Good morning. Welcome to the AngioDynamics Fiscal Year 2026 Second Quarter Earnings Call. [Operator Instructions] As a reminder, this conference call is being recorded. The news release detailing AngioDynamics' fiscal 2026 second 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. A webcast replay of the call will be available at the same site approximately 1 hour after the end of today's call. Before we begin, I'd 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 2026 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 in 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. 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 were divested in June 2023, the PICC and Midline products that were divested in February 2024 and the Radiofrequency and Syntrax support catheter products that we discontinued in February 2024. Also, unless otherwise noted, all comparisons will be the second fiscal quarter of 2026 versus the second fiscal quarter of 2025. Now I'd like to turn the call over to Jim Clemmer, AndioDynamics' President and Chief Executive Officer. Mr. Clemmer?

Thank you, operator. Good morning, everyone, and thank you for joining us for AngioDynamics' Fiscal 2026 Second Quarter Earnings Call. Joining me today is Steve Trowbridge, AngioDynamics' Executive Vice President and Chief Financial Officer. We delivered strong results in the second quarter. Revenue grew 8.8% with Med Tech up 13%, and we translated that top line performance into improved profitability. Adjusted EBITDA nearly doubled year-over-year, and we generated positive cash flow. These results prove that we can drive both revenue growth and profitability simultaneously. Based on our strong performance, we are raising our full year guidance for both revenue and adjusted EBITDA, which Steve will detail later in the call. What's particularly encouraging is the breadth of our execution across our portfolio. Auryon delivered another quarter of double-digit year-over-year growth. Our Mechanical Thrombectomy platforms continue to gain traction, both commercially and from a regulatory product development standpoint. NanoKnife is well positioned to capitalize on the prostate opportunity with the CPT code becoming effective a few days ago, and our Med Device business delivered solid results. Now let me walk you through each of our businesses. Auryon continues to perform exceptionally well. We delivered our 18th consecutive quarter of double-digit growth, and we continue to take share in the atherectomy market. Our strategy to increase penetration in hospitals is working, driving both higher volumes and better economics. International is starting to contribute following our CE Mark approval. We're also making progress on expanding the addressable market. The AMBITION BTK study is enrolling well, and we're advancing our work towards coronary applications. These initiatives will take time, but they represent opportunities to broaden where Auryon can compete. Moving to mechanical thrombectomy. We are pleased with the continued trajectory of our mechanical thrombectomy platform and we are thrilled with the 3 regulatory milestones…

Thanks, Jim, and good morning, everybody. As always, 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. Unless otherwise noted, all metrics and growth rates mentioned during today's call are on a pro forma basis, which excludes 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. Additionally, unless otherwise noted, all comparisons will be the second fiscal quarter of 2026 versus the second fiscal quarter of 2025. Top line revenue performance was strong again in the quarter. Revenue increased 8.8% to $79.4 million, driven by growth across both our Med Tech and Med Device segments. Med Tech revenue was $35.7 million, a 13% increase. We're very pleased with the performance of our Med Tech segment. Now the comp for our second quarter was much more difficult than the comp for our first quarter. And year-to-date, Med Tech is up 19.1%. In the quarter, our Med Device revenue was $43.8 million, an increase of 5.6%. For the second fiscal quarter, our Med Tech platforms comprised 45% of our total revenue, compared to 43% of total revenue a year ago, further illustrating the sustained execution of our strategy to increase the percentage of our overall revenue base coming from our higher growth, higher-margin Med Tech segment. Digging into our Med Tech segment, our Auryon platform contributed $16.3 million in revenue, growing 18.6% compared to last year. Auryon has now delivered double-digit year-over-year growth for 18 consecutive quarters. As Jim mentioned, this growth is supported by our strategy to increase the percentage of our atherectomy business in…

Before we open the line for questions, I want to share an update on the leadership transition we announced earlier today. After a decade with the company, I have announced my intention to retire. I have spent over 30 years in the industry and have made the decision, along with my family to move on to the next chapter of my life. The last 10 years at AngioDynamics have been tremendously rewarding as we have transformed the company into a leading innovator of novel solutions that directly address the world's 2 leading causes of death. Within our Med Tech segment, we now have products addressing over a $10 billion global addressable market, and we have set ourselves up to be a physician partner and focus on expanding the applicability of these platforms to help more health care providers and their patients. With all of the work we have done, particularly over the last few years, the organization has earned enormous trust through the efficacy of our life-changing platforms, and we are in a fantastic position to execute on our strategy and continue the momentum we have built. I worked with the Board with regard to the timing of my retirement and the Board has established a search committee and is conducting a comprehensive process, assisted by a leading executive search firm to identify our next CEO, which we expect to occur during fiscal 2027. Until my successor is appointed, I will continue to oversee the company's strategic and financial initiatives and will continue with the company to ensure a seamless transition. I will have plenty of time to reflect before my transition occurs, but I wanted to take this opportunity to thank each and every one of our employees, our partners and the talented health care providers that I have had the good fortune to work alongside during these last 10 years as we have collectively worked to help health care providers deliver the best care to patients with unmet needs. With that, we can open the line for questions.

