Q1 2025 AngioDynamics Inc Earnings Call

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Good morning, and welcome to the Android Identics fiscal year 'twenty to 'twenty five first quarter earnings call. At this time, all participants are in listen only mode.

Speaker Change: And answer session will follow the formal presentation.

Speaker Change: If anyone today should require operator assistance during the conference. Please press star zero from your telephone keypad.

Speaker Change: As a reminder, this conference call is being recorded.

Speaker Change: The news release detailing Andrew dynamics as fiscal 2025 first quarter results crossed the wire earlier. This morning and is available on the company's website.

Speaker Change: This conference call is also being broadcast live over the Internet at the investors section of the company's website at Www Dot and Geodynamics dotcom.

Speaker Change: And a webcast replay of the call will be available at the same site approximately one hour after the end of today's call.

Speaker Change: Before we begin I would like to caution listeners that during the course of this conference call. The company will make projections or forward looking statements regarding future events, including statements about expected revenue adjusted earnings and gross margins for fiscal year 'twenty 'twenty five as.

Speaker Change: Well as trends that May continue.

Speaker Change: Management encourage you to review the company's past and future filings with the SEC, including without limitation, the Companys Form 10-Q and 10-K.

Speaker Change: To identify specific factors that may cause the actual results or events to differ materially from those described in the forward looking statements.

Speaker Change: The company will also discuss certain non-GAAP and pro forma financial measures during this call.

Speaker Change: Management uses these measures to establish operational goals and review operational performance and believes that these measures may assist investors in analyzing the underlying trends in the company's business overtime.

Speaker Change: Investors should consider these non-GAAP and pro forma measures. In addition to not as a substitute for or as superior to financial reporting measures prepared in accordance with GAAP.

Speaker Change: A slide package offering insight into the company's financial results is also available on the investors section of the company's website under events and presentations.

Speaker Change: This presentation should be read in conjunction with the press release discussing the company's operating results and financial performance. During this morning's conference call.

Jim Clemmer: I'd now like to turn the call over to Jim Clemmer intuitive damages, President and Chief Executive Officer, Mr. Clemmer.

Jim Clemmer: Thank you operator, good morning, everyone and thank you for joining us for Asia dynamics fiscal 2025 first quarter earnings call.

Speaker Change: Joining me on today's call is Steve Trowbridge, Andrew dynamics, Executive Vice President and Chief Financial Officer.

Speaker Change: I will begin today's call by providing an overview of our <unk>.

Speaker Change: Recent performance, Steve will then provide a detailed analysis of our first quarter financial performance and I will concur.

Speaker Change: <unk> with our outlook for the balance of the year before opening the line for questions.

Speaker Change: Unless otherwise noted all financial results and growth rates mentioned during todays call are on a pro forma basis.

Which excluded the results of the dialysis and fire century businesses that we divested in June 2023.

Speaker Change: The pitch and midline products.

Speaker Change: We divested in February 2024.

Speaker Change: And the radio frequency and <unk> support catheter products that we discontinued in February 2024.

Speaker Change: We kicked off our fiscal 2025 with a very solid first quarter.

Speaker Change: Total worldwide revenue was $67 5 million.

Speaker Change: Representing growth of just over 1% year over year in line with our expectations.

Speaker Change: Our <unk> segment had another strong quarter growing approximately 9% led by.

Speaker Change: Alphabet, which both grew north of 20% in the quarter.

Speaker Change: Beyond the top line, we made significant progress towards profitability.

Speaker Change: Putting an adjusted EBIT loss of just $200000.

Speaker Change: Outside of our financial performance, we continued to execute on our key 2025 patents, which included new product launches hitting key regulatory timelines.

Speaker Change: Collecting data that supports our products safety and effectiveness.

Speaker Change: Starting with an update on our med Tech business.

Speaker Change: <unk> continued to deliver outstanding results.

Speaker Change: 25%.

Speaker Change: Over the prior year.

Speaker Change: As our efforts to expand our customer base and broaden the utility of the product continue to pay dividends.

Speaker Change: As mentioned last quarter.

Speaker Change: We expect it to drive increased penetration into hospitals as.

Speaker Change: We put a greater emphasis on this largely untapped customer base.

Speaker Change: We are excited that those efforts over the last 12 months are paying off.

Speaker Change: Beyond our commercial execution the great work our team has done to broaden the utility of our.

Speaker Change: Helped to drive growth in the quarter.

Speaker Change: As the launch of <unk>, XL, and our $1 seven millimeter catheter earlier this calendar year continue to be well received by customers.

Speaker Change: Just before the end of the quarter.

Speaker Change: We received CE Mark approval for Oreo.

Speaker Change: This is a significant milestone, which not only validates the clinical value of Argos, but also gives us access to the European.

Speaker Change: Market.

Speaker Change: We are currently in a limited market release in Europe Ferrari.

Speaker Change: And expect this geography to account for a low single digit percentage of total <unk> revenue for the year.

Speaker Change: Turning to our mechanical thrombectomy business, we are very encouraged by the performance of both also back and Andrea back.

Speaker Change: Alpha back had a very strong quarter with revenue increasing by over 21% despite.

Speaker Change: Despite the tough year over year comp.

Speaker Change: The first quarter of fiscal 2024 included peak apex trial participation.

Speaker Change: This also marks the second straight quarter of sequential revenue growth for alphabet.

Speaker Change: Highlighting the demand for its use in treating p/e.

Speaker Change: Following our FDA clearance in early April.

Speaker Change: Our CE marking in late May.

Speaker Change: Supported by the strength of the apex trial data and a fully trained global sales force.

Speaker Change: We moved into full market release in both the U S and Europe.

We are very encouraged by physician interest and willingness to evaluate alphabet.

I recently had the opportunity to attend a pulmonary embolism response team.

Speaker Change: Annual meeting in mid September.

Speaker Change: Which is the leading event in the U S for raising awareness of solutions for the treatment of pulmonary embolism.

Speaker Change: I was generally energized by the enthusiasm physicians have shown towards alphabet.

Speaker Change: Many shared their experiences and the feedback has been overwhelmingly positive for.

Speaker Change: For those who have adopted the technology, surpassing even our own expectations.

Speaker Change: Physicians continually highlight the intuitive design.

Speaker Change: The efficiency.

Speaker Change: <unk> ability of the device.

Speaker Change: And most importantly, they are impressed with how much they can remove.

Speaker Change: Aligning with the excellent data that we saw in our apex trial.

Speaker Change: This valuable feedback reinforces our belief.

Speaker Change: That help a vacuum not only meeting, but exceeding the needs of the clinical community.

Speaker Change: We're excited about the momentum we're seeing and the impact this will have on patient outcomes moving forward.

Speaker Change: As expected the vast majority of our growth in the quarter was driven within the U S.

Speaker Change: And as our focused commercial efforts in combination with the strength of our apex data have been very successful.

Speaker Change: While we have started to see contribution from the launch in Europe.

We expect the U S to continue to be the biggest driver of growth for Alfa back in the near term.

Speaker Change: To help support longer term growth in Europe in May.

Speaker Change: In September we launched the recover AAV clinical trial.

Speaker Change: <unk> is designed to evaluate the safety and efficacy of alpha back for that.

Speaker Change: Treatment of acute intermediate risk P in the European market.

Speaker Change: Turning to angio back.

Speaker Change: We continue to see stabilization within this product during the first quarter as we delivered $5 8 million.

Speaker Change: In line with revenue in the fourth quarter.

Speaker Change: Will 2024.

Speaker Change: Lastly, within our Med Tech segment is nevertheless, we.

Speaker Change: We delivered approximately $5 $1 million in revenue, which was down six 9% over the first quarter of fiscal 2024.

Speaker Change: This was primarily the result of a large European distributor coming onboard during the first quarter of fiscal 2024.

Speaker Change: This included a significant upfront inventory purchase that did not reoccur during the first quarter of this year.

Speaker Change: We are very encouraged by the adoption and utilization trends within them.

Speaker Change: The new system installation trends observed during 2024 continues into the first quarter of 2025.

Which are a leading indicator of future disposable revenue volumes.

Speaker Change: In particular, we continue to be excited about its use by urologists.

Speaker Change: As we have continued to see a steady increase in prostate case volumes with Nano-tech.

In July we completed the 12 month follow up as part of our preserve study.

Speaker Change: As expected we hit the primary endpoint.

Speaker Change: Giving us high quality data supporting the efficacy of NAND life as well as its ability to avoid the various quality of life side effects forced upon prostate cancer patients.

