Q4 2020 AngioDynamics Inc Earnings Call

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Good morning, and welcome to the Angiodynamics fourth quarter fiscal year 2020 earnings call. At this time all participants are in listen only mode. A question answer session will follow the formal presentation. If anyone should require operator assistance. Please press star zero Wonder telephone keypad as a reminder, this conference call is being booked.

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The news release detailing the fourth quarter in fiscal year 2020 results crossed the wire earlier. This morning. It was available on the company's website. This conference call is also being broadcast live over the Internet at the Investor section of the company's website at Www Dot Angiodynamics Dot com and webcast replay of the coal will be available at the same time.

Same site approximately one hour after the end of today's call before I 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 in gross margins for fiscal year 2021 management encourages.

To review, the company's past and future filings with the FCC, including without limitation. The company's forms 10-Q, and 10-K, which identifies specific factors that may cause the actual results or events could differ materially from those described in the forward looking statements slide package offering insight into the Companys financial results is also available on the Investor section of the company's website.

<unk> under events and presentations this presentation should be read in conjunction with the press release discussing the company's operating result, and financial performance. During the morning. This conference call I know the trickle over to gym climber, Angiodynamics, President and Chief Executive Officer Mr. clever.

Thank you Kevin Good morning, everyone and thank you for joining us for Angiodynamics fiscal 2024th quarter and full year 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 fourth.

Quarter financial performance.

You're all aware for the past several months the world has been impacted by the ongoing Copays 19, pandemic, putting particular strength on the healthcare industry.

We remain focused on our ability to provide products to our customers of patients. While also continuing to invest in our growth platforms and carefully managing our expenses and our cash position.

Well, we are seeing early signs of improvement since the onset of a pandemic in March the near term impacts from this virus are not fully transparent and our business has not yet returned to pre covert levels.

With that in mind, Stephen I will characterize the potential impacts from the virus our business with us much transparency as we can for you throughout this call.

Our fourth quarter and full year 2020 real results were negatively impacted by this pandemic.

Fourth quarter revenue of $58.3 million decreased 18.1% year over year and decreased roughly 17% when excluding escalera.

Revenue for the full year was $264.2 million, a decrease of 2.4%, but flat compared to 2019 when excluding square.

In addition.

We reported and adjusted loss per share of six cents for the core reflecting the impacts of co in 19 as well as ongoing investments in our key technology platforms.

Most notably in preparing for the full launch of our already on atherectomy system.

Adjusted earnings per share for the full year 2020 was nine cents.

As we discussed on our third quarter call hospitals began restricting access for all non essential employees and procedures in the early part of March.

These restrictions led to a decline in procedural volumes, which significantly impacted our sales in the latter part of March and April.

However.

Pleased to say that during the month of May procedure volumes began to rebound.

Since that time, we have seen a steady improvement in procedure volumes and with a corresponding improvement in our sales.

Our revenue has not yet returned to pre coated levels, but I can report to you that this positive trend continued throughout June and the first half of July and we are seeing encouraging trends in our marketplace.

Turning now to the operations side.

Our priority during the quarter was to manage expenses closely and conserve cash in the near term, while still investing strategically and our key long term growth platforms.

Angiovac nearby and ARIA.

As was the case during the third quarter.

We put employee safety and product availability ahead of efficiencies at our gross margin took a step back as a result.

We anticipate this pressure will continue through or at least the first half of fiscal 2021.

As we assure that we are ready to resume growing our business as quickly as possible once the environment normalizes. So that we can rebuild our momentum from the first few months of this calendar year.

I am pleased with our ability to balance these priorities during the quarter.

I believe that we remain well positioned to weather the coping 19 pandemic and we'll be able to return to a more normalized level of growth once the macroeconomic begins to stabilize.

As it stands today, we've maintained a solid financial foundation and continue to drive compelling strategic transformation.

Driven by our key technology platforms.

To drive these key technology platforms forward, we focused our spending during the quarter on two areas.

Internal research and development.

And our clinical and regulatory pathway expansion.

Let me update you our accomplishments in each of these areas.

On the R&D front.

We continue to focus investment.

The key technologies, Angiovac ARIA and nearby.

While seeking out ways to increase the profitability profile of or other products.

We continue to see strong interest in Nanoknife 3.0, and Angiovac 3.0.

And we remain focused on further developing these platforms.

Regarding angiovac.

We remain on track to deliver two new products next calendar year and.

And we look forward to share on these developments with you in future quarters.

We also continued to advance the Arianna technology.

And as we told you last quarter, we focused our investment in three primary areas.

Ensuring a robust and efficient supply chain.

Introducing physician and sales training programs and.

And developing a dedicated selling and marketing channel to take this unique product to market.

We are planning a full launch early in the second quarter of this fiscal year.

And we currently anticipate ARIA generating $7 million to $10 million in revenue in fiscal 2021.

We're excited to see with this product does in the hands of physicians.

The second driver of our transformation is clinical and regulatory expansion and data generation.

Which are foundational pillars to our strategic transformation.

Our Pathfinder indirect studies are still a primary focus but requires a certain level of flexibility in this current environment.

As we mentioned last quarter.

Mass in hospitals throughout the country prioritize critical care procedures and preserving treatment capacity.

Additional site initiation activities and patient enrollment efforts in both Pathfinder, our atherectomy registry and direct our nanoknife pancreatic cancer I'd or pause.

However, as hospitals are now gradually opening back up we are seeing activity around these initiatives the again once again.

As of today.

21 direct study sites have secured IR be approval.

As we've added two additional sites since our last quarterly call providing further evidence that these activities are indeed, beginning to occur again.

Additionally, we received an expanded indication.

For our unit views thrombectomy product.

But now allows for the administration of fluids into vessels that are impacted by thrombus.

Including both the peripheral and pulmonary arteries.

This additional indication is consistent with our long term strategy of building out along that continuum of thrombus management and developing a robotic technology platform that will address thrombectomy of any complexity.

We also won an appeal of a non substantial equivalence ruling from the FDA regarding our smart four plus.

We went through the appeals process and the FDA overturned the initial ruling and provided five 10-K clearance.

Further evidence of our significantly strengthened clinical and regulatory acumen.

We also received CE mark for smart per plus ports in Jim.

Well I did the specifically mentioned M&A as an area of focus spending in the fourth quarter. It will continue to play an important role in our transformation.

As we learn more about the shape of the recovery of the immediate and the long term.

However, we do not to anticipate engaging in M&A activity.

Until the cobot pandemic is ultimately behind us.

At that time, we will maintain our disciplined approach of identifying appropriate M&A targets and continued to assess opportunities.

While also prioritizing the strength of our balance sheet amid this rapidly evolving macroeconomic climate.

Before I turn the call over to Steve.

I'd like to provide an update on how the koeppen 19 pandemic continues to impact our business.

Our lease some headquarters has reopened in accordance with New York State guidelines.

Our other office space employees are continuing to work remotely and doing so effectively and efficiently.

We will we will remain flexible and supportive and ensuring that we remain productive at all of our office locations.

From a manufacturing standpoint.

We have employees on the manufacturing floor to ensure that our products are available to save lives and as I mentioned earlier, we want to be ready to resume growing the business as quickly as possible once the environments returns to normal.

Our field based reps, who have been grounded when we last spoke are now starting to reenter the field in a safe and well orchestrated manner.

In order to once again provide unparalleled service to our physicians.

Our clinical support teams also did a terrific job of supporting cases, even without being elbow to elbow with physicians.

And we are using learnings from that to develop even more efficient and effective ways of supporting our customers.

I'd like to say again, how proud I am of our team the amazing job that they did providing remote support to our customers throughout this pandemic.

We remain very proactive around CRM activities and business development planning.

So that we are prepared to spring into action as elective procedures, we resume and continue building on the momentum that we had generated prior to being impacted by 20 Cobot 19.

From a procedural impact perspective.

Our business includes products that fall on both sides of the critical care and necessary lives.

Angiovac cases.

Faced cobot related headwinds during the fourth quarter.

But have shown signs of a robust recovery.

June was a record month for Angiovac from both a procedure and revenue perspective.

Oncology procedure straddle the line between acute and elective like.

And while we saw strong nanoknife capital sales during the fourth quarter procedural volumes declined.

So far in the early days of the first quarter of fiscal 2021, we're also seeing a slow positive uptake in case volumes.

Laser atherectomy procedures with our already on laser have continued consistent with other procedures and are still very early in the ramp states.

Well, we saw a decline in LTC during the fourth quarter not unexpectedly.

This line is proving to be the slowest to recover.

And finally sales of our VA products, including picks Midlines imports remained resilient over the past few weeks.

Driven by our previously announced line extensions for our picks and Midlines as well as moderate tailwinds for our new agreement with Premier.

