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Unaudited Pro Forma Condensed Consolidated Financial Statements
AngioDynamics, Inc. and Subsidiaries
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
Nine Months Ended February 28, 2023
(in thousands of dollars, except per share data)
| As Reported (a) | Pro Forma Adjustments | Notes | As Adjusted | ||||||||||
| Net sales | $ | 247,678 | $ | (23,690 | ) | (b) | $ | 223,988 | |||||
| Cost of sales (exclusive of intangible amortization) | 119,791 | (9,322 | ) | (b) | 110,469 | ||||||||
| Gross profit | 127,887 | (14,368 | ) | 113,519 | |||||||||
| Operating expenses: | |||||||||||||
| Research and development | 22,023 | (167 | ) | (b) | 21,856 | ||||||||
| Sales and marketing | 77,956 | (45 | ) | (b) | 77,911 | ||||||||
| General and administrative | 29,775 | 8 | (b) | 29,783 | |||||||||
| Amortization of intangibles | 14,384 | (1,450 | ) | (b) | 12,934 | ||||||||
| Change in fair value of contingent consideration | 2,084 | - | 2,084 | ||||||||||
| Acquisition, restructuring and other items, net | 12,009 | (17 | ) | (b) | 11,992 | ||||||||
| Total operating expenses | 158,231 | (1,671 | ) | 156,560 | |||||||||
| Operating loss | (30,344 | ) | (12,697 | ) | (43,041 | ) | |||||||
| Other expense: | |||||||||||||
| Interest expense, net | (1,801 | ) | - | (1,801 | ) | ||||||||
| Other expense, net | (427 | ) | - | (427 | ) | ||||||||
| Total other expense, net | (2,228 | ) | - | (2,228 | ) | ||||||||
| Loss before income tax benefit | (32,572 | ) | (12,697 | ) | (45,269 | ) | |||||||
| Income tax benefit | (1,597 | ) | - | (c) | (1,597 | ) | |||||||
| Net loss | $ | (30,975 | ) | $ | (12,697 | ) | $ | (43,672 | ) | ||||
| Loss per share | |||||||||||||
| Basic | $ | (0.79 | ) | $ | (1.11 | ) | |||||||
| Diluted | $ | (0.79 | ) | $ | (1.11 | ) | |||||||
| Weighted average shares outstanding | |||||||||||||
| Basic | 39,436 | 39,436 | |||||||||||
| Diluted | 39,436 | 39,436 |
AngioDynamics, Inc. and Subsidiaries
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended May 31, 2022
(in thousands of dollars, except per share data)
| As Reported (a) | Pro Forma Adjustments | Notes | As Adjusted | ||||||||||
| Net sales | $ | 316,219 | $ | (27,694 | ) | (b) | $ | 288,525 | |||||
| Cost of sales (exclusive of intangible amortization) | 150,487 | (10,472 | ) | (b) | 140,015 | ||||||||
| Gross profit | 165,732 | (17,222 | ) | 148,510 | |||||||||
| Operating expenses: | |||||||||||||
| Research and development | 30,739 | (347 | ) | (b) | 30,392 | ||||||||
| Sales and marketing | 95,301 | (85 | ) | (b) | 95,216 | ||||||||
| General and administrative | 38,451 | - | 38,451 | ||||||||||
| Amortization of intangibles | 19,458 | (1,820 | ) | (b) | 17,638 | ||||||||
| Change in fair value of contingent consideration | 1,212 | - | 1,212 | ||||||||||
| Acquisition, restructuring and other items, net | 9,042 | (69 | ) | (b) | 8,973 | ||||||||
| Total operating expenses | 194,203 | (2,321 | ) | 191,882 | |||||||||
| Operating loss | (28,471 | ) | (14,901 | ) | (43,372 | ) | |||||||
| Other expense: | |||||||||||||
| Interest expense, net | (688 | ) | - | (688 | ) | ||||||||
| Other expense, net | (790 | ) | - | (790 | ) | ||||||||
| Total other expense, net | (1,478 | ) | - | (1,478 | ) | ||||||||
| Loss before income tax benefit | (29,949 | ) | (14,901 | ) | (44,850 | ) | |||||||
| Income tax benefit | (3,402 | ) | - | (c) | (3,402 | ) | |||||||
| Net loss | $ | (26,547 | ) | $ | (14,901 | ) | $ | (41,448 | ) | ||||
| Loss per share | |||||||||||||
| Basic | $ | (0.68 | ) | $ | (1.06 | ) | |||||||
| Diluted | $ | (0.68 | ) | $ | (1.06 | ) | |||||||
| Weighted average shares outstanding | |||||||||||||
| Basic | 39,009 | 39,009 | |||||||||||
| Diluted | 39,009 | 39,009 |
AngioDynamics, Inc. and Subsidiaries
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
As of February 28, 2023
(in thousands, except share data)
| As Reported (a) | Pro Forma Adjustments | Notes | As Adjusted | ||||||||||
| Assets | |||||||||||||
| Current assets | |||||||||||||
| Cash and cash equivalents | $ | 30,111 | $ | 46,790 | (d) | $ | 76,901 | ||||||
| Accounts receivable, net of allowances of $2,030 | 50,892 | - | 50,892 | ||||||||||
| Inventories | 63,532 | (3,663 | ) | (e) | 59,869 | ||||||||
