Good morning, and welcome to the AngioDynamics Fiscal Year 2024 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference call is being recorded. The news release detailing AngioDynamics' fiscal 2024 first quarter results crossed the wire earlier this morning and is available on the company's website. This conference call is also being broadcast live over the Internet at the Investors section of the company's website at www.angiodynamics.com, and the webcast replay of the call will be available at the same site approximately one hour after the end of today's call. Before we begin, I would like to caution listeners that during the course of this conference call, the company will make projections or forward-looking statements regarding future events, including statements about expected revenue, adjusted earnings and gross margins for fiscal year 2024, as well as trends that may continue. Management encourages you to review the company's past and future filings with the SEC, including, without limitation, the company's Forms 10-Q and 10-K, which identify specific factors that may cause the actual results or events to differ materially from those described in the forward-looking statements. The company will also discuss certain non-GAAP and pro forma financial measures during this call. Management uses these measures to establish operational goals and review operational performance and believes that these measures may assist investors in analyzing the underlying trends in the company's business over time. Investors should consider these non-GAAP and pro forma measures in addition to, not as a substitute for or as superior to, financial reporting measures prepared in accordance with GAAP. A slide package offering insight into the company's financial results is also available on the Investors section of the company's website under Events & Presentations. This presentation should be read in conjunction with the press release discussing the company's operating results and financial performance during this morning's conference call. I'd now like to turn the call over to Jim Clemmer, AngioDynamics' President and Chief Executive Officer. Mr. Clemmer?

Thank you, and good morning, everyone, and thank you for joining us for AngioDynamics’ fiscal 2024 first quarter earnings call. Joining me on today's call is Steve Trowbridge, AngioDynamics’ Executive Vice President and Chief Financial Officer, who will provide a detailed analysis of our first quarter financial performance. Unless otherwise noted, all financial metrics and growth rates provided during the call today will be on a pro forma basis, which excludes the impact of our divested Dialysis and BioSentry businesses in both our fiscal ‘24 and fiscal ‘23 first quarters. In our first quarter of FY ‘24 was highlighted by the attainment of important milestones in our long-term strategy and is a solid start financially against our fiscal year goals. Over the last few quarters, we've outlined for you several areas, where we were focused on improving, and I'm happy to say that we are seeing improvements here during the first quarter, although there's still more to come. We ended the first quarter with revenue of $78 million, representing growth of approximately 6% year-over-year, led by growth of approximately 13% from our MedTech segments. Our adjusted pro forma EPS was a loss of $0.13 and was in-line with our expectations. This excludes approximately $700,000 in sales from the divested businesses during the six business days in June that we still own to them. Beyond our financial performance, we made important progress on key milestones related to our long-term strategy. As we have stated, it is our mission to address meaningful treatment gaps in large, high-growth markets with a focus on cardiovascular disease and cancer. During our first quarter, we enrolled and treated our final patient in our PRESERVE study, which is designed to prove that NanoKnife is a safe and effective treatment for men diagnosed with intermediate-risk prostate cancer. We…

Thanks, Jim. Good morning, everyone. Before I begin, I'd like to direct everyone to the presentation on our Investor Relations website summarizing the key events from our quarterly results. As Jim mentioned, unless otherwise noted, all metrics and growth rates mentioned during today's call are on a pro forma basis and exclude the results of the Dialysis and BioSentry businesses that we divested in mid-June. Our revenue for the first quarter of FY '24 increased 5.7% year-over-year to $78 million, driven by continued strength in our Med Tech platforms. This is exclusive of approximately $700,000 of revenue from Dialysis and BioSentry in June. On an as-reported basis, revenue for the first quarter was $78.7 million. Med Tech revenue was $25.9 million, a 13.3% year-over-year increase, while Med Device revenue was $52.1 million, growing 2.3% compared to the first quarter of FY '23. For the first fiscal quarter, our Med Tech platforms comprised 33% of our total revenue compared to 31% of total revenue a year ago. Our Auryon platform contributed $11.1 million in revenue during the first quarter, growing 25.7% compared to last year. Mechanical thrombectomy revenue, which includes AngioVac and AlphaVac sales, declined 5.8% over the first quarter of FY '23. AlphaVac revenue for the first quarter was $1.8 million. AngioVac revenue was $6.3 million in the quarter, representing a decline of 7.7% over the prior year, but up sequentially from the fourth quarter and trending in the right direction. AngioVac continues to stabilize and rebound from the challenges we faced in Q2 and Q3 of fiscal '23, and we continue to take meaningful steps to address those challenges, including new sales leadership as well as a more robust sales training platform. Additionally, we recently received the Breakthrough Device Designation for the use of AngioVac in right heart and…

