Good morning, and welcome to the AngioDynamics Fourth Quarter and Fiscal Year 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference call is being recorded. The news release detailing AngioDynamics' fourth quarter and fiscal year 2023 results crossed the wire earlier this morning and is available on the company's website. This conference call is also being broadcast live over the Internet at the Investors section of the company's website at www.angiodynamics.com, and the webcast replay of the call will be available at the same site approximately one hour after the end of today's call. Before we begin, I would like to caution listeners that during the course of this conference call, the company will make projections or forward-looking statements regarding future events, including statements about expected revenue, adjusted earnings and gross margins for fiscal year 2024 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 identifies 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 the 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. Investors should consider these non-GAAP measures in addition to, not as a substitute for or as superior to, financial reporting measures prepared in accordance with GAAP. A slide package offering insight into the company's financial results is also available on the Investors section of the company's website under Events & 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. I'd now like to turn the call over to Jim Clemmer, AngioDynamics' President and Chief Executive Officer. Mr. Clemmer?

Good morning, everyone, and thank you for joining us for AngioDynamics' fourth quarter fiscal 2023 earnings call. Joining me on today's call is Steve Trowbridge, AngioDynamics' Executive Vice President and Chief Financial Officer, who will provide a detailed analysis of our fourth quarter and fiscal year financial performance and our fiscal 2024 guidance. FY '23 saw continued progress against our long-term strategy and we have already had an exciting start to FY '24 with the strategic divestiture that we announced on June 8, and are looking forward to delivering solid proforma revenue growth this year. We ended the fourth quarter with revenue of $91.1 million, representing growth of 4.7% year-over-year, led by growth of 17.2% from our Med Tech segment. For the full fiscal year, our revenue was $338.8 million, representing growth of 7.1% over the previous year. Our Med Tech segment grew 22.8% and our Med Device segment grew 1.9%. We are now 24 months into our 36 month plan and we are progressing at or ahead of our long-term revenue targets that we provided in July of 2021. We are very pleased with the results from our Auryon PAD business, as we finished the year with revenue of $41.1 million, which was an increase of 41% over FY 2022. We are continuing to gain share in this category based upon the science behind Auryon, which provides physicians with the power they seek and the safety they require when treating patients with peripheral artery disease. In less than three years since launch, Auryon is becoming a trusted tool and many physicians are also sharing their positive experiences with Auryon. In addition, we are excited about early findings published in the Cardiovascular Revascularization Medicine outlining the ability of the Auryon laser to fracture medial arterial calcification in small vessels. We…

Thanks, Jim. Good morning, everyone. Before I begin, I'd like to direct everyone to the presentation on our Investor Relations website, summarizing the key items from our quarterly and fiscal year results. Our revenue for the fourth quarter of FY '23 increased 4.7% year-over-year to $91.1 million, driven by continued strength in our Med Tech platforms, including Auryon, NanoKnife and thrombectomy. We are pleased with the growth year-over-year, particularly in light of the fact that we had a very strong Q4 last year as our capacity improvement initiatives significantly reduced the existing back order at that time. Last year's Q4 exhibited growth of 13.2% over the prior year, so our results for Q4 of FY '23 illustrate continued strong execution against our strategic plan. Med Tech revenue was $26.5 million, a 17.2% year-over-year increase, while Med Device revenue was $64.6 million, growing 0.3% compared to the fourth quarter of FY '22. For the full year 2023, our Med Tech platform grew 22.8% and our Med Device businesses grew 1.9% compared to the prior-year period. Through the first two years of our three-year plan, our Med Tech segment has grown at a CAGR of 33.1%. For the fourth fiscal quarter, our Med Tech platforms comprised 29% of our total revenue. For the full year 2023, our Med Tech platforms comprised 29% of our total revenue compared to 25% for fiscal 2022. Our Auryon platform contributed $11.8 million in revenue during the fourth quarter, growing 22% compared to last year. As Jim mentioned, we are very pleased with the trajectory of this business and are developing additional indications in the VTE space, as well as international opportunities in atherectomy that we think will open up additional significant addressable markets. Mechanical thrombectomy revenue, which includes AngioVac and AlphaVac sales, increased 3.7% over the…