| Prepaid expenses and other | 8,039 | (1,807 | ) | (e) | 6,232 | ||||||||
| Total current assets | 152,574 | 41,320 | 193,894 | ||||||||||
| Property, plant and equipment, net | 45,559 | (52 | ) | (e) | 45,507 | ||||||||
| Intangible assets, net | 134,011 | (18,113 | ) | (e) | 115,898 | ||||||||
| Goodwill | 199,976 | - | 199,976 | ||||||||||
| Other assets | 10,729 | - | 10,729 | ||||||||||
| Total assets | $ | 542,849 | $ | 23,155 | $ | 566,004 | |||||||
| Liabilities and stockholders' equity | |||||||||||||
| Current liabilities | |||||||||||||
| Accounts payable | $ | 35,600 | $ | - | $ | 35,600 | |||||||
| Accrued liabilities | 21,775 | - | 21,775 | ||||||||||
| Current portion of contingent consideration | 9,877 | - | 9,877 | ||||||||||
| Other current liabilities | 2,380 | - | 2,380 | ||||||||||
| Total current liabilities | 69,632 | - | 69,632 | ||||||||||
| Long-term debt | 49,807 | (49,807 | ) | (d) | - | ||||||||
| Deferred income taxes | 13,490 | - | (c) | 13,490 | |||||||||
| Contingent consideration, net of current portion | 9,182 | - | 9,182 | ||||||||||
| Other long-term liabilities | 3,083 | - | 3,083 | ||||||||||
| Total liabilities | 145,194 | (49,807 | ) | 95,387 | |||||||||
| Stockholders' equity | |||||||||||||
| Preferred stock, par value $.01 per share, 5,000,000 shares authorized; no shares issued and outstanding | - | - | - | ||||||||||
| Common stock, par value $.01 per share, 75,000,000 shares authorized; 39,976,422 shares issued and 39,606,422 shares outstanding | 382 | - | 382 | ||||||||||
| Additional paid-in capital | 596,225 | - | 596,225 | ||||||||||
| Accumulated deficit | (189,388 | ) | 72,962 | (116,426 | ) | ||||||||
| Treasury stock, 370,000 shares | (5,714 | ) | - | (5,714 | ) | ||||||||
| Accumulated other comprehensive loss | (3,850 | ) | - | (3,850 | ) | ||||||||
| Total Stockholders' Equity | 397,655 | 72,962 | 470,617 | ||||||||||
| Total Liabilities and Stockholders' Equity | $ | 542,849 | $ | 23,155 | $ | 566,004 |
NOTE 1. Basis of Presentation
The Company's historical consolidated financial statements have been adjusted in the unaudited consolidated pro forma financial
statements to present events that are (i) directly attributable to the sale of the Business, (ii) factually supportable and (iii) are expected to have a continuing impact on the Company's consolidated results following the sale of the Business. The
pro forma consolidated statements of operations do not reflect the estimated gain on the sale of the Business.
The Company determined that this sale of the Business did not constitute a strategic shift that had a major effect
on the Company's operations or financial results and as a result, this transaction will not be classified as discontinued operations.
NOTE 2. Pro Forma Adjustments
The following adjustments have been reflected in the unaudited consolidated pro forma financial statements:
(a) Reflects the Company's historical US GAAP consolidated financial statements, as reported, before pro forma adjustments
related to the sale of the Business for the nine month period ended February 28, 2023 and the year ended May 31, 2022.
(b) Reflects the elimination of revenues and expenses representing the historical operating results of the Business.
(c) There are no adjustments for income tax
expense or deferred taxes when considering valuation allowances on the Company's deferred taxes.
(d) Reflects estimated net cash proceeds from the sale of the Business of $46.8 million, representing the gross sale price of
$100.0 million less estimated transaction costs and the payoff of long-term debt.
(e) Represents the assets conveyed to Merit in the sale of the Business. The intangible assets relate specifically to the
identifiable intangible assets related to BioSentry product technologies, trademarks, licenses and customer relationships.
NOTE 3. Transition Services Agreement
Pursuant to a transition services agreement and a contract manufacturing agreement entered into and effective on the closing of the sale of the Business, the Company will
supply certain services to Merit. No pro forma adjustments have been made associated with these agreements as services to be provided with a defined monetary value are not considered material, will not have a continuous impact and the variable
elements are not estimable at this time.