Q1 2027 AngioDynamics Inc Earnings Call

October 8, 2026

Speaker #1: Good morning, and welcome to the AngioDynamics fiscal year 2027 first quarter earnings call. At this time, all participants are on listen-only mode. A question and answer session will follow the formal presentation.

Operator 1: Good morning, and welcome to the AngioDynamics Fiscal Year 2027 first quarter earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. The news release detailing AngioDynamics Fiscal 2027 first quarter results was issued earlier this morning and is available on the company's website. This conference call is also being broadcast live over the internet at the investors section of the company's website at www.angiodynamics.com. A webcast replay of the call will be available at the same site approximately 1 hour after the end of today's call.

Operator: Good morning, and welcome to the AngioDynamics Fiscal Year 2027 first quarter earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. The news release detailing AngioDynamics Fiscal 2027 first quarter results was issued earlier this morning and is available on the company's website. This conference call is also being broadcast live over the internet at the investors section of the company's website at www.angiodynamics.com. A webcast replay of the call will be available at the same site approximately one hour after the end of today's call.

Speaker #1: As a reminder, this conference is being recorded. The news release detailing AngioDynamics' fiscal 2027 first quarter results was issued earlier this morning and is available on the company's website.

Speaker #1: This conference call is also being broadcast live over the Internet at the Investors section of the company's website, www.angiodynamics.com. A webcast replay of the call will be available at the same site approximately one hour after the end of today's call.

Speaker #1: Before we begin, I'd like to caution listeners that during the course of this conference call, the company will make projections or forward-looking statements regarding future events, including statements about expected revenue, adjusted earnings, and gross margin for the fiscal year 2027, as well as trends that may continue.

Operator 1: 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 margin for the fiscal year 2027, as well as trends that may continue. Management encourages you to review the company's past and future filings with the SEC, including, without limitation, the company's Forms 10-Q and 10-K, which identify specific factors that may cause the actual results or events to differ materially from those described in the forward-looking statements. The company will also discuss certain non-GAAP financial measures during this call. Management uses these measures to establish operational goals and review operational performance and believes that these measures may assist investors in analyzing the underlying trends in the company's business over time.

Operator: 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 margin for the fiscal year 2027, as well as trends that may continue. Management encourages you to review the company's past and future filings with the SEC, including, without limitation, the company's Forms 10-Q and 10-K, which identify specific factors that may cause the actual results or events to differ materially from those described in the forward-looking statements. The company will also discuss certain Non-GAAP financial measures during this call. Management uses these measures to establish operational goals and review operational performance and believes that these measures may assist investors in analyzing the underlying trends in the company's business over time.

Speaker #1: Management encourages you to review the company's past and future filings with the SEC, including, without limitation, the company's Forms 10-Q and 10-K, which identify specific factors that may cause the actual results or events to differ materially from those described in the forward-looking statements.

Speaker #1: The company will also discuss certain non-GAAP financial measures during this call. Management uses these measures to establish operational goals and review operational performance, and believes that these measures may assist investors in analyzing the underlying trends in the company's business over time.

Speaker #1: Investors should consider these non-GAAP measures in addition to, and not as a substitute for or as superior to, financial reporting measures prepared in accordance with GAAP.

Operator 1: Investors should consider these non-GAAP measures in addition to, not as substitute for, or as superior to, financial reporting measures prepared in accordance with GAAP. A slide package offering insight to the company's financial results is also available in the investors section of the company's website under Events and Presentations. This presentation should be read in conjunction with the press release discussing the company's operating results and financial performance during this morning's conference call. Unless otherwise noted, all comparisons will be the first fiscal quarter of 2027 versus the first fiscal quarter of 2026. Now, I would like to turn the call over to Jim Clemmer, AngioDynamics President and Chief Executive Officer. Mr. Clemmer.

Operator: Investors should consider these Non-GAAP measures in addition to, not as substitute for, or as superior to, financial reporting measures prepared in accordance with GAAP. A slide package offering insight to the company's financial results is also available in the investors section of the company's website under Events and Presentations. This presentation should be read in conjunction with the press release discussing the company's operating results and financial performance during this morning's conference call. Unless otherwise noted, all comparisons will be the first fiscal quarter of 2027 versus the first fiscal quarter of 2026. Now, I would like to turn the call over to Jim Clemmer, AngioDynamics President and Chief Executive Officer. Mr. Clemmer.

Speaker #1: A slide package offering insight into the company's financial results is also available in the Investors section of the company's website, under Events and Presentations.

Speaker #1: This presentation should be read in conjunction with the press release discussing the company's operating results and financial performance during this morning's conference call. Unless otherwise noted, all comparisons will be for the first fiscal quarter of 2027 versus the first fiscal quarter of 2026.

Speaker #1: Now, I would like to turn the call over to Jim Klemer, AngioDynamics President and Chief Executive Officer. Mr. Klemer?

Speaker #2: Thank you, operator. Good morning, everyone, and thank you for joining us for AngioDynamics' fiscal 2027 first quarter earnings call. Joining me today is Steve Trowbridge.

Jim Clemmer: Thank you, operator. Good morning, everyone, and thank you for joining us for AngioDynamics' fiscal 2027 first quarter earnings call. Joining me today is Steve Trowbridge, AngioDynamics' Executive Vice President and Chief Financial Officer. Before I get into our results, I want to start with an important update. Our board has completed a comprehensive search for my successor. I am pleased to share that Eric Honroth will be joining us as President and Chief Executive Officer effective 2 November. Eric brings more than 20 years of leadership experience in MedDevice and life sciences. He most recently served as Global President, Life Science at Getinge, and before that, he led Getinge's $1.2 billion North American business, where he accelerated growth, delivered sustained revenue gains, and strengthened operational performance.

Speaker #2: AngioDynamics Executive Vice President and Chief Financial Officer. Before I get into our results, I want to start with an important update. Our board has completed a comprehensive search for my successor.

Speaker #2: I am pleased to share that Eric Hanroth will be joining us as president and chief executive officer, effective November 2nd. Eric brings more than 20 years of leadership experience in medical devices and life sciences.

Speaker #2: He most recently served as Global President, Life Science at Getinge, and before that, he led Getinge's $1.2 billion North American business, where he accelerated growth, delivered sustained revenue gains, and strengthened operational performance.

Speaker #2: His career spans the cardiovascular, endovascular, urology, and oncology markets, with senior leadership roles at Abbott Vascular, Becton Dickinson, CareFusion, and Boston Scientific. That combination is exactly what our board was looking for—someone who's driven real growth and profitability in large, complex organizations, and who knows our markets firsthand.

Jim Clemmer: His career spans the cardiovascular, endovascular, urology, and oncology markets, with senior leadership roles at Abbott Vascular, Becton Dickinson, CareFusion, and Boston Scientific. That combination is exactly what our board was looking for: someone who's driven real growth and profitability in large, complex organizations and who knows our markets firsthand. I am confident that he's the right person to build upon the foundation that we've put in place, and I'll remain closely involved to make sure that we have a smooth transition. I want to thank our board, our search committee, and everyone across this organization who helped make this happen. Now, moving on to results. We grew total revenue by approximately 7%, led by strength in our MedTech segment, which grew more than 13%. That's clear evidence that the strategy guiding our transformation over the past several years keeps paying off.

Speaker #2: I am confident that he's the right person to build upon the foundation that we've put in place, and I'll remain closely involved to make sure that we have a smooth transition.

Speaker #2: I want to thank our board, our search committee, and everyone across this organization who helped make this happen. Now, moving on to results: we grew total revenue by approximately 7%, led by strength in our Medtech segment, which grew more than 13%.

Speaker #2: That's clear evidence that the strategy guiding our transformation over the past several years keeps paying off. As a result, MedTech now represents approximately 49% of our total revenue, and that shift is only gaining momentum as we move through the year.

Jim Clemmer: As a result, MedTech now represents approximately 49% of our total revenue, and that mix shift is only gaining momentum as we move through the year. Starting with Auryon, which remains one of the most consistent growth engines in this business. This quarter marked our 21st consecutive quarter of double-digit year-over-year growth. We're taking share across both the hospital and OBL settings, with international adoption building as well. We're also advancing enrollment in our AMBITION BTK case study, which we believe will support the long-term clinical case for Auryon below the knee. Turning to mechanical thrombectomy. We're also growing above market in this business, and the reason is simple. We have the most versatile product on the market and a commercial team that is executing at a high level, and we're taking share from our competitors. AlphaVac is building real momentum as more hospitals continue to adopt it.