Finally, I'd like to address three additional one off items.

To start we recently made the decision to implement a restructuring of our oncology organization.

As it has not been meeting our expectations.

On our third quarter call. We mentioned that we were not pleased with the performance of our Biocentury and radio dine businesses, and we took action to create more effective organization.

This included the creation of an inside sales team that will go live in three weeks to cover our Biocentury and radio dime products.

And likely it will become a larger part of our broader organization overtime.

This dynamic is also driving a more significant reorganization of the broader oncology business unit.

Which is now reporting directly to me.

Allow me to get close to the business and provide better insight into the right long term path for this business.

These efforts will allow us to increase our focus on driving the realization of the benefits of our unique technologies like nanoknife and getting them to perform as fast as they can.

Next during the fourth quarter. Our overall results were negatively impacted by a recall initiated by BARDA.

That is related to a component in our fee a case that we provide.

The full net impact inclusive of cost incurred was roughly $750000 during the fourth quarter.

And lastly, our first quarter 2021 revenue.

We'll also include a onetime order in the UK from NHS.

During the fourth quarter, a distributor partner reached out to us.

On a onetime stocking order related to pandemic planning.

Our team did a great draw in addressing this order and working urgently to fill the order.

$1 million was shifted in the fourth quarter and we expect the shipped $5 million during the first quarter, that's why 2021.

We do not expect disorder to repeat.

While the current environment, certainly unprecedented we continue to prioritize the health and safety of our employees and our patients.

Moving forward.

We will remain thoughtful and disciplined.

About our overall spending.

As we continue to effectively manage the near term macro risks.

While still positioning our innovative product portfolio to succeed over the long term.

With that I'd like to turn the call over to Steve Trowbridge, Our executive Vice President and Chief Financial Officer.

Thank you Jim and good morning, everyone.

Before I begin I'd like to point to the presentation on our Investor Relations website summarizing the key items associated with our quarterly and full year results.

I'd also like to note that with respect to the fourth quarter and our business moving forward, we will provide slightly more intra quarter detail than we would in a normal operating environment.

We will not be providing guidance at this time as it remains difficult to accurately assess the impacts from cobot 19, a procedural volumes in the near future.

Additionally, unless otherwise noted all prior year results and comparisons exclude the contribution of our name at fluid management business, which we divested at the end of our fiscal year ended May 31 2019.

As Jim mentioned, our sales during the fourth quarter were negatively impacted by cobot, our net sales for the fourth quarter fiscal 2020 decreased 18.1% year over year to 58.3 million.

Excluding the fiscal 2019 revenue contribution from the a sclerosis sliver of therapy product, which we stopped distributing during the fourth quarter of fiscal year 2019 revenue declined for the fourth quarter was roughly 17%.

Each of our three businesses slug varying degrees of impact from the deferral of non essential procedures associated with the cobot 19 pandemic.

Our oncology and VIP businesses faced the greatest impact that these two businesses had the largest exposure to elective procedures.

Our VA business faced a smaller impact as solid growth in picks in midlines helped to offset declines of other products in the VA portfolio.

Our total VIP business declined 28.8% year over year, and when excluding Declara declined 26.2% driven by declines in the Venus and core businesses.

Angiovac sales fell 11% compared to the fourth quarter of last year. However, as Jim mentioned, we have seen a strong rebound and angiovac procedures and sales volume, which drove a record month in June.

Vascular access revenue decreased 4.6% during the fourth quarter as double digit declines and sales of ports and dialysis were offset by solid growth in pick and midline sales.

Revenue from our oncology business declined 18% during the quarter as the deferral of non essential procedures broadly impacted sales across the oncology portfolio.

However, nanoknife sales increased roughly 26% year over year, driven by strong growth capital sales.

Sales approach declined during the fourth quarter after seeing improvement in the third quarter.

Moving down the income statement, our gross margin for the fourth quarter fiscal 2020 was 51.8% a decrease of 630 basis points compared to a year ago.

As Jim mentioned this decline in gross margin was primarily driven by a conscious decision to focus on employee safety and product availability.

We expect this trend to continue through the first half of 2021, which will obviously have an impact on our full year gross margin as we continue to assess the shape and timing of the cobot 19 recovery.

In addition to this dynamic gross margin during the fourth quarter was also negatively impacted by 160 basis points due to a onetime write off of raw materials and existing inventory associated with poor track. The dissymmetry product that was purchased pursuant to the Companys acquisition of radiation.

Our research and development expenses during the fourth quarter fiscal 2020 were 7.2 million or 12.4% of sales compared to 6.9 million or 9.7% of sales a year ago.

We are continuing to invest strategically in R&D in clinical with a focus on further developing our nanoknife angiovac and RPM products, while remaining focused on driving the profitability of our other businesses.

For the fiscal year research and development expenses were 29.8 million.

We continue to be thoughtful about our investments in light of the uncertain environment. However, we intend to maintain investment in our key growth drivers, while being more judicious in our investment in other areas of the portfolio.

While we reserve the right the pullback on these investments if the environment changes meaningfully for fiscal 2021, we anticipate R&D spend to be between 32 and 34 million.

As DNA expense for the fourth quarter of fiscal 2020 decreased to 26.4 million, representing 45.3% of sales compared to 29.3 million, representing 41.1% of sales a year ago.

For the fiscal year, SGN expense was 116.5 million or 44.1% of sales.

We currently anticipate SGN expense to be between 123, and 127 million for fiscal year, 2021, which factors in the impact of the Annualization of the Orient acquisition as well as the planned increase in spending to support the already on Salesforce expansion.

We will support our upcoming product launches as well as the needed investments for commercial release of already on heading into fiscal 2021.

Given the current environment, we are continually assessing controllable discretionary spend with an eye towards spending cash management, while maintaining investment in our key technologies.

Our adjusted net loss for the fourth quarter fiscal 2020 was 2.1 million or a loss of six cents per share compared to adjusted net income of 2.8 million or seven cents per share in the fourth quarter of last year.

For the fiscal year adjusted net income was 3.5 million or income of nine cents per share compared to adjusted net income of 8.2 million or 22 cents per share a year ago.

Adjusted EBITDA in the fourth quarter fiscal 2020 was point 6 million compared to $8.5 million for the fourth quarter fiscal 2019.

For the fiscal year, adjusted EBITDA was 18 million compared to 30.6 million in fiscal 2019.

As you read our press release. This morning, we incurred a goodwill impairment charge during the quarter of 157.6 million, which impacted our GAAP results.

At May 31, 2020, the company identified a triggering event, resulting from our market capitalization being below our book value of equity for sustained period of time.

Following the triggering event, we determine the fair value of the company using a combination of the income approach end market approach. This valuation assessment indicated at the company's book value exceeded is calculated fair value.

Turning to our balance sheet in the fourth quarter fiscal 2020, we began with roughly 52.2 million in cash equivalents when factoring in the $25 million draw on all revolver that we disclosed and discussed in the third quarter call and we gained 3.9 million of cash in operating activities.

During the fourth quarter, we have capital expenditures of 1.5 million.

As of May 31, 2020, we had 54.4 million in cash and cash equivalents at 40 million in debt outstanding.

Turning now to guidance as Jim and I have discussed on this call. It in our third quarter call. We remain committed to improving the company's cash and expense position in the last thing manner that will improve the company over the long term and we're pleased with the progress we've made on this front.

As I mentioned earlier, given the current trajectory of Cowen 19 cases, and the continued uncertainty surrounding the magnitude and duration of these impacts we will not be providing financial guidance for 2021 at this point in time.

We will continue to monitor the operating environment closely and will provide guidance when appropriate.

With that I'll turn it back to Jim for a few closing remarks before we begin the Q and a portion of call Jim.

Thanks, Steve like remind everybody how hard our company work during this pandemic our marketing our training of our clinical teams worked really closely with our customers. So surely at the support they needed to provide care. During this process, our manufacturing quality and logistics teams also work in an uninterrupted fashion.

Providing our life saving products.

Providing availability globally during this period.

The cobot 19 situation is incredibly dynamic with mandates and recommendations changing on a daily basis globally and know from end in sight.

We are encouraged by the sales trends, we have seen throughout the first month of June and the first half of July.

While we have not yet returned to our pre co with sales levels. We have continued to see consistent improvement back towards these levels.

We are optimistic that these trends will continue as states in hospitals reopened and procedural volumes continued to improve.

However, given the recent surgeon cases in states, such as Florida, Texas, Arizona, California.

We acknowledge that the recovery will not be linear and we remain cautious and our optimism.

I am pleased with the way our team is responding to this crisis I believe we have taken the necessary steps to preserve the momentum that we had established through the end of Q3.

While remaining focused on controlling expenses and preserving cash.

