believe was two weeks ago.

Just to chime in on Jan’s last comment with regard to the expenditures and actually we look at the nondirect labor headcount in the company as one of the metrics that we follow and it has actually been flat now for four consecutive quarters. (inaudible) is to trim, as well as not hire replacement people. So, we are operating at a substantially lower level of headcount than we would have had the gross margins been higher or the sales been higher. And then secondly, with regard to the marketing programs, we cut back on a number of marketing programs, and you go to virtually any trade show today, and you'll see a lot fewer people exhibiting and it is just I think a big trend in the industry where there is a lot less expenditure going on in marketing programs. So we don't think that any of these are things that are going to hurt us in the longer run.

Thank you. And management, I show there are no further questions at this time.

Okay. Well, thank you, Jeremy. I thank you all on the call for your interest in AngioDynamics. We will continue to provide updates on our progress, and I look forward to talking with you again during our fourth quarter fiscal 2010 conference call somewhere in July. Thank you very much, and have a great evening and balance of the week.

Ladies and gentlemen, this concludes the AngioDynamics 3Q 2010 financial results conference call. If you would like to listen to a replay of today’s conference please dial 1-800-406-7325. For international participants, dial 1-303-590-3030 and enter the access code 426-3674 followed by the pound key. ACT would like to thank you for your participation. You may now disconnect.