Speaker #2: Starting with Arion, which remains one of the most consistent growth engines in this business. This quarter marked our 21st consecutive quarter of double-digit year-over-year growth.

Speaker #2: We're taking share across both the hospital and office-based laboratory settings, with international adoption building as well. We're also advancing enrollment in our Ambition BTK study, which we believe will support the long-term clinical case for Arion below the knee.

Speaker #2: Turning to mechanical thrombectomy, we're also growing above market in this business, and the reason is simple: we have the most versatile product on the market and a commercial team that is executing at a high level.

Speaker #2: And we're taking share from our competitors. AlphaVac is building real momentum as more hospitals continue to adopt it. In addition, we're really pleased with the progression of our AlphaVac Return blood management system IDE trial.

Jim Clemmer: In addition, we're really pleased with the progression of our AlphaReturn blood management system IDE trial to further strengthen our position. AngioVac is working through a tougher comp right now, but the underlying demand for the product remains strong, and we expect it to return to more normal growth as the year progresses. Finally, NanoKnife continues to fundamentally change the landscape of men's healthcare by improving outcomes and preserving quality of life through an innovative procedure for men with intermediate risk prostate cancer. Reimbursement progress remains a key driver, including the positive MAC coverage decision that we received last quarter. And we're now working with additional regions with the goal of building towards consistent nationwide coverage. Physician interest and procedure volumes in prostate care remain strong.

Speaker #2: To further strengthen our position, AngioVac is working through a tougher comp right now, but the underlying demand for the product remains strong. We expect it to return to more normal growth as the year progresses.

Speaker #2: Finally, NanoKnife continues to fundamentally change the landscape of men's healthcare by improving outcomes and preserving quality of life through an innovative procedure for men with intermediate-risk prostate cancer.

Speaker #2: Reimbursement progress remains a key driver, including the positive MAC coverage decision that we received last quarter. We are now working with additional regions, with the goal of building towards consistent, nationwide coverage.

Speaker #2: Position interest and procedure volumes in prostate care remain strong. We also received FDA approval for our RELIEF study, which is evaluating NanoKnife for the treatment of BPH, a condition affecting millions of men.

Jim Clemmer: We also received FDA approval for our RELIEF Study, which is evaluating NanoKnife for the treatment of BPH, a condition affecting millions of men and a market opportunity we estimate at approximately $1.9 billion, an important step in expanding where this technology can help patients. Our MedDevice segment grew approximately 1%. This business remains a steady, reliable performer, providing the consistent cash flow that funds our investment in MedTech platforms. Before I turn things over to Steve, I really want to thank our team. The work happening across the company is reflected in this quarter's results and is driving future growth ahead. We compete in large, fast-growing markets, and we are positioned to win. Looking ahead, we have real catalysts in front of us. Continued progress in AlphaReturn, expanding reimbursement coverage for NanoKnife, and ongoing enrollment in our AMBITION BTK study, each of which will create new opportunities.

Speaker #2: And a market opportunity we estimate at approximately $1.9 billion, an important step in expanding where this technology can help patients. Our Med Device segment grew approximately 1%.

Speaker #2: This business remains a steady, reliable performer, providing the consistent cash flow that funds our investment in medtech platforms. Before I turn things over to Steve, I really want to thank our team.

Speaker #2: The work happening across the company is reflected in this quarter's results and is driving future growth ahead. We compete in large, fast-growing markets, and we are positioned to win.

Speaker #2: Looking ahead, we have real catalysts in front of us: continued progress in alpha return, expanding reimbursement coverage for NanoKnife, and ongoing enrollment in our Ambition BTK study, each of which will create new opportunities.

Speaker #2: This all comes back to patients first. We believe people living with some of society's most challenging diseases deserve trusted solutions that deliver real care and better outcomes.

Jim Clemmer: This all comes back to patients first. We believe people living with some of society's most challenging diseases deserve trusted solutions that deliver real care and better outcomes. When we deliver on that, we deliver value for everyone we serve, from patients and physicians to our shareholders. Now I'll turn it over to Steve to review the financials for the quarter.

Speaker #2: When we deliver on that, we deliver value for everyone we serve—from patients and physicians to our shareholders. Now, I'll turn it over to Steve to review the financials for the quarter.

Speaker #3: Thanks, Jim, and good morning, everybody. As always, before I begin, I'd like to direct everyone to the presentation on our Investor Relations website, which summarizes the key items from our quarterly results.

Steve Trowbridge: Thanks, Jim, and good morning, everybody. As always, before I begin, I'd like to direct everyone to the presentation on our investor relations website summarizing the key items from our quarterly results. Unless otherwise noted, all comparisons will be the first fiscal quarter of 2027 versus the first fiscal quarter of 2026. Company top-line revenue performance was strong again in the quarter. Revenue increased 6.9% to $80.9 million, driven by growth across our MedTech segments. MedTech revenue was $39.9 million, a 13.2% increase. For the first fiscal quarter, our MedTech platforms comprised 49% of our total revenue, compared to 47% of total revenue a year ago, reflecting the ongoing shift in our business mix. We remain on track for our MedTech segment to comprise a majority of our overall revenue base during this fiscal year.

Speaker #3: Unless otherwise noted, all comparisons will be the first fiscal quarter of 2027 versus the first fiscal quarter of 2026. Company top-line revenue performance was strong again in the quarter; revenue increased 6.9% to $80.9 million, driven by growth across our medtech segments.

Speaker #3: Medtech revenue was $39.9 million, a 13.2% increase. For the first fiscal quarter, our medtech platforms comprised 49% of our total revenue, compared to 47% of total revenue a year ago, reflecting the ongoing shift in our business mix.

Speaker #3: We remain on track for our MedTech segment to comprise a majority of our overall revenue base during this fiscal year. Within our MedTech segment, our Arion platform contributed $18.9 million in revenue, growing 14.7% compared to last year.

Steve Trowbridge: Within our MedTech segment, our Auryon platform contributed $18.9 million in revenue, growing 14.7% compared to last year. Auryon has now delivered double-digit year-over-year growth for 21 consecutive quarters. This above-market growth continues to be supported by our strategy to shift more of our atherectomy business towards the hospital side of care, while we keep growing our customer base across both the hospital and OBL settings, along with ongoing international adoption following our CE Mark approval. We're confident in the long-term opportunity for our mechanical thrombectomy portfolio. Combined AngioVac and AlphaVac sales were $12 million, an increase of 6.7% year over year. In the quarter, AlphaVac continued its strong trajectory, generating revenue of $4.5 million, representing a 37.4% year-over-year increase, as well as growth of 6.4% sequentially.

Speaker #3: Arion has now delivered double-digit year-over-year growth for 21 consecutive quarters. This above-market growth continues to be supported by our strategy to shift more of our atherectomy business towards the hospital side of care, while we keep growing our customer base across both the hospital and OBL settings, along with ongoing international adoption following our CE mark approval.

Speaker #3: And we're confident in the long-term opportunity for our mechanical thrombectomy portfolio. Combined ANGIOVAC and ALPHAVAC sales were $12 million, an increase of 6.7% year-over-year.

Speaker #3: In the quarter, ALPHAVAC continued its strong trajectory, generating revenue of $4.5 million, representing a 37.4% year-over-year increase, as well as growth of 6.4% sequentially.

Speaker #3: We're also pleased with the trajectory of AngioVac, which generated revenue of $7.5 million. While this represented a 5.9% year-over-year decrease, AngioVac grew 9.1% sequentially.

Steve Trowbridge: We are also pleased with the trajectory of AngioVac, which generated revenue of $7.5 million. While this represented a 5.9% year-over-year decrease, AngioVac grew 9.1% sequentially. On the clinical front, we are encouraged by the ongoing progress in our AlphaReturn and AngioVac right-sided infective endocarditis IDE studies, both of which are seeing strong enrollment. Turning to NanoKnife, total revenue was $8.3 million, an increase of 29%, with probes growing 24.1% and capital sales growing 53.5%. Probe sales are primarily driven by demand for NanoKnife in prostate care, and we hit record procedure volumes during the quarter. Additionally, as systems are placed and new physicians and providers experience the improved patient outcomes our technology enables, we expect them to drive continued increases in probe utilization going forward.

Speaker #3: On the clinical front, we are encouraged by the ongoing progress in our Alpha Return and AngioVac right-sided infective endocarditis IDE studies, both of which are seeing strong enrollment.