We will continue to work hard to ensure that we maintain this balance in the near term while positioning ourselves to build on our previous momentum as we exit this pandemic.

We spent a lot of time today, telling you how we're managing through the covert 19 per dynamic, but I want to ensure that we have not lost sight of our long term strategy and the fact that we are in the early stages of a transformation.

This transformation will reshape angiodynamics inter company with differentiated technology platforms that will compete in larger higher growth addressable markets, where we compete effectively.

While we have been challenged by cobot, we acted urgently and decisively.

And as we sit here today, we have a solid financial platform and a sound long term strategy.

As the impacts of Cobot 19, eventually paper overtime, we are excited to be able to return our entire focus the growing the business and delivering increasing value to all of our stakeholders.

With that Kevin I'd like to turn.

The call back for questions.

Thank you now conducting a question answer session. If you like be placed into question can you. Please press star 100 telephone keypad a confirmation Tony will indicate you line is in the question Q you may prostar too if you'd like to remove your question from the Q for participants using speaker equipment, maybe necessary to pick up your handset before present.

In the store keys.

Once again that star ones you plays into question Q.

One moment, please what we pull for questions.

Our first question today is coming from Citi approval from Canaccord Genuity. Your line is now live.

Hi, Thanks for taking your question.

I guess I wanted just with.

And really what's factored into your 2021 guidance and really just what you've been able to GE. During its current period in terms of customer outreach and setting up.

Personal lines and then just how you're thinking about initial penetration whether laser accounts non laser and then also hospital setting.

Facility as Jim Good morning, Thanks for the question.

So regarding our young.

So what we will we talked about is the three areas that were investigating immediately after our acquisition of XML medical So our supply chain Buildout has occurred when now building products that meet our quality standards not just the hardware lasers, but the catheters to support the delivery of energy throughout our products. We've also done the physician and sales training programs.

We added people to our team. So the ended that's why 20, we had 16 people dedicated to this business.

In a few more weeks by August one will have 24 people dedicated to the business and by the end of year about 40 in the Standalone business within our with our company. So this really were very very.

Committed to growing the business as we mentioned most of these people are fuel base people sales reps in clinical support members sport the customer use.

So along the way as we gain more confidence from our customers that are used the product to treat more people will be able to support them. We feel over time sealants affiliate, we'll see a balance about 50 50 from in hospital customers and procedures and Ob Ela procedures in the office Spacelabs. Initially we're seeing a lot of the contracts that we've signed and a lot of the new.

Business that we're gaining comments on the Ob else as the cycle procurement seems to go a little faster. There were also seeing interest from people use each of the current technologies in the market today.

Obviously, many of the folks who are used to the current laser that's offered at seem to be kind of people most interested in come over but overtime. We think will be an alternative each of the products out there I would guess it over time, a really most nobody else, we'll have a product like ours. In addition to a mechanical entry as well, but as people gain confidence in our product and.

We can treat hard and soft calcification above and below the knee, we think will be a product of choice and many applications.

Yes. Thank you Jim and then I guess, if I could just trying to angiovac and really the trends that you called out based on gene.

If you could provide more color around really what you're seeing his main drivers have been strong rebound and then just how you think about that going forward in the sustainability of what you've seen in June.

Thank you.

Sure. So facility, it's obviously going in Q3, I think we reported a 40% 44% growth in Q3 and a lot of that was driven by the Angiovac 3.0 that we launched late calendar year. That's why of 2019. So we've had a lot of physicians try the product I would argue about 3.0 that hadn't try to before we're so.

Being really amazing results driven clinically, we can pull thrombus and get rid of Clos that no other device into in the market. So really unique product. So we saw it now even with the slowdown from co would that really hit us in April and May we were probably a little surprised with the uptick in June but really we shouldn't be over time, because this amazing tech.

No it is being utilized by more and more physicians. So June was.

The largest month, we've had for procedures and even sales.

So we're really encouraged by this product and as you know we've spoken publicly about the two new products will launch next year with in Asia, and a four smaller version that will enable physicians to get into other vessels and to treat Clos and other vessels and then finally, another product that will be able to compete right in the middle of the spectrum where today.

We don't play as well as you know with our unit views casket a replay of the low end.

The thrombectomy clinical need spectrum, and with our Angiovac on the highest but we really look forward to launching a new product next year that allow us to compete with that middle end of acuity, where a lot of other companies have offerings today. The market is growing as a market trust mechanical thrombectomy more and more we really look forward to sharing our new technology with you soon as we want to be.

Major player Angiovac is a platform and the outcome of that agenda rates are very impressive. So we'll continue to see sales growth. We believe not just throughout fiscal year 21, but as we add our new products and technology. This would be a platform of growth for our company for the long term.

To see what I would add too which is that.

Is he mentioned that we did see that drop off in procedure volume in the April time frame into early may and in our third quarter call. We talked about that shifting line of where procedures would fall on the essential versus non essential.

We were surprised at the time to see some of those angiovac procedures fall down the way that they did.

We have been very pleased with the trend that even seeing through may and that definitely into June and July we're keeping an eye on it we think that we're looking to see if there are signs of they're having been some pent up demand, which are now seeing in June. So we're keeping our eye on that what would what we will say going back to a Jim mentioned don't forget the angiovac procedures are on a very far end of the acuity spectrums.

So these are very sick patients that has to be put out of universal bypass with a tremendous amount of clock burden I don't think those the type procedures that you would necessarily have the opportunity to delay and see pent up demand. So we're really driving where angiovac is currently playing in that marketplace, but as Jim said, what we've seen has been a verified by other competitors in the space that middle.

Korea is is a very hot market because of the physicians are becoming very comfortable using mechanical interventions to keep thrombectomy. So as we continue to to really honing in on the market. The current area that market that Andrew that plays and today. We're excited about the angiovac platform moving into the other areas and driving our business over the long term.

Great. Thank you Ms. Kim.

Thank you. Thank you.

Thank you and its question today coming from Matthew Mission from Keybanc. Your line is allied.

Great. Thanks for taking the questions.

Good morning, Jim Steven.

I just a follow up just a follow up to that I mean, given that angiovac is isn't.

It's for those higher acuity procedures.

Do you think it do you think it's possible that some of the delays in that.

That patients in patients actually getting that procedure had moved them from.

A middle acuity two to a higher acuity procedure and you're seeing more patients that would necessarily.

Benefit from Angiovac as a result to some of that some of the delays.

In addressing their conditions.

So Matt this is Steve I think it's a thing is a great point, we're looking at that I don't know that we have enough data points right now to affirmatively say that a patient who might be a candidate for one of those middle section mechanical procedures. If you wait too long. We will then end up into Angiovac, it's something that we're looking at.

I think it's there's a certain logic to it but we don't have the data now to definitively say.

What we do know is that over the previous years as well as what we're seeing now theres definitely a market for Angiovac and were doing really well in the market that angiovac plays in and we're still very interested and building out that platforming moving into other areas as well.

And on the vascular access side, the onetime order for from the UK in in a throughput and planning.

[music].

In the years, then that's that's Oh.

Restocking of will have some of what.

With the way they run down inventory of R&D preparing for a second waves of the virus with that.

Or is this something that they are now addressing in saying that we need to have a certain amount of inventory in preparation now moving forward and this is this is part of US just stocking up where it and I'm sorry for the we're part question. What was included what was what was really included in that order. It's in a good.

As a good gauge for what what countries would we are looking to stock up on as part of your vascular access unit for for future.

Yes.

Sure So Matt good series of questions.

So we would probably the middle of pandemic when the NHS in our partner in the UK reach out to US was really looking for picks in mid lines, primarily and I think a little bit of all the things your reference matter exactly what occurred here they were seeing the need to get fluid in medication to people and fix it in line to widely used in those situations we have.

Good amount of business in those markets They trust our products.

And so were accurately as about a 6 million dollar offer.

To supply bandwidth. So our operations team move very quickly and were able to produce product to the specifications. They required and as you saw weakness we filled about $1 million of that in may and the remaining $5 million will ship. This quarter. So we wanted to make you guys aware of that as we see it as a onetime or Matt but to your point. This is really a little bit of.

When you mentioned it was taking care of current need filling the shelves little bit, but also you want to put a stockpile. There. So the case to navigate rave to happens or something else NHS wanted to prepare for their citizens have adequate supply of these products on the Sheldon and maybe we'll see that with other other countries and other governments, we've not yet seen it to that level, but I think a cover.

For the or as you touched upon you're exactly right.

Okay excellent.

And switching over to Nanoknife.

I guess, how much of your installed base has has switched over to the Nanoknife 3.0.

And at this point and how much of the uptake in this conversion is the existing base versus new users.

So you look back met in 2025, 2020, we sold record capital and a lot of that was brand new full systems on some of those were upgrades. We saw we operate as to the Gen. Three version.