Thanks, Steve. Our FY '23 and the subsequent divestiture have positioned us to continue investing and growing the business in FY '24, while also managing our cost structure, and looking to expand the margin profile of our business. We're excited with where we are today, while also looking forward to introducing new products and new indications to the market and opening up additional addressable markets for our existing products. Our team did a commendable job in FY '23, shown true dedication to our strategy, and I'm very proud of what they've accomplished in the transformation of AngioDynamics so far. When we sold NAMIC in 2019, we told you that we are going to be a different company, one driven by innovation, science and data generation. Since then, we have taken the necessary steps and have made the necessary investments to set AngioDynamics up to win. This doesn't take place overnight, and is part of the organizational journey when becoming a science-based company. The most successful companies in medtech got to where they are by delivering innovation to the customer and to the patient. We are committed to that process of delivering innovation and to challenging the current standards of care. We believe that our portfolio will do just that over the next five years, fueled by our investments in R&D, clinical expansion and sales and marketing resources. These investments and the important research that is being done today are the fuel that will power us to significantly expand our presence in large addressable markets and generate profitable growth for years to come. With that, operator, I'd like to turn the call back and take questions.

Thank you. We'll now be conducting a question-and-answer session. [Operator Instructions] And our first question comes from the line of Jason Bedford from Raymond James. Please proceed with your questions.

Good morning. Can you hear me okay, guys?

Hi, Jason. Good morning. Yes.

Good morning. Okay. So just on the EPS guide, perhaps surprising a few folks, but it seems pretty consistent with your disclosures around profitability of the divested business. I think part of the problem is you haven't really tackled the pseudo fixed cost tied to the divested business. So my question is, when do you start pulling out some of the cost and kind of rightsizing the cost structure for $30-some-odd million less than -- in revenue?

Yes, it's a good question, Jason. As we had indicated when we first announced the divestiture, there weren't a lot of direct costs that come with this business, but we are going to be tackling those costs. And so the guide partially reflects the fact that right off the bat, we're going to continue to run our business, and then over time, look to rightsize it as we get some operating experience. So I do expect you're going to see some of those cost come out, but you're also going to see us continue to grow into the structure that we have. So I think it's going to be a little bit of a timing process, but also we did make that choice to monetize those assets and recapitalize the balance sheet and we made that trade off a little bit for operating profit during the year.

Okay. And just as it relates to the deal, should we expect more divestitures in fiscal 2024?

Hi, Jason, it's Jim. As we've said before, we've tried to let our investors see our focus strategically towards our Med Tech platform. That still comprises only about 30% of our company's revenue. So we want to continue to focus there. We have a lot of moving parts here. So it's easier to operate the company with less moving parts, easier to focus our investments going forward. And some of those things were challenged, Jason, during COVID, with supply chain challenges when you have this many products and categories that you serve. So we'll watch and see. We've mentioned we'll be active portfolio managers, and we'll make sure that we do the right thing to keep our strategic goals in line, yet still back to what Steve said, making sure that our growth comes with a profitability that investors will be pleased to see. It may take a little bit of time to get there. We've tried to outline that to you guys, but we'll be active in our portfolio management.

Okay. And just on the cash, obviously, the cash position has flipped here. You're burning a little bit of cash, not a ton. But can you just walk through your plans for capital allocation? What are you going to do with the cash?

Yes. Good question. I think what our current projection is to take a little bit of time, six, eight, 10 months and keep the cash. We want to be able to illustrate externally that we can manage the business in accordance with the guidance that we gave today. We want to show you that we're not burning a significant amount of cash. And then as we exit that timeframe and we're getting back to the cash flow positive, that's when we'll be a little bit more clear in terms of indications at that time of use of the cash. As of right now, we don't have any expectations of going out and doing divestitures or spending that cash. We're going to continue to keep that cash and then illustrate our operating model before we move into uses of that cash.

Okay. And I'll just ask one more and then jump back in queue. On thrombectomy, you mentioned that you'll be launching enhancements, product enhancements. Can you just walk through the timing on those enhancements?

Yes, Jason, it's Jim. Just some of the feedback we've received now that AngioVac has been on the market for just over a year. We've got some great feedback on how it works, the safety and efficacy that it gives to the physicians, but you always get good feedback. So we're looking at making some product enhancements as anybody would do on a 2.0 version, adding some things. We expect some of those enhancements to be launched in calendar 2025 -- I'm sorry, Jason, calendar 2024. I get confused on our fiscal year. Next calendar year.

Okay. Thank you.

