Shares of therapeutic and diagnostic devices maker AngioDynamics (ANGO) fell following its disappointing preliminary fourth-quarter fiscal 2011 results, which trailed Street expectations. Moreover, the Queensbury, New York-based company’s President and CEO Jan Keltjens resigned effective immediately.
AngioDynamics’ shares fell $1.08 (or 7.4%) to $13.49 after the closing gong on Monday. The company is slated to release final results for the quarter on July 14.
AngioDynamics stated that it expects to post fourth quarter adjusted earnings per share of 10-11 cents on revenues of roughly $56.4 million, which is below the current corresponding consensus forecast of 14 cents and $59 million. Sales fell short of the company’s forecast of $57.5-$60.5 million, issued in April 2011.
The adjusted earnings for the fourth quarter exclude a one-time, non-cash charge of $4.2 million associated with the company’s discontinuation of a product development. On a reported basis, AngioDynamics expects to post breakeven earnings in the quarter.
For fiscal 2011, sales are expected to be flat year over year at $216 million, also below the company’s guidance of $217-$220 million.
As per the preliminary results, Oncology/Surgery sales rose roughly 11% year over year in the fourth quarter to $18.5 million. However, Vascular revenues slid 13% to $37.9 million.
Overseas sales surged 28% while domestic revenues clipped 10% in the quarter. The company’s popular tumor-zapping NanoKnife IRE system is expected to fetch sales of $2.7 million and $7.3 million in the fourth quarter and fiscal 2011, respectively.
Separately, AngioDynamics announced that Scott Solano, its senior vice president and chief technology officer, will serve as the interim CEO while the company looks for a replacement for Jan Keltjens.
AngioDynamics posted respectable results in third-quarter fiscal 2011. Its adjusted earnings for the quarter matched the Zacks Consensus Estimate while revenues narrowly beat the forecast. Profit climbed 14% year over year on the back of solid oncology sales and lower tax. Oncology sales soared 19% year over year, buoyed by sustained healthy adoption of the NanoKnife system.
AngioDynamics has market leading positions in several of its operating segments including angiographic products and thrombolytic catheters. The company competes with larger rivals such as Boston Scientific (BSX) and C.R. Bard (BCR).
AngioDynamics’ focus on interventional peripheral products is expected to help drive future growth. The company should continue to benefit from the ongoing shift from open surgery to less invasive interventional procedures. NanoKnife remains the key driving force for AngioDynamics and the company is seeking its approval in additional indications to expand commercial opportunity.
However, we remain wary about the pricing and procedure volume headwinds, which continue to hurt the company’s core vascular business. Currently, we have a Neutral recommendation on AngioDynamics.
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