Speaker #3: Turning to NanoKnife, total revenue was $8.3 million, an increase of 29%, with probes growing 24.1% and capital sales growing 53.5%. Probe sales are primarily driven by demand for NanoKnife in prostate care, and we hit record procedure volumes during the quarter.

Speaker #3: Additionally, as systems are placed and new physicians and providers experience the improved patient outcomes our technology enables, we expect them to drive continued increases in probe utilization going forward.

Speaker #3: I will note that capital sales are always lumpy quarter to quarter, so we would not expect capital to grow at this rate going forward.

Steve Trowbridge: I will note that capital sales are always lumpy quarter to quarter, so we would not expect capital to grow at this rate going forward. We continue to view disposables as the bellwether for this business. In Q1, our Med Device segment increased 1.4% year over year, with revenue of $41 million. This business generates consistent cash and profitability, allowing us to continue to invest in the growth of our MedTech platforms. Moving down the income statement, our gross margin for Q1 FY27 was 59.4%, a 410 basis point increase from Q1 FY26, driven primarily by favorable pricing and the ongoing revenue mix shift towards MedTech, which is partially offset by the manufacturing transition and global inflation, all of which were in line with the company's expectations.

Steve Trowbridge: I will note that capital sales are always lumpy quarter to quarter, so we would not expect capital to grow at this rate going forward. We continue to view disposables as the bellwether for this business. In Q1, our Med Device segment increased 1.4% year over year, with revenue of $41 million. This business generates consistent cash and profitability, allowing us to continue to invest in the growth of our MedTech platforms. Moving down the income statement, our gross margin for Q1 FY 2027 was 59.4%, a 410 basis point increase from Q1 FY26, driven primarily by favorable pricing and the ongoing revenue mix shift towards MedTech, which is partially offset by the manufacturing transition and global inflation, all of which were in line with the company's expectations.

Speaker #3: We continued to view disposables as the bellwether for this business. In the first quarter, our Med Device segment increased 1.4% year over year, with revenue of $41 million.

Speaker #3: This business generates consistent cash and profitability, allowing us to continue to invest in the growth of our medtech platforms. Now, moving down the income statement, our gross margin for the first quarter of FY27 was 59.4%, a 410 basis point increase from the first quarter of FY26.

Speaker #3: We're driven primarily by favorable pricing and the ongoing revenue mix shift towards MedTech, which is partially offset by the manufacturing transition and global inflation—all of which were in line with the company's expectations.

Speaker #3: Gross margin also benefited from tariff refunds received during the quarter. Absent that benefit, gross margin would have been 57.8%. We expect gross margin to be higher in the first half of fiscal 2027 than in the second half, and we remain on track for full-year gross margins to be within our guided range of 54% to 55%.

Steve Trowbridge: Gross margin also benefited from tariff refunds received during the quarter. Absent that benefit, gross margin would have been 57.8%. We expect gross margin to be higher in H1 of fiscal 2027 than in H2, and we remain on track for full year gross margins to be within our guided range of 54% to 55%. Total operating expenses, which include R&D, SG&A, amortization, and non-recurring items in the quarter were $55.3 million, representing 68.4% of sales, compared to $52.5 million or 69.4% of sales last year. Turning to R&D, our research and development expense was $8 million or 9.9% of sales, compared to $6.4 million or 8.5% of sales a year ago.

Speaker #3: Total operating expenses, which include R&D, SG&A, amortization, and non-recurring items, in the quarter were $55.3 million, representing 68.4% of sales, compared to $52.5 million, or 69.4% of sales last year.

Speaker #3: Turning to R&D, our research and development expense was $8.0 million, or 9.9% of sales, compared to $6.4 million, or 8.5% of sales a year ago.

Speaker #3: We remain committed to investing in R&D initiatives to support the long-term growth of our medtech segment, and we're targeting approximately 10% of sales going forward.

Steve Trowbridge: We remain committed to investing in R&D initiatives to support the long-term growth of our MedTech segment, and we are targeting approximately 10% of sales going forward. SG&A expense for Q1 FY27 was $42.5 million, representing 52.5% of sales, compared to $40.7 million or 53.7% of sales a year ago. On a GAAP basis, our net loss for Q1 was $7.1 million, or a loss per share of $0.17, compared to a net loss of $10.9 million or a loss per share of $0.26 a year ago.

Steve Trowbridge: We remain committed to investing in R&D initiatives to support the long-term growth of our MedTech segment, and we are targeting approximately 10% of sales going forward. SG&A expense for Q1 FY 2027 was $42.5 million, representing 52.5% of sales, compared to $40.7 million or 53.7% of sales a year ago. On a GAAP basis, our net loss for Q1 was $7.1 million, or a loss per share of $0.17, compared to a net loss of $10.9 million or a loss per share of $0.26 a year ago.

Speaker #3: SG&A expense for the first quarter of FY27 was $42.5 million, representing 52.5% of sales, compared to $40.7 million, or 53.7% of sales a year ago.

Speaker #3: On a GAAP basis, our net loss for the first quarter was $7.1 million, or a loss per share of $0.17, compared to a net loss of $10.9 million, or a loss per share of $0.26 a year ago.

Speaker #3: Our adjusted net loss for the first quarter of FY27 was $1.8 million, or an adjusted loss per share of $0.04, compared to an adjusted net loss of $4.2 million, or an adjusted loss per share of $0.10 in the first quarter of last year.

Steve Trowbridge: Our adjusted net loss for Q1 of FY27 was $1.8 million or an adjusted loss per share of $0.04, compared to an adjusted net loss of $4.2 million or an adjusted loss per share of $0.10 in Q1 of last year. Adjusted EBITDA in Q1 of FY27 was $5 million, compared to adjusted EBITDA of $2.2 million in Q1 of 2026. Touching briefly on tariffs. Tariff-related expenses were $0.9 million during the quarter, compared to $1.7 million for the prior year quarter. This is in line with our expectations. Additionally, we did receive $1.2 million of tariff refunds during the quarter, resulting in a net tariff benefit of about $400,000. Turning to cash. In Q1, the company used $15.3 million of cash from operations, in line with our expectations.

Steve Trowbridge: Our adjusted net loss for Q1 of FY 2027 was $1.8 million or an adjusted loss per share of $0.04, compared to an adjusted net loss of $4.2 million or an adjusted loss per share of $0.10 in Q1 of last year. Adjusted EBITDA in Q1 of FY 2027 was $5 million, compared to adjusted EBITDA of $2.2 million in Q1 of 2026. Touching briefly on tariffs. Tariff-related expenses were $0.9 million during the quarter, compared to $1.7 million for the prior year quarter. This is in line with our expectations. Additionally, we did receive $1.2 million of tariff refunds during the quarter, resulting in a net tariff benefit of about $400,000. Turning to cash. In Q1, the company used $15.3 million of cash from operations, in line with our expectations.

Speaker #3: Adjusted EBITDA in the first quarter of FY27 was $5 million, compared to adjusted EBITDA of $2.2 million in the first quarter of FY26.

Speaker #3: Touching briefly on tariffs, tariff-related expenses were $0.9 million during the quarter, compared to $1.7 million for the prior year quarter. This is in line with our expectations.

Speaker #3: Additionally, we did receive $1.2 million in tariff refunds during the quarter, resulting in a net tariff benefit of about $400,000. Turning to cash, in the first quarter, the company used $15.3 million in cash from operations, in line with our expectations.

Speaker #3: We ended the quarter with $34 million in cash, and we maintain a strong, debt-free balance sheet. We also remain on track to generate positive cash flow from operations for the full fiscal year.

Steve Trowbridge: We ended the quarter with $34 million in cash, and we maintain a strong debt-free balance sheet. We also remain on track to generate positive cash flow from operations for the full fiscal year. Turning to guidance. For fiscal 2027, we continue to anticipate net sales to be in the range of $336 to $341 million, representing growth of between 5% and 6.5% over fiscal 2026 revenue of $320.2 million. Within each of our businesses, we expect MedTech net sales to grow 12% to 15% year over year, and we expect MedDevice sales to be roughly flat. For fiscal 2027, we expect gross margin to be in the range of 54% to 55%. We expect adjusted EBITDA to be in the range of $13 million to $16 million. And finally, we expect adjusted loss per share in the range of $0.29 to $0.24.

Speaker #3: Turning to guidance, for fiscal '27, we continue to anticipate net sales to be in the range of $336 to $341 million, representing growth of between 5% and 6.5% over fiscal '26 revenue of $320.2 million.