Prior to the Genthree version being launched we had almost 300 nanoknife sold over the years globally.

And one of our challenges has been getting those products utilized to provide patient care to daily basis. So part of the challenge we out in front of us and getting the direct study of any idea approved is critical for us in getting the product use.

The age of about 3.0 platform has a better physician interface and it's a little easier to use and user to train on we think will increase adoption of our product get more people into the direct study.

But over time, we look forward to as we said earlier, we're investing in this platform and we will talk you about a newer version of Angiovac overtime that will be far easier to use we think will enable physicians to access other organs for treatment, we'll look at opening up those clinical pathway as with the FDA as well. So it's I know your question is a hardware.

To put our arms around because we haven't been able to get all the nice in the field utilized the level that we'd like to natural working on.

Okay, excellent graduations, and really managing through a tough quarter very welcome.

Thanks, Matt our team did a really great job. Thanks, Matt.

Thank you as a reminder, ladies and gentlemen at star one to be plates and the question Q. Our next question today is coming from Jason Bedford.

Raymond James Your line is alive.

Hi, this is not listening on for Jason Bedford, Thanks for taking the questions here.

So I know you're not giving guidance on fiscal 21, and so you know at a higher level.

Fiscal 2000 was obviously, a little bit transformational year with koby headwinds on top.

We speak about EPS as growing in fiscal 21.

And with that can provide a bit more color on the gross margin headwinds you're expecting through the first half of this fiscal year.

As well thank you.

Good morning, So couple of things, we'll see we'll follow.

You know word investment phase, we've called that out with our acquisition of eczema Medical last October and I mentioned, a few minutes ago. The vessel are making into adding people opt to service our customers in this unique business division. So we're not going to give guidance at this point, we hope to soon we have full market transparency, but you got to remember again, we are investing in especially the three.

Primary platforms of growth that we have internally.

Further gross margin headwind, Steve will give detailed minute, but as I mentioned earlier, we made a decision during the cold period to operate our facilities that produce our products because we didnt, how long coated with in Alaska, and we know people need our products for care treatment. So our operations team did a terrific job they run a really well oiled.

Mission and effective machine that produces high quality products, but in this case.

The push efficiency to the site that focus on employee safety and production of our products maintaining our supply chain secured so we pushed our gross margin to the cipher wallet. We're still there honestly because we got to make sure our voice to operate safe manner, and we produce our products and the quality levels. Our customers expect so for a while we're going to take that hit on gross margin we.

Biggest reasonable necessary to do the right thing during this pandemic, Steve anything you'd like to add yes, Matt I think it's a good question and as Jim mentioned and as you alluded to in the beginning of your question why 20 was a transformational year for US we are.

Putting into strong foundational financial foundation to make this strategic transition to being a growth company.

And so we are focusing on growth that we had a line of sight to growth through 521 in light of the areas that we talked about.

I think if you look at F. why 20 through Q3, we were driving growth and we were also driving a nice amount of that growth down to the prior to the bottom line in terms of profit.

When you saw our Q4 as we were managing through coated.

The profitability becomes more challenging as your as you're trying to do as Jim said and keep keep people in their seats and to keep the company moving through that through that challenge.

As we showed in Q4, we were focusing on our people we are focusing on our cash management and we then we are focusing on our business and as we mentioned here, we don't see our business back to pre koby levels, yet we expect to continue to be tracking that way through the first half of the year Thats what were seeing but we're not going to get there. So I think you can you could use that as a nice microcosm of thinking of how we're looking at.

21, we have a site towards growth with our products, we talk about already on a seven to 10 million that is it purely incremental to what we're seeing that we talked about our VA business being relatively resilient, we expect that to continue angiovac bouncing back and see where we can do there we definitely have a line of sight to growth on the topline, but as you saw the impact that cold it has on the bottom line.

We do expect that to continue into half way 21. In addition to the the targeted investments that we want to make and the gross margin is a big part of that so we made a conscious decision to do all the things that Jim talked about maintain inventory levels to to address whatever the shape of this recovery looks like keep the plant functioning I use it as as insurance policy in case there.

As a second wave coming back around.

So I think you, although we weren't able to give clear guidance. We wanted to give you some directional sense of where we're heading on other areas of the income statement like R&D NSG nay.

That are based upon the environment that we see today I think we put all that together how we're looking at 21 is we really are focusing on continuing our march of that transformation driving topline growth continuing the investments as we can wildly continue to manage through this the continuing covance endemic so thats going to have a challenge on EPS. So I wouldn't expect to see EPS growing the same.

Okay that our revenue is expected to grow.

Got it makes total sense to appreciate the details there.

So as I guess just following up.

From a product standpoint, thrombolytic was probably even stronger than than I would've thought can you talk about kind of the dynamics. There are you seeing no kick in from the license maybe in we with more interventional treatment or are you seeing an increase in dumbo double that because that's a bit and is this kobin related directly or can you just.

Thanks.

Yes, it's a great question, we are looking at that I mean, clearly in the Angiodynamics portfolio Angiovac is the flagship when it comes the thrombus management and that's where we're putting a lot of our efforts that were seeing a lot of our activity I do think our probabilistic business is also going to rise in that type of Angiovac moving forward. So.

We expected to seeing nice growth with Thrombolytics than we are seeing that as we've mentioned to play as other very far left end to the spectrum as we define this market, whereas angiovac is on the very far right.

So I don't necessarily believe that we're seeing a shift in the market back to using from a license or catheter directed travel Isis in lieu of mechanical interventions.

But what you are seeing is continued adoption of all of the spectrum of treatments in the thrombus management space. So our from analytic.

Portfolio, coupled with our Angiovac portfolio ended dedicated sales force that we're able to.

Put onto the market is seeing that growth and I think you probably are seeing a little bit of.

The coven patients and what we're learning about how they're being treated.

Coming into that thrombolytic space I wouldn't call that the main driver though.

So I think it's more of a dynamic of the full portfolio approach that we're going to take the thrombus management as we continue to be excited as Jim talked about of moving into that middle space over the course of calendar year.

Okay understood.

Just last one from me.

So so nanoknife, obviously strong in the quarter the rest of oncology, probably held up a bit worse than we thought do you think this is mainly related to.

Just just overall deferrable trends related to two facility shutdown for coded or was there a more maybe it was there any share loss impact or was there any impact from the E.

The restructuring of the segment that you started to do in the quarter.

Just any more detailed there would be great and that does it.

Okay. Thanks for the question since both pieces played a partner says no doubt that our customers you know our healthcare providers did last procedures that required our ablation technologies and our other oncology products. So definitely a procedure related slowdown due to the pandemic, but have a second Dan importantly, we can always control that we can control our own business. So.

I mentioned on the Q3 earnings call, we were disappointed with the pace with our already nine balloons, and our Biocentury products and I talked about at the time, we realize how we could go to market in a better fashion and bringing a dedicated inside sales division that primary responsibility of those products I was important to us we saw opportunity there. So we acted quickly.

Even with a pandemic him with us freezing expenses and holding things back we still are able to build that a team that goes live in a few weeks and we look forward to share with you at the end of Q1, how it's working but we know we aim to go to market differently and that's what we're doing and across the board in oncology, Although we had record capital sale last year, there like which is very impressive we saw.

I would guess still do a better job getting the analyte penetration of it's deeper Ahmed even working or how we come back our competitors. The microwave space. We have a unique microwave product we compete against JNJ Medtronic to talk competitors, but we think we can do better there. So beyond just the reorganizing the sales force, adding on the inside sales team.

We're looking at the structure of oncology. The current team did a great job getting our highly he done getting direct study up selling and Nanoknife 3.0, but we need to do a bit more so I'll share with you more about the reordering coming quarters, how restructure this business to obtain the performance we think account.

Got it thanks very much.

Thank you I'd now turn the call back over to Mr. clamor for any closing remarks mr. clever.

Thank you, Kevin again, I want to remind our investors in our company worked really hard during this uncertain pandemic period to maintain our capital structure and maintain a strong balance sheet, we reacted very quickly and with consistency across our board. The fact that we could maintain a cash balance that we had prior to this pandemic was important to.

Yes, the show that we put the strength of our balance sheet forward now while we did that we also didn't want to lose momentum that we had after Q3 not just short term momentum that we had with the growth you saw Q3, but our longer term strategic momentum of building a transformation around our portfolio changes to make any dynamics eight long term growth company.

We have at least now three unique sciences technologies that provide outcomes that are measureable I'll provide performance for our company to grow upon our people did a great job. During this period, we're really really fortunate to have a resilient team of folks. Thank you again for tuning in today, we look forward to speaking again have a good day.

Thank you that does conclude today's teleconference. You may disconnect your lines as time and have a wonderful day. We thank you for your participation today.