Speaker Change: Treatment modalities.

Speaker Change: With the preserve data in hand.

We have filed our submission to the FDA.

Speaker Change: And we remain excited.

About receiving an FDA clearance in prostate around the end of this calendar year.

In conjunction with our pursuit of an FDA clearance, we continue to work towards solidifying reimbursement.

Speaker Change: In mid September.

Speaker Change: The company participated in the CPT editorial panel meeting.

During what's the panel discusses proposals to create new CPT codes.

Speaker Change: <unk> was on the agenda.

Speaker Change: With a proposal to create a new CPT level, one code specific to prostate procedures.

Speaker Change: We expect to hear dependent decision later in October with hopefully successful outcomes for IRR.

Speaker Change: And then a knife.

Speaker Change: Turning to our med device segment.

Revenue declined approximately 4%.

Speaker Change: Our U S med device business increased 2% over prior year.

Speaker Change: Offset by a shortfall in our international business as.

Speaker Change: As a result of the timing of certain.

International orders during the first quarter of fiscal 2024.

Speaker Change: And some softness in our microwave products.

Speaker Change: We continue to expect to hit our previously issued guidance for our med device segment of 1% to 3% growth for the full year.

Speaker Change: Beyond our commercial execution.

Speaker Change: We made significant process on our path to profitability.

Speaker Change: We reported an adjusted EBITDA loss of just $200000 during the first quarter.

Speaker Change: Compared to a loss of $1 1 million in fiscal 2024.

Speaker Change: In the quarter adjust.

Speaker Change: Adjusted EPS was a loss of <unk> 11 per share.

Speaker Change: Improving.

Speaker Change: Loss of <unk> 16 per share.

Speaker Change: 2024.

Speaker Change: These results highlight that our strategy to drive towards profitability is going to our plan.

Speaker Change: Before turning the call over to Steve.

Speaker Change: I wanted to provide a quick update on our shift to outsourced manufacturing.

Speaker Change: This process is tracking in line with our expectations and will allow us to fundamentally change our manufacturing overhead structure.

Steve Trowbridge: You can take out overhead costs, which will ultimately flow through to our bottom line.

Speaker Change: As a reminder.

Speaker Change: We expect this transition to generate approximately $15 million in annualized savings.

Speaker Change: Fiscal 2027.

Speaker Change: We are very pleased with our performance during the quarter.

Speaker Change: We made significant progress across our portfolio and.

Speaker Change: <unk> continued to make strides on key operational initiatives.

With that I'll turn the call over to Steve Trowbridge, Our executive Vice President and Chief Financial Officer to review the quarter in more detail.

Speaker Change: Steve.

Steve Trowbridge: Thanks, Jim and good morning, everybody.

Steve Trowbridge: Before I begin I'd like to direct everyone to the presentation on our Investor Relations website summarizing the key items from our quarterly results.

Speaker Change: As Jim mentioned, unless otherwise noted all metrics and growth rates mentioned during todays call are on a pro forma basis, which exclude the results of the dialysis and biosurgery businesses that we divested in June 2023, the pick in midline products that we divested in February 2024, and the radio frequency in Cintra support catheter.

Speaker Change: Alex that we just continue also in February 2024.

Speaker Change: We were very pleased with our first quarter results overall revenue was in the range of our expectations driven by Ariana <unk> alphabet gross margin was strong stemming from the thrombus performance leading to strong bottom line results in terms of adjusted EBITDA and adjusted EPS.

Speaker Change: Our revenue for the first quarter of FY 'twenty five increased one 1% year over year to $67 5 million again, driven by growth in both our med Tech and U S med device platforms.

Speaker Change: Med Tech revenue was 28 million and eight 7% year over year increase.

Speaker Change: While med device revenue was $39 5 million or three 6% decrease compared to the first quarter of FY 'twenty four.

Speaker Change: Jim mentioned, our U S med device business was up two 1% over the prior year.

Speaker Change: For the first fiscal quarter, our med Tech platforms comprised 41, 4% of our total revenue compared to 38, 5% of total revenue a year ago.

Speaker Change: Our ion platform contributed $13 $7 million in revenue during the first quarter growing 24, 9% compared to last year.

Speaker Change: <unk> was a key strong contributor in the first quarter of FY 'twenty five.

Speaker Change: Mechanical thrombectomy revenue, which includes <unk> sales declined one 6% over the first quarter of FY 'twenty four.

Speaker Change: <unk> revenue for the first quarter was $2 2 million, an increase of 21, 1% year over year and 13, 2% sequential increase over the fourth quarter of 2024, largely as a result of the strong early adoption of Alphatec for PE.

Speaker Change: We're also pleased to see the continued stabilization in angio back with $5 8 million of revenue in the quarter.

Speaker Change: As we discussed last quarter. This first quarter provided a tough year over year comparison for mechanical thrombectomy, we were reaching peak enrollment in our alphabet P/e trial during the first quarter of last year, and angiographic was performing well prior to the disruption we experienced in the second quarter of last year.

Speaker Change: Given this dynamic we are very pleased with the performance of our mechanical thrombectomy business as we continue to successfully compete in this exciting growing and large total addressable market.

Speaker Change: Nevertheless, disposable revenue during the quarter declined four 6% and capital sales declined 15% as I just mentioned the first quarter of last year provided for a particularly tough comparison Fernando as Nandonet grew over 35% in the first quarter of last year aided by the timing of bringing some new international distributors online.

Speaker Change: We were very pleased with the trajectory of prostate cases in the quarter and are on track for our projections for NIM for the full year admittedly the dynamic around like timing doesn't mean that our second quarter will have an easier year over year comparison.

Moving down the income statement, our gross margin for the first quarter of FY 2025 was 54, 4% a decrease of 40 basis points compared to the year ago period, but ahead of our expectations for the quarter.

Speaker Change: For the first fiscal quarter Med Tech gross margin was 63, 3% a decrease of 160 basis points and med device gross margin was 48, 2% a decrease of 40 basis points, each when compared to the first quarter of last year.

Speaker Change: The year over year decline in gross margin for the Med Tech business was primarily driven by increased hardware depreciation and inflationary pressures.

Speaker Change: Margin for the med device business was impacted by inflationary pressures and costs associated with the transition to outsource manufacturing.

Speaker Change: Turning to R&D, our research and development expense during the first quarter of FY 2025 was $6 3 million or nine 3% of sales compared to $7 7 million or 11, 6% of sales a year ago.

Speaker Change: SG&A expense for the first quarter of FY 2025 was $36 6 million, representing 54, 2% of sales compared to $36 7 million or 55% of sales a year ago.

Speaker Change: Our adjusted net loss for the first quarter of FY 2025 was $4 4 million.

Speaker Change: And adjusted net loss per share of 11.

Speaker Change: Compared to an adjusted net loss of $6 2 million or adjusted loss per share of <unk> 16 in the first quarter of last year.

Speaker Change: Year over year improvement is largely attributable to higher revenue and improving operating leverage during the first quarter of this year.

Speaker Change: Adjusted EBITDA in the first quarter of FY 2025, with a loss of 152000 compared to a loss of $1 1 million in the first quarter of 2024.

Speaker Change: At August 31, 2024, we had $55 million in cash and cash equivalents compared to $76 1 million in cash and cash equivalents at May 31 2024.

Speaker Change: As a reminder, we currently have zero debt compared to $50 million of debt. When we began FY 'twenty four.

Speaker Change: In the first quarter of fiscal 2025, we used $18 3 million in operating cash and capital expenditures of $1 1 million and additions to our in placement and evaluation units of $1 3 million.

Speaker Change: Our first fiscal quarter has historically exhibited the highest utilization of cash in the first quarter of fiscal 'twenty five was in line with our expectations and another update on our balance sheet as announced in July of this year. The company approved a stock repurchase program authorizing purchases of up to $15 million of our outstanding common shares.

Speaker Change: Through the end of the first fiscal quarter. The company purchased approximately $500000 worth of stock at an average share price of $7 62.

Speaker Change: And we will continue to be opportunistic about our decision to make further repurchases based on a number of factors, including market conditions as well as the need to balance investment in our growth strategy as we seek to leverage the strength of our balance sheet to create value for our shareholders.

Speaker Change: Turning now to guidance for the fiscal year 2025, we are reiterating each component of our previously issued guidance. We continue to expect revenue will be in the range of $282 million to $288 million representing growth of between four 2% and six 4% over fiscal year 2024.