Speaker #3: Within each of our businesses, we expect MedTech net sales to grow 12% to 15% year-over-year, and we expect Med Device sales to be roughly flat.

Speaker #3: For fiscal '27, we expect gross margin to be in the range of 54% to 55%. We expect adjusted EBITDA to be in the range of $13 million to $16 million.

Speaker #3: And finally, we expect adjusted loss per share in the range of $0.29 to $0.24. We expect the impact from tariffs to be broadly similar to fiscal '26, based on our current view of the tariff situation, but this remains dynamic and clearly subject to change.

Steve Trowbridge: We expect the impact from tariffs to be broadly similar to fiscal 2026 based on our current view of the tariff situation, but this remains dynamic and clearly subject to change. With that, I'll turn it back to Jim.

Speaker #3: So, with that, I'll turn it back to Jim.

Speaker #1: Thanks, Steve. Before we close, I'd like to say a word about our leadership transition. Leading AngioDynamics has been the privilege of my career, and I'm incredibly proud of what our team has built together over the past 10 years.

Jim Clemmer: Thanks, Steve. Before we close, I'd like to say a word about our leadership transition. Leading AngioDynamics has been the privilege of my career, and I'm incredibly proud of what our team has built together over the past 10 years. Together, we set a clear direction, built a strategy to transform this company, and created a robust product portfolio that competes and wins in large, important markets. It has not been easy, but this team has done it, and I'm very confident that our strength will carry forward. I have full confidence in Eric and in our organization's ability to keep executing at a high level through this transition. With that, operator, let's open the line for questions.

Speaker #1: Together, we set a clear direction, built a strategy to transform this company, and created a robust product portfolio that competes and wins in large, important markets.

Speaker #1: It has not been easy, but this team has done it, and I'm very confident that our strength will carry forward. I have full confidence in Eric and in our organization's ability to keep executing at a high level through this transition.

Speaker #1: With that, Operator, let's open the line for questions.

Speaker #2: Thank you. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Operator 2: Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Frank Takkinen with Lake Street Capital Markets. Please proceed with your question.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Frank Takkinen with Lake Street Capital Markets. Please proceed with your question.

Speaker #2: You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker #2: Our first question comes from the line of Frank Takkanen with Lake Street Capital Markets. Please proceed with your question.

Speaker #4: Great. Thank you for taking the questions and congrats on the progress and the new CEO appointment. On NanoKnife, I'd like to follow up on how you guys think about, once the equipment is placed, the timeline to really scaling to a higher utilization rate?

Frank Takkinen: Great. Thank you for taking the questions and congrats on the progress and the new CEO appointment. On NanoKnife, I would like to follow up on how you guys think about once the equipment is placed in the timeline to really scaling to a higher utilization rate. Obviously, fiscal Q4 had a really nice placement quarter, and then you had a nice placement quarter in fiscal Q1 again. How should we think about when these systems might start to really contribute to the disposables business and that ramp-up expectation?

Speaker #4: Obviously, fiscal Q4 had a really nice placement quarter, and then you had a nice placement quarter in fiscal Q1 again. How should we think about when these systems might start to really contribute to the disposables business, and what is the ramp-up expectation?

Speaker #5: Hey, good morning, Frank. This is Steve. Thanks for the question. So, I think capital placement is a good way to think about driving NanoKnife, but we think that the better way to think about it is disposable growth.

Steve Trowbridge: Hey, good morning, Frank. This is Steve. Thanks for the question. I think capital placement is a good way to think about driving NanoKnife, but we think that the better way to think about it is disposable growth. As we have talked about before, we have got a number of different placement models with NanoKnife, particularly in the prostate space. We are continuing to sell systems. We are also placing systems during the quarter, getting them in the hands of urologists. As we have said in the past, we do not want access to capital to be a governor on whether or not a urologist chooses NanoKnife for their practice. So we have been very pleased with the pace of capital sales that we have seen over the course of the last six, eight quarters, as we have talked about. You are right, Q4 was a very strong capital quarter. Q1 was another strong capital sales quarter.

Speaker #5: As we've talked about before, we have a number of different placement models with NanoKnife, particularly in the prostate space. We're continuing to sell systems.

Speaker #5: We're also placing systems during the quarter, getting them in the hands of urologists. As we've said in the past, we don't want access to capital to be a governor on whether or not a urologist chooses NanoKnife for their practice.

Steve Trowbridge: As we have said in the past, we do not want access to capital to be a governor on whether or not a urologist chooses NanoKnife for their practice. So we have been very pleased with the pace of capital sales that we have seen over the course of the last six, eight quarters, as we have talked about. You are right, Q4 was a very strong capital quarter. Q1 was another strong capital sales quarter.

Speaker #5: So, we've been very pleased with the pace of capital sales that we've seen over the course of the last six to eight quarters, as we've talked about.

Speaker #5: You're right. Q4 was a very strong capital quarter. Q1 was another strong capital sales quarter. But we think that the right way to look at this business is the disposable sales.

Steve Trowbridge: We think that the right way to look at this business is the disposable sales. And we have been really pleased with the trajectory of the disposable sale growth that we have seen sequentially as well as year over year. Yes, utilization is a good way to think about it, but utilization is going to be variable from system to system, dependent upon where we place it, if it is going into a system that has had experience with NanoKnife in the past. As Jim talked about, there is variability in the pace of adoption based upon reimbursement in that particular area. We have been very pleased with what we have seen since we got the CPT I code and certainly with the Palmetto MAC decision that we talked about last quarter. All of that is trending in the right direction.

Speaker #5: And we've been really pleased with the trajectory of disposable sale growth that we've seen sequentially, as well as year over year. So yes, utilization is a good way to think about it, but utilization is going to be variable from system to system depending upon where we place it. If it's going into a system that has had experience with NanoKnife in the past, as Jim talked about, there's variability in the pace of adoption based upon reimbursement in that particular area.

Speaker #5: We've been very pleased with what we've seen since we got the CPT-1 code, and certainly with the Palmetto MAC decision that we talked about last quarter.

Speaker #5: So all of that is trending in the right direction. We think they're all showing very healthy signs for NanoKnife, starting with capital sales, but more importantly, looking at those disposable sales.

Steve Trowbridge: We think they're all showing very healthy signs for NanoKnife, starting with capital sales, but more importantly, looking at those disposable sales.

Speaker #4: Very helpful. Maybe on mechanical thrombectomy—I know we've talked in the past about some of the commercial enhancements you guys have implemented. Over the last few quarters, maybe you could give us an update on some of those, and whether or not those were drivers for the quarter, or if we're still waiting for some of the new heads to start contributing, and could see that as a second half contribution in the mechanical thrombectomy business.

Frank Takkinen: Very helpful. Maybe on mechanical thrombectomy, I know we've talked about in the past some of the commercial enhancements you guys have implemented over the last few quarters. Maybe an update on some of those and whether or not those were kind of drivers in the quarter, or if we're still waiting for some of the new heads to start contributing, and we could see that as a second half contribution in the mechanical thrombectomy business.

Speaker #5: Yeah. Frank, we expect mechanical thrombectomy to continue to grow, as we've talked about coming into this year. We're really excited about the combined ANGIOVAC and ALPHAVAC business together.

Steve Trowbridge: Yeah, Frank, we expect mechanical thrombectomy to continue to grow. As we've talked about coming into this year, we're really excited about the combined AngioVac AlphaVac business together. We think AngioVac is a little bit more niche right now. We expect that to be kind of in the single digit growth, and we expect AlphaVac to really be driving that growth. We're definitely seeing the contributions from some of those changes that we made in the commercial organization. I expect those to continue. We're also just seeing continued enthusiasm for physicians who have got their hands on our product. As Jim said in the past, we really believe we've got the best product out there, and the more that we can get that product in the hands of physicians, they're going to choose AlphaVac for PE.

Speaker #5: We think AngioVac is a little bit more niche right now. We expect that to be in the single-digit growth range, and we expect AlphaVac to really be driving that growth.

Speaker #5: We're definitely seeing the contributions from some of those changes that we made in the commercial organization. I expect those to continue. We're also just seeing continued enthusiasm from physicians who have gotten their hands on our product.

Speaker #5: As Jim said in the past, we really believe we've got the best product out there. The more we can get that product into the hands of physicians, they're going to choose ALPHAVAC for PE, and they're going to choose ANGIOVAC for those cases where ANGIOVAC is the right product line.