Thanks, Jason.

Our next question is coming from the line of Bill Plovanic with Canaccord Genuity. Please proceed with your question.

Great, thanks for taking my questions. Good morning. First off, just the Auryon product, the uses seem to be expanding as you talk about the thrombectomy and then going into coronary. Just trying to kind of get wrap my head around. One, as we look at the business today, that was really solid growth. How much of that was U.S. versus OUS driven? How much of that is outpatient versus OBL? And then just two, how should we think about this strategically as you move forward? It seems like this product is becoming a bigger and bigger piece of the company's overall Med Tech franchise in finding more uses.

Yes. So, Bill, good question. So first of all, almost every dollar of revenue that we had in 2023 was in the U.S. So we're gaining our CE mark as we speak. We said we expect that in the first half of this fiscal year. There was some research that was done in Europe and some of that was been published, we've talked about it, by some clinicians and physicians in Europe, who are really excited by Auryon. We look forward to seeing what they're doing. But almost all that was U.S. based. And second, we're running now at a clip, I call it, 75% OBL revenue and 25% hospital revenue. That's increasing. The hospital percentage is increasing as we speak, which we would expect. As you know, we launched in September of 2020. During the pandemic, it was harder to get access in the hospitals at the time. So our initial customers are OBL related, but we're watching that mix balance a bit more towards the hospitals. And finally, Bill, your question is a great one. When we acquired Eximo Medical, we believed in what it could do in this market, in the PAD market, and challenging the four good companies that we compete with. These guys are good companies with good products. But we knew what Auryon did was special and could create a spot in the market. We're proving that. We also knew how it works, the mechanism of action and the science behind it could be applicable in other parts of the anatomy in other disease states. And that's what we now have a lot of confidence in. So talking about launching the venous version in FY -- sorry, in calendar year 2025 is important to us as we'll round out our thrombectomy portfolio with Auryon in that small vessel platform. And also, Bill, we really believe as well as it works in peripheral artery disease. We can do the same thing in coronary, giving doctors that safety they require treating coronary indications and also the power of how Auryon delivers the energy within that vessel wall to break up calcium and clot. So that will be part of our future as you identified.

And then given the moving into these new indications, are there major studies that we should be tracking? How do we think about that? And then just on the AlphaVac, that seems obviously to be going a little slower than original expectations. How -- is that until we get the F18 for PE, you're going to be kind of hands tied behind your back on that one in terms growth? How should we think about that until the PE indication comes?

It's a good question. As far as the Auryon version for thrombectomy, that's a 510(k) process. So there won't be a lot of studies required to get through the 510(k) process that's built into our development and launch models that we have. And second, if we do a coronary model, there is a pathway that exists today, so we would expect a study there, more of a PMA process. So we'll highlight and give you guys more guidance as we get closer. It will be more complicated, but there is a pathway that we'll follow that the FDA kind of has it in place today. And then second back to -- you mentioned about AlphaVac. We actually achieved the revenue we gave as guidance last year, 7% to 9%, I think, is what we talked about, so within that range. But it's true, we really learned a lot during the course of the year, talked about enhancements we'll make from some customer feedback. But overall, the product is really safe and effective. People are getting very confident when they use it as to how well it works. We also think the APEX study will open up that large PE market for us. And today we're in that study phase; more than half enrolled, which is great. But we really want to unlock that -- finish the study, unlock that PE market. So until then, we'll do what you would expect us to do; tread lightly, educate physicians on our product. There's spot they can use it within the anatomy today to remove clot and that's what we'll work on, as well as finishing the study. When that study comes out, Bill, it opens up a large market for us. And we think we'll see large growth from there.

Okay. And last question, I promise, just on PRESERVE studies enrolled. Just give us timelines for data submission, approval. I assume this is a 510(k), I believe. How should we think about that? And then, how do you expect the impact on the business? How should we think about the timing for that -- the data be seminated into the marketplace and potentially drive that business? Thanks for taking my questions today.