Speaker Change: Within each of our businesses, we continue to expect Med Tech net sales to grow in the range of 10% to 12% and their device net sales to grow in the range of 1% to 3%.

Speaker Change: For fiscal 'twenty five we continue to expect gross margin to be in the range of 52% to 53% and we continue to expect adjusted EBITDA in the range of a loss of $2 5 million to zero and finally, we continue to expect an adjusted loss per share in the range of 38% to 42.

Speaker Change: With that I'll turn it back to Jim.

Jim Clemmer: Thanks, Dave looking through the balance of the year, we will remain focused on a number of key strategic areas of our business aimed at driving growth.

Speaker Change: We continue to be very excited about the growing market opportunities that exist within our med Tech segment.

Speaker Change: With our recent new product launches and geographic expansions. Our total addressable market is now roughly $10 billion up from $3 billion.

Speaker Change: Just three years ago.

Starting with <unk> in the U S. We will leverage the momentum built during the first quarter to continue to drive increased penetration with a particular focus on the hospital setting.

Speaker Change: Also expect new customer growth as a result of the recent launch of <unk>, XL and our $1 seven millimeter catheter.

Speaker Change: Having received a CE mark in late Q1, we.

Speaker Change: We can now shift our attention to commercializing <unk> in the EU.

Speaker Change: As with any new geographic expansion we.

Speaker Change: We are beginning with a limited market release before returning to a full market release later in fiscal year 2025.

We will continue to develop supporting clinical data and launching new product line extensions as we move forward.

Speaker Change: With Alphatec, we continue to push ahead commercially as we focus on driving increased adoption of alpha back therapy in the U S and CE Mark countries.

Speaker Change: We will continue to invest in high quality clinical data highlighting the benefits of our products to help support long term adoption.

Speaker Change: In addition, we continue to expect to launch new product enhancements.

Speaker Change: Over the course of the year to refine and improve usability.

Speaker Change: And lastly, with nano life, we expect the FDA approval by the end of calendar 2024.

Speaker Change: After which we will push to drive increased adoption in the U S for prostate treatment.

Speaker Change: And we are pursuing a specific CPT code that clarity.

Speaker Change: So the reimbursement pathway for the procedure.

Speaker Change: We are very excited about the future here at Angio dynamics.

With the quality of our portfolio as well as the commercial clinical and regulatory strategies that we have in place. We are in a fantastic position to drive growth for years to come.

Speaker Change: With that we'll open up the line for questions.

Thank you we will now be conducting a question and answer session.

Speaker Change: I'd like to ask a question today, you May press star one from your telephone keypad and a confirmation tone will indicate your line is in the question queue.

Speaker Change: You May press Star two if you would like to withdraw your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: One moment please poll for questions. Thank you.

Speaker Change: Thank you and our first question will be coming from the line of Steven Lichtman with Oppenheimer <unk> Company. Please proceed with your questions.

Speaker Change: Yes.

Speaker Change: Hi, Good morning, guys. This is amir in for Steve.

Amir: My first question was on Alfa Bank.

Speaker Change: Is there any further color.

Speaker Change: You guys can provide from the field on how the launch ramp is going.

Speaker Change: Such as the number of physicians trained and accounts using it.

Speaker Change: Amir good morning, Thanks for asking so I had mentioned on the call. We had really good feedback in line with what we expected from the data that the apex study generated and comments that we received during the apex study by the sites that were enrolled.

Dr. <unk>: We learned a lot we learned that our initial design elements that we factored into the alphabet were being met and being received by our customers. Some of those design elements of the intuitive design, we built into the handle which is really important as Dr. <unk> said they wanted more control while doing a procedure controlled meeting steer ability to go from the left to the right.

And then we gave the ability in a very innovative way to wirelessly, if a physician chooses and without having that wire, reducing time and other risks and the procedure.

Dr. <unk>: Raising efficiency levels.

Speaker Change: And then there are also many we're comfortable with the vortex funnel tip. We've had on our <unk> device for years, a large bore catheter in the vortex funnel tip have been proven to remove a lot of clot burden.

Speaker Change: A simple and efficient manner. So those are some of the design elements. We built him. We're hearing really good feedback we heard it during apacs and now in our in our prelaunch and now we're full launch. So we're really excited in the field. We've got two really good competitors with good products out there as well, but we know that we're all three going to move and shift people. We believe from the old lytic based therapies.

Speaker Change: Two of these mechanical interventions. These are really good safe ways to get pay patients treated all three of us have a different approach towards it but really like the feedback we've gotten great feedback and we're measuring as you asked earlier, new customer interactions new customer take ups and we know how many customers have us going through the value analysis process.

Speaker Change: Watching that process, we're measuring really closely we're pleased with our results.

Speaker Change: Yes.

Speaker Change: Great. Thank you and also just on the hospital market opportunity is there any more details you can provide on what initiatives you're targeting in particular to go after that market.

Speaker Change: Sure Ken so dialing back a little bit remember, we did our full launch of <unk> on almost four years ago, just over four years ago September of 2020 remember the world was different than two was six months into Covid and a lot of the hospitals are kind of total device companies to step down a stand back that we're not going to be running the normal vac process and bring new products in so the <unk>.

Speaker Change: <unk> for the first places that we are getting demand served in our first customers when the obl's. So our ratio of youll be able to hospital business was higher than we had thought it would be and now the hospitals are kind of back to normal business. We're seeing the takeout. So all we're really doing is shifting the focus of our team focusing more on those hospital customers.

And you know it works many of those have a high demand in Oregon, because they've come familiar with it.

Speaker Change: They may have used it already in the OBL and now want to have it in the lab and hospital. So we're focusing more and we're getting really good feedback to us. It's an important shift because over time, we think our ion could even provide more.

Speaker Change: Care modalities honest unique device in the hospital customers a more stable long term customer for us. So we're hitting the goals. We thought we're shifting that hospital mix each quarter and it also raises our profitability a bit each time, we do so so it's a good program our team is executing really well.

Speaker Change: Great and just one brief last one on my side.

Speaker Change: Have you ramp again on the manufacturing transition can you provide any more color on the potential savings that you expect for this fiscal year.

Speaker Change: Just as a follow up to that any color on the ramp you think you could see in gross margin over the next couple of years as the transition complete thank you.

Yes, Hi, Barry this is Steve so as Jim mentioned.

Speaker Change: <unk> manufacturing transfer program that we have in place is going according to our plans. So we're very pleased to see that as we had mentioned when we first announced this the real change in gross margin and the benefit that we're going to see in gross margin really comes at the end of that program. So when we have the ability to.

Speaker Change: To get out of the areas that we wanted to get out of and then take some of those overhead costs out. So it's not going to be a smooth ramp in gross margin coming from that program and that being said if you look at our gross margin results for this quarter you really go back to what the overall strategy is for graduate dynamics. When it comes to gross margin, we expect to see gross margin accretion coming from this.

Speaker Change: That we have a larger portion of our overall revenue base coming from that higher margin Med Tech product line. We saw that this quarter. We are absolutely seeing that mix shifts driving benefits in gross margin now thats going to be a little bit offset until we can get through our manufacturing transfer process by the fact that we're overpaying or double paying for some of that overhead that we haven't been able to take out.

Speaker Change: While we're still manufacturing products for those discontinued product lines that we talked about as well as doing and preparing ourselves for that moves we've seen some of those costs were definitely looking at taking that but you're really going to see the step function. Once we get to the end of that program and as we said, we think it's going to take about $15 million out of our overhead structure all of which will hit gross margin and then essentially draw.

Speaker Change: To the bottom line.

Thank you.

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

Speaker Change: Hey, gentlemen, thanks for taking the question and congrats on the quarter I, just want to start or narrow nice Andrew.

John Young: And just the comments around the CET pathway.

Speaker Change: Will you launch key the can you just provide some initially just timelines for that beyond just the October date for an editorial committee and then would you launch that.

Without commercialize it without the code initially and then also how you're going to think about it.

Speaker Change: If you do get a level one CPT code would you price the disposables for the prostate higher than maybe disposables currently any timing when you could take there. Thanks.

Speaker Change: Hi, John Thanks for the question. So as we've said we've been able to really parallel past the process of going after the specific indication for prostate that we have with the FDA process and working to get reimbursement. So it hasn't been a linear process, we've been able to parallel path these things and bring in the.

Speaker Change: The timeline as you know, it's a really complex process. When you go through reimbursement. So we were very pleased to be on the agenda as Jim said, we're waiting to hear the decision on that once there is a decision that it becomes a process where you either get the code or you don't get the code you have to then go through the rock process, where they will evaluate your time and your cost and.