Thank you, Steve. And before we open up the call for questions, I'd like to say a few words. Like Steve and I, many of you have had the pleasure of knowing Matt Mishan, who sadly and unexpectedly passed away several weeks ago. Matt did an excellent job following our company for many years, and all of us here at AngioDynamics truly enjoyed working with him, both as an analyst and as a person. Matt will be missed, and we offer our condolences to his family and his key bank colleagues, particularly Brett. Now operator, could you please open up the call for questions.

Thank you. [Operator Instructions] And our first question today comes from the line of Jayson Bedford with Raymond James. Please proceed with your questions.

Hi. Good morning, guys. Maybe just to start on the business. NanoKnife use is quite strong. I was wondering, if you could break out growth U.S. versus internationally. And internationally, are you seeing it mostly in prostate or are you seeing use in other areas?

Hi, Jayson. Actually, we're seeing it in both. So we track different organs that we treat. There's been some -- the international team has had a head start and the U.S. team, they've done a great job of establishing relationships internationally with some really strong prostate physicians. And then, I'll refer back to the July call we had for Q4, we announced that NICE had upgraded our status in the U.K. So we think that also has a knock-on effect in other areas within Europe, Jayson. So we're going to continue to work with our clinicians and grow in Europe and U.S. Steve, do you have to break down.

Yes. And then Jayson, we saw a strong growth in both geographies. So in the U.S., disposable growth was 28%. And in the international markets, our disposable growth for NanoKnife was about 44%. So we've seen really strong growth, both sides of the ocean.

Okay. On mechanical thrombectomy, you seem to be stabilizing AngioVac. AlphaVac still seems like it's kind of stuck in first year. Can you just give us a little indication as to why growth should improve in AlphaVac? And I think you also alluded to a second-gen product and I apologize I may have missed the timing there.

No, it's fine. Again, AngioVac, we're really confident in -- obviously, how the device works and what it does and gaining the breakthrough designation from the FDA is important because they've acknowledged an area of unmet need that we think AngioVac can fit, or work with them on the study design and get that communicated soon. Second, the AlphaVac, we love the product and the physician feedback is really strong. I was at PERT, two weeks ago talking to many, many physicians who have used it, want to try it. The trick for us, Jayson are two things: completing the APEX PE enrollment. You saw we announced today, we're 75% of the way there, which is actually a great time line being that there are two other good products already with a PE indication. And we're growing at the same pace. I think that the first one of those went out a couple of years ago, and they got their indication. We're really pleased in the -- take-up of the product. So we do -- and we did announce this morning, we have a couple of design enhancements that we'll launch next calendar year, Jayson. So you'll see those enhancements. So really, next year is really important for us. We'll have that PE indication, we believe, about mid-calendar year next year. We'll also have some design enhancements to the product. Anybody does, after you launch the first gen, just based on physician feedback to make it a little more intuitive and user-friendly, but we have full confidence that AlphaVac F18 will be a major player, not just PE, but other clot removal within the anatomy.

And does the design enhancements require an additional filing?

No. The simple enhancements, I think they've just done as a letter to file to our current design. Again, I'm answering it from my regulatory team, but I'm pretty sure that's the case, Jayson, we'll let you know.

Okay. And then just lastly, and I'll let others jump in. On Auryon, strong, can you just give us an update in terms of the installed base? And I realize you don't get a lot of upfront for the capital, but is this -- the growth you're seeing, is it procedure driven or have you seen a bolus in placement or capital sale?

