AngioDynamics Inc. (ANGO), a provider of innovative, image-guided, minimally invasive solutions, recently reaffirmed its second quarter and fiscal 2015 guidance. The company also reiterated its long-term five year growth target at sales growth of 10% and gross margin of 60%.
AngioDynamics reported an impressive first quarter of 2015 beating the Zacks Consensus Estimate on both lines. The results were driven by strong growth across all three product categories, with Peripheral Vascular and Vascular Access increasing in mid-single digits and Oncology/Surgery registering double-digit growth.
For the second quarter, AngioDynamics expects adjusted earnings in the range of 14 to 17 cents per share on revenues of $89 to $92 million. For fiscal 2015, earnings are forecasted in the range of 65 to 71 cents per share on revenues of $362 to $368 million, which reflecting 3%–5% year-over-year growth.
AngioDynamics expects sales to increase 10% to reach $600 million by fiscal 2020 (up from 4% in fiscal 2014). Segment-wise, by fiscal 2020, Peripheral Vascular sales are forecasted to reach approximately $300 million ($193 million in fiscal 2014), Vascular Access sales $200 million ($106 million in fiscal 2014) and Oncology/Surgery $100 million ($49 million in fiscal 2014) in sales.
We believe that AngioDynamics’ expanding product portfolio that includes AngioVac, Bioflo and Celerity significantly enhances its market opportunities. The strong product line helps the company in offering solutions to patients suffering from venous thromboembolism (approximately 1 million events per year in the US) and varicose vein problem (approximately $80 million sales opportunity by 2020).
Celerity, which can be used with an existing ultrasound system, is significantly cost effective in finding tip location as compared to other prevalent competitive solutions. Another product – Nanoknife – is expected to improve AngioDynamics’ competitive position in the tissue ablation solution market, going forward.
Improving operating efficiency through consolidation of the N.Y. distribution center and ERP implementation is expected to result in almost $15 to $18 million in cost savings, which will help AngioDynamics reach the gross margin target. Notably, gross margin expanded 70 basis points to almost 51% in fiscal 2014.
AngioDynamics recently received a warning letter from the U.S. Food and Drug Administration (FDA) related to its Navilyst Medical facilities located in Marlborough, MA and Glens Falls, NY. However, the company does not expect it to negatively impact operations as it is committed to comply with FDA.
Nonetheless, we believe international expansion and accretive acquisitions will boost AngioDynamics’ competitive position against the likes of Boston Scientific Corp. (BSX), CR Bard Inc. (BCR) and Merit Medical Systems, Inc. (MMSI) going forward.
Currently, AngioDynamics sports a Zacks Rank #1 (Strong Buy).
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