Speaker Change: It's going to be a little while before they put the full reimbursement in place. So as we have more details we will certainly get back and tell you about that to your question around the launch yes look we are in the process of launching this product one of the things about nano knife. It has the the general indication as we've talked about with the uptick from the urology community that we've seen over the course of the last 24.

Speaker Change: Four months or so that has been driving the growth at nano knife, that's coming from those urologists adopting the technology primarily to treat prostate cancer patients. So we're in the process of working through that that was that what allowed us to go through preserve get through the enrollment get through the follow up procedure. We've now filed for the yet to the FDA for that five 10-K clearance and as Jim said, we expect to.

Jim Clemmer: Get that clearance around the end of the calendar year. So that'll be the end of the of a long process that we've gone into all the while while we've been continuing to commercialize it don't want to really speak to where we think numbers are going to come out through reimbursement as we said that's part of our whole complex process. We will give you more details as that comes forward.

Jim Clemmer: I don't know that necessarily I would expect that theres going to be a huge change one way or the other in terms of how we've been commercializing in how we will go to market with nano nice in terms of pricing.

Jim Clemmer: But we think that this whole process has really been put in place in our overall plan is to drive adoption through getting all three of the things that are necessary to launch a product getting the indication from the FDA, making sure Theres reimbursement and then doing the work the coverage and coding and then making sure that we increase awareness in the overall market all of those things are at.

Jim Clemmer: Built into our plan and we're pretty pleased with the way the plan is going so far.

Speaker Change: Okay, great. Thanks for the color on that and just the cash burn and this quarter is pretty significant 21 million I believe.

Can you just walk us through your ability to hit cash flow breakeven I know you had targeted previously on profitability in fiscal year 'twenty six do you still expect that.

Speaker Change: And just that pathway to cash flow positivity. Thank you.

Speaker Change: Yes, John absolutely, we expect to hit that Theres nothing thats different from what our expectations were as we said Q1 as it is with most companies is always the highest utilization of cash quarter for US 25 was no different. It was also exactly in line with our expectations. Some of the things that you have to deal with in Q1 as you've got your incentive compensation that goes out you are paying all the commissions yearly to your salesforce that all goes out the door.

Speaker Change: In Q1.

Speaker Change: Also things like insurance premiums and the high cost of our D&O insurance.

Speaker Change: We've got some minimum royalty payments that get paid all in Q1 that don't repeat themselves as you move into the rest of the balance of the year. So this is right where we expect it to be I think we were signaling that we expected to use around $10 million to $15 million in cash from where we ended Q4 by the end of this year, we're still on target for that so expect that.

Youre not going to see nearly the same utilization at all going forward in fact over the course of Q2, three and four expect cash to increase kind of exactly what we see in Q4 is always the highest source of cash quarter for us that's going to be the same again this year and then as we move into FY 'twenty six.

Speaker Change: We expect to turn that corner to get to the point, where at the end of the full year will be cash flow positive.

Speaker Change: Okay.

Speaker Change: One more in here just on the med device that the comments on the O U S.

Speaker Change: Should we expect some of that revenue pushed.

Speaker Change: Pushed out to Q2.

Speaker Change: Yes, I think Thats right I think.

Speaker Change: As we've talked about with our international business.

Speaker Change: In contrast to the U S, where we're primarily direct and in fact, we're all direct here in the U S were primarily through distributors in the international markets and Theres going to be some choppiness. Some puts and takes in terms of windows order timings come in Jim also mentioned Youll look we expect Q2 to have a different comp so when youre looking at it purely on a year over year percentage basis definitely expect to see Q2 different than what you saw.

Speaker Change: In Q1, and yet do you expect that some of those distributor orders come in.

Speaker Change: In future quarters and growth going forward in that business.

Speaker Change: One thing as Jim mentioned, we had that.

Speaker Change: International distributor come online for nano knife.

Speaker Change: Getting those initial orders in Q1, it's not that that distributor wasn't buying through the rest of the year. They were it's just not at the same level when youre looking at it year over year comparison to the initial order that they had in Q1.

Speaker Change: Great. Thanks again.

Speaker Change: Our next question is from the line of <unk> Chen with H C. Wainwright. Please proceed with your question.

Speaker Change: Yes.

Speaker Change: Thank you for taking my questions could you give us some additional color.

Speaker Change: You expect that launch trajectory for <unk> in Europe.

Speaker Change: And roughly what timeframe for Europe.

Speaker Change: Okay.

Speaker Change: And a similar level of sales in the U S.

Speaker Change: Thank you.

Hi, Good morning. This is Jim So Ferrari our team has done a really good job building kind of awareness of <unk> globally. Since we've launched the product there's been a lot of published data that's occurred in some of that data has been global some physicians.

Speaker Change: In other parts of the world have used oriented kind of familiarity with it and we've run our own series of scientific symposiums over the last few years and we've held those over in Europe, and so I think a lot of global physicians have gotten awareness of argon I've heard from some of their colleagues here in the U S. How it works how it's safe to use how efficient it is so there.

The demand we believe globally already built up by the interest in Oregon. So now getting the CE marks importance. We can now commercialize it properly you talked to people as we said in the call anywhere entering new geographies. We are building a limited launch process as you would expect us to do then roll to a full launch this year, while also being conservative the European market is.

Speaker Change: Not as mature as the U S.

Speaker Change: It uses atherectomy to treat <unk> in the same percentages. They do here in the U S. So we're fully aware of that so we are realistic goals. We've set but also really encouraged by the demand we see by the interest in <unk> and our team will do a really good job commercializing that we know so we expect <unk> to give you updates over the next few quarters as to how that process is going.

Got it and with respect to the issue due to the timing of international orders as the issue being resolved.

Speaker Change: Has it only affected sales of nano knife.

Speaker Change: Okay.

You just mentioned on the last call a second ago. These are things that we knew about we built in when someone starts off with us easily by a higher percentage of it get some capital with some disposables that usually doesn't repeat during the course of the year. There are orders that fulfill their customer needs through our distributor channel. Those are normal. So we had a little bit of that on the device side a little bit.

Speaker Change: Remember a year ago, and nano had I think were up like 35% Q1, 3% Q2, we told everyone. Even after Q1, we don't expect that again, it'll normalize around that 20% level, which it did we expect that here to almost flipped. So probably started a little softer Q2 will probably be stronger and get back to the guidance that Steve gave in that area.

Speaker Change: So just to clarify the timing issue could recur in the future correct.

Speaker Change: Yes, we hope that anytime you do a new distributors coming on you have a lot of that choppiness. So over time as our business grows we think it will smooth out I don't think youll see as much of this over time, we don't want to see it we'd like to have a smooth out, but we love some of the distributors that have come on the way they've come on adopting our technologies, bringing our products into stock and these folks also really helpful. They have clinic.

Speaker Change: <unk> teams around the globe getting training done at levels that we couldnt do without their help so maximizes our use of our people working there and minimize the amount of people we have to put these locations. So when you do it there's choppiness overtime I would expect it to smooth out you always have a little bit.

Speaker Change: Got it thank you.

Speaker Change: Thank you.

Speaker Change: Thank you at this time I'll turn the floor back to management for closing remarks.

Speaker Change: Thanks, operator, and we're really pleased with the work here that our team at <unk> genomics is done we have a lot of things going on at the same time. These are our plans we knew we'd have important catalyst that we've meet during the calendar year of 2024. Those catalysts include new product launches new regulatory approvals in new geographic expansions all the while.

We're running our normal business and we're also shifting our manufacturing footprint, we couldnt do that our team of people, who do a really great job in maximizing our ability to serve our customers globally. Thanks to each of them and thank you for tuning in today.

Speaker Change: This will conclude today's conference you may disconnect your lines at this time and thank you for your participation.

Speaker Change: [music].

Speaker Change: [music].

Speaker Change: [music].

Speaker Change: Good morning, and welcome to the NGA dynamics fiscal year 'twenty towards 25 first quarter earnings call. At this time, all participants are in listen only mode.

Speaker Change: A question and answer session will follow the formal presentation.

Speaker Change #100: If anyone today should require operator assistance during the conference. Please press star zero from your telephone keypad.

Speaker Change #100: As a reminder, this conference call is being recorded.

Speaker Change #101: The news release detailing and your dynamics as fiscal 2025 first quarter results crossed the wire earlier. This morning and is available on the company's website.