Steve Trowbridge: They're going to choose AngioVac for those cases where AngioVac is the right product line. Yeah, I expect to see continued benefits coming from all of the changes we're making in the commercial organization. But as we continue to just get more products in the hands of physicians, we expect that to also be a catalyst for growth. We mentioned in the prepared remarks, we're really excited about the pace of our AlphaReturn IDE enrollment to add blood return as another option to this product line. The continued development of the products, the line extensions, getting more people time in the sales organization, and just getting more products in the hands of physicians are all going to continue to contribute to that growth over the course of this year.

Speaker #5: So, yeah, I expect to see continued benefits coming from all of the changes we're making in the commercial organization. As we continue to get more products in the hands of physicians, we expect that to also be a catalyst for growth.

Speaker #5: We mentioned in the prepared remarks, we're really excited about the pace of our Alpha Return IDE enrollment. To add Blood Return as another option to this product line.

Speaker #5: So the continued development of the products, the line extensions, getting more people time in the sales organization, and just getting more products in the hands of physicians are all going to continue to contribute to that growth over the course of this year.

Speaker #4: Very helpful. And then, if I could just squeeze one more in, maybe related to cash usage. Obviously, fiscal Q1 is your highest cash usage quarter of the year.

Frank Takkinen: Very helpful. If I could just squeeze one more in, maybe related to cash usage. Obviously, fiscal Q1 is your highest cash usage quarter of the year. However, I think if you look back at last year, you used a little bit less cash on a little bit less revenue, and this year a little more revenue, but a little more cash usage. Can you maybe talk about some of the moving pieces related to that, and then maybe how we should think about cash generation through the end of the year? Thanks.

Speaker #4: However, I think if you look back at last year, you used a little bit less cash on a little bit less revenue. In this year, a little more revenue, but a little more cash usage.

Speaker #4: Maybe you could talk about some of the moving pieces related to that, and then how we should think about cash generation through the end of the year.

Speaker #4: Thanks.

Speaker #5: Yeah, in general, I wouldn't say that there was a very big difference in this quarter versus where we've been historically. Q1 is always the largest utilization of cash quarter for us, and that comes from things like incentive compensation, sales compensation that gets paid in the quarter. Tariffs are something new that's been added the last two years.

Steve Trowbridge: Yeah. In general, I wouldn't say that there was a very big difference in this quarter versus where we've been historically. Q1 is always the largest utilization of cash quarter for us, and that comes from things like incentive compensation, sales compensation that gets paid in the quarter, tariffs that are something new that's been added the last 2 years. So in general, you should think of cash utilization as being pretty consistent historically. So what that means is, expect Q1 to be the largest utilization, expect Q2 and Q3 to not have that level of utilization. Sometimes we generate a little bit of cash. Maybe it's flat Q2 and Q3, with then Q4 being the largest generation of quarter moving forward. I would expect that same cadence to continue this year.

Speaker #5: So, in general, you should think of cash utilization as being pretty consistent historically. What that means is, expect Q1 to be the largest utilization; expect Q2 and Q3 to not have that level of utilization.

Speaker #5: Sometimes we generate a little bit of cash. Maybe it's flat in Q2 and Q3, with Q4 being the largest quarter for cash generation moving forward. I would expect that same cadence to continue this year.

Speaker #5: And then, as we mentioned, we expect to be generating positive cash flow from operations for this full fiscal year.

Steve Trowbridge: As we mentioned, we expect to be generating positive cash flow from operations for this full fiscal year.

Speaker #4: Perfect. Thank you for taking the questions. Congrats again.

Frank Takkinen: Perfect. Thank you for taking the questions. Congrats again.

Speaker #5: Thanks, Frank.

Steve Trowbridge: Thanks, Greg.

Speaker #2: Thank you. Our next question comes from the line of John Young with Canaccord Genuity. Please proceed with your question.

Operator 2: Thank you. Our next question comes from the line of John Young with Canaccord Genuity. Please proceed with your question.

Operator: Thank you. Our next question comes from the line of John Young with Canaccord Genuity. Please proceed with your question.

Speaker #6: Hey, Genuity. Congratulations on the quarter, and Jim, congratulations again on the past 10 years, and best wishes for your retirement. I also wanted to talk about the mechanical thrombectomy business with you guys.

John Young: Hey, Jim and Steve. Congratulations on the quarter, and Jim, congratulations again on the past 10 years and best wishes for your retirement. I also wanted to talk about the mechanical thrombectomy business with you guys. Any color just on the number of new accounts that you opened on the quarter, and how we should think about growth in this quarter from new accounts versus existing accounts. Have you been able to take any advantage of some of the disruptions that continue to occur in this space?

Speaker #6: Any color just on the number of new accounts that you opened in the quarter, and how we should think about growth this quarter from new accounts versus existing accounts?

Speaker #6: And have you been able to take any advantage of some of the disruptions that continue to occur in this space?

Speaker #3: Yeah. Hi, John. Good question. So we measure new business through different angles here in this space: through new competitive conversions, through doctors who have come online to use it, how they go up—kind of the same sort of sales approach.

Jim Clemmer: Yeah. Hi, John. Good question. We measure new business through different angles here in this space, through new competitive conversions, through doctors who have come online to use it, how they go up, kind of the same store sales approach. We measure how many hospitals put us through their value analysis process and get us into stock as well on the shelf next to maybe competitive products. Each of those are trending in the right direction. The sales force additions we talked to you about we made earlier this year, the people are now trained, up to speed, and they are contributing to each of those things. So we have more doctors coming on using our device, more doctors using it in the same accounts, and then more people who have it in stock on the shelf. So we are really pleased.

Speaker #3: We measure how many hospitals put us through their value analysis process and get us into stock, as well as on the shelf, next to maybe competitive products.

Speaker #3: So, each of those are trending in the right direction. The sales force additions we talked to you about—we made earlier this year—those people are now trained up to speed.

Speaker #3: And they're contributing to each of those things. So, we have more doctors coming on using our device, more doctors using it in the same accounts, and then more people who have it in stock on the shelves.

Speaker #3: So we're really pleased. We measure each of those very carefully, and we're building up to what we hope will be the Alpha Return project getting on label early next calendar year.

Jim Clemmer: We measure each of those very carefully and building up to what we hope will be the AlphaReturn project getting on label early next calendar year. As Steve mentioned earlier, we are pleased with the pace of enrollment, and we expect that to come on. That will just take down one more hurdle that some marketplace has for us. We are managing our company, John. We watch the market really carefully. We have good competitors in the space, as you know, and there has been disruption at those competitors. That we cannot control. We watch, but we want to make sure we are the best Angio that we can be.

Speaker #3: As Steve mentioned earlier, we're pleased with the pace of enrollment, and we expect that to come on. That'll just take that one more hurdle that some marketplace has for us.

Speaker #3: But we're managing our company, John. We watch the market really carefully. We've got good competitors in the space, as you know, and there's been disruption at those competitors.

Speaker #3: That we can't control. We watch. But we want to make sure we're the best ANGIO that we can be. So we continually build upon how we make our company better, what we bring to the physicians as a value prop—better—and we'll monitor the disruption other places.

Jim Clemmer: We continually build upon how we make our company better, what we bring to the physicians as a value prop better, and we will monitor the disruption other places, but we think we are going to win on our game as well, irrespective of our competitors.

Speaker #3: But we think we're going to win in our game as well, irrespective of our competitors.

Speaker #6: Okay, that's great to hear. And then just on that, I have disposables in the quarter down 20% from the last May quarter, sequentially.

John Young: Okay, that is great to hear. Just on NanoKnife disposables in the quarter, down 20% from the last May quarter sequentially. Is that heightened seasonality of just a larger base of business now? Was there stocking the last fiscal quarter? Maybe how did the results compare to your internal expectations? Can you just talk about any differences you are seeing in the business on the disposal side between sell-in and sell-through? Thank you.

Speaker #6: Is that heightened seasonality or just a larger base of business now? Was there stocking in the last fiscal quarter? And maybe, how did the results compare to your internal expectations?

Speaker #6: And can you just talk about any differences you're seeing in the business on the disposable side between sell-in and sell-through? Thank you.

Speaker #5: Yeah, John, thanks for the question. We're really excited about the trajectory we're seeing with NanoKnife, and this business is a little bit more mature than some of the other growth businesses.

Steve Trowbridge: Yeah, John, thanks for the question. We are really excited about the trajectory we are seeing with NanoKnife. This business is a little bit more mature than some of the other growth businesses. So there is seasonality that you are going to see. Q4 for us is always our highest quarter. It is pretty typical in the MedDevice business, you see that. So we were not expecting that we were going to see growth off of where we ended Q4. With your question to was there stocking and the throughput, I do not think that that is a material piece that we are seeing here. There is always going to be fluctuations in terms of selling and using. In a growth business, we want to be selling ahead of the curve. We want to make sure that those products are on the shelf for physicians so that they can use it when those patients come in.