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Good morning, and welcome to the Angiodynamics fourth quarter in fiscal year 2020 earnings call. At this time, all participants are new listen only mode. A question answer session will follow the formal presentation. If anyone should require operator assistance. Please press star zero hundred telephone keypad as a reminder, this.

Conference call is being recorded.

The news release detailing the fourth quarter in fiscal year 2020 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 Investor section of the company's website at Www Dot Angiodynamics Dot com and webcast replay of the coal will be available at the same time.

Same site approximately one 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 in gross margins for fiscal year 2021 management incurred.

As you to review the company's past and future filings with the FCC, including without limitation. The Companys forms 10-Q, and 10-K, which identifies specific factors that may cause the actual results or events to differ materially from those described in the forward looking statements.

Slide pack is offering insight into the Companys financial results is also available on the Investor 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 the mornings conference call I'd now like turn the call over to Jim Clemmer Angiodynamics present.

And Chief Executive Officer Mr. Clemmer.

Thank you Kevin Good morning, everyone and thank you for joining us for Angiodynamics fiscal 2024th quarter and full year earnings call.

Joining me on todays call as Steve Trowbridge, Angiodynamics Executive Vice President and Chief Financial Officer, who will provide a detailed analysis of our fourth quarter financial performance.

As you're all aware for the past several months the world has that impacted by the ongoing Copays 19 pandemic, putting particular strain on the healthcare industry.

We remain focused on our ability to provide products to our customers of patients. While also continuing to invest in our growth platforms and carefully managing our expenses and our cash position.

While we are seeing early signs of improvement since the onset of a pandemic in March the near term impacts of from this virus are not fully transparent and our business has not yet returned to pre covert levels.

With that in mind, Stephen I will characterize the potential impact from the virus or our business with as much transparency as we can for you throughout this call.

Our fourth quarter and full year 2020 real results were negatively impacted by this pandemic.

Fourth quarter revenue of $58.3 million decreased 18.1% year over year and decreased roughly 17% when excluding escalator.

Revenue for the full year was $264.2 million.

A decrease of 2.4%, but flat compared to 2019 when excluding square.

In addition.

We reported and adjusted loss per share of six cents for the quarter, reflecting the impacts of code 19, as well as ongoing investments in our key technology platforms.

Most notably in preparing for the full launch of our Aryan Atherectomy system.

Adjusted earnings per share for the full year 2020 was nine cents.

As we discussed on our third quarter call hospitals began restricting access for all non essential employees and procedures in the early part of March.

These restrictions led to a decline in procedural volumes, which significantly impacted our sales in the latter part of March and April.

However, I'm pleased to say that during the month of May procedure volumes began to rebound.

Since that time, we have seen a steady improvement in procedure volumes and with a corresponding improvement in our sales.

Our revenue has not yet returned to pre coated levels, but I can report to you that this positive trend continued throughout June and the first half of July and we are seeing encouraging trends in our marketplace.

Turning now to the operations side.

Our priority during the quarter was to manage expenses closely and conserve cash in the near term, while still investing strategically and our key long term growth platforms angiovac nearby and Aryan.

As was the case during the third quarter.

We put employee safety and product availability, the head of efficiencies and our gross margin took a step back as a result.

We anticipate this pressure will continue through or at least the first half of fiscal 2021.

As we ensure that we are ready to resume growing our business as quickly as possible once the environment normalizes.

So that we can rebuild our momentum from the first few months of this calendar year.

I am pleased with our ability to balance these priorities during the quarter.

I believe that we remain well positioned to weather the Kobin 19, pandemic and we'll be able to return to a more normalized level of growth once the macroeconomic begins to stabilize.

As a stand today, we've maintained a solid financial foundation and continue to drive compelling strategic transformation.

Driven by our key technology platforms.

To drive you to key technology platforms forward, we focused our spending during the quarter on two areas.

Internal research and development.

And our clinical and regulatory pathway expansion.

Let me update you on our accomplishments in each of these areas.

On the R&D front.

We continue to focus investment.

Three key technologies, Angiovac ARIA and Nanoknife.

While seeking out ways to increase the profitability profile of our other products.

We continue to see strong interest in Nanoknife 3.0, and Angiovac 3.0.

And we remain focused on further developing these platforms.

Regarding angiovac.

We remain on track to deliver two new products next calendar year and.

And we look forward to share in these developments with you in future quarters.

We also continued to advance the Arianna technology.

And as we told you last quarter, we focused our investment in three primary areas.

Ensuring a robust and efficient supply chain.

Introducing physician and sales training programs.

And developing a dedicated selling and marketing channel to take this unique product to market.

We're planning a full launch early in the second quarter of this fiscal year.

And we currently anticipate ARIA generating $7 million to $10 million in revenue in fiscal 2021.

We are excited to see with this product does in the hands of physicians.

The second driver of our transformation is clinical and regulatory expansion and data generation.

Which are foundational pillars through our strategic transformation.

Our half finder and direct studies are still a primary focus but require a certain level of flexibility in this current environment.

As we mentioned last quarter.

Mass and hospitals throughout the country prioritize critical care procedures and preserving treatment capacity.

Additional site initiation activities and patient enrollment efforts in both Pathfinder, our atherectomy registry and direct our nanoknife pancreatic cancer 80 or paused.

However, as hospitals are now gradually opening backup we are seeing activity around these initiatives the again once again.

As of today.

21 direct study sites have secured IR be approval.

As we've added two additional sites since our last quarterly call.

Providing further evidence that these activities are indeed, beginning to occur again.

Additionally, we received an expanded indication.

For our unit views thrombectomy product.

That now allows for the administration of fluids into vessels that are impacted by thrombus.

Including both the peripheral and pulmonary arteries.

This additional indication is consistent with our long term strategy of building out along the continuum of thrombus management and developing a robust technology platform that will address thrombectomy of any complexity.

We also won an appeal of a non substantial equivalents ruling from the FDA regarding our smart four plus.

We went through the appeals process and the FDA overturned the initial ruling and provided five 10-K clearance.

Further evidence of our significantly strengthened clinical and regulatory acumen.

We also received CE mark for smart per plus ports in June.

While I did the specifically mentioned M&A as an area of focus spending in the fourth quarter. It will continue to play an important role in our transformation.

As we learn more about the shape of the recovery of the immediate and long term.

However, we do not to anticipate engaging in M&A activity.

Until the cobot pandemic is ultimately behind us.

At that time, we will maintain our disciplined approach of identifying appropriate M&A targets and continued to assess opportunities.

While also prioritizing the strengths of our balance sheet amid this rapidly evolving macroeconomic climate.

Before I turn the call over to Steve.

I'd like to provide an update on how the koeppen 19 pandemic continues to impact our business.

Our late some headquarters has reopened in accordance with New York State guidelines.

Our other office space employees are continuing to work remotely and doing so effectively and efficiently.

We were we will remain flexible and supportive in ensuring that we remain productive at all of our office locations.

From a manufacturing standpoint.

We have employees on the manufacturing floor to ensure that our products are available to save lives and as I mentioned earlier, we want to be ready to resume growing the business as quickly as possible once the environments returns to normal.

Our field based reps, who have been grounded let me last spoke are now starting to reenter the field in a safe and well orchestrated manner.

In order to once again provide unparalleled service to our physicians.

Our clinical support teams also did a terrific job of supporting cases, even without being elbow to elbow with physicians.

And we are using learnings from that to develop even more efficient and effective ways of supporting our customers.

I'd like to say again, how proud I am of our team the amazing job that they did providing remote support to our customers throughout this pandemic.

We remain very proactive around CRM activities and business development planning.

So that we are prepared to spring into action as elective procedures, we resumed and continue building on the momentum that we had generated prior to being impacted by talent Cobot 19.

From a procedural impact perspective.

Our business includes products that fall on both sides of the critical care and necessary lines.

Angiovac cases.

Faced cobot related headwinds during the fourth quarter.

But have shown signs of a robust recovery.

June was a record month for Angiovac from both a procedure and revenue perspective.

Oncology procedure straddle the line between acute and elective like.

And while we saw strong nanoknife capital sales during the fourth quarter procedural volumes declined.

So far in the early days of of the first quarter of fiscal 2021, we're also seeing a slow positive uptake in case volumes.

Laser atherectomy procedures with our already on laser have continued consistent with other procedures and are still very early in the ramp states.

While we saw a decline in LT during the fourth quarter not unexpectedly.

This line has proven to be the slowest to recover.

And finally sales of our VA products, including picks Midlines and porous remained resilient over the past few weeks.

Driven by our previously announced line extensions for our picks and Midlines as well as moderate tailwinds for our new agreement with Premier.

Finally, I'd like to address three additional one off items.