[Operator Instructions] Our first question is from the line of Frank Takkinen with Lake Street Capital.

Jim, congratulations on the retirement. Wishing you all the best in that new chapter. I was hoping to start with a question around gross margin. It feels like that really outperformed nicely in the quarter, and obviously saw the guidance stay unchanged. And I think I heard a comment around staying relatively stable, which would imply gross margin actually doing a little bit better than where the consensus is at right now for the year? Any comments around kind of gross margin expectations and why we shouldn't see that kind of mid-50% gross margin stay throughout the end of the year and into the following years?

Frank, this is Steve. I'll take the gross margin question. So you're right. We were very pleased with the performance that we've seen on gross margin, particularly in the first half. And as we mentioned, there's a couple of dynamics that are driving that. We're seeing positive price in both our Med Tech and our Med Device businesses. And we're seeing a benefit of the production related to us getting ready to do is the move of some of those materials down to Costa Rica. So increased price along with the mix shift to Med Tech and then some of those production volumes are what we're seeing as a nice positive for gross margin in the first half. In the back half of the year, the price that we took is still going to continue to stay there. That mix shift will continue, but we're going to have a little bit of a structural underabsorption as we move some of those final products out of Queensbury and having them being produced by our third-party manufacturing partner down in Costa Rica. As we talked about this plan originally, we knew that there was going to be some of that structural underabsorption. And we had mentioned that, that would be somewhat offset by taking costs out, and that has been the overall plan as we take some costs out of indirect labor. The good thing that our team has done is we've accelerated some of those costs coming out of the plant. So you're seeing that in the first half of the year. So really, the dynamic going into the second half is some of those products now finalizing their move according with our plans, you'll see some of that structural underabsorption. You won't have the offsetting cost cuts, but that's because those costs have already come out. So that's really the dynamic and the difference between the first and the second half.

Got it. Okay. That's helpful. And then maybe just for my second one, I was hoping to talk a little bit more about mechanical thrombectomy. I heard the comments around AngioVac had a more challenging year-over-year comp, but I was curious if there's anything else going on in that business. We were hoping it would be a little bit stronger growth, but I understand it was off a pretty tough comp. And then maybe as a second part to that, if you could talk about kind of ApexReturn and some of the other work in right heart and what that might do to the growth profile of that line item over time?

Yes, Frank, thanks for the question. Really, really pleased with the performance of AlphaVac and PE as we're gaining new cases, new doctors and getting awarded kind of status in the hospital through VAC committees, getting "on the shelf in inventory". In new accounts, the performance of AlphaVac is terrific. We see pictures every day, hear stories of new physicians using it because of the unique design elements that we innovatively put into the product. So really excited about that continued growth at a strong level for a long time to come. AngioVac will be fine. If you look back a year ago, we had a really strong Q2, and revenue went down in Q3 and back in Q4. There are cycles that just happen sometimes. So we're pleased. And you saw, I think we're up 11% in AngioVac in the first 6 months of the year. So we're really pleased with the platform. It will be one of our key growth categories for a long time to come. We have 2 amazing products that work really well in that place and it will drive growth. And then Steve, as far as...

Yes. And then, Frank, to follow up on the question on AlphaReturn. As we've always said, we've got the best product on the market. We're very confident in that. We think when we take the AlphaVac product, we get that into the hands of physicians, consistently, the feedback that we're getting is that it gives them what they need and it's the best product that is out there. As we've talked about, a hurdle to adoption in some areas because of the way that the market has been conditioned has been the ability to then return the blood. AlphaVac is designed upfront to limit blood loss and mitigate that. But there's no doubt that the market is looking for an opportunity to return that blood in certain scenarios. And so we think that the AlphaReturn product is really important for us to get over some of those initial humps to have people choose AlphaVac if maybe in the past, they've been used to using competitive products. So we're really excited about it. We've talked about the conversations we've been having FDA for a while. We are very pleased to get this over the finish line. We're excited about the IDE study starting it and then getting this into the bag of our sales force really as a way to take away an objection, and we expect it to be a catalyst to accelerating growth in the future.

The next questions are from the line of Bill Plovanic with Canaccord Genuity.

Just first, Jim, congratulations. I know 10 years is a long time, and it's a lot of work that you've accomplished and some great outcomes. So my hats off to you and you'll definitely be missed. In terms of my questions are, I want to start with prostate. I know you're only a few days in. Just talk about the change to the Level 1 CPT code. How many insurers have really made that back-end change to reflect the coding change to prevent the automatic denials so far by your estimation? And then I noticed that the capital was a really strong quarter. I mean disposables were good. They saw a very strong, but it seems like capital was even stronger. And I'm curious, is that a precursor to the prostate is they're buying the systems to get ready to do procedures?