Yeah. So in terms of placements, Jayson, the net new placements for this quarter were about 10% from where we were finished last year. But we have also, as we've talked about in the past, seen a lot of shifting of lasers from some of the lower volume users and moving into higher volume users. So as we talked last year, we were going to pair back a little bit on buying the new systems and the cash utilization that goes along with that, but we're going to focus on driving utilization, and that's what we've seen. So there's -- we finished the quarter with right around 415 total lasers in the field, that's about 10 new net from the end of the year, but then also a significant number of lasers that we've been shifting from maybe lower performing customers to finding some of those higher-performing customers.

Okay. Thank you.

Our next question is from the line of Steve Lichtman with Oppenheimer. Please proceed with your question.

Thank you. Good morning, guys. Just wondering, if you could provide a little bit more detail on NanoKnife performance outside of the U.S. It sounds like that business has been a key performer in your international growth overall. Can you give us any visibility on what that could look like in the coming quarters and years? What are you seeing on the ground there and how sustainable is that?

Hi, Steve. We think it's sustainable. That was a really strong number in Q1. I don't know if I expect that number throughout the course of the year. The team did a great job. But they're also training our partners network to get clinical support during cases and procedures. We're going to have our -- in Monte-Carlo at the end of this month, our fourth Clinical Symposium where our physicians presenting on their experiences and their data with NanoKnife and a lot of it is highly compelling. So we've got a lot of things happening. You also have a little knock-on effect here as well with our Solero growth. We think that Nano, as it gets more widely recognized as to how it works, the mechanism of action, we're getting doctors also utilizing our Solero at a higher rate. We've got some great competitors in the microwave (ph) space. We think our Solero is the most effective tool out there. We're seeing doctors also give that a try and adopt it, with I think, NanoKnife side by side. So a lot of good things are happening, Steve. It's going to grow stronger this year. I don't know if I expect the same growth rate during the next couple of quarters. But we're also working here in the U.S., as you know to wrap up the data collection on PRESERVE, which will be done next summer submit and then we hope to get that indication in the U.S. next year, but we just still see strong growth U.S. and internationally even prior to that.

Got it. Thanks. And then our Auryon small vessel DVT, you reiterated calendar year '25. You talk about some docs that are using it in the field. Can we expect any single-center data or is there anything you're getting a sense on that from your customer -- from some of those customers from in small vessel DVT?

Steve, we're not sure if you'll see any data published by our customers prior to 2025. We hear anecdotes too where people try it in different areas are so confident in how it works. We're focused on our internal R&D process. And the research has shown, we're really, really excited about what it does. There's a good aspiration device on the market today that does a really good job in small vessel DVT. But we think the -- what Auryon does in addition to aspiration, the way our laser can disrupt and break up some of the clock, we found that our testing is really significant. So we're going to continue to focus on our internal testing, get the product ready for launch. In the meantime, doctors are always free to do their own research, but I wouldn't expect to see anything I don't believe, prior to our launch.

Okay. Got it. And then just lastly, as you're thinking about the Med Tech) business, how are you thinking about balancing the potential benefits of additional sales on top line gross margin versus, I think you mentioned again, Jim, some of the cash benefits that those products provide to the overall company. So should we be thinking about potential additional product line divestitures ahead, or just how are you thinking about balancing those two? Thanks.

A couple of things, we've always talked about our role as an active portfolio manager as we grow our Med Tech businesses. But the Med Device segment does a terrific job in providing us that cash and stability to invest in the other side of the house. And we really love what the business does. We mentioned today, we highlighted our ports. Here we compete against a really great company. The number one company in that market is a strong, great company. Our ports are better. And our company is better, and our team is strong. So although, we're a small guy here, David versus Goliath, we're going to continue to win in categories like ports, our mid-line did really well as well [indiscernible] will always be a battle, and we know that. But it's a good business, Steve. We like the balance, it provides us today. Let's go back two years ago, when we first talked about our transformation into the Med Tech business that we want to be. Med Tech was only 15% of our revenue. Now you see it about a third of our revenue. So as that continues to grow, we'll be less reliant on the device cash and stability. But today, we still think it has a good mix over time that could change.