Speaker Change #101: This conference call is also being broadcast live over the Internet at the investors section of the company's website at Www Dot NGL dynamics dotcom.

And a webcast replay of the call will be available at the same site approximately one hour after the end of today's call.

Speaker Change #102: Before we begin I would like to caution listeners that during the course of this conference call. The company will make projections or forward looking statements regarding future events.

Speaker Change #102: Statements about expected revenue adjusted earnings and gross margins for fiscal year 2025 as.

Speaker Change #102: As well as trends that May continue.

Speaker Change #103: Management encourages you to review the company's past and future filings with the SEC.

Speaker Change #103: Without limitation, the Companys Form 10-Q, and 10-K, which identify specific factors that may cause the actual results or events to differ materially from those described in the forward looking statements.

Speaker Change #103: Company will also discuss certain non-GAAP and pro forma financial measures during this call.

Speaker Change #103: Management uses these measures to establish operational goals and review operational performance and believes that these measures may assist investors in analyzing the underlying trends in the company's business overtime.

Speaker Change #103: Investors should consider these non-GAAP and pro forma measures in addition to not as a substitute for or.

Speaker Change #104: Or as superior to financial reporting measures prepared in accordance with GAAP.

Speaker Change #104: A slide package offering insight into the company's financial results is also available on the investors section of the company's website under events and presentations.

Speaker Change #104: This presentation should be read in conjunction with the press release discussing the company's operating results and financial performance. During this morning's conference call.

Speaker Change #104: I'd now like to turn the call over to Jim Clemmer, angina damages, President and Chief Executive Officer.

Jim Clemmer: Mr Clemmer.

Jim Clemmer: Thank you operator, good morning, everyone.

Thank you for joining us for Asia dynamics fiscal 2025 first quarter earnings call.

Jim Clemmer: Joining me on today's call is Steve Trowbridge, Andrew dynamics, Executive Vice President and Chief Financial Officer.

Speaker Change #105: I will begin today's call by providing an overview of our.

Steve Trowbridge: Recent performance, Steve will then provide a detailed analysis of our first quarter financial performance and I will conclude with our outlook for the balance of the year before opening the line for questions.

Unless otherwise noted.

All financial results and growth rates mentioned during todays call are on a pro forma basis.

Speaker Change #106: Excluding the results of the dialysis and bio century businesses that we divested in June 2023.

Speaker Change #107: <unk> and midline products that we divested in February 2024.

Speaker Change #107: And the radio frequency and <unk> support catheter products that we discontinued in February 2024.

Speaker Change #107: We kicked off our fiscal 2025 with a very solid first quarter.

Speaker Change #107: Total worldwide revenue was $67 5 million.

Speaker Change #107: Representing growth of just over 1% year over year in line with our expectations.

Speaker Change #108: Our med Tech segment had another strong quarter growing approximately 9% led by Oreo alphabet, which both grew north of 20% in the quarter.

Speaker Change #108: Beyond the top line, we made significant progress towards profitability.

Speaker Change #108: Reporting an adjusted EBIT loss of just $200000.

Speaker Change #108: Outside of our financial performance, we continued to execute on our key 2025 tenants.

Speaker Change #108: Which included new product launches.

Speaker Change #109: Adding key regulatory timelines and collecting data that supports our products safety and effectiveness.

Speaker Change #109: Starting with an update on our med Tech business.

Speaker Change #109: <unk> continued to deliver outstanding results growing 25%.

Speaker Change #109: Over the prior year.

Speaker Change #109: As our efforts to expand our customer base and broaden the utility of the product continue to pay dividends.

As mentioned last quarter, we expected to drive increased penetration into hospitals as.

Speaker Change #109: As we put a greater emphasis on this largely untapped customer base.

Speaker Change #109: And we are excited that those efforts over the last 12 months are paying off.

Speaker Change #109: Beyond our commercial execution.

Speaker Change #110: Great work, our team has done to broaden the utility of <unk>.

Speaker Change #110: Helped to drive growth in the quarter.

Speaker Change #110: As the launch of <unk>, XL, and our $1 seven millimeter catheter earlier this calendar year continue to be well received by customers.

Speaker Change #110: Just before the end of the quarter.

We received CE Mark approval for Oreo.

Speaker Change #111: This is a significant milestone, which not only validates the clinical value of Rei, but also gives us access to the Europeans.

Speaker Change #110: The market.

Speaker Change #110: We are currently in a limited market release in Europe Ferrari.

Speaker Change #110: And expect this geography to account for a low single digit percentage of total <unk> revenue for the year.

Turning to our mechanical thrombectomy business, we are very encouraged by the performance of both also back in <unk>.

Speaker Change #112: Alpha back had a very strong quarter with revenue increasing by over 21%.

Speaker Change #110: Despite the tough year over year comp.

Speaker Change #110: As the first quarter of fiscal 2024 included peak apex trial participation.

Speaker Change #113: This also marks the second straight quarter of sequential revenue growth for alphabet.

Speaker Change #113: Highlighting the demand for its use in treating p/e.

Speaker Change #114: Following our FDA clearance in early April.

Speaker Change #114: For our CE, marking in late May.

Speaker Change #115: Supported by the strength of the apex trial data in a fully trained global sales force.

Speaker Change #116: We moved into full market release in both the U S and Europe.

Speaker Change #116: We are very encouraged by physician interest and willingness to evaluate alphabet.

Speaker Change #117: I recently had the opportunity to attend the pulmonary embolism response team or <unk>.

Speaker Change #116: <unk>.

Speaker Change #118: Annual meeting in mid September.

Speaker Change #119: Which is the leading event in the U S for raising awareness of solutions for the treatment of pulmonary embolism.

Speaker Change #119: Our January energized by the enthusiasm physicians have shown towards alphabet.

Speaker Change #119: Many shared their experiences and the feedback has been overwhelmingly positive.

Speaker Change #120: For those who have adopted the technology, surpassing even our own expectations.

Speaker Change #120: Physicians continually highlight the intuitive design.

Speaker Change #120: The efficiency.

<unk> ability of the device.

Speaker Change #120: And most importantly, they are impressed with how much they can remove.

Speaker Change #120: Aligning with the excellent data that we saw in our apex trial.

Speaker Change #120: This valuable feedback reinforces our belief.

Speaker Change #120: <unk> is not only meeting, but exceeding the needs of the clinical community.

Speaker Change #121: We're excited about the momentum we're seeing and the impact this will have on patient outcomes moving forward.

Speaker Change #122: As expected the vast majority of our growth in the quarter was driven within the U S.

Speaker Change #122: And as our focused commercial efforts in combination with the strength of our apex data have been very successful.

Speaker Change #122: While we have started to see contribution from the launch in Europe.

Speaker Change #122: We expect the U S to continue to be the biggest driver of growth for Alfa back in the near term.

Speaker Change #122: To help support longer term growth in Europe and med.

Speaker Change #122: In September we launched the recover AAV clinical trial.

Speaker Change #122: <unk> is designed to evaluate the safety and efficacy of Alpha bank for the treatment of acute intermediate risk pay in the European market.

Speaker Change #122: Turning to angio back we.

Speaker Change #122: We continue to see stabilization within this product during the first quarter as we delivered $5 8 million.

In line with revenue in the fourth quarter.

Speaker Change #122: Will 2024.

Speaker Change #122: Lastly, within our Med Tech segment is nevertheless.

Speaker Change #122: We delivered approximately $5 $1 million in revenue, which was down six 9% over the first quarter.

Speaker Change #122: 2024.

Speaker Change #122: This was primarily the result of a large European distributor coming onboard during the first quarter of fiscal 2024, which included a significant upfront inventory purchase.

Speaker Change #122: That did not reoccur during the first quarter of this year.

We are very encouraged by the adoption and utilization trends within them.

The new system installation trends observed during 2024 continued into the first quarter of 2025.

Which are a leading indicator of future disposable revenue volumes.

Speaker Change #122: In particular, we continue to be excited about its use by urologists.

Speaker Change #122: As we have continued to see a steady increase in prostate case volumes with nanometers.

Speaker Change #122: In July we completed the 12 month follow up as part of our preserve study.

Speaker Change #123: As expected we hit the primary endpoint.

Speaker Change #124: Giving us high quality data supporting the efficacy of their life as well as its ability to avoid the various quality of life side effects forced upon prostate cancer patients.

Speaker Change #124: Treatment modalities.

Speaker Change #124: With the preserve data in hand.

