Good morning and welcome to the AngioDynamics Fiscal Year 2025 First Quarter Earnings Call. At this time all participants are in 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 2025 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 a 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 2025, 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 Form 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. 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 GAPP. The slide package offering insight into the company's financial results is also available on the Investors section of the company's website under Events and 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, operator. Good morning, everyone. And thank you for joining us for AngioDynamics fiscal 2025 first quarter earnings call. Joining me on today's call is Steve Trowbridge, AngioDynamics Executive Vice President and Chief Financial Officer. I will begin today's call by providing an overview of our recent performance. Steve will then provide a detailed analysis of our first quarter financial performance, and I will conclude with our outlook for the balance of the year before opening the line for questions. Unless otherwise noted, all financial results and growth rates mentioned during today's call are on a pro forma basis, which exclude the results of the Dialysis and BioSentry businesses that we divested in June 2023, the PICC and Midline products that we divested in February 2024, and the RadioFrequency and Syntrax Support Catheter products that we discontinued in February 2024. We kicked off our fiscal 2025 with a very solid first quarter. Total worldwide revenue was $67.5 million, representing growth of just over 1% year-over-year in line with our expectations. Our MedTech segment had another strong quarter, growing approximately 9% led by Auryon and AlphaVac, which both grew north of 20% in the quarter. Beyond the top line, we made significant progress towards profitability, reporting an adjusted EBITDA loss of just $200,000. Outside of our financial performance, we continued to execute on our key 2025 catalysts, which included new product launches, hitting key regulatory timelines, and collecting data that supports our product's safety and effectiveness. Starting with an update on our Medtech business, Auryon continued to deliver outstanding results, growing 25% over the prior year, as our efforts to expand our customer base and broaden the utility of the product continue to pay dividends. As mentioned last quarter, we expected to drive increased penetration into hospitals as we put…

Thanks, Jim, and good morning, everybody. Before I begin, I'd like to direct everyone to the presentation on our Investor Relations website summarizing the key items 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, which exclude the results of the Dialysis and BioSentry businesses that we divested in June 2023, the PICC and Midline products that we divested in February 2024, and the Radiofrequency and Syntrax support catheter products that we discontinued also in February 2024. We were very pleased with our first quarter results. Overall revenue was in the range of our expectations, driven by Auryon, AngioVac and AlphaVac. Gross margin was strong, stemming from the thrombus performance, leading to strong bottom line results in terms of adjusted EBITDA and adjusted EPS. Our revenue for the first quarter of FY ‘25 increased 1.1% year-over-year to $67.5 million, again driven by growth in both our MedTech and U.S. Med Device platforms. MedTech revenue was $28 million, an 8.7% year-over-year increase, while Med Device revenue was $39.5 million a 3.6% increase, compared to the first quarter of FY ‘24. But as Jim mentioned, our U.S. Med Device business was up 2.1% over the prior year. For the first fiscal quarter, our MedTech platforms comprised 41.4% of our total revenue, compared to 38.5% of total revenue a year ago. Our Auryon platform contributed $13.7 million in revenue during the first quarter, growing 24.9%, compared to last year. AlphaVac was a key strong contributor in the first quarter of FY ‘25. Mechanical Thrombectomy revenue, which includes AlphaVac and AngioVac sales, declined 1.6% over the first quarter of FY ‘24. The AngioVac revenue for the first quarter was $2.2 million, an increase of 21.1% year-over-year and 13.2%…

Thanks, Steve. Looking to the balance of the year, we will remain focused on a number of key strategic areas of our business aimed at driving growth. We continue to be very excited about the growing market opportunities that exist within our MedTech segment. With our recent new product launches and geographic expansions, our total addressable market is now roughly $10 billion, up from $3 billion just three years ago. Starting with Auryon, in the U.S., we will leverage the momentum built during the first quarter to continue to drive increased penetration with a particular focus on the hospital setting. We also expect new customer growth as a result of the recent launch of Auryon XL in our 1.7 millimeter catheter. Having received a CE mark in late Q1, we can now shift our attention to commercializing Auryon into EU. As with any new geographic expansion, we are beginning with a limited market release before turning to a full market release later in fiscal year 2025. We will continue to develop supporting clinical data and launching new product line extensions as we move forward. With AlphaVac, we continue to push ahead commercially as we focus on driving increased adoption of AlphaVac for PE in the U.S. and CE-marked countries. We will continue to invest in high-quality clinical data highlighting the benefits of our products to help support long-term adoption. In addition, we continue to expect to launch new product enhancements over the course of the year to refine and improve usability. And lastly, with NanoKnife, we expect the FDA approval by the end of calendar 2024, after which we will push to drive increased adoption in the U.S. for prostate treatment. And we are pursuing a specific CPT code to add clarity to the reimbursement pathway for the procedure. We are very excited about the future here at AngioDynamics. With the quality of our portfolio, as well as the commercial, clinical, and regulatory strategies that we have in place, we are in a fantastic position to drive growth for years to come. With that, we'll open up the line for questions.