Speaker #5: So there is seasonality that you're going to see. Q4 for us is always our highest quarter. It's pretty typical in the med device business.

Speaker #5: You see that. So, we weren't expecting that we were going to see growth off of where we ended Q4. With your question, too, was there stocking and the throughput—I don't think that that's a material piece that we're seeing here.

Steve Trowbridge: With your question to was there stocking and the throughput, I do not think that that is a material piece that we are seeing here. There is always going to be fluctuations in terms of selling and using. In a growth business, we want to be selling ahead of the curve. We want to make sure that those products are on the shelf for physicians so that they can use it when those patients come in.

Speaker #5: There's always going to be fluctuations in terms of selling and using. In a growth business, we want to be selling ahead of the curve.

Speaker #5: We want to make sure that those products are on the shelf for physicians, so that they can use them when those patients come in.

Speaker #5: We track the procedure volume every month, and we've been seeing consistent records that we're setting in terms of prostate procedures every month. Q1, we had larger procedure volume than what we saw in Q4.

Steve Trowbridge: We track the procedure volume every month, and we have been seeing consistent records that we are setting in terms of prostate procedures every month. Q1, we had larger procedure volume than what we saw in Q4. You see those procedures upticking. I think that is the right way to think about the business. There is going to be a little bit of seasonality. Q4 being the highest quarter, usually Q1 a little bit down from Q4. Usually Q2 is a step up from Q1, with Q3 being our softest quarter because structurally that includes December, January, and February. It is kind of a tough structural quarter there. Put that aside, we are really excited about what we are seeing with NanoKnife. Continued procedure growth, new physicians that are coming on adopting this technology, physicians that have already adopted it continuing to lean in and use it more.

Speaker #5: So you see those procedures upticking. I think that's the right way to think about the business. So, there is going to be a little bit of seasonality.

Speaker #5: Q4 is typically the highest quarter. Usually, Q1 is a little bit down from Q4, and Q2 is a step up from Q1. Q3 tends to be our softest quarter because, structurally, it includes December, January, and February.

Speaker #5: So, it's kind of a tough structural quarter there. Put that aside, we're really excited about what we're seeing with NanoKnife—continued procedure growth, new physicians that are coming on and adopting this technology, physicians that have already adopted it continuing to lean in and use it more, and good decisions that we're seeing on the reimbursement front.

Steve Trowbridge: Good decisions that we are seeing on the reimbursement front. Of course, it is not mission accomplished there yet. There is a lot of work for us to do to continue to make sure that there is consistent, reliable reimbursement across the country. But what we have seen so far have all been very positive.

Speaker #5: Of course, it's not mission accomplished there yet. There's a lot of work for us to do to continue to make sure that there's consistent, reliable reimbursement across the country.

Speaker #5: But what we've seen so far has all been very positive.

Speaker #6: Okay, great. And then just one more, if I could. I understand the gross margins and that the quarter benefited from tariffs, but even on the adjusted basis that you called out, what drove increases beyond that?

John Young: Okay, great. Just one more if I could. I understand the gross margins in the quarter benefited from tariffs, but even on the adjusted basis that you called out, what drove increases beyond that? Are there any other one-times versus just lasting benefits that you are seeing? Is Costa Rica fully contributing at this point and baking into the guidance? Thanks.

Speaker #6: Are there any other one-time versus just lasting benefits that you're seeing? And is Costa Rica fully contributing at this point and baked into the guidance?

Speaker #6: Thanks.

Speaker #5: Yeah, so gross margin—we were pleased with what we saw in Q1. And you had mentioned the tariffs. I do think the right way to think about gross margin is to probably take out that tariff refund that we saw in the quarter.

Steve Trowbridge: Yeah. Gross margin, we were pleased with what we saw in Q1. You had mentioned the tariffs. I do think the right way to think about gross margin is to probably take out that tariff refund that we saw in the quarter. We expect to continue to get more tariff refunds going forward. I just do not know when they are going to come in, so that 57.8% as opposed to the 59%, I think that is the right way to think about it as a baseline. One of the things that we have talked about historically is we do have a little bit of a structural impact on gross margin, where the first half of the year is going to be a little bit higher than the back half. That is just the way that you account for the rising cost environment.

Speaker #5: We expect to continue to get more tariff refunds going forward. I just don't know when they're going to come in. So that $57.8 million, as opposed to the $59 million, I think that's the right way to think about it as a baseline.

Speaker #5: One of the things that we talked about historically is that we do have a little bit of a structural impact on gross margin, where the first half of the year is going to be a little bit higher than the back half.

Speaker #5: That's just the way that you account for the rising cost environment. So that's why we said we still expect guidance for gross margin to come in for the full year in that 55 to 56 range.

Steve Trowbridge: So that's why we said, we still expect guidance for gross margin to come in the full year in that 55% to 56%. But really to get to your question, the underlying gross margin trajectory is very strong. We are seeing the benefit from price that we talked about, particularly in the MedDevice business, and then that mix shift. So as the MedTech higher margin products become a larger portion of our overall revenue base, we are seeing that continue to build in and drive gross margins. The benefit of Costa Rica is in what we are seeing. We have talked about the fact that we were able to accelerate some of those cost savings over the course of the last six quarters or so. So you have seen that kind of starting to get into the base, and that can be a nice catalyst as we continue to move forward.

Speaker #5: But really, to get to your question, yeah, the underlying gross margin trajectory is very strong. We're seeing the benefit from price that we talked about, particularly in the device business, and then that mix shift.

Speaker #5: So, as the med tech, higher-margin products become a larger portion of our overall revenue base, we're seeing that continue to build in and drive gross margins.

Speaker #5: The benefit of Costa Rica is in what we're seeing. We've talked about the fact that we were able to accelerate some of those cost savings over the course of the last six quarters or so.

Steve Trowbridge: The benefit of Costa Rica is in what we are seeing. We have talked about the fact that we were able to accelerate some of those cost savings over the course of the last six quarters or so. So you have seen that kind of starting to get into the base, and that can be a nice catalyst as we continue to move forward.

Speaker #5: So you've seen that kind of starting to get into the base, and that can be a nice catalyst as we continue to move forward.

Speaker #5: So, we like what we're seeing in gross margin, definitely. It's all part of the strategy that we put in place. The long-term driver is going to be that mix shift that we're seeing the benefit for.

Steve Trowbridge: So we like what we are seeing in gross margin. Definitely, it is all part of the strategy that we have put in place. The long-term driver is going to be that mix shift that we are seeing the benefit for. You have got noise with tariffs, you got noise with some of the rising cost environment. But as you eliminate that gross margin accretion story is really taking hold.

Speaker #5: You've got noise with tariffs. You've got noise with some of the rising cost environment. But as you eliminate that, the gross margin accretion story is really taking hold.

Speaker #6: Thanks again.

John Young: Thanks again.

Speaker #1: Thank you. Our next question comes from Line Fu Chen with HC Wainwright. Please proceed with your question.

Operator 2: Thank you. Our next question comes from the line of Yi Chen with H.C. Wainwright. Please proceed with your question.

Operator: Thank you. Our next question comes from the line of Yi Chen with H.C. Wainwright. Please proceed with your question.

Speaker #7: Hi, good morning. This is Katie on for Yi. Looking at Relief, what does that program need to demonstrate for you to commit to a larger BPH program?

[Analyst] (H.C. Wainwright): Hi. Good morning. This is Katie on for Yi. Looking at RELIEF, what does that program need to demonstrate for you to commit to a larger BPH program? Symptom improvement, durability? What are you guys looking for? If it meets that threshold, would the next stage fit within your existing R&D spending framework or require a step up?

Speaker #7: Symptom improvement, durability—what are you guys looking for? And if it meets that threshold, would the next stage fit within your existing RNA spending framework, or require a step-up?

Speaker #5: Yeah. In terms of relief and using NanoKnife to treat BPH, we're excited about that opportunity. One of the things that we've always talked about is the fact that our med tech product portfolio is made up of three legs to a stool there.