Speaker Change #124: We have filed our submission to the FDA and we remain excited about receiving an FDA clearance in prostate around the end of this calendar year.

Speaker Change #124: In conjunction with our pursuit of an FDA clearance, we continue to work towards solidifying reimbursement.

Speaker Change #124: In mid September.

Speaker Change #124: The company participated in the CPT editorial panel meeting.

Speaker Change #124: During what's the panel discusses proposals to create new CPT codes.

Speaker Change #124: Hiring was on the agenda.

Speaker Change #124: With a proposal to create a new CPT level, one code specific to prostate procedures.

Speaker Change #124: We expect to hear the panel decision later in October with hopefully successful outcomes for IRR and then a nice.

Speaker Change #124: Turning to our med device segment.

Speaker Change #124: Revenue declined approximately 4%.

Speaker Change #124: Our U S med device business increased 2% over prior year.

Speaker Change #124: Offset by a shortfall in our international business.

Speaker Change #124: As a result of the timing of certain international orders during the first quarter of fiscal 2024.

Speaker Change #124: And some softness in our microwave products.

Speaker Change #124: We continue to expect to hit our previously issued guidance for our med device segment of 1% to 3% growth for the full year.

Speaker Change #124: Beyond our commercial execution.

Speaker Change #124: We made significant process on our path to profitability.

We reported an adjusted EBITDA loss of just $200000 during the first quarter.

Compared to a loss of $1 1 million in fiscal 2024.

Speaker Change #124: In the quarter adjust.

Speaker Change #124: Adjusted EPS was a loss of <unk> 11 per share.

Speaker Change #124: Improving from a loss of <unk> 16 per share in fiscal 2024.

Speaker Change #124: These results highlight that our strategy to drive towards profitability is going to our plan.

Speaker Change #124: Before turning the call over to Steve.

Speaker Change #125: Wanted to provide a quick update on our shift to outsource manufacturing.

Steve Trowbridge: This process is tracking in line with our expectations and will allow us to fundamentally change our manufacturing overhead structure.

Speaker Change #126: And take out overhead costs, which will ultimately flow through to our bottom line.

Steve Trowbridge: As a reminder.

Steve Trowbridge: We expect this transition to generate approximately $15 million in annualized savings by fiscal 2027.

Steve Trowbridge: We are very pleased with our performance during the quarter.

Steve Trowbridge: We made significant progress across our portfolio.

Steve Trowbridge: And continue to make strides on key operational initiatives.

Steve Trowbridge: With that I'll turn the call over to Steve Trowbridge, Our executive Vice President and Chief Financial Officer to review the quarter in more detail.

Steve Trowbridge: Steve.

Thanks, Jim and good morning, everybody.

Steve Trowbridge: Before I begin I'd like to direct everyone to the presentation on our Investor Relations website summarizing the key items from our quarterly results.

Speaker Change #127: As Jim mentioned, unless otherwise noted all metrics and growth rates mentioned during todays call are on a pro forma basis, which exclude the results of the dialysis and biosurgery businesses that we divested in June 2023, the pick in midline products that we divested in February 2024, and the radio frequency and <unk> support catheter <unk>.

Speaker Change #127: Alex that we just continue also in February 2024.

Speaker Change #128: We were very pleased with our first quarter results overall revenue within the range of our expectations driven by <unk> and Alphatec gross margin was strong stemming from the thrombus performance leading to strong bottom line results in terms of adjusted EBITDA and adjusted EPS.

Speaker Change #129: Our revenue for the first quarter of FY 'twenty five increased one 1% year over year to $67 5 million again, driven by growth in both our med Tech and U S med device platforms.

Speaker Change #130: Med Tech revenue was 28 million and eight 7% year over year increase while med device revenue was $39 5 million or three 6% decrease compared to the first quarter of FY 'twenty four but as Jim mentioned, our U S. Med device business was up two 1% over the prior year.

Speaker Change #131: For the first fiscal quarter, our med Tech platforms comprised 41, 4% of our total revenue compared to 38, 5% of total revenue a year ago.

Speaker Change #131: Our ion platform contributed $13 7 million in revenue during the first quarter growing 24, 9% compared to last year.

Speaker Change #132: Out of that was a key strong contributor in the first quarter of FY 'twenty five.

Speaker Change #132: Mechanical thrombectomy revenue, which includes <unk> and <unk> sales declined one 6% over the first quarter of FY 'twenty four.

Speaker Change #133: <unk> revenue for the first quarter was $2 2 million, an increase of 21, 1% year over year and 13, 2% sequential increase over the fourth quarter of 2024, largely as a result of the strong early adoption of Alpha Vac for P/e.

We're also pleased to see the continued stabilization in angio back with $5 8 million of revenue in the quarter.

Speaker Change #134: As we discussed last quarter. This first quarter provided a tough year over year comparison for mechanical thrombectomy, we were reaching peak enrollment in our alphabet P/e trial during the first quarter of last year and anti Iraq was performing well prior to the disruption we experienced in the second quarter of last year.

Speaker Change #135: Given this dynamic we are very pleased with the performance of our mechanical thrombectomy business as we continued to successfully compete in this exciting growing and large total addressable market.

Speaker Change #136: Nevertheless, disposable revenue during the quarter declined four 6% and capital sales declined 15% as I just mentioned the first quarter of last year provided for a particularly tough comparison Fernando as Nandonet grew over 35% in the first quarter of last year aided by the timing of bringing some new international distributors online.

Speaker Change #137: We are very pleased with the trajectory of prostate cases in the quarter and are on track for our projections for NIM for the full year now admittedly the dynamic around NOI timing doesn't mean that our second quarter, we will have an easier year over year comparison.

Speaker Change #138: Moving down the income statement, our gross margin for the first quarter of FY 2025 was 54, 4% a decrease of 40 basis points compared to the year ago period, but ahead of our expectations for the quarter.

For the first fiscal quarter Med Tech gross margin was 63, 3% a decrease of 160 basis points and med device gross margin was 48, 2% a decrease of 40 basis points, each when compared to the first quarter of last year.

Speaker Change #138: The year over year decline in gross margin for the Med Tech business was primarily driven by increased hardware depreciation and inflationary pressures.

Speaker Change #138: Gross margin for the med device business was impacted by inflationary pressures and costs associated with the transition to outsource manufacturing.

Speaker Change #138: Turning to R&D, our research and development expense during the first quarter of FY 2025 was $6 3 million or nine 3% of sales compared to $7 7 million or 11, 6% of sales a year ago.

Speaker Change #138: G&A expense for the first quarter of FY 2025 was $36 6 million, representing 54, 2% of sales compared to $36 7 million or 55% of sales a year ago.

Speaker Change #138: Our adjusted net loss for the first quarter of FY 2025 was $4 4 million and.

Speaker Change #138: And adjusted net loss per share of 11.

Speaker Change #138: Compared to an adjusted net loss of $6 2 million or adjusted loss per share of <unk> 16 in the first quarter of last year.

Speaker Change #138: The year over year improvement is largely attributable to higher revenue and improving operating leverage during the first quarter of this year.

Speaker Change #138: Adjusted EBITDA in the first quarter of FY 2025, with a loss of 152000 compared to a loss of $1 1 million in the first quarter of 2024.

At August 31, 2024, we had $55 million in cash and cash equivalents compared to $76 1 million in cash and cash equivalents that may 31 2024.

Speaker Change #139: As a reminder, we currently have zero debt compared to $50 million of debt. When we began FY 'twenty four.

Speaker Change #139: In the first quarter of fiscal 2025, we used $18 3 million in operating cash and capital expenditures of $1 1 million. In addition to the R&M placement and evaluation units of $1 3 million.

Speaker Change #140: Our first fiscal quarter has historically exhibited the highest utilization of cash in the first quarter of fiscal 'twenty five was in line with our expectations and another update on our balance sheet as announced in July of this year. The company approved a stock repurchase program authorizing purchases of up to $15 million of our outstanding common shares.

Speaker Change #140: Through the end of the first fiscal quarter. The company purchased approximately $500000 worth of stock at an average share price of $7 62.

Speaker Change #141: And we will continue to be opportunistic about our decision to make further repurchases based on a number of factors, including market conditions as well as the need to balance investment in our growth strategy as we seek to leverage the strength of our balance sheet to create value for our shareholders.

Speaker Change #141: Turning now to guidance for the fiscal year 2025, we are reiterating each component of our previously issued guidance. We continue to expect revenue will be in the range of $282 million to $288 million representing growth of between four 2% and six 4% over fiscal year 2024.