Thank you. We'll now be conducting a question-and-answer session. [Operator Instructions] Thank you and our first question will be coming from the line of Steven Lichtman with Oppenheimer & Company. Please proceed with your questions.

Hi, good morning guys. This is [Amir] (ph) in for Steve. And my first question was on AlphaVac PE. Is there any further color you guys can provide from the field on how the launch ramp is going, such as number of physicians trained and accounts using it?

Amir, good morning. Thanks for asking. So, as mentioned on the call, we had really good feedback in line with what we expected from the data that the APEC study generated and comments that we received during the APEC study by the sites that were enrolled. We learned a lot. We learned that our initial design elements that we factored into the AlphaVac were being met and being received by our customers. Some of those design elements are the intuitive design we built into the handle, which is really important. As doctors said, they wanted more control while doing a procedure. Control meaning steerability to go from the left to the right PA, and then we gave the ability in a very innovative way to work wirelessly if a physician chooses. And without having that wire, reducing time and other risks in the procedure, raising efficiency levels. Then there were also, many were comfortable with the Vortex funnel tip we've had on our AngioVac device for years, the large bore catheter, the Vortex funnel tip, have been proven to remove a lot of clot burden in a simple and efficient manner. So those are some of the design elements we built in. We're hearing really good feedback. We heard it during APEX and now in our pre-launch, and now our full launch. So we're really excited in the field. We've got two really good competitors of good products out there as well. But we know that we're all three going to move and shift people we believe from the old lytic based therapies to these mechanical interventions. These are really good safe ways to get PE PICC patients treated. All three of us have a different approach towards it, but really like the feedback we've gotten, heard great feedback, and we're measuring, as you asked earlier, new customer interactions, new customer take-ups, and we know how many customers have us going through their value analysis process, watching that process, we're measuring really closely and we're pleased with our results.

Great, no thank you. Also just on the Auryon Hospital market opportunity, is there any more details you can provide and what initiative you're targeting in particular to go after that market?

Sure, I can. So dialing back a little bit, remember we did our full launch of Auryon almost four years ago, just over four years ago, September of 2020. Remember the world was different then too, it was six months into COVID. And a lot of the hospitals had kind of told all device companies to step down and stand back. They were not going to be running the normal Vac process and bringing new products in. So the OBLs were the first places that we were getting demand served. And our first customers were in the OBLs. So our ratio of the OBL hospital business was higher than we had thought it would be. And now the hospitals are kind of back to normal business. We're seeing the takeout. So all we're really doing is shifting the focus of our team, focusing more on those hospital customers, and you know how it works. Many of those have a high demand in Auryon because they've come familiar with it. They may have used it already in their OBL and now want to have it in the lab in the hospital. So we're focusing more and we're getting really good feedback. To us, it's an important shift, because over time, we think Auryon could even provide more care modalities on this unique device. And the hospital customers are more stable long-term customer for us, so we're hitting the goals we thought. We're shifting that hospital mix each quarter, and it also raises our profitability a bit each time we do so. So it's a good program. Our team is executing really well.

Great, and just one brief last one on my side. Have you ramp again on the manufacturing transition, can you provide any more color on the potential savings that you expect for this fiscal year? And just as a follow-up to that, like any color on the ramp you think you could see in gross margins over the next couple of years has the transition complete? Thank you.