To start we recently made the decision to implement a restructuring of our oncology organization.

As it has not been meeting our expectations.

On our third quarter call. We mentioned that we were not pleased with the performance of our Biocentury and radio dine businesses, and we took action to create more effective organization.

This included the creation of an inside sales team that will go live in three weeks to cover our Biocentury and radio dime products.

And likely it will become a larger part of our broader organization over time.

This dynamic is also driving a more significant reorganization of the broader oncology business unit, which has now reporting directly to me.

Allow me to get close to the business and provide better insight into the right long term path for this business.

These efforts will allow us to increase our focus on driving the realization of the benefits of our unique technologies like nanoknife and getting them to perform as bad as they can.

Next during the fourth quarter. Our overall results were negatively impacted by a recall initiated by BARDA.

That is related to a component in our fee a case that we provide.

The full net impact inclusive of cost incurred was roughly $750000 during the fourth quarter.

And lastly, our first quarter 2021 revenue.

We'll also include a onetime order in the UK from NHS.

During the fourth quarter, a distributor partner reached out to us.

On a onetime stocking order related to pandemic planning our team did a great draw in addressing this order and working urgently to fill the order $1 million were shipped in the fourth quarter and we expect to ship $5 million during the first quarter of asked why 2021.

We do not expect disorder to repeat.

While the current environment certainly unprecedented.

We continue to prioritize the health and safety of our employees and our patients.

Moving forward.

We will remain thoughtful and disciplined.

About our overall spending.

As we continue to effectively manage the near term macro risks.

While still positioning our innovative product portfolio to succeed over the long term.

With that I'd like to turn the call over to Steve Trowbridge, Our executive Vice President and Chief Financial Officer.

Thank you Jim and good morning, everyone.

Before I begin I'd like to pointing to the presentation on our Investor Relations website summarizing the key items associated with our quarterly and full year results.

I'd also like to note that with respect to the fourth quarter and our business moving forward, we will provide slightly more intra quarter detailed and we would in a normal operating environment.

We will not be providing guidance at this time as it remains difficult to accurately assess the impacts from cobot 19, a procedural volumes in the near future.

Additionally, unless otherwise noted.

All prior year results and comparisons exclude the contribution of our name it fluid management business, which we divested at the end of fiscal year ended May 31 2019.

As Jim mentioned, our sales during the fourth quarter were negatively impacted by Covis, our net sales for the fourth quarter fiscal 2020 decreased 18.1% year over year to $58.3 million.

Excluding the fiscal 2019 revenue contribution from the us sclerosis, swear our therapy product, which we stopped distributing during the fourth quarter of fiscal year 2019 revenue declined for the fourth quarter was roughly 17%.

Each of our three businesses saw varying degrees of impact from the deferral of non essential procedures associated with the cobot 19 pandemic.

Our oncology in VIP businesses faced the greatest impact as these two businesses had the largest exposure to elective procedures.

Our VA business faced a smaller impact as solid growth in picks in midlines helped to offset declines of other products into the portfolio.

Our total VIP business declined 28.8% year over year, and when excluding Asclera declined 26.2% driven by declines in the Venus and core businesses.

Angiovac sales fell 11% compared to the fourth quarter of last year. However, as Jim mentioned, we have seen a strong rebounded angiovac procedures and sales volume, which drove a record month in June.

Vascular access revenue decreased 4.6% during the fourth quarter as double digit declines in sales of ports and dialysis were offset by solid growth in pick and midline sales.

Revenue from our oncology business declined 18% during the quarter as the deferral of non essential procedures broadly impacted sales across the oncology portfolio.

However, nanoknife sales increased roughly 26% year over year, driven by strong growing capital sales.

Sales approach declined during the fourth quarter after seeing improvement in the third quarter.

Moving down the income statement, our gross margin for the fourth quarter fiscal 2020 was 51.8% a decrease of 630 basis points compared to a year ago.

As Jim mentioned this decline in gross margin was primarily driven by a conscious decision to focus on employee safety and product availability.

We expect this trend to continue through the first half of 2021, which will obviously have an impact on our full year gross margin as we continue to assess the shape and timing of the covert 19 recovery.

In addition to this dynamic gross margin during the fourth quarter was also negatively impacted by 160 basis points due to a onetime write off of raw materials and existing inventory associated with poor track. The dissymmetry product that was purchased pursuant to the Companys acquisition of radio.

Our research and development expenses during the fourth quarter fiscal 2024, 7.2 million or 12.4% of sales compared to 6.9 million or 9.7% of sales a year ago.

We are continuing to invest strategically in R&D in clinical with focus on further developing our nanoknife angiovac and RPM products, while remaining focused on driving the profitability of our other businesses.

For the fiscal year research and development expenses were 29.8 million.

We continue to be thoughtful about our investments in light of the uncertain environment. However, we intend to maintain investment in our key growth drivers, while being more judicious in our investment in other areas of the portfolio.

While we reserve the right to pull back on these investments if the environment changes meaningfully for fiscal 2021, we anticipate R&D spend to be between 30 to 34 million.

As DNA expense for the fourth quarter of fiscal 2020 decreased to 26.4 million, representing 45.3% of sales compared to 29.3 million, representing 41.1% of sales a year ago.

For the fiscal year, SGN expense was 116.5 million or 44.1% of sales.

We currently anticipate SG in a sense to be between 123 in 127 million for fiscal year, 2021, which factors in the impact of the Annualization of the Orient acquisition as well as the planned increase in spending to support the on Salesforce expansion.

We will support our upcoming product launches as well as the needed investments for commercial release of already on heading into fiscal 2021.

Given the current environment, we are continually assessing controllable discretionary spend with an eye toward spending cash management, while maintaining investment in our key technologies.

Our adjusted net loss for the fourth quarter fiscal 2020 was 2.1 million or a loss of six cents per share compared to adjusted net income of 2.8 million or seven cents per share in the fourth quarter last year.

For the fiscal year adjusted net income was 3.5 million or income of nine cents per share compared to adjusted net income of 8.2 million or 22 cents per share a year ago.

Adjusted EBITDA in the fourth quarter fiscal 2020 was point 6 million compared to 8.5 million for the fourth quarter fiscal 2019.

For the fiscal year, adjusted EBITDA was 18 million compared to 30.6 million in fiscal 2019.

As you read our press release. This morning, we incurred a goodwill impairment charge during the quarter of 157.6 million, which impacted our GAAP results.

At May 31, 2020, the company identified a triggering event, resulting from our market capitalization being below our book value of equity for sustained period of time.

Following the triggering event, we determine the fair value of the company using a combination of the income approach end market approach. This valuation assessment indicated at the company's book value exceeded is calculated fair value.

Turning to our balance sheet in the fourth quarter fiscal 2020, we began with roughly 52.2 million in cash equivalents when factoring in the $25 million draw on our revolver that we disclosed and discussed in the third quarter call and we gained 3.9 million of cash in operating activities.

During the fourth quarter, we have capital expenditures of $1.5 million as of May 31, 2020, we had 54.4 million in cash and cash equivalents at 40 million in debt outstanding.

Turning now to guidance as Jim and I have discussed on this call and in our third quarter call. We remain committed to improving the company's cash and expense position in the last thing manner that will improve the company over the long term and we're pleased with the progress we've made on this front.

As I mentioned earlier, given the current trajectory of Cowen 19 cases, and the continued uncertainty surrounding the magnitude and duration of these impacts we will not be providing financial guidance for 2021 at this point in time.

We will continue to monitor the operating environment closely and will provide guidance when appropriate.

With that I'll turn it back to Jim for a few closing remarks before we begin the Q and a portion of call Jim.

Thanks, Steve like remind everybody how hard our company work during this pandemic our marketing our training of our clinical teams worked really closely with our customers to shortly as a support they needed to provide care. During this process, our manufacturing quality and logistics teams also work in an uninterrupted fashion.

Providing our life saving products.

Providing availability globally during this period.

The covenant IP and situation is incredibly dynamic with mandates and recommendations changing on a daily basis globally and know from end in sight.

We are encouraged by the sales trends, we have seen throughout the first month of June and the first half of July.

While we have not yet returned to our pre co with sales levels. We have continued to see consistent improvement back towards the these levels.

We are optimistic that these trends will continue as states at hospitals reopened and procedural volumes continued to improve.

However, given the recent surgeon cases in states, such as Florida, Texas, Arizona, California.

Acknowledged that the recovery will not be linear and we remain cautious and our optimism.

I am pleased with the way our team is responding to this crisis and I believe we have taken the necessary steps to preserve the momentum that we had established through the end of Q3.

While remaining focused on controlling expenses and preserving cash.

We will continue to work hard to ensure that we maintain this balance in the near term proposition in ourselves to build on our previous momentum as we exit this pandemic.