Bill, thanks for the question. This is Steve. And we want to congratulate Jim too, although he's not going anywhere right away. So he's going to be with us for a while. So we're happy about that, and there will be time to talk about everything that he's done. On your question on prostate, we're just a few days into it, so we don't have an estimate for the changes that you were talking about, but it's something that our team is absolutely keyed in on, and we're going to continue to watch and monitor. We think that this is going to be a catalyst for us, particularly on the Medicare side. So it's something that we're going to stay close to and watch. But we're pleased now with over the last year, I've been talking about the code going into effect. So the turn of the calendar was a good move for us, and we're excited about that. On capital, there's 2 dynamics. Capital was strong. There was also the capital sales that we talked about in the distribution channel move in France that added some additional NanoKnife capital. But on top of that, we were still pretty pleased with the capital sales that we saw. So as we've mentioned, capital sales are mostly going to be in the international markets. Here in the U.S., it's going to be a mixture of different models to make sure that we get capital into the hands of our physicians that could be through placement models, that could be through sales. I think the arbiter that we're looking at are those probe sales. And so we were really pleased with the nice increase in probe sales. And it's all coming from increased awareness and enthusiasm on the part of urologists. And it's really a prostate that's driving the NanoKnife results that we've seen so far.

And then just on EBITDA, you mentioned that the back half would be, I think, lower than the first half. And -- just directionally, how do we think of adjusted EBITDA in the third quarter? Is it going to be negative?

Yes. Thanks, Bill. So on EBITDA, we just wanted to make sure we were very pleased with the performance that we've seen here in the first half in EBITDA. We think it does prove out that the model is and can generate positive EBITDA, can generate cash as well as driving the top line. So we're excited to keep that continuing. We've also talked about wanting to balance that with investments that are necessary to continue to drive the top line growth in those Med Tech businesses. And so we've talked about investments into feet on the street in terms of the sales force as well as some of those R&D investments that Jim mentioned with his prepared remarks today for some of the nice trials that are coming up. So some of that's going to come into the back half. We don't expect negative in the third quarter. Maybe just not as robust as what we saw in the first half.

The next question is from the line of Eduardo Martinez with H.C. Wainwright.

Congrats on the quarter. I had a few questions on Auryon. You mentioned the CE Mark, and I'm just curious what your expectations are for international sales, if there are any specific regions you guys are going to target. And if that would be associated with any increased sales spend? And also if you could quantify the opportunity there and your expectations for this year?

Thanks, Eduardo. Good question. We're really pleased the fact that our team got the CE Mark for Auryon. And then our commercial and clinical teams have really done a great job driving awareness outside of the U.S. Atherectomy isn't chosen at the same rate outside the U.S. to treat PAD as it is here. But we've used a series of clinical forms and educational programs that our team has driven outside of the U.S. to really give people confidence in Auryon as a platform, how the science works. And it's important for us because once people see how the science works, how safe and effective the product is in treating that artery, above or below the need, flexible and safe. So it doesn't take a lot of hands-on user training by us. So we're able to use our really good distributor network to support growth, support customers during the use of the product. So we've not identified or targeted yet a size of the market that we think we'll capture, but we're really pleased with the uptake already in people getting new Auryon systems, buying the disposables, treating patients with PAD and having really good results. So over time, you'll see our international sales creep up as a larger percentage of our overall sales.

Got it. That's really helpful. And also on Auryon, you mentioned expansion into coronary applications. I'm just curious if you had a time line for that? And also any increased spend, if that's something we can expect in the R&D line item this year in 2026?

I wouldn't expect a significant amount of spend in the R&D line item this year as we talk about coronary. Clearly, it's a strategic imperative of ours to take the product and move into the coronary space. It's a little bit of a longer-term initiative. As we talked about, it's probably a PMA trial. So we gave some highlights in the past of the ability to take our current platform technologies and through clinical and regulatory pathway expansion, move into additional TAMs. A very good example of that is Auryon moving into the coronary space, but it's not something that's going to be impactful in terms of the spend in this year.

At this time, I'll hand the call back to Mr. Jim Clemmer for closing remarks.

Thanks, Rob. Rob, I'd like to thank all of our employees here at AngioDynamics, who've made these great results possible by their commitment and dedication to our customer and our products. So we've changed this company by its portfolio. You've seen us become active portfolio managers to make sure our company is positioned in the right places at the right time with the right products for future growth. The company is doing a really good job executing today, but we're also building for tomorrow and investing in opportunities to expand the application of our products geographically and in new clinical applications. So we're really pleased with where the company is headed. We can't wait to share more results with you in the future. Thanks to all of our teammates.

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