Bill, good question. So, we're excited that we've completely enrolled the study. The study has a 12 month follow-up. So you'd expect us over the course of the year until next July complete the follow-up, compile the data, we'll submit to the FDA not long after that. And we expect really if the process goes well, to receive an indication by end of calendar year '24. We hope along the way we can publish some data, make it public. During that process, we think it will be compelling. If it's based upon other data that you know has been published around the globe by physicians who've utilized this unique device to treat these intermediate risk prostate cancer patients, we believe the data is going to be compelling, not only because it reduces the effect of the tumor, but we also give the quality of life benefits back to those patients that they would risk with other procedures. So we're excited, Bill. We're going to again just continue what we're doing today, support our customers. But we would expect when we receive that indication, you'll see a different selling and marketing and clinical support approach from our company to maximize the opportunity in this market. That will really kick in more in calendar year '25 after that indication is received.

Thanks for taking my questions.

Thank you.

The next question is from the line of Matthew Mishan with KeyBanc Capital Markets. Please proceed with your question.

Thanks. Good morning. Thanks for taking the questions. Hey, Jim, Steve, it seems like you're taking a little bit of a different approach to guidance this year, especially around some of the individual moving pieces. But could you help us build up to that 20% to 25% Med Tech guidance for FY '24? What is, what's above, what's below, and how you're accounting for AngioVac in that?

Yes, it's a good question, Matt. So, we are -- in the past couple of years as we were really just getting to the point of first reporting our business in the two reportable segments: Med Tech and Med Device. And with some brand new product launches, we did feel that it was important to give you guys a little bit more granularity. You've been able to see the progression and the trajectory of our businesses. So when you think about building up to that Med Tech guide of 20%, 25% growth, you've seen the trajectory from Auryon. We've talked about continuing to be pleased with what we're seeing with Auryon and continued opportunities to take share as well as increase utilization within our installed base. So you can think of Auryon on that same trajectory. Again, with NanoKnife, you've seen more than 20%-plus growth probes as we continue to execute on our trials and continue to see really strong growth in the U.S. as well as international markets, very, very similar trajectory with NanoKnife. To your question around thrombectomy, this is the second year of launch for AlphaVac. That's a growth product for us. We're going to continue to see some good growth in AlphaVac. We did clearly take into account when we were building our models, what we saw last year with AngioVac. We're still excited about AngioVac. It still has a growth opportunity for us. But as we talked about in Q3, we're turning the ship from what we saw was the valley for AngioVac. You saw Q4 be sequentially up. So clearly, we think we've turned that trend. But we've taken that into account as we've given you guys the guidance and thought about building up our models in Med Tech.

Okay. That's helpful. And is the way to think about the mechanical thrombectomy platform that you'll hopefully execute with the FDA and get a indication for pulmonary embolism at some point towards the end of this fiscal year, middle of next year? And at the same time, given it does seem like it's a 510(k) process, you potentially could launch in that same year a DVT product with Auryon. Is that the right way to think about a year out like FY '25 as pipeline?

Yes. Matt, your timeline is pretty good. So we agree with you on what you just said about APEX PE, completing that study and maybe getting an indication. We gave a rough range because still a lot of regulatory work to do. But your timeline is aligned with ours. So assume call it a year from now where we think we'd have that APEX PE indication. And then about a year after that, we talked today, I mentioned during calendar year '25, having the Auryon version for venous thrombectomy being launched. So we really have -- the next 24 months will be exciting in that spot: having the PE indication for APEX, that's important; having some design enhancements and developments added during next calendar year; then the Auryon version coming out in calendar '25. We're really excited over these next 24 months of how we'll be a significant player in that market with a really neat portfolio.

Okay. And then on the Auryon international opportunity, just curious, is the model going to be different there, whether maybe capital purchases of the equipment, or is it still the same commercial model, where you take that on your balance sheet and it's really just the disposable volume?

Yes. Great question. Thanks for asking. We're seeing a different approach, Matt. It didn't have the amount of kind of history built by the other player in the market who had utilized the approach already providing capital to market. That was more prevalent in the U.S. So we're already seeing a different approach towards the European market. We'll give you more details as we get into the market. But I think the model you're talking about, capital being done differently is what we expect as well. So it won't require as much significant investment from us to bring new customers online.

Okay. That's great. Thank you.

Thank you, Matt.

Thank you. At this time, we've reached the end of question-and-answer session. I'll turn the call over to Jim Clemmer for closing remarks.

Thank you, operator, and thanks again to the team at AngioDynamics. Hope that the investors are seeing our commitment to our transformation as we're going to become a growth company that does provide profitability to the bottom-line for years to come, based and founded by our innovation and the quality of our products. Thank you for joining us today. We'll speak again soon.

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