We spent a lot of time today, telling you how we're managing through the cobot 19 per dynamic, but I want to ensure that we have not lost sight of our long term strategy and the fact that we are in the early stages of a transformation.

This transformation will reshape angiodynamics inter company with differentiated technology platforms that will compete in larger higher growth addressable markets, where we compete effectively.

While we have been challenged by Cove, It we acted urgently and decisively.

And as we sit here today, we have a solid financial platform and a sound long term strategy.

As the impacts of covert 19, eventually paper over time, we're excited to be able to return our entire focus the growing the business and delivering increasing value to all of our stakeholders.

With that Kevin I'd like to turn.

The call back for questions.

Thank you nothing ducking. Your question answer session. If you like be placed into question Q. Please press star 100 telephone keypad, a confirmation Tony will indicate you line is in the question Q you meet press star to if you'd like to remove your question from the Q for participants using speaker equipment, maybe necessary to pick up your handset before press.

In the store keys.

Once again that star ones. He plays into question Q.

One moment, please what we pull for questions.

Our first question today is coming from Citi approval from Canaccord Genuity. Your line is alive.

Hi, Thanks for taking my question.

I guess.

I wanted just.

Yes.

Really what's factored into your 2021 underwriting.

And really just what you've been able to GE doing its current period in terms of customer outreach and setting up full commercial launch and then just how you're thinking about initial penetration whether laser accounts non laser and then also hospital setting.

Facility as Jim Good morning, Thanks for the question.

So regarding Aryan.

So what we what we talked about is the three areas that were investigating immediately after our acquisition of eczema medical so our supply chain Buildout has occurred when now building products that meet our quality standards not just the hardware lasers, but the catheters to support the delivery of energy throughout our products. We've also done the physician and sales training programs.

We added people to our team.

So the end of that July 20, we had 16 people dedicated to this business.

In a few more weeks by August one will have 24 people dedicated to the business and by the end of the year about 40 in the Standalone business within our with our company. So this really were very very.

Committed to growing the business as we mentioned most of these people are field base people sales reps in clinical support members sport the customer use.

So along the way as we gain more confidence from our customers that are used the product to treat more people will be able to support them. We feel over time sealants affiliate, we'll see a balance about 50 50 from in hospital customers and procedures and Ob L. procedures in the office Spacelabs. Initially we're seeing a lot of the contracts that we've signed and a lot of the new.

As if that were gaining comment from the Ob else as the cycle will be Kermit seems to go a little faster. There were also seeing interest from people use each of the current technologies in the market today, obviously, many the folks who are used to the current laser that's offered app seem to be kind of people most interested in come over but overtime, we think will be an alternative.

Each of the products out there I would guess it over time, a really most obiols, we'll have a product like ours. In addition to a mechanical entry as well, but as people gain confidence our product and the fact, we can treat hard and soft calcification above and below the Nate we think will be a product of choice and many applications.

Yeah. Thank you Jim and then I guess, if I could just trying to angiovac and really the trends that you called out the sign gene.

If you could provide some more color around really what you're seeing his main drivers have been strong rebound and then just how you think about that going forward in the sustainability as what you've seen since I think im.

Sure. So facility. It's as you saw even in Q3, I think we reported a 40% 44% growth in Q3 and a lot of that was driven by the Angiovac 3.0 that we launched late calendar year. That's why of 2019. So we've had a lot of physicians try the product Bob with our indirect 3.0 that hadn't try to before we're so.

Being really amazing results driven clinically, we can pull thrombus and get rid of Clos that no other device into in the market to really unique product. So we saw it now even with the slowdown from cold with that really hit us in April and May we were probably a little surprised with the uptick in June but really we shouldn't be over time, because this amazing tech.

Now it is being utilized by more and more positions. So June was.

The largest month, we've had for procedures and even sales.

So we're really encouraged by this product and as you know we've spoken publicly about the two new products will launch next year with an age or not for smaller version that will enable physicians to get into other vessels and to trade Clos and other vessels and then finally, another product that will be able to compete right the middle of the spectrum where today.

Hey, we don't play as well as you know with our unit fuse capital we play in the low end of the thrombectomy clinical need spectrum and with our Angiovac on the highest but we really look forward to launching a new product next year that allow us to compete when that middle end of acuity, where a lot of other companies have offerings today. The market is growing as a market trusts mechanical.

Back to be more and more we really look forward to showing our new technology with you soon as we want to be a major player Angiovac is a platform and the outcomes at a generates are very impressive. So we'll continue to see sales growth. We believe not just throughout fiscal year 21, but as we add our new products and technology. This would be a platform for growth for our company for the long term.

To see what I would add to adjust that.

As he mentioned that we did see that drop off in procedure volume in the April time frame into early may and in our third quarter call. We talked about that shifting line of where procedures would fall on the essential versus non essential.

We were surprised at the time to see some of those angiovac procedures fall down the way that they did.

We have been very pleased with the trend that even seeing through may and that definitely into June and July we're keeping an eye on it we think that we're looking to see if there are signs of they're having been some pent up demand, which are now seeing in June. So we're keeping our eye on that what would what we will say going back to a Jim mentioned don't forget the angiovac procedures are on a very far end of the acuity spectrums.

So these are very sick patients that have to be put out of universal bypass with a tremendous amount of clock burden I don't think those the type procedures that you would necessarily have the opportunity to delay and see pent up demand. So we're really driving where angiovac is currently playing in that marketplace, but as Jim said, what we've seen has been very.

Verified by other competitors in the space that Middle area is is a very hot market because of the physicians are becoming very comfortable using mechanical interventions to keep thrombectomy. So as we continue to to really honing in on the market. The current area that market that Angiovac plays and today. We're excited about the angiovac platform moving into the other areas and driving our business over the long term.

Thank you Vince can keep.

Thank you. Thank you.

Thank you next question today coming from Matthew Mission Keybanc. Your line is allied.

Great. Thanks for taking the questions.

Good morning, Jim Steven.

Just a follow up just a follow up to that I mean, given that Angiovac is isn't it is for those higher acuity procedures.

Do you think it do you think it's possible that some of the delays in that.

That patients in patients actually getting that procedure had moved them from.

A middle acuity two to a higher acuity procedure and you're seeing more patients that would necessarily.

Benefit from Angiovac as a result in some of that some of the delays.

In addressing their conditions.

So Matt this is Steve I think it's adding is a great point, we're looking at that I don't know that we have enough data points right now to affirmatively say that patient who might be a candidate for one of those middle section mechanical procedures. If you wait too long will then end up into Angiovac, it's something that we're looking at.

I think it's there's a certain logic to it but we don't have the data now to definitively say.

What we do know is that over the previous years as well as what we're seeing now theres definitely a market for Angiovac and we're doing really well in the market that angiovac plays in and we're still very interested on building out that platforming moving into other areas as well.

Okay.

And on the vascular access side, the onetime order for from the UK in in through pinned landing.

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In the years since that's that's that's.

As.

Restocking of will have some of what what the way they run down inventory of R&D preparing for a second waves of the virus with that.

Or is this something that they are now addressing and saying that we need to have a certain amount.

Inventory in preparation now moving forward and this is this is part of US just stocking up where it and I'm sorry for the four part question. What was included what was what was really included in that order it's in a.

As a good gauge for what what countries would we are looking to stock up on that as part of your vascular access unit for future.

Yes.

Sure So Matt good series of questions.

So we would probably the middle of pandemic when the NHS in our partner in the UK reach out to US was really looking for picks in Midlines, primarily and I think a little bit of all the things you referenced matter exactly what occurred here that we're seeing the need to get fluid in medication to people and fix it and lines of widely used those situations we.

Have a good amount of business in those markets They trust our products.

And so were accurately as about a 6 million dollar offer.

That to supply that way so our operations team move very quickly and were able to produce product to the specifications. They required and as you saw we could we feel about $1 million of that in May and the remaining $5 million will ship. This quarter. So we wanted to make you guys aware of that as we see it as a onetime or Matt but to your point. This is really a little bit.

As a blend you mentioned it was taking care of current need filling the shelves little bit, but also they want to put a stockpile. There. So a case to navigate raise to happens or something else NHS wanted to prepare for their citizens have adequate supply of these products on the Sheldon and maybe we'll see that with other other countries and other governments, we've not yet seen it to that level, but I think it.

For the or as you touched upon their exactly right.

Excellent.

And switching over to Nanoknife.

Yes, I guess, how much of your installed base has has switched over to the Nanoknife 3.0.

And at this point and how much of the uptake in this conversion is the existing base versus new users.

So you look back on that in 2025 2020, we sold record capital and a lot of that was brand new full systems on some of those were upgrades. We saw we operate as to the Genthree version.