Yes. Hi, Amir, this is Steve. So as Jim mentioned, the manufacturing transfer program that we have in place is going according to our plan, so we're very pleased to see that. As we had mentioned when we first announced this, the real change in gross margin and the benefit that we're going to see in gross margin really comes at the end of that program. So when we have the ability to get out of the areas that we want it to get out of and then take some of those overhead costs out. So it's not going to be a smooth ramp in gross margin coming from that program. Now, that being said, if you look at our gross margin results for this quarter, you really go back to what the overall strategy is for AngioDynamics when it comes to gross margin. We expect to see gross margin accretion coming from the fact that we have a larger portion of our overall revenue base coming from that higher margin MedTech product line. We saw that this quarter. We were absolutely seeing that mixed shift driving benefits in gross margin. Now, that's going to be a little bit offset until we can get through our manufacturing transfer process by the fact that we're overpaying or double paying for some of that overhead that we haven't been able to take out, while we're still manufacturing products for those discontinued product lines that we talked about, as well as doing and preparing ourselves for that move. We've seen some of those costs. We're definitely looking at taking that, but you're really going to see the step function once we get to the end of that program. And as we said, we think that's going to take about $15 million out of our overhead structure, all of which will hit gross margin and then eventually drop to the bottom line.

Thank you.

Our next questions are from the line of John Young with Canaccord Genuity. Please proceed with your questions.

Hey Jim and Steve. Thanks for taking the question and congrats on the quarter. I just want to start on NanoKnife that on nice and just the comments around the CPT pathway. Will you launch the -- can you provide initially just timelines for that beyond just the October date from the editorial committee? And then would you launch that without commercializing, without the code initially? And then also how are you going to think about the price? If you do get a Level 1 CPT code, would you price the disposable for the prostate higher than the other disposables currently? Any premium you could take there? Thanks.

All right, John, thanks for the question. So, as we've said, we've been able to really parallel path the process of going after the specific indication for prostate that we have with the FDA process and working to get reimbursement. So it hasn't been a linear process. We've been able to parallel path these things and bring in the timeline. As you know, it's a really complex process when you go through reimbursement. So we were very pleased to be on the agenda. As Jim said, we're waiting to hear the decision on that. Once there is a decision, there becomes a process where you either get the code or you don't get the code. You have to then go through the rock process where they'll evaluate your time and your cost and then it's going to be a little while before they put the full reimbursement in place. So as we have more details, we'll certainly get back and tell you about that. To your question around the launch, you know, look, we're in the process of launching this product. You know, one of the things about NanoKnife, it has is the general indication, as we've talked about with the uptick from the urology community that we've seen over the course of the last 24-months or so, that has been driving the growth in NanoKnife. That's coming from those urologists adopting the technology primarily to treat prostate cancer patients. So we're in the process of working through that. That was what allowed us to go through, preserve, get through the enrollment, get through the follow-up procedure. We've now filed for the -- to the FDA for that 510(k) clearance. And as Jim said, we expect to get that clearance around the end of the calendar year. So that will be the end of a long process that we've gone into all the while we've been continuing to commercialize it. Don't want to really speak to where we think numbers are going to come out through reimbursement. As we said, that's part of a whole complex process. We'll give you more details as that comes forward. I don't know that necessarily I would expect that there's going to be a huge change one way or the other in terms of how we've been commercializing and how we'll go to market with NanoKnife in terms of pricing. But we think that this whole process has really been put in place and our overall plan is to drive adoption through getting all three of the things that are necessary to launch a product, getting the indication from the FDA, making sure there's reimbursement, and then doing the work, the coverage and coding, and then making sure that we increase awareness in the overall market. All of those things have been built into our plan, and we are pretty pleased with the way the plan is going so far.

Okay, great. Thanks for the color on that. And just the cash burn in this quarter, it was pretty significant $21 million I believe. Can you just walk us through just your ability to hit cash flow breakeven? I know you had targeted previously profitability in fiscal year ‘26. Do you still expect that? And just that pathway to cash flow positivity? Thank you.

Yes, John, absolutely we expect to hit that. There's nothing that's different from what our expectations were. As we said, Q1 as it is with most companies, is always the highest utilization of cash quarter for us. ‘25 was no different. It was also exactly in line with our expectations. Some of the things that you have to deal with in Q1 is you've got your incentive compensation that goes out. You're paying all the commissions yearly to your sales force, that all goes out the door in Q1. Also things like insurance premiums and the high cost of our D&O insurance. We've got some minimum royalty payments that get paid all in Q1 that don't repeat themselves as you move into the rest of the balance of the year. So this is right where we expect it to be. I think we were signaling that. We expected to use around $10 million to $15 million in cash from where we ended Q4 by the end of this year. We're still on target for that, so expect that you're not going to see nearly the same utilization at all going forward. In fact, over the course of Q2, Q3, and Q4, expect cash to increase, kind of exactly what we've seen. Q4 is always the highest source of cash quarter for us. That's going to be the same again this year. And then as we move into FY ‘26, we expect to turn that corner to get to the point where at the end of the full-year we'll be cash flow positive.