Speaker Change #141: Within each of our businesses, we continue to expect Med Tech net sales to grow in the range of 10% to 12% and med device net sales to grow in the range of 1% to 3%.

Speaker Change #141: For fiscal 'twenty five we continue to expect gross margin to be in the range of 52% to 53%.

Speaker Change #141: We continue to expect adjusted EBITDA in the range of a loss of $2 5 million to zero and finally, we continue to expect an adjusted loss per share in the range of 38 to 42.

Speaker Change #141: With that I'll turn it back to Jim.

Jim Clemmer: Thanks, Steve looking through the balance of the year, we will remain focused on a number of key strategic areas of our business aimed at driving growth.

Speaker Change #142: We continue to be very excited about the growing market opportunities that exist within our med Tech segment.

Speaker Change #143: With our recent new product launches and geographic expansions. Our total addressable market is now roughly $10 billion up from $3 billion.

Speaker Change #143: Just three years ago.

Speaker Change #145: Starting with ARIA in the U S. We will leverage the momentum built during the first quarter to continue to drive increased penetration with a particular focus on the hospital setting.

Speaker Change #146: Also expect new customer growth as a result of the recent launch of Oregon, XL and our $1 seven millimeter catheter.

Speaker Change #146: Having received a CE mark in late Q1, we.

Speaker Change #147: We can now shift our attention to commercializing <unk> in the EU.

Speaker Change #148: As with any new geographic expansion, we are beginning with a limited market release before returning to a full market release later in fiscal year 2025.

Speaker Change #148: We will continue to develop supporting clinical data and launching new product line extensions as we move forward.

Speaker Change #148: With Alpha that we continue to push ahead commercially.

Speaker Change #149: As we focus on driving increased adoption of <unk> therapy in the U S and CE Mark countries.

Speaker Change #149: We will continue to invest in high quality clinical data highlighting the benefits of our products to help support long term adoption.

Speaker Change #149: In addition, we continue to expect to launch new product enhancements.

Speaker Change #149: Over the course of the year to refine and improve usability.

Speaker Change #150: And lastly, with net of life, we expect the FDA approval by the end of calendar 2024.

Speaker Change #150: After which we will push to drive increased adoption in the U S for prostate treatment.

Speaker Change #150: And we are pursuing a specific CPT code.

Clarity to the reimbursement pathway for the procedure.

Speaker Change #150: We are very excited about the future here at angio dynamics with.

Speaker Change #151: With the quality of our portfolio as well as the commercial clinical and regulatory strategies that we have in place. We are in a fantastic position to drive growth for years to come.

Speaker Change #151: With that we'll open up the line for questions.

Speaker Change #152: Thank you we will now be conducting a question and answer session.

Speaker Change #153: If you'd like to ask a question today you May press star one from your telephone keypad and a confirmation tone will indicate your line is in the question queue.

Speaker Change #153: You May press star two if you'd like to Australia. Your question from the queue.

Speaker Change #153: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change #153: One moment please poll for questions. Thank you.

Speaker Change #154: Thank you and our first question will be coming from the line of Steven Lichtman with Oppenheimer <unk> Company. Please proceed with your question.

Speaker Change #153: Okay.

Speaker Change #155: Hi, Good morning, guys. This is amir in for Steve.

Amir: My first question was on Alpha Bank P/e is there any further color.

Speaker Change #156: You guys can provide from the field on how the launch ramp is going.

Speaker Change #157: Such as the number of physicians trained and accounts using it.

Speaker Change #158: Amir good morning, Thanks for asking so I had mentioned on the call. We had really good feedback in line with what we expected from the what the data that the apex study generated and comments that we received during the apex study by the sites that were enrolled.

Dr. <unk>: We learned a lot we learned that our initial design elements that we factored into the alphabet were being met and being received by our customers. Some of those design elements of the intuitive design, we built into the handle which is really important as Dr. <unk> said they wanted more control while doing a procedure control meeting steer ability to go from the left to the right.

Dr. <unk>: And then we gave the ability in a very innovative way to work wirelessly, if a physician chooses and without having that wire, reducing time and other risks and the procedure.

Dr. <unk>: Raising efficiency levels.

Speaker Change #159: And then there are also many we're comfortable with the vortex funnel tip. We've had on our <unk> device for years, a large bore catheter. The vortex funnel chip have been proven to remove a lot of clot burden in a simple and efficient manner. So those are some of the design elements. We built him. We're hearing really good feedback we heard it during apex now in our in our prelaunch and now we're full launch so we're really.

Speaker Change #160: Excited in the field, we've got two really good competitors with good products out there as well, but we know that we're all three going to move and shift people. We believe from the old lytic based therapies to these mechanical interventions. These are really good safe ways to get pay patients treated all three of us have a different approach towards that but we really like the feedback we've gotten.

Speaker Change #161: <unk> heard great feedback and we're measuring as you asked earlier, new customer interactions new customer take ups and we know how many customers have gone through the value analysis process watching that process. We're measuring really closely we're pleased with our results.

Speaker Change #162: Great. Thank you and also just on the hospital market opportunity is there any more details you can provide on what initiatives you're targeting in particular to go after that market.

Speaker Change #163: Sure. Ken this is dialing back a little bit remember, we did our full launch of <unk> almost four years ago, just over four years ago September of 2020 remember the world was different than two was six months into Covid and a lot of the hospitals are kind of total device companies have stepped down to stand back that we're not going to be running the normal vacuum process and bring new products in so the <unk>.

Speaker Change #164: <unk> were the first places that we are getting demand served in our first customers are in the OBL. So our ratio of youll be able to hospital business was higher than we had thought it would be and now the hospitals are kind of back to normal business. We're seeing the takeout. So all we're really doing is shifting the focus of our team focusing more on those hospital customers.

Speaker Change #164: And you know it works many of those have a high demand in Oregon, because they've come familiar with it.

Speaker Change #165: They may have used it already in the OBL and now want to have it in the lab and hospital. So we're focusing more and we're getting really good feedback to us. It's an important shift because over time, we think our ion could even provide more.

Care modalities almost unique device in the hospital customers are more stable long term customer for us. So we're hitting the goals. We thought we're shifting that hospital mix each quarter and it also raises our profitability a bit each time, we do so so it's a good program our team is executing really well.

Speaker Change #165: Great and just one brief last one on my side.

Speaker Change #166: Have you ramp again on the manufacturing transition can you provide any more color on the potential savings that you expect for this fiscal year.

Speaker Change #167: Just as a follow up to that like any color on the ramp you think you could see in gross margin over the next couple of years as the transition complete thank you.

Speaker Change #167: Yes, Hi, Barry This is Steve so as Jim mentioned, the manufacturing transfer program that we have in place is growing according to our plans. So we're very pleased to see that as we had mentioned when we first announced this the real change in gross margin and the benefit that we're going to see in gross margin really comes at the end of that program. So when we have the ability to.

Speaker Change #168: To get out of the areas that we wanted to get out of and then take some of those overhead costs out. So it's not going to be a smooth ramp in gross margin coming from that program now that being said if you look at our gross margin results for this quarter you really go back to what the overall strategy is for graduate dynamics. When it comes to gross margin, we expect to see gross margin accretion coming from this.

Speaker Change #169: <unk> that we have a larger portion of our overall revenue base coming from that higher margin Med Tech product line. We saw that this quarter. We are absolutely seeing that mix shifts driving benefits in gross margin now thats going to be a little bit offset until we can get through our manufacturing transfer process by the fact that we're overpaying or double paying for some of that overhead that we haven't been able to take out.

Speaker Change #170: While we're still manufacturing products for those discontinued product lines that we talked about as well as doing and preparing ourselves for that moves we've seen some of those costs were definitely looking at taking that but you're really going to see the step function. Once we get to the end of that program and as we said, we think it's going to take about $15 million out of our overhead structure all of which will hit gross margin and then eventually <unk>.

Speaker Change #169: To the bottom line.

Speaker Change #169: Thank you.

Speaker Change #169: Our next questions are from the line of John Young with Canaccord Genuity. Please proceed with your question.

Speaker Change #171: Hey, gentlemen, thanks for taking my question and congrats on the quarter I, just want to start or narrow nice.

John Young: Just the comments around the CVT pathway.

John Young: Will you launch key.

John Young: Can you provide some initially just timelines for that beyond just the October date for an editorial committee and then would you launch that.

John Young: Whats out commercialize it without the code initially and then also how youre thinking about that.