Prior to the Genthree version being launched we had almost 300 nanoknife sold over the years globally.

And one of our challenges has been getting those products utilize to provide patient care to daily basis. So part of the challenge we out in front of us and getting the direct study of me I'd approved is critical for us in getting the product use.

The Asia Pac 3.0 platform has a better physician interface and it's a little easier to use and user to training on we think will increase adoption of our product get more people into the direct study.

But over time, we look forward to as we said earlier, we're investing in this platform and we will talk you about a newer version of Angiovac overtime that will be far easier to use we think will enable physicians to access other organs for treatment, we'll look at opening up those clinical pathway as with the FDA as well. So it's I know your question at the hardware.

To put our arms around because we haven't been able to get all the nice in the field utilized the level that we'd like to natural working on.

Okay, excellent graduations, and really managing through a tough quarter very well here.

Thanks, Matt our team did a really great job. Thanks, Matt.

Thank you as a reminder, ladies and gentlemen at star one to be placed in the question Q. Our next question to these coming from Jason Bedford.

Raymond James Your line is now live.

Hi. This is not was mean on for Jason Bedford, Thanks for taking the questions here.

So I know, you're not giving guidance on fiscal 21, and so at a higher level.

Fiscal 2000 was obviously a bit of a transformational year with koby headwinds on top.

Let me speak about EPS as growing in fiscal 21.

And with that.

And a bit more color on the gross margin headwinds you're expecting through the first half of this fiscal year.

As well thank you.

So good morning, So couple of things Steve will follow.

We're in investment phase with called that out with our acquisition of Eczema Medical last October and I mentioned, a few minutes ago. The eventual are making into adding people opt to service our customers in this unique business division. So we're not going to give guidance at this point, we hope to soon we have full market transparency, but you got to remember again, we are investing in especially these three.

Primary platforms of growth that we have internally.

It further gross margin headwind, Steve will give detailed minute, but as I mentioned earlier, we made the decision during the cobot period to operate our facilities that produce our products because we didnt, how long coated with in Alaska, and we know people need our products for care treatment. So our operations team did a terrific job they run a really well oil.

Efficient and effective machine that produces high quality products, but in this case I tend to push efficiency to the side that focus on employee safety and production of our products maintaining our supply chain secured so we pushed our gross margins of the side for a while we're still there obviously because we got to make sure are poised to operate a safe manner and we produce our products.

The quality levels, our customers expect so for a while we're going to take that hit on gross margin. We think it's reasonable necessary to do the right thing during this pandemic, Steve anything like that yes, Matt I think it's a good question and as Jim mentioned and as you alluded to in the beginning of your question why 20 was a transformational year for US we are.

Putting in the strong foundational financial foundation to make this strategic transition to being a growth company.

So we are focusing on growth that we had a line of sight to growth through 521, and a lot of the areas that we talked about.

I think if you look at F. why 20 through Q3, we were driving growth and we were also driving a nice amount of that growth down to the product to the bottom line in terms of profit.

When you saw our Q4 as we were managing through coated.

The profitability becomes more challenging as your as you're trying to do as Jim said and keep keep people in their seats and to keep the company moving through that through that challenge.

As we showed in Q4, we are focusing on our people we are focusing on our cash management and we then we are focusing on our business and as we mentioned here, we don't see our business back to pre coated levels. Yet we expect to continue to be tracking that way through the first half of the year Thats what were seeing but we're not going to get there. So I think you can you could use that as a nice microcosm of thinking of how we're looking.

Hi Fi 21, we have a site towards growth with our products. We talk about R&D seven of the 10 million that is it purely incremental to what we're seeing that we talked about our VA business being relatively resilient, we expect that to continue into that bouncing back and see where we can do there. We definitely have a line of sight to growth on the topline, but as you saw the impact that cold it has on the bottom line.

We do expect that to continue into half way 21. In addition to the targeted investments that we want to make and the gross margin is a big part of that so we made a conscious decision to do all the things that Jim talked about maintain inventory levels to to address whatever the shape of this recovery looks like keep the plant functioning I use it as as insurance policy in case there.

As a second wave coming back around.

So I think you, although we weren't able to give clear guidance. We wanted to give you some directional sense of where we're heading on other areas of the income statement like R&D NSG ne.

That are based upon the environment that we see today I think we put all that together how we're looking at equity 21 is we really are focusing on continuing our margin that transformation driving topline growth continuing the investments as we can wildly continue to manage through this the continuing hope its endemic so thats going to have a challenge on EPS. So I wouldn't expect to see EPS growing the same way.

Okay that our revenue is expected to grow.

Got it makes total sense appreciate the details there.

So as I guess just following up.

From a product standpoint, thrombolytic, which is probably the stronger than than I would've thought can you talk about kind of the dynamics. There are you seeing an uptick in from the license maybe in lieu of more interventional treatment or are you seeing an increase in dumbo doubling because that's a bit and is this kobin related directly or.

Can you speak to that thanks.

Yes, it's a great question, we're looking at that I mean, clearly in the Angiodynamics portfolio Angiovac is the flagship when it comes the thrombus management and that's where we're putting a lot of our efforts that were seeing a lot of our activity I do think our probabilistic business is also going to rise in that type of Angiovac moving forward. So.

We expected to see nice growth with Thrombolytics than we are seeing that as we've mentioned to play as other very far left end to the spectrum as we define this market, whereas angiovac is on the very far right.

So I don't necessarily believe that we're seeing a shift in the market back to using thrombus license or catheter directed thrombolysis in lieu of mechanical interventions.

But what you are seeing is continued adoption of all of the spectrum of treatments in the thrombus management space. So our thrombolytic.

Portfolio, coupled with our Angiovac portfolio ended dedicated sales force that we're able to.

Put onto the market is seeing that growth and I think you probably are seeing a little bit of.

The coded patients and what we're learning about how they're being treated.

Coming into that thrombolytic space I wouldn't call that the main driver though.

So I think it's more of a dynamic of the full portfolio approach that we're going to take the thrombus management as we continued to be excited as Jim talked about of moving into that middle space over the course of calendar year.

Okay understood.

I guess last one from me.

So so nanoknife, obviously strong in the quarter the rest of oncology, let me held up a bit worse than we thought do you think this is mainly related to.

Just just overall deferrable trends related to two facility shutdown for coded or was there a more.

Maybe it was there any share loss impact or was there any impact from the E.

The restructuring of the segment that you started to do in the quarter.

Just any more detail there would be great and that does it for me. Thank you.

Thanks for the question scissors, both pieces played a partner says no doubt that our customers you know our health care providers did last procedures are required to our ablation technology is in our other oncology products. So definitely a procedure related slowdown due to the pandemic, but over the second and importantly, we can always control that we can control our business. So as I mentioned on.

The Q3 earnings call, we were disappointed with the pace with our already nine balloons at our Biocentury products and I talked about at a time, we realize how we could go to market in a better fashion and bringing a dedicated inside sales division that primary responsibility of those products are was important to us we saw opportunity there to acted quickly even.

With that pandemic are with us freezing expenses and holding things back we still are able to build that a team that goes live in a few weeks and we look forward to share with you at the end of Q1, how it's working but we know we need to go to market differently and Thats, what were doing and across the board in oncology, Although we had record capital sales last year, there like which is very impressive we thought we could still.

To a better job getting nanoknife penetration of it deeper Ahmed even working now how we come back our competitors the microwave space. We have a unique microwave product. We competed against JJ that try to talk competitors, but we think we can do better there. So beyond just the reorganizing the sales force, adding on the inside sales team were.

Looking at the structure of oncology. The current team did a great job getting our highly he done getting direct study up selling and Nanoknife 3.0, but we need to do a bit more so I'll share with you more about the reorder in coming quarters, how restructure this business to attain the performance we think account.

Got it thanks very much.

Thank you I'd now turn the call back over to Mr. clamor for any closing remarks mr. clever.

Thank you, Kevin and again I want to remind our investors in our company worked really hard during this uncertain pandemic period to maintain our capital structure and maintain a strong balance sheet, we reacted very quickly and with consistency across our board. The fact that we could maintain a cash balance that we had prior to this pandemic was important to.

Yes, the show that we put the strength of our balance sheet forward now while we did that we also didn't want to lose momentum that we had after Q3 not just short term momentum that we had with the growth you saw Q3, but our longer term strategic momentum building a transformation around our portfolio changes to make angiodynamics eight long term growth company.

We have at least now three unique sciences technologies that provide outcomes that are measurable provide performance for our company to grow upon our people did a great job. During this period, we're really really fortunate to have resilient team of folks. Thank you again for tuning in today, we look forward to speaking again have a good day.

Yeah.

Thank you that does conclude today's teleconference. You may disconnect. Your lines. This time and have a wonderful day, we thank you for your participation today.