All right. Thanks, Jim.

Our next question is from the line of John Young with Canaccord Genuity. Please proceed with your question.

Hi, Jim, Steve. Thanks for taking our questions this morning. First for us just on Med Tech gross margin. It was a great number to see. I know you guide to 65% on the high end of the fiscal guidance for the year from Med Tech specifically, but it feels a bit conservative. Can you just talk about the puts and takes here on the gross margin for Med Tech? Thanks.

Yeah. So John, as we've talked about, right, the overall gross margin kind of long-term strategy for Angio is that you're going to see gross margin accretion coming from this mix shift as we have the Med Tech products comprised a larger portion of our overall revenue base. We've seen that, but we've seen it at the corporate level be chewed up a little bit by some of those inflationary pressures that we've talked about. So on the Med Tech side specifically, increased sales in NanoKnife as we've stabilized, as Jayson talked about, the mechanical thrombectomy business, those are both going to be pretty good tailwinds for us on the gross margin. And then you've also seen, as we've talked about pulling back a little bit on brand-new lasers being put in the field and trying to increase utilization with those lasers on the Auryon business. All of those things are going to be supportive of that continued shift with the Med Tech business kind of driving that shift over overall gross margins.

Great. Thanks. And then on APEX too, getting enrollment now, I saw on the slide, it's now guided for complete by early calendar '24. It feels like a bit of a push there. Have the other ongoing PE studies in the space impacted the ability to get patients enrolled?

Hi, John. It's Jim. No, I don't think so. I think if you take a look at when we started enrollment and to when we think we finish enrollment, it's about an 18-month window, we believe, from start to finish. I think if you go back and look at the market leader, I think, is what they took a few years ago when there's nothing else in the field. So we were a little cautious coming out knowing that we'd be third in behind the other two players there. We thought it might be a little challenging. And it probably was initially, I think there's a lot of momentum building in the product and physicians, their peers that use it, talk about great outcomes and shared some great outcomes along the way. So I think the momentous building, John, we're really pleased with the schedule. It fits what we internally had projected, and we can't wait to get on label next year, but we'll do the work to finish it right now. Your question is a good one because it is a space now, we'll be third in. And it probably will be harder for others. I can't speculate for them, but we have a unique novel device we're bringing into that space with two other good products there. So we think we'll really get people in choice.

Great. Thanks, Jim. And maybe just my last one I just sneak it in. Just on the strategy on capital allocation. Just thoughts on stock buyback given the strength of the balance sheet and current stock price? Thanks.

Yeah. Steve and I talk about that a lot, and we have conversations with our Board. I think today, given that the external market kind of disruptions and where things have gone, we want our investors to say, hey, we have a strong balance sheet. They want to take a time out for a second. Steve has given you guidance as to where we think our cash utilization will be this year. And if people look back a year ago after Q1, Steve gave the same guidance, we really hit that by the end of the year. So we're really -- we think we're in a good position to utilize the cash we have. We do have a good strong balance sheet with cash. We'll always talk about the investments that we're looking at. And I'm sure at some point, it will be a good conversation around a buyback. We believe there's a disconnect in our value today, a strong disconnect. We'll take a look at that, but we also want to share with investors who want to ensure that we have a stable balance sheet for a while. We get their view as well.

Thanks.

Thanks, John.

I'd now like to turn the call back over to Mr. Clemmer for any closing remarks. Mr. Clemmer?

Thank you, operator, and thanks again to all of our AngioDynamics employees. We are on a transformation here, changing our company to one that is highly differentiated by our science and technology and provides meaningful outcomes in patient wellness when our products are utilized. Thanks again, there are tremendous employees who enabled this to occur every day. I look forward to speaking with you at the end of our Q2. Thank you.

This will conclude today's conference. You may now disconnect your lines at this time, and thank you for your participation.