Speaker Change #172: If you do get at a level one CPT code would you price the disposal for the prostate higher than maybe disposables currently any premium and you could take there. Thanks.

Hi, John Thanks for the question. So as we said we've been able to really parallel past the process of going after the specific indication for prostate that we have with the FDA process and working to get reimbursement. So it hasn't been a linear process, we've been able to parallel path these things and bring in.

The timeline as you know, it's a really complex process. When you go through reimbursement. So we were very pleased to be on the agenda as Jim said, we're waiting to hear the decision on that once there is a decision there becomes a process where you either get the code or you don't get the code you have to then go through the rock process, where they will evaluate your time and your cost and.

Speaker Change #173: It's going to be a little while before they put the full reimbursement in place. So as we have more details we will certainly get back and tell you about that to your question around the launch yes look we are in the process of launching this product one of the things about nano night. It has the the general indication as we've talked about with the uptick from the urology community that we've seen over the course of the last 24.

Speaker Change #174: Four months or so that has been driving the growth at nano knife, that's coming from those urologists adopting the technology primarily to treat prostate cancer patients. So we're in the process of working through that that was that what allowed us to go through preserve get through the enrollment get through the follow up procedure. We've now filed for the <unk> to the FDA for that five 10-K clearance and as Jim said, we expect to.

Speaker Change #175: Get that clearance around the end of the calendar year. So that'll be the end of the of a long process that we've gone into all the while while we've been continuing to commercialize it don't want to really speak to where we think numbers are going to come out through reimbursement as we said thats part of our whole complex process. We will give you more details as that comes forward.

Speaker Change #176: I don't know that necessarily I would expect that theres going to be a huge change one way or the other in terms of how we've been commercializing in how we will go to market with nano knife in terms of pricing.

Speaker Change #176: But we think that this whole process has really been put in place in our overall plan is to drive adoption through getting all three of the things that are necessary to launch a product getting the indication from the FDA, making sure Theres reimbursement and then doing the work the coverage and coding and then making sure that we increase awareness in the overall market all of those things are at.

Speaker Change #176: Built into our plan and we're pretty pleased with the way the plan is going so far.

Okay, great. Thanks for the color on that and just the cash burn in this quarter is pretty significant $21 million.

Speaker Change #177: Can you just walk us through your ability to a cash flow breakeven I know you had targeted previously on profitability in fiscal year 'twenty six do you still expect that.

Speaker Change #177: And just that passed by cash flow.

Speaker Change #177: Thank you.

Yes, John absolutely, we expect to hit that Theres nothing thats different from what our expectations were as we said Q1 as it is with most companies is always the highest utilization of cash quarter for US 25 was no different. It was also exactly in line with our expectations. Some of the things that you have to deal with in Q1 as you've got your incentive compensation that goes out you are paying all the commissions yearly to your sales force that all goes out the door.

Speaker Change #178: In Q1.

Speaker Change #179: Also things like insurance premiums and the high cost of our D&O insurance.

We've got some minimum royalty payments that get paid all in Q1 that don't repeat themselves as you move into the rest of the balance of the year. So this is right where we expect it to be I think we were signaling that we expected to use around $10 million to $15 million in cash from where we ended Q4 by the end of this year, we're still on target for that so expect that.

Youre not going to see nearly the same utilization at all going forward in fact over the course of Q2, three and four expect cash to increase kind of exactly what we see in Q4 is always the highest source of cash quarter for us that's going to be the same again this year and then as we move into FY 'twenty six.

Speaker Change #180: We expect to turn that corner to get to the point, where at the end of the full year will be cash flow positive.

Speaker Change #179: Okay.

Speaker Change #179: One more in here just on the med device that the comments on the quarter.

Speaker Change #181: Should we expect some of that revenue pushed out to <unk>.

Speaker Change #182: Yes, I think Thats right I think.

Speaker Change #182: As we've talked about with our international business.

Speaker Change #183: In contrast to the U S, where we're primarily direct and in fact, we're all direct here in the U S were primarily through distributors in the international markets and Theres going to be some choppiness and puts and takes in terms of Windows order timings come in Jim also mentioned, we expect Q2 to have a different comp so when youre looking at it purely on a year over year percentage basis definitely expect to see Q2 different than that.

Speaker Change #184: What you saw in Q1, and yet do you expect that some of those distributor orders come in.

Speaker Change #185: In future quarters and growth going forward in that business.

Speaker Change #186: One thing as Jim mentioned, we had that.

Speaker Change #187: International distributor come online for nano knife with getting those initial orders in Q1, it's not that that distributor wasn't buying through the rest of the year. They were it's just not at the same level when youre looking at a year over year comparison to the initial order that they had in Q1.

Great. Thanks again.

Speaker Change #188: Our next question is from the line of <unk> Chen with H C. Wainwright. Please proceed with your question.

Speaker Change #189: Thank you for taking my questions could you give us some additional color.

Speaker Change #190: Youre expected launch trajectory for <unk> in Europe.

Speaker Change #191: And roughly what timeframe for Europe.

Speaker Change #190: <unk>.

Speaker Change #192: And a similar level of sales in the U S.

Speaker Change #190: Thanks.

Speaker Change #193: Hi, Good morning. This is Jim so Ferrari on our team has done a really good job building kind of awareness of <unk> globally. Since we've launched the product there's been a lot of published data. That's occurred in some of that data has been global some physicians and other parts of the world have used <unk> on again familiarity with it and we've run our own series of scientific symposiums.

Speaker Change #194: Over the last few years and we've held those over in Europe, and so I think a lot of global physicians have gotten.

Speaker Change #195: Awareness of <unk> I've heard from some of their colleagues here in the U S. How it works how it's safe to use how efficient. It is so there is some demand we believe globally already built up by the interest in Ari. So we're now getting the CE marks importance. We can now commercialize it properly you talked to people as we've said in the call we're anywhere entering new geographies, we're building a limit.

Speaker Change #196: Launch process as you would expect us to do with enrolled to a full launch this year, while still being conservative the European market is not as mature as the U S and while it uses atherectomy to treat <unk> in the same percentages. They do here in the US. So we are fully aware of that so we are realistic goals. We've set but also really encouraged by the demand we see by the <unk>.

In Oregon, and our team will do a really good job commercializing that we know so we expect to give you updates over the next three quarters as to how that process is going.

Speaker Change #197: Got it and with respect to the issue due to the timing of international orders has the issue being resolved.

Speaker Change #197: Has it only affected sales of nano knife.

Speaker Change #198: You just mentioned on the last call a second ago. These are things that we knew about we build in with someone who starts off with us easily by a higher percentage they get some capital with some disposables that usually doesn't repeat during the course of the year. There are orders that fulfilled their customer needs. Our distributor channel. Those are normal so we had a little bit of that on the device.

Speaker Change #199: <unk> little bit nano remember a year ago and nano had I think we were up like 35% Q1, 3% Q2, we told everyone. Even after Q1, we don't expect that again, it will normalize around a 20% level, which it did we expect that here to almost flipped so probably started a little softer Q2, probably be stronger and get back to the guidance that Steve gave in that area.

Speaker Change #200: So just to clarify the timing issue could recur in the future correct.

Speaker Change #201: Yeah, we hope that anytime you do a new distributors coming on you have a lot of that choppiness. So over time as our business grows we think it'll smooth out I don't think youll see as much of this over time, we don't want to say it we'd like to have a smooth out, but we love some of the distributors that have come along the way they've come on adopting our technology is bringing our products into stock and these folks also really helpful. They have.

Speaker Change #202: Clinical teams around the globe getting training done at levels that we couldnt do without their help so maximizes our use of our people working there and minimizing the amount of people we have to put these locations. So when you do it there is choppiness overtime I would expect it to smooth out you always have a little bit.

Speaker Change #202: Got it thank you.

Speaker Change #202: You.

Speaker Change #203: Thank you at this time I'll turn the floor back to management for closing remarks.

Speaker Change #204: Thanks, operator, and we're really pleased with the work here that our team at <unk> has done we have a lot of things going on at the same time. These are our plans we knew we'd have important catalysts that we'd meet during the calendar year of 2024.

Speaker Change #205: Catalysts include new product launches, new regulatory approvals in new geographic expansions all the while we're running our normal business and we're also shifting our manufacturing footprint, we couldnt do that our team of people, who do a really great job in maximizing our ability to serve our customers globally. Thanks to each of them and thank you for tuning in today.

Speaker Change #206: This will conclude today's conference you may disconnect. Your lines at this time. Thank you for your participation.