Steve Trowbridge: Yeah, in terms of RELIEF and using NanoKnife to treat BPH, we are excited about that opportunity. One of the things that we have always talked about is the fact that our MedTech product portfolio is made up of three legs to a stool there, and every one of those legs is a platform opportunity. We are really excited about the opportunity to take AngioVac and AlphaVac to go into PE and then maybe take AngioVac onto the left side, where we think we have got a right to win and can really address an unmet clinical need. We are excited about Auryon and how it can work in the peripheral, and we have talked about taking the steps to now take Auryon and go into a coronary space. NanoKnife and BPH is that potential platform opportunity for us. We are certainly early stages.

Speaker #5: And every one of those legs is a platform opportunity. So we're really excited about the opportunity to take AngioVac and AlphaVac to go into PE, and then maybe take AngioVac onto the left side, where we think we've got a right to win and can really address an unmet clinical need.

Speaker #5: We're excited about Arion and how it can work in the peripheral. We've also talked about taking steps to now take Arion and move into the coronary space.

Speaker #5: NanoKnife BPH is that potential platform opportunity for us. We're still in the early stages. I think it's important for us to do the work to understand how NanoKnife impacts the tissue when it comes to BPH. Durability, that you mentioned, is going to be a question for us.

Steve Trowbridge: I think it is important for us to do the work to understand how does NanoKnife impact the tissue when it comes to BPH. Durability that you mentioned is going to be a question for us. I do not think our pilot study is going to answer the durability, but it is something that we are going to continue to be focused on as we build out the business case here. RELIEF is really an opportunity for us to do the early stage work, take NanoKnife, start to build out that business case of moving into that longer-term platform opportunity into BPH.

Speaker #5: I don't think our pilot study is going to answer the durability, but it's something that we're going to continue to be focused on as we build out the business case here.

Speaker #5: So, Relief is really an opportunity for us to do the early-stage work, take NanoKnife, start to build out that business case of moving into that longer-term platform opportunity into BPH.

Speaker #7: Great. Thank you.

[Analyst] (H.C. Wainwright): Great. Thank you.

Speaker #5: I'm sorry. Just to answer your question on the R&D, we've talked about targeting around 10% of sales for R&D going forward. And that's inclusive of the growth that we expect to see, particularly driven by Med Tech over the course of our strategic planning horizon.

Steve Trowbridge: Sorry, just to answer your question on the R&D. We have talked about targeting around 10% of sales for R&D going forward, and that is inclusive of the growth that we expect to see, particularly driven by MedTech over the course of our strategic planning horizon. I do not look right now as BPH as something that is going to dramatically change our overall P&L. We are looking to take all of our opportunities and kind of fit it within that 10% target that we have for R&D going forward.

Speaker #5: So, I don't look right now at BPH as something that's going to dramatically change our overall P&L. We're looking to take all of our opportunities and kind of fit them within that 10% target that we have for R&D going forward.

Speaker #7: Thank you.

[Analyst] (H.C. Wainwright): Thank you.

Speaker #1: Thank you. Ladies and gentlemen, as a reminder, if you'd like to join the question queue, please press star one on your telephone keypad. Our next question comes from the line of Ireland Kanatsky with Freedom Broker.

Operator 2: Thank you. Ladies and gentlemen, as a reminder, if you would like to join the question queue, please press star one on your telephone keypad. Our next question comes from the line of Arlen Kanatsky with Freedom Broker. Please proceed with your question.

Operator: Thank you. Ladies and gentlemen, as a reminder, if you would like to join the question queue, please press star one on your telephone keypad. Our next question comes from the line of Arlen Kanatsky with Freedom Broker. Please proceed with your question.

Speaker #1: Please proceed with your question.

Speaker #8: Hi, thanks for taking my question, and congrats on a strong start to the year. Jim, congrats on the retirement and on everything you've built over the last 10 years.

Arlen Kanatsky: Hi. Thanks for taking my question, and congrats on a strong start to the year. Jim, congrats on the retirement and on everything you have built over the last 10 years, and welcome to Eric. I wanted to ask about two things, if that is okay.

Aralyn Konotzky: Hi. Thanks for taking my question, and congrats on a strong start to the year. Jim, congrats on the retirement and on everything you have built over the last 10 years, and welcome to Eric. I wanted to ask about two things, if that is okay.

Speaker #8: And welcome to Eric. I wanted to ask about two things, if that's okay.

Speaker #5: Sure.

Jim Clemmer: Sure.

Speaker #8: First, on Arion, as more peripheral cases move into office-based labs, has that changed how you go to market? I'm also curious whether those customers behave differently from hospital accounts.

Arlen Kanatsky: First on Auryon, as more peripheral cases move into office-based labs, has that changed how you go to market? I am also curious whether those customers behave differently from hospital accounts. Are they more price sensitive, or do they tend to be more loyal once they adopt?

Aralyn Konotzky: First on Auryon, as more peripheral cases move into office-based labs, has that changed how you go to market? I am also curious whether those customers behave differently from hospital accounts. Are they more price sensitive, or do they tend to be more loyal once they adopt?

Speaker #8: Are they more price-sensitive, or do they tend to be more loyal once they adopt?

Speaker #5: So, great question. I'll remind you, we launched Arion in the marketplace in September of 2020. If you look back, that was six months after the COVID interruption that affected all of our lives.

Jim Clemmer: So great question. I will remind you, we launched Auryon in the marketplace in September 2020. If you look back, that was six months after the COVID interruption that all of our lives affected. So launching Auryon then required us to spend most of our initial launch with the office-based lab customers because many hospitals were closed for business for new products. They had to deal with the pandemic challenges they had internally. So we got a lot of experience out of the gate building our business around the office-based lab customer, learned what is important to them, and how we grew that business very rapidly. So we understand that marketplace. A lot of the clinical needs are the same in the hospital or in the OBLs. Economically, it is a little different story.

Speaker #5: So, launching Arion then required us to spend most of our initial launch with the office-based lab customers, because many hospitals were kind of closed for business for new products.

Speaker #5: They had to deal with the pandemic challenges they had internally. So, we got a lot of experience out of the gate building our business around the office-based lab customer, learned what's important to them, and how we grew that business very rapidly.

Speaker #5: So we understand that marketplace. A lot of the clinical needs are the same in the hospital or in the OBLs. Economically, it's a little different story.

Speaker #5: So, a couple of years ago, when the hospitals more or less reopened for business again, we talked to you about our shift and our intention to have our sales reps focus on that business.

Jim Clemmer: So a couple of years ago, when the hospitals more or less reopened for business again, we talked to you about our shift and our intention to have our sales reps focus on that business, and you have seen what we have done since then. Seeing a really great growth in the hospital business. So over time, what you should expect from us is a good balance between both. Both are important to us. There is different economics in both. We understand both. Clinically, again, we win in both, and we are taking share from the other five players in this space in both of those settings. Due to what Auryon brings scientifically, clinically, how it works, the safety, the effectiveness, the only product that can do in stent restenosis treatment, work above the knee and below the knee.

Speaker #5: And you've seen what we've done since then, seeing really great growth in the hospital business. So, over time, what you should expect from us is a good balance between both.

Speaker #5: Both are important to us. There are different economics in both. We understand both. Clinically, again, we win in both. And we're taking share from the other five players in this space in both of those settings.

Speaker #5: Due to what Arion brings—scientifically, clinically, how it works, the safety, the effectiveness—it's the only product that can do instant restenosis treatment and work both above the knee and below the knee.

Speaker #5: So we're really, really versatile for our customers, and that's really important to office-based labs, especially when they have economic challenges, space challenges, and can't have a lot of other products on the shelf.

Jim Clemmer: So we are really, really versatile for our customers, and that is really important to office-based labs, and especially when they have economic challenges, space challenges, and cannot have a lot of other products on the shelf. And we are finding also some of those correlate in the hospital as well. So great question. Continue to follow us. You will see growth continue in both of those care settings.

Speaker #5: And we're finding also some of those correlate in the hospital as well. So, great question. Continue to follow us; you'll see growth continue in both of those care settings.

Speaker #8: Thank you so much. And second question on the NanoKnife facade: Could you give us a sense of who's adopting as well right now? Is it mostly academic urology centers within IRE Champion, or are you starting to see community urologists come on board?

Arlen Kanatsky: Thank you so much. Second question on NanoKnife per se. Could you give us a sense of who is adopting as well right now? Is it mostly academic urology centers with an IRE champion, or are you starting to see community urologists come on board? Also related to that, when a site buys the generator but takes a while to reach steady procedure volume, what is usually holding it back? Thank you.