Maybe I could just squeeze one more in here too, just on the Med Device, so the comments on the OUS order timing, should we expect some of the revenue vendors to be pushed out to F Q2?

Yes, I think that's right. I think, you know, as we've talked about with our international business, in contrast to the U.S. where we're primarily direct, in fact we're all direct here in the U.S., we're primarily through distributors in the international market. So there's going to be some choppiness and puts and takes in terms of when those order timings come in. Jim also mentioned, look, we expect Q2 to have a different comps, so when you're looking at it purely on a year-over-year percentage basis, definitely expect to see Q2 different than what you saw in Q1. And yes, you expect that some of those distributor orders come in, in future quarters and growth going forward in that business. One thing, as Jim mentioned, we had that international distributor come online for NanoKnife with getting those initial orders in Q1. It's not that, that distributor wasn't buying through the rest of the year. They were, it's just that not at the same level when you're looking at a year-over-year comparison to the initial order that they had in Q1.

Great, thanks again.

Our next question is from the line of Yi Chen with H.C. Wainwright. Please proceed with your question.

Thank you for taking my questions. Could you give us some additional color? You expected launch trajectory for Auryon in Europe and roughly in what timeframe for Europe you expect the Auryon sales could achieve the kind of similar level of sales in the U.S.? Thank you.

Hi, Yi. Good morning. This is Jim. So for Auryon, our team has done a really good job building kind of awareness of Auryon globally. Since we've launched the product, there's been a lot of published data that's occurred and some of that data has been global. Some physicians in other parts of the world have used Auryon, gotten familiarity with it, and we've run our own series of scientific symposiums over the last few years and we've held those over in Europe. And so I think a lot of global physicians have gotten awareness of Auryon. I've heard from some of their colleagues here in the U.S. how it works? How it's safe to use? How efficient it is? So there's some demand we believe globally already built up by the interests of Auryon. So we're now getting to CE Mark's importance. We can now commercialize it properly, talk to people. As we said on the call, anywhere entering new geographies, we're building a limited launch process that you'd expect us to do, then roll to a full launch this year. We're also being conservative. The European PAD market is not as mature as the U.S., and while it uses atherectomy to treat PAD in the same percentages that they do here in the U.S. So we're fully aware of that. So we have realistic goals we've set, but also really encouraged by the demand we see, by the interest in Auryon, and our team will do a really good job commercializing that we know. So we expect Yi to give you updates over the next three quarters as to how that process is going.

Got it. And with respect to the issue due to the timing of international orders, has the issue been resolved and has it only affected sales of NanoKnife?

Yi, Steve just mentioned on the last call, second ago, these are things that we knew about and you filled in. When someone starts off with us, they usually buy a higher percentage, they get some capital with some disposables. That usually doesn't repeat. During the course of the year, there are orders that fulfill their customer needs or a distributed channel. Those are normal. So we had a little bit of that on the device side, a little bit in Nano. Remember a year ago, Nano had, I think we were up like 35% Q1, 3% Q2. We told everyone even after Q1, hey don't expect that again, it'll normalize around that 20% level, which it did. We expect that here too, almost flipped. So probably started a little softer, Q2 probably be stronger, get back to the guidance that Steve gave in that area.

So just to clarify, the timing issue could recur in the future, correct?

Yes, we hope not. Anytime you deal with new distributors coming on, you have a little of that choppiness. So over time as our business grows, we think it'll smooth out. I don't think you'll see as much of this over time. We don't want to see it. We like to have it smooth out, but we love some of the distributors that have come on the way they've come on, adopting our technologies, bringing our products into stock. And these folks also are really helpful. They have clinical teams around the globe getting training done at levels that we couldn't do without their help. So it maximizes our use of our people working there and minimizes the amount of people we have to put into these locations. So when you do it, there's choppiness over time. I would expect it to smooth out. You always have a little bit.

Got it. Thank you.

Thank you.

Thank you. At this time I'll turn the floor back to management for closing remarks.

Thanks operator and we're really pleased with the work here that our team at AngioDynamics has done. We have a lot of things going on at the same time. These are our plans. We knew we'd have important catalysts that we'd meet during the calendar year of 2024. Those catalysts include new product launches, new regulatory approvals, and new geographic expansions. All the while we're running our normal business, we're also shifting our manufacturing footprint. We couldn't do it without our team of people who do a really great job in maximizing our ability to serve our customers globally. Thanks to each of them, and thank you for tuning in today.

This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.