AngioDynamics Beats Zacks Estimate - Analyst Blog

AngioDynamics, Inc. (ANGO) recently reported third quarter fiscal 2010 earnings per share of 13 cents that beat the Zacks Consensus Estimate of 12 cents and the year-ago earnings of 8 cents. 

Sales 

Total revenues in the third quarter increased 6% year over year to $52.2 million. Peripheral Vascular sales increased 8% year over year to $22.4 million. Growth was led by higher sales of VenaCure EVLT, Benephit targeted renal therapy systems, and Micro-Introducer kits. 

Oncology/Surgery sales increased 19% year over year to $13.7 million. Growth was due to higher demand for RF ablation products and NanoKnife. 

Access revenue declined 6% year over year to $16.1 million. The decline can be attributed to lower average selling prices (ASPs) of certain Access products due to a competitive pricing environment, and delay in new product launches.
 
On a geographic basis, the U.S. contributed 89% to total revenue and increased 5.2% year over year. International revenues increased 8.4% year over year. 

Margins 

Gross margin declined 310 basis points (bps) year over year in the third quarter to 58.0%. The decline was due to lower ASPs of some Access and Peripheral Vascular products as a result of a competitive pricing environment. Higher raw material costs for certain Access products also contributed to the decline. 

AngioDynamics’ strong cost control initiatives helped it in increasing operating and net margins. Both operating and net margins increased 540 bps and 250 bps year over year to 10.7% and 6.4%, respectively. 

Balance Sheet & Cash Flow 

AngioDynamics ended the third quarter with cash and short-term investments of roughly $85.8 million, an increase of 26% in the first nine months of the fiscal year. The company had an outstanding long-term debt of $6.6 million at the end of the third quarter. AngioDynamics generated cash flow from operations of $11.4 million in the reported quarter. 

Outlook 

AngioDynamics reiterated its outlook for fiscal 2010. For the year, net sales are estimated between $214 million and $217 million, an increase of 10% to 11% year over year. 

Gross margin should range between 59% and 60%. Operating income is expected to range between $19 million and $21 million. EBITDA should be between $31 million and $33 million. GAAP EPS is expected in the range of 46 cents to 48 cents. 

AngioDynamics is engaged in the designing, development, manufacture and marketing of therapeutic and diagnostic devices to treat peripheral vascular disease (PVD) and other non-coronary diseases. 

Presently, we are ‘Neutral’ on AngioDynamics.
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