Aralyn Konotzky: Thank you so much. Second question on NanoKnife per se. Could you give us a sense of who is adopting as well right now? Is it mostly academic urology centers with an IRE champion, or are you starting to see community urologists come on board? Also related to that, when a site buys the generator but takes a while to reach steady procedure volume, what is usually holding it back? Thank you.

Speaker #8: And also related to that, when a side buys a generator but takes a while to reach steady procedure volume, what's usually holding it back?

Speaker #8: Thank you.

Speaker #5: Yeah, so starting on the first question, what's driving NanoKnife results these days is prostate. So it's urologists, and it's choosing NanoKnife to treat prostate.

Steve Trowbridge: Yeah. Starting on the first question, what is driving NanoKnife results these days is prostate. So it is urologists and it is choosing NanoKnife to treat prostate. Prostate is by far the highest organ that is being treated. That flipped maybe a handful of quarters ago. There is a difference between when we used to be focused in the hepatobiliary side for pancreatic cancer, liver cancer, and what we are seeing with physicians who are treating prostate cancer. The prostate cancer treatment is not something that is concentrated in the university settings. It is something that is being done in a lot of those regional hospitals and the other hospital setting. It is one of the reasons why we think it is a better business opportunity for us.

Speaker #5: Prostate is by far the organ that is being treated most. That flipped maybe a few handful of quarters ago. And there is a difference between when we used to be focused on the hepatobiliary side for pancreatic cancer, liver cancer, and what we're seeing with physicians who are treating prostate cancer.

Speaker #5: The prostate cancer treatment is not something that is concentrated in the university settings. It is something that is being done in a lot of those regional hospitals and the other hospital setting.

Speaker #5: It's one of the reasons why we think it's a better business opportunity for us. There's an opportunity for us to get more systems out there, to have more physicians doing it, as opposed to being concentrated in some of those university settings.

Steve Trowbridge: There is an opportunity for us to get more systems out there to have more physicians doing it, as opposed to being concentrated in some of those university settings. So we are seeing that through the prostate move, and that is what is driving NanoKnife as we go forward, and that is where our focus is going to be. We want to continue to drive NanoKnife utilization, particularly in the United States, in prostate. In international markets, it is a little bit more balanced. We are seeing growth within prostate, but then there is also a lot of growth in utilization coming from folks who had done some of those liver and pancreatic treatments. NanoKnife is a great technology. There are opportunities for us in almost any solid tumor basis. But you think about our strategy, we are focusing primarily US on prostate and then supporting the use of NanoKnife as we think globally.

Speaker #5: So we're seeing that through the prostate move, and that's what's driving NanoKnife as we go forward. That's where our focus is going to be.

Speaker #5: We want to continue to drive NanoKnife utilization, particularly in the United States, in prostate. Now, in the international market, it's a little bit more balanced.

Steve Trowbridge: In international markets, it is a little bit more balanced. We are seeing growth within prostate, but then there is also a lot of growth in utilization coming from folks who had done some of those liver and pancreatic treatments. NanoKnife is a great technology. There are opportunities for us in almost any solid tumor basis. But you think about our strategy, we are focusing primarily US on prostate and then supporting the use of NanoKnife as we think globally.

Speaker #5: We're seeing growth within prostate, but then there's also a lot of growth in utilization coming from folks who had done some of those liver and pancreatic treatments.

Speaker #5: NanoKnife is a great technology. There are opportunities for us in almost any solid tumor basis. But if you think about our strategy, we're focusing primarily in the U.S. on prostate and then supporting the use of NanoKnife as we think globally.

Speaker #5: And so we're excited about what we're seeing there. That's where the growth is coming from. On your question about what stops someone from really getting a utilization, it is a little bit specific to each individual physician.

Steve Trowbridge: We are excited about what we are seeing there. That is where the growth is coming from. On your question about what stops someone from really getting up utilization, it is a little bit specific to each individual physician. For folks who are buying the system, that is a great sign that they are very committed to NanoKnife as part of their practice. One of the things we have also talked about, particularly in that urology setting, is making sure that we have got alternative placement models so that we can get capital into the hands of physicians so they can start doing those procedures. I think what we are seeing is it is a lot of factors that go into physicians who are building up their business. It starts with getting access to the capital, it starts with what is best for the patient, right?

Speaker #5: For folks who are buying the system, that's a great sign that they're very committed to NanoKnife as part of their practice. One of the things we've also talked about, particularly in that urology setting, is making sure that we've got alternative placement models so that we can get capital into the hands of physicians so they can start doing those procedures.

Speaker #5: I think what we're seeing is that a lot of factors go into physicians who are building up their business. It starts with getting access to capital.

Speaker #5: It starts with what's best for the patient, right? And they're choosing NanoKnife because they know that NanoKnife can avoid quality-of-life side effects and achieve really good outcomes for their patients.

Steve Trowbridge: They are choosing NanoKnife because they know that NanoKnife can avoid quality of life side effects and get to really good outcomes for their patients. Last quarter, we talked about putting out our two-year follow-up data coming out of PRESERVE, being really excited about the fact that there was zero additional incidents of recurrence coming out of NanoKnife. So we know it is good for patients. They can get access to the capital, they can treat their patients, and then get reimbursement. That is why we have talked a lot about the work that we have done on reimbursement to provide that foundation for physicians. All of those things working together are what helps drive a physician to really build their practice, and we like what we are seeing.

Speaker #5: Last quarter, we talked about putting out our two-year follow-up data coming out of PRESERVE, being really excited about the fact that there were zero additional incidents of recurrence coming out of NanoKnife.

Speaker #5: So we know it's good for patients. They can get access to the capital. They can treat their patients. And then get reimbursement. And that's why we've talked a lot about the work that we've done on reimbursement to provide that foundation for physicians.

Speaker #5: So all of those things working together are what helps drive a physician to really build their practice, and we like what we're seeing.

Speaker #8: Thank you so much, and congrats again.

Arlen Kanatsky: Thank you so much, and congrats again.

Aralyn Konotzky: Thank you so much, and congrats again.

Speaker #5: Thank you.

Steve Trowbridge: Thank you.

Speaker #1: Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll now turn the floor back to Mr. Clemer for final comments.

Operator 2: Thank you. Ladies and gentlemen, that concludes our question and answer session. I will turn the floor back to Mr. Clemmer for final comments.

Operator: Thank you. Ladies and gentlemen, that concludes our question and answer session. I will turn the floor back to Mr. Clemmer for final comments.

Speaker #5: Thank you again for joining our call. We're really pleased with the start of our fiscal year for AngioDynamics, and what you heard here today is not an accident.

Jim Clemmer: Thank you again for joining our call. We are really pleased with the start of our fiscal year for AngioDynamics. What you heard here today is not an accident, and it is not random. It is a well-planned idea that we could transform our company, starting with our portfolio changes we started to make five and six years ago. We were deliberate. We were intentional. We also tried to be very transparent with you on our journey, and you can see what we have today. Today we have a company built upon the strength of a MedDevice platform that gives us the capital and the strength and the background to invest in our MedTech platform that will be the growth engine for years to come.

Speaker #5: And it's not random. It's a well-planned idea that we could transform our company, starting with the portfolio changes we began to make five or six years ago.

Speaker #5: We were deliberate. We were intentional. We also tried to be very transparent with you on our journey. And you can see what we have today.

Speaker #5: So today, we have a company built upon the strength of a medical device platform that gives us the capital and the strength in the background to invest in our med tech platform, which will be the growth engine for years to come.

Speaker #5: Today, what we showed, I think, is that our products are winning in each of the markets that we serve—winning against really good companies and good competitors.

Jim Clemmer: Today what we showed, I think, is that our products are winning in each of the markets that we serve, winning against really good companies and good competitors. But winning because we are getting confidence in the physicians that choose to use us to treat the patients they serve. The outcomes stand alone. We have a really great company. We have new people who have joined us, brought their talents to our company, and their ambition, driven by their belief in what our mission is. I am excited to welcome Eric to our company. Hopefully you will stay with our journey. We will continue to deliver great results. Thank you again for all of my teammates and our company. Talk to you soon.

Speaker #5: But we're winning because we're gaining confidence in the physicians who choose to use us to treat the patients they serve. The outcomes speak for themselves. So we've got a really great company.

Speaker #5: We've got new people who've joined us and brought their talents to our company. Their ambition, driven by their belief in what our mission is—I’m excited to welcome Eric to our company.

Speaker #5: And hopefully, you'll stay with our journey. We'll continue to deliver great results. Thank you again to all of my teammates and our company. Talk to you soon.

Operator 2: